The document discusses Supreme Canning Company, an American company that produces canned tomatoes. It has excess production capacity and is seeking new international markets. The company had initial discussions with a large Japanese distributor but the negotiations broke down due to cultural misunderstandings between the two companies regarding business practices and hierarchy in Japan. The document emphasizes the importance for companies to thoroughly research cultural differences before expanding internationally to avoid such issues negatively impacting business relationships.

1. IB 4020
Student: Benedetta Piva International Trade Management
Fall Semester 2011

2. Supreme Canning Company
American company located in the state of Californian that produce:
It produces cans with its own-brand label but much of its output is
canned for other companies
International Trade Management Fall Semester 2011

3. Heavy competition due to:
competitors overseas inadequate domestic demand
International Trade Management Fall Semester 2011

4. US company’s annual processing capacity not absorbed by
domestic demand: 100,000 tons of tomatoes
Supreme Canning Company needed to find additional markets
Inquiry from Japan: a well known Japanese food packer and
distributor, handling a large number of products with great success.
Much larger than the American company.
Was it interesting?
International Trade Management Fall Semester 2011

5. Japan was an interesting country for companies interested in
exporting products:
reduce trade barriers encourage imports
Concerning tomato-canning industry, there was
an increasing demand for specialty tomato
products (due to the growing popularity of
pizza and Italian-style foods and restaurants)
and it could not support its economical domestic industry
without imports because of the scarcity of land
Great opportunity for the US company because it needed to
saturate its production and that was a well-known Japanese firm
International Trade Management Fall Semester 2011

6. After a first successful four days meeting at the Japanese
company, the Americans invited the Japanese to visit their
plant in California for four days.
During first meeting: Japanese interested in mutual letter of
cooperation, Americans wanted specific contract.
Then, the Japanese communicated that their president
wouldn’t be able to come and that the other senior
executives would be able to stay just two days instead of
four.
Americans : why?
[frank and direct letter, with a impolite
tone, as a person talking to an equal]
The Japanese decided to cancel the visit and not to
have further contact with the US company
International Trade Management Fall Semester 2011

7. Local businessman of Japanase extraction = intermediator
Japanese food products producer and distributor (larger than
the first Japanese company)
Visit at the US company’s plant
International Trade Management Fall Semester 2011

8. Us company’s president to
Family name of the Japanese
local businessman: Business
company’s president!
with them? No, thanks!
No official position in the company The semi-retired
No english president’s father!!!
International Trade Management Fall Semester 2011

9. Yes!
Big differences in how to do business and day by day life
No matter if managers have little knowledge of Japan and its
usages
A company must be aware and well prepared on business and
culture in a country to enter it successfully
CULTURAL AND SOCIO-CULTURAL ISSUE
International Trade Management Fall Semester 2011

10. Whas the Japanese interest for mutual letter of cooperation good?
Yes! Great first step in concluding a lonf-term
business agreeement
Why?
Japanese prefer to get to know people before doing
business
It takes time to them to trust someone else
International Trade Management Fall Semester 2011

11. Frank and direct letter, with a impolite tone, as a person talking to an equal
(to first Japanese company)
Respect and status in Japan (little companies to big
ones, buyer to seller)
Semi-retired father of the second Japanese company: no ufficial position
Americans: he hid facts
Japanese: No! Status issue
International Trade Management Fall Semester 2011

12. Yes!
Even if value system is deep-seated in Japan, understand and
accept different cultures
Great examples:
International Trade Management Fall Semester 2011

13. Apologize personally with the second Japanese company:
• ask for an appointment through the go-between
• Group of two or three company’s manager
• Gifts
The US company should prepare a structured plan focused on
research and analysis of new international markets in
order to systematically create new opportunities
Not wait for inquiry from the market!
International Trade Management Fall Semester 2011

14. A company must to keep in mind:
• foreign companies, competitors and custommers
• Different culture, competitors, economic, political, and legal
forces
Before approaching to international markets:
• identify countries target;
• deep knowledge of foreign usage and characteristics
in order to avoid major misunderstandings and have successful
business relationships!
International Trade Management Fall Semester 2011

15. • Albaum, G., Duerr, E., (2008). International marketing
management and export management. New York: Prentice Hall.
• Parker, P. M., (2011). The world market for fresh and chilled
tomatoes: A 2011 global trade perspective. Singapore &
Fontainebleau: ISEAD.
• Parker, P. M., (2011). The world market for tomato ketchup and
tomato sauces: A 2011 global trade perspective. Singapore &
Fontainebleau: ISEAD.
• Varley, H. P., (2000). Japanese culture. Honolulu: University of
Hawaii Press.
International Trade Management Fall Semester 2011