Globalization, Coffee Crisis, Colombia
Globalization has affected every part of the society around the world. Multinational corporations are opening new shops, manufacturing plants, and marketing agencies in other countries around the world. These efforts are aimed at reducing costs of production, in search of cheap labor as well as marketing strategies to acquire new markets. In its expansion strategy, Starbucks has embarked on a project to establish coffee shops in Colombia with the aim of tapping the huge coffee market in the country. Despite the many opportunities in employment and publicity of the coffee market in Colombia, there are factions in the coffee sector worried about the fate of national coffee chains such as Juan Valdez and OMA.
In rare cases, governments have adopted mercantilism as means of shoving local business into profitability in the advent of globalization. The national coffee farmers' strikes in Colombia that started in February 2013 were instigated by the falling coffee prices in the country (Clarence-Smith & Topik 2003). To many, globalization led to increased production of coffee berries leading to low global prices. In the Colombian context, the introduction of Starbucks coffee shops may improve the coffee prices in the country. However, the local coffee chains argue that introducing mercantilism would protect them from the huge multinationals such as Starbucks.
[...] Conclusion Globalization can be harmful as well as helpful to an economy. In order to harness the benefits of globalization, it is important for countries to adopt globalization strategies that accrue benefits to the nation. As it has been discussed, the Colombian coffee crisis that started in February 2013 and still continues can be resolved through adoption of proper globalization strategies. Strategies that attract investment in the production and marketing of coffee will resolve the coffee crisis and stop strikes by the farmers. [...]
[...] The coffee crisis in Colombia erupted as a result of poor prices for farmers. The poor prices were as a result of increased supply of coffee in the global market. By adopting mercantilist policies, the government would hinder the entry of multinationals such as Starbucks (Hellin & Higman 2003). The coffee crisis which has led to several strikes by farmers would not be solved by such policies since locally-produced coffee market in the country would remain low as the few coffee stores would continue to import coffee for local consumptions. [...]
[...] Starbucks as Solution to Globalization and the Coffee Crisis in Colombia Contents I. Globalization and the Coffee Crisis in Colombia II. Starbucks as a Solution to the Coffee Crisis III. Mercantilism and the Coffee Crisis in Colombia IV. Mercantilist Policies as Accelerators of Coffee Crisis V. Conclusion Globalization Globalization has affected every part of the society around the world. Multinational corporations are opening new shops, manufacturing plants, and marketing agencies in other countries around the world. These efforts are aimed at reducing costs of production, in search of cheap labor as well as marketing strategies to acquire new markets. [...]
[...] Globalization on the ground: Postbellum Guatemalan democracy and development. Lanham [Md.: Rowman & Littlefield Publishers. Clarence-Smith, W. G., & Topik, S. (2003). The global coffee economy in Africa, Asia and Latin America, 1500-1989. Cambridge Cambridge University Press. [...]
[...] To many, globalization led to increased production of coffee berries leading to low global prices. In the Colombian context, the introduction of Starbucks coffee shops may improve the coffee prices in the country. However, the local coffee chains argue that introducing mercantilism would protect them from the huge multinationals such as Starbucks. Globalization enhances free trade while the mercantilism, in most part, hinders free trade. In the advent of new strikes by coffee farmers in Colombia, should the government embrace globalization or should it adopt mercantilism? [...]
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