Unicord Plc’s Rise and Fall Admn 417

Executive Summary

The Unicord PLC’s rise and fall occurred over a very short period of time.  Dumri (founder and CEO) had a very positive vision of the position Thailand could take in the export of Tuna and the role Unicord could play in the global market.  The project to expand into primary global markets happened quite quickly with the purchase of Bumble Bee in the U.S.   Initially this venture was very profitable, until the events of the Tuna-Dolphin controversy occurred, and the events which shook out from this event caused unrecoverable financial stress on the companies.  Dr. Juanjai, Unicord’s special advisor, was left to establish the chartered course for this global institution, with the death of Dumri and the financial lenders both in the U.S. and Thailand looking to recover some of the debt they had provided to the organization.  Dr. Juanjai was left to focus on restructuring the parent company, reviewing the global needs for the products they produce and coming up with a new plan for the future of the company.

Problem Statement

Dr. Juanjai Ajanant was left to figure out what happened with Unicord PLC, where things went wrong and if it was possible to recover from the current financial difficulties.  What would Unicord PLC’s roll be in the future?  The global tuna industry was changed due to the drastically reduced consumer demand in the U.S.  Unicord must consider its other product lines and assess where the company should place its focus to move forward.

Analysis

Looking back, from 1989 to 1995, there were some very clear events which took place for the company.  

The first was the purchase of Bumble Bee from Pillsbury.  This purchase allowed Unicord the access to the largest of its current export markets without the worry of changing tariffs and non-tariff barriers.  Unicord implemented a state of the art processing system that would allow Bumble Bee to import frozen tuna to be processed at the U.S. facilities.  Bumble Bee’s also had processing plants in Puerto Rico which provided cost saving options as well.  Dumri’s vision was to gain access to five continents to provide the company with greater access to the largest portions of the market that they were already exporting to.  The purchase of Bumble Bee was a major step to achieving this vision.  This movement into the US market saw a chance to remove the middle man that was taking a significant cut of the profits from Unicord, in the process of distributing to major customers globally.

The next event of importance was the Tuna-Dolphin Controversy.  The American tuna market was already a competitive market which demanded high volumes of sales to offset the large advertising and operating expenses incurred to secure market share.  In the search for more cost efficient means of fishing, more and more fishing fleets (both American and International) were converting to the newest technology of fishing for tuna.  The newest method was called purse-seining.  This method was found to provide large catches, however due to the close relationship of tuna and dolphins swimming together, dolphins were also being caught and drowned by the fishing method.  The loss of dolphins was the reason that environmental groups began raising the awareness of the American consumers.  This awareness created additional strain on the profitability of the tuna producers, and the American consumers were now holding the American processors accountable for their choices and methods of attaining tuna for processing.  In the late 80’s there was a call to boycott the main American tuna processing companies until they showed environmental responsibility.  Bumble Bee made the decision to make a public statement about being dolphin-safe, stated their support of government legislation, invited the environmentalists to place a member in the Unicord Parent company operations, and encouraged the public to support reputable environmental groups.  Bumble Bee was challenged about its honesty regarding their statement by the Earth Island Institute.  In reply to the challenge, unlike their competitors, they decided to be truthful and state that they weren’t quite dolphin-safe but believed they would attain this status in six months.  The new, truthful statement, lead to some bad press regarding current packaging and the company’s credibility in the American market.  The Americans lack of faith in the Bumble Bee product affected the company’s market share substantially.