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Ecuador: A Rosy Export Future
Transcript of Ecuador: A Rosy Export Future
Negotiations are done via email
Exporters make occasional visits to importers
Sales are f.o.b. Quito
Importers sell to wholesalers
Market retailers and hotels
Wholesalers sell to florists then to final consumers
Sales to importers are highly personalized
5. There are a number of ways that Ecuadoran growers might increase demand for their cut roses. Among these are;
(a) to try to get more consumers to move up-market by buying premium roses,
(b) to promote more rose demand for a different special day, and
(c) to promote sales in relatively untapped markets, such as the Middle East.
Compare these and any other alternatives that you can think of.
1. Cultural Factors
2. Legal/Political Factors
3. Economic Factors
Two Major Factors:
1. Expanding Sales
2. Improved Technology
Comparative Advantage- Global efficiency gains may still result from trade if a country specializes in what it can produce most efficiently-regardless of whether other countries can produce those same products more efficiently.
Absolute Advantage- Ecuador has an absolute advantage in producing a premium flower from its natural resources.
Individual families owned farms and diversification
United States largest market
Ecuador’s cut flowers exports consist mainly of roses
Exceeded only by petroleum and banana exports
700 companies, 70,000 people directly and 250,00 indirectly
300 rose farms
Colombia is top exporter
Kenya and Ecuador right behind
Ship regionally (Colombia and Ecuador primarily to the U.S., Kenya to the Netherlands)
UPS, FEDEX etc. Allow for same day delivery
Global Changes (cont.)
Grower’s Lack of Control
Promote Natural Resources
6. Some countries have had success by promoting the nationality of their products, such as the Juan Valdez campaign for Colombian coffee and the “If it’s Danish it’s good” campaign for Danish agriculture products. Discuss the viability of a national campaign to promote Ecuadoran roses abroad.
A. Change Consumer Demand
B. Promote More Special Days
C. Market to the Middle East
D. Team Recommendation
4. Think back to the external environmental conditions (cultural, legal-political, and economic) discussed in Chapters 2 through 3 and discuss how these have affected and might affect future demand for Ecuadoran cut roses.
3. Look back in Chapter 1 to the factors in increased globalization and explain which factors have influenced the growth of world in cut roses and why.
Theory of Country Size – Large countries usually depend less on trade than small ones.
2. What trade theories do not help explain Ecuador’s competitive position in exporting roses?
Why do these theories fail to explain?
Factor-Proportions Theory- The differences in countries endowments of labor compared to land or capital endowments explain differences in the cost of production factors.
1. Explain each of the trade theories that help to explain Ecuador’s competitive position in exporting roses.
Factors to Grow
Alignment with Demand
Ecuadorian roses have larger buds, more vibrant colors and last longer once cut.
Sell for more than Colombian roses, higher margins.
Ecuadorian Adv. (cont.)
Position on Equator
High altitude growth
Watered with melted snow from the Andes
Less rain than Colombia, less risk of damage
Rose cultivation started in Ancient China
Small market due to perishable product
Air travel allowed for fast delivery
Account for almost half industry
A Rosy Export Future
Professor Ray Valadez