FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

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END- COURSE ASSIGNMENT

Course title: International Business
Course code: KDOE307

Student: Phạm Thanh Liêm FOR EXAMINERS ONLY

Student ID: 2112533033 Grade (in number):
Cohort: K60CLC5 – ML122 ………………..
Semester: 02 Grade (in words):
Academic year: 2022-2023 ………………..
Submission date: 05 April 2023 Examiner 1
Student’s signature: Liem (Signature & Full name)
………………..
Examiner 2
(Signature & Full name)
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Ho Chi Minh City, April 2023

 TABLE OF CONTENTS

TABLE OF CONTENTS .................................................................................................

QUESTION 01 ................................................................................................................ 1

QUESTION 2 .................................................................................................................. 4

1. Overview ...................................................................................................................... 4

2. Company analysis ....................................................................................................... 4

2.1 Financial resources: .............................................................................................. 4

2.2 Physical assets: ..................................................................................................... 4
2.3 Human resources: ................................................................................................. 4
2.4 Company culture: ................................................................................................. 5

3. SWOT Analysis........................................................................................................... 5

3.1 Strengths ............................................................................................................... 5

3.2 Weaknesses .......................................................................................................... 6
3.3 Opportunities ........................................................................................................ 6
3.4 Threats .................................................................................................................. 6

4. Expansion strategy options analysis ......................................................................... 6

4.1 Competitive advantages of NorthCan .................................................................. 6

4.2 Four options of expansion strategy ...................................................................... 7

5. Northcan expansion strategy ..................................................................................... 8

5.1 General expansion strategy recommendations ..................................................... 8

5.2 Marketing strategy ............................................................................................... 9
5.3 Operation strategy ................................................................................................ 9

REFERENCES ............................................................................................................. 11
 1

QUESTION 01

As the world becomes more interconnected, interactions between people of different

cultures have become more frequent. These experiences can be exciting and enlightening, but
they can also be disorienting and unpleasant, especially when they challenge our preconceived
notions of how people should behave or interact. We refer to these instances of cultural
dissonance as culture shock. My most recent experience with culture shock occurred during a
trip to Thailand. I have always been fascinated by Thai culture, but I was not prepared for the
extent to which my expectations clashed with reality. In this paper, I will reflect on this
experience of culture shock and examine how the six dimensions proposed by Hofstede et al.
(2010) can help explain the reasons behind it.

Culture shock is a common experience for travelers who visit countries with different
languages and cultural norms. For example, my experience of culture shock occurs when I had
my very first abroad trip to Thailand, which is universally known as a culturally complex
country, and encountered language barriers. The story begins when I visited Jodd Fair, a
popular night market in Bangkok that is reputable for Thai local cuisine. I was captured by a
grilled food stall with the appetizing aroma of sizzling skewed octopus. Unfortunately, its menu
is completely written in Thai. As someone who always enjoys trying new foods, I was
determined to order some, despite the language barrier. However, when I attempted to place
my order, I found myself struggling to communicate with the vendor, who spoke little to no
English.

Although I was well aware that it may be difficult to communicate with Thai locals,
particularly in rural areas, due to their limited English proficiency, I was astounded to discover
this case while in Bangkok, where the majority of tourists speak English. The experience
became more shocking when I received 4 skewers for each flavor, while I only ordered 1
skewer for each of the 4 flavors. As a result, I had to pay an unexpectedly expensive bill for
this culinary experience. This is the first time I have experienced verbal obstacles in a foreign
country. Therefore, it was totally frustrating and embarrassing, and I could feel myself
becoming increasingly flustered.

The situation indicates that there was a significant linguistic misunderstanding between
the two different cultural representatives. This experience of struggling to communicate with a
vendor at a food market may seem like a minor inconvenience, but it highlights the challenges
of cross-cultural communication and how even small cultural differences can have a significant
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impact on our interactions with others. In the following sections of this essay, I will use the six
dimensions of culture proposed by Hofstede et al. (2010) to analyze this experience of culture
shock and explain the factors that contributed to it.

Regarding the six Hofstede et al. (2010) dimensions, Uncertainty avoidance best explains
my culture shock due to the language barrier in Thailand. Uncertainty avoidance refers to
whether a country is exposed to uncertain events and unconventional environmental threats
through formal channels to avoid and control uncertainty. (“Geert Hofstede’s Cultural
Dimensions Theory and Its Implications in SLA,” 2022).

One the one hand, according to Alfonso (2021), Thailand has a moderately high UAI
score, which indicates that they value predictability and stability, scoring 64 on the UAI index
(Hofstede Insights, 2017). This cultural value is evident in different aspects of Thai life, such
as communication. Thai individuals may be hesitant to communicate with foreigners in English
when they are not confident in their language skills, as they may fear making mistakes or
violating social norms.

On the other hand, according to Phan, T.K. (2017), Vietnam has a low preference for
avoiding uncertainty, with a score of 30 on this dimension. In the Vietnamese culture, practice,
and experience take priority over rules, and deviation from established norms is more quickly
tolerated. And hence, as a Vietnamese, I am at ease in ambiguous circumstances and with
unfamiliar risks.

In the context of my food order at the night market, the seller was hesitant to speak
English or communicate at all, possibly because he lacked confidence in his linguistic
ability. Alternately, he may have been reluctant to communicate with me as he was uncertain
of my expectations or desires and feared offending the customers. Meanwhile, I myself was
confident in my verbal capability when it comes to simple social tasks like making an order.
Thus, for these theoretical reasons, a culture shock occurred due to a language barrier.

In conclusion, my experience of culture shock during my trip to Thailand demonstrates

the difficulties of cross-cultural communication and the influence that even minor cultural
differences can have on our interactions with others. By analyzing this experience through the
lens of Hofstede's dimensions of culture, it becomes clear that the cultural value of uncertainty
avoidance was a major factor in the language barrier I encountered. This experience has shown
me the value of being prepared for cultural differences when traveling to a foreign country.
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Furthermore, this could serve as a practical example of a cultural factor that should be
considered when establishing and operating international businesses later on.
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QUESTION 2

1. Overview

Company history: NorthCan is a Canadian company that was established in the early
1960s and began as a small operation executing business operations out of a small apartment
and rented warehouse space. Since then, the company has grown to become an industry leader
in packaging products and services.

Vision: to be an industry leader in packaging products and services, particularly in the

fresh produce packaging market

Mission: Consistently growing, evolving, and improving business operations and

ensuring customer satisfaction with the highest standard of packaging products and service.

Strategic goals: As inferred from the document, NorthCan has expanded its operations
beyond southern Ontario. Its focus on the fresh produce packaging market may indicate a goal
of expanding into new markets within the food service packaging sector.

2. Company analysis

2.1 Financial resources:

− Total current assets: CA$ 7,945,000 (September 2020)

− Total revenue: CA$ 27,500,000 (September 2020)
− Net income: CA$ 1,462,737 (September 2020)

2.2 Physical assets:

− In 1978: to a 20,000-square-foot headquarter in southern Ontario, Canada

− In 2014: a distribution center in Texas served customers in the southern United States
and Mexico.
− In 2019: the opening of two additional warehouses, in Mexico and Georgia

2.3 Human resources:

Experienced leadership: NorthCan's organizational structures, following the hierarchy

business structure, has enabled the company to become an industry leader and expand into new
markets.

Skilled employees: NorthCan's skilled employees, including its service technicians,

allow the company to provide superior customer service.
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Training and development programs: NorthCan's emphasis on continuing education

and training ensures its employees have the requisite knowledge and skills to effectively serve
customers.

2.4 Company culture:

NorthCan has a knowledge-based culture that emphasizes the transfer of knowledge and
expertise to its customers. This culture is reflected in the company's investment in its people
and employees, which includes training and ongoing education to ensure the transfer of
packaging expertise to customers.

Additionally, NorthCan prioritizes customer satisfaction and comfort, emphasizing the

importance of a seamless and efficient business relationship with its customers. This is
reflected in the company's value-added strategy, which connects customers directly with
NorthCan's service technicians to facilitate a smooth and productive business relationship.

NorthCan also values environmental sustainability and consistently collaborates with

partners to reduce packaging and increase the amount of recyclable material in its products.
This indicates that the company values sustainability and seeks to positively impact the
environment.

3. SWOT Analysis

3.1 Strengths

− The value-added solution of providing customers with packaging equipment,

consumables, and service agreements with technicians creates a streamlined and
productive business relationship.
− Highly automated packaging equipment: NorthCan's state-of-the-art packaging
equipment offers customers efficient methods for meeting their packaging needs and
ensures the durability and protection of products.
− Concentration on consumables: NorthCan's concentration on consumables ensures the
protection and viability of products and has resulted in a reduction of packaging materials
and an increase in packaging speeds.
− Knowledge-based corporate culture: NorthCan's emphasis on knowledge and
continuing education equips its employees to provide the highest level of customer
satisfaction and accountability.
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3.2 Weaknesses

− Limited market focus: While NorthCan has expanded into the fresh produce packaging
market, its focus on this segment may limit its ability to enter other food service
packaging markets.
− Reliance on service agreements: NorthCan's value-added solution is dependent on
service agreements with technicians, which may limit pricing and service options for
customers.

3.3 Opportunities

− Increasing demand for eco-friendly products: Consumers' increasing demand for eco-
friendly packaging solutions creates opportunities for NorthCan to develop and innovate
its product line, and gain a competitive advantage.
− Increasing demand for fresh food and produce packaging products: The US market
for packaging products, especially fresh food and produce packaging, is significant and
growing, giving NorthCan large customer base.
− The preference and willingness of American consumers to pay a premium for fresh food,
which creates huge opportunities for this industry players.

3.4 Threats

− Intense competition in the US packaging market: NorthCan is a relatively small

player compared to its main competitors, Bunzl and Orora, who have more significant
resources and a larger market share.
− Strict regulations: The regulatory environment for labeling and packaging in the US
market is complex and stringent, which could create compliance challenges and slow
down NorthCan's expansion.
− The potential for market saturation and price competition in the packaging industry could
limit NorthCan's profitability and growth potential

4. Expansion strategy options analysis

4.1 Competitive advantages of NorthCan

NorthCan has two competitive advantages relative to its competition:

(1) It offers packaging equipment, consumables, and service and maintenance contracts
to customers as a value-added solution.
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(2) It is heavily knowledge-based and invests plenty of resources in its employees to

keep them involved in the company and to ensure that customers receive accurate
packaging knowledge.

By providing a value-added solution to customers, NorthCan has been able to remain

salient in the packaging industry and consistently stay ahead of competitors. Customers much
prefer purchasing a complete solution from one provider, rather than purchasing various
components from different providers. Therefore, NorthCan can fulfill all of a customer's
packaging requirements, eliminating the need for them to work with multiple vendors.

In addition, NorthCan offers maintenance and service contracts to ensure that its
customers' equipment is always in pristine condition, thereby minimizing downtime and
production losses. With this, NorthCan can increase its prices accordingly, as customers are
more inclined to pay more for a total solution that is backed by distinct value.

The second strategy that made it a competitive advantage ensures that NorthCan's
employees are well-equipped to provide customers with expert advice and recommendations,
thereby enhancing the company's credibility with its customers. By having knowledgeable
employees, NorthCan is also able to distinguish itself from rivals who may not offer such
expertise. This advantage enables NorthCan to provide customers with more comprehensive
packaging solutions and advice tailored to their particular requirements.

4.2 Four options of expansion strategy

To compare the various expansion options, we must evaluate their costs, potential
revenues, risks, and organizational implications.

Construct or Purchase a Facility: This option requires a substantial initial investment,

with construction costs of approximately US$120 per square foot as well as additional costs
for insurance, permits, and maintenance. Possible benefits include closer proximity to
customers, a smaller carbon footprint, and the establishment of a reputation in the United
States. However, this option could limit NorthCan's business flexibility and could require
considerable time to locate or build a facility. Also, it would require NorthCan to establish a
physical presence in the United States and possibly hire local staff, which could affect its initial
organizational structure.

Strategic Partnership: This option has a significantly lower initial investment of $2

million, but may present difficulties in identifying a partner, resolving conflicts, and allocating
resources. Access to specialty commodities and a US labor force, as well as leveraging
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NorthCan's packaging expertise, are among the potential benefits. This strategy may be
supported by the company's knowledge-based culture, which bolsters its ability to leverage the
resources and technology of strategic partners. This alternative needs the establishment of a
working relationship between NorthCan and a U.S.-based partner and may necessitate the
management of additional resources.

Franchise Sales and Services: This option could enhance brand awareness and expand
sales and service consulting without assuming total risk. However, the investment structure is
complex, and once franchisees are established, NorthCan would have to resign some brand
control. Besides, NorthCan has to acquire skills in franchising and franchisee management.

Become a Specialist Provider: This option involves expanding into the United States
while continuing to sell and provide support for solutions from Canada. The estimated initial
investment is $1.75 million, with potential revenues of $14 million over the following eight
years. Furthermore, NorthCan could utilize its strength of having the value-added solution to
provide full packaging equipment. This plan would necessitate adjustments to NorthCan's
Canadian operations and the placement of service technicians in designated U.S. regions. The
most significant obstacle is the requirement to position service technicians in the United States
and modify Canadian operations.

5. Northcan expansion strategy

5.1 General expansion strategy recommendations

By carefully evaluating these factors and conducting a comprehensive SWOT analysis, I

would suggest NorthCan pursue a combination of options 2 and 4. NorthCan could expand into
the United States by stationing service technicians in designated U.S. regions, and establishing
a long-term strategic partnership with a US-based packaging solutions company while
continuing to provide core operations from its Canadian facility. NorthCan would be provided
with access to a US workforce and specialty commodities while allowing NorthCan to leverage
its packaging expertise. This strategy would allow NorthCan to minimize up-front costs and
operational risks while simultaneously expanding its sales and service consulting offerings in
the United States.
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5.2 Marketing strategy

5.2.1 Product

Customized Packaging Solutions: NorthCan could develop customized packaging

solutions tailored to the unique needs and requirements of the US fresh produce industry. For
example, developing clamshell packaging designs that emphasize convenience and easy to
open experience for customers

Developing eco-friendly solutions: As sustainability is a growing concern among U.S.

consumers, NorthCan could highlight the sustainable and eco-friendly aspects in NorthCan
brand image and its packaging solutions.
5.2.2 Price - Penetration pricing:

Consider offering promotional discounts or introductory pricing to entice new customers

and promote trials.

Offer transparent and adaptable pricing options that accommodate the diverse needs of
customers, such as bulk orders or custom pricing packages for large orders.
5.2.3 Place

Utilize e-commerce platforms and online marketplaces; for example, Amazon, to

increase customer reach and visibility.
5.2.4 Promotion

Develop a multichannel marketing and communication strategy for promoting

NorthCan's value-added solutions and sustainable brand image in the US market.

Utilize social media, such as Facebook and B2B channels, content marketing, search
engine optimization (SEO), and pay-per-click (PPC) advertising to reach and engage with
potential customers.

5.3 Operation strategy

5.3.1 Establish strategic partnerships:

NorthCan could form strategic partnerships with reputable U.S.-based packaging

solutions providers that offer complementary products. These partnerships can grant NorthCan
access to local knowledge, networks, and resources while allowing them to leverage its
packaging expertise.
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5.3.2 Station service technicians:

NorthCan could station service technicians in particular U.S. regions to offer sales and
service consulting services. These technicians can provide on-site customer support, offer
technical expertise, and develop connections with potential customers. This will assist
NorthCan in creating a local presence and providing customized service to customers in the
US market.
5.3.3 Logistics: Utilize the expertise of 3PLs

NorthCan could set up a strong logistics and supply chain system to ensure efficient and
timely delivery of its packaging solutions to customers across the US. In addition, expanding
the business via 3PLs can optimize the supply chain, reduce transit times, and lower logistics
costs to gain a US market advantage.
 REFERENCES

1. Alfonso (2021) Characteristics of Thai Culture - The Unusual Trip. Available at:
https://theunusualtrip.com/characteristics-of-thai-culture/.
2. Geert Hofstede’s Cultural Dimensions Theory and Its Implications in SLA (2022)
Academic Journal of Humanities & Social Sciences, 5(14). Available at:
https://doi.org/10.25236/ajhss.2022.051411.
3. Hofstede Insights (2017) Thailand - Hofstede Insights. Available at:
https://www.hofstede-insights.com/country/thailand/.
4. Phan, T.K (2017) The impact of Vietnamese national culture on the effectiveness of quality
management in higher education institutions.