1. What is SANParks/ Kruger National Park’s objective and vision? Is selling rhino consistent with their objective and vision?
If not, then what should it be? The objective and vision of Kruger National Parks is to create a safe haven for black and white rhinos to avoid extinction as well as keeping the park running for the hundreds of species of South African animals and plant life that is found in Kruger National Park. They also wanted to be able continue to capture game to add to the parks wildlife. SANParks/Kruger National Park’s vision was also to create a breeding enclosure to help stop many soon to be extinct species of animals from dying out. Selling rhino is consistent with their objective and vision.
2. Who are the suppliers of rhino and what was the average selling price of a rhino?
In 2009, 500 rhinos were sold in South Africa. Kruger National Park claimed 252 of these transactions; the others were sold from provincial parks and the private sector (auctions). The average selling price of a white rhino is $30300.
3. What is different about selling to a safari company and a hunting company?
The difference between selling to a safari company and a hunting company is that a safari companies are far less extravagant with their customers than hunting companies. Selling to a safari company also meant it simulated a wildlife environment for tourist attractions as opposed to releasing the rhinos onto private grounds for the sole purpose of hunting.
4. How does a sale to a hunting and safari company affect the economy?
Selling to hunting and safari companies is extremely beneficial to the South African economy. In 2009, the revenue generated from rhino sales totalled $7,033,400. In 2009, South Africa generated an estimated $6.9 billion in revenues from tourist attraction; of that amount, hunting accounted for 70% or about $4.8 billion. The rhino capture business is very profitable because the cost of hunting rhino is so expensive. A typical rhino hunt could cost $82,400 per hunter but varies on the safari company.
5. What are the driving forces behind poaching?
The driving force behind poaching is profit. The sale of rhino horn has great profitability and chance for creating wealth. By the sale of rhino horn being so profitable it has made poaching a large problem. The lack of regard that poaching is illegal seems outweighed by the profit for poachers. Emerging markets such as China & India fuel demand for rhino horns. In 2009, rhino horns sold on the black market for $3,600 per pound. In 2010, the cost increase to $7,200 per pound.
6. How would you reduce poaching?
The only way to eliminate poaching is to eliminate the market; in the meantime Kruger can make a better effort at tracking rhino once they leave the park with RFID chips & better tracking of sold rhinos. Also to reduce poaching, imposing a long jail sentence, such as 15- 20 years in prison, plus a fine of at least $500,000 should help.
7. How would you reduce poaching if a rhino’s horn could be cut and regrown in six years?
If a rhino’s horn could be cut and regrown in six years, I would allow for the rhinos’ horns to trade, by creating a business of harvesting and selling rhino horns on a legal market where it would be regulated and taxed.
8. Construct a five forces model for the rhino sales industry. What competitive threats are associated with the rival sellers, suppliers, buyers, substitutes, and new entrants?
The analysis showed that KNP has an advantage in most areas of the industry and can focus their strategy on dominating the industry and increasing revenues.
•Turning negative situation into positive using natural business advantages
•Focus on increasing tourist visitation to park and rhino horn sales
•Work to create new “legal” industry for rhino horns and work with government to regulate
•Develop better regulations for rhino sales, tracking sold rhino, and enforcing federal laws about hunting
•Look to establish partnerships with other organizations, esp. in Asia to spread awareness
•Continue into research development and park progression