Shrimp Farming in Ecuador

The primary decision maker operated an extensive shrimp farming business in Ecuador. The shrimp value chain consisted of many activities that culminated in the preparation of a wide variety of frozen appetizers and dinners. In order to increase profitability, the company faced the challenges of moving up the value chain. Meanwhile, global consumption of shrimp value-added products was increasing rapidly. Foreign food processors and retailers had an interest in guaranteeing supply by integrating backwards into the shrimp farming business. A joint venture might offer benefits to both the company and a foreign corporation. The case raises issues of concern from the perspective of both potential partners. Ecuador had just emerged from a political revolution; interest rates and foreign exchange rates were unstable; financial institutions in Ecuador were charging extremely high interest rates; labour unrest might result in various kinds of work stoppages. In such a rapidly changing environment of business, how should the company plan for its economic future?