Dole Food Company Inc. Analysis

Executive Summary

Dole Food Company Inc. is involved in the delivery of fresh fruits and vegetables. Reports reveal that the company offers packed vegetables, ready-to-eat salads as well as fruit products. It will be documented that this company runs its business within four segments specifically fresh-cut flowers, fresh vegetables, packaged foods, and fresh fruit. The fresh vegetable section which basically entails the cut flowers operates via two divisions: specifically value-added products and commodity vegetables (“Dole Food Company, Inc. Company Information” n. p.). The firm sources allot and markets various kinds of fresh vegetables, like brussels, cauliflower, sprouts, eggplants, broccoli, green and red leaf lettuce, carrots, romaine lettuce, iceberg lettuce, artichokes, celery, butter lettuce, green onions, asparagus as well as snow peas. Dole Food Company’s global team of packers, growers, processors, employees, and shippers is fully committed to providing high-quality and safe fresh fruit, food products and vegetables along with fresh-cut flowers as well as environmental protection where its products are processed and grown where it expands in the line of value-added products.

Within the primary markets in which the company serves, it also takes the largest market share in its key product types, including salads, bananas, packaged fruit, and salads. The company’s annual return is estimated at $7 billion, which serves as an indication of having a good performance in company departments. The company supplies retail, wholesales well as institutional customers around the world with high-quality food products. The management team believes that the DOLE trademarks, as well as their products, actually have a global appeal since they provide convenience and value, while correspondingly profiting from the mounting focus towards wellness and health within the consumers worldwide (Dole Organic n. p.).

The company was founded in 1851, where since then they have actually developed a fully-integrated functional platform which allows them to grow, source, process, distribute and market their approximately 200 products in at least 90 countries with David H. Murdock acting as the chairman, owner as well as the chief executive officer of Dole Food Company Inc. (Ziegler 187). The management sources their products globally both from independent and producer grower arrangements and directly from Dole leased or owned land through which they offer different farming, marketing, and shipping services. The company then uses its worldwide cold storage chain of supply which features the leading refrigerated containerized type of fleet within the world, plus a wide network of ripening, packaging and distribution centers that are aimed at delivering fresh Dole goods to markets. It will further be realized that Dole Food Company was, in fact, incorporated in Delaware during July 2001. The company executive offices are situated at One Dole Drive in Westlake Village, California.

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POSISTION

Mission Statement

Dole Food Company, Inc. considers that for them to preserve sustainability, it is of supreme significance to treat their resources, people, community and environment as the most valuable assets. Organizations can be a significant agent and actor for change by creating services and products which the society values, instituting primary jobs as well as efficiently using the resources available (Dole Sustainability. Mission Statement n.p). A clearly stated mission helps in improving working conditions, addressing the rights of the employees, thus, reducing any possible chaos that may arise in the workplace. It must also be ethically responsible for concerning environmental responsiveness and corporate social responsibility. Ideally, as a firm devoted to turning the world to become a better living place for both today and during the future, the mission of Dole is to:

· Provide the whole world with nutritious and healthy foods.

· Providing employees with competitive wages, sufficient benefits as well as a safe working environment

· Honoring the rights of the employees

· Empowering and enhancing the communities so as to prosper and advance.

· Protecting natural resources as well as vigorously seeking techniques to decrease the environmental impact.

Vision and Goal

It will be documented that Dole has initiated charitable programs as a way of giving back to the surrounding community. Through steering one area, Dole focuses on maximizing its resources to make the utmost progress within that area. The goal of Dole under this perspective, therefore, is to assist the succeeding generation of grown-up avert various diseases through coaching the value of noble nutrition to their children via interactive and improved teaching curriculum for the schools countrywide. The company donates a non-branded CD-ROM program on nutrition education to schools (Charitable Programs n. p.). Additionally, Dole has extended to create a nutrition education website which is accessible on the Internet. This company has truly been a major donor towards countrywide food bank so as to assist in distributing supplementary fresh fruit as well as vegetables to charity organizations all through the United States. The program offers access to fresh produce which is ordinarily not obtainable within the low-income individuals’ diets. Within the overseas operations carried out by Dole, each branch contributes towards the societies in which the Dole workers work and live with a specific focus on conservation and reforestation; building hospitals, housing, roads, infrastructure and schools; and training the local people on care towards the environment.

Dole manages operations globally which belong to various economic sectors such as manufacturing, farming, research, food processing, transportation, sales and distribution. Within these operations, it will be recognized that the goal of Dole is to avert adverse effects on safety, health and environment. Reports reveal that it is the goal of the company to offer analogous levels of safety, health as well as environmental protection basically for those who help in production of the company products along with all the societies affected by their operations. Studies have it that Dole struggles to employ and develop approaches which are most effective and appropriate subject to local conditions so as to make substantial progress towards achieving their goals (Dole Sustainability. Dole’s Policies n.p). It should be acknowledged that the efforts undertaken these efforts, the firm is actually guided by means of scientific knowledge and research; risk analysis principles; community, public plus worker concerns; as well as regulatory United States standards and policies, the EU and international bodies like World Health Organization. In summary, Dole is fully committed to safety, quality, prevention of pollution and constant improvement towards environmental protection.

Key Stakeholders

As previously discussed, Dole is completely committed to offering transparent information towards the firm’s Corporate Responsibility in addition to Sustainability practices. For this to be achieved, Dole upholds a constructive and open dialogue with its key stakeholders, suppliers, customers, non-governmental and governmental organizations, trade unions, employees, consumer organizations, investors, community representatives, and shareholders. Dole considers that open dialogues are crucial towards the improvement of mutual confidence and understanding amid the involved parties. Within some sectors, like environmental and labor-areas, Dole has entered into partnership agreements particularly with the local stakeholders which aim at resolving local concerns before they actually grow to become problems (“Dole Sustainability” Stakeholder Involvement, n. p.). Some agreements usually set a background aimed at making sure that societies together with their representatives are capable of promoting their views in the event they want to create new community programs. Additionally, Dole maintains frequent communication especially with the local stakeholders and international multi-stakeholder initiatives so as to develop investment programs that may increase the levels of revenue to the company as well as the national income, a situation that helps in addressing the country’s macroeconomic problems, inflation, and unemployment.

SENSE

It will be documented that the company undergoes various risks that affect its production chain, profitability levels and competitive advantage among other critical areas. To begin with, natural disasters, adverse weather conditions, pests, crop diseases among other natural conditions impose substantial losses and costs to the business. Fresh produce is susceptible to adverse weather circumstances such as drought, floods, extreme temperatures and windstorms that are usually hard to foresee and may possibly be propelled by changes within the global climate. These conditions, therefore, cause unfavorable propagation conditions that reduce crop quality and volume. It will, as a result, be documented that the main sources where the company obtains its raw materials are affected by the natural conditions wherein the extreme cases, the products are fully destroyed. These factors, therefore, lead to rise of incremental costs, reduced revenues and extra charges that ultimately affect the financial condition and operations of the business.

Maintenance of the current market share is another problem facing the company. Currently, several firms compete within the area, reducing the anticipated sales, although very few established companies are capable of operating on a regional and national basis in several or one branded product lines. Most of the competitors may probably have larger operating flexibility making them respond quickly and more efficiently within the industry or be able to k introduce new products more quickly while having huge market support. Most of the product lines usually compete in terms of fresh alternatives, private label products, and imports. It will, thus, be recognized that this type of risk may be no longer operative in connection to the company being sold as soon as the transaction of sales is consummated. Another factor that may help to affect our market share is the fact that it may truly be difficult of forecast the promotional or pricing actions taken by the competitors since they may have a negative impact on the company (Dole Food Company, Inc n.p)

The third problem is that the earnings of Dole are sensitive to changes within the market prices and product demand. In the event there is excess supply, this condition may lead to severe price competition within the company. Negative effects arising from the natural conditions affect the market prices due to their influence on the quality and supply of the product. On the other hand, fresh produce is extremely perishable and in most cases, it ought to be transported to the marketplace and vended soon once harvested. A number of items, like lettuce, should be vended more hurriedly, but other products can be seized within the cold storage for lengthier time periods. The vending price obtained for every form of the product is subject to all of these influences, counting the quality and availability of the produce within the marketplace, as well as the quality and availability of competing kinds of produce. Additionally, overall public perceptions concerning health, safety or quality risks related to specific food products might decrease prices and demand for most of the products. A decrease within the vending price obtained for the products as a result of the factors defined above may possibly have material adverse consequences on the business, results of operations results and financial condition.

Fourthly, fluctuations arising from the currency exchange have a substantial effect on the operations of the company. Basically, approximately 200 items traded by the firm are actually grown, sourced, processed, distributed and marketed in at least 100 countries worldwide where most of the transactions are carried out in European currencies and United States dollars. This implies that transactions of the company are fully affected by the changes within the rates of the currency exchange in both selling and outsourcing locations. Studies extend to disclose that Dole approximates that a ten percent strengthening in the United States dollar comparative to the euro may decrease operating income by roughly $15 million, not including the effect of hedges against foreign currency exchange.

The continued utilization of herbicides and other hazardous substances during the operations of the business may result to harm of the environment leading to increased costs for the business. Dole uses herbicides among other hazardous substances which demand them to pay for the damages and costs linked with any improper application, misuse, and accidental release. The insurance of the company at times fails to cover these damages and costs necessitating supplementary means to be used.

Increases within the raw product or commodity cost like paper and fuel adversely affect the company operating results. Several factors may affect the supply and cost of fresh produce including currency fluctuations, external conditions, governmental changes in the regulations and laws, commodity market variations, natural disasters, agricultural programs, and prolonged and severe weather conditions. Many factors may affect the cost and supply of fresh produce, including external conditions, commodity market fluctuations, currency fluctuations, changes in governmental laws and regulations, agricultural programs, severe and prolonged weather conditions, and natural disasters. Augmented costs for purchased vegetables and fruit have negatively impacted the operating results in the past, although, there is no valid assurance that the indicated factors above will not unfavorably affect operating outcomes in the future. Varying prices of commodities considerably affect the company costs, literally reducing the anticipated profits.

An organization usually faces problems arising from its international operations. It will as a result, be recognized that the operations of the business are purely dependent on the products sold, purchased and grown internationally. These operations are a substantial factor within the c economies of countries in which the business operates, a condition that increases susceptibility and visibility to regulatory or legal changes. All these activities carried out by the organization are purely dictated to the risks which are inherent when operating within foreign countries (Dole Food Company, Inc. n. p.). The possible problems that accrue from operating in international market extend to include the fact that:

· Most of the foreign countries might change regulations and laws or introduce currency restrictions among other restraints

· In some countries, there is a possible danger that the government might confiscate the assets

· Other countries begin to impose burdensome quotas and tariffs

· Economic crises and political changes lead to changes within the environment of the business within which it operates

· International conflicts, such as terrorist acts, significantly affect the business, results of operations and financial condition.

· Political instability, economic downturns, civil disturbances and war dramatically disrupt distribution logistics and production and further limit the sales within individual markets.

The fact that the company may be required to pay significant penalties as stipulated in the European antitrust laws is one of the key problems experienced. The EC previously released a decision that was aimed at imposing a fine of about €45.6 million to Dole particularly on its subsidiary branch in Germany. This was due to the assumption that the firm had violated the competition laws in Europe. Therefore, it implies that the company may face penalties in the event it slightly violates laws, a situation that may affect the performance and operation of its activities.

The downturn witnessed in the global economy adversely affects the company where it leads to decline in revenue and sales, thereby upsetting the operations of the business. During global economic downturns, most of the customers reduce their amount of purchases and instead focuse on valuing prices, a circumstance that affects the pricing and sales of the products (Schaus 163). These trends in the economy might unfavorably affect the outcomes of the company operations since there is no guarantee on when or whether the confidence of the consumer will return and if a long-term recovery ensues.

The issues within the global credit and capital market may negatively affect the liquidity of the firm, raise the borrowing costs and further disrupt the customers as well as suppliers’ operations. It will be noted that the global credit and capital market have been experiencing disruption and volatility for the past couple of years, making it hard for businesses to access these markets. Dole partly depends on the well-functioning, liquid, and stable credit and capital markets so as to fund most of their operations. The management generally considers that their prevailing gyrating credit agreement, access to credit and capital markets and operating cash flows will essentially permit them to overcome their financing needs particularly for the predictable future since there is no enough assurance that the increased or constant disruption and volatility within the credit and capital markets will actually not damage their liquidity or escalate their borrowing costs.

An additional problem that the company faces is product liability and product contamination claims. The trade of food items consumption encompasses the jeopardy of injury towards consumers. These injuries may possibly originate from interfering by unlicensed third parties, product spoilage or contamination, counting the presence of foreign chemicals, substances, objects among other agents, or even residues used in the course of storage, growing, transportation or handling phases. The company has constantly been involved in lawsuits regarding product liability, where none happened to be material towards the business. Despite the fact that the company is subject to continuous governmental regulations and inspection and its facilities comply within all material esteems with appropriate regulations and laws, the firm is unable to be sure that the product consumption may not lead to health-related disorders in future or even that it will not fully be liable to lawsuits or claims concerning such matters (Wanjek 62-66).

Events that relate to the Dole brand may, perhaps, have a substantial impact on the business. Institutional and consumer recognition towards the trademarks of Dole and other related products and the link of these products with safe and high quality food items is an essential part of the business. This clearly implies that any occurrence of events that makes both the companies and consumers not to associate the products with safety and high-quality food products can have an unfavorable impact towards the value of demand and the brand name of Dole products (Rothwell 377-379). Finally, the main problem that the company faces is the effect brought about by changes within the market prices and product demand since the earnings are sensitive to these fluctuations. This is fueled by natural conditions as the firm deals with agricultural products.

UNCOVER

As discussed above, the key problem that the organization undergoes is fluctuations of the market prices which lead to changes within the anticipated sales and revenues. It is believed that a decline in the revenues of a firm affects its performance, environmental responsiveness and investment decision, and results in a possible closure. Hence, all the factors affecting the sales and revenues of the firm need to be addressed as soon as possible. The firm can decide to purchase in bulk when there is an excess supply of the products to ensure that during the periods of shortages which are purely caused by natural conditions, the firm is able to maintain its level of production. This strategy may be hard to adapt since most of the products are perishable and long storage calls for more costs. The firm may advance its storage facilities, for instance, by purchasing more and effective refrigerators that will help in storing the products for a long period of time. The firm may also decide to lay off some of its employees in response to declining revenues and sales resulting from the impact of environmental conditions. The firm may also indulge in programs that help in enhancing the production of the items through artificial means in the event environmental conditions become unreliable.

SOLVE

The company, therefore, needs to determine a feasible solution that will essentially help in ensuring that the impacts of the problem do not influence performance, production, and responsiveness to the communities and environment in general. Based on the data collected, bulk purchasing and the use of refrigeration may help in gradually solving the problem. Such an approach is economically wise and ethical and may result in increased production. The two strategies must be implemented simultaneously due to the perishability of the products. The other alternatives are considered to be not ethical, for instance, lying off the employees will certainly result in a higher ration of unemployment in the country. On the other hand, developing artificial methods of production, such as irrigation, is highly expensive, hence, the company may fail to afford them due to its current financial status.

BUILD

It will be realized that for the firm to reach a constant flow of income it should focus on addressing the issue of environmental conditions since they affect the prices that are passed to the customers. The purchase of goods in bulk and efficient use of refrigeration is affordable to the company as the costs that are incurred are larger than the consequences that might result in the event the business failure. Though the approach may incur additional expenses to the company, the benefits may surpass the costs incurred. Economically, in the event the supply of products reduces the demand, it automatically causes an increase in the prices. This serves as a clear indication that the company will obtain large profits from the increased prices, resulting from the reduced supply, thereby maintaining their market share and profitability levels.

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ACHIEVE

The solution to this problem should be fully implemented and introduced to the organization to ensure that its implementation is budgeted. Implementation of the approach will entail three steps which extend to include the following (Implementing Your Solution, n. p.).

· Preparing and planning to implement the desired solution

· Monitoring and implementing the action

· Analyzing and reviewing the success of the selected action (Section 7. Putting Your Solution into Practice, n. p.).

To determine the effectiveness of the solution aimed at addressing the key problem revolving around this firm will begin by determining and documenting the desired activities, indicators and outcomes. This helps in ensuring that one can check out whether the program follows the milestones to avoid it being too expensive or go beyond the company budget. Strategies should, then, be developed to assess the quality and quantity of achievements. As soon as the program outcomes, indicators and activities have been drafted, it is required to reexamine the indicators to estimate whether different forms of information that will be essential in evaluating the program are considered (Gajda and Jennifer 8). Quantity here will serve to measure numerical descriptions regarding the program achievements and activities while quality will measure and the program achievements and activities via narrative descriptions. For effectiveness to be achieved, a monthly thorough evaluation will be carried out to ensure that any deviations from the expected results are detected in advance and solved. This will help the company in addressing the key problems and overcome its competitors in the market as well as increase its market share.