INTERNATIONAL BUSINESS ASSIGNMENT

Name: Saurabh Agrawal

Reg. No.: 17PGDM047

Case solution on: Chiquita Brands International(A)

Que 1: What role has politics played in the history of Chiquita Brands and its
predecessor?
Ans:
 Politics are deeply rooted in the history of Chiquita brands and the United Fruit
Company
 The company was proclaimed "El Pulpo" due to their evident influence in
Latin America
 The bananas plantations were located in distant area and in the jungle. Without
any support of politicians it would have been very difficult to obtain and keep
the different authorization needed.
 Minor Keith, the vice president of the United Fruit Company, earned the title
as the "Uncrowned king of Central America" due to his political power
 A change in political system such as in Gautemala when the dictator was
overthrown for a democracy led to the company losing a substantial amount of
land
 An alteration in the import policies of regions or countries, this is most evident
in the EU which implemented quotas and tariffs on bananas from specific
regions
To sum up politics are well rooted in Chiquita’s management and instead of
finding an alternative to the strong EU rules such as acquiring small producers to
increase the exportation quotas or trying enter new markets using the strong power
Chiquita had, they decided to continue to fight against and with politics.
Que 2: What role has protectionism played in the global banana market?
Ans:
 Many Latin American countries whose exports of bananas were highly
dependent on Chiquita Brands International were heavily affected by the
protectionist measures implemented by the European Union
 Preferential treatment for those banana imports from former colonies of the
ACP region
 European Union would state that the quotas and tariffs were imposed in order
to follow their foreign policy interests, by prioritising particular companies
and supplier's sources
 The losers from this situation may argue that these protectionist policies hurt
free trade and do not compensate them for their huge investment

Que 3: What should Linder do about the EU’s banana policy? How should
Bob Dole respond to Linder’s request?
Ans:
Chiquita Banana did not take into account numerous factors when they were
trying to sell their product. The European Union placed tariffs on Latin American
countries as they granted preferential status to former African, Caribbean and the
Pacific Rim colonies. This made it more expensive for Chiquita Bananas to
export their bananas to the European Union, and would force Chiquita to increase
their selling price.
Another problem with Chiquita's was that they decided to expand globally too
fast and as a result, were pushed further into debt. Long term debts almost
doubled and interest expense were more than double.
Linder should have opted following options:

1. Concentrate on existing market(Market Penetration): Linder should

concentrate on existing US market
2. Product Diversification: Chiquita needs to offer something different to
consumers in order to compete in the market place. Perhaps they could offer fruit
juices, canned goods or any other fruit related product that have not been
introduced into the market yet. This would make them more appealing to
consumers.
3. Alternative Markets: Chiquita should explore alternative market like Japan and
Asia.