Blood Bananas: Chiquita in Columbia Case Analysis

I. Problem Statement: With Chiquita’s bad reputation and the increase in

competitive banana business they are struggling to find a plan to get them back to the top
where they once were.
II. Alternatives: Chiquita can sell their farms in Latin American countries and grow
elsewhere to avoid the high taxes from Europe. Another option could be for Chiquita to
remain growing in Latin America, but find other retailers outside of Europe. Chiquita
could begin developing strategies to produce goods other than bananas to increase sales
and profit. Lastly, they could do nothing and hope their reputation of dealing with
terrorist and Europe’s high taxes slowly disappears.
III. Analysis: The first option to produce goods somewhere outside of Latin America
may by a hard task to complete. The majority of good land that can produce bananas
(near the equator) is mostly already integrated by other fruit producing companies and the
majority, if not all, of Chiquita’s produce comes from these areas. Starting out a plan with
no product to sell would be a hard beginning point for a bright new future. The second
option may be more achievable, but will take some time. Chiquita mainly export its
goods to European countries and with the burdensome taxes on imports it is causing them
to struggle. Chiquita could begin looking for new retailers in the U.S. or other countries
so the demand to sell to Europe decreases. As time goes on and they maintain steady
business elsewhere they can begin to cut sales to Europe. This tactic may also persuade
Europe to consider lowering their taxes, however at that point Chiquita will be safe either
way with their new business partners and paying less to sell their product. Another aspect
of this strategy would include making themselves more marketable in order to get new
clients. The industry is described by having increased buyer power these days, which will
put more pressure on Chiquita than they have had previously. They need to focus on
producing high quality bananas and packaging to provide something other companies
may not be able to give. Also, with the increase in revenue from halting sales to Europe,
Chiquita may be able to lower their prices for US companies who are also closer to ship
to in order to become more competitive. Another route for Chiquita could be to invest
into producing other goods like many fruit companies do. They did have a market for
bagged salads, but a contaminated spinach crop demolished it. If they continue to invest
and become successful in creating other products, Chiquita may have an advantage
amongst other companies when it comes to providing goods. Finding new low-margin
products and distributing them Chiquita could find relief from their struggles. The last
option the company has is to not change anything and hope for the market to come
around. However it is unlikely they make up their losses from fines for dealing with
terrorists while paying high taxes and not changing any aspect of their marketing strategy.
The market in this era is transient and fast-paced, so waiting for their moment to find
success if not a strategy that will work.
IV. Recommendation: Chiquita should begin focusing efforts on new products,
producing high quality fruits, and discovering new retailers outside of Europe. They
should slowly and cautiously break ties with Europe to refrain from getting ahead of
themselves and losing too much revenue at once. By producing new and fresh products,
Chiquita will become competitive amongst other companies to find new retailers outside
of Europe.

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