Fyffes Strategy
Strategic Management- Second Assessment
Mr Paul Goodwin
20 March 2012
Completed by:
Lara Ciora
David Hegarty
Alan Kenny
Daniel O’Byrne
Michael Ryan
Jingbo Wang
Lili Zhu
The company’s overall Strategy
Fyffes follows a low cost strategy, but what does a low cost strategy mean for Fyffes?
The market size for tropical fruit is really large, bananas being the fifth most important agricultural commodity in world trade after cereals, sugar, coffee and cocoa. Six countries (India, Brazil, Ecuador, Philippines, China and Indonesia) account for 55% of total world production. Bananas and pineapples are common fruits, on average 10 kg of bananas are consumed by each of the 350 million EU citizens; therefore it is not really possible for companies to differentiate fruit products. Because of that it would be complicated for Fyffes to follow a strategy of differentiation. Furthermore the market growth is slow, and it does not change all that much, the main transnational companies between 1995 and 2007 stayed unchanged; they are Chiquita, Dole, Del Monte, Fyffes and Noboa. These transnational companies (TNCs) control over 75 percent of the world trade (Chiquita 26%, Dole 25%, Del Monte 16%, and 8% for Fyffes and Noboa). But Fyffes is the market leader in UK, Ireland, the Netherlands, Spain and Denmark.
The difference between each exporter will be in terms of the prevailing production systems and costs of production. Shipping and fuel are the most important costs for Fyffes, but also these costs are not specific to Fyffes, and their increasing is a risk for all competitors. Thus Fyffes requires its direct banana and pineapple suppliers to have low costs in so much as are possible. It also expects the suppliers to comply with policies which are designed to reduce the impact of agricultural production on the environment and to ensure safe working conditions and fair treatment for workers in compliance with internationally accepted labour standards.
Fyffes
Mr Paul Goodwin
20 March 2012
Completed by:
Lara Ciora
David Hegarty
Alan Kenny
Daniel O’Byrne
Michael Ryan
Jingbo Wang
Lili Zhu
The company’s overall Strategy
Fyffes follows a low cost strategy, but what does a low cost strategy mean for Fyffes?
The market size for tropical fruit is really large, bananas being the fifth most important agricultural commodity in world trade after cereals, sugar, coffee and cocoa. Six countries (India, Brazil, Ecuador, Philippines, China and Indonesia) account for 55% of total world production. Bananas and pineapples are common fruits, on average 10 kg of bananas are consumed by each of the 350 million EU citizens; therefore it is not really possible for companies to differentiate fruit products. Because of that it would be complicated for Fyffes to follow a strategy of differentiation. Furthermore the market growth is slow, and it does not change all that much, the main transnational companies between 1995 and 2007 stayed unchanged; they are Chiquita, Dole, Del Monte, Fyffes and Noboa. These transnational companies (TNCs) control over 75 percent of the world trade (Chiquita 26%, Dole 25%, Del Monte 16%, and 8% for Fyffes and Noboa). But Fyffes is the market leader in UK, Ireland, the Netherlands, Spain and Denmark.
The difference between each exporter will be in terms of the prevailing production systems and costs of production. Shipping and fuel are the most important costs for Fyffes, but also these costs are not specific to Fyffes, and their increasing is a risk for all competitors. Thus Fyffes requires its direct banana and pineapple suppliers to have low costs in so much as are possible. It also expects the suppliers to comply with policies which are designed to reduce the impact of agricultural production on the environment and to ensure safe working conditions and fair treatment for workers in compliance with internationally accepted labour standards.
Fyffes
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