are worried about the firm’s homespun and patriotic image. Mr. Swanson has seen
the film clips of protestors at the World Bank and other international meetings
calling for fair trade, not free trade and wants to avoid controversy. Explain
to Mr. Swanson in a personal discussion the meaning of fair trade. Your 1250-
to 1500-word report should include:
Discuss the difference between free and fair trade.
How does fair trade differ from free trade? Identify a
product or products that are fairly traded.
Where and how are these products marketed?
Are milk and milk products generally considered fair traded
goods?
Scenario:
Content Cow Dairy, Inc. began as a small, family-run dairy
farm in Wisconsin in the 19th century, established by a Swedish immigrant, John
Swanson. Over the years, the firm has acquired more land and now runs a herd of
roughly 1,000 milk-producing cows. The firm is now incorporated for reasons of
liability although the Swanson family retains control. The dairy has greatly
expanded its production of milk and milk products to the point that Content Cow
Dairy has sufficient cash flow to weather most fluctuations in dairy prices.
The national Got Milk? campaign run by the industry helped keep consumption of
milk products up in the U.S. for a number of years despite popular concerns about
cholesterol and saturated fats and competition from other beverages. To
maintain the company’s growth and decrease its reliance on the mature American
market, Karl Swanson, the President and CEO of Content Cow Dairy (and the
great-grandson of its founder) is seeking new markets overseas for the
company’s products, particularly shelf-stable milk beverages and cheeses. Egypt
is at the top of the list as a prime market and a focus of Content Cow’s future
plans.
Currently, no one in the firm has any experience with
overseas markets or how to export products. Karl has the idea that countries
without the natural endowments needed for raising dairy cattle (ample water and
grazing land) might be good markets for dairy products. He is also aware that
his family firm is competing for foreign markets with other U.S. firms and
firms from leading dairy countries such as New Zealand and Denmark. For these
reasons and on the advice of his state’s department of commerce, Karl has
decided to seek the assistance of a trade consulting firm, Alexander and Kravis
(A&K).
A&K, Inc. is an international trade consulting service
that has been in operation for the past 15 years. The principals in the firm
include attorneys specializing in international trade law, economists, former
members of the U.S. Foreign Service, former U.S. customs officials, logistics
specialists, and customs brokers. The firm advises its clients on both
importing to the U.S. and exporting from the U.S. to various foreign countries.
The firm is especially knowledgeable about business
conditions in Latin America, the Middle East, and North Africa although it has
access to consultants for other geographic areas. The firm is able to assist
its clients in identifying potential markets for its products, developing
relationships with foreign distributors, navigating U.S. export and foreign
import laws, understanding foreign business practices and customs, and
developing a long-term strategy for expansion of the client’s business
overseas. It provides specialists who can prepare the necessary export and
import documents and arrange for transportation and shipping of the exports.
Translation services are also available. A&K has a number of large
corporations as clients but has identified a niche in serving small to midsize,
family-owned firms.
As A&K’s account manager for Content Cow Dairy, you are
tasked with explaining various aspects of the international business
environment and the export process to Mr. Swanson. You will be preparing a
series of briefings, memos, and reports to help him understand.
