Busm3097 Sgs g6 a2 Oneday

Nghia Nippers Business plan in Canada

ONE DAY TEAM 1

IN

INTERNATIONAL MANAGEMENT

BUSINESS PLAN

LECTURER: PETER TRAN GROUP: 6

TEAM: ONE DAY

Pham Huu Hoang Tran Vu Duy

Pham Tuong Vi Tran Thi Hien Khanh

Nguyen Ngoc Dai Nghia Tran Hong Lan


ONE DAY TEAM 2

RMIT International University Vietnam Bachelor of Commerce Program

ASSIGNMENTCOVER PAGE

Your assessment will not be accepted unless all fields below are completed

Subject Code:

BUSM3097

Subject Name:

International Management

Location where you study:

RMIT Vietnam – SGS Campus

Title of Assignment:

International Business Report

File(s) Submitted

BUSM3097_SGS_G6_A2_OneDay.docx

Student name:

Pham Huu Hoang (s3210128)

Tran Vu Duy (s3209853)

Pham Tuong Vi (s3210060)

Tran Thi Hien Khanh (s3210050)

Tran Hong Lan (s3192916)

Nguyen Ngoc Dai Nghia (s3210371)

Learning Facilitator in charge:

Mr. Peter Tran

Assignment due date:

Monday 9th

May 2010

Date of Submission: Monday 9th

May 2010

Late Submission Approval NA

Number of pages including this one: 51


ONE DAY TEAM 3

Table of Contents

Executive summary……………………………………………………………………………………4

Introduction……………………………………………………………………………………………5

Country overview

1. Profile .............................................................................................................................................. 5

2. Geography ....................................................................................................................................... 5

3. Population ....................................................................................................................................... 6

4. Economy: ........................................................................................................................................ 7

5. Government ..................................................................................................................................... 9

Company overview

1. Company profile & structure ........................................................................................................ 12

2. Product Overview ......................................................................................................................... 13

International Business Environment

1. Business Practices, Cultures, Dos and Don‟ts .............................................................................. 20

2. Social Conditions .......................................................................................................................... 22

3. Economic condition ...................................................................................................................... 24

4. Legal ............................................................................................................................................. 26

5. Competitors Analysis: ................................................................................................................... 27

6. SWOT Analysis ............................................................................................................................ 32

Global Competing Strategy

1. Marketing Objectives .................................................................................................................... 33

2. Entry modes: ................................................................................................................................. 34

3. Segmentation and Targeting ......................................................................................................... 36

4. Positioning .................................................................................................................................... 38

Financial Plan

1. Financial objectives ……………………………………………………………………………....42

2. Financial Marketability…………………………………………………………………………...41

3. Projected PNL Statement for year 1 (monthly) and year 1 to year 3 (yearly) ................................ 42

International Aspect…………………………………………………………………………………48

Conclusion……………………………………………………………………………………………48

Reference……………………………………………………………………………………………...49

Appendix……………………………………………………………………………………………...51


ONE DAY TEAM 4

Executive Summary

Nghia Nippers is established in 2000 with a view to becoming one of leading global group in

the field of producing and supplying service for caring beauty that makes women more confident,

attractive and successful in life via the promotion of “quality-care-share” international standards. With

the acquisition of more than 80% of nailing care industry in Vietnamese market and a wide

distribution coverage of more than 120 stores all over the world, Nghia Nippers Corporation hold a

firm foundation expand its business into a promising market- Canada. Based on this spirit, this

business is formulated to offer a very deep insight into how Nghia‟s Nippers will penetrate into this

market where opportunities and threats are awaiting for them.

It can be said that Canada would be a thriving land for doing business here since Canada has

possessed some competitive advantages that other countries do not have. It can be included the

strategic geography, aging population, stable government, proliferating legal social and economic

conditions which can be considered as most potential critical success factors for a newcomers like

Nghia Nippers Corporation. Based on the evidence of rigorous country analysis, the Canadian market

will be a lucrative one for Nghia Nippers to achieve viability and sustainable development since

government has gone its great length to smoothen its legal procedures allowing external business to

participate in its country. Also, the high living standard and stable economic growth will be a good

condition for Nghia Nippers to launch its long-term development plan in the foreseeable future.

Besides these advantages, there exist potential threats for Nghia Nippers since the business

practices, cultures distinction and difference in Canadian consumer behavior will mainly affect the

effectiveness when transferring its successful business model into Canada where bears little

resemblance to what Nghia Nippers has implemented in other Europe and Asian countries.

Specifically, in the Hofstede Cultural Dimension Analysis, some of culture‟s mismatches have been

identified so that Nghia Nippers can learn from the previous cultural misunderstanding in doing

business in unfamiliar environment. These experiences will be a great concern in Canada market

where Nghia Nippers has to confront with harsh competition from strong competitors in Canada

nailing care equipment industry such as Revlon, Aimex, LaCross. However, Nghia Nippers holds

more confidence in its own strength supporting by many differentiating features to be endures in this

battle.

With very deep insight into some prevalent issues in Canada business practice, environment

as well as great concern in business environment analysis, Nghia Nippers has explores the most

appropriate entry mode approach bridging its products to Canadian users. Specifically, the exporting

entry mode will be the preferable orientation in the first two years in Canada as its cost has been

outweighed by substantial benefits this method may offer including low expenditures and efficiency.

To put this entry mode into practice, Nghia Nippers has carefully designed clear market segmentation

analysis to offer the effective marketing plan in Canada with a view to raising its brand awareness in

Canada such as Advertising, Promotion Campaign, and Sponsorship.

With regard to financial aspect, Nghia Nippers will be aiming at Reach the sales revenue of

$2 million after 1 year and increase the net profit margin to approximately 40% after 1 year. These

objectives hopefully will not be beyond Nghia Nippers Control since it has done very good

performance in cost management and sale activities in other countries.

Overall, it is undeniable that Nghia Nippers‟ expansion plan to a new market especially

Canada will confront a lot of challenges; however, Nghia Nipper Management Team will try their

best to make this promising plan conform to reality.


ONE DAY TEAM 5

Introduction

Nghia Nippers Company is being the market leader in Vietnamese nail-care manufacturing

and has vision to go globalization. Meanwhile, Canada is a developed country with many

opportunities for foreign business. It is a best choice for Nghia Corporation to set up its business for

several reasons that will be illustrated in this report.

Country overview

1. Profile

Canada is a one of the world's wealthiest countries.

A member of the Organization for Economic Co-operation and Development (OECD), North-

American Free Trade Association (NAFTA) (1994), World Trade Organization (WTO) (1995)

and Group Eight (G8) (1978).

Has a closely doing business with U.S.

2. Geography

Canada occupies the vast portion of the American continent (41%) and becomes the second

largest country in the world after Russia (About website). Canada located in the northern North

America with the rich natural resources such as fish, forest and plain, etc.

Figure 1: Canada map

http://en.wikipedia.org/wiki/Organization_for_Economic_Co-operation_and_Development

http://vi.wikipedia.org/wiki/NAFTA


ONE DAY TEAM 6

Table 1 : Canadian Geographic

Land area 9,984,670 km2

Coastline 202,080 km2

Climate The south-western coast is mild in the winter

Seven months a year are very cold below freezing

In summer, the temperature can exceed 30 degree and high level

of humidity

Natural Resources Fish, forest, plain, petroleum, mineral.

Largest cities Toronto, Montréal, Vancouver, Ottawa Gatineau, Calgary, Edmonton,

etc.

3. Population

Although being the second largest country in the world, the number of Canadian population is

slowly increasing by 57,500 people in the fourth quarter of 2009 to 33.9 million and ranking the 33rd

in the world due to immigration (Statistics Canada, 2010). Thus, this is a great potential market for

Nghia Nippers as the high number of immigration from Asia where women care much about nails.

Ethics: Canada has more than 34 groups of ethics consisting of English, French, German, Italian,

Irish, Ukrainian and Chinese with high rate of immigration. To Boyd (2005), 60% of Canada‟s

population growth is contributed by immigrants and they are the potential market for any business in

Canada (figure 2).

Figure 2: Percentage of Ethics in Canada

Religions: Along with various ethics is the variety of religions; the Canadian majority follows the

Christianity, Islam, Judaism and Buddhism.

Age: Canada is seen as an aging country because the baby boomer generation is retiring and the high

quality of healthcare service.

http://en.wikipedia.org/wiki/Calgary


ONE DAY TEAM 7

Gender: Statistics of Canada shows that in 2004, more than 16 million women accounted for 50.4%

of the Canadian population.

Birth and Death rate: Approximately 10% of Canadian population increases each year due to new

born babies (IndexMundi 2010) (figure 3). On the other side, the death rate of Canada is slightly low

at fewer than 8% each year due to good healthcare service (figure 4).

Figure 3: Canadian Birth rate (IndexMundi 2010)

Figure 4: Canadian Death rate (IndexMundi 2010)

4. Economy:

According to The World FactBook (2009), Canada enjoyed solid economic growth from 1993

through 2007. Furthermore, although the economy was affected by a sharp recession in the final

months of 2008 and early of 2009 which led to a significant decrease in the Real GDP (figure 5),

Canada‟s Real GDP still gained the better rate rather than other G7 countries (figure 6).


ONE DAY TEAM 8

Figure 6: Real GDP Annualized % change

Moreover, after the global crisis, Canada has been cover much quicker than other G8

countries. For example, in the fourth quarter of 2009 the real and nominal GDP has beyond

the forecast one i.e. the actual Real GDP has been risen up to 5% and the Nominal GDP has

grown by 4.5 % (figure 7). In addition, international trading such as import and export have

been dramatically increased by 36% and 12.2 %, import and export respectively. Most

importantly, Canada has an ideal unemployment rate which is 8.6% in Jan, 2010. Comparing

to US when they both entering the crisis, Canada‟s labor market performance significantly

strong than US almost three time since Canada can maintain more than 106,000 jobs, yet US

just can save less than 104,000 jobs (figure 8) .

Although Canada has a stable economy, Canada still does not take advantages of their plenty

of resources to serve the demand of different industries in their country. Furthermore, since the GDP

contribution among the economic sectors has a huge gap i.e. 69.6%, 28.4%, and 2%,, service,

Figure 7: Canadian Labor market Figure 8: Real and Nominal GDP vs. the

forecast in 2009

Figure 5: G8 Real GDP during crisis period


ONE DAY TEAM 9

industry and agricultural respectively. Canada has to depend on the supply from other countries

(figure 9).

Figure 9: Import and Export Annualized % change

5. Government

Source: Adapted from World Fact Book, 2009

According to World Factbook (2009), Canada operates under a British-style parliamentary

system of government, with an elected House of Commons and an appointed Senate. Our

representatives in the House of Commons, comprising 305 Members of Parliament (MPs), are elected

to serve by direct popular vote. Our Senate includes up to 105 Senators who are selected on the advice

of the Prime Minister of Canada and appointed by the Governor General of Canada.

The Canadian judiciary system is independent from all branches of government and the actions and

conduct of government, and all statutory laws, rules and regulations are subject to the scrutiny of the

courts. Our Superior Court judges are appointed by the Prime Minister of Canada through the

Governor General of Canada. The courts are responsible for ensuring that all laws comply with the

principles of Canada‟s Charter of Rights and Freedoms and that all governments conduct themselves

in accordance with the Constitution.

Under the Canadian Constitution, there is a division of powers between the federal and provincial

governments. Generally, the federal government is responsible for national and international matters,

while the provincial governments are responsible for more local matters relevant to their particular

provinces/territories.


ONE DAY TEAM 10

Company & Product Overview

1. Company overview

Table 2 : Company's overview

Official Name Nghia Nippers Ltd or Nghia Nippers

Established Year September 2000

Distribution channels More than 120 stores over domestic and oversea

Market share 80%

Market leader in Vietnamese nail tool manufacturing industry

Core business Manufacturing and exporting manicure set

Export value 30% of total sale

Head office 10/20 Lac Long Quan street, District Binh Thanh, HCMC

Official website http://www.nghianippers.com

Vision Nghia Nippers brand wishes to become one of the leading global

groups in the field of producing tools and supplying services for

caring beauty that makes women more confident, attractive and

successful in their lives.

http://www.nghianippers.com/


ONE DAY TEAM 11

Mission statement Affirming "Nghia Nippers" to be proud of the Vietnamese Brand in

the global market. Nghia Nippers brand meets needs of caring

beauty for women in the world through producing perfect products

as well as supplying best services for caring beauty.

Slogan For a meaningful life

Core value of brand Nghia Nippers = Quality + Care + Share

Quality: Commit to supply customers best products and

services of beauty care.

Care: Women always represents for the natural beauty. It is

respectful that its beauty is well-cared and honored.

Share: Our aim is to share responsibilities with the society, the

community and the whole nation.

Achievements 2002-2009: Vietnam High Quality Goods

2005 & 2007: Kem Nghia trademark got prize of Sao Vang Dat

Viet

2006: Vietnam Strong Trademark of 2006

2007: Gold cup of Top Integration Quality of 2007

2007: 100 Vietnam High Quality Top Trademarks of 2007


ONE DAY TEAM 12

2. Company structure


ONE DAY TEAM 13

3. Product Overview

Even though being exporting to Canada, Nghia Nippers also plans to promote its products at

the most effective marketing.

a. Product:

Strategies:

It is a fact that Nghia Nipper Company currently dominates nail care product market in

Vietnam. Regarding global business vision, they ought to apparently pursue market-development

strategy which means company will expand business scale to international segments within the same

product categories (see Appendix).

Ansoff’s Product/Market Development Grid (Adopted from Kotler 2006)

Moreover, Nghia Nippers follows focus low-cost leadership (Porter, 1980), which aims to

target nail care businesses in some dense areas and high number of Vietnamese people at first. Then,

the corporation will expand to low-cost leadership to make it popular across Canada.

Product level Description

Core product Providing nail care products

Actual product High product quality which is accredited by ISO 9001:2000

Nghia Nippers is renowned as prestigious brand in nail caring products in

Vietnam.

The design of each product categories is customized to suit changes in

customer‟s fashion preference.

Augmented

product

Customer care service: Nghia Nippers offers customer with pre-purchase

& post-purchase online and offline consultation service regarding how to

care their nails at best.

Warranties: all products are warranted for certain time which yields

trustworthiness among customers.

Installation: After purchasing the products, customers will be guided on

how to use it effectively.

Services: there is repairing/maintenance service for Nghia Nippers

products at their stores for free within warranty time.

Table 3 : Levels of product


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b. Place: Distribution spread through domestic & international market.

As Nghia Nipper brand is brandly new to Canadian market, in order to mitigate the risks of

being failure when migrating into this market, Nghia Nippers will apply selective distribution

(Kotler et al. 2009) method to distribute products in regions which gather the majority of Vietnamese

expatriates (figure 10).

Figure 10 : Vietnamese population in Canada 2001 (Statistics Canada 2001)

According to Canadian General Statistics Office (2001) the majority of Canadians of

Vietnamese live in Ontario (67,000 people), Quebec (28,000 people), British Columbia (27,000

people) or Alberta (21,000 people). Therefore, we will start out global strategy in those four areas by

find the reliable importers for our products.

c. Price:

Nghia Nippers‟ products have been known as premium products in Vietnam. However, when

exporting to Canada, Nghia Nippers‟ pricing strategy is competitor-based pricing so it has a great

competitive advantage in the price; for example, high quality of products and has cheaper price than

other main competitors in Canada:


ONE DAY TEAM 15

Figure 11 : Prices in comparison with competitors

Although Nghia Nippers has advantage in pricing, it also needs appropriate strategies to

compete with the existing competitors in Canada‟s market:

Table 4 : Pricing strategies

Penetration Pricing

To gain market share in Canada, firstly, Nghia Nippers sets the

price a bit lower than others competitors. Then, when they reach

the desirable market share, the price will steadily increase by

changing the packages, the color or design.

Product Bundle Pricing

Instead of selling single product such as one nipper for 5 CAD, one

nail file 0.5 CAD and one cuticle nipper for 2 CAD, Nghia Nippers

will combine them as a whole package which only cost 7CAD. By

doing that, Nghia Nippers will encourage customers to buy because of

cheaper price. Furthermore, Nghia Nippers can also use this strategy to

sell their old stocks.


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d. Promotion:

Advertising:

Advertising seems to the creative tools which can launch customer awareness toward Nghia

Nippers brand. That is the reason why marketing team tries to deliver company‟s message – “For a

meaningful life” to Canadian audiences in the hope he or she will react in certain way. Therefore, the

advertising campaign aims to run in the following objectives:

Announce 20% of target customers about our products and build positive manicure supplier

image in consumer perception

Convince customers that Nghia Nippers will bring the best manicure product quality with

reasonable price to Canadian buyers.

Remind Nghia Nippers brands in customer mind during low shopping seasons.

To achieve these goals, the firm invests huge budget in this campaign. Nghia Nippers firstly

introduces its goods to Canadian market, thus the company needs to spend more on promotion

activities which cost around 20% sale revenue each year. The following table presents details

advertising programs.

Key media Evaluation Vehicles Classification

Newspaper

Inexpensive

media to

produce

Reach large

number of

audiences.

In fact,

78% of the

total

Canadian

population

read a print

or online

edition of

their daily

newspaper

at least

once a

week (Sass

2010).

Halifax News Net : Weekly news from Halifax is one of

the best value print advertising

They had 51% of 117,680 readers every week are from 34 to 56

years old (Readership survey 2007). So we can estimate the

number of Nghia Nipper target customers may read this

newspaper is 60,017 readers/per week. Furthermore, we want to

reach 20% of these potential customers which is 20% of 60,000

readers = 12,000 readers/per week will notice our advertising.

The frequency = 2 times/month

Ad placement time = 16 weeks = 4 months

Gross rate point (GRP) = 2*12,000*4 = 96,000 views

Cost per thousand views (CRM) = $40 Total costs:

(96,000*40) / 1000 = $ 3840 / per year

Vancouver Sun: Canadian breaking news, sports and

business. (Daily newspaper)

They had 62% of 23 million readers every month are from 25 to

55 years old (The Vancouver Sun 2010). So we can estimate the


newspaper is 14,260,000 readers/per month. Furthermore, we

want to reach 20% of these potential customers which is 20% of

12,000,000 readers = 2,400,000 readers/per month will notice our

advertising.

The frequency = 1 time /month (average)


ONE DAY TEAM 17


Gross rate point (GRP) = 1*2,400,000 *4 = 9,600,000 views

Cost per thousand views (CRM) = $10 Total cost: (9,600,000

*10) / 1000 = $ 96,000/ per year

The Gazette: Montreal; Online Daily news

They had 62% of 7.5 million readers every month are from 25 to

54 years old (The Gazette 2010). So we can estimate the number

of Nghia Nipper target customers may read this newspaper is

4,650,000 readers/per month. Furthermore, we want to reach 20%

of these potential customers which is 20% of 4,650,000 readers =

930,000 readers/per month will notice our advertising.



GRP = 1*930,000*4 = 3,720,000 views

CRM = $10 Total cost: (3,720,000 *10) / 1000 = $ 37,200/ per

year

Household

magazine

Long life

and high

expectation

for next

edition

Easy to

reach

demographi

c

segmentati

on.

Canadian Family: is the only lifestyle magazine

enriching all aspects of contemporary family life in

Toronto. In here, we place our ad on “big box” layout

(300x250). This magazine only publishes 8 issues per

year.

They had around 2.5 million readers every year are from 25 to 45

years old (Canadian Family 2010). So we can estimate the


newspaper is 208,333 readers/per month. Furthermore, we want

to reach 20% of these potential customers which is 20% of

200,000 readers = 40,000 readers/per month will notice our

advertising.


Ad placement time = 8 months

GRP = 1*40,000*8 = 320,000 views

CRM = $15 Total cost: (320,000 *15) / 1000 = $ 4,800/ per

year

Canadian Living: Canada's favorite family magazine

offers solutions and information on the topics that matter

family. Present up-to-the-minute health and wellness

information; practical parenting and relationship advice

and even beauty features. (Publish 12 issues per year)


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They had around 15 million readers every year are from 24

to 55 years old (Canadian Living 2010). So we can estimate the


newspaper is 1.25 million readers/per month. Furthermore, we

want to reach 20% of these potential customers which is 20% of

1.25 million readers = 250,000 readers/per month will notice our

advertising.



GRP = 1*250,000 *4 = 1,000,000 views

CRM = $20 Total cost: (1,000,000 *20) / 1000 = $ 20,000/

per year

Internet

Low costs

in long

period of

time such

as “Pay per

click” tactic

which

means we

only pay ad

fee when

customers

click on our

ad banners.

Fast

connect to

large

number

web users

and

interactive

capability.

Nghia Nippers webste: www.nghianippers.com

E-shopping site: Best place to compare prices –

www.canada.shoplocal.com

They had around 175,000 consumers every year are from 25 to 54

years old (Shoplocal 2010). So we can estimate the number of

Nghia Nipper target customers may read this newspaper is 14,583

consumers/per month. Furthermore, we want to reach 20% of

these potential customers which is 20% of 14,583 consumers =

3,000 consumers /per month will notice our advertising.



GRP = 10*3,000 *6 = 180,000 views

CRM = $30 Total cost: (180,000 *30) / 1000 = $ 5,400/ per

year

Advertising site: where manufacturers place their promotion

programs and advertising banners. We will place our ad on

“skyscraper” format (160px by 600px)

http://toronto.flyerland.ca/

They had around 100,000 visitors every month are from 25

to 54 years old (Woorank report 2010. And we want to reach 20%

of these potential customers which is 20% of 100,000 web

visitors = 20,000 visitors /per month will notice our banner.



GRP = 12*20,000 *6 = 1,440,000 views

CRM = $25 Total cost: (1,440,000 *25) / 1000 = $ 36,000/

per year

http://www.nghianippers.com/

http://www.canada.shoplocal.com/

http://toronto.flyerland.ca/


ONE DAY TEAM 19

Sale promotion:

Table 5 : Sale promotion programs

Coupon

Nghia Nippers issues coupons that 5%

discount each purchase when buying at

Nghia‟s store in the holidays and for bulk-

buy customers with more than 5 tools per

time. Simultaneously, Nghia can add coupon

on Fashion Magazine to attract young women

about the brand and come for shopping. To

Armstrong (2007, p.456), it will stimulate

sale and promote brand effectively.

Premium

Every time buying a pack of nippers,

customers will receive premium such as a

free nail-color to fully decorate themselves.

More than $50 paid can get a free nail tool.

Thus, customers can get incentives to

purchase in Nghia Nippers.

Sponsorship:

Nghia Nippers can be a sponsor for Skill competences Canada (Nail Art Design) competition

which is held in from October to November 2011. Thus, by using the tools of Nghia Nippers to

perform, professional designers indirectly advertise for Nghia Nippers and enhance Canadians aware

about the brand. By that, customers can recognize the value and quality of Nghia Nippers then buy the

tools with high belief.


ONE DAY TEAM 20

International Business Environment

1. Business Practices, Cultures, Dos and Don’ts

a. Hofstede’s cultural dimensions

Figure 12: Hofsteade's cultural dimension Canada & Vietnam

Figure 13: Work-related Values of Canada

Power Distance:

Power distance of Canada is slightly low (39) in comparison with Vietnam (70). This rank

indicates that Canadian society is equal and mainly ignores the differences between people‟s power

and wealth (Hofstede 1984). Thus, with lower price of nail tools in comparison to Canadian

competitors and high quality, Nghia Nippers may catch attention from low to high income people.

-

20

40

60

80

PDI UAI IDV LTO

39 48

80

23

70

30 20

80

Hofstede's Cultural dimensions

Canada vs Vietnam

Canada

Vietnam


ONE DAY TEAM 21

Uncertainty avoidance:

Even though ranking at the average (48), Canadians are not as tolerant for social ambiguity or

uncertainty as Vietnamese people (80). It is because Canada is a developed country with strict rules,

laws in order to control their variety of immigrants and cultures while Vietnam has simpler culture

and has been developing recently. Consequently, to do business in Canada, Nghia Nippers should do

research about laws and policies about nail to ensure performance.

Individualism:

As can be seen in figure 13, Canada has the high ranking of individualism (80). Most English

speaking countries like United Kingdom or United States have high individual-focus rank as they are

self-reliant and tend to look towards themselves and close family members (Hofstede 1984).

Although Canadians are self-confident and open, they like to keep personal privacy limited except

family members or close friends. For Nghia Nippers, encouraging individual coming to the store is

rather than the group of people.

Long-term orientation:

While Vietnam scored 80 in long-term-orientation dimension as it is a typical Eastern country

where tradition is respected, Canadians with (23) score was low long-term oriented. Due to the

various races and culture-mix in Canada, this country accepts the changes or innovations more easily

without concern much about tradition and long-term orientation. Therefore, Nghia Nippers can be

successful in Canada as a new entrant as long as the quality and design are acceptable.

b. Dos vs. Don’ts:

According to World business culture (2010) and International business center (2008), there are

some points that an International enterprise need to notice as an entrant to Canada.

Table 6: Canadian business styles

Styles Dos Don’ts

Communication

Directly say what you mean

Reserved, understated communication

but straight forward.

Verbal communication rather than non-

verbal.

French Canadians are more open than

Canadians with more gestures and stand

closer.

Overtly coded language

causes suspiciousness

and bad images to

customers

Use many gestures and

movements (handshake,

touch) when speaking

with English Canadians

(except French

Canadians)

Meeting/ Behavior

A firm handshake with good eye-contact.

Do research before coming to the

meetings.

Democratic, calm and neutral

conversation is seen as politeness and

courtesy.

Well-prepared empirical facts to prove

Come to the meeting

without information

about the partners

Showing aggressiveness

and heat

Inability to give relevant

facts causes

http://www.geerthofstede.com/


ONE DAY TEAM 22

the ideas and taken decisions.

suspiciousness to

Canadian.

Eating while walking in

public is impolite.

Dressing

In cities, Tights and suits for men and

formal dress for women are standard in

viral meetings between companies and

customers.

Simple, classic suits and dress with are

valued in navy, grey and black.

High quality of clothes‟ material is

considered.

Relaxed, informal

costumes make

customers less believe

in the company.

New and fashionable

suits.

Culture

Show respect to diversity of cultures in

Canada by making awareness of the

business for multi-ethical people.

Business-women must show professional

and competent manner and being

respected by the partners without

encounters about gender.

Focus on original and

ignoring immigrates or

advertising about

specific regions may

lose the rest of the

customers in this

market.

2. Social Conditions

a. Lifestyle:

Figure 14: Shopping Frequency for Canadian Residents (ICSC, 2009)


ONE DAY TEAM 23

Canadians have been known as “avid shopper” since it is reported that during the recession in

2009, Canadians had just slightly cut of 19% their sending (International Council of Shopping

Centers, 2009). Furthermore, according to International Council of Shopping Centers (ICSC) within

60 days at the end of 2009, Canadians reported visiting enclosed malls nearly twice as often as US

shoppers (figure 14). Therefore, it is a great advantage for Nghia Nippers to participate in a market

that the buyer is always willing to buy their products.

In Canada, women are typically responsible for a larger share of the household shopping

(ICSC, 2009). Furthermore, woman is also Nghia Nipper‟s target customer, consequently, it creates a

good chance for Nghia Nipper to reach and influence their buying habit.

ICSC (2009) stated that Canadians are always optimistic about their financial situation because when

being asked about their expectation about the financial situation in the next 12 months, only 11%

think that it will be worse (figure 15). Since Canadians believe that their economy will not become

worse, they obviously feel wealthy and increase their expenditure and are willing to buy goods.

b. Population:

Canadian has been known as young population country since the percentage of 15-64 year

old is up to 60% which also the targeted customers that Nghia Nipper aims to serve (figure 16).

Figure 15: Over the next 12 months, do you think your financial situation will (ICSC, 2009)

Figure 16: Demographic trend by age group


ONE DAY TEAM 24

c. Living standard:

Figure 17: Classification of Living Standard in Canada (ISCS, 2009)

The living standard of Canada is high since Canada‟s Human development index (HDI) ranks

fourth among American countries (Federal Statistical Office Germany, 2010). Moreover, the majority

occupation of the society is far and good financial level which is 35% and 40% respectively (ISCS,

2009). Furthermore only 18% of the nation is concerned as poor class (figure 17). Since Canada has a

high living standard, people will require for extra service or premium products that will enhance their

life. Nghia Nippers sees Canada as a potential market since their product is high quality which will be

consumed well in Canada.

3. Economic condition

During the global crisis in 2009, Canadian Government had implemented appropriate policy such

as financial support, expansionary monetary, fiscal policies, price stability and long-term fiscal

sustainability to eliminate the downturn of the economy. Thus, Canada has been known as one of the

stable and strong economy and fiscal position which Nghia Nippers thinks will be a good market‟s

condition for their business.

a. GDP:

Another sign that reflects the recovery of Canada‟s economy is the increase of real and

nominal GDP which has beyond the forecast. In detail, the actual Real GDP has been risen up to 5%

and the Nominal GDP has grown by 4.5 % (Statistic Canada, 2010) (figure 18). Therefore, it is less

risky for Nghia Nipper to doing business in a country that have such a stable economic condition like

Canada. Furthermore, these above numbers have shown the positive growth of almost economic

activities such as consumption, government spending and import and export which can be considered

as great advantages for Nghia Nipper‟s business.


ONE DAY TEAM 25

b. Support the economic growth:

Although Canada suffered less than other G7 countries after the global recession, the economy still

got negative effect on the economy, thus the Government decided to support the economy by reducing

the interest rate which will encourage the people in lending money and investor in investing.

Consequently, the business within the nation as well as international business will have incentive to

operate in Canada. Furthermore, the Federal also reduces the income tax for Canadians as well as

international partnerships to support the business (figure 19 & 20).

Figure 18: Real and Nominal GDP vs. the forecast in 2009

(Statistic Canada, 2010)

Figure 20: Progress in Implementing Canada’s Economic Action Plan

(Public Works and Government Services Canada, 2009)

Figure 19 : Effective Interest Rates and Policy Rate 2009


ONE DAY TEAM 26

4. Legal

According to International Finance Corporation (2010), Canada stands on 38 out of 183 countries in

the attractiveness of doing business 2010 (figure 21). Therefore, Nghia Nipper business would like to

comply with the regulation, rules or policies for the purpose of importing their products into Canada.

Figure 21: Trading Across Borders – Global Rank (IFC 2010)

Firstly, the nature of import procedure in Canada is quite short with 4 documents and 11 days

required (figure 22). Therefore, Nghia Nippers might find it comfortable to approach through the

registration process, import account and the range of tax duties, etc. The sooner Nghia Nippers

finalize the process, the better they generate profits.

Figure 22: The duration & US costs of import procedures (International Finance

Corporation 2010)

Secondly, Nghia Nippers should update and go along with the imported rules. For instance,

according to IFC (2010), the Canada Border Services Agency (CBSA) recently establishes the

advanced rules. By this rule, the businesses provide their information, description of imported

products, etc in order to get approval of 10-digit number of tariff classification. Therefore, the benefits

from this are disclosure on the certain type of documents such as the commercial invoice, Form C11,

etc.

Finally, the imported goods are charged 5% GST for the consumption in Canada (IFC 2010). The

numbers of tax vary from province to province such as Canadian Provincial Sales Tax (PST), Quebec

Sales Tax, etc. These taxes are added up on the GST. Therefore, Nghia Nippers should understand

clearly about these taxes before penetrating any provinces of Canada


ONE DAY TEAM 27

5. Competitors Analysis:

a. Competitor analysis:

Brand Name Products Description

Domestic competitors

La Cross is a leading brand of beauty implement in

Canada since 2002.

Be sub-brand of Sally Hansen who is the biggest

cosmetic and beauty care company takes over 50%

market share.

La Cross offers various kinds of nail implements

with attractive package and high prices (price range:

$23 $ 26 / nail nipper). (La Cross Pty Ltd 2010)

Commentary:

La Cross has more competitive advantages than Nghia

Nippers because they are domestic brand with high brand

awareness and non-tariff fee. However, Nghia Nippers can

be outstanding of lower manicure tool prices in cost

management. The reasons are low labor costs and production

expenses.


ONE DAY TEAM 28

Revlon is found in 1932 and a world leader in

cosmetics, fragrance and personal care.

Provide glamour, excitement and innovation through

quality products at affordable prices (Price range:

$10 - $24). (Revlon Pty Ltd 2010)

Commentary:

In term of product category, Revlon is a mass producer with

wide range beauty goods and perform successfully in North

America and European.

Nevertheless, Nghia Nippers is proud of strong Vietnamese

brand reputation and wealth experiences in exporting over 20

countries in the world.

Aimex Canada Ltd. is a wholly Canadian Venture

based in Southern Ontario since 1989. (Aimex Ltd

2010)

Commentary:

Aimex caters to wholesale businesses offering good quality

products at competitive prices. However, it seems to be less

competitive advantage than Nghia Nippers because of

product appearance and design. In fact, Nghia Nipper‟s

exporting products are well-designed and made by good raw

material – stainless steel.


ONE DAY TEAM 29

Exporter competitors

Beauty Bone is the Pakistan's Beauty Tools

manufacturer.

Established for over 10 years and carry a global

reputation for quality, excellence and outstanding

service. (Beauty Bone Pty Ltd 2010)

Commentary:

Both Beauty Bone and Nghia Nippers are market leaders of

manicure tools suppliers in their domestic nations. However,

Nghia Nippers takes more competitive advantages toward

Beauty Bone. Firstly, Pakistan has not been a member of

international trade community or organization, so they suffer

high cost of tariff and import licensing procedures. Secondly,

Vietnamese political environment are stable, so Canadian

consumers have good perception on Nghia Nippers

commodity.

Established in 1992 as a manicure set manufacturer

from China (Yangjiand FuGi Industrial Co. Ltd

2010).

Export Percentage : 85 percent to 89 percent

Capital :US$100,000 to 199,999

Current Export Markets

o Eastern Europe

o North America

o Mid East/Africa

o Central/South America

o Asia

o Western Europe


ONE DAY TEAM 30

o Australasia

Commentary:

China seems to be an exporting leader in the world of

many products‟ kinds because of cheap price goods. In

nail nipper set, Nghia Nippers can have a prestigious

position in global consumer mind with high quality

nippers with acceptable prices. The Vietnamese

manufacturer uses good quality raw materials and

conduct beautiful product design compared to Chinese

supplier.

The Salon Supply Source (SSS) is the leader of beauty

implement manufacturer in US and now brings these

values to Canada. The company knows what you want

and need: Quality Products; Service and Selection;

Low Prices! (The Salon Supply Source Co. Ltd 2010)

Commentary:

The US firm takes advantage of close geographical

distance, easy import procedures and customer

preferences. As new supplier in Canadian market,

Nghia Nippers has pressures of these issues and try to

come up effective marketing plan in order to create

brand awareness. Moreover, Vietnam has famous of

low labor costs and good quality products, hence, Nghia

Nippers can compete efficiently to SSS in term of price

and good appearance.


ONE DAY TEAM 31

b. Porter’s five forces:

Rivalry

Highly intensive of big competitors such as La Cross and Revlon which locates in evoked set of customer mind for long

time. However, Nghia Nippers can compete effectively in term of price and product quality.

The threat of substitute

products

There is low or none substitute product of manicure equipment. However, the availability of various product design and

packaging from strong competitors (Revlon and La Cross) may threat Nghia Nipper market position.

Bargaining power of

customers

Since beauty salon is very developed in Canada, so there is high demand of manicure treatments with many nail care

tools manufacturers. Therefore, customers are easy to switch other brands which provide best quality and reasonable

prices.

Supplier power

Manicure manufacturer requires raw material and technique machines. So Nghia Nipper must find best quality resource

of stainless steel and machine providers. On the other hand, Vietnamese labor source is cheap compared to other

nations, so this is a potential competitive advantage of Nghia Nipper in Canadian market.

Barriers to Entry

Nghia Nipper has strong brand name in Vietnam and exporting experience in some European areas which brings high

profits to the company.

However, there is still high barrier to entry Canadian market because of investment capital, exporting policies and

product approval.


ONE DAY TEAM 32

6. SWOT Analysis


ONE DAY TEAM 33

Global Competing Strategy

1. Marketing Objectives

Table 7 : Marketing perspectives

Perspective

Objectives

(Balance Scorecard)

Time

Frame

KPIs & Critical Success Factors

Capture the market share for Nipper

Equipments 10% each year after one

year operation. After 3 year, Nghia

Nipper Corporation will gain market

leadership in Canadian market.

After 2

year

Besides marketing campaign, Nghia Nippers will

diversify the sale channel such as via website or

telephone purchase as well as actively searching for

strategic alliance with at least 5 Canada corporate

clients such as nail shops for Nghia Nippers.

Enhance the Nghia‟s Nipper brand

awareness in the Canadian customers

„eyes.

After 3

year

Besides marketing activities, Nghia Nipper plans to

hold at least one CSR Program like Teenager

Hygiene & Health in Canada to raise customers‟

attention of Nghia Nippers brand.

Increase the customer satisfaction

index to 70% while using booking

online service and it will increase

10% in each following year

Quarter 2

in year 1

Spend 15% of sales revenue on market research to

know new users‟ tastes and trend.

Provide bigger discount for loyal customers and

some clients who buy in bulk.

Collect more than 70% of Canadian customers‟

feedback to improve our products.

Achieve sale revenue of

approximately 2 million dollars after

one year and then revenues

percentage will hopefully increase

10% the following year.

1 Year To gain higher sale revenue, besides targeting at

individual consumers, Nghia Nippers has an

intention of establishing strategic alliance with

other retailing firms to make its products more

accessible.

Nghia Nippers will be striving for

introduce new product line with a

view to meeting various customers

„needs.

Year 2 Investment of 20 % sales revenue in the second

year in R&D and review customer feedback will be

a foundation for Nghia Nippers to modify and

customize its product to a great extent.

Nghia Nippers Corporation has a

willing to open at least 5 distribution

branches over Canada after one year

Quarter 2

year 2

Nghia Nipper plan is to cut down administrative

cost to open 5 additional shops over Canada after

one year successful financial performance.

The customer satisfaction index for

Nghia Nipper Product will be

increased up to 80% after one year.

Year 1 The waiting time from customer order placement to

delivery will be shortened within one day to satisfy

even toughest customers.

After 1 year performance, Nghia

Nippers will develop online

purchasing model so that customers

can approach different channel of

Nghia‟s product delivery.

Year 2 After one year, Nghia Nippers will establish a new

customized function in Nghia websites where

customer can make order and payment online.


ONE DAY TEAM 34

Increase the customer retention rate

up to 70% after one year. By this

way, Nghia Nippers builds up

customer loyalty year by year.

Year 3 Along with setting up purchasing online function,

Nghia will develop new model call E-CRM online

to manage Canadian customer profile so that it can

launch appropriate marketing strategy for each

segment.

The staff turnover rate will be

minimized to 20% each year via

satisfactory reward system.

After

Year 1

Provide clear job promotion & career path with

detail time frame and achievements.

Offer yearly holiday packages for employees who

achieve the MVP (most valuable personnel) award

of the year.

Increase salaries if company obtains more than

$600,000 retained profit after year 1.

2. Entry modes:

Based on the company current performance and business environment, we would select to

analyze three options: exporting, franchising and strategic alliances as major modes for entering

Canadian market.

Table 8 : Entry modes

Entry modes Advantages Disadvantages

Exporting

Avoid cost of

establishing

manufacturing

operations in Canada

Advantages of low

manufacturing cost in

Vietnam

May compete with

Canadian low-cost

host country

manufacturers.

Possible high

transportation costs

Exposure to tariff

barriers

Possible lack of

control over marketing

Franchising Low cost of

establishment, low risk

Rapid geographically

expansion.

Profit from cultural

knowledge and know-

how.

Difficult to manage a

large number of

franchiser.

Diversified

franchising

management skill

requirementdifficult

to manage quality

control and brand.


ONE DAY TEAM 35

Strategic alliance Share the cost of

developing new

products e.g

distribution cost.

Tap into competitor‟s

specific strengths

Gain access to partner‟s

channels

The alliance could

become a future

competitor.

In short-term, exporting should be considered as the number one prioritized entry mode for

Nghia Nippers Company. There are several reasons for that. Firstly, although Nghia Nippers brand is

renowned in Vietnamese market, yet it‟s time consuming to build brand awareness among Canadian.

Secondly, there is great deal of initial capital investment for company to establish new business in

Canada i.e new building, purchasing new plant, expensive labor costs which lead to higher unit cost

and against their competitive advantage (low-cost provider). Next, there is potential deficiency

regarding management skills because of differentiation in Canadian‟s enterprise legislation, tariff,

political and consumption behavior. Finally, Nghia Nippers may over-optimistic the benefits of

brand-globalization; there could be hidden costs that they do not take into consideration. Therefore,

by applying exporting model, company can effectively address those foreseeable risks. Thanks to

exporting model, Nghia Nippers enters into contract to sell company products without changing

Nghia Nippers brand. This will create solid fame for company before they actually migrate into

Canadian market in the future.

Management team:

Figure 23 : Nghia Nippers’ Export structure

In order to assure quality consistency, it is recommended that Nghia Nipper should assign

permanent team working in Canada market. This team should be divided into three different groups

which are legal & administrative, quality assurance and information buffering.

Legal & Administrative Group: this group will be responsible for legal issues i.e. import-

export contract, business license, enterprise legislation in order to ensure that all company

business activities adjusting to Canadian law.

Quality Assurance Group: this group plays the role as quality moderator which means

checking the quality compatibility between product selling in Vietnam and Canada. Also,

figuring out whether there are imitated products in the Canadian market. In case Canadian

importers do not follow the term in contract regarding product quality. Them the quality

assurance team must inform to legal group for terminating contract with them.

Information buffering Group: It is a fact that business situation will be ever changed.

Therefore, it is necessary for Nghia Nippers to keep track up with changes regarding

Import & Export Department

Legal & Administration

Group

Quality Assurance

Group

Information Buffering

Group


ONE DAY TEAM 36

Canadian importing-exporting quota legislation, customer‟s preference, business environment

circumstance. The information will be buffered to quality assurance group and legal group,

hence, they will make changes to adjust to the market.

3. Segmentation and Targeting

a. Geographic:

Initially, Nghia Nippers will introduce its products to some main state of Canada especially at

crowded cities such as: Toronto, Montreal, Vancouver and Halifax. The reason why Nghia Nippers

Corporation chooses these strategic places lies in the fact that these crowded areas might generate

sufficient demand.

b. Demographic:

For individual segment, Nghia Nippers Corporation will target at female especially women in the

middle age (above 25 years old) in the generation X and Y and above with moderate to high

disposable income more than $1,000 per month. With this segment, Nghia Nipper holds a strong

belief as it can generate substantial demand as Nipper is an indispensable (figure 24 & 25).

For corporation segment, Nghia Nippers targets most nail shops in big cities in Canada to

establish a strategic alliance as a main supplier for nailing equipments at these shops in Canada.

c. Psychographic:

Our target customers are sociable, energetic, and outgoing in an industrial lifestyle like

Canada. Thus, the demand for nice looking appearance and hygiene is becoming indispensable trend

to create a good impression among Canadian community.

Per 1,000 Per 1,000

25

95

90

75

70

Age

85

45

0

20

15

10

80

50

60

65

100

55

5

35

40

30

12 9 6 3 012 9 6 3 0 0 3 6 9 120 3 6 9 12

Figure 25: Percentage change in the population

by age groups between 2001 and 2006 in Canada

Figure 24 : Canadian Population Structure

by gender in 2009


ONE DAY TEAM 37

a. Online Segmentation for Nghia Nippers adapted from CACI 2008

Table 9 : Online segmentation

Segment 1 Segment 2 Segment 3 Type 2: Professionals,

spending and socializing

online

Type 4: Young, supported

networkers

Type 13: Time-short

families, functional users

.

CANADA

Age: 25-44

Gender: male, female

Income: Moderate-high

Internet usage:

Professionals

18-24

Male, female

Above Average

Professionals

Having children aging

from 5-15

Female

Above average

Professionals

They actively engage in the social

aspects of the Internet, using it to

plan their social lives as well as

reading and writing blogs, online

dating, downloading music, TV

programs and podcasts.

They are also likely to spend

time selling items on eBay.

It‟s likely that they will visit

sites such as MySpace,

YouTube and Piczo and have

probably posted content there.

This group of consumers will

typically read magazines

rather than newspapers. They

are typically comfortable with

direct forms of

communication and many use

mail order and telephone

banking.

They want to take advantage of

Internet to proliferate their social

life physically and mentally.

They will be affected by some

interesting promotion

campaign of new product like

Nghia Nipper via these pages

above.

New products should be

informed via direct contact

such as email or direct

marketing.

We will place some banner in some

popular Canadian entertainment

websites to raise Nghia‟s Nipper

brand awareness

Make a funny video clips

about Nghia Nipper‟s

products on You Tube to raise

attention among “net-tizen”.

Create a community site for

female & woman to discuss

about hot issues such as

beauty; hygiene, healthcare

etc.


ONE DAY TEAM 38

4. Positioning

a. PROFIT Model

Resources

Characteristics Valuable/

Profitable

Rare/

Distinctive

Hard to

Copy

Can

Substitute

Competitive

Advantage

Physical Product Yes

Service Quality x Yes

Reputational History No

Organizational Management x Yes

Good Employees No

Financial Capital Investment No

Intellectual Customer Service x Yes

Industrial Contacts No

Technical Information System

with Online booking

No

Despite the fact that Nghia‟s Nipper Brand is relatively immature in Canadian market owing to lack

of capital investment and especially industrial contacts to obtain strategic alliances; however, based on the

PROFIT model above, Nghia Nippers takes prides in furnishing unique, convenient products with an

affordable price to most customers. What Nghia Nippers is adding to its product is not only its function

but its aesthetics as well. With a various products from a wide range of color and design, Nghia Nippers

Corporation hold a strong belief in outstandingly differentiating its product compared to other rivals.

Along with Product Differentiation, Service and Channel Differentiation are what Nghia Nippers is

striving to apply in Canada since Nghia has successfully applied this model in many countries.

Furthermore, most Canadian is not still familiar with its brands. Therefore, in the next 2 years, Nghia

Corporation will go great length to improve these things.

b. Value Proposition & positioning map:

Nghia Corporation defines itself in the segment of “Less

for the same” which means that Nghia Corporation will

charge customers with lower price for any items which is

relatively same function and design as other competitor.

Figure 26: Value proposition model (Kotler 2005)


ONE DAY TEAM 39

c. Channel Map:

Figure 27 : Nghia Nippers’ Channel Map when exporting to Canadian Market

As we can see in the Channel Map above, Nghia Nipper has many alternatives in bringing its

products to Canadian customers. Initially, Nghia Nipper will search for reliable importers in Canada to

import nippers from Vietnam via the third-party logistic of Vietnamese Shipping Company: Maersk or

Vinalink. Then, Nghia Nippers will sign a contract with one delegated suppliers with high reputation to

executively distribute products to individual and corporate customers. On the other hand, Nghia Nipper

can have supermarket chain as an intermediary bridging potential customer and Nghia Nipper.

Warehousing:

At the very first stage of penetrating into Canadian market, Nghia Nipper will have no intention

of building any warehouse here as it contains a lot of risk owing to high capital investment, seasonal

demand and uncertainty about this market. Instead, Nghia Nipper will initiate Pull Marketing Strategy for

the Whole Supply Chain. To illustrate, with the support of marketing campaign, Nghia Nipper can

generate more actual demand from customers and then can estimate the relatively accurately forecast for

each year.


ONE DAY TEAM 40

Transportation:

Table 10 : Transportation modes

Transportation Mode Advantages Disadvantages Options

Water

Relatively

cheaper than

other means.

Have a lot of

domestic

company can

take this role.

Long transit time

Low accessibility (affect

by weather condition)

Unsafe for products (due

to accessible of sea-water

and vibration).

Airplane

Fastest transit

time.

High security

level.

Low rate of

damaged goods

Expensive and High

Cost.

Financial Plan

Financial Objectives

Reach the sales revenue of $2 million after 1 year

Increase the net profit margin to approximately 40% after 1 year

Achieve the net profit to approximately $3.5 million after 3 years.

Achieve the marketing budget to approximately $300,000 CAD in the first year.

Mark

etin

g &

Su

pp

ly

Ch

ain

Pu

ll

Str

ate

gy

Formulate actual demand and create a reliable

foundation for Nghia Nippers‟ forecasts or logistics

budget every year.

Take advantages of disintermediation as Nghia

Nipper can directly approach its customers.

High budget for marketing

to initiate the demand.

Good integration among

supply chain membership.


ONE DAY TEAM 41

Financial Marketability


ONE DAY TEAM 42

Projected PNL Statement for year 1 (monthly) and year 1 to year 3 (yearly)

NGHIA NIPPERS Pty. Ltd.

INCOME STATEMENT FOR THE YEAR ENDED AT 31.12.2011


ONE DAY TEAM 43

Figure 28

The income statement measures how the business enables to generate the wealth during the

financial year. In term of Nghia Nippers, there is a rapid increase in total income from $45,000 CAD in

January to $451,500 CAD in December in 2011. It indicates that the business gain the better position in

term of sales in the industry due to the effective alignment of the marketing campaign, establishing the

outlets and inventory in term of logistic issues (figure 28). The marketing campaign concentrates on some

months such as April, June and the last quarter of the year leading to the significant increase in operating

expenditure by more than $180,000 CAD. However, Nghia Nippers does not intend to reduce other

operating costs. They plan to establish more 5 outlets and transport more inventory for the purpose of

correspond with the marketing campaign. By doing these, they achieve the heightened goals of

approximately $2 million of sales revenue in the first year stemming from the significant soar in the

volume of customers.


ONE DAY TEAM 44

Table 11: Budget 2011-2013

Furthermore, on the table 11, there is an anticipation of 40% increase in total income after 3

years. Although these figures are quite high, Nghia Nippers take into account the excess of the market

growth of the next 3 years for the purpose of gaining the goal of market leader after 3 years. Therefore,

Nghia Nippers need to put more effort to achieve these heightened figures in the Canada market.


ONE DAY TEAM 45

Figure 29

Secondly, in term of profitability ratio, gross profit margin measures how much the business can

turn the sales revenue into net profit. In this case, Nghia Nippers anticipates the 75% of gross profit

margin during 3 years (figure 29). It triggers the challenge that Nghia Nippers is required to monitor the

COGS stability occupying 25% through 3 years even though there is the fluctuation in the prices of raw

materials, oil, etc.

Furthermore, the net profit margin measures the ability of the business to generate profits from

sales revenue. In this case, there is a negative figure during the first two months and the significant

increase from 4.74% in March to 43.64% in December of the first year (diagram below). It indicates that

Nghia Nippers is quite realistic as establishing this business plan. They take into account many risks and

difficulties they have to overcome in the first two months leading to the negative net profit. After that,

they enable to manage the operating expenses effectively resulting in the increase in the rest of 10

months. As a result, they gain the beautiful figure in term of net profit $177,320 CAD in December of the

first year. Additionally, the net profit margin in the next two years also soars to 37.6% and 46.1%

respectively (figure 29). It is supported that Nghia Nippers might gain the better performance in term of

monitoring the operating expenses in the next 2 years even though there is the anticipation 40% increase

in operating expense.


ONE DAY TEAM 46

International Aspect

In long-term business vision, when Nghia Nippers brand is popularized by initial exporting mode,

company should then utilize its potential by officially allowing franchising in Canada. The reason why we

selected franchising as the next step of business vision is due to the tremendous benefits which bring

about by franchising. First, Nghia Nippers can be able to quickly expand its distribution channel cross

Canadian market without a remarkable layout of capital requirement. Moreover, the company can also

take advantages of franchisee‟s entrepreneurial abilities, inside-out local market knowledge. Although

Nghia Nippers does not directly control day-to-day operation of all outlets, but there is binding contract

between franchisor-franchisee which clearly claims the responsibilities and authorities of franchisees in

term of loyalty commitment, quality management and pricing policies. Therefore, Nghia Nippers

management board ensures that their brand quality is maintained consistently throughout all outlets.

Nevertheless, in order to mitigate the risk of franchising failures, we recommend Nghia Nippers

should primarily franchise domestically prior to internationally franchise process. By doing so, company

is not only internally well-prepared for management level with necessary franchising skills, experiences,

but also spend time enough time to raise brand awareness within Canadian market.

If things happen in order, Nghia Nippers will be internationally recognized, it is recommended

that company should consider converting franchising into wholly-owned mode. This could only be

implemented unless Nghia Nipper Company owns sufficient capital, managerial skills, knowing market

inside-out and operation costs are optimized. Wholly-own mode should not only lead to dramatic increase

in profitability, but also tighten control level over business operation.

As well, as Nghia Nippers expands market to the whole Canada, the corporation follows low-cost

leadership which aims to keep low price of product with high quality in order to take market share and

push sale revenue to become market leader of nail care tool brand in Canada within next 10 years.

Table 12 : Time of changing modes

Time frame 2011-2015 2016-2020 2021

Modes Exporting Franchising Wholly-owned

subsidiary

Strategies

Product

Focus-Low-cost

Low-cost

Low-cost

Conclusion

To conclude, with the good image of high quality, well-organized management plan and strong

financial base, it is undeniable that Nghia Nippers‟ expansion plan to a new market especially Canada

will confront a lot of challenges; however, Nghia Nipper Management Team will try their best to make

this promising plan conform to reality.


ONE DAY TEAM 47

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<http://www.indexmundi.com/canada/death_rate.html>.

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<http://www.cyborlink.com/besite/canada.htm>.

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shopping habits, <http://www.icsc.org/web/RecessionBooklet_lores.pdf>.

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Corporation, viewed 14 April 2010,

<http://www.doingbusiness.org/Documents/CountryProfiles/CAN.pdf>

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Financial Corporation, viewed 14 April 2010,

<http://www.doingbusiness.org/ExploreTopics/TradingAcrossBorders/Details.aspx?economyid=

35>.

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<http://www.nghianippers.com/sanpham.php?pgIndex=1&menuTypeID=8>.

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2010, <http://www.lacross.com/category.cfm?cat=3&subcat=10>.

http://www.apec.org/apec/ministerial_statements/annual_ministerial/2009_21th_apec_ministerial.html



http://www.aimex.com/index.htm

http://www.beautybone.com/profile.asp?lngid=en

https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html

http://www.actionplan.gc.ca/grfx/docs/ecoplan_e.pdf

http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Content/Publikationen/SpecializedPublications/Countryprofiles/Content75/Canada,property=file.pdf



http://www.geert-hofstede.com/hofstede_canada.shtml

http://haglland.vn/about_company_detail.php?company=nghianippers

http://www.indexmundi.com/canada/death_rate.html

http://www.cyborlink.com/besite/canada.htm

http://www.icsc.org/web/RecessionBooklet_lores.pdf

http://www.doingbusiness.org/Documents/CountryProfiles/CAN.pdf

http://www.doingbusiness.org/ExploreTopics/TradingAcrossBorders/Details.aspx?economyid=35



http://www.nghianippers.com/sanpham.php?pgIndex=1&menuTypeID=8

http://www.lacross.com/category.cfm?cat=3&subcat=10


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18. Maps of world 2009, Population of Canada, viewed 1st April 2010,

<http://www.mapsofworld.com/canada/population-of-canada.html>.

19. Revlon Pty Ltd 2010, Cosmetic and beauty implements, Revlon, viewed 12 April 2010,

<http://www.revlon.com/Revlon-Home/Revlon-Corporate/Corporate.aspx>.

20. Sass, E 2010, Read All Aboot It: Canadians Still Like Print Newspapers, Media Post, viewed 19

April 2010,

<http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=124681>.

21. The Salon Supply Source Co. Ltd 2010, Beauty salon services and nail implements supplier, SSS,

viewed 14 April 2010, <http://www.supplysourcecanada.com/aboutUs.php>.

22. UIP 2010, Canada's population rises to 33.9 million, viewed 1st April 2010,

<http://www.upi.com/Top_News/International/2010/03/25/Canadas-population-rises-to-339-

million/UPI-16021269538076/>.

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Canada, Vietnamese Industry and Trade Ministry, viewed 16 April 2010,

<http://www.ecvn.com/ROOTSYS/book/member/gioithieuthitruongCanada/QuanheTMVNvaCa

nada.html>.

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Ship Agents and Brokers Association, viewed 16 April 2010, <

http://www.visaba.org.vn/vn/newsdetail.aspx?id=246>.

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<http://www.worldbusinessculture.com/Business-in-Canada.html>.

26. Yangjiand FuGi Industrial Co. Ltd 2010, Manicure set manufacturer, Yangjiand FuGi, viewed 14

April 2010,

<http://yjfugi.manufacturer.globalsources.com/si/6008827811400/CompanyProfile.htm>.

http://www.mapsofworld.com/canada/population-of-canada.html

http://www.revlon.com/Revlon-Home/Revlon-Corporate/Corporate.aspx

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=124681

http://www.supplysourcecanada.com/aboutUs.php

http://www.upi.com/Top_News/International/2010/03/25/Canadas-population-rises-to-339-million/UPI-16021269538076/

http://www.upi.com/Top_News/International/2010/03/25/Canadas-population-rises-to-339-million/UPI-16021269538076/

http://www.ecvn.com/ROOTSYS/book/member/gioithieuthitruongCanada/QuanheTMVNvaCanada.html



http://www.visaba.org.vn/vn/newsdetail.aspx?id=246

http://www.worldbusinessculture.com/Business-in-Canada.html

http://yjfugi.manufacturer.globalsources.com/si/6008827811400/CompanyProfile.htm


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Appendix

Product categories: Nipper set, Scissors, nail art dotting, pusher, tweezers, nail nipper, metal nail file.


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Busm3097 Sgs g6 a2 Oneday

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