Red Star China Case

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Unicord PLC Group A Florida Atlantic University Professor: Dr. Hemant Merchant Emerging Markets MAN-6728 February 15, 2010 Problem/Decision Dr. Juanjai Ajanant, a special advisor to Unicord PLC’s board, has been tasked with deciding the best strategy to take Unicord out of receivership. Unicord, as a relatively young company, was a leading tuna processor and one of the “shining stars” of Thailand. As a top tuna exporter, the company had shown year over year growth since its inception in 1978. It appears that their challenges began soon after the purchase of Bumble Bee in 1991. In four short years, Unicord quickly spiraled downward and seemingly out of control. By 1995, the founder and CEO, Dumri, was…show more content…
However, Unicord’s desire to become a global power took the company away from its convictions on which it was built. Acquiring Bumble Bee was the answer for Unicord to become that power. BBBumble Bee was the third largest American producer of tuna at the time of Unicord’s acquisition. The largest American producer, H.J. Heinz’s Star Kist initially offered to purchase the company but the sale was disallowed as it was determined the purchase would hinder free competition of the American companies. This opened the door for Unicord to purchase Bumble Bee, which was twice the size of Unicord. The purchase also occurred at a time Thailand desired to become an emerging market leader in the global economy. The purchase was approved by the Bank of Thailand and landed President Dumri as one of the countries prominent businessmen. But, were there indications that the Bumble Bee acquisition would not be the best move for Unicord? The American tuna industry was in transition mode; profits were decreasing and existing canneries were moving operations away from the continental U.S. Bumble Bee’s reaction to the dolphin controversy was to reduce prices to increase market share. In the short run, it worked. Market share in the U.S. increased from 17% in 1989 to 25.7% in 1992. Production in Thailand increased to spur on the increased market share. However, what was overlooked was the consumption of tuna was falling at a faster rate
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