It is a fact that economies of scale enable companies to reduce their costs of production. Therefore, companies strive to increase their production capabilities to benefit fully from economies of scale (Mankiw, 2011). However, in so doing the company should not compromise the quality of products. Reduced costs of production due to economies of scale enables companies in foreign locations to compete effectively with local companies.
However, it is vital for the company to use strategies that are responsive to the needs of the local population (Iyer, 2009). The peasants’ revolt in France highlights the importance of being sensitive to the needs of the local population while entering foreign markets. Increased large-scale industrial farming led to a peasant farmers’ revolt in southern France.
Increased industrial farming enables farmers to benefit from economies of scale. This leads to significant reduction in costs of farming. Reduced costs of farming ultimately leads to reduction in prices of farm produce (Kaplan, 2012). However, according to the peasant farmers, large-scale industrial farming compromised the quality of agricultural products.
American companies were the major parties that engaged in large-scale industrial farming. Americans used artificial hormones to produce beef. Beef produced using hormones are tasteless and may be harmful to human health. The French farmers viewed McNonald as a symbol of la sale bouffe (tasteless, mass produced food). On the other hand, the farmers claimed that French chicken and pork producers are used sewerage sludge in the production of meat rapidly and cheaply for supply to French supermarkets (Lichfield, 1999).
The peasants also attacked supermarkets since they offered low prices to farmers and sold the fruits and vegetables at high prices to the customers. This unfair practice reduced the income of the fruit and vegetable farmers but enabled supermarkets to make handsome profits. To counter this practice, the government introduced a cumbersome system of double labeling.
Supermarkets included both the price that the customer should pay and the price that the supermarkets paid the farmers. The failure of this system in increasing the price that supermarkets offered farmers forced the farmers to take action. The farmers dumped rotting fruits in the car parks of supermarkets. In addition, some farmers sold their fruits directly to shoppers (Lichfield, 1999).
Selling directly to shoppers eliminated the role of the supermarkets in the supply chain. This eliminated the role supermarkets in the supply chain. Eliminating th role of supermarkets in the supply chain increased the income of the farmers as shoppers bought the fruits and vegetables at a price that was higher than what the supermarkets offers the farmers (Pride, Hughes & Kapoor, 2010).
Confederation Paysanne – a French farmers’ organization – was the organization that led the anti-McDonald and anti-supermarket offensive. Confederation Paysanne broke away from the national federation of French farm unions (FNSEA) – the major French farmers’ organization – in 1987. Confederation Paysanne claimed that FNSEA advocated for increased production at all costs, which favored large farmers and the French government.
Jose Bove was the individual who represented the peasant farmers’ revolt. Bove led several attacks against institutions that companies that propagated industrialization and globalization (Lichfield, 1999). Companies should take into consideration the opinion of the locals in venturing into foreign markets. The attacks on supermarkets and McDonald’s in southern France highlight the importance of considering the opinion of the locals in international business.
Small-scale farmers in southern France were against the industrialization of agriculture since it compromised the quality of products. In addition, the French farmers wanted supermarkets to offer them suitable prices for their products. The farmers resisted activities that threatened to reduce the price of fruits and vegetables, which were the source of their livelihoods.
References
Iyer, R. (2011). MBA fundamentals international business. New York: Kaplan Publishing.
Kaplan, D.M. (2012). The philosophy of food. Los Angeles, CA: University of California Press.
Lichfield, J. (1999). France’s farmers cause a stink over fast food. The Independent. Web.
Mankiw, N.G. (2011). Principles of economics. Mason, OH: Cengage Learning.
Pride, W.M., Hughes, R.J. & Kapoor, J.R. (2010). Foundations of business. Mason, OH: Cengage Learning.