When Better Doesn’t Pay: The Case of Ecuadorian Roses
Case number:
A08-19-0009
Abstract
At the end of 2018, international markets were no longer paying a premium for Ecuadorian roses. Despite globally recognized product quality, mainly attributed to a longer vase life, Ecuadorian rose growers found it extremely difficult to achieve attractive levels of profitability. A multi-year analysis of US-based data showed just how pronounced this trend was (see Exhibit 1). Being one of Ecuador’s chief exportable products, and generating more than 100,000 jobs, the industry needed a change. How could this small Latin American country reimagine how it competes in this global market?
Teaching
Teaching Purposes including 3 learning objectives
1. To consider enterprise challenges and opportunities as product superiority and price premiums don’t correlate.
2. To examine ways to overcome the dilemma that arises when superior products struggle to command premium prices in international markets using the specific example of Ecuadorian roses.
3. To consider the economic and social implications participants in a declining industry face.
4. To debate and better understand the decisions leaders must face when their comparative advantage for producing a premium product doesn’t translate into premium prices in international markets.
1. To consider enterprise challenges and opportunities as product superiority and price premiums don’t correlate.
2. To examine ways to overcome the dilemma that arises when superior products struggle to command premium prices in international markets using the specific example of Ecuadorian roses.
3. To consider the economic and social implications participants in a declining industry face.
4. To debate and better understand the decisions leaders must face when their comparative advantage for producing a premium product doesn’t translate into premium prices in international markets.
Case number:
A08-19-0009
Subject:
General Management
Year:
Setting:
Ecuador, Europe, Global
Length:
9 pages
Source:
Published sources