North South University

SBE, Department of Marketing and International Business

International Business
Course Code: INB372
Semester: Summer2020

MIDTERM
(To BE ATTENDED BY ALL STUDENTS)

Name: Khondokar Jubayer

ID: 1911716630 Roll: 25 Sec: 19

Faculty: TFZ Date: 15.8.2020

TOTAL MARKS - 30

Marks obtained:

(This space is for faculty's usage. Do not write here.)

INSTRUCTIONS:

[NOTE: Students needs to be assigned different companies in different markets, and based on that they
will run the following analysis]
1. INTRODUCTION:
I have been assigned to a multinational corporation named Chatime. It's mainly a
beverage based industry. Its primary genre is Bubble Tea. Chatime was founded by Henry
Wang Yao-Hui in Zhubei, Hsinchu County, Taiwan, in 2005. Chatime utilizes modern tea
and coffee machines to deliver just the best beverages. The brand has an assortment of
beverages under categories, for example, milk tea, fruit tea, mousse, smoothie, juices, and
coffees. Chatimes's top-rated drink is its pearl milk tea. Chatime products come with an
assortment of garnishes, for example, rainbow jelly, pearls, nata de coco, and so on. A few
items are just accessible in specific nations.
Chatime is operating more than 2500+ outlets in 38 countries. Among them, some states
are the United States, Canada, UK, France, Germany, India, Australia, Singapore, Malaysia,
UAE, Bangladesh, etc.
Its parent company is La Kaffa International Co. Ltd. La Kaffa International Co. Ltd.
appeared on Taiwan's Emerging Stock Market at NT$168 per share in December 2012.
Astonishingly, it is the only bubble tea company that was listed publicly in Taiwan. The first
outlet of Chatime was opened outside of Taiwan was California, the United States, in 2006.
Following that, the next country was Australia in 2009, Chatime opened its first store in
India, and It has ten stores in Bangladesh also as of 2020. (Wikipedia, 2020)

2. MARKET ANALYSIS: I want to analyze the market of Canada, where Chatime is

currently operating its business.
i. GLOBALIZATION OF MARKET AND GLOBALIZATION OF PRODUCTION-
Chatime is well aware of these two orientations. From the starting of the company,
Chatime is spreading its business and unique products globally to reach its goal. They are
offering the same primary products in 38 countries, and Canada is one of them. Chatime
created a global market for their own. (Wikipedia, 2020) Some examples from the
company's perspective, which reflect the orientations precisely are given below:

 To expand Chatime's sales and make more profit, Chatime is spreading its business
globally so that they can reach many markets and consumers to sell their products.

 To adapt the perspective and distinction of the global market, Chatime is using an
assortment of effective strategies for each market.

 To make mass production, Chatime is enabling large scale industrialization in order to

the globalization of the market.

 To reduce the labor and transportation cost, Chatime is targeting many least developed
countries for the globalization of production where they can operate their business
smoothly and make the product useful and also can help those countries regarding
unemployment problems.
  To reduce overall cost structure, Chatimes is using the globalization of production.
ii. Political environment- Canada's political standing, the cost, risk, and opportunities
which are offering towards the multinational company like Chatime are given below:

 Standing:

 Canada is a democratic country.

 The political situation is so stable with a low crime percentage and dependable
policing administrations, Canada positions itself an excellent spot for business.

 Canada has earned a good image in terms of international peacekeeping. (Joe

David, 2018)

 Cost:

 Loss of productivity due to the low labor issue, which may cost high labor wages.

 High household debt in a few locations, which may cost high prizes but stabilize.

 Dependent on the U.S. economy (Février, 2020)

 Risk: According to World Investment and Political Risk, top political risks of
Canada are given below:

 Adverse regulatory changes

 Breach of contract by the foreign government

 Transfer and convertibility restrictions

 Opportunities:

 A fundamentally steady and productive business environment, in any case, leaves

the opportunity to get better.

 The lowest political risk than other countries according to theglobaleconomy.com

 All-round development of trade relations (CETA with the E.U.) (Février, 2020)

iii. ECONOMIC ENVIRONMENT- Canada's economic standing, the cost, risk, and
opportunities which are offering towards the multinational company like Chatime are
given below:
  Standing:

 Canada has its 10th largest economy in the world and 1st among 32 countries in
America.

 Canada has membership in the World Trade Organization (WTO), the

Commonwealth of Nations, the Organisation for Economic Co-operation and
Development (OECD).

 GDP growth rate is 1.8%. (The Heritage Foundation, 2020)

 Cost:

 Highly developed mixed economy where people and the government make
economic choices for Canada.

 The inflation rate is 1.95% as of 2019 according to statista.com

 The federal corporate tax rate is 15%.

 Risk:

 Interest rate hikes in 2018, but from 2019 it was started reviving.

 Dependent on the U.S. economy.

 Competitiveness is shown low in manufacturing organizations due to low labor

productivity (Février, 2020)

 Opportunities:

 The free trade agreement with the E.U. called the Comprehensive Economic and
Trade Agreement (CETA) in September 2017, which aims to make the trade more
accessible to export products and services to benefit business and people.

 Trustworthy and well-regulated banking system.

 One of the largest (5th) oil and gas producer in the world

 Canada has the top-notch infrastructure and entrepreneurial people, which attracts
the attention of the MNC of the world. (Février, 2020)

iv. LEGAL ENVIRONMENT- Canada's legal standing, the cost, risk, and opportunities
which are offering towards the multinational company like Chatime are given below:
  Standing:

 Federal and provincial jurisdiction deals with peace, order and good government of
Canada. For example, the Competition Act, the Patent Act, the Trademark act, etc.

 Canada follows the Common Law system. Contract and property law are similar to
the U.S. and U.K. Doing business under the Common law system is quite smooth.
(LLP and LLP, 2011)

 Cost:

 There are many methods, such as joint venture, proprietorship, limited partnership,
etc. regarding doing business here. (LLP and LLP, 2011)

 As per the Canada Business Corporations Act, "At least 25 percent of the directors
must be resident Canadians (if 25% of the directors is not a whole number round
up to the nearest whole number). Where a corporation has less than four
directors, at least one must be a resident Canadian (S. 118(3))." (Susan Ward,
2019)

 Risk:

 Tax rate increases

 Strict cyber rules

 Fraud in the e-payment system (Canadian Manufacturing.com, 2016)

 Opportunities:

 Equal Treatment of Nationals and Foreigners

 Canada is one of the least countries in terms of corruption

 Strict in terms of providing justice in terms of company law, civil law, criminal
law, etc. (Export Entreprises S.A., 2020)

v. CULTURAL ENVIRONMENT-

 Canada's cultural scenario based on the cultural variable:

  Canada's main religion is Christianity, which is 67.3% of its population, along
with other religions.

 In the education of Canada, the literacy rate is 99% for both males and females,
whereas the secondary diploma attainment rate is 93%, and the post-secondary
diploma rate is 68%.

 The primary languages of Canada are English and French.

 In terms of political philosophy, Canada has a tradition of liberalism.

 In terms of economic philosophy, Canada follows capitalism. (Wikipedia

Contributors, 2019)

 In terms of social structure,

 The living standard is so high

 10% wealthiest citizens of the population hold 40% wealth of Canada

 Lack of skilled workers, so Canada encourages skilled immigrant

 Job sustainability (Joe David, 2018)

 A work environment based on Hofstede's dimension:

 Power Distance: Canada's power distance is so low with a score of 39 out of 50,
which reflects how Canadians are open with each other.

 Uncertainty Avoidance: Canada's uncertainty avoidance is so low with a score

of 48, which states that high acceptance of new ideas, innovations, business
practices, etc.

 Individualism: Canada's score in this individualism versus collectivism

dimension is 80, which can be described as an individualist culture where
employees are self-reliant.

 Masculinity: Canada's score in this masculinity versus femininity dimension is

52, which can be pointed as moderately Masculine, which means that Canadians
endeavor to accomplish exclusive expectations of performance in all
undertakings.

 Confucian Dynamism: Canada's score in this dimension is 36, which marks the
country as a normative society. (Hofstede Insights, 2020)
 Based on Hofstede's dimension, there are no-cost and risk but opportunities which may
include:
 Cross-culture facilities
 Friendly and attractive environment for business
 Up to date innovative approaches and so on.

3. CONCLUSION:

After analyzing Chatime and its market in Canada, it is clear that Chatime is operating its
business smoothly. From starting the company to spreading its business in 38 countries
worldwide with 2500+ outlets, it's an excellent success for Chatime in terms of doing
business internationally. In Canada, the political, economic, legal, cultural environment is
more than perfect. However, there are some difficulties and risks which are familiar with
doing business in other countries. But Chatime adapts the atmosphere correctly and is doing
business in Canada by using their strategies and facing the difficulties smartly if those occur.
Canada is one of the stable countries in terms of political, economic, legal, and cultural, so
every multinational like Chatime would be pleased to come and start their business to spread
its legacy. This attractive business environment of Canada gets attention from many
multinationals like Chatime and would love to operate their business smoothly like Chatime.

4. REFERENCE

 Wikipedia. (2020). Chatime. [online] Available at: https://en.wikipedia.org/wiki/Chatime.

 Joe David (2018). PESTEL analysis of Canada | howandwhat. [online] howandwhat.
Available at: https://howandwhat.net/pestel-analysis-canada/.
 Février (2020). Economic Studies and Country Risks. [online] Coface. Available at:
https://www.coface.com/Economic-Studies-and-Country-Risks/Canada
 The Heritage Foundation (2020). Canada. [online] Available at:
https://www.heritage.org/index/country/canada
 LLP, R.P., Partner, Osler, Hoskin &.Harcourt and LLP, D.H., Partner, Osler, Hoskin
&.Harcourt (2011). Legal Requirements for Doing Business | Location Canada. [online]
Area Development. Available at: https://www.areadevelopment.com/Canada-Investment-
Guide/LocationCanada2011/canada-legal-requirements-doing-business007885.shtml.
 Susan Ward (2019). How to Start a Business in Canada -- When You're Not Canadian.
[online] The Balance Small Business. Available at: https://www.thebalancesmb.com/as-
a-non-canadian-how-can-i-open-a-business-in-canada-2948586.
 Canadian Manufacturing.com (2016). Top 10 legal risks for Canadian Business in 2016.
[online] Available at: https://www.canadianmanufacturing.com/technology/top-10-legal-
risks-for-canadian-businesses-in-2016-160544/
 Export Entreprises S.A. (2020). Canada: Legal Environment. [online] Available at:
https://santandertrade.com/en/portal/establish-overseas/canada/legal-environment
 Wikipedia Contributors (2019). Religion in Canada. [online] Wikipedia. Available at:
https://en.wikipedia.org/wiki/Religion_in_Canada.
 Wikipedia Contributors (2019). Education in Canada. [online] Wikipedia. Available at:
https://en.wikipedia.org/wiki/Education_in_Canada.
 Wikipedia Contributors (2019). Politics of Canada. [online] Wikipedia. Available at:
https://en.wikipedia.org/wiki/Politics_of_Canada.
 Hofstede Insights (2020). Canada. [online] Available at: https://www.hofstede-
insights.com/country/canada/