First Trade Analysis (Essay Sample)

Fair Trade
Fairtrade is defined as a labeling initiative that is aimed at improving the lives of the poor in underdeveloped countries by offering producers better terms and helping them to grow. According to (Mike et al.829), for businesses, strategic choices can include acquisition and alliances, innovation, strategic position, among others. A strategic choice involves a business situation where the business or organization will adopt a certain decision and from different substitutes (Tansu et al.212). Businesses that choose the best strategic alternatives enjoy multiple benefits, including competitive power and increased revenues. Strategic choices are affected by different factors that include the impact of past strategy, environmental constraints, values and preferences, information constraints, time constraints, competitors' reaction; among others (Tansu et al.212).
Therefore strategic action includes developing a particular strategy and using it to curb the challenges faced by the organization which in this case has made Fair Trade-certified imports survive market dynamics. The managers should possess strategic action competency, which includes the knowledge to grasp a strategy and ensure it is followed by all employees, for the strategy to be successful (Parvathi and Waibel.12). This appeal is represented by the impressive growth of Fair Trade-certified imports for the past decades. Since the incorporation of Fair Trade-certified imports over the past two decades, there has been rapid growth in terms of sales. In 2016, Fairtrade statistics had recorded 1,400 Fair Trade-Certified producer organizations globally which translates to 1.6million Fair Trade-certified farmers and workers for 73 different countries for about 19 product categories.
   Several products have fair trade certification like coffee which in comparison with other products has the highest number of producers falling under the certification. Therefore, Fairtrade accounts for 48% of all farmers of Fair Trade and again it takes 46% of total premiums paid. This makes it of much importance in developed countries that mechanisms are put in place to improve farmer's lives. The first mechanism is giving a guarantee on the minimum price that is paid when a product is sold as Fair Trade (Valkila, Joni, and Anja Nygren.321) The main aim is to cover average costs of sustainable production and providing a guarantee in reducing the risk faced by coffee growers. The second one is the price premium that is paid to producers which is in connection to the sales price and must be set aside and invested in projects in improving the life quality of producers and their communities. Furthermore, the relationship between the sum of the premium and minimum price guarantee