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Fair Trade Coffee Case Study Sample Essay

Mexican java husbandmans have had an tremendous sum of problem selling their java beans at a monetary value that would bring forth sustainable net income. Nico Roozen and Frans van der Hoff had a vision to implement a just trade concern that would increase non merely net incomes of the husbandmans but their overall life styles. Nico and Frans both face the job of distribution because reasonably traded java was distributed merely through the alleged Third World Shops that didn’t generate adequate demand to make a stable supply concatenation. The possible options to this job would be for them to make their ain trade name of java. publicize the rise of just trade java and its great quality. or make a trademark with Solidaridad.

The first option would be for the Mexican husbandmans to make their ain trade name. The first advantage is the company could get down directing its merchandise in their ain bundle to guarantee quality. and direct it to merely the fatherland of Holland. This would do the gross to mount dramatically. The company could find a monetary value that was competitory with the other trade names that were presently sold and allow the quality of their java speak for itself. The 2nd advantage is one time the Mexican java gained a undermentioned in Holland. the company could widen the distribution to the other states in their part that consume the highest per capita of java universe broad: Suomi. Sweden. Norway and Denmark. The 3rd advantage is the advertizement of the new company could be aided by the Solidaridads’ bridgehead in the churches. If churches indorsed the java from Mexico. its parishioners’ may follow the tendency and get down buying Mexico’s java.

Once the java had a strong consumer base. it could be sold in supermarkets where the mainstream consumer could buy it. While the vision of Mexican husbandmans to hold their ain separate company to sell their merchandise seems like an easy solution. it is far from that. The first disadvantage is Solidaridad would hold to put up a whole new company to carry through this. Solidaridad would hold to put on the line a great trade of money that it does non hold. and since the husbandmans presently do non hold adequate capital to help the start up of a new company. this solution is highly hard. The 2nd disadvantage is while Solidaridad is a Dutch inter-church foreign assistance company. the start of a Latin American java company is outside of its normal concern. It is unfamiliar district for the company. The 3rd disadvantage is they have small cognition of the old transporters who are now disgruntled that they are losing their monopoly over the java husbandmans. The fiscal hit that the prairie wolfs could convey upon the new company could do the whole Solidaridad organisation to travel under.

The 2nd option would be to form an organic advertisement run on the rise of just trade java and the UCIRI. The first advantage is it would inform people of the new thought of just trade java and the quality of the merchandise making more demand. They need to advise the universe of just trade java and its benefits. The 2nd advantage is it would increase market portion and perchance assist acquire just traded java into supermarkets and bigger retail shops. All reasonably traded java sold through the Third World shops accounted for merely. 2 % market portion. In order for this java to pull more mainstream consumers it has to be sold through supermarkets. The 3rd advantage is it could raise consumer consciousness of what reasonably traded coffee’s ends are. Many consumers don’t know about the negative effects on manufacturers of international trade. which might do them to exert their buying power. positively more towards just trade java alternatively of regular java.

The first disadvantage is it would be a big ball of money to form an advertisement run. The UCIRI is a new company. but has many fiscal issues with the Mexican Bankss affecting paying off debt. The 2nd disadvantage is they would hold to take clip to develop an advertisement run. They would hold to make out to Solidaridad to come up with the resources and people to form it. The 3rd disadvantage is even with an organic advertisement run. it would be a monolithic battle to turn consumers attending to reasonably traded java from regular java. Regular java dominates the market and many people feel loyal to their trade name of java they drink. The advertisement run could turn into a waste of clip and money by non turning many consumers attending to fair traded java.

The 3rd option would be for the Mexican java workers to make a trademark within the Solidaridad Company. The first advantage of this option is Solidaridad would supply and give entree to more resources that the husbandmans can’t range by themselves. The 2nd advantage is it would be less than get downing up their ain company. Since it would be merely a subdivision of the Solidaridad Company. it would be less than get downing up and funding a whole new company. The 3rd advantage of this option is it would be quicker to get down than a whole new company. Time is a cardinal factor for the husbandmans particularly with the Mexican Bankss seting force per unit area on them to refund debts. so they need to bring forth gross every bit fast as they can. The first disadvantage of this is it still would be a good sum of money even though it is less than get downing up a whole new company. The husbandmans are on a really tight fiscal budget with non a batch of money to pass.

The 2nd disadvantage is the farmer’s ultimate end is to run by themselves without support from other companies. By making a trademark with Solidaridad. they could be looking at taking a measure back from their hereafter end than taking a measure frontward. The 3rd disadvantage is get downing up a trademark has a good sum of hazard. The husbandmans still owe money to the Bankss. the ‘coyotes’ are seeking to monopolise and halt them from runing on their ain. and the 3rd universe portion of java gross revenues is merely. 2 % . which is non about a strong adequate consumer base to go successful.

The best solution for the Mexican husbandmans is to make a trademark within the Soldaridad Company. This would let them to make a subdivision that could stipulate in the exportation of java without holding to engage an full new staff to run a new company. The trademark could go on to supervise the lease of trucks and perchance assist the java husbandmans set up relationships with the boats from the Netherlands. Because the concern program would merely imply assisting with the enfranchisement of reasonably traded java. the company could concentrate on that narrow end and accomplish it. It is less expensive to merely make a sub-division in the Solidaridad Company so to make a new company out of nil. The reduced startup cost would assign more money to be used in the exportation procedure and to accomplish the higher quality that Mexican java wants to be known for. The possible long-run benefits are much of the same to get downing a new company in itself.

The java can derive a strong followers in Solidaridad’s fatherland Holland. and finally spread out into all of the Netherlands. It is quicker to get down so a whole new company. Time is indispensable for the husbandmans that owe big debts to the Mexican Bankss and the hostile prairie wolfs that want to return to power in the monopoly of java gross revenues. The Oklahoman the UCIRI and java husbandmans can run under their ain gross. the easier it will be for them to spread out. The disadvantages are overlooked by the advantages of merely medium hazard and the big possibility of wages in the long tally makes this the best concern option.

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