Blood Bananas and Boeing Bets the Company

Question: Discuss about theBlood Bananas and Boeing Bets the Company. Answer: Chiquita Brands International Inc. was one of the major marketer and distributor of quality fresh produce in the world especially banana produce and had its headquarter in Cincinnati, Ohio (Teagarden, M Schotter, A, 2010). To increase its market share, the company opened another branch in Colombia called Banadex Company. However, during this time the Colombian country was characterized by lawlessness whereby armed local militias by the name AUC organization were involved in many atrocities. They demanded cash from Banadex Company, and in return, the AUC group would protect them. Presented with these challenges, Chiquita Company was in a dilemma on whether to pay the AUC team and in return get protection or refuse to pay the paramilitary group and risk the safety of their employees and the company and the last option was to close the business and exit the country (Teagarden, M Schotter, A, 2010). From the above options, the most viable one was to agree to pay the AUC because of the following key issues. One of the biggest problems is that Chiquita had already established its brand and market in North America and Europe. Banadex had a large plantation holding in Colombia for producing bananas, and out of the other international subsidiaries, it was the most profitable one (Harnish, V, Dumaine, B Collins, J, 2013). From the sales of Chiquita brand, Banadex contributed a significant share of the bananas sold. Apart from the local demand in USA and Colombia, there was also an increasing demand for bananas from many other countries. Therefore, exiting Colombia could have affected the supply of the bananas to these markets and perhaps lose the market for not meeting their customers demand. Also, it would have affected the profit generated by the Chiquita brand and the value of the stakeholder (Pederson, J Thomson, G, 2007) Besides, Banadex Company had a duty to protect their employees as stipulated in the world labor laws. AUC organization threatened their employees by either kidnapping or killing them, and therefore the company had to ensure the safety of their employees is guaranteed. According to the US state department the AUC was not yet listed among the worlds Foreign Terrorist Organization, therefore paying them their demand for cash was not illegal, and at the end, they would protect their employees (Pederson, J Thomson, G, 2007). Banadex generated many jobs in Colombia; in fact, it created 4,400 direct jobs and further 8,000 indirect jobs for workers which were performed entirely by Colombians. Besides, Banadex Company generated a good amount of the revenue to the Colombian government. Yearly, the Company generated approximately $70 million to the economy in Colombia. This income was in the form of taxes, payroll, pension, social security, capital expenditure and the local purchase of goods and services. Hence, closing the company and exiting the country would have made a significant impact on the Colombian government since the source of revenue would have been reduced and loss of many jobs to the locals would translate poverty to many families. Lastly, the cost of hiring an authorized security company to protect the employees, plantation and the company against AUC organization members who numbered ranged from 8,000 to 11,000 was costly. Such kind of a security arrangement would have been provided by the Colombian or US government however they were not ready to intervene in the situation. Also, it was very unlikely for the Colombian government to accept a security firm hired by Chiquita from the US to ensure the safety in the Colombian soil. Therefore it is prudent for Chiquita to take the option of agreeing despite having some ramifications since the benefits of paying the AUC organization is the only viable option, and it outweighs the cost of taking other options because of their dire implications. From the two companys strategies, Boeing Company had the best chance of succeeding in the future market since their strategy were mainly focused on reducing the cost and increasing the efficiency. The Boeing Company is one of the leading companies in the aerospace industry and manufactures both commercial and military planes. Faced with a myriad of challenges in 2004, Boeing business management came up with a new differential strategy. The company decided to produce 787 Dreamliner planes that compete with Airbus A380 (Newhouse, 2007). The Boeing Companys differential strategy was aimed at fulfilling clients unique needs and what the clients identified as valuable and unique (Malcolm-Gibbs, W, Roberts, P, Sharam, D, 2007). Many airlines mostly use the hub and the spoke system however according to Boeing this is not going to be the future of the aviation market system. According to Boeing, in future, this system will shift to flights that deal with direct flights destinations between smaller airports. Thus this will enable the clients to reach their destination timely without wasting their time to pass through airports. The Boeing 787 which is a midrange plane unlike A380 which is a Jumbo jet was designed to carry passenger ranging 220 to 250. It was to consume 20% less fuel, and this would make it be more fuel efficient and cheap to operate in contrast to other planes. Currently, due to the skyrocketing price of gasoline, and the cost of plane maintenance, companies, will be buying more fuel efficient and cheap to operate aircraft like 787. Besides, Boeing 787 airplane was to be manufactured using graphite/epoxy resin in place of using the traditional Aluminum material. By using graphite/epoxy resin which is lightweight composite material they will be able to reduce the time consumed during the inspection (Mathew, 2007). Therefore because of using such material, it will significantly reduce the manufacturing time. Also, the plane was designed to fly faster, higher cover more nautical miles, cleaner, produce less noise and more efficient than other midrange aircraft. To solve the customers complaints, 787 were designed with bigger windows, seats, restrooms and overhead bin, therefore, increasing the comfort of the clients. Customers like traveling in a more comfortable environment and thus will be attracted to 787 since it offers that convenience (Harnish, V, Dumaine, B Collins, J, 2013). Also, by designing the plane in both short and long-range designs means they will be able to satisfy the customer demands. With increased competition, it is most likely that the passengers will opt for planes that travel point to point contrary to point to hub and change to moving with bigger planes (Flottau, J Norris, G, 2014). After being characterized by previous production problems that led to delay in production, Boeing needs to re-examine the need for offshore outsourcing products for the manufacturing process. They should mend their ways labor unions involved in outsourcing to avoid such a scenario. Therefore, Boeing should incorporate new supply chain design that includes tier-1 and tier-2 suppliers. Therefore if this will be done effectively will help in reducing the final assembly time to three days in con trast to 737 version. This means there will be timely delivery of 787 as scheduled. Bibliography Flottau, J Norris, G. (2014). Firm Commitment: Civil Aircraft Manufacturers are Betting on Positive Market Fundamentals, but this alone will not ensure risk-free ride. 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