discussion- Globalization
Diamond11
group_1_ecuadorean_rose_industry.pptx
Ecuadorean Rose Industry Case Study
Aayush Singhania
Davey Gant
Donamechi Davis
Jorge A. Hernandez
Sojung Kim
Harvard Summer School 2011
MGMT S-5650
International Business
Question 1
Ecuador is the world's 4th largest producer of rose.
The country exports nearly $240 million.
The roses are exported mostly to the United States and Europe.
What is the basis of Ecuador’s comparative advantage in the production of roses?
The lowering of the trade barriers.
More efficient harvesting techniques.
Area on which the rose is grown.
Cheap labor.
Sunlight, fertile soil, equatorial location.
Harvard Summer School 2011
MGMT S-5650
International Business
Question 2
Most Ecuadorean roses are sold in the United States or Europe. Who in these countries benefits from the importation of Ecuadorian roses and how do they benefit? Who loses? Do you think the benefits outweigh the cost?
The United States and Europe are the main importers of Roses.
The consumers will benefit because they can buy great quality at a lower price.
The Florist will also benefit by selling cheaply produced roses which they have arranged, for premium price; especially on holidays like mother’s day and Valentine’s Day.
However major rose produces in and outside of these two countries will suffer. They will first lose customer which will lead to a lack of profitable business. Less profit will lead to layoffs, which will soon lead to foreclosures and bad debt with the government. The more bad debts you owe the more control the government has over your life.
Harvard Summer School 2011
MGMT S-5650
International Business
Question 3
How does the rose export industry benefit Ecuador? Do these benefits have any implications for the United States and Europe?
Job Creation
Increase in Taxes due to Increase in number of rose growers
Earning of Farm Labourers
Implications
Harvard Summer School 2011
MGMT S-5650
International Business
Question 4
How should developed nations respond to reports of poor working conditions in this industry? Should importers in some way certify Ecuadorean producers, only importing from those who adhere to strict labor and environmental standards?
Accusations of misuse of toxic chemicals
Leading to health issues
Developed nations must form their own moral compass
Possible solutions include voluntary programs to identify responsible rose growers or trade sanctions
Trade-off between safety measures and their consequences
Harvard Summer School 2011
MGMT S-5650
International Business
Case Update
Has the problem been solved already?
New masks, gloves and equipment, but the health conditions still prevail.
Roses are sold for as much as $120 USD, most of which go to the U.S.
116,000 of which 60% are women.
Two thirds (about 500 million blooms) to U.S.
Still pay roughly up to $140 to employees.
Rose companies pay doctors to visit weekly.
Sources updated up to 2003 and 2010.
Harvard Summer School 2011
MGMT S-5650
International Business
