Management Challenges in a Maturing Industry: A Teaching Case Study of Melon Farming in Latin America

Abstract

This is a horticulture case study of the export market for melons (Cucumis melo) from Central America to the United States. Melons have provided growers an excellent production and marketing opportunity since the early 1980s. “Off-season” shipments have changed from a consumer novelty to a commodity. The case documents how this producer entered the industry and became a dominant firm using a cost leadership strategy that included adopting advanced production technology and generating large sales volume to take advantage of its opportunity. As the product moved through the cycle from new product to mature market, there were changes in behavior by competing firms, a slowdown in growth of the markets, and reduced profits. Other management practices such as creating profit centers, using employee incentives at all levels, and outsourcing transportation and brokerage services were used to supplement the cost leader strategy. The development of the market and of the firm is documented, providing the basis for discussion of management and marketing issues in courses at the university level in horticulture and agribusiness.