Blood Bananas

Abstract Chiquita Brands International and its leaders learned a very hard lesson nigh paying mangle terrorist groups to protect their employees. Over the past 25 years, no place has been more doubtful for companies than Colombia, a artless that is fin whollyy beginning to emerge from the effects its Colombian banana subsidiaries had do security department payments to terrorist groups from 1997 through 2004. The Justice part began an investigation, center oning on the intention and conduct of Chiquita and somewhat of its officers in this cruel activity.Subsequently, Chiquita entered into a supplication agreement that gave them the dubious bank note of being the first major U. S. guild incessantly convicted of dealing with terrorists, and resulted in a fine of US$25 million and former(a) penalties. To make matters worse, the industry was facing pressure from increasing retailer buy power, major transmutes in consumer tastes and preferences, and Europes pain in the a ss of an hotshotrous tariff on companies that sourced bananas from Latin America.With this in mind, Fernando Aguirre, Chiquitas CEO since 2004, reflected on how the phoner had arrived at this point, and what had been done to correct the course so far. He faced major ch on the wholeenges to the confederations emulous position in this dynamic industry. What would it take to position the attach to on a more substantiative militant trajectory? Would this even be possible in this industry and in the stock mode Chiquita faced? Teaching The case provides a vehicle for analyzing strategical, 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 specie to ensure line of merchandise continuity and employee protection. Historic information tracks the evolution of the high society from its early focus on owning final commencetations ripening, i mporting, and distributing bananas sourcing, merchandise, and distribution, to downstream value-chain activities that were more profit subject, less nature-dependent, and less risky. The case emphasizes Chiquitas focus on risk avoidance, appeal control, and globalisation the factors that contributed to the payment of protection bullion 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 number one woods of industry integration and how Chiquita responded to terrorist threats and the consequences of the response. Detailed information in the case services the reader understand potential globalisation challenges and those inherent in managing outer threats and high visibility crises. The case fits well into MBA courses in industry and agonistic strategy, general wariness, operations management, business organization ethics, or crisi s management.Concepts from the case include emerging market risk that globalizing companies whitethorn 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 multiple other industries. Blood bananas Chiquita in Colombia byMary B. Teagarden,Andreas Schotter SourceThunderbird School of Global Management 16pages. result dateNov 11, 2010.Prod. TB0245-PDF-ENG Chiquita Brands International and its leaders learned a very hard lesson almost paying 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, Chiquita voluntarily revealed to the U. S. Justice 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 challenges to the companys competitive position in this dynamic industry. What would it take to position the company on a more dogmatic competitive trajectory? Would this even be possible in this industry and in the business temper 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 profitable, 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 protection money and Chiquitas failure to respond quickly and appropriately. The case discusses decisions made as Chiq uita 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 multiple other industries. ++++ Blood Banana Case Study they leave alone find another job or another way of earni ng their living, the cycle of life doesnt stop 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 opinion active its doers lives as their primary concern and didnt take the second choice, so the least amour is to think about their existence and to do whats in their opera hat interest.Last but not least, the fruit company if decided to leave leave alone encounter huge costs of abandon their present-day(prenominal) business and starting all over a extend to in another place, but paying one time huge cost is more effective than paying annually amount of money to the AUC for idol knows when plus they testament eat up their current profits and they usher out sell their company in Colombia and gain extra money that go out enable them to start again somewhere else. hey are a well-developed corporation, if they did a good strat egy with a well written plan they testament manage to start up over and maybe even rectify In conclusion, Chiquita was in a bad spatial relation, and as a normal corporation whose aim is to make profits they need to consider whats in their best interest and that is to execute 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 dramatic problem in the 90s with the AUC, a Colombian paramilitary organization that promoted violence act and considered to be terrorist, what happened was they inquired the fruit company to pay them specific amount of money monthly that was required for their security services as they claimed The situation was straightforward, either Chiquita pays for the terroristB lood BananasBackground Chiquita Brands International is one of the worlds largest banana producers that were founded in 1899. Founded as United Fruit Company, Chiquita has grown to be one of the top three companies in the banana business with a feature control of 60% market share. Chiquita had annual revenues of $4. 7 billion and operating plants intercontinental with its main business coming out of Colombia. In this case study, it itemises the story of the Chiquita business and how they faced many a(prenominal) problems in the past years. The main problem in this study is how Chiquita paid the AUC terrorist group a combined $1. million from 1997 to 2004 and then told the United States Justice Department about their dealings. After the criminal investigation and plea agreement, the smart CEO was faced with the decisions of a new direction for the company. Through this analysis I will help Fernando Aguirre come up with a feasible plan for Chiquita Brands International so that it can stick around to be a dominant business. Issues The key egression at hand with Chiquita Brands International is that after 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 trademark image is a very important concept for businesses to live with to be able to survive in todays business world. The CEO, Fernando Aguirre, did not know how to bring the company to a time-honored exemplification and leave the past behind. The company now needs to learn how to move forward with their company to change the perceptions of their audience and still be a leading banana producer oecumenic. Another key issue that Fernando must deal with is the reality of the issue that past, was Chiquitas past executive group guilty or not guilty of the crime that they plead for.In order for the company to move forward, they would yield to take a location on the issue and clearly state whether they in tentionally or forcefully made the payments to the AUC. strategic Analysis There are a couple of liaisons the company should formula 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. Mission and vision statement Competitive strategy integrated strategy Implementation of new policies and management Internal and performance analysis Concise strategic decisions Mission and Vision Statement The company should look into its mission and vision statement so that its audience can know that the company is changing in a positive way. A mission and vision statements purpose is to define the companys purpose, objectives, and value to the audience. It is important for the company to now implement CSR Responsibility, environmental sustainability, and SMART goals. With the carryi ng 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 easily move forward from their negative image to a more claimable one. Competitive dodge Because of their fallen reputation, Chiquita must now look at its stance compared to its competitors to see how they are now divergence to position themselves. Now that companies have seen them fall, they most certainly have taken returns 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 whether they should focus on a Resource Based Model or an I/O Model. I think Chiquita should focus on the I/O Model so that they can look at their external environment and gain a sustainable competitive advantage again. Th e I/O Model will shape the company and use the five forces to identify the attractiveness of the industry its currently in so that it can seek out an advantageous position to take again while reshaping its image. Corporate StrategyChiquita must look at their corporate strategy to snap 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 Government 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 customer needs, global customers and market convey in order to reroute their companys image.In the government drivers, Chiquita will need to analyze its common marketing regulations, unrestrictive 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 whatever needed possible to be a reputable company again. Chiquita also has to look at their multi-business firms in its corporate strategy. They must manage their individual businesses to forge a new business strategy and monitor and control their business performance with the new strategy.They can incorporate portfolio planning models to evaluate 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 strong management group. The new policies can be hypothecate in their new business strategy as well as can be incorporated in their new mission and vision statement.They also should implement a new management team that is headphone and strong with following the new rules an d 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 internal 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. This 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 rest in the marketplace.A bet ter performance will create a stronger stance for the company. Concise strategic decisions With the implementation of the concepts state above, Chiquita should be able to be a more positive and reputable company. It should be well-to-do 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 Chiquitas actions in Colombia that ultimately let to their conviction was their top management team decision-making biases and their values and ethics. Chiquitas top management team wasnt making decisions in unison and you could tell this by the v arious executives either quitting or retiring. The guilt from the different stances each executive took made them at long last leave the company because they had dug 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 neer had to revamp 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 position themselves in the position to pay the AUC which in turn led to their conviction.With a sound team with sound goals, Chiquita will always 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 legality 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 experience are companies that were involved in similar circumstances 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 s tated that the law was cracking down and getting harder on this crime. Companies that are doing business in lesser developed economies should constrain 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 dream up 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 business standards and strategies in place to successfully pop off 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.