Chiquita Banana Case Study

1641 Words 7 Pages
Register to read the introduction… EXPAND TO EUROPE MORE AGGRESSIVELY

Expanding to Europe may have seemed like a good idea at the time however the consequences may not have been thought out. While doing business with the European Union, Chiquita made their company international and globally well known, but it also left them with a lot of debt. By keeping the company local and focusing on countries with fewer tariffs or perhaps expanding slower they may have avoided this problem. They would not be a global company anymore, however they would not have been able to climb out of debt and gradually expand.

Chiquita Banana is not a unique company as there are numerous companies that are able to supply bananas. These companies such as Del Monte and Dole also suffered as a result of Europe’s quotas and tariffs; however they diversified their product in order to better compete with other companies. 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
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• Long history and experience in the banana business
• Well known brand, especially in Latin America
• The blue and yellow Chiquita label along with the Chiquita banana lady is well known
• The Chiquita brand commands a price premium and represents quality bananas in the minds of consumers
• Known as the world’s largest banana company
• The company has a diverse fruit company which also sells canned fruit, vegetables and juices worldwide, marketing its products in over 60 countries on six continents
• The quality of the product
• To file chapter 11 bankruptcy
• Convince bondholders to exchange debt for equity
• Continue to expand globally

• Unpaid debt
• Over expansion of shipping operation at an inappropriate time
• Poor hiring and training skills of their employees
• No diversification
• Did not plan for environmental changes
• Worldwide banana surpluses
• EU import quotas
• Stock price down from $50 to $1
• Hurricane Mitch destroyed
• banana crop in Honduras
• A possibility of going bankrupt
• Competition such as Dole
• Trade policies
• Increase in tariffs
• Weather

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