Blood Bananas

Abstract Chiquita Brands worldwide and its leaders learned a actually(prenominal) hard lesson about nonrecreational off terrorist groups to protect their employees. Over the ultimo 25 years, no abode has been to a greater extent perilous for companies than Colombia, a region that is finally beginning to supply from the effects its Colombian banana tree subsidiaries had make protection yieldments to terrorist groups from 1997 by 2004. The judge di pile began an investigation, focusing on the office staff and conduct of Chiquita and virtually of its officers in this criminal activity.Subsequently, Chiquita entered into a plea organisation that gave them the dubious distinction of macrocosm the first major U. S. attach to perpetually convicted of dealing with terrorists, and resulted in a fine of US$25 ace thousand million and other penalties. To make matters worse, the manufacture was facing pressure from increasing retail merchant purchasing power, major vary s in consumer tastes and preferences, and Europes imposition of an hard tariff on companies that sourced bananas from Latin America.With this in mind, Fernando Aguirre, Chiquitas chief operating officer since 2004, reflected on how the turn back party had arrived at this point, and what had been through to correct the course so far. He faced major challenges to the companys war equal position in this dynamic intentness. What would it live with to position the company on a more validatory competitive trajectory? Would this even be possible in this industry and in the ancestry climate Chiquita faced? Teaching The grapheme tins a vehicle for analyzing strategical, contextual, and ethical challenges underlying Chiquitas presence in Colombia, a primary global source for bananas.The field of study highlights the trade-offs that Chiquita made term stipendiary protection money to ensure contrast continuity and employee protection. historical cultivation tracks the evoluti on of the company from its early focus on owning plantations maturement, importing, and distri onlying bananas sourcing, marketing, and distribution, to downriver value-chain activities that were more profit sufficient, less nature-dependent, and less risky. The chemise emphasizes Chiquitas focus on risk avoidance, court in corporeal, and globalization the factors that contributed to the payment of protection money and Chiquitas failure to respond cursorily and appropriately.The lawsuit discusses conclusivenesss made as Chiquita grew from a small firm to produce an industry giant innovation, and continuous avail as device drivers of industry desegregation and how Chiquita responded to terrorist threats and the consequences of the response. Detailed in variateation in the case helps the reader understand dominance globalization challenges and those inherent in managing impertinent threats and high visibility crises. The case fits salubrious into MBA courses in industry a nd competitive strategy, general management, operations management, business ethics, or crisis management.Concepts from the case include emergent market risk that globalizing companies may encounter implications of administrative heritage for organisational structure and parley flows wakeless challenges of global coordination and control and strategic communication role of the leader in a crisis. These concepts atomic number 18 applicable in multiple other industries. phone line Bananas Chiquita in Colombia byMary B. Teagarden,Andreas Schotter fountainThunderbird School of Global Management 16pages. Publication dateNov 11, 2010.Prod. TB0245-PDF-ENG Chiquita Brands International and its leaders learned a very hard lesson about striveful off terrorist groups to protect their employees. Over the past 25 years, no place has been more perilous for companies than Colombia, a country that is finally beginning to emerge from the effects of civil war and narco-terrorism. In 2004, C hiquita voluntarily revealed to the U. S. evaluator Department that one of its Colombian banana subsidiaries had made protection payments to terrorist groups from 1997 through 2004.The Justice Department began an investigation, focusing on the role and conduct of Chiquita and some of its officers in this criminal activity. Subsequently, Chiquita entered into a plea agreement that gave them the dubious distinction of being the first major U. S. company ever convicted of dealing with terrorists, and resulted in a fine of US$25 million and other penalties. To make matters worse, the industry was facing pressure from increasing retailer purchasing power, major changes in consumer tastes and preferences, and Europes imposition of an onerous tariff on companies that sourced bananas from Latin America.With this in mind, Fernando Aguirre, Chiquitas CEO since 2004, reflected on how the company had arrived at this point, and what had been done to correct the course so far. He faced major cha llenges to the companys competitive position in this dynamic industry. What would it take to position the company on a more positive competitive trajectory? Would this even be possible in this industry and in the business climate Chiquita faced? Learning ObjectiveThe case provides a vehicle for analyzing strategic, contextual, and ethical challenges underlying Chiquitas presence in Colombia, a primary global source for bananas. The case highlights the trade-offs that Chiquita made while paying protection money to ensure business continuity and employee protection. Historic information tracks the evolution of the company from its early focus on owning plantations growing, importing, and distributing bananas sourcing, marketing, and distribution, to downstream value-chain activities that were more paying, less nature-dependent, and less risky.The case emphasizes Chiquitas focus on risk avoidance, cost control, and globalization the factors that contributed to the payment of protectio n money and Chiquitas failure to respond quickly and appropriately. The case discusses decisions made as Chiquita grew from a small firm to become an industry giant innovation, and continuous improvement as drivers of industry consolidation and how Chiquita responded to terrorist threats and the consequences of the response. Detailed information in the case helps the reader understand potential globalization challenges and those inherent in managing external threats and high visibility crises.The case fits well into MBA courses in industry and competitive strategy, general management, operations management, business ethics, or crisis management. Concepts from the case include emerging market risk that globalizing companies may encounter implications of administrative heritage for organizational structure and communication flows fundamental challenges of global coordination and control and strategic communication role of the leader in a crisis. These concepts are applicable in multip le other industries. ++++ Blood Banana Case Study they entrust find a nonher military control or another way of earning their living, the cycle of life doesnt surrender when you become unemployed and if you asked them would they prefer losing their jobs temporary or losing their lives forever? Am pretty sure they wont chose the second alternative. The company already thought about its workers lives as their primary lodge in and didnt take the second choice, so the least affair is to count on about their existence and to do whats in their best interest. utmost but not least, the fruit company if decided to leave allow for encounter huge costs of throw out their legitimate business and off pay back all over again in another place, but paying one conviction huge cost is more effective than paying yearbookly amount of money to the AUC for God k at presents when plus they volition stimulate their current net profit and they send word sell their company in Colombia and gain extra money that entrust enable them to start again somewhere else. hey are a well-developed corporation, if they did a good strategy with a well written plan they will manage to start up over and maybe even cleanse In conclusion, Chiquita was in a hazardous situation, and as a normal corporation whose aim is to make profits they need to consider whats in their best interest and that is to diverge tail the country. Costs will occur no matter what option they choose, but some were less harmful and less costly than others, its like what they say the best of the worst all the alternatives were bad but abandon the country is the best between them.Blood banana Chiquita Inc. was one of the largest and growing fruit company in America who faced a spectacular problem in the 90s with the AUC, a Colombian paramilitary organization organization that promoted violence act and considered to be terrorist, what happened was they inquired the fruit company to pay them specific amount o f money monthly that was required for their security go as they claimed The situation was straightforward, either Chiquita pays for the terroristBlood BananasBackground Chiquita Brands International is one of the worlds largest banana producers that were founded in 1899. Founded as United proceeds Company, Chiquita has grown to be one of the top three companies in the banana business with a combined control of 60% market share. Chiquita had annual revenues of $4. 7 billion and operating plants worldwide with its main business glide slope out of Colombia. In this case study, it tells the report of the Chiquita business and how they faced many an(prenominal) problems in the past years. The main problem in this study is how Chiquita nonrecreational the AUC terrorist group a combined $1. million from 1997 to 2004 and then told the United States Justice Department about their dealings. later the criminal investigation and plea agreement, the unfermented CEO was faced with the de cisions of a new direction for the company. Through this epitome I will help Fernando Aguirre come up with a viable plan for Chiquita Brands International so that it privy continue to be a dominant business. Issues The key issue at hand with Chiquita Brands International is that subsequently all of their problems, they had to face the decision with how the company would be position themselves positively.The companys image had been shot and brand image is a very serious concept for businesses to put up to be able to survive in todays business world. The CEO, Fernando Aguirre, did not make do how to bring the company to a reputable standard and leave the past behind. The company forthwith needs to learn how to touch off forward with their company to change the perceptions of their auditory modality and still be a leading banana producer worldwide. other key issue that Fernando moldiness deal with is the reality of the issue that past, was Chiquitas past executive team disc redited or not guilty of the crime that they plead for.In order for the company to move forward, they would boast to take a stance on the issue and clearly state whether they designedly or forcefully made the payments to the AUC. Strategic Analysis There are a couple of things the company should carriage at to reroute the stance of their company in a positive direction. With these concepts, the company should be able to form a new plan that will help the CEO know what to do in the decisions he makes for the future of the company. These concepts will be listed below. electric take down and vision didactics Competitive strategy Corporate strategy writ of execution of new policies and management Internal and performance abridgment Concise strategic decisions Mission and Vision Statement The company should visualise into its mission and vision statement so that its audience back end know that the company is ever-changing in a positive way. A mission and vision statements purpo se is to define the companys purpose, objectives, and value to the audience. It is important for the company to now implement CSR Responsibility, milieual sustainability, and SMART goals. With the carrying out of these tactics, Chiquitas audience will see that they are changing and know that they can earn the companys trust again.Each goal that the company defines in their new statements should be specific, measurable, achievable, realistic, and time-based. With SMART goals, Chiquita will be able to soft move forward from their negative image to a more pleasing one. Competitive Strategy Be take a shit of their fallen reputation, Chiquita must now look at its stance compared to its competitors to see how they are now going to position themselves. this instant that companies have seen them fall, they most certainly have taken advantage of some of Chiquitas audience who has turned away from the brand.The best thing for Chiquita to do is to look at their models and determine whethe r they should focus on a resourcefulness Based Model or an I/O Model. I weigh Chiquita should focus on the I/O Model so that they can look at their external environment and gain a sustainable competitive advantage again. The I/O Model will frame the company and use the five forces to identify the attractiveness of the industry its currently in so that it can seek out an discriminatory position to take again while reshaping its image. Corporate StrategyChiquita must look at their corporate strategy to go bad their global strategy and multi-business firms. Since Chiquita is a worldwide company, they must look at their globalization drivers. The globalization drivers are listed below. Market driver Cost driver Technology driver disposal driver Competition driver. Their main focus would be their market driver and their government driver. In the market drivers, Chiquita will need to analyze its node needs, global customers and market channels in order to reroute their companys ima ge.In the government drivers, Chiquita will need to analyze its common marketing regulations, nonrestrictive trade and investment policies and compatible technical standards so that their audience will know its stance on the past situations and see that they are doing any(prenominal) needed possible to be a reputable company again. Chiquita too has to look at their multi-business firms in its corporate strategy. They must manage their soul businesses to formulate a new business strategy and monitor and control their business performance with the new strategy.They can incorporate portfolio planning models to approximate their business performance and formulate business strategies to allocate resources properly. With the new analyzing of these concepts, Chiquita will have better coordination, control, and profitability for the firm. Implementation of new policies and management Chiquita must implement new policies for the company as well as a besotted management team. The new pol icies can be formulated in their new business strategy as well as can be incorporated in their new mission and vision statement.They to a fault should implement a new management team that is sound and strong with following the new rules and regulations that will be put in place. Chiquita must accept its mistakes and move forward with a new team so that it can make the right decisions for the better of the company. Internal and performance analysis Through this strategic analysis, Chiquita must analyze its intrinsic and performance. The best thing to look at through the internal analysis is the VRIN analysis framework.Even though the company should rely on the I/O Model, they should also look at their resources and capabilities because this is what will give the company its competitive advantage and set it aside from its competitors. Through the VRIN analysis, Chiquita will be able to continually analyze whether its producing valuable, rare, inimitable, and nonsubstitutable goods. T his will also help give the company a sustainable competitive advantage. The company should also analyze its performance through financial assessment and real actions. Through this, Chiquita will asses a better standing in the marketplace.A better performance will create a stronger stance for the company. Concise strategic decisions With the implementation of the concepts stated above, Chiquita should be able to be a more positive and reputable company. It should be easygoing for Fernando to implement these strategies and come up with concise decision. Concise strategic decisions will help the company have a stronger background to rely on and make their implementations work strategically. Arguments and Recommendations Above was listed how Fernando should implement various strategies and plans for the company.I will now recommend various decisions for the company in its past dealings with the AUC and how it should move forward from those decisions. I believe the root causes for Chiq uitas actions in Colombia that at last let to their conviction was their top management team decision-making biases and their set and ethics. Chiquitas top management team wasnt making decisions in concurrence and you could tell this by the various executives either quitting or retiring. The guilt from the variant stances each executive took made them eventually leave the company because they had take themselves as well as the company into the ground.I also believe the cause for Chiquita to get convicted was their values and ethics. I believe this because in the case, Chiquita tried to change their core values in 1999 to better the company. If they believed in strong values and ethics from the start, they would have never had to regenerate their core values. Chiquita shouldve taken charge from the start with their decision making styles and their values and ethics so that they would have never placed themselves in the position to pay the AUC which in turn led to their convicti on.With a sound team with sound goals, Chiquita will renouncelessly prosper internally. I believe Chiquita and its managers did have a choice in the AUC payments. Yes Chiquita was doing business in an unstable political environment but they should have taken a stance and fought for what they thought was right. The actions the manager partook in were not ethical principles and I believe they were looking out more so for themselves than the company as a whole. I believe Chiquita could have came up with a strategy that would have made both the company profitable and satisfy its stakeholders without paying the AUC.If Chiquita felt like it didnt have a choice, they should have involved the law enforcements well before they started the payments. If they would have done this, they would have never had to worry about the safety of its company or the terrorist groups in Colombia. Other companies that should be worried about Chiquitas incur are companies that were involved in similar circu mstances as Chiquita. In the case, it stated that Chiquita was the first company to get convicted for paying terrorist groups.If similar companies were doing the same, they should cease the payments and learn from Chiquitas mistakes because it stated that the law was cracking down and acquire harder on this crime. Companies that are doing business in lesser developed economies should keep the employees safety at heart but at the same time do business in ethical ways. The factors of the political and economic environment should also be in concern when doing business in these lesser developed economies so that they will make sound business decisions.This story changes my perspective about doing business abroad because it shows me that just because you have a competitive advantage and resources to make millions doesnt mean you have a safe environment to run your business in. It helps me understand that there is more to business than making money and that you have to have all of your b usiness standards and strategies in place to successfully operate a company abroad. The current CEO can implement the strategies I listed above in my strategic analysis to restore Chiquitas reputation and ensure future competitiveness.With the implementation of these strategies, Fernando can lead the company in the right direction and provide a stronger stance for the company. The main thing for the company to do is to revamp its mission and vision statement because this is the most important start for the company. After that, it will help formulate the companys competitive and corporate strategies that it must restructure. In these they will implement new policies and analyze their internal performance for the company. In the end, Chiquita should come up with concise strategic decision so that it can make the right plan for its company.