Caso: "CHIQUITITA a General Analysis"

El trabajo de cooperación consiste en escoger una organización real existente y analizarla a través de sus modelos: su entorno, estructura, estilo de dirección, productividad, control y organización general.

In her early years, Miss Chiquita appeared as an animated banana, helping to teach consumers about the great nutritional value of bananas and how to ripen them. Over the years, Miss Chiquita's looks may have changed a bit, but she's still the undisputed first lady of fruit.

CHIQUITA

GENERAL ANALYSIS

PRESENTATION

Chiquita Brands International, Inc. (NYSE: CQB) and its subsidiaries (collectively, "Chiquita" or the company) operate as a leading international marketer and distributor of high-quality fresh and value-added processed food products – from energy-rich bananas and other fruits to nutritious blends of convenient green salads sold under the “Fresh Express”.

The company produces approximately one-third of the bananas it markets on its own farms, and purchases the remainder of the bananas and all of the lettuce and other fresh produce from third-party suppliers throughout the world.

Chiquita is one of the world's leading banana producers.

Chiquita employs approximately 26,000 full-time employees from all over the world, operating in more than 70 countries worldwide of which some 14,000 live and work in Latin America where we grow our bananas.

PRODUCTS

The company’s products and services are designed to win the hearts and smiles of the world’s consumers by helping them enjoy healthy fresh foods (www.chiquita.com and www.freshexpress.com).

Business segments:
Chiquita operates and reports its results in three business segments: Bananas; Salads and Healthy Snacks; and Other Produce.
The Banana segment includes the sourcing (purchase and production), transportation, marketing and distribution of bananas.
The Salads and Healthy Snacks segment includes value-added salads; fresh vegetable and fruit ingredients used in foodservice, healthy snack operations, as well as processed fruit ingredient products. The US Company distributes approximately 400 different Fresh Express branded products. Chiquita also provides fresh-cut products, such as lettuce, tomatoes, spinach, cabbage, broccoli, cauliflower, onions and peppers, to foodservice distributors who resell these products to foodservice operators.
The Other Produce segment includes the sourcing, marketing and distribution of whole fresh fruits and vegetables other than bananas.

BANANA:

Chiquita sources, distributes and markets bananas sold principally under the “Chiquita” brand name. In 2007, 2006, and 2005 approximately 70% of banana sales were in Europe and other international markets, with the remainder in North America.
Chiquita’s other international markets for bananas include the Middle East and the Far East, which are both primarily served through a joint venture that sources its bananas from the Philippines.

SALADS AND HEALTHY SNACKS

The Salads and Healthy Snacks segment includes value-added salads sold under the Fresh Express and other labels, fresh vegetable and fruit ingredients used in foodservice, healthy snacks, and processed fruit ingredient products.

HEALTHY SNACKS:

The healthy snacks business involves purchasing, processing, packaging and distributing a variety of fresh-cut apples, grapes, carrots and snow peas in a variety of convenient, Chiquita-branded packaging, like the “Chiquita Fruit Bites” sliced apple and other fruit snacks, which are sold throughout most of the U.S.

OTHER PRODUCTS:

Chiquita distributes and markets an extensive line of fresh fruit and vegetables other than bananas in Europe, North America and the Far East. The major items sold are grapes, pineapples, melons, stone fruit, apples, kiwi and tomatoes.

MARKETS, CUSTOMERS, DISTRIBUTION
When people hear Chiquita, they think of superior quality, taste and nutrition.

BANANA:

The company is one of the largest banana producers in the world and a major supplier of bananas in Europe (company is the market leader and obtains a price premium for its Chiquita® bananas) and North America (the company is the market segment leader and obtains a price premium in value-added salads with the Fresh Express® brand and maintains a No. 2 market position in bananas).
In Europe, the company’s core market is the member states of the European Union (except new entrants Romania and Bulgaria, which continue to be reported in “trading markets”), plus Switzerland, Norway and Iceland.
Chiquita’s customers are primarily retailers and wholesalers. To a significant extent in North America, and increasingly in Europe, the company’s retail customers are large chain stores. Both retailers and wholesalers are generally seeking annual or multi-year contracts with suppliers that can provide a wide range of fresh produce.
In North America, Chiquita enters into product and service contracts with large retail customers, most often for one year terms. Approximately 90% of the volume sold in North America is sold under these contracts.
“Chiquita To Go” bananas into quick service restaurants and convenience stores in supply boxes containing 40 individual bananas. In 2007, the volume of “Chiquita To Go” bananas doubled from 2006.
SALADS AND HEALTHY SNACKS:
The Salads and Healthy Snacks segment includes value-added salads sold under the Fresh Express and other labels, fresh vegetable and fruit ingredients used in foodservice, healthy snacks, and processed fruit ingredient products.
The Fresh Express acquisition has diversified the company’s business, accelerated revenue growth in value-added products and provided a more balanced mix of sales between Europe and North America, which makes the company less susceptible to risks unique to Europe, such as the market dynamics in the European Union (“EU”) under the banana import regime and foreign exchange risk.
Chiquita’s Fresh Express subsidiary is a leading purchaser, processor, packager and distributor of a variety of value-added salads and other healthy snacks in North America. The company distributes approximately 400 different Fresh Express branded products nationwide to grocery/food retailers (nation’s top retailers) as well as foodservice distributors (raw products) and operators and quick-service restaurants.
HEALTHY SNACKS:
The company sources fruit from North and South America, depending on the season.
OTHER PRODUCTS:
Most Other Produce sales are in Germany and Austria, through Atlanta, which primarily distributes items carrying third-party brands. At these locations, daily shipments of a variety of fresh produce are delivered from a variety of producers and importers; the company then recombines these items to fill customer orders, in some cases repackaging produce into consumer packaging. The company provides other value added services, including product sourcing, ripening and logistics. Compared to North America, in Europe the company provides a particularly wide selection of Other Produce products.
The company is investigating opportunities to leverage the brand in Asia and the Middle East in pursuit of profitable growth. Also included in the Other Produce segment is “Just Fruit in a Bottle,” a 100 percent fruit smoothie.
PRICING
BANANAS:
Banana pricing is seasonal because bananas compete against other fresh fruit, a major portion of which comes to market in the summer and fall.
Chiquita generally obtains a premium price for its bananas sold in Europe.
HEALTHY SNACKS:
The company makes frequent deliveries to customers, which include retailers, such as large grocery chains, and distributors, as well as foodservice customers, mainly quick service restaurants.
SOURCING
BANANAS:
One-fifth of all bananas sold by Chiquita were sourced from each of Costa Rica and Guatemala. Chiquita also sources bananas from numerous other countries, including Panama, Ecuador, Colombia, Honduras, the Philippines and the Ivory Coast. In 2007, approximately one third of the bananas sourced by Chiquita were produced by subsidiaries and the remainder were purchased from independent growers under short and long-term fruit supply contracts in which Chiquita takes title to the fruit, either at packing stations or once loaded aboard ships
SALADS AND HEALTHY SNACKS:
The company sources all of its raw products for the Salads and Healthy Snacks segment from third-party growers, primarily located in California, Arizona and Mexico.
HEALTHY SNACKS:
The company sources fruit from North and South America, depending on the season.
OTHER PRODUCTS:
Sourcing commitments with growers for non-banana fresh produce are generally for one year or less. Chiquita sources certain seasonal produce items in both the northern and southern hemispheres in order to increase availability of a wider variety of fresh produce throughout the year. Other sources are exporters from the country of origin and importers or wholesalers in the country of sale.
The majority of Other Produce items are sourced from growers in Central America, Mexico, and South America.
LOGISTICS
And they'll find Chiquita products at grocery stores in more than 60 countries. In fact, more than 90% of people in countries where our bananas are sold know the Chiquita name, which makes us one of the world's best recognised brands!

BANANAS:

Bananas distributed internationally are transported primarily by refrigerated, ocean-going vessels. These ships are highly specialized, in both size and technology, for international trade in bananas and other refrigerated products and are operated under contractual arrangements having terms of one to seven years. The company has experienced interruptions in its shipping, for reasons such as mechanical breakdown or damage to a ship, strikes at ports and port damage due to weather, the price of bunker fuel.
SALADS AND HEALTHY SNACKS:
Once harvested, the produce is typically cooled and shipped by environment-controlled trucks to the company’s facilities where it is inspected, processed, packaged and boxed for shipment. The company has seven processing/distribution plants and two distribution centres located in California, Georgia, Illinois, Pennsylvania and Texas.
HEALTHY SNACKS:

The company has healthy snack fruit processing facilities in: Chicago, Illinois; Atlanta, Georgia; and Salinas, California.
OTHER PRODUCTS:

Most Other Produce sales are in Germany and Austria, where the company operates 17 distribution centres through its Atlanta AG subsidiary (“Atlanta”). Fresh produce is highly perishable and must be brought to market and sold generally within 30 to 60 days after harvest. The company generally uses common carriers to transport this fresh produce.

COMPETITIONS
BANANAS:

Bananas are distributed and marketed internationally in a highly competitive environment. Although smaller companies, including growers’ cooperatives, are a competitive factor, Chiquita’s primary competitors are a limited number of other international banana importers and exporters, principally Dole Food Company, Inc., Fresh Del Monte Produce, Inc. and Fyffe’s plc. To compete successfully, Chiquita must be able to source bananas of uniformly high quality at a competitive cost, maintain strong customer relationships, and quickly and reliably transport and distribute products to worldwide markets.

SALADS AND HEALTHY SNACKS:

Fresh Express competes with a variety of other branded and private label packaged, ready-to-eat salads in the retail market. In addition, there are many other processed food and other food and produce sellers who could enter the value-added salads category and other healthy snack markets.
Competitors in the foodservice area are predominately national, regional and local processors. There is intense competition from national and large regional processors when selling produce to foodservice customers.

HEALTHY SNACKS:

Its primary competitors are regional producers of branded and private label fresh-cut fruit selections.

OTHER PRODUCTS:

Chiquita’s primary competitors in the Other Produce segment are other wholesalers and distributors of fresh produce, which may be local or national.

POSITION

Chiquita is one of the world leaders in this sector: largest banana producers in the world and a major supplier of bananas in Europe and North America.

CORPORATE COMITMENT:

Chiquita is a good citizen, we care about social issues and the environment. Take Latin America, where we have a long tradition of building schools, hospitals, ports, railways and power plants. Our banana farms create jobs and enhance the quality of life for local people.
Code of conduct
Our philosophy as a company is to operate in an ethical, legal and socially responsible manner befitting a global company. We believe that adhering to this Code makes Chiquita stronger
Core value
Our four Core Values are based on discussion with 1,000 Chiquita employees worldwide. They are Integrity, Respect, Opportunity and Responsibility
Corporate Responsibility reports
At Chiquita, our achievement of high standards of corporate responsibility has become an essential part of our culture and business strategy. Our progress is made public in our corporate responsibility reports.

The Chiquita Nature & Community Project aims to preserve plant and animal species, and to promote local environmental awareness through education

FOCUS AND STRATEGIES

The company focuses on healthy, value-added, higher-margin products and will seek to selectively invest in markets that have the greatest potential for profitable growth, while maintaining its commitment to profitable traditional product lines.
Chiquita’s key strategic objectives are to:

Deliver innovative, higher-margin products. Chiquita strives to leverage its brands and market leadership to diversify its offerings of healthy, fresh foods. In Europe, the company is the market leader and obtains a price premium for its Chiquita® bananas. In North America, the company is the market segment leader and obtains a price premium in value-added salads with the Fresh Express® brand and maintains a No. 2 market position in bananas.
In addition, the company’s goal is to increase revenues from new value-added products. A major focus of the company’s innovation efforts is expanding distribution channels, extending product shelf life and developing new product offerings to meet the growing desire of consumers for healthy, convenient and fresh food choices.
The company is also keenly focused on meeting consumer needs for healthy, convenient, fresh foods and on meeting customer needs by excelling in category management, product quality, customer service and in-store execution. In 2007, for example, Progressive Grocer magazine recognized both Chiquita and Fresh Express as Category Captains for exceptional category management for the ninth and seventh consecutive years, respectively.
Build a high-performance organization. Chiquita seeks to attract, engage and retain high performing employees, apply best-in-class people practices, ensure that the company has the right people in the right jobs, leverage processes and technology to improve decision making, employ conservative financial practices and continue to demonstrate leadership in corporate responsibility.
Achieve sustainable, profitable growth. Chiquita remains focused on cost savings in both production and logistics, including synergies achieved by combining the strengths of Chiquita and Fresh Express. The company hedges the majority of its fuel costs and foreign currency exposures to help minimize the volatility in operating a global business.
Chiquita is also focused on improving its debt-to-capital ratio and its financing arrangements to allow for greater covenant flexibility and focus on shareholder returns. In the past year, Chiquita has performed a sale-leaseback of its ships, issued convertible senior notes and entered into a commitment letter with Rabo Bank to refinance the remaining portions of its existing senior secured credit facility.
In 2007, the company continued to expand its distribution of convenient, single “Chiquita To Go” bananas, which use proprietary packaging technologies to extend the shelf life of bananas. In 2006, the company successfully introduced “Just Fruit in a Bottle” in Belgium and in 2007 it became the leading fruit smoothie in that country. Due to its success, the company expanded the distribution of “Just Fruit in a Bottle” to Germany and the Netherlands in 2007 and intends to expand into other European countries in the future. Fresh Express also continued to add new offerings in 2007, including “Mediterranean Supreme” and “Pacifica! Veggie Supreme” blends, to its line of ready-to-eat salad kits and premium value-added salads. Chiquita intends to continue providing value-added products and services in ways it believes better satisfy consumers, increase retailer profitability and boost the in-store presence of Chiquita and Fresh Express branded products.
The company also focuses on effective management of risks in its business. However, the company operates in a highly competitive industry and is subject to significant risks beyond its immediate control.
The major risks facing the business include industry and other product supply cost increases, weather and agricultural disruptions and their potential impact on produce quality and supply, industry and pricing dynamics following the 2006 implementation of a tariff-only banana import regime in the European Union (“EU”), the company’s ability to achieve the full expected benefits from its October 2007 restructuring, consumer concerns regarding the safety of packaged salads, exchange rates, risks of governmental investigations and other contingencies, and access to and cost of capital.
The company anticipates significantly increased costs for purchased fruit and vegetables, as well as increased costs for its own production of bananas in 2008 approximately two-thirds of the bananas and all of the lettuce and other produce that the company markets purchased from independent producers and importers.
Many factors affect the cost and supply of fresh produce, including market factors such as supply and demand, changes in governmental regulations, and weather conditions and natural disasters. If and to the extent the company is unable to pass on increased costs to customers, it could affect the company’s reported results.
Transportation costs are significant in the company’s business, and the market price of fuel is an important variable component of transportation costs. The company attempts to pass through to customers any increased fuel costs, but the company has not been able to fully recover these cost increases. The company also enters into hedge contracts which permit it to lock in fuel purchase prices for up to three years on up to 75% of the fuel consumed in its ocean shipping fleet, and thereby minimize the volatility that fuel prices could have on its operating results. However, these hedging strategies cannot fully protect against continually rising fuel rates and entail the risk of loss if market fuel rates decline (see Note 10 to the Consolidated Financial Statements).
At December 31, 2007, the company had 65% hedge coverage through January 2010 on fuel used in its banana shipments to core markets in North America and Europe; in relation to market forward fuel prices at December 31, 2007, these hedge positions entailed gains of $24 million in 2008, $21 million in 2009, and $4 million in 2010.
The cost of paper and plastics are also significant to the company because bananas and some other produce items are packed in cardboard boxes for shipment, and packaged salads are shipped in plastic packaging. If the price of paper and/or plastics increases, or results in a higher cost to the company to purchase fresh produce, and the company is not able to effectively pass these price increases along to its customers, the company’s operating income would decrease.
The company’s supply of raw product, including primarily bananas and lettuce, is subject to weather and other event risks that can have a significant impact on the availability of product and the company’s cost of goods sold. In 2007, the Salads and Healthy Snacks segment results for the first half of the year were impacted by $6 million from a record January freeze in Arizona which affected lettuce sourcing. In 2006, the company incurred $25 million of higher sourcing, logistics and other costs for replacement fruit due to banana volume shortfalls caused by Hurricane Stan and Tropical Storm Gamma, which occurred in the fourth quarter of 2005. These storms, along with Hurricane Katrina in 2005, caused significant damage to banana cultivations and port facilities and resulted in increased costs for alternative banana sourcing, logistics and farm rehabilitation, and write-downs of damaged farms.
In January 2006, the European Commission implemented a new regime for the importation of bananas into the EU. It eliminated the quota that was previously applicable and imposed a higher tariff on bananas imported from Latin America, while imports from certain African, Caribbean and Pacific (“ACP”) sources are currently assessed zero tariff. The new tariff, which increased to €176 from €75 per metric ton, equates to an increase in cost of approximately €1.84 per box for bananas imported by the company into the EU from Latin America, Chiquita’s primary source of bananas.
As a result, each year since 2005, the company has incurred approximately $75 million in higher tariff-related costs, which consists of approximately $115 million in incremental tariff costs minus approximately $40 million in lower costs to purchase banana import licenses, which are no longer required. In addition, the elimination of the quota has resulted in increases in total industry imports into the EU and resulting lower local currency prices compared to 2005. While the company has maintained its price premium in EU markets, the pressure from lower market prices has had a substantial negative impact on the company’s profitability. In December 2007, the World Trade Organization (“WTO”) upheld a complaint from Ecuador and ruled that the EU’s current banana import regulations violate international trade rules. However, the decision is subject to appeal. Several other challenges are also pending in the WTO. Unless the cases are settled before the final rulings are issued, final decisions are expected no earlier than the summer of 2008. There can be no assurance that any of these challenges will result in changes to the EC’s regime or that the resulting changes will favourably impact the operating results of the company.
Despite Chiquita’s track record of excellent performance in this area, food safety continues to be a significant risk in our business. In September 2006, E. coli was discovered in spinach products of certain industry participants. Even though Fresh Express products were not implicated, consumer concerns regarding the safety of packaged salads in the United States continued to impact Fresh Express operating results throughout 2007, resulting in lower than anticipated category sales growth and higher food safety related costs.
The company’s results are significantly affected by the value of the euro in relation to the U.S. dollar, as a result of the conversion of euro-denominated sales into U.S. dollars. In 2007, the value of the euro continued to strengthen against the U.S. dollar. The company seeks to reduce its exposure to a possible decline in the value of the euro by purchasing euro option and collar hedging contracts. At December 31, 2007, the company has hedging coverage for approximately 70% of its estimated net euro cash flow in 2008 at average put option strike rates of $1.40 per euro and approximately 40% of its estimated net euro cash flow in 2009 at average strike rates of $1.38 per euro.
The company is a defendant in several pending legal proceedings. See Note 17 to the Consolidated Financial Statements and “Item 3 – Legal Proceedings” in the Annual Report on Form 10-K for a description of, among other things:
The four lawsuits filed against the company claiming liability for alleged tort violations committed by the company’s former banana producing subsidiary in Colombia.
The five shareholder derivative lawsuits filed against certain of the company’s current and former officers and directors alleging that the named defendants breached their fiduciary duties to the company and/or wasted corporate assets in connection with the payments that were subject to the company’s September 2007 plea agreement with the DOJ.
An investigation by EU competition authorities relating to prior information sharing in Europe.
Customs proceedings in Italy. As of December 31, 2007, the company had $814 million outstanding in total debt, most of which is issued under debt agreements that require continuing compliance with financial covenants. The most restrictive of these covenants are in the company’s bank credit facility, which consists of a revolving credit facility and Term Loan C (the “CBL Facility”). The company was in compliance with these covenants at December 31, 2007, and expects to remain in compliance. In

February 2008 the company completed an offering of $200 million of 4.25% Convertible Senior Notes due 2016, the net proceeds of which were used to partially repay Term Loan C. The company also has entered into a commitment letter with Rabo Bank to refinance its CBL Facility in a manner that is expected to lower interest expense, extend debt maturities, and significantly increase covenant flexibility.

COMPETITIVE STRENGTH

Chiquita believes the following competitive strengths should enable the company to adjust to challenges in its business and to capitalize on future growth opportunities:
Powerful Brand. Chiquita believes that customers and consumers associate the Chiquita brand with healthy, fresh and high-quality food products. Fresh Express is the North American industry leader in value-added salads, and its brand is synonymous with healthy and fresh products. The company believes it can leverage the Chiquita and Fresh Express brands through higher-margin product extensions and new product introductions.
Strong Market Positions. The company’s Fresh Express brand holds the No. 1 market share position in U.S. value-added salads. For bananas, Chiquita holds the No. 1 market share in the EU and the No. 2 market share in North America. In 2007, Chiquita increased its leading estimated share of the banana volume sold by the top 25 retailers in the United States to 39% compared to 35% in 2006.
High Quality Products and Value-Added Services. Chiquita believes it delivers value to its retail customers by providing high-quality products and value-added customer service and category management. Fresh Express is considered an industry leader in food safety as a result of its integrated and preventive food safety standards and other food safety practices.
Competitive Supply and Logistics Costs. Chiquita believes that it is able to produce and/or source bananas, lettuce and other fresh produce and deliver them to customers at competitive costs. This competitive position has resulted, in part, from gains achieved in recent years in improving farm productivity, diversifying its supplier base, reducing waste, divesting non productive assets, centralizing purchasing, entering a long-term alliance in 2007 with expert global shipping operators and improving efficiency throughout the company’s global supply chain operations.
Geographic Diversity of Sourcing. Chiquita maintains wide geographic diversity in its sourcing of bananas and other produce, which reduces the company’s risk from natural disasters, labour disruptions and other supply interruptions in any one particular location. Sourcing in both the northern and southern hemispheres permits the company to provide many produce varieties year-round.
High Level of Corporate Responsibility. Chiquita manages its operations in accordance with its Core Values -Integrity, Respect, Opportunity and Responsibility- and its Code of Conduct. Chiquita sets high environmental, social and ethical standards while balancing stakeholder’s interests. For example, all Chiquita-owned banana farms in Latin America have been certified to the Rainforest Alliance standard, the Social Accountability 8000 social standard, and the Global GAP food safety standard. In addition, a majority of banana farms owned by the company’s suppliers in Latin America have been certified to the Rainforest Alliance and Global GAP food safety standards.

RISKS FACTORS

CHIQUITA business, financial conditions or results could adversely affect our operating results:

Increases in commodity or raw product costs, such as fuel, paper, plastics and resins, could adversely affect our operating results.
Increased tariff costs and competition in the European banana market resulting from changes in the EU banana import regime implemented in 2006 has adversely affected our European business and our operating results, and will continue to do so.
We may not fully realize the anticipated benefits from our restructuring program.
Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.
We operate in a highly competitive environment in which the pricing of our products is substantially dependent on market forces, and we may not be able to pass on all of the increased costs to our customers.
Our high level of indebtedness and the financial covenants in our debt agreements could adversely affect our ability to execute our growth strategy or to react to changes in our business, and we may be limited in our ability to use debt to fund future capital needs.
Future acquisitions, strategic alliances and investments and other innovations may be costly and not achieve their intended goals, and they could distract our management, increase our expenses and adversely affect our business.
Our international operations subject us to numerous risks, including U.S. and foreign governmental investigations and claims.
We have a substantial amount of goodwill and other intangible assets on our balance sheet; a substantial impairment of our goodwill or other intangible assets may adversely affect our operating results.
Our operations and products are regulated in the areas of food safety and protection of human health and the environment.
We are subject to the risk of product liability claims; claims or other events or rumours relating to the ‘‘Chiquita’’ or ‘‘Fresh Express’’ brands could significantly impact our business.
Reliance on third-party shipping providers, future increases in charter rates, and an extended interruption in our ability to ship our products could materially affect our operating results.
Labour issues can increase our costs or disrupt our operations; pressure to increase union representation could adversely affect our operations and changes in immigration laws could impact the availability of produce purchased from third-party suppliers.
Fluctuations in currency exchange rates may adversely impact our financial results.

PORTER ANALYSIS

CUSTOMERS

Chiquita distributes her products across the following channels:
Grocery stores (in more than 60 countries)
Food retailers
Foodservice distributors and operators
Quick-service restaurants
Fresh produce foodservice offerings primarily to third-party distributors for resale

Chiquita’s customers are primarily retailers and wholesalers. To a significant extent in North America, and increasingly in Europe, the company’s retail customers are large chain stores. Both retailers and wholesalers are generally seeking annual or multi-year contracts with suppliers that can provide a wide range of fresh produce.

In North America, Chiquita enters into product and service contracts with large retail customers, most often for one year terms. Approximately 90% of the volume sold in North America is sold under these contracts.

“Chiquita to Go” bananas into quick service restaurants and convenience stores in supply boxes containing 40 individual bananas. In 2007, the volume of “Chiquita to Go” bananas doubled from 2006.

Consequently, Chiquitita’s customers are not concentrated at all, being widely distributed along Europe and North America. We consider this distribution structure a core asset as the presence in so different markets decreases the risk level even if globalization has integrated economies and its performance.

Even if banana distribution is highly concentrated in the USA, this market can be considered a whole heterogeneous market itself.. Indeed, this concentration risk is compensated with the wide distribution of salads, snacks and coffee in Europe and Middle East.

Another asset in Chiquitita’s organization is the fact that now client can buy directly our production, as it is nearly totally integrated in our manufacturing channel, as we cultivate and produce our products. So there is no potential risk from the supplier side as our vertical integration policy prevents us from that risk

Likewise, our brand image is well positioned among our customers, being considered as a quality product that brings health, and happiness, that enables us to have an excellent position in the market. Needless to say that this image is supported by continuous commercial campaigns and information services to promote the positive effects of consuming fresh and healthy food

PROVIDERS

As we have mentioned before, our company has a vertical integration strategy that has taken us to control the 90% of our banana production, including quality control and establishment cost generation, enabling us to control all the processes along the value chain until the distribution and avoiding a possible forward integration of the providers.

On the other hand is in logistic area where Chiquitita has may have hardest difficulties in things related to warehousing, handling, transport and distribution. Anyway, even if cost control and distribution problems may arise, Chiquitita can solve them due to the long experience in cargo managing and the big quantity of volume we manage.

In addition, our contracting volume allows us getting scale economies and reducing cost by having a powerful position when dealing with our providers. This win–win negotiation comes from the prestige that is for our providers to work with a company that has been operating for more than one hundred years in this business.
Indeed our product is strongly differentiated from the competitors in quality and health standards, company culture and origin and production methods. This sector enables us to increase our dealing position with our providers

COMPETITORS

For this analysis, we will distinguish between the three markets in which Chiquitita competes. Regarding her first product, the banana, Chiquitita competes on a few segmented where competitors can be divided into two different groups. The first group is composed by big multinationals such as Dole, Del Monte and Fyffe’s. These are Chiquitita's great competitors as they are the ones that can create more problems along her value chain. Firstly, competitor can negotiate with the same banana suppliers (even if it’s only 10% of total production of bananas), impeding the acquisition of raw material.

Next step refers to the logistic suppliers, a really important question in the value chain as it involves the use of highly specialized ships with refrigerating containers to maintain products quality during transport. Even if competitors can deal with Chiquitita’s suppliers, she relies on wide experience in the emergency management that can solve the situation. The analysis ends with the consideration about the distribution at the supermarkets. Chiquitita is positioned as a quality product, but she must face the hard competition of the big multinationals at the moment of locating her bananas in the shop shelves.

No need to say that this group composes the principal threat for Chiquitita, due to it’s competitive position that companies like Dole has, companies that can compete in quality with Chiquitita and the volume of production that manages allows Dole to keep competitiveness in price. In addition, Dole’s production is geographically more diversified that Chiquitita’s, which allows them to confront better the climatic casualties.

On the other hand we have a group composed that grow banana and do not sell their production to any of those multinational companies previously mentioned. In some way, these competitors could become Chiquitita’s providers. The main competitive advantage they have is based on the distribution, as they can emplace faster and better their product not only in supermarkets but especially in small scale shops at high income neighbourhoods. Indeed, many people may rather pay an extra price in order to buy these country made products.

Besides, this group has high out barriers, as it is difficult that they stop producing. In many cases, they are subsidized by their governments, and nowadays, no northern country will allow to the stop cultivating their bananas as it would mean the end of most rural economies.

Regarding salads and fresh snacks, it’s not possible to make a segmentation among it’s competitors. Even though, we must stand out those ones that manufacture all equal or substitute products in the healthy and diet market segment. Not only do we mean salads and snacks, but also juices, cereals, low fat products. In this market, quality is even more important and Chiquitita’s good image is a real asset.

SUBSTITUTIVE PRODUCTS

For any kind of product we only distinguish an important Group of products that can be considered as substitutes. We consider as substitute products all the fresh fruit juices, low fat food, biologic manufactured products. We would like to outline that we do not consider other fruits as substitute for bananas as their characteristics are quite different. We consider that those who want to eat banana will not eat an apple or watermelon instead.

MODELS OF MANAGEMENT ANALYSIS

ADMINISTRATION AND PRODUCTION MODEL

We consider that Chiquitita has a Productive model that is opposed to the Traditional Management model, since as is gathered from the guidelines themselves and the corporate letter from the Chairman & CEO, the company is permanently concerned with ongoing improvement and strategic progress, through a “Just in Time” stocks management system and zero tolerance of errors, as well as support and enhancing in performing tasks based fundamentally on its teams, by ensuring that both staff and management receive the message that quality is the responsibility of the entire organisation, from senior management to the most elementary level.

ORGANIZATIONAL STRUCTURE MODEL

The organisational model of Chiquita is clearly focused on its parent company, since in our opinion, it operates based on a regional and geographic scope, with a high degree of independent management delegation, and yet great value is attached to processes and operations such as production and distribution.

This is a highly functional style based on processes with a territorial organisation that is established by its markets, as we have already mentioned. It is seen that for example, the sales director of a specific area must not only report to his immediate local superior, but must also report to the sales division director of the parent company itself.

LEADERSHIP AND MANAGEMENT MODEL

Chiquita’s organisation is both hierarchical and horizontal and the delegation of responsibilities by competences is greatly enhanced, based on results, with sufficient management autonomy. However, this autonomy is subordinated to a global corporate policy. It is also a flexible and highly dynamic organisation.

Its most obvious advantages are the obtaining of consolidated results based on a global approach, and its ability to maintain a clear professional identification of the different positions in the organisation, although great responsibility on the part of the organisation itself is required, with clear specialisation in the benefits of its products, its well-defined markets and its location.

Nonetheless, this model may lead to certain conflicts of interest between the different lines of authority, and therefore absolute clarity is required in the guidelines and management control exercised by the authority over the teams and subordinates, as otherwise there will be a risk of fragmentation in the management chains and dualities that could cause the company to lose its focus of action and give rise to touchiness, suspicions and double-dealing in day-to-day operations, which could reduce its results in the immediate short term.