Course: Economics for Business in a Global Environment Course Code: INBA 6085 Lecturer: Mr.

Henry Bailey Project: Describe the Industry Structure and Competitive Dynamics in the Poultry Industry of Trinidad and Tobago.
Group Members: Karth Arthur Sonnia Alfred Keisha Deokiesingh Aaron Mohammed Nerrisa Mohammed Josanne Thomas

811006596 03757156 05744922 02733603 02734251 809006305

Contents
ABSTRACT...................................................................................................................................................... 3 INTRODUCTION ............................................................................................................................................. 3 LITERATURE REVIEW ..................................................................................................................................... 8 ANALYSIS / DISCUSSION .............................................................................................................................. 12 CONCLUSION............................................................................................................................................... 19 BIBLIOGRAPHY ............................................................................................................................................ 21 APPENDICES ................................................................................................................................................ 24 Appendix 1 .......................................................................................................................................... 24 Appendix 2 .......................................................................................................................................... 24 Appendix 3 .......................................................................................................................................... 25 Appendix 4 .......................................................................................................................................... 26 Appendix 5 .......................................................................................................................................... 27 Appendix 6 .......................................................................................................................................... 28

Figure 1 Number of broilers farms in Trinidad and Tobago.......................................................................... 5 Figure 2 Capacity of broilers farms in Trinidad and Tobago ......................................................................... 6 Figure 3 Difference in the number of broilers farms from 2010 to 2011 ..................................................... 6 Figure 4 Difference in the capacity of broilers farms from 2010 to 2011 .................................................... 7 Figure 5 Average weekly chicken prices ....................................................................................................... 7 Figure 6 Kinked demand curve (Economicshelp n.d.) ................................................................................. 20 Figure 7 Demand curve for a collusive Oligopoly (Cartel) (Economicshelp n.d.)........................................ 21

Table 1 Market structure and concentration Ratio (AmosWEB 2000-2012) ................................................ 9 Table 2 quick reference to basic market structures (WebFinance 2012) ................................................... 12 Figure 6 Number of broilers sold during 2006 to 2010............................................................................... 15 Figure 7 Live weight of broilers sold during 2006 to 2010 ......................................................................... 16 Table 3 Poultry Industry compared to Oligopoly. ....................................................................................... 17 Table 4 CR4 and HHI of Trinidad & Tobago Poultry Industry ...................................................................... 18 Table 5 Numbers of broilers farms in Trinidad and Tobago ....................................................................... 24 Table 6 Average weekly price of chicken .................................................................................................... 25 Table 7 Numbers of broilers sold during 2006 to 2010 .............................................................................. 26 Table 8 Live weights of broilers sold during 2006 to 2010 ......................................................................... 26

Table 9 components of the poultry industry .............................................................................................. 27 Table 10 Porters Five Forces Analysis of the Poultry Analysis of Trinidad & Tobago ................................ 29

ABSTRACT
The purpose of this study is to understand the operation and identify the market structure of the Poultry Industry of Trinidad and Tobago. This report considers the competiveness, the threat of substitutes and new entrants, supplier and buyer power within the industry. This study also considers the concentration of the industry and the types of products available. The results of this analysis show the industry confirms to the factors of an Oligopoly.

INTRODUCTION
Thefreedictionary.com defines poultry as domesticated birds kept by humans for the purpose of producing eggs, meat, and/or feathers. Birds that are killed for their meats are also referred to as poultry. Poultry meat is rich in proteins and is a good source of phosphorus and other minerals, and of B-complex vitamins. It is a healthier alternative to beef and pork because of a lower fat content and has a higher proportion of unsaturated fatty acids than saturated fatty acids. Poultry meat comprises of: Chickens (87%) Turkeys (6.7%) Ducks (4%) Geese, pigeons, quails, pheasants, ostriches and emus (2.7%)

The top five poultry producers are: United States China Brasil Mexico India Poultry accounts for 30% of meat produced worldwide, second only to pork 38%. The 2011 global forecast for poultry estimates a grow rate of 2% and output of 100 million tones. The increasing popularity of poultry can be attributed to: value/price compared with other foods; good nutritional profile/low in fat;
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convenience/ease of preparation; versatility; well suited for quick-service and casual dining menus.
Source: Agribusiness Handbook, poultry, meat and eggs FAO, 2010

The poultry industry in Trinidad and Tobago plays in important in the agriculture sector. The industry highlights are: 60 % Agriculture GDP Sales TT$ 1.3 billion (2010) Export TT$ 10 million Value added products TT$ 250 million Employment approximately 50,000 persons Linked to

agricultural sector via feed suppliers, garden shops service sector via restaurants, supermarkets the manufacturing sector via plastics, packaging, labelling

Over 500 farmers 4 hatcheries 5 feed plants 4 primary processing plants 2 further processing plants Over 3000 entrepreneurs. 2 % increase in the number of poultry farms (2010 2011) but with a decrease in capacity of 11 %. (table 5 Appendix 1, figures 1 to 4)

NUMBER OF FARMS IN?TRINIDAD & TOBAGO

600 500 400 300 200 100 0 Small - less than 10 000 Medium - 10 000 - 49 999 Large - 50 000 and over TOTAL

556

546

239 233

274 266

January 2011 Number January 2010 Number

43 47

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 1 Number of broilers farms in Trinidad and Tobago

CAPACITY OF BROILER FARMS IN TRINIDAD & TOBAGO

11235,672
12000,000 10000,000 8000,000 6000,000 4000,000 2000,000 0 Small - less Medium - 10 Large - 50 than 10 000 000 - 49 999 000 and over TOTAL

10049,366 5618,397 5431,971 1318,436 1375,949 4298,839

January 2011 Capacity

3241,446

January 2010 Capacity

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 2 Capacity of broilers farms in Trinidad and Tobago

Difference in Number of farms from 2010 to ? 2011

12 10 8 6 4 2 0 (2) (4) (6) Small - less than 10 Medium - 10 000 - Large - 50 000 and 000 49 999 over TOTAL Difference Number

10 8 6

(4)

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 3 Difference in the number of broilers farms from 2010 to 2011

Difference in Capacity of farms from 2010 to 2011

200,000 0 (200,000) (400,000) (600,000) (800,000) (1000,000) (1200,000) (1400,000) Small - less than Medium - 10 000 Large - 50 000 10 000 - 49 999 and over (186,426) TOTAL

57,513

Difference Capacity

(1057,393) (1186,306)

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 4 Difference in the capacity of broilers farms from 2010 to 2011

The price of chicken at groceries and supermarkets has seen many fluctuations from May 2010 to December 2011 and shows a 15.62 % increase over the period. However, the price of live chicken has decreased by 7.75 % over the same period (figure 5, table 6 Appendix 2).
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AVERAGE WEEKLY CHICKEN PRICES

TT$16.00 TT$14.00 TT$12.00 TT$10.00 TT$ TT$8.00 TT$6.00 TT$4.00 TT$2.00 TT$0.00 May-10 Nov-10 Aug-10 Dec-11 Feb-11 Sep-11 Apr-12 Jan-10 Jun-11 TT$6.84 TT$5.24 TT$11.79 TT$13.18 TT$13.40 PLUCK SHOP PRICES ($ / lb) LIVE WEIGHT GROCERIES AND SUPERMARKETS PRICES ($ / lb) Linear (PLUCK SHOP PRICES ($ / lb) LIVE WEIGHT) Linear (GROCERIES AND SUPERMARKETS PRICES ($ / lb))

Month-Year Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 5 Average weekly chicken prices

LITERATURE REVIEW Industry Analysis

Businessdictionary.com defines a market analysis as a market assessment tool designed to provide a business with an idea of the complexity of a particular industry. It analyses the effects of an industrys profitability, economic and market factors, the performance of competitors, and estimates the industrys future prospects.

Porters Five Forces

Porter's Five Forces is a simple but powerful tool used to analyse industry attractiveness. It provides insights into current market position and provides opportunities to identify and maximise situations of strength, correct weaknesses and minimises mistakes as well as identify potentially profitable products and services. Porters five forces suggest five factors that should be analysed to determine competitive power = in an industry. These are: Supplier power Buyer power Competitive rivalry Threat of new entrants Threat of substitutes

Competitive Rivalry
Competition is integral to the success of many market structures and is determined by analysing: Concentration ratio Quickmba.com defines concentration ratio as the percentage of market share owned by the largest m firms in an industry, where m is a specified number of firms, often

four. It illustrates the market control of an industrys four largest or eight largest firms. Its calculated by adding their market share, CR4 or CR8.

CONCENTRATION No concentration Total concentration Low concentration Medium concentration High concentration

% 0.00 % 100.00 % 0 50 % 50 80 % 80 100 %

POSSIBLE MARKET STRUCTURE Perfect competition, Monopolistic competition Monoploy Perfect and Monopolistic competition, Oligopoly Oligopoly Oligopoly, Monopoly

Table 1 Market structure and concentration Ratio (AmosWEB 2000-2012)

Product differentiation involves differentiating from competitors' products as well as a firm's own product offerings (price, quality, service, benefits, etc.) for intended customers
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Exit barriers cost related obstacles that prevent a company from exiting a market. Growth rate - The amount of increase a particular variable has acquired within a specified period of time. Rivalry is higher in markets characterised by slow growth and weaker in markets with faster growth.

Threats to new entrants

Potential Threat of New Entrants is influenced by: Entry barriers circumstances particular to a given industry that create disadvantages for new competitors attempting to enter the market (government regulations, economic factors, marketing conditions, capital requirements, brand loyalty). Low entry barriers represent high attractive and high entry barriers low attractiveness

Pool of entry candidates The number of persons or firms that possesses the resources necessary to enter the industry

Power of suppliers
This considers the strength of supplier-seller relationships within the industry. Supplier bargaining power is determined by: Product Availability product is readily available from many suppliers at the going market price. Switching costs - Degree of ease associated with switching from one supplier to another or to switch to attractive substitute inputs. High switching costs signal strong supplier bargaining power. Low switching costs signal weak bargaining power. Degree of pricing power - Addresses suppliers of items considered to be in short supply. Supplier bargaining power decreases with high availability and increases with low availability.
2

Backward integration - Focuses on whether it makes good economic sense for industry members to self-manufacture items they have been buying from suppliers. Suppliers

specializing in the high volume production of a component at a lower cost, means industry members could achieve via self-manufacturing.

Threat of substitutes
This affects the competitive environment of industry firms and influences their ability to achieve profitability. The availability of substitutes threatens the profitability of an industry. Lack of close substitutes makes an industry less competitive and increases profit potential for the firms. Relative price performance of substitute - Greater relative value of the substitutes, limits the industry profit potential

Buyer switching costs - High switching costs deter switching to substitutes, whilst low switching costs make substitutes more attractive. Typical switching costs include the time and convenience, costs of additional equipment, time and cost in testing, quality and reliability of the substitute, psychological costs of severing old supplier relationships and establishing new ones. Perceived level of product differentiation - Availability of a variety of differentiated products increases the attractiveness of buyers and reduces the threat of substitutes. The availability of substitutes - When greater substitute products are available, the demand is more elastic

Market structure
The characteristics of a market, includes the number, relative strengths of buyers and sellers, degree of collusion, competition levels of firms, extent of product differentiation, and ease of
2

entry into and exit out of the market The market structure refers to the different characteristics such as size, number of providers, market share, purchasing behaviour, and growth forecast. Several market structures exist: Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly. Refer to the table below

Seller Market Entry Structure Barriers Perfect No Competition Many Number Seller

Buyer Buyers Entry Number Barriers

Product

CR4

HHI

Homogeneous 0 50 % < 1000 No Many

Monopolistic No competition Many No Many

Differentiated 0 50 % < 1000

Homogeneous / 40 100 > 1000 Oligopoly Yes Few No Many Differentiated % Oligopsony No Many Yes Few Homogeneous Unique Monopoly Yes One No Many % Monopsony No Many Yes One Differentiated 80 100 10000

Table 2 quick reference to basic market structures (WebFinance 2012)

Herfindahl-Hirschman Index (HHI) Economics.about.com defines HHI as a way of measuring the concentration of market share held by particular suppliers in a market. HHI is the
2

sum of the square of the market share of the firms competing in the industry. Its value can be as low as 0 and as high as 10000. The HHI value for competitive markets is below 1000; between 1000 1800 represents a moderately concentrated market and above 1800 represents a concentrated market.

ANALYSIS / DISCUSSION
The Poultry Association of Trinidad and Tobago valued the 2010 sales of broiler meat locally at TT$1,300m with exports totalling TT$10m. The Food and Agriculture Organization (FAO) reported in November 2005, that poultry represented 60% of agricultures contribution to gross domestic product (GDP). This suggests that this is a highly profitable industry with newcomers expecting to earn attractive profits.

Arawak and Company Ltd and Warner Grain Mills Limited indicated that potential entrants require a high start-up capital of approximately TT$2b which reduces the threat of potential entrants into the industry. Government regulation is a barrier to entry in the poultry industry as Environmental Management Authority, clearance is required before the construction of broiler pens and Public Health approval is required before actual operations begin. Production processes and operations are not protected by regulations or patents, therefore no licences or permits are required to do business. The poultry industry is an open market and information on the production process is readily available, making it quite attractive for a new entrant. Inputs for the poultry industry are easily accessible. Two of larger firms have backward integrated in feed production. Corn and soya bean used in the production of feed are obtained on a commodity market at a fixed price set by the Chicago Board of Trade, while hatching eggs,
2

medication, vitamins etc. are obtained from several suppliers. This makes it easy for new competitors to enter the industry. Whilst the Muslim community prefers halaal chicken, it would seem that the majority of customers in the industry do not portray a significant level of brand loyalty as products are not unique, resulting in little or no costs of switch to another brand. Therefore a potential competitor has to spend very little to overcome customer loyalties and build its own clientele, making it a favourable industry to enter. Whether the industrys entry barriers are considered high or low depends on the resources and competencies possessed by the potential entrant. That is, if the company has sizable financial resources and proven competitive capabilities they may be able to combat the industrys entry

barriers rather easily thus making their threat greater. However, if the company does not have access to sizable financial resources, their threat is greatly reduced to existing firms.

The market has various firms and so the retailer is able to choose from many producers. All producers provide basically identical products and so the bargaining power of Buyers would be substantial given the presence of competitors. Four firms have the majority of the market share and the price is set by the demand and supply in the market. Arawak sells 40% of their product in Supermarkets and 30% in the Food Services sector. They consider their partnerships with their Prestige Buyers to be a competitive advantage. Similarly, WGM sells 30% of their produce to restaurants and supermarkets. Some large retailers have bargaining power based on being Prestige Buyers. WGM has buyers
2

such as PriceSmart, Tru Valu, Movietowne and Foodbasket. Arawak has buyers such as Hi Lo, Mc. Donalds and Prestige Holdings. The substantial value of these buyers purchases contribute to a large share of income for these producers which increases their power and has negotiated product specifications, such as pre-ready chicken, special cuts, seasoned chicken, specified size and weight, as well as best by date. The companies in the local poultry industry spend less than 5% of their revenue on advertising and are less focused on innovation. The local industry consists of four major firms of different sizes. These firms are not aggressive in their pursuit of market share. The level of differentiation in the poultry industry is fairly low. The top four firms can easily interchange most of their products with very little consequences.

The industry has experienced slow steady growth from 2006 to 2010. The number of broilers sold has increased by an average of 2.93 % per year (shown in figure 6 and table 7 Appendix 3) with a corresponding increase in price of 4.08 % per year (shown in table 8 Appendix 4 and figure 7) over the same period. This low growth rate can serve to increase competition within the industry.

NUMBER OF BROILERS SOLD DURING 2006 TO 2010

39000 Number / 000 Birds 38000 37000 36000 35000 34000 33000 32000 31000 2005

y = 1033.9x - 2E+06 R = 0.9173

38000

35499 35664 32652 31918

2

SALES Linear (SALES)

33140

2006

2007

2008

2009 Year

2010

2011

2012

2013

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 6 Number of broilers sold during 2006 to 2010

LIVEWEIGHT OF BROILERS SOLD DURING 2006 2010

75000 Weight / 000 Kg 70000 65000 60000 55000 50000 2005

72000 69174 63261 63642 56106

y = 2421.3x - 5E+06 R = 0.6512
2006 2007 2008 2009 Year 2010 2011 2012 2013

65256
SALES Linear (SALES)

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Figure 7 Live weight of broilers sold during 2006 to 2010

In the Poultry Industry two of the top four firms are fully integrated and are not directly influenced by suppliers. Inputs to the poultry production process demonstrate low levels of product differentiation allowing firms to easily switch amongst suppliers. Also, inputs are not in short supply which weakens suppliers pricing ability and bargaining leverage. It can be concluded that bargaining power of suppliers is weak because inputs are readily available, switching costs are low; industry members are a threat to integrate backwards into the business of suppliers and self-manufacture their own inputs.

Locally produced poultry is the least expensive option in the animal protein market with the prices of pork, goat, lamb, beef, imported meats and seafood ranging from 1.5 to 4.5 times the price of chicken.
2

Substitute products are readily available at supermarkets or pluck shops; therefore, consumers spend very little time and incur minimal inconvenience to switch to a substitute product. Restaurants and groceries include a range of meat options and dishes on their menus and shelves which provide consumers with a wide range of choice. The consumers tastes, habits, demographics and income determine which product is consumed. The diverse and multicultural background of Trinidad and Tobago, results in a seasonal demand for poultry. During seasons and religious festivals, such as Lent, Divali and Christmas, poultry in some instances is abstained from, with consumers preferences redirected to other meats or seafood. The overall threat of substitute products was assessed as low based on mainly the relative priceperformance of poultry when compared to other substitute products, and the increasing level of

product differentiation

since price was considered to be the main determinant of industry

sustainability. The completed Porters Five Forces Analysis is shown in Apendix 5 and 6.

Market Structure
Seller Market Entry Structure Barriers Number Barriers Seller Entry Number Buyer Buyers Product CR4 HHI

Homogeneous OLIGOPOLY YES FEW NO MANY Differentiated Homogeneous POULTRY YES FEW NO MANY Differentiated
Table 3 Poultry Industry compared to Oligopoly.

/ 40 100 % > 1000

/ 85.00 %

2766.00

2 Seller Entry Barrier, seller numbers, buyer entry barriers and buyer numbers are features of the

Oligopolistic structure that will be analysed. In an oligopoly market structure barriers to entry exist where EMA (Environmental Management Authority) must grant a Certificate of Environmental Clearance (CEC) for establishment of all Poultry and Animal Husbandry Production. Start-up capital can be considered yet another barrier where the requirement is approximately TT$2 billion if one wants to compete with the four larger firms.

The poultry industry has several sellers including pluck shops and small scale farmers; however Arawak, Warner Grains Mills (WGM), Nutrina and Mastermix account for approximately 85% of the overall market share. There are no barriers for entry into this industry by buyers as they are free to purchase from whom they deem more economical or by taste preference. The industry

has many buyers, some of which are; Pricesmart, True Value, Marios, Movietown, foodbasket, KFC, Mc Donalds, Japs, Pollo Tropical just to name a few.

In analysing the four firm concentration (CR4) ratio (Table 4 ) it was clear that Trinidad and Tobagos Poultry Industry has an oligopoly market structure as the four largest poultry firms combined holds more than 50% of the market share, together they hold approximately 85% market share.
Market TOP 4 FIRMS Arawak & Company LTD WGM Nutrina Farms Mastermix Farms Concentration Ratio, CR4 HHI Share / % 45.00 25.00 10.00 4.00 85.00 2766.00 Market Share ^2 2025.00 625.00 100.00
2

NOTE: The market share of Nutrina and Mastermix farms has been estimated based on their customer base.

16.00

Table 4 CR4 and HHI of Trinidad & Tobago Poultry Industry

Based on the analysis, Trinidad and Tobagos poultry industry can be classified as an Oligopoly market structure, as the market is dominated by four (4) companies that holds majority of the market share, being Arawak, WGM, Nutrina and Mastermix with Arawak holding majority share out of the four.

Prices in an oligopoly are usually lower than in a monopoly, but higher than it would be in a competitive market and also tends to remain stable because if one company lowers the price too much, then the others will do the same. The result lowers the profit margin for all the companies, but is great for the consumer. On the downside however output in this type of industry would be less than in a competitive market and more than in a monopoly. Research and development (or innovation), location, packaging, marketing can be considered competing forces among companies in an oligopoly. Major barriers such as economies of scale, access to technology, patents, and actions of the businesses keep companies from joining oligopolies. Barriers can also be imposed by the government, such as limiting the number of licenses that are issued.

CONCLUSION
The poultry industry in Trinidad and Tobago plays an important role in the agriculture sector. 0 The number of birds produced has grown at a rate of 2.93 % from 2006 to 2010 with a corresponding 4.08 % increase in the live weight of broilers resulting in over 65 million Kg of chicken sold in 2010. Firms trying to enter the industry have to overcome some entry barriers resulting in few sellers. Correspondingly, it is very easy for buyers to enter the market leading to a large number of buyers. The products in the industry are considered to be differentiated products. The concentration ratio of the top four firms is approximately 85 % with a Herfindahl-Hirschman Index of approximately 2500. These factors support our conclusion that the market structure is an Oligopoly. Firms in an Oligopoly can influence the price and quantity of a product in many ways. Two such ways are collusion (Cartel) or follow a kinked demand curve.

Figure 6 Kinked demand curve (Economicshelp n.d.)

The Kinked Demand Curve (Figure 6) maximises profits at Q1, P1 where MR=MC. Thus a change in MC, may not change the market price. Assumptions:
0

Firms are profit maximisers. Demand is price elastic for price increases. Demand is inelastic for price decreases

Figure 7 Demand curve for a collusive Oligopoly (Cartel) (Economicshelp n.d.)

Collusion in an Oligopoly leads to the formation of a Cartel. Once formed, firms will try to fix prices and determine quotas at the level that maximizes profits. The industry will set a quantity of QM (shown in figure 7) and a corresponding price of PM. The Quantity QM distributed between the firms in the industry.

BIBLIOGRAPHY
Abdolreza Abbassian, Paul Racionzer, Concepcin Calpe, Peter Thoenes, El Mamoun Amrouk, Nancy Morgan, Michael Griffin, Audun Lem,. Food Outlook, Global Market Analysis. June 2011. http://www.fao.org/docrep/014/al978e/al978e00.pdf (accessed 03 08, 2012). About.com, Economics. The H Index (The Herfindahl-Hirschman Index) . 2012. (accessed 03 18, 2012).

AmosWEB. Concentration ratios. 2000-2012. http://www.amosweb.com/cgibin/awb_nav.pl?s=wpd&c=dsp&k=concentration+ratios (accessed 03 17, 2012). Arthur A. Thompson, Jr., A. J. Strickland 111, John N. Gramble. Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases, 17/e. McGraw-Hill Higher Education, 2010. Barriers to exit. 2012. http://www.investopedia.com/terms/b/barriers-to-exit.asp#axzz1oxKLyWfn (accessed 03 12, 2012). Co., M. Hamel-Smith &. Environmental approval. 2009. http://www.trinidadlaw.com/home/general/content.aspx?CategoryID=19&SubCategoryID=63 (accessed 03 13, 2012). Division, Agricultural Planning. Average weekly prices of chicken. Poultry Bulletin, August 2011: 6. . Average weekly prices of chicken. Poultry Bulletin, July 2011: 6. . Average weekly prices of chicken. Poultry Bulletin, September 2011: 6. . Average weekly prices of chicken. Poultry Bulletin, October 2011: 6. . Average weekly prices of chicken. Poultry Bulletin, November 2011: 6.
. Average weekly prices of chicken. Poultry Bulletin, December 2011: 6.

Economicshelp. Oligopoly diagram. n.d. www.economicshelp.org/microessays/markets/oligopolydiagram.html (accessed 03 19, 2012). Fintonin. Market structure, Monolopy, Oligopoly, Monopolistic and Perfect Competition. 2011. http://fintowin.com/2011/07/market-structure-monopoly-oligopoly-monopolistic-and-perfectcompetition/ (accessed 03 18, 2012). inc, Farlex. poultry. 2012. http://encyclopedia2.thefreedictionary.com/poultry (accessed 03 12, 2012). inc, Webfinance. barriers to entry. 2012. http://www.investorwords.com/425/barriers_to_entry.html (accessed 03 17, 2012). Inc, Webfinance. Market structure. 2012. http://www.businessdictionary.com/definition/marketstructure.html#ixzz1pKFFlK3o (accessed 03 16, 2012). Industry analysis. 2012. http://www.businessdictionary.com/definition/industry-analysis.html (accessed 03 12, 2012). Inna Punda, Dmitry Prikhodko. Agribusiness Handbook, Poultry, Meats and Eggs. 2010. http://www.fao.org/docrep/012/al175e/al175e.pdf (accessed 03 08, 2012).

Investpedia. Herfindahl-Hirschman Index - HHI. 2012. http://www.investopedia.com/terms/h/hhi.asp#axzz1pQseQY30 (accessed 03 18, 2112). Koopman, Philip. How to write an abstract. October 1997. http://www.ece.cmu.edu/~koopman/essays/abstract.html (accessed 03 18, 2012). Lovetoknow, Corp. Oligopoly Examples. 1996-2012. http://examples.yourdictionary.com/oligopolyexamples.html (accessed 03 16, 2012). Ltd, Bloombury Information. Market structure. 2011. http://www.qfinance.com/dictionary/marketstructure (accessed 03 15, 2012). Ltd, Bloomsbury Information. Market structure. 2009-2011. http://www.qfinance.com/dictionary/market-structure (accessed 03 16, 2012). ltd, planning & controls solutions. Industry analysis, what is industry analysis. 2012. http://businesscoaching.typepad.com/the_business_coaching_blo/2008/04/industryanalys.html (accessed 03 12, 2012). Madison, The writing center @ the University of Wisconsin -. Abstracts examples. n.d. http://writing.wisc.edu/Handbook/presentations_abstracts_examples.html (accessed 03 18, 2012). Office, Central Statistical. Poultry Bulletin, Vol.13, No.354. Poultry Bulletin, January 2011: 1-13. Philip K.Y Young, John J. McAuley. Industry Concentration. 2010. http://www.quickmba.com/econ/micro/indcon.shtml (accessed 03 12, 2012). Product differentiation. 2012. http://www.businessdictionary.com/definition/productdifferentiation.html (accessed 03 12, 2012). Tobago, Poultry Association of Trinidad and. The Poultry Industry, A national Asset Worth Defending. Port of Spain, 2011. tutor2U. Kinked demand curve under Oligopoly. n.d. http://tutor2u.net/economics/content/topics/monopoly/kinked_demand.htm (accessed 03 12, 2012). Ulc, Investopedia. Oilgopoly. 2012. http://www.investopedia.com/terms/o/oligopoly.asp#axzz1pND9KroW (accessed 03 13, 2012). WebFinance, Inc. Market structure. 2012. http://www.businessdictionary.com/definition/marketstructure.html#ixzz1pKFFlK3o (accessed 03 16, 2012).

APPENDICES
Appendix 1 January 2011 SIZE OF FARM (square Difference Difference feet) Number Small - less than 10 000 Medium - 10 000 - 49 999 Large - 50 000 and over 239 274 43 Capacity 1375,949 5431,971 3241,446 Number 233 266 47 Capacity 1318,436 5618,397 4298,839 Number 6 8 (4) Capacity 57,513 (186,426) (1057,393) January 2010

TOTAL

556

10049,366 546 2%

11235,672 10 -11%

(1186,306)

Change in the number of farms

Change in capacity

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Table 5 Numbers of broilers farms in Trinidad and Tobago

Appendix 2 PLUCK SHOP GROCERIES AND PRICES ($ / lb) SUPERMARKETS MONTH May-10 Jun-10 Jul-10 Aug-10 LIVE WEIGHT TT$5.68 TT$6.84 TT$5.49 TT$5.82 PRICES ($ / lb) TT$11.59 TT$11.98 TT$12.61 TT$13.18

Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

TT$5.86 TT$5.92 TT$5.91 TT$6.00

TT$12.72 TT$11.79 TT$12.70 TT$13.17

TT$5.42 TT$5.49 TT$5.56 TT$5.46 TT$5.56 TT$5.56 TT$5.12 TT$5.24

TT$11.81 TT$13.34 TT$11.79 TT$11.79

TT$13.15 TT$13.00 TT$12.68 TT$13.40

CHANGE -7.75%

15.62%

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Table 6 Average weekly price of chicken Appendix 3 000 Birds WHOLESALE PERIOD SALES TOTAL / PROCESSORS CONTRACTORS NONCONTRACTOR TOTAL LIVE AND RETAIL KILLED

DRESSED 2006 2007 2008 2009 2010 31918 32652 33140 35499 35664 31888 32566 33061 35462 35647 2.93% 29267 29478 27643 28589 26758 2621 3090 5418 6873 8890 30 86 79 37 17 16 45 25 7 4 14 41 54 30 13

Growth Rate

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Table 7 Numbers of broilers sold during 2006 to 2010

Appendix 4 000 Kg WHOLESALE RETAIL KILLED PERIOD SALES TOTAL / PROCESSORS DRESSED 2006 2007 2008 2009 2010 56106 63261 63642 69174 65256 56016 63134 63449 69104 65214 4.08% 51629 56888 61797 54516 47668 4387 6246 11652 14588 17547 90 127 193 70 42 54 55 40 8 7 36 72 153 62 35 CONTRACTORS

NONCONTRACTOR TOTAL

LIVE

AND

Growth Rate

Source: Central Statistical Office, Poultry Bulletin, Vol.13, No.354, January, 2011.

Table 8 Live weights of broilers sold during 2006 to 2010

Appendix 5

Inputs
Feed (wheat or corn) Baby Chicks (Hatcheries)

Processing of Poultry
Equipment/Machinery Skill

Outputs
Live poultry Packaged meats Distribution to

Vitamins

Expertise retailers/consumers

Hormones Labour Vaccines

Packaging Live Storage/Pens Cold Storage Quality Assurance Inspection and Testing

Processed meats

Table 9 components of the poultry industry

?

Appendix 6

Exit costs are relatively low High capital investment Industry concentration is high Medium government regulations Fixed costs are relatively high EMA and Health certificates Industry growth is low Relatively easy access to inputs. Insignificant differences There is no significant protection via Switching costs are low patents. Low brand loyalty MEDIUM product THREAT OF NEW ENTRY Low level of brand loyalty

BUYER POWER SUPPLIER POWER LOW Small number of suppliers Differentiation of inputs is LOW insignificant Inputs are readily available Switching costs are low Possibility of backward THREAT OF SUBSTITUTION MODERATE LOW COMPETITIVE
RIVALRY

MODERATE LOW Buyer switching cost is low Many buyers of various sizes Customers could grow their own poultry for their own use. readily Product differentiation has medium significance Many substitutes are available but are more costly

Switching costs are low Substitutes available Many substitutes are available but are more costly are

integration is moderate

Table 10 Porters Five Forces Analysis of the Poultry Analysis of Trinidad & Tobago