Porter’s Five Forces Analysis of Zanzibar’s Seaweed Industry
Asian Journal of Agricultural Extension, Economics & Sociology, Volume 40, Issue 11,
Page 185-196
DOI:
10.9734/ajaees/2022/v40i111700
Abstract
Aim: This study intended to analyse the Zanzibar seaweed industry’s (ZSI) profitability potential by adopting Porter’s five forces industry analysis framework. The objective was to identify factors in its structure contributing to the industry’s ongoing primary challenge of low returns.
Methodology: The study was conducted on Zanzibar island in the United Republic of Tanzania. A case study design approach was adopted. The study’s sample consisted of seaweed farmers, exporters and officials from government institutions linked to the industry. Seaweed farmers were selected through multistage and quota sampling. Exporters were chosen based on experience, i.e. at least five years of operations and above. Government officials were selected through purposive and convenience sampling. The study utilised both primary and secondary data. A triangulation approach was adopted for data collection. Data analysis was done through thematic analysis, descriptive statistics and literature review. Results were adapted into Porter’s framework for further analysis. The threat level for each Porter’s force was determined by weighing their corresponding driving factors, and respondents rated the final results based on the perceived threat level.
Results: The study found that the Zanzibar seaweed industry has low profitability potential. Threats emanate from the industry’s lack of entry barriers, several available cheap and high-performing substitutes, low switching costs and high bargaining power of buyers and suppliers. The government’s role in promoting the industry’s activities is almost non-existent. Similarly, the industry’s production methods were found to be still traditional. Innovative activities were found to be minimal. In terms of opportunities, the industry remains a viable economic alternative for the rural Zanzibarians due to its low capital entry requirements and short production cycles. The potential for increased income and improved health and nutrition exists if domestic markets are established. The growing global demand for carrageenan also signals the industry’s revenue and income growth potential. Similarly, the ZSI is also a source of economic gender empowerment for rural Zanzibari women.
Conclusion: Zanzibar’s seaweed industry’s low profitability potential is a result of its structure, production system and the absent role of the Revolutionary Government of Zanzibar (RGoZ). Due to the unique nature of ZSI challenges, Porter’s generic strategies were found unsuitable. Hence, this study recommends creating a guiding industry business strategy and marketing plan to guide its activities. The industry’s customer base should also be diversified to expand buyer options and minimise risks associated with the global Rhodotypa market’s oligopolistic conditions. The creation of domestic and regional demand is also crucial. The Revolutionary Government of Zanzibar should also step in to give the necessary support, primarily through creating industry policy. Additionally, diversification of ZSI export products through establishing carrageenan extraction industries in Zanzibar is vital.
- Porter’s five forces
- Zanzibar seaweed industry (ZSI)
How to Cite
References
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