ppt international business final.pptx

7/29/2019 PPT international business final.pptx

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Presented To : Dr. Manohar Pandit

Case Study Analysis : Are Colombian Flowers Experiencing a

U.S. Drought?

Presented By :

Ms. Chetna Koli (A-07)

Mr. Amit Kadam (A-26)

Mr. Nitin Rathod (A-31)

Mr. Ashish Mishra (A-40)

Mr. Vikas Padwal (A-49)

Mr. Abhishek Belsare (C-01)


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Are Colombian Flowers Experiencing A U.S.

Drought?


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World Flower Market-Flower Industry Overview

Floriculture Item Sales at All Retail Outlets in U.S.

Source-U.S. Bureau ofEconomic Analysis, May 2012

Year Sales

2011 $32.1 billion

2010 $30.5 billion

2009 $29.6 billion

2008 $33.0 billion

2007 $34.6 billion

2006 $33.7 billion

2005 $31.1 billion

2004 $29.4 billion

2003 $28.2 billion

2002 $27.7 billion

2001 $26.7 billion

2000 $25.3 billion


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Where Flowers Come From (2010)

83 % cut-flowers production from :

Holland

Colombia

Ecuador Kenya

73% cut-flowers imported by :

Germany

U.K.

Holland

France


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Flower market trends in U.S.A

Size of the floriculture industry: US$19.4 billion

Specialty-cut flowers increased their share in sales toUS homes.

Ten years ago, half the sales of ornamental productsin supermarkets were flowers, today they representtwo thirds.

Fresh-cut flowers make up 75% of the transactions inflorist shops.

Internet sales of flowers held its participation atbetween 5% and 6% of the number of transactions.


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The Colombian Flower Industry

1,000,000 Colombians depend on floriculture

7,266 hectares

60% of the workforce are women

95% of total production is exported

Colombia is: the first supplier of flowers to the United States

the first supplier of carnations worldwide the second largest flower exporter in the world

75% of air cargo exported from Colombia in the last 10 yearwere flowers


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The Colombian Flower Industry cont

Colombias 2nd leading agro export (cut-flowers),

distributed to 89 countries, makes it number2 exporterworldwide.

Colombian Flower Producers Firms divided in two :

Asocolflores (large exporters)

Fedeflores (medium-to-small sized colombian-ownedfarms)


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Key Local Characteristics For Flower

Industry Development

Ideal Climate

Low-cost Labour

Suitable Transportation

Proximity to U.S. Market

The Colombian entrepreneurship

Abundant water resources

Good air connections

Colombia leveraged the Flower Industry


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Exchange Rate Currency

COP-Colombian Peso

USD-United States Dollar

COP/USD = 1,788.27518

USD/COP = 0.00056


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Colombia

America

Strong Air Connections


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ColombiaUnited States Relations

Mutual cordiality during the 19th and early 20thcenturies.

Key Issues:--Fighting communism

-War on Drugs

-Threat of terrorism


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Timeline Of Colombian Flower

Industry

1960s - Colombia cut flower industry began

1969 - 1st Multinational Columbian CompanyFloramerica

1970s - Colombia quickly grew to be a major exporter of cut

flowers to the US and many other countries

1974 - Colombia accounted for 83% of all imported cut flowers inthe U.S.

1980s -second largest exporter of cut flowers

1991- President Bush Sr. passed the Andean Trade Preference Act(ATPA)

2009 - more than 80% of all cut flower exports to the United States

(U.S.) were from Ecuador or Colombia


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ATPDEA

Andean Trade Promotion and Drug Eradication

Act ,2002

Extension of ATPA, 1991

Help to Bolivia, Ecuador, Peru & Colombia

Elimination of Tariff Duties

Expiry of ATPDEA IN 2011, US importers had to pay 3.2to 7% tax on Colombian flowers


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USAID

U.S. Agency for International Development

Social aid, Funding aid by U.S. to Colombia

Result-

1,72,000 Jobs (92,000 directly associated withfloriculture)

Corporate Responsibility


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US-Colombia

Free Trade Agreement: Allies Get Closer

Free Trade Agreement (FTA)

Eliminating the trade barriers

Colombia will have an upward trend in terms oftrade and investment relations


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Current Challenges For The Flower

Industry

Excess Supply with unmatched Demand

Seasonality of Sales within U.S.

(Mothers Day & Valentines Day)

Distribution Channel (Supermarket Standards& pricing)


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Tools To Navigate The Current Challenges

Relying in intimate knowledge of the Industry

High quality flower industry

Future technological advances

Identify individual firms Strengths andweaknesses(growth potential)


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Supply > Demand

Expanding the Pie

Marketingcampaign


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Understanding U.S. Culture

Top Five Cut Flower, Flowering/Green Plant and

Garden Plant Purchasing Holidays in the U.S.

Christmas/Hannukkah

Mother's Day

Valentine's Day

Easter/Passover

Thanksgiving

Top Five Non-Calendar Occasions to Purchase Cut Flowers,

Flowering/Green Plants and Garden Plants in the U.S.

Home decoration

Birthday

Sympathy

Anniversary

(Source: Ipsos-Insight FloralTrends Consumer Tracking Study, 2005 as cited bySAF, 2005)


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Fedeflores Are To Be Given Attention

Make information accessible to SMEs

Improve financing possibilities for SMEs

Targeted research and training for SMEs


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Potential Market - Europe


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Questioning Sustainability?

Is European market Sustainable?

Swiss spend77(US$112)22(US$ 29) spent by Americans

Check - Flow Route Euro conversion Rate Freight & Tariff

Consider the local and global aspects of each of theseareas


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Conclusion

Global trade is not about protecting selectedgroups of producers but about affordingconsumers choice, quality and price, and it

seems that Colombia's flowers will carry onblooming in the American market andothers too


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ppt international business final.pptx

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