HKUST Submission (Global MBA Challenge)

1. Let’s Go
Bananas!
Saving banana
farmers in Africa
Presenting: Nanyang Consulting
Presenting to: African Centre of Research of
Bananas and Plantains
(CARBAP)
Nanyang Business School
Ankit Agarwal / Komal Goyal /
Lokesh Gupta / Olga Kotenko
Banana farmers face significant
challenges in their business
Fragmented market and small size of each farmer’s
production leads to low coordination between them
Bananas is a perishable commodity, which cannot be stored
more than 2-3 days, and farmers lack storage spaces
Demand for bananas is hard to predict
Local banana markets are inefficient with high information
asymmetry
How can Nanyang Consulting help banana farmers in Africa
increase their welfare?
Let’s Go
Bananas!

2. Let’s Go
Bananas!
BANANA MARKET IN AFRICA IS MAINLY ORIENTED
TOWARDS INTERNAL CONSUMPTION
Nanyang Consulting2
Problem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
• Limited market information available
to farmers
• Low access to technology leading to
low yields
• High dependence on wholesalers
due to low direct market access
• Limited/substitutes
• Perennial crop with multiple benefits
• Low bargaining power versus
wholesalers
• Low profit share (unequal
distribution)
• Fluctuating prices
• High domestic consumption (staple
food crop)
• High competition between farmers
due to fragmentation
• Multiple private and commercial
uses (bread, beer, wine)
INTERNAL EXTERNAL
WHOLESALERSFARMERS
VALUE CHAIN
UNORGANIZED RETAIL
ORGANIZED RETAIL
COMMERCIAL INDUSTRY

3. Let’s Go
Bananas!
BANANA FARMERS CAN HAVE SEVERAL OPTIONS
ON HOW TO ADDRESS THEIR CHALLENGES
Nanyang Consulting3
Problem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
OPTION Financial benefits Costs Competitiveness TOTAL
Co-operative model
Online marketplace using mobile
Futures contracts for bananas
Form an export consortium
SHORT MEDIUM LONG-TERM
Form a co-operative
Disintermediate
wholesalers to sell
directly to retail and
commercial buyers
Expand across value
chain to sell high
margin products
directly to end
consumers

4. Let’s Go
Bananas!
START THE BANANA MOVEMENT – FORM A
COOPERATIVE (1/2)Problem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
African Centre for Research on Bananas and Plantains (CARBAP) organizes all small farmers and
producers into a cooperative model
Increase collective
bargaining power
1. CARBAP floats a cooperative model in each country as separate chapters
2. Form a 4 tier structure governed by elected representatives - managed by professionals
3. Form Banana Producer Cooperative Societies (BPCS) at village level , banana unions at region level,
a federation at country level and executive leadership at Africa level
4. Producers become cooperative members by buying a share and committing to sell bananas only to
the society
5. Major portion of the BPCS profits is additionally paid to producers as bonus at year end
6. Cooperative further provides support services to farmers – financing, pooled storage, HYV seeds
WHAT?
WHY?
HOW?
Access market information,
technology & financing
Scale production &
Improve yield
Coordinate supply
and demand
4 Nanyang Consulting

5. Let’s Go
Bananas!
Village banana producers,
Managing committee
Chairpersons of Village BPCS,
BOD – farmer reps from all societies,
MD – professional appointed by BOD
Region union level chairpersons,
technical experts, CEO
Executive Leadership –
appointed by BOD and CARBAP
START THE BANANA MOVEMENT – FORM A
COOPERATIVE (2/2)Problem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
Level and Composition
5 Nanyang Consulting
Banana Producer Cooperative Societies
District/ Region Unions
• Collect bananas, pay farmers
• Provide support services to members
• Sell bananas to village local consumers
• Supply to unions for further sell
• Procure from BPCS, sell to other buyers
• Provide inputs – fertilizers, storage,
cooperative training, financing
• Decide the price paid to farmers
Country Federation
• Process, sell banana products
• Decide product mix
• Create and maintain brand
Africa
• Coordinates each chapter
• Sets the vision and goals
• Checks governance; manages conflicts
Functions
CARBAP (Provides mgmt. & advisory support)
Produce
Knowledge

6. Let’s Go
Bananas!
DISINTERMEDIATE THE WHOLESALERSProblem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
Disintermediate wholesalers to sell directly to retail and commercial buyers
Maximize profit
share in value chain
1. Develop business competencies (marketing, sales, distribution) in association with NGOs (Fairtrade)
and non-profits
2. Establish a brand for the cooperative
3. Establish district marketplace to sell directly to retail and private buyers
4. Set up contracts with industrial buyers to get stable demand
5. Attract government as a buyer
WHAT?
WHY?
HOW?
Eliminate middlemen; get
direct access to customer
Predict & maintain
continuous demand
Control demand in
addition to supply
6 Nanyang Consulting

7. Let’s Go
Bananas!
EXPAND ACROSS THE VALUE CHAINProblem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
Expand across value chain to sell high margin products directly to consumers
Maximize profits
for producers
1. Establish manufacturing / processing facility to produce processed products
2. Market the cooperative brand which reinforces the message “Buy Africa for Africa”
3. Develop further profit –end business capabilities by hiring executive leadership talent
4. Diversify product portfolio by producing high-margin products like beer and wine, tooke flour (dried
banana), matoke paste (banana paste), etc.
5. Eventually, move towards organic production to enhance exports “By Africa - For the world”
WHAT?
WHY?
HOW?
Access new markets,
generate stable demand
Diversify product
portfolio; minimize risk
Capitalise on USP –
control over supply
7 Nanyang Consulting

8. Let’s Go
Bananas!
BANANA FARMERS CAN ENCOUNTER SEVERAL
PROBLEMS WHILE IMPLEMENTING THE STRATEGY
Nanyang Consulting8
Each tier will have farmers
representation to maintain
the purpose
Participatory board engage
continuous audits to maintain
transparency
The cooperative model may
succumb to corrupt practices
or may become too powerful
Integrate wholesalers into
cooperative as members and
leverage on their
competencies while
expanding on the value chain
Disintermediation of
wholesalers leads to channel
conflict
Develop a strong brand name
with FTO certification that
provides quality goods to
customers and ensures
protection of social and
environmental rights
High competition in the
downstream integration
market from existing players
Problem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
1
Probability
Impact
2
3
Risk map of the major risks affecting the
success of the strategy implementation
RISK CONTINGENCY PLAN
1
2
3

9. Let’s Go
Bananas!
TIMELINE
Nanyang Consulting9
Problem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
Task Name
Form co-op
1) CARBAP - approach local leaders
2) Enroll providers and members
3) Elect farmer representatives at all levels
4) Register the co-op
Establish sales and distribution channels
1) Develop business competencies
2) Establish a brand
3) Establish district marketplace
4) Set up contracts with industrial buyers
5) Provide advisory support to farmers
Expand across value chain
1) Set up manufacturing facility
2) Market co-op consumer brand
3) Hire executive leadership and talent
4) Diversify product portfolio
01 January 2019 15 May 2020 27 September 2021 09 February 2023

10. Let’s Go
Bananas!
WITH THE PROPOSED STRATEGY BANANA
FARMERS WILL ACHIEVE HIGHER WELFARE
Nanyang Consulting10
Problem
Analysis
Options
Recommenda
tions
Risks &
Mitigation
Timeline
• Uncoordinated supply and
demand
• Low bargaining power of
farmers
• Organize producers into co-
op societies
• Sell directly to the
customers
• Expand across value chain
• Empowered farmers
• Better supply-demand
mapping
• Economic freedom for
farmers
• Better life for Africans
• United African banana
market
PROBLEM SOLUTION OUTCOME
THANK YOU!