Blue Skies: Connecting African Farmers to Global Markets
2014 | Case No. IDE08 | Length 16 pgs.
In June 2014, Anthony Pile, founder and chairman of Blue Skies, called a board meeting to discuss the company’s development plans. The economic crisis in Europe had made consumers more price sensitive, putting pressure on profit margins and spurring the search for new markets. Founded in 1998, Blue Skies was a fruit processing company headquartered in the U.K., with its main production site located in Ghana, Africa, where it cut and packaged fruits sold primarily to retailers in Europe. Relying on air-freight transport, it shipped produce within 48 hours of harvesting. Although Blue Skies had grown into a multinational with production operations on three continents, the company was still dependent on European markets. It remained largely focused on the U.K., whose retail sector was one of the most competitive in the world, but thanks to its product innovation capabilities, it was in a unique position to shape the future of the fresh-cut fruit industry. The case describes the evolution of Blue Skies since its foundation as a small fruit processing business exporting fresh-cut pineapple to Europe. It gives an overview of its strategy to capture more value using vertical integration as a mean to reduce supply costs and improve the quality of inputs. It illustrates how competitive structures in the fresh-cut market shape the balance of power within the agri-food value chain, and how Blue Skies maintained its competitive edge through a combination of production efficiency, product quality and market diversification.
Learning ObjectiveTo show how innovation in a commodity chain can be a source of value creation and competitiveness. The purpose of the case is to expose students to key concepts of competitive strategy and value chain analysis, with particular reference to approaches such as process/product/channel/intersectoral upgrading.
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