Case Study #2: Global Business Environment and Cultural Considerations

682 Words Sep 8th, 2013 3 Pages
Global Business Environment

Case Study #2: Global Business Environment and Cultural Considerations

Steeping in opportunity
Twelve Trees is a Canadian company that imports loose teas from China. They receive the tea in bulk from independent Chinese farmers, and package the tea in 400g, 2000g, and 5000g portions for distribution among their retailers, for the price of $110.00, $410.00, and $1,180.00, respectively. Their suppliers reside in the Lingnan area (comprising the Guangdong, Guangxi, and Fujian provinces), and they specialize in Wulong tea, although some of their suppliers also grow green, black, and white teas. During the past fiscal year, the number of retailers interested in purchasing their product in bulk has increased
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This area produces mainly black and green teas, and specializes in Pu’er tea, which has been used in China for hundreds of years as a cleansing and detoxifying drink. The cooperative is called Defang Hezuo’She, and it meets the three principles Twelve Trees insists upon to maintain their socially responsible and organic brand, and allows Twelve Trees to diversify their product offerings. An added bonus of Defang Hezuo’She is that all of the participating farms have been growing tea for centuries, adding a rich historical background to the product.

Twelve Trees is interested in securing a long-term contract with the cooperative, but in order to do so, they need to travel to the Yunnan province to inspect operations and to create a stable relationship with the cooperative’s executive members. Twelve Trees does not currently employ anyone fluent in Mandarin. They have managed their previous Chinese business through an interpreter. Twelve Trees decides to continue using interpreters to begin contract negotiations with the Chinese cooperative. After a detailed negotiation process, Twelve Trees and Defang Hezuo’She successfully agreed upon contract terms, and the cooperative is now preparing its first major tea shipment to Canada.

Case Study 2: Questions

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