Demand and Supply Analysis CASE 1.0 Thailand Tuna The case of Thai Tuna is a good example of the fth product strategy alternative. In 1980 world canned tuna imports stood at some 110,000 tons. world consumption was stagnant, prices depressed and rising operating costs were leading to the closure of the tuna processing facilities in the US, Japan and Europe. HoWeVer, up to 1990, World tuna imports quadrupled to 431000 tons with large scale canning operations shifting to several lower cost developing countries. No country experienced the dramatic development more than Thailand. in 1980 it did not export one single can. In 1990, Thaiiand exported 225,000 tons {51% of wortd market share} with a gross value in 1989 of 033 53? miilion. The Thai industry development was rapid and interesting because it was based on imported raw materials. Tuna landings by Thai vessels rarely exceeded 30,000 tons, whilst its Imports of foreign tuna [mostly skipjack} has increased past the 250,000 ton mark. The reason for this was the shift in fishing patterns. Historically the eastern Atlantic and Pacific were the most important areas but in the 19?0s, US vessels began to exploit the tuna shoals of the Western Pacific and European vessels the Indian Ocean. The result was the increase of landings from 1,? million tons in 1930 to 2,5 mitlion tons in 1983, but a signicant drop in prices accompanied this increase. Thaiiand was In a position to capitalise on these new low cost suppliers and in the eariy to mid 1930s several fruit and vegetable canners and other entrepreneurs invested in large modern processing facilities specially for fish. Their operating costs were kept low by efficient management, low cost labour, backward integration into production and the efcient use of by products from processing. This was basically an "invention" product strategy. In order to gain access to and capltaltse on the expanding markets in the US and Europe (except France 'which favoured Francophone African suppliers] Thai canners entered into packaging arrangements with American and European firms. Latter, Thailand's largest processor look over the third largest tuna canner in the US, enabling it to take advantage of the Hatters exclusive distribution network and welt-established hranrl names: 1. In launching new products into international markets, as a manager what are your comparative analysis is a very useful technique for new product introduction. 2. Why do we need to consider this product as a new introduction for international market? 3. In the production decision cost, what are your favorable steps as manager considering the decisiondmaking concept and the isoquant of production function reevaluations