North American Regional Project International Business Erick Blank, Craig Eidle, Damian Mace, Konnar Meier Miss Dinnella

North American Regional Project

International BusinessErick Blank, Craig Eidle, Damian Mace, Konnar Meier

Miss Dinnella

Part IGeneral Information on Country

United States

United States Information Geography – Northern, Western, Eastern Hemispheres; Two

peninsulas (Alaska and Florida) – two ports for trade; chain of islands (Hawaii); Territories in Caribbean Islands; Northern Border = Canada; Southern Border = Mexico

History – Once occupied by Great Britain (13 Colonies); Officially became a country of July 4, 1776 with the signing of the Declaration of Independence

Culture – Known as the Melting Pot of the world (multiple cultures from many countries)

Government – Presidential System, Federal Republic; Three Branches

Economy – World’s largest national economy; mixed economy (public and private enterprises); sixth high GDP per capita

Company for Project Purpose

Starbucks

StarbucksProducts Coffee, smoothies, bottled drinks, iced

tea, sandwiches, Panini’s, salads, yogurt, fruit, muffins, scones, breakfast sandwiches and wraps, oatmeal

Countries More than 18,000 stores in 62 countries

Adaptations to Countries The logo is constant throughout, as well as the menu; only changes involve product labeling

Partnerships have helped them expand around the world

Part IIEconomic Factors

Countries Used

United States

Canada

Mexico

Panama

Haiti

GDP, Per Capita Income, Balance of Trade, Unemployment

What Does It All Mean?Less Developed Unstable, Developing Fluctuating,

Industrialized Stable

These changes may result in business activity within each country A company wants to work in a developed, promising,

prosperous country, not an unreliable one

Relation of GDP, Per Capita Income, Balance of Trade, Unemployment

Review Imports, Exports, Sales Rates, Currency Rates, Past Companies. Analyze prior business activities and measure success rate!

Part IIICultural Analysis of a Foreign Market

Part III Country

CanadaHistory & Business – Very little political involvement =

reduction of business necessary documents, Staple Industry

Language – French, English, Indian (Northern Parts); Hand Gestures; Very Literal

Education – Similar to the United States; School only required until 14 or 16 in some territories; Secondary education is based upon territory (not national government); Literacy Rates as of 15 is 99%

Social Institutions (Family, Religion, Labor Unions, Employment) – Similar to the United States due to bordering of one another

Canada Continued

Shopping Practices – Similar to U.S.; Boxing Day (December 26th) is the biggest shopping day, not Black Friday

Foods – Peameal (Canadian) Bacon, Poutine, Maple Syrup, Ketchup Chops

Major Holidays – All of the same as the U.S., minus July 4th; Addition of Labour Day, Canada Day, Victoria Day, and Family Day

Business Practices – No discussion of business over a meal (considered rude); Typical 40 hour week (8 hours, 5 days a week); Similar to the United States

Part IVAssessing Political Risk and Legal Restrictions

Canada Politics and Legality Aspects

Very low civil disruptions (Zero since 2011) Result of little government interference A lot left up to local governments

Minimum wage of 9.95 Canadian Dollars/hour; Same labor laws and safety laws as U.S. (enough to cover workers)


Very lenient with trade restrictionBut only trades with countries with obvious benefit

Has free Trade with North America Through NAFTA, also has free trade with EFTA, which includes Iceland, Liechtenstein, Norway, and Switzerland

Other countries such as China Japan and India have comprehensive, outlined Trade agreements

Can only invest in Canada directly if investment is over 344 million and benefit is obviously apparent


Canada is very lenient with Foreign Direct investors and Business incentives

Very low corporate tax regime, generally about 13% lower than the US, with a progressive duty free manufacturing tariff regime

Separate Provinces offer a wide variety of incentives for business depending on Province

Incentives are generally grants, interest-free loans, risk-sharing agreements, and investment tax credits

Provinces very supportive of Business investment in a wide range of business fields and expenditures


Biggest law for Foreign direct investment which addresses limitations and establishment of investing is the Investment Canada ActMost simple and direct outline of allowance for

investment is the “Net Benefit Test”Must Pass the Test to be considered a

reasonable investment in Canada and be beneficial for the country

To Test for Net Benefit the Minister of Industry considers the following factors:

Additional InfoThe effect of the investment on the level and nature

of economic activity in Canada

The degree and participation by Canadians

The factors of productivity, efficiency, technological development, product innovation and variety

Competition in Canada

The compatibility with national industrial, economic and cultural policies

Canada's ability to compete in world markets

Part VPlanning and Organizing Global Business Operations

International Business and Starbucks

Advantages and Disadvantages

Considerations of Starbucks for expanding into more than 62 countries (What would they have to do besides change the labels?)

Indirect Exporting, Direct Exporting, Management Contracting in the BusinessHow can these be used in investment situations?Low Risk

Part VIDeveloping An Exporting Plan

Product Description

Starbucks Coffee Machine

Changes in the Product would include translation of instructions and packaging

Foreign Business Environment

Cultural and Social Factors – Provide more products to put through the maker, such as tea, hot chocolate, etc.

Geography of BrazilTemperateAmazon RainforestVery Wet and Rainy, perfect of coffee beans

Affects on Exportation Process – Developing Country Not Stable grounds for business procedure

Market PotentialCustomer Base – Coffee Drinkers in Brazil

Advertising Hang posters (Large city populations) Run a display in local shopping centers Seminars on its success and popularity in other

countries Ease of use!

Seventh largest economy in the world (Over 200 million people); out of this number, the product should sell without a doubt, especially with the beans coming from the country itself

Export Transaction Details Exporting Cost Blocks – Import Costs, Tariffs, Duties/Quotas

Importing Documents include: Bank Document Bill of Lading Cargo Release Order Commercial Invoice Customs Import Declaration Entry Invoice (Nota Fiscal) Packing List Technical Standards/Health Certificate

Exporting Documents include: Bill of Lading Commercial Invoice Customs Export Declaration Export Invoice (Nota Fiscal) Packing List Technical Standards/Health Certificate

13 days to get all of exporting documentation at a cost of $2215

17 days to get all of importing documentation at a cost of $2275

Part VIIThe Changing Values of Currencies

United States U.S. Dollar (Different Dollar Bill Amounts, Coins)

Inflation 3.75%, Interest 0.25%, Unemployment 6.70% Lost Cash

Unfavorable balance of payments (More imports than exports) results in decrease in value of currency (prices go up; inflation)

Political Factors

Exchange Controls – foreign currency in country and spendable); None in the United States

Factors include interest rates, employment outlook, economic growth expectations, trade balance, and central bank actions.

United States Currency Value Compared to Others

Part VIIILaws Around the World

Brazil Brazil’s legal system is classified as Civil Law Code

Federal Constitution is the supreme law of Brazil

Brazil’s culture has a normal affect on the legal system. Different laws and rules are based off of the cultures, religions, and rights of the people of Brazil making it fair for everyone.

Some issues affecting legal agreements in Brazil include some parties not having what was promised, from monetary amounts to services and products. Some other issues are that there are some false companies that don’t actually offer anything but steal the money or products being traded to them.

Brazil’s federal government levies taxes on foreign trading, both importing and exporting. This is meant to try to make more people buy products built within their own country by saving money from the cost of taxes and to protect domestic businesses.

Different out of court resolution processes might include mediation and arbitration. Both of these try to make an agreement between two parties to be fair and meet wants and needs by those parties.