Primary Uncertainty in the Seafood Industry: An Exploratory Study of How Processing Firms Cope

Abstract

A key challenge to processing firms in the seafood industry is that they are exposed to a high degree of external uncertainty. Such uncertainty comes in several forms, but primary uncertainty due to more or less unpredictable changes in states of nature related to the supplies of raw materials, is particularly important. This paper explores how eight processing firms in the Norwegian seafood industry cope with primary uncertainty to secure timely and adequate supplies and compete effectively in their output markets. It was observed that different types of primary uncertainty are present, and that a wide range of different coping strategies exists. Different strategies are applied to cope with different types of uncertainties. Further, coping strategies are applied at the input, throughput, and output stages of firms' operations, indicating that supply uncertainty has a profound effect on processing firms' behavior.