International Business

Case 03
Group A
Group Members Name:
* Name: Ali Md. Nahian
ID: 1812729030
*Name: Sunan Ahmed
ID: 1811898030
*Name :Rifatul alam
ID: 1812589630

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*Name: Chowdhury Basit Abdullah

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ID: 1731047630

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*Name: Tabassum Chowdhury Medha
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ID: 1731428030
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Roses with altitude: why Ecuador’s flowers industry stands out.

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• What is the basis of Ecuador’s comparative advantage in the production of roses?

Ecuador is the world's fourth biggest maker of rose. The basis advantages in the production of
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roses are:
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1. The mix of extraordinary daylight, fruitful volcanic soil, a central area, and high-
elevation makes for perfect developing conditions, permitting roses to blossoms nearly all year.
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2. And furthermore modest work and bringing down the exchange is the reason that
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Ecuador clearly has relative points of interest of roses.

3. It has its own competitive advantage of unique climate condition’s and innovation.
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2. What is the reason behind the growth of the Ecuadorian rose industry?

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 The growth of the Ecuador’s floriculture industry was kick started at 1991. In the early years
rapid growth was accompanied by criticism of the wages and working conditions of the flower
works but after a lot of labor unrest, the industry cleaned up its act. They improve their flower
process and try to reach out the other countries as well. Like most the Ecuadorian roses are sold
in the united states of Europe, and they made their flower in good quality and sell it at lower
price. By doing all these they made a good profit and it helps the growth of the industry.

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Traditionally, the US has been the biggest market for Ecuador’s flowers, accounting for 88 per
cent of exports in 1990. Today that figure has fallen to 41 per cent and exports to Russia have
increased to 23 per cent. Whereas US supermarkets and their customers prefer shorter flowers,
Russian consumers like large roses of between 90cm and 100cm, which can cost significantly
more. Or at least, they used to. BellaRosa specializes in the premium long-stemmed varieties

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with large heads that are particularly prized in Russia. The signs dotted around the reception area

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are in both Spanish and Cyrillic script to guide Russian buyers and visitors around the plantation.

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With the present world situation, an important group of companies has shifted markets without

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having time to change product characteristics and marketing strategies, having much lower
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prices than expected. And it’s more likely that more Russian-oriented companies will keep
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changing part of their sales to destinations like the US and Europe. A complete process of change
can take no less than six months. Ecuadorean plantations are now attempting to re-orientate
themselves to the US market and its preference for shorter, cheaper roses, but it takes time to
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replant. At the moment, the lorryloads of roses are still trundling down Ecuador’s highways, but
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the Russian market offers little to be optimistic about. On International Women’s Day, March 8,
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which is traditionally the most important date in the calendar for sales to Russia, exports from
Ecuador were down 16 per cent. Whether the signs on the BellaRosa plantation will soon change
from Russian to English remains to be seen.
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Q4. How does the rose export industry benefit Ecuador? Who are the main competitors of this
Ecuadorian rose industry?
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Ans:
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The rose export industry by using the advantages of the climate such as sun light and there is no
use of artificial illumination it grows flowers all year around and it keep the environment clean
and also the perfect use of renewable resources. This company has a huge contribution in the
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economy of the Ecuador. The flower industry is a huge source of employment for the workforce
of the Ecuador and wages and salary is higher than country like Colombia and the developments
in working condition is noticeable. More over the flower plantations has a great attraction to
visitors. Another thing is that by selling those product in US the industry earn us dollars and also
it is expanding its business to the Europe in Russia and only in international women’s day this
industry sell a lot of flowers to Russia.

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 Ecuador has one of the highest minimum wages in the region; it currently stands at $354 per
month, almost $100 higher than that of Columbia, which is the biggest South American rival of
Ecuador in the flower business. To add to Ecuador’s problems, other equatorial countries are
rapidly developing their own industries. De Ruiter has plantations in both South America and
Africa and as Ad van Rooijen explains, the contrast is stark. “Africa is booming, particularly
Kenya, followed by Zimbabwe and Uganda. In Kenya the plantations are going to higher and
higher altitudes so you can grow the same long-stemmed varieties as they do in South America,
and of course Africa is much closer to the big markets of Europe and Eastern Europe. So, these
countries are the main competitors of Ecuadorian rose industry.

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