Glofish Case Analysis

GloFish, LLC

Situation Analysis

GloFish, founded in 2001 by Alan Blake and Richard Crockett, is a company that sells genetically modified, tropical zebra fish (K&P, pg. 377). The zebra danio fish has been a controversial topic due to scientific alterations of injecting natural fluorescent protein genes that causes the fish to appear as if glowing. Although the company has had many obstacles to hurdle prior to its launch, GloFish now has the opportunity to increase revenue through their choice of distribution. Since freshwater ornamental fish market in the United States exceeds $700 million annually, GloFish has the opportunity to capture a larger portion and increase sales (K&P, pg. 384).

Problem Definition

Initially, Blake had estimated a profit in 2004 of $4,000,000 for GloFish (K&P, pg. 377). GloFish’s largest problem is that their actual revenue for 2004 was a mere $500,000 causing GloFish to operate at a loss of $120,000 (K&P, pg. 377). This problem is partly due to the fact that they are a new company, and they are paying 36% in royalties for licensing agreements (K&P, pg. 379). Not only is GloFish motivated to capture a larger portion of the $700 million freshwater ornamental fish market, but rumors of an Asian company entering the U.S. to sell a similar product creates a great sense of urgency (K&P, pg. 377). In addition to profit issues, GloFish also faces trouble from an ethical standpoint. If GloFish does not clear up all rumors of their product being environmentally unsafe, they could potentially lose clients, specifically those in California which is an important market for GloFish (K&P, pg. 380).

Options

There a few distribution options that have been presented that could allow GloFish to capture a larger market share and increase sales. GloFish’s first distribution option would be small, independent establishments considering they are the majority of retailers who sell freshwater ornamental fish (K&P, pg. 384)....