Red Lobster Case Study

2442 Words 10 Pages
Register to read the introduction… A possible advantage to this is that it would provide a better living environment for the divers. It is stated in the article that after the sacabuzos (middlemen), boat captains, and fish processors take their share of the money, what remains for the buzos is a mere $2 per pound of lobster fetched. Within a two week time period, this rate will amount to about $300. If the divers are trying to support families, $300 for two weeks is quite meager. By increasing the price that Red Lobster is willing to pay for wholesale lobster, the divers will benefit considerably due to a higher salary. Another advantage to a higher salary would mean that more individuals would be inclined to become divers, creating a higher turnout of lobster each day. However, disadvantages to this option would be that the net worth of the company would decline due to the increase in price that the company would have to pay for lobster. This in turn would create problems with the shareholders, since the value of the company would be decreasing. I would advise Gerry to not implement this option for a number of reasons. For instance, increasing the salary of the divers is not going to fix the decompression sickness that is affecting the divers—in fact, it may actually amplify the situation. With the incentive of a higher wage, divers may be further inclined to go on more dives, and in turn create additional deaths. Also, this option does not have any positive affect on the company. Red Lobster would be losing money, and would not be gaining anything in return. Therefore, Gerry should investigate one final option with which to choose …show more content…
There are, however, a few disadvantages to choosing this option. For example, the net worth of the company may decrease due to the cost of the project. This in turn may create shareholders to become upset, and may bring upon shareholder suits against the company and the officers. Another disadvantage would be that there would be fewer lobsters if the regulations were put into effect. Furthermore, there is the possibility that the implementation of this option would be taking away from the culture of the buzos. It is stated in the article that young buzos continue to sign up for dives because of a strong tradition of "machismo." The Miskitos (the individuals who reside on the coast) have a reputation for stubbornness, and many of the risky dives that are conducted by the buzos are done so as a rite of passage. By creating fewer dives for the buzos, this may interfere with their traditions, creating a dissatisfying situation. When noting this disadvantage, globalization comes to mind. According to a website pertaining to globalization, it is defined as the spread and connectedness of production, communication, and technologies across the world. The ‘spread' has involved the interlacing of economic and cultural activity.i Globalization on the Mosquito Coast will better protect the lives of the divers by providing improved equipment and more protection, but it may negatively affect the customs that they are so use to. However, after examining both the advantages and disadvantages of this option, I feel that this is the most favorable out of all of the options for Gerry Mullen to choose from. Therefore, I would advise him to implement this option. By deciding to go with this option, Gerry will truly be employing Red Lobster's slogan of "Share the Love." Not only will he be helping the divers on the Mosquito Coast, but he will also be satisfying his customers and shareholders by maintaining the low price of lobster and creating a positive reputation

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