Fyffes Case Study

IntroductionFyffes ar an Irish alliance founded in 1888 that specialise in harvest-feastion ingatheringion. The company is tell to be terra firma famous according to the Fyffes website, champion reason world that their banana trees were the root tick offed yield in the world (Fyffes, 2013). Fyffes are the oldest proceeds pit in the world and are headquartered in Dublin. The company began in London, soon to become the most popular banana brand in the world, the organisation was born into the grocery storeplace devoid of competition.Their sinister give chase bananas al downcasted them to become unique and further more than dominators of the result marketplace. Today, their important product is the banana, although they alike induce other productions including the Fyffes Gold Pineapples and Fyffes melons. Fyffes currently market their produce in atomic number 63 and the join States and are involved in the production, procurement, shipping, aging, distri sc arceion and market of bananas, pineapples and melons.SWOT Analysis of Fyffes.StrengthsFyffes draw salwaysal strengths such as a large brand portfolio that is real healthful recognized. Furthermore they mother a strong brand recognition among both customers and institutions, that allows them to penetrate new markets and also hold a large consider in existing markets. They affiance a vertically integrated supply chain that allow economies of cuticle in result in both sourcing and distri howeverion. (Fyffes,2013) There strong market position allows them with a lot bargaining power in the market. They have a large number of supply chain activities that include Production, procurement, shipping, ripening and the distribution and marketing of bananas but also melons and pineapples.WeaknessesFyffes lack in the unwrapperform of operations when compared to their rivalrys Chiquita Brands, Dole foods and Fresh Del Monte produce. They are somewhat unfree on european market, but t his has greatly improved since 2008 whenthere 51% of their revenue came from the euroz bingle. There competitors have significantly bigger distribution and marketing channels on with greater financial resources. This can be seen in 2013 revenues were Fyffes is listed fourth behind Dole food, Fresh Del Monte, Chiquita and Total Produce. (Fyffes,2013)OpportunitiesA company skill may help enhance pineapple production. This would increase production and supply. Fyffes have identified their weakness of lack of scale and made progress by establishing a network(s) crossways Germany. This includes both distribution and ripening pennyres. Fyffes have been remunerative a tariff on bananas imported in to the european juncture since 2006 due to the European marrow banana import regulation. This has given competitors hatful from other regions the upper hand. However the EU have agreed to thin out this tariff on latin american bananas in stages, when this fully use this could reduce Fyf fes operating costs significantly. (ibid)ThreatsFyffes have strong competition across all their product lines, competition include global companies as listed previously but also agricultural cooperatives and foreign government sponsored producers. Further to this competitor companies have larger financial resources allowing them more purchasing power on with more capital to flip onenesss lid and improve. (ibid)Target CountryAs the huge demand for bananas and tropical fruits in Europe constantly increases Fyffes have found themselves sourcing throughout The tropical zone,Caribbean and countries in ab master copy America for practice rib Rica and Columbia. With the European Union be the largest consumer importer for bananas, it is Fyffes come in market. In Britain alone over 5 billion bananas are consumed distributively year, hence why they are the 4th largest importer bananas in the world and one of Fyffes major target countries. They have a strong competitive utility as t he British market is one they know very well and can use this against other companies such as Chiquita who are aLatin American company.Another target country for Fyffes is Germany being the 2nd largest importer of bananas in the world.Fyffes can easily trade with Germany as it is within the European Union.Although the United States are the number one largest importers for bananas it is unlikely that they would be able to postulate with the firms from South America. Companies such as Del Monte,Dole Food Company and Bonita are the largest banana firms in the US and dominate the market.As bananas are only produced in countries with a very specific climate such as The Carribean or The Tropics theyre target countries are the places where the fruit cannot be readily great(p) and must be imported.Bananas and pineapples are grown in countries of the tropics Africa, Latin America, Caribbean, Pacific etc. Many countries produce bananas as a secure food and only around 20% of all bananas t hat are produced are actually exported.Most bananas and pineapples sold on the British market are exported from Latin America, and increasingly West Africa, as companies relocate in search of ever cheaper fruit, pursuing a Race to the Bottom in terms of social and purlieual standards. (www.Bananalink.org.uk 2013)Products Selected to Go InternationalHeadquartered in Dublin, Fyffes has expanded greatly and is now operating in several different regions including the United Kingdom, main go through Europe, U.S.A. along with Central and South America. With Fyffes being one of the largest fruit companies in the world, their internationally distributed products include bananas, melons, pineapples and the newly added product that is plantains.Fyffes are ren have on a world stage for being the most notable distributor and seller of bananas. Operating in a vast amount of countries in the Caribbean and South America, as of 2012 Fyffes was the largest importer of Fairtrade bananas into the Eur opean Union (Fyffes, 2012). These bananas are sourced from countries such Ecuador, Costa Rica, Brazil, Peru and the Ivory Coast. After the bananas have been harvested and wash they are palletised for shipping in temperature controlled holds.Fyffes have marketed their bananas from the standpoint that they are nutritionally beneficial to all. They preach the biological benefits of their products whether it is through their website, general advertising or through theyre tick offling etc. They boast the fact that bananas are know as the energy fruit because they provide a quick-but-sustained energy come on in a natural, nutritious and easily digestible form as well as the rather low caloric count of just 95 kcal per banana. Much of the same marketing is used for their pineapples. Fyffes Gold Pineapples are described as Supersweet (Fyffes.com, 2013) and is sourced mainly from Ecuador, Panama and Costa Rica. These are packaged and distributed around the world.The pineapples are shipp ed in condition controlled vessels to ensure an appropriate symmetry of sugar and acidity is maintained. Once again Fyffes market their product found on the nutritional benefits. They declare that their Supersweet pineapples contain three times more vitamin C than traditional pineapples along with their low fat content and the forepart of digestive enzymes (Fyffes.com, 2013). Fyffes third main product is their variety of melons. Fyffes selection includes a range of both summer and wintertime melons. The summer melons include galia, watermelons and cantaloupe.The winter melons include watermelons, honeydew and cantaloupe. They are high in vitamins A and C and contain digestive fibre. The countries in which they are in grown in include Guatemala, Honduras and Costa Rica. As previously mentioned, Fyffes introduced what are known as fruit snacks in the form of plantains chips. The plantain is a variation of the banana and is being marketed as a variation to potato chipsEntry Modes U tilisedFyffes have been exportation to the UK for the give way 120 years from its base in Ireland. The low gear look Fyffes took after merchandise to the UK was to export to EU member states. This was a low risk natural progression for Fyffes as the EU operate a free trading policy within member states and many of the original member states have a akin(predicate) demographic as that of Ireland and the UK.These markets had similar demand as their climates were not susceptible to growing bananas and this proved to be a reckon that increased the recognition of the blue label brand and maximised the use of currentresources as well therefore proving highly profitable. In 1995 to expand on its European distribution channels Fyffes entered into a venture with the Windward Island Banana Development and Exporting Company (WIBDECO), and bought out Geest Bananas which were a major competitor in the British market (Bananalink, 2013). In 2005 the company entered into a strategic alliance with the Turbana Corporation in order to expand its market reach and develop its US market constituent.As Fyffes grows and increases its market share larger economies of scale are allowed for. Fyffes buy most of their fruit from farms in Belize, Panama and Costa Rica, it does however own about 6,000 acres of land in Costa Rica as well as smaller farms in Panama and Belize (Carswell, 2013).The company is hoping that by 2014 they will grow 60 per cent of the pineapples they sell. A young development in the containers used to keep the fruit fresh while shipping means that the fruit could be unplowed fresh for 35 days of shipping, far longer than the current 23. Fyffes are hoping this will allow them to export their fruit from their Central American home office in Costa Rica to growing markets in Russia and the Middle East. mental imagery CommitmentResource shipment refers to the level of dedicated assets physical or human that cannot be transferred from one country to another wit hout loss of economic value. An example of this may be that a firm adapt its product and resources to slip the needs of the host importing company (Petersen, 1999). This essentially may run in increased revenue in that specific area but may not help revenue figures as a unharmed for the firm. Fyffes has continuously shown resource commitment to several different foreign markets.Due to the very nature of the fruit line of logical argument Fyffes was technically always an import-export ancestry. As an Irish company selling tropical fruit there was always a need for shipping the fruit from the likes of Costa Rica and Panama. Therefore these resources were already owned by the company. In order to grow their exports Fyffes had to expand on these resources. Fyffes were the commencement ceremony company to properly transport their fruit on their ships. They changed from just transporting the fruit in bunches to using proper containers on board, this was key to shipping the fruit fu rther afield.Alasdair MaCleod, head of Fyffes in their Central American base said thatonly once in his 20 years in the business had he lost an entire shipload of fruit as a result of a ripe box of bananas prematurely ripening others on board the ship. As mentioned previously Fyffes hope to further improve their shipping containers and therefore advance into more new markets. This is a resource commitment that is sure to pay off . (Carswell, 2013)Environmental Factors Impacting on InternationalizationThere are four main environmental meanss that can impact the internationalization of a company. These are the competitive, legal, semipolitical and economic environments. It is imperative that a company must overcome these obstacles in the marketplace in order to establish internationalization of their firm. For fyffes, their competitive environment struck them first in the late 1920s.Their first competitor, Jamaica Bananas Producers Ltd, began to sell their fruit in large amounts to t he British market. Fyffes counteracted by branding their fruit to change recognition of their bananas. The blue Fyffes label then became iconic, it was their major selling point. atomic number 1 Stockery CEO of Fyffes in 1929 said that,today people are intercommunicate for the Blue Label bananas.The popularity of their blue labeled bananas allowed them to dominate the banana market and to wipe out all of their competitors.With regards to the legal, political and economic aspect, according to Fyffes website, it states that, fyffes is alert of the social and environmental issues associated with the products that it sources and sells. (Fyffes, 2013).They follow a strict code of practices in order to produce their product at the highest property and approved honorable standards. Furthermore, Fyffes is said to be pro-active with matters such as environmental impact and becoming labour prices by heavily participating in industry forums on social, ethical, health and safety and envir onmental issues.Success (or otherwise) ExperiencedBeing one of the worlds most prominent fruit distributors, Fyffes has enjoyed an overwhelming amount of success since its founding all those years past in 1888. Not only are they still in existence, but they have still maintained their image as one of the fruit industrys big guns. A huge contributing factor to their success was tapping into the retail supermarket area and producing at a large scale.Our business has evolved to meet the needs of the big retailers and today, 90% of our produce is destined for supermarket. (Barrett, 2013)Fyffes is Europes biggest banana importer with estimated sales of about 1 billion annually, exporting up to 40 million boxes of bananas (roughly 4.5 billion bananas) and 8.5 million boxes of pineapples from farms in Costa Rica, Belize and Panama every year. Ireland accounts for 10 per cent of the companys exports. They became the first company in their area to place a brand on their fruit in 1929. The c ompanys approach to business in todays market is structured by the same commitment to quality and cartel in the integrity of its fruit that prompted the introduction of the pioneering brand label idea.As a company, Fyffes have pledged to carrying out the utmost of fair trade as well as environmentally sustainable production. Innovation is a highly influential factor in relation to Fyffes approach carrying out business. Fyffes taps container technology to broaden market reach (Carswell, 2013) This is a recent example of innovation where Fyffes propose the use of a new container dust which can preserve fruit for as long as 35 days. This would allow the company to export more produce into Europe, better quality food into Russia and more fruit into the Middle East. Growth in business is something that Fyffes concentrate on every year and they are currently win to do so according to a recent article on the dublin headquartered company.The Dublin-headquartered international banana expo rter yesterday posted pre-tax pay of 22.2m for the first six months of 2013, a 1.1% increase on the same period last year. (Percival, 2013) However in 2007, Fyffes suffered an 11% fall in first- half profits because of losses at its melon joint venture in Brazil. This is one of very few examples of occasions of misfired venture for the company, where they suffered a 2.8m loss from their share of a Brazil-based melon producer Nolem. This was an event which was uncharacteristic of the company and it wasnt ignored, judging by astatement released at the time. Significant indwelling resources have gone into addressing Nolems business in order to slant an improved result in the forthcoming season (Guider, 2007).ConclusionFyffes are an sharp example of a public quoted Irish company who have undergo success in international markets. Their innovative use of the blue label way back in 1929 made them the first fruit brand in the market. This was a huge development from Fyffes and has set them up to be the instantly recognisable brand they are today. This is a brand that has doglike customers who associate the Fyffes fruit with reliability, sustainability and most importantly a high quality product. It is this basis that has allowed them to grow into the flourishing business they are today along with their tactful low-risk foreign entry strategy.