Ecuadorian Rose Industry

* Case Title -

Ecuadorean Rose Industry

Course Name: MGT 372 (International Business)

Section: 08

Team Name: Harsh Love

Members:

Abdur Rakib Khandoker 1220035030

Sadruddin H. Hirji 1230442030

Rafayatul Kabir 1311251630

Raiyaan Mahmood 1310335030

Rad Sharar Bin Kamal 1310762030

Scenario and background information

Ecuador has 460 rose farms located in the Cayabe and Cotopaxi regions. Ecuador has a comparative advantage in rose production and is the world’s fourth-largest producer of roses. Roses brought Ecuador’s gross national income per capita to $1,080 a year and helps generate $240 million in sales a year, even more including tariff and tax revenues. This has helped to pave roads, build schools, construct sophisticated irrigation systems, develop urban establishments and increase standards of living.

Issues

Q1. What is the basis of Ecuador’s comparative advantage in the production of roses?

Comparative advantage basically defines all the advantages and opportunities enjoys by one country over another. A country can enjoy comparative advantage in terms of geographical location, wide varieties of natural resources as well as cheap labor. Labors are one of the factors of production which is solely responsible for producing goods, having a cheap labor drastically reduces the cost as well as uplifting the profit level of the country.

Most of the regions in Ecuador are located on top of the hill of Andes. The rose plantations are located 10000 feet above the ground. The soil of the region is highly fertile primarily because of the volcanic eruptions which deposited innumerable amount of sedimentation and other minerals which accentuate the growth of such beautiful roses accompanied with different shades of colors ranging from crimson red to lover’s blush. The geographical location of Ecuador provides the country with maximum revenue thus assisting the country in attaining $240 million of surplus simply by exporting roses of vibrant...