WWW.WAS.ORG • WORLD AQUACULTURE • JUNE 2025 63 Example: A consumer has the option to choose between two seabass fish products, product X (produced by company A), and product Y (produced by company B). Both products are identical in terms of quantity, nutritional value, and other valueadded attributes such as food safety labelling. However, product X is priced at ₹1000 per kg, while product Y is available at ₹800 per kg. Key Takeaways from SCA: • Consumer Preference: A rational consumer opts for product Y due to its lower price, maximizing their utility through cost savings. • Competitive Advantage: Since both products offer the same attributes, company B holds a competitive advantage over company A due to its lower pricing. • Reason for Price Difference: The question arises as to how company B managed to price its product lower while maintaining similar quality? A detailed analysis revealed that company B has optimized its supply chain, by efficiently managing planning, procurement, warehousing, production, and marketing, leading to significantly lower operational costs across the chain. Strategies for Company A to Improve Efficiency: To remain competitive, company A must focus on supply chain optimization by implementing the following strategies: • Supplier Optimization: Evaluate and, if necessary, switch to more cost-effective suppliers. • Direct Procurement: Reduce intermediaries in input supply by sourcing directly. • Waste Minimization: Improve efficiency in the production process to minimize waste. • Workforce Efficiency: Employ skilled labour while reducing reliance on unskilled workers. • Logistics Enhancement: Optimize transportation by selecting a more efficient logistics team. • Technology Integration: Invest in machinery and digital technology to enhance productivity and lower production costs (excluding fixed costs in the short term). By improving these areas, company A can reduce production expenses, lower product prices, and enhance its market competitiveness, ultimately leading to higher profitability and customer satisfaction. Value Chain Analysis (VCA) The primary focus of VCA is about achieving effectiveness. Effectiveness refers to performing activities in the best possible way to produce a high-quality output, even if it requires more time than usual. Being effective contributes to quality, which inherently holds value across all markets. In the context of the aquaculture sector, upstream and downstream value chains aim to enhance the worth of the product (seed, feed, chemicals, raw fish) through various value-adding activities such as attractive packaging, strong branding and marketing, food safety labelling, certifications, use of premium feeds that improve the taste and quality of the fish, and so on. These enhancements allow the final product to be sold at a price higher than the cost of creating the added value. When value addition surpasses that of competitors, it can result in higher profits, a competitive edge, and improved customer satisfaction by boosting sales. The concept of value creation is often used to describe fish and fishery products that stand out in the market due to unique characteristics such as: • Geographical identity: Mediterranean tuna, Norwegian salmon, Thailand black tiger shrimp. • Environmental responsibility: Products with certification program labels, eco-labels, or fair-trade labels. • Organic production. • Food safety: HACCP-certified, free from antibiotics and heavy metals (De Silva, 2011). However, it is important to note that value is subjective and varies depending on consumer perception. Consumers are willing to pay higher prices only if they perceive the product as more valuable. As highlighted by De Silva (2011), various factors influence consumer demand for fish and fishery products. They include price, consumer demographics, convenience, nutritional content, safety, availability of substitutes, taste, trends, advertising, and consumer expectations. These factors must be considered when designing value-added or value-created products. Therefore, the key goal of value chain management is to deliver value to consumers through superior, value-added products and, in return, gain value for the business in the form of higher sales, profits, and customer satisfaction. Example: Consider a hypothetical market scenario where rohu (Labeo rohita) fish is in high demand. At the same time, consumers in the region prioritize health, hygiene, and food safety, making these attributes crucial in their purchasing decisions. In this situation, two companies namely company A and company B are selling rohu fish. Company A recognized the consumer demand and implemented value-addition strategies such as premium packaging, food safety labelling, and displaying nutritional information, thereby enhancing the perceived value of its product. In contrast, Company B did not incorporate any value-addition measures and sold the fish in its raw form without any additional attributes. The details of value creation and economic outcomes between company A and B is shown in Table 1. Key Takeaways from VCA: • Despite having a higher production cost (₹ 180 per Kg) than company B (₹ 150 per Kg), company A achieved a greater net revenue of ₹ 70,000, compared to ₹ 45,000 for company B. • Company A sold more fish (1000 Kg) at a higher price (₹ 250 per Kg) than company B (900 Kg at ₹ 200 per Kg). • Consumers perceived the higher price of company A’s fish as justified due to the added value in terms of quality packaging, safety labelling, and transparency in nutritional content. Use supply chain analysis to find cost leaks, time delays, or inefficiencies in operations. Use value chain analysis when the goal is to improve product appeal, brand strength, or consumer trust. Both tools help enhance competitiveness, just from different angles. 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