Introduction
As a world-renowned player in the food industry, Blue Skies has created a niche out of ensuring they provide fresh and quality products for its customer base. Starting off a small company in Ghana, the company has managed to expand its operations and become a multinational corporation have leveraged several innovative strategies over the years. With over five thousand employees spanning across the globe, Blue Skies has managed to remain competitive and successful through flexibility and adaptability. By establishing an efficient supply chain and farmer network, Blue Skies continues to enjoy significant industry dominance. The company’s journey has, however, not been a smooth ride altogether numerous challenges and upheavals have been part of the company's growth over the years. This write-up delves into the analysis of a Harvard University case study on the company.
Case Summary
Following a global economic crunch in 2008 a series of economic events unraveled to bring about tremendous economic tribulations, more so for the business world. The impact of these changes would go on to haunt Blue Skies in 2014. Blue Skies primary market of Europe was undergoing a major economic crisis. This, in turn, made consumers to be price sensitive thus pilling a great deal of pressure on the company’s profit margins. Blue Skies has its origins back in 1998 focusing on the food industry, with specialization in fruit processing. The company's headquarters are to be found in the U.K with its operations spanning across Africa as well as South America. Brazil, Ghana and South Africa are some of the core areas of the company’s operations (Clara & Ferguson, 2014). The company’s products mainly comprise of packaged fruits and with the main target being retailers across Europe. In differentiating itself from its competition focuses on the provision of fresh products to its clientele, a strategy that is achieved by leveraging the global air-freight transport system.
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In this case, therefore, it is able to deliver it produce within 48 hours as compared to the sea shipping system that takes weeks for the produce to arrive at the store. The Blue Skies case study thus focuses on the evolution of Blue Skies since its inception up until 2014. Beginning a small company processing fruits in Ghana, the company has since grown to become one of the largest suppliers of fresh fruits in Europe. The case study also covers various strategies that were employed by the company in navigating through different economic challenges and problems. It is evident that vertical integration was vital to the company's success by allowing it to not only reduce supply costs but also enhance the quality of its products. The major take away from the case study is that competitive structures are vital within any organization. In this case, therefore, it is necessary to focus on the enhancement of the product quality, production efficiency as well as market diversification.
Case Analysis
Blue Skies foundation is to be found in the choice of positioning of company operations. Africa and more specifically Ghana offered a significant competitive edge in terms of air-freight charges as well as ease of access to the European market in terms of proximity. This best captured in the statement: “With freight costs at about $0.70 per kg compared to $1.5 to $2 from the other countries supplying Europe with fruit and vegetables…” (Clara & Ferguson, 2014). In this case, therefore, the company focused on developing an efficient and effective supply chain within the Ghanaian fruit industry. Pile, Blue Skies founder, began by establishing links with various smallholder farmers and high-street vendors. This allowed for a smooth supply of high quality. It, however, came with the challenge of maintaining quality as the demand for the fruits continued to expand within the European market. Blue Skies quickly responded by establishing the food safety and quality standards which were supposed to be observed by its suppliers.
The second challenge that Blue Skies had to deal with was that of industry fragmentation. The pineapple producers lacked coordination, an element that greatly impacted information flow. In this case, therefore, consistency of supplies was often unattainable. Blue skies navigated this particular obstacle by creating a culture of trust and respect. In other words, the company focused on wining the loyalty of the farmers by developing programs such as interest-free loans, timely payments and prices that were above the industry average (OECD, UNDP, UN & ADB, 2013). Blue skies have also continually reinvented its product offering to ensure it remains competitive. A good example is to be found in the company’s decision to introduce more tropical fruits through the inclusion of “fresh-cut assortments of mango, coconut, papaya and passion fruit” (Clara & Ferguson, 2014).
The company experienced another major challenge in the form of the smooth cayenne crisis. The introduction of a new pineapple variety by the name MD2 resulted in a shift in consumer preferences resulting in the significant decline in Blue Skies sales. Besides the problem of wasted investments on the part of the farmers, Blue skies also incurred tremendous losses as a result of the new consumer demands. Adjusting to these new production requirements pushed the company to adopt a strategy aimed at improving the quality of its products (Chisholm, 2011). This particular approach was implemented by eliminating the knowledge and skill gap among the farmers. Efforts entailed the provision of agricultural education, agronomic support as well as assisting farmers to access credit finance (Christy & Bogan, 2011).
Blue skies went ahead to enhance the transportation network within its regions of operation by establishing road networks to enhance the efficiency of the supply chain. Besides saving the company delivery time, it also helped the company to improve product quality by eliminating the transportation delays and damage. The onset of the health-conscious consumer, specifically under the organic front, created another avenue for the company to increase its profit margins. Organic pineapples, on the other hand, presented a further challenge in terms of its color which remained green when ripe and proved to be a major customer turnoff (Shepherd, 2007). The company’s response came in the form of a change in pineapple variety in an effort t to leverage the organic production potential. A strategy that materialized through the inception of the Blue Skies Organic Collective (BSOC), an association that focused on the organic production of the Sugar Loaf variety.
Conclusion
While the case study begins with the 2014 economic crisis of Europe and its impact on Blue Skies operations, the entirety of the company’s story highlights the volatility and dynamism of the business world. Of greater importance, however, is the fact that innovation was central to Blue Skies ability to adapt and remain viable despite the stiff competition it was facing. It is evident that challenges and obstacles are part of any business operation. The secret, however, is to be found in smooth information flow, timely decision making, and innovation. The company's commitment to enhancing the efficiency and quality of the food industry has been vital in the company's growth and expansion over the years. Moving into the future, however, it necessary for the company to consider the integrating communication technologies within its strategy. This will go a long way in creating a more robust and dynamic organization whose decision-making is information driven.
References
Chisholm, L. M. (2011). Reinventing Africa into a Global Supplier of Food Goods: An Analysis of Agri-business Development, Sustainability, Supply Chain Integration and Export in Developing Economies . California CA: University of California, Riverside.
Christy, R. D., & Bogan, V. L. (2011). Financial inclusion, innovation, and investments: Biotechnology and capital markets work for the poor . Singapore: World Scientific Pub. Company Incorporated.
Clara, L. & Ferguson, J. (2014). Blue Skies: Connecting African farmers to global markets . Retrieved on 7 April 2018, from https://www.gsb.stanford.edu/faculty-research/case-studies/blue-skies-connecting-african-farmers-global-markets.
Organisation for Economic Co-operation and Development, United Nations Development Programme, United Nations, & African Development Bank. (2013). African economic outlook 2013: Structural transformation and natural resources . Retrieved on 7 April 2018, from http://www.undp.org/content/dam/rba/docs/Reports/African%20Economic%20Outlook%202013%20En.pdf.
Shepherd, A. W. (2007). Approaches to linking producers to markets: A review of experiences to markets . Rome: Food and Agriculture Organization of the United States.
