Supreme canning company.docx

CASE STUDY 3.1SUPREME CANNING COMPANY

Student: Benedetta PivaIB 4020

International Trade ManagementFall Semester 2011

International Trade Management

INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Fall Semester 2011

Supreme Canning Company

The case

American company located in the state of Californian that produce:

It produces cans with its own-brand label but much of its output is canned for other companies


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Fall Semester 2011

Heavy competition due to:

Tomato-canning industrycompetitors overseas inadequate domestic demand


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Fall Semester 2011

US company’s annual processing capacity not absorbed by domestic demand: 100,000 tons of tomatoes

First Japanese opportunity

Supreme Canning Company needed to find additional markets

Inquiry from Japan: a well known Japanese food packer and distributor, handling a large number of products with great success.Much larger than the American company.

Was it interesting?


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Fall Semester 2011

Japan was an interesting country for companies interested in exporting products:

and it could not support its economical domestic industry without imports because of the scarcity of land

Japan

reduce trade barriers encourage imports

Concerning tomato-canning industry, there was an increasing demand for specialty tomato products (due to the growing popularity of pizza and Italian-style foods and restaurants)

Great opportunity for the US company because it needed to saturate its production and that was a well-known Japanese firm


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Fall Semester 2011

After a first successful four days meeting at the Japanese company, the Americans invited the Japanese to visit their plant in California for four days.

During first meeting: Japanese interested in mutual letter of cooperation, Americans wanted specific contract.

Then, the Japanese communicated that their president wouldn’t be able to come and that the other senior executives would be able to stay just two days instead of four.

Situation

Americans : why?[frank and direct letter, with a impolite tone, as a person talking to an equal]

The Japanese decided to cancel the visit and not to have further contact with the US company


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Fall Semester 2011

Local businessman of Japanase extraction = intermediatorJapanese food products producer and distributor (larger than

the first Japanese company)

Second Japanese opportunity

Visit at the US company’s plant


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Fall Semester 2011

Misunderstanding

Family name of the Japanese company’s president!

Us company’s president to local businessman: Business with them? No, thanks!

The semi-retired president’s father!!!

No official position in the companyNo english

INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Was the chairman of the US company wrong forn not having found out in advance abut Japanese

business practice?

International Trade Management Fall Semester 2011

Yes!Big differences in how to do business and day by day life

No matter if managers have little knowledge of Japan and its usages

A company must be aware and well prepared on business and culture in a country to enter it successfully

CULTURAL AND SOCIO-CULTURAL ISSUE

INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Whas the Japanese interest for mutual letter of cooperation good?

Yes! Great first step in concluding a lonf-term business agreeement

Why?

Japanese prefer to get to know people before doing business

It takes time to them to trust someone else


business practice?


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Frank and direct letter, with a impolite tone, as a person talking to an equal (to first Japanese company)

Respect and status in Japan (little companies to big ones, buyer to seller)

Semi-retired father of the second Japanese company: no ufficial position

Americans: he hid factsJapanese: No! Status issue


business practice?


INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

Was the Japanese wrong for not having found out about US business practice before they initiated

contacts?


Yes!Even if value system is deep-seated in Japan, understand and

accept different cultures

Great examples:

INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

What should the president of the US company do now?


Apologize personally with the second Japanese company:

• ask for an appointment through the go-between• Group of two or three company’s manager• Gifts

The US company should prepare a structured plan focused on research and analysis of new international markets in order to systematically create new opportunities

Not wait for inquiry from the market!

INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

What we have learnt?


A company must to keep in mind:

• foreign companies, competitors and custommers

• Different culture, competitors, economic, political, and legal forces

Before approaching to international markets:

• identify countries target;

• deep knowledge of foreign usage and characteristics

in order to avoid major misunderstandings and have successful business relationships!

INTRODUCTION

QUESTION 1

QUESTION 2

CONCLUSION

QUESTION 3

References


• Albaum, G., Duerr, E., (2008). International marketing management and export management. New York: Prentice Hall.

• Parker, P. M., (2011). The world market for fresh and chilled tomatoes: A 2011 global trade perspective. Singapore & Fontainebleau: ISEAD.

• Parker, P. M., (2011). The world market for tomato ketchup and tomato sauces: A 2011 global trade perspective. Singapore & Fontainebleau: ISEAD.

• Varley, H. P., (2000). Japanese culture. Honolulu: University of Hawaii Press.

Supreme canning company.docx

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