Memo to Chiquita Brands International Essay

1748 Words Apr 9th, 2012 7 Pages
MEMO
To: Chiquita Brands International

Introduction: For the subject choosing a strategy to overcome effects of EU’s banana policy, I have gone through the whole issue of EU’s banana policy and its effects on the banana business of Latin America in general and Chiquita Brands International in particular. I have also analyzed the way the whole issue has been approached by the company and tried to formulate a plan that may prove successful for the company. Since the present problem is a serious nature threatening the existence of a big player in the banana market, I have tried to go back to history of the company of highly political nature of the international policy making in this trade. I have tried to understand the role of
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Protectionism in global banana market – Good or bad?
The present crisis being faced by the company seems to be a result of protectionism in the global banana market. Ideally there should be no restriction for free flow of goods and services but this is not true. There is hardly any field where restrictions are not present in trade as the nation/region imposing those restrictions wants to protect local economies from tough international competition. Banana industry is no exception to this general rule. The world is still in a transition phase as regards real integration of the world trade into an ideal single market. Undoubtedly the protectionism has played a spoil sport for big players in banana market but at the same time provided much needed support to developing nations especially ACP region that formed former colonies of Britain and France. The trade barriers proved successful for the less-efficient producers as they got protection against bigger players. Such a strategy can provide control to smaller entities in growing bigger and providing tough competition in the market.

Despite the protectionist policies of European region as regards banana trade the US companies and those from other parts of the world have made good money out of it. The trade has been quite profitable through all these years and has rather stopped this industry from becoming a home-ground for one or two big players only. The fact that this business needs a
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