The Irish Food Processing Industry.

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Introduction

The Irish Food Processing Industry Competitiveness of the prepared consumer foods sector The competitive performance of the prepared consumer foods sector has already been outlined. A Porter analysis was also carried out to analyze the factors leading to the emergence and growth of the sector over the past decade. A survey of firms in the sector was carried out in order to assess company strategies, company performance and factors that facilitated and inhibited growth. The impact of future policy and industry changes on competitiveness was also evaluated and the needs of the sector identified. Factor conditions 1. Raw materials: Ireland has a reasonable endowment of high-quality, indigenous raw materials (such as dairy ingredients, meat, poultry and fish) which forms the basis for the prepared consumer food sector. The processed meat sector has benefited from Ireland's traditional strength in meat production, along with historically high per capita consumption of meat products in the home market. 2. Peripherality: Ireland is at a disadvantage with regard to its peripheral location and low population density. Higher energy, natural gas and transport costs in relation to the UK are a source of competitive disadvantage (Forfás, 1998).

Middle

An estimated 40% of the sample employed less than 10 employees. In view of the structure of the European food industry, Irish firms are not uniquely disadvantaged in terms of company size. Innovation : Innovation, in terms of product development, is often cited as the most important source of competitiveness in the food industry, given the proliferation of new products, short product life cycles and the changing tastes of consumers (Traill and Grunert, 1997). In our survey, we asked managers to rank the factors that facilitated new product development (Table 3). Table 3: Factors that facilitated new product development; results of a survey of firms in Irish prepared consumer foods sector. Factor % importance Availability of finance/grant aid 45% Availability of R&D staff (eg. food technologists) 64% Access to universities/research institutes/facilities 29% Customer-driven: response to market opportunity/customer need 91% Competitor-driven: pressure of competition forcing firms to react 42% Supplier-driven: interactions with suppliers of raw materials, food ingredients, packaging or plant & equipment 34% Retailer-driven: result of interactions with retailer 63% The survey showed that the incentive to innovate depends to a large extent on the existence of strong demand for the product.

Conclusion

Related industries do not seem to make a significant contribution towards the competitive advantage of the prepared consumer food sector. Food ingredients have the potential of developing into a strong related industry to the prepared consumer food sector. The prepared consumer food sector in Ireland is not extensively clustered and is not very R&D or knowledge-intensive. Conclusions * Ireland had a strong competitive position vis-à-vis our EU partners in the large sub-sectors of the food industry in 1994. Our strategic position was somewhat weaker when account was taken of our level of growth in the high growth food sub-sectors. * In the prepared consumer foods sub-sector, Ireland had a relatively strong competitive position among EU members in 1996. * The competitiveness of the shellfish sector was predominantly based on the quality of the raw material. * The dairy industry's competitiveness was positively affected by factor conditions in the Irish market, the operations of multinational companies, the strategic behaviour of Irish dairy companies and the Common Agricultural Policy. * Major factors which contributed to the competitiveness of the prepared consumer foods sector were high quality raw materials, population changes and a dynamic retail sector in Ireland. Reference: http://www.teagasc.ie/research/reports/foodprocessing/4984/eopr-4984.htm ?? ?? ?? ?? Wu Qian 28 Oct,2003 - 1 -

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