The case Banana Wars was introduced in my high school geography class based on a concept of reducing disparities.  As I recalled this case, I decided to analyze this from a business perspective by applying and referencing Porter’s Five Forces Diagram.

Bananas are a popular fruits and are generally grown in tropical areas such as the Caribbean. Since 1975 EU[1] provided Caribbean countries the privilege to import bananas without tariffs, it caused a significant collapse in Latin America’s banana industry as it was very hard to compete with those who were favored by EU.

Reasons that caused the downfall of Latin America banana industry are: high threats of being substituted by the Caribbean industries due to buyers inclination changed towards bananas at low price; weak buyer power as most buyers are civilians; and strong supplier power as the Carribean countries imports tariffs free bananas with support from EU.

Although Latin America’s banana industry made several adjustments in order to compete, it were unsuccessful as they debilitated themselves by lowering banana price temporarily and eventually claimed bankruptcy as they kept on focusing on one distribution channel without opportunity to differentiate.