Chiquita Banana Overview Essay

Chiquita Brands International, Inc. is one of the close merchandiseant international food market placeers and distri preciselyors of food harvest-times derived from banana tree tree trees, as well as different harvestings and healthy snack harvest-feasts. Chiquita banana revenues for around $3 billion dollars a yr and employs more than 21,000 people and operates in approximately 70 countries worldwide. Chiquita Banana to makeher with Dole, Del monte and Fyffes control about 80% of the global banana market. In 1993 the EU pissd the Common Organization of the Market in Bananas (COMB) to choose with the harsh competition between these companies. They would completelyow credit line free nark to the EU but athletic field to quotas to bananas from the Africas, Caribbean and Pacific, while bananas from Latin America were subject to an import tax of 176 Euros per ton and a quota of 2533 t. As an Ameri erect sum up with we realize decided to take reward of the un fermented treaty curb Latin Ameri outho use and ACP countries from exporting bananas to the EU. It leave alone non be an motiveless task be social movement we still sport to compete against europiuman banana manufacturing businesss, but we be an established comp any(prenominal) and we be determined to benefit from this casing and gain market sh be in the European center. PESTEL analysis for the European UnionPOLITICALThe European Union is composed of 28 phallus states.The EU has created a single market by standardizing laws within the get goingicle states.Some of the objectives of cr feeding this union is to create a expose flow on the circulation of goods, enceinte, people and services within the union. Once a good or service is accepted within the union it is protected from customs, taxes and import quotas as long as they re principal(prenominal) within the union.Free movement of capital is in plyed to allow investment of properties between countries, something t hat could help banana growers since they croupe look for more fertile land in neighboring countries.The fiscal policy is the Eurozone and is g overned by the European Central Bank.ECONOMICThe European Unions GDP is ranked as number one in the world accounting for $16.58 trillion dollars.Export goods account for $1.687 trillion, some of the main export partners of the European union are oUS 17.3%China 8.5%Switzerland 7.9%Russia 7.3%Turkey 4.5 %Food, drinks and tobacco account for 5.9%Import of goods account for $2.302 trillion dollars and the main import partners areChina 16.2%Russia 11.9%US 11.5%Switzerland 5.8%Nor fashion 5.6%Food, drinks and tobacco account for 5.2% of import goods.The service empyrean is the most important one in the EU making up 69% of the GDP followed by the manufacturing industry with 28.4% GDP and agriculture for and 2.3% of GDPThe agricultural sector is supported by subsidies from the EU and before long represents 40-50% of the EUs total spending.SOCIOC ULTURAL FACTORSThere is limited data on European childrens product ingestion, but the data shows that the modal(a) fruit intake is about 141 g per day. Fruit intake is highest in Austria and Portugal and is the lowest in Iceland and Spain.Girls and women run off more fruits and vegetables and boys and men do, there is no simple explanation to this but its believed to be beca affair women in customary are more concerned about their weight and keeping a slim fit figure.Children tend to eat less fruit as they age, but its the exact opposition with adults. Intake levels increase with age, perhaps because income and knowledge increases and one becomes more aware of the benefits of good eating habits. manpower once they are married comport an increase in fruit intake. Women seem to have an impact on their husbands fruit intake as well as the variety of fruits eaten. Women tend to cargo hold health-related issues more commonly than men so they tend to buy and constitute more fo od than men.Childrens fruit intake levels directly correlated with how much their parents consume. But pressure to eat fruit does not positively affect childrens intake, but it is enhanced when parents are good role-models and advocate them to eat fruits and vegetables.People with self-efficacy tendencies have a higher fruit intake in adults, overly people with a high self-esteem tend to eat more fruits and vegetables because they take their health into account. TECHNOLOGICALThe EU is accompaniment a project for pesticide free fruits and vegetables by removing the threat of fruit flies. component farmers come to customers demands for safe fruits while being purlieually assured. oThe project involve to use an insect attractant to draw insects and pathogens such as infectious micro-organisms, virus, fungus that cause diseases in fungus. oThis attractant will be applied in the form of an insect trap near plantations to take bugs away from plantations, this will be a long- co ncludinging and biodegradable baiting station. Europe is becoming more conscious about noteing a cleaner environment, the EU is committed to providing a better future for the next generations. So they specialize on clean energy, from turbines in Germany to solar panels in Spain, and countries across the EU are using inhering resources of sustainable energy bringing investment to businesses and citizens.LEGALWith the birth of the item-by-item European Market in 1993 the Common Market Organization for Bananas was perpetrate into effect (COMB). COMB is concerned on the importation, sale and distribution of bananas. A policy was clan in motion allowing EU suppliers to export duty free bananas to all EU states. Also quotas were set for African, Caribbean and Pacific countries (ACP) noble- forelanded import licenses for a fixed rate of volume of bananas, and limited imports through and through excessively high tariffs. oA quota of 857,000 hemorrhoid for duty free access from ACP cou ntries one-third fibers of licenses were issued in order to regulate this quota to ACP countries Third countries that were not considered in the quota are subject to a tariff of Ecu 850 per ton. In order to prevent any loss of income by EU banana producers a compensation of payments for 850,000 tons were granted in case the prices fell below the production be. environmentalFlat-free piss system chargers are common in some countries in Europe. This does not encourage efficient behavior to households and agriculture according to a plow from the European Environment Agency (EEA). The EEA is considering pissing pricing in the undermentioned countries Croatia, England and wales, France, Germany, Netherlands, Scotland, Serbia, Slovenia and Spain. In most countries, farmers are allowed to use as much pissing as they want for a flat rate. By charging the amount of water used in Europe it prognosticated to cut overcome on water used by agriculture for about 10 20 %. This will p ush farmers to not only cut down on their water utilization but to invest on better irrigation system as well as fixing water leaks. The general population in the European Union seem to support this motion to cut down water overuse, about 84% of the population agree with this principle.Marketing liquifyIn order to better penetrate the European market we have to better understand our own products, so a marketing immingle was created to see what we can offer to the market and this will help us to better oversee our operations in the European market. PRODUCTChiquita banana takes pride in their first class bananas. But banana consumption vary from country to country so they have other products to satiate the change in apiece countries demand. They always keep in mind the environment and consumers health, so they have products that meet these two qualifications, products such as ready do salads, fruit snacks. An independent survey was conducted about peoples preferences and attitude s about bananas, and the poll indicated that the taste of Chiquita bananas was better than competing brands and people preferred it 2 to 1 to the leading brand. The bananas by Chiquita banana are 100% natural approved and certified by the USDA which means that they adhere to the requirements and meet the organic standards of growing bananas.PRICEThese are the prices for bananas per metric ton for the last few months. Bananas prices vary depending on the location where they are being sold. In France the average price for a kg is about $2.00 dollars. In Spain is about $1.00 per kg. But these prices tend to fluctuate with the seasons as well, and some variables take go under to why this happens. One of the reasons is that bananas grow in tropical areas so they choose hot weather to grow, but its harder to maintain them fresh during summer. issueChiquita banana sells its products internationally to about 70 countries worldwide. The majority of the products grown come from South Amer ica and the Caribbean which are past sent to distribution centers. Europe is the largest consumer and importer of bananas in the world, so this would be the best place for the largest banana producer in the world to invest and tap into this gold mine. In the year 2011 people living in the European Union consumed an betoken of 5 million tons of bananas and about 4.6 million tons were imported. Europe would be the best market to try to penetrate and take market divide from. Sweden, UK, Denmark, Finland and Portugal are the main consumers of bananas in Europe (see Appendix A). These are the countries within the EU for Chiquita banana to penetrate first. PROMOTIONThe way that Chiquita banana promotes their product is very innovative. They have sticker contests and they encourage people to send drawings for likely logos for their stickers. But their latest promotion is endorsing the charismatic minion characters from the movie horrible Me, they have even worked on an app game avail able for apple and droid. The mention of this game is to run and get as many bananas as come-at-able without running into any obstacles. There is no record for the increase in sales of Chiquita bananas yet because the game is recent, but its safe to declare that this gamification strategy will work well for the alliance. Also, as a part of their promotion they attend school lunches, celebrate major anniversaries and sponsor Olympics. They use the slogan quite possibly, The Worlds Perfect Food cram AnalysisSTRENGTHSChiquita Banana is number one in the fruit market in the world and sells its products to more than 70 countries worldwide.The inspecter had a $3 billion dollar revenue last year.Its net income is about $405 million dollars.The company is committed to being socially responsibleA ten ago they implemented social accountability 8000 which has helped improve their practices to better go on out the community.SA 8000 provides standards based on national laws, internatio nal human rights norms and the conventions of the International travail Organization. Management system requirements ensure that these standards are consistently implemented over time, and independent audits and certification help measure progress and identify areas for improvement.WEAKNESSESThe company has not been able to reach out to consumers in Europe, they had a $2 million profit during the last quarter, better compared to the previews year where there was an $11 million loss. sales fell 2% from $793 million to $774 million in one year. There was an 18 an article was published of Chiquita secrets revealed by the enquirer, where the company had been accused of mistreating workers in Central America, polluting the environment and allowing cocaine to be brought to the US in its ships.OPPORTUNITIESWith the new regulations from 1993 the European market has opened for banana companies that do not belong to the ACP countries and Latin America. Our opportunities go glide by in hand with the highest consumers of bananas in the EU. According to appendix A, they are oSwedenUKDenmarkFinlandPortugalThese are the first countries that we mustiness try to focus our internationalisation efforts into, since they are the highest consumers of our product. Even with the new regulations by COMB Chiquita banana has no real competition from European banana growers, European countries are not optimal for banana growth. Chiquita banana can bring larger quantities at competing prices. THREATSSome of the threats come from competing companies like Dole, Del Monte and Fyffes.The analysis of this figure shows Chiquitas market share shrinking from 1966 to 1995 and then remaining constant at 25% market share. We can also observe that for the year 2007 Dole Company had a bigger market share thanChiquita. Chiquita has to be attentive of the existing competing brands but also the new incoming brands that are stealing market share from the company. Internationalization strategy an d ViabilityAs already stated before, the European Market is the biggest consumer and importer of bananas. Which is why we are interested in creating an internationalization strategy in order to compute which cities in the European market target more specifically. There is a map in appendix A portraying the European Countries and an estimate of banana consumption, we can see that the northern countries together with Portugal enjoy eating bananas the most. Then we can see a ranking list with the countries that consume the most bananas in Europe, with Sweden being on top of the list. Chiquita banana Co. gets their product from the countries with a yellow dot. Since these are countries that have hot and humid temperature, fair to middling for banana growth. This map shows us that that in order for the bananas to be shipped from this countries to the EU they have to be shipped in a boat that has to travel the Atlantic for about 6,000 miles. These bananas are stored and refrigerated. Thi s crossing of the Atlantic takes an average of 5 eld and the bananas are refrigerated to a temperature between 13.5 and 15 C carrel ripening.Even though flavor and consistency remain virtually intact, this pilgrimage shortens the shelf life to be 7-10 days. Portugal would be a strategic vizor for the companys internationalization strategy. A logistics platform could be set up in Porto, a northern city in Portugal, this way we can kill two birds with one rock. We re-fuel the ships and get them ready for their voyage to Sweden (our top priority in terms of distribution) and unload some containers to pass Portugals banana demand. Aside from Portugal the countries with the highest consumption of bananas per capita is in Northern Europe, so another logistic platform would be convenient as a final stop before the final destination in each country. Le Havre, France would be a convenient location since it is south of the UK and it is cheaper to have a distribution center there because the euro is not as steady as the sterling pound. Once we have our logistics platform set up in Le Havre we can make accommodations and agreements with companies and retailers that handle fruits and vegetables belonging to the countries that have the highest banana consumption. We would deliver to the following terminal or portsGothenburg, SwedenBrighton, UKSkagen, DenmarkFinland is a slender more inaccessible through the Baltic Sea, so we would ship Finlands required bananas to Gothenburg, Sweden as well. From Sweden we could work another logistic route to get to Finland by truck.Porto, PortugalLe Havre, FranceCHANCEIceland is Europes top producer of bananas with their world of the art greenhouse installations, even though they rely on their technology they have to constantly monitor their products and create the proper environment for the bananas. This is where Chiquita banana has an opportunity since they dont have to worry about creating the right conditions for banana gro wth, the company looks for a convenient location for banana growth and plants the fruit. This enables the company to worry solely on cropping and shipping. Another advantage that the company has over the biggest European banana producer is that, Chiquita banana can acquire bananas in massive quantities while Icelands producers have to create the environment to grow more bananas. This is unless the COMB sets a tighter quota.IncotermAn incoterm is a made up word composed of three words. in means international, co commerce and term means term. Incoterms are used to describe the type of relationship between purchaser and supplier and they type of contract they use to deliver and receive a product. POSSIBLE INCOTERMS FOR THE COMPANYAs a seller the most optimal incoterm for the company would be to agree with the buyer of working with Ex Works since the buyer would have to assume the exaltation costs and the risks of brining the goods to their stores. I believe this to be very one sided and not efficient, since in order to maximize profits a business deal has to be long-term. Sooner or later one of the competing brands could offer our buyers a better agreement and we would be out of business, so I would call this a lose-lose situation. Another option would be the exact opposite from Ex works where the seller mantains most of the obligations and expenses while there is token(prenominal) for the buyere. This would be a DDP, here the seller is responsible for delivering the goods to the named place in the country of the buyer, and pas all costs in bringing the goods to the destination including import duties and taxes. Seller is not responsible for unloading. this is also very one sided. My whimsy is that if we are going to have a long lasting relationship with our business partner we have to compromise, and here we would be taking all most of the bourden of the business deal. SolutionAs already stated before, in order to create a long lasting relationship with our business partners and maximize profits we have to compromize. Chiquita Banana is trying to gain marketshare in Europe, so the best thing we can do with our business partners is to share the transportation burden and costs. Deliverd at Terminal (DAT) incoterm would be the best possible solution for Chiquita and our buyers. We can promise to deliver the product fresh, safe and buy the farm to the following city ports Gothenburg, Brighton, Skagen, Porto and Le Havre. We can accept all costs and risks (except for import clearance costs) and from each terminal they can send the bananas to their single distribution centers or directly to the retailers. That is up to our business partners to decide. It is safe to consecrate that we are taking most of the costs, since it is expensive to cross the atlantic with ships and maintain the fruit at a certain temperature to keep it fresh. But in order to have our buyers support, we have to go the extra mile. This strategy at the same time w ill speed up the process of internationalization and market share gain for Chiquita Banana.Works CitedEuropean Union. Wikipedia. Wikimedia Foundation, 20 Oct. 2013. Web. 20 Oct. 2013 Economy of the European Union. Wikipedia. Wikimedia Foundation, 18Oct. 2013. Web. 20 Oct. 2013 Economy of the European Union. Wikipedia. Wikimedia Foundation, 18 Oct. 2013. Web. 20 Oct. 2013. Intelligent Approaches to Achieving Pesticide-free Produce. N.p., n.d. 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