What do you think were root causes for Chiquita’s actions in Columbia?
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Colombia was a key concern to the company’s day-to-day operations. The emergence of terrorist groups in the region became a major issue in Columbia because systems had to be changed in order for them to accommodate terror-based regimes. The absence of a stable government that was able to defend its citizens and assure the company’s safety left Chiquita with no choice. With the increasing need for Chiquita to protect its employees and properties, the company had to pay the terrorists some money for its own protection. There was no law that barred the company from making payments to non-designated terrorists group, and it was only logical and fair for the company to provide security to its employees and property by using all means possible.
Do you think Chiquita or its managers had a choice?
The company and its managers had no better way of dealing with their predicament. They had to ensure that their employees were protected in order to continue their daily production and meet their market demands. Quitting their operations in Colombia would have led to a severe loss of this staple commodity and affect consumers the world over. The main activity for Chiquita in Colombia was banana trade, and it encompassed planting, harvesting, processing, distributing, and marketing. Colombia has a vast area of diverse geography consisting of highlands, mountains, rain forests, tropical grasslands and vast coastlines. All these factors account for Chiquita’s choice of Colombia as a fertile ground on which to base its operations. Ecologically, Colombia is one of the world’s most bio-diverse countries. Bananas are tropical fruits and Colombia’s climate made this area the ideal place to grow them. Their continued action was also was also propelled by the company’s desire to prevent political and economic downfall of Colombia, an ally of United States of America. Chiquita’s actions in Colombia were further fueled by the fact that as a large multinational company the business enjoyed economies of scale and reduced competition. Entry into any monopolistic market calls for a large amount of upfront capital, and this discourages smaller companies from entering the trade. Possession of the large amount of capital in form of land and money ensured the monopolization of major factors of the banana trade by Chiquita. This predisposition gave Chiquita an upper hand in this trade compared to other companies.
What other companies do you think should be worried about Chiquita’s experience?
Other production and processing companies should be worried about Chiquita’s experience. Companies operating in regions prone to terrorism should also struggle to stay operational even in situations where manipulation by terrorist groups lurks. Companies like Dole and Del Monte also need to employ precautionary measures to avoid falling into similar situations. In a world of increasing insecurity and terrorism, local, national, and multinational companies should keenly consider their surroundings and analyze potential dangers to their security.
What can current CEO Aguirre do to restore Chiquita’s reputation and ensure future competitiveness?
To enhance the company’s reputation and competitiveness, the current CEO of Chiquita should carry out streamlining changes on his Public Relations Department. A good public relation strategy will most likely change the public’s conception of the company and its products due to its previous actions. The company can also participate in community projects as a way of winning consumers’ trust and goodwill. The company should also motivate its employees by providing excellent working and living conditions for them. Promotions, rewards to outstanding employees, and education grants can also revive the employees’ morale. To prevent challenges of similar magnitude in future, the company should also rely on a lawyer who will keep the management informed of any legal implications on the company’s operations.
This was the case when the company remained oblivious of the government’s declaration that AUC was a designated terrorist group, making any transactions with this group illegal. The legal advisor of the company should be well informed of recent changes in law. This move will go a long way to save the company from financial and reputational losses. The company should put in place a communication platform to enable staff members to relay their concerns and challenges to the management. This is a necessary step in ensuring internal cohesiveness and satisfaction of staff and guarantee optimum productivity. To prevent similar incidences, the company can also avoid direct involvement in the production stage and concentrate on purchasing bananas from the local farmers in bulk. This will in turn help Chiquita lay down the burden of having to provide security to its employees and assets on its vast farms, on its own cost, passing this to the local farmers.
Canadian Breast Cancer Foundation
Do you think cause-related marketing actually works?
Yes, I think cause-related marketing actually works. A corporation can use this program to enhance its reputation. The program can also be used to market a new product, reaffirm consumers on the company’s willingness to support good health and community work in general. This brands the company as an entity that upholds corporate social responsibility, which could be a motivator to employees and consumers. A company can also use the program in developing and maintaining solid loyalty of consumers whilst creating an emotional link with their target market. However, the success of this marketing strategy depends on the reputation and the foundation of associate company. When the foundation’s reputation starts declining the associate company risks losing its reputation and eventually its consumer’s loyalty.
To gain maximally from a cause-related program, a company has to analyze the foundation it intends to link up with and reach an amicable resolution. The program can only be of reputable importance to the company if it does not contradict with its principles and core values and if it has no negative influence among its staff and customers. Cause-related marketing works, but its success depends largely on the influence that the recipient foundation has on the public. Another major consideration is the proportion of the general public or the target group that is associated with the recipient foundation. In business, it is not only enough to make profits but to reap exceeding profits. To achieve this goal, a firm has to relate with a cause that a large proportion of people are involved in and one that has potential for maximizing customer contact.
How might pink washing pose a risk for corporations?
Pink washing poses the risk of reputation decline for companies once consumers awaken to the fact that the products are not of any health importance to them. On the contrary, pink washing activities are merely a business scam to increase a company’s profit margin; a disguised form of exploitation. The companies also risk legal action as this could be interpreted as denying consumers the full knowledge concerning products through misleading or incomplete labeling of the products, ambiguous supply channels, or manipulative marketing schemes that play with the emotions of consumers. Once pointed out as a “pink washing” company, an organization can as well be described as a business that is on its verge of collapse. This is because the ensuing tarnished reputation may erode the consumers’ trust on all of the company’s other products hence depriving the corporation of its market share. Pink washing too may ruin chances of a corporation ever associating with other foundations on a cause-related program. Charitable foundations will always avoid any form of association with companies that have been branded sheer exploiters for fear of losing the public’s good will and also to protect the names of other donors. From the foregoing case study, it is evident that even though pink washing can result in a bountiful profit margin; it also stands to ruin a company in the long term.
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What are the benefits and risks associated with each proposal?
Association with Vita-King Company is of great benefit to the Canadian Breast Cancer Foundation. Vita-King Company would provide a large amount of funding for the Canadian Breast Cancer Foundation given its enviable financial situation. However, since it was only recently that research linked vitamin D with the prevention of cancer, the foundation could not entirely count on the new product for funding. Consumers’ reaction of the dose might not be as pleasing as the company hopes. Ergo, the foundations risks running out of funds or eventually losing a donor should consumers reject this product. However, positive reaction of the market and good returns would mean more funding since the company would also bring in other foundations that harbor similar interests. A relationship with the Grape Vine Company is of benefit to a business since the company is unlikely to participate in unorthodox practices. For instance, the company‘s executive has a personal experience with the breast cancer foundation and therefore understands the plight of the cancer patients.
The company’s main goal is authentic; to give back to society that helps the foundation to uphold its principles and values. The company is a major financier of the foundation, and offers a lump sum amount. In addition, the company aims to create a seasonal messaging campaign and give the foundation a further contribution based on the sales during the season. However, most of this funding depends on sales and it is not static. This denies the foundation a chance to plan for this funding thereby hampering some of its activities. Fluid Chem’s contribution too depended on its sales and so the foundation was deprived chance to plan prior for this money as it was not a static amount. Another risk was that Fluid Chem’s main driving force was the company’s need to differentiate its brands from those of its competitors. The reaction of the market to the pink windshield washer would determine the company’s ability to sustain its relationship with the foundation. A negative response would deny the foundation the chance to secure a major financier. On the other hand, their relationship is worthwhile considering the amount that Fluid Chem is willing to contribute thereby making it a major financier for the foundation.
How can challenges for the Foundation be overcome?
Proper scrutiny of proposals to ensure their alignment with the foundation’s core values and principles could overcome the challenge of possible pink washing. The foundation should also ensure the companies adhere to the terms of this initial relationship up to and including the post-program accountability. Proper financial management could also assist the foundation to maintain its good reputation among donors. This stipulation will also ensure that money is only used in the right manner hence prevent wastage of resources within the foundation. In addition, pre-defined and democratic means of conflict resolution in the foundation are important, as they would assist in maintaining a good public picture and attract more donors.