Case Study #2: Global Business Environment and Cultural Considerations
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 by 37 percent. Twelve Trees attributes their product’s rise in popularity to an increasing interest in alternative health treatments, particularly among young and middle-aged women, and to the fact that the teas are certified organic and grown in a socially responsible manner. While they are excited about the prospects of increased business, Twelve Trees is struggling to find enough Chinese farmers to fill their orders.
There are several guidelines Twelve Trees requires their suppliers to meet. First, the tea must be grown in a way that maintains the long-term fertility of soils without using artificial inputs such as chemical fertilizers or insecticides. Second, the tea should be grown on an agriculturally diverse farm, a farm on which tea is not the only plant being produced. Third, the employees at the farms must be paid competitive wages, enough to sustain a decent standard of living. This final point is dependent on the location of the farm – a ‘decent’ standard of living is relative to the market forces of the region in which the farm is located. These three principles are ensured through regular visits to the farms by independent observers. By virtue of these inspections, Twelve Trees is able to guarantee an organic and
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 by 37 percent. Twelve Trees attributes their product’s rise in popularity to an increasing interest in alternative health treatments, particularly among young and middle-aged women, and to the fact that the teas are certified organic and grown in a socially responsible manner. While they are excited about the prospects of increased business, Twelve Trees is struggling to find enough Chinese farmers to fill their orders.
There are several guidelines Twelve Trees requires their suppliers to meet. First, the tea must be grown in a way that maintains the long-term fertility of soils without using artificial inputs such as chemical fertilizers or insecticides. Second, the tea should be grown on an agriculturally diverse farm, a farm on which tea is not the only plant being produced. Third, the employees at the farms must be paid competitive wages, enough to sustain a decent standard of living. This final point is dependent on the location of the farm – a ‘decent’ standard of living is relative to the market forces of the region in which the farm is located. These three principles are ensured through regular visits to the farms by independent observers. By virtue of these inspections, Twelve Trees is able to guarantee an organic and