Module and Activity Number: M9 Activity 3 Evaluate: Our global plan!

Group Number: Group 8

Hypothetical Export Business: Banana

Leader: Diana Rose C. Sarsalejo

Uploaded by: Diana Rose C. Sarsalejo

Members:

Names Percent %

Diana Rose C. Sarsalejo 100 %

Riquelen Del Castillo 100 %

Glaze Pobadora 100 %

Avrile Mikhaela Soronio 100 %

Maria Rizza Tan 100 %

In the world of global production, determining business strategic decisions regarding product
cultivation and outsourcing plays a pivotal role in the success of a business. This discussion will
underscore the different thoughts in making decisions not to produce bananas in-house but rather
to outsource from established farms in the Philippines, with a focus on exporting to
manufacturers in South Korea. The discussion follows considerations which include
cost-effectiveness, risk mitigation, and alignment with core competencies, reflecting a nuanced
approach to optimizing the supply chain and ensuring long-term viability.

Are you going to produce your own product?

No, because choosing to outsource banana produce rather than cultivating our own offers
strategic advantages for our group, particularly in facilitating the export of bananas from a
Philippine farm to manufacturers in South Korea. Firstly, although the Philippines provides an
ideal climate for banana cultivation, producing our own bananas would require us to invest
heavily in controlled environments. By outsourcing from established farms in the Philippines, we
benefit from economies of scale, leveraging lower production costs and efficient supply chains.

The cost-efficiency of outsourcing is a significant factor, especially for labor-intensive crops like
bananas. Establishing and maintaining banana farms in a fickle climate environment would entail
substantial expenses, making outsourcing from local farms with lower production costs a
financially prudent choice.

Risk mitigation is crucial. Outsourcing from a region with established measures to address these
risks allows us to minimize uncertainties associated with banana production. Moreover, it aligns
with the strategic focus on our core competencies. We can concentrate on activities such as
marketing and distribution while leaving the specialized task of banana cultivation to those with
the necessary expertise and resources.

Logistically, given the well-established trade relations between the Philippines and South Korea,
smoother transportation and distribution processes are ensured, reducing complexity and costs in
managing the supply chain. While potential drawbacks exist, our analysis suggests that choosing
not to produce our own product aligns with our strategic considerations, emphasizing
cost-effectiveness, risk mitigation, and focus on our business’ core competencies.

Which country will produce it?

As stated earlier, our strategic decision not to embark on the in-house production of our product
stems from the inherent nature of our merchandise—a raw agricultural product cultivated on a
farm. Outsourcing proves to be a judicious choice in this context, allowing us to leverage
external expertise and streamline our operations. By collaborating with established agricultural
producers, we ensure the proficiency required for the optimal growth and cultivation of our raw
materials.

Delving further into the rationale behind our decision, outsourcing becomes an attractive
proposition in light of the potential challenges associated with international production. Factors
such as fluctuations in prices and inflation present considerable concerns for our business model.
A proactive stance is imperative, and by choosing to outsource, we can navigate these economic
uncertainties more effectively. Moreover, international production compels us to navigate the
diverse landscapes of different countries, each with its unique set of challenges, including
varying weather patterns, political issues, and the associated costs incurred by our organization.

In the intricate web of global production, the impact of geopolitical and climatic factors cannot
be overstated. By outsourcing our production, we sidestep the need to directly engage with these
intricate challenges, instead allowing us to focus on our core competencies. Balancing the scales
of economic viability, political stability, and production costs requires a nuanced approach, and
our decision to outsource is a testament to our commitment to ensuring the sustained success of
our venture.

Are you going to outsource?

Yes, because the decision to outsource bananas was made for several reasons, including the
benefits of cost savings and access to high-quality products. Outsourcing helps to reduce costs
and allows the company to focus on its core business activities. It also diversifies the supply
chain, reducing the risk of disruptions caused by unforeseen events in traditional sources. This
diversification can lead to potential growth opportunities, as the company can explore new
markets and form alliances with suppliers in different countries. All in all, outsourcing bananas is
a well-considered strategy that strengthens the business and supports its long-term prosperity.

Where will you outsource it? Why?

We decided to outsource our products here in the Philippines because it can be beneficial due to
our country’s favorable climate for banana cultivation, lower production costs, and
well-established agricultural sector. The tropical climate provides ideal conditions for banana
growth, resulting in higher yields and quality. Additionally, labor costs and operational expenses
are often lower here in the Philippines, contributing to the cost-effectiveness of banana
production. Outsourcing allows our company to leverage these advantages, making it a strategic
choice for the banana industry.

We have also considered outsourcing in South Korea, however, it is not geographically suitable
for large-scale banana production due to its climate and limited land availability. South Korea
experiences cold winters and relatively short growing seasons, making it less than ideal for
tropical crops like bananas. It is more suitable to outsource the product to countries located close
to the equator that enjoy warmer climates and longer growing seasons, allowing for year-round
banana production with less reliance on artificial inputs.

While there may be some logistical challenges associated with importing bananas, such as
transportation costs and ensuring quality control, the benefits of outsourcing often outweigh
these considerations. By focusing on its strengths, South Korea can ensure a stable supply of
high-quality bananas for its population.

Moreover, the country’s strategic location in Asia also facilitates efficient distribution to regional
markets. It’s also essential to consider factors such as cultural compatibility, quality standards,
and legal regulations when exploring outsourcing opportunities in South Korea.
In conclusion, the strategic choice to outsource banana production to South Korea emerges as a
well-founded decision, associated with a comprehensive and thorough analysis of economic,
logistical, and environmental factors. By utilizing the strengths of the Philippines for banana
production and the technological prowess of South Korea for manufacturing, the company
positions itself to benefit from cost savings, high-quality products, and efficient distribution
channels. This outsourcing strategy enables us to navigate the intricacies of global production,
building resilience and long-term success in a dynamic business landscape.