International Trade Management

Thé Store Manufacturing and Distribution Inc.

Exporting Specialty Tea to the U.S.

International Trade Management

FITT ID 317053

March 25th, 2016

Table of Contents1.0 Executive Summary...................................................................................................................1

2.0 Corporate Profile and Nature of the Business...........................................................................2

3.0 Management and Human Resources.........................................................................................3

Thé Store Organizational Structure..............................................................................................3

Operations Department................................................................................................................3

Finance Department.....................................................................................................................4

Marketing Department.................................................................................................................4

Executive Bios.............................................................................................................................4

Human Resources Summary........................................................................................................6

4.0 Target Market and Environmental Scan....................................................................................7

Projected Revenues......................................................................................................................9

Competition................................................................................................................................11

Competitor Pricing.....................................................................................................................12

Target Market Summary in relation to Internationalization......................................................13

5.0 Market Entry and Market Strategy..........................................................................................14

6.0 Operational Overview and Analysis........................................................................................19

7.0 Financial and Risk Management Strategy...............................................................................20

Financial Strategy......................................................................................................................20

Risk Management......................................................................................................................21

8.0 Conclusion and Recommendations..........................................................................................22

9.0 Bibliography............................................................................................................................23

Appendix

Appendix A – Branding............................................................................................................24

Appendix B – Canadian Price List............................................................................................25

Appendix C – Balance Sheets...................................................................................................26

Appendix D – Income Statements............................................................................................28

Appendix E – Annual Cash Flow Statements...........................................................................29

Appendix F – Monthly Cash Flow Statements.........................................................................30

List of Figures

Figure 1: Corporate Structure.....................................................................................................3

Figure 2: Executives...................................................................................................................4

Figure 3: Operation and Logistics Model.................................................................................19

Figure 4: Information Management Cycle................................................................................19

Figure 5: Risk Considerations Relative to Thé Store’s Corporate Goals.................................21

List of Tables

Table 1 – SWOT Analysis..........................................................................................................6

Table 2 – Qualifications for New Hire.......................................................................................7

Table 3 – Target Markets from Demand Analysis......................................................................9

Table 4 – Projected Revenues from Demand Analysis............................................................10

Table 5 – Total U.S. Projected Annual Revenue......................................................................10

Table 6 – U.S. Competition Pricing..........................................................................................12

Table 7 – Analysis of Competitor Pricing................................................................................13

Table 8 – U.S. Pricing Analysis for Thé Store.........................................................................13

Table 9 – Internationalization Requirements............................................................................14

Table 10 – Thé Store Negotiation Process................................................................................15

Table 11 – U.S. Market Pricing List.........................................................................................16

Table 12 – U.S. Store List from Market Demand Analysis......................................................16

Table 13 – Outsourced Partners................................................................................................18

Table 14 – Projected Expenses.................................................................................................20

1.0 Executive SummaryThé Store Manufacturing and Distributing Inc. is a specialty tea manufacturing company

based in Toronto, Ontario with 21 employees and several plantations in Southern China and

India. The company was incorporated in 2010 with only five employees and over time grew into

a major industry force that now controls over 75% of the Canadian market share, with 37M

revenues from Canadian markets. Because of the huge success in the domestic markets, the

company is now considering an international expansion.

The company is considering an expansion to the U.S. market, due to the financial and

technical skill level maturity. The purpose of this business plan is to outline the operating details

of expanding to the U.S. market, as well as identifying the company’s shortcomings if any and

how to address them.

The U.S. is compatible with The Store’s culture and strengths in political, economic,

social, technological, legal and regulatory environments, providing great potential for market

penetration. Through an outsourced agent working in conjunction with major retailers as new

customers, a research on demand and projected revenues was carefully analyzed and showed

promising results. Of majority interest are highly urbanized and densely populated areas like

New York, Florida, Texas, and California. Competitor analysis show that a market penetration

pricing would be an effective way of quickly gaining market share. Due to an exceptional

demand for the company’s tea in the U.S. market, proximity of the market to Canada and the

favorable market conditions in that country, this business plan concludes that addressing the lack

of human resources will greatly aid Thé Store in successfully entering the U.S. tea market.

Thé Store Inc. 1

2.0 Corporate Profile and Nature of the BusinessThé Store Manufacturing and Distribution Inc. is a Canadian manufacturer and distributor

of premium specialty teas. Based in Toronto, Ontario since 2010, Thé Store has built itself up,

collaborating with businesses from other countries, and gained access to plantations and

production facilities in India and Southern China that supply all of their tealeaves and types of

tea. The offices are occupied by 21 employees, which with its current operations amasses an

impressive $90 million Canadian dollar annual revenue. The products are sold retail to the public

at premium prices for its premium quality, in either loose-leaf or teabag form.

The biggest attractions of Thé Store are the simplicity of its philosophy, its elegance in

design, and focus on service. The attractiveness of the company shows through its annual growth

in sales and speed of national expansion, and in 2015, Thé Store decided it was ready to create an

international brand. The first step was to enter into the affluent U.S. markets.

Thé Store offers premium teas in loose-leaf bags and tea sachets, as well as ready-to-

drink cups in established retail teahouses. Among the products, Black and Herbal tea are the

most popular in all formats. The company has decided to test the U.S. market involving only the

two most well liked teas of Canada in hopes that the cultural similarity will show in the U.S.’s

tastes in tea.

Since its inception, Thé Store has had success and rapid growth in its industry, obtaining

a lasting brand image as well as a strong financial backing. Research on the political, legal

economic as well as social aspects of the U.S. market has shown promising prospects in revenue

from expanding.

Despite a lack of human resources, Thé Store will succeed very well in the U.S. market if

the company can recognize its shortcomings and address them accordingly. This international

business management plan shows that the company has matured in expertise, grown in finances,

and is prepared to enter into the U.S. markets.

Thé Store Inc. 2

3.0 Management and Human Resources

Thé Store Organizational Structure

Figure 1: Corporate Structure

The success of Thé Store can be attributed to the design and efficiency of its corporate

structure. Thé Store has three interconnected branches, Operations, Finance, and Marketing.

Operations will deal with production and IT systems; Finance with accounts and HR; and

Marketing with advertising and R&D.

Operations Department

Led by Alexander Jin, COO of Thé Store, there are seven employees in the department of

Operations, comprising of an IT team and a Quality Control team. As head of the Operations

department, Jin oversees the contracting of the outsourced partners, manage the IT team ensuring

the functioning of the highly centralized EIS that is integral to all operations and research, as

well as to supervise the production team responsible for monitoring the manufacturing and the

quality control of the products. The IT team develops and maintains a database server that logs

all logistics, finances, and customer feedback, which also presents the data for better analysis to

gain company and market insights. The Quality Control team manages all aspects of the

manufacturing process, from working in tandem with HR in employing plantation workers,

supervising said plantation workers, purchasing of plantations and processing plants, as well as

maintaining strict control over quality sparing no expense.

Thé Store Inc. 3

Finance Department

Led by Robert Wolfe, CFO of Thé Store, the department of Finance comprises of a

Financial Planning & Risk Management (FPRM) team, an Accounts teams, and an HR team.

This department is responsible for keeping all information on funding, credit, treasury, as well as

payroll, taxes, travel and other expenses. The Accounts team is responsible for all AR, AP,

payroll, as well any general accounting duties. The FPRM team will analyze finances, manage

risks, and forecast business results.

Marketing Department

Led by Annie London, CMO of Thé Store, the department of Marketing comprises of a

Market Research and Analysis (MRA) team, a Product Research and Development (PRD) team,

an Advertising team as well as a Customer Service team. The MRA team will continually

monitor competitor prices, collaborate with the finance department’s FPRM team to devise either

a response or pre-emptive tactic.

Executive Bios

Figure 2: Executives

Thé Store Inc. 4

Henry Huxley has successfully manifested a cultural shift within Canada to move from

coffee to tea, and has positioned Thé Store as the leader in directing this consumer behavior. A

calculated risk-taker with strong knowledge on the beverage industry as well as fierce intuition,

Huxley is famous for the uncanny ability to turn an industry topsy-turvy by innovative business

strategies and creating market demand. Embracing the core values of integrity, innovation, and

growth, Huxley consistently delivers excellent experiences to each of his businesses. At the start

of year 2000, Huxley joined Apple Inc. and praised as an effective creator of consumer desire.

Known for his immense need for simplicity, Huxley’s philosophies complemented Apple well

during his time there. Huxley holds a Master’s degree in Marketing as well as a bachelor’s

degree in Finance Accounting. As a former marketing professional with Apple Inc., his 10 years

of experience in the finance and technology arenas has made him a master at planning strategies

to implant a consumer presence and imprint successful branding. Huxley is a valued speaker on

global marketing and technology, presenting regularly at _____, and other industry events.

Alexander Jin is in charge of the Operations department, overlooking all operations

aspects of the company. Jin holds a master’s degree in security technologies as well as a

bachelor’s in electronic business technologies from the University of Ontario. Jin got his big start

at Certicom Corp., a cryptography company that was acquired by Canadian company Research

In Motion, better known as BlackBerry. There, he designed and developed patented technologies

that are today licensed and employed by the NSA to protect U.S. and allied government

information. Admiring his expertise, Jin was hired to be a chief of research and development in

security technologies at Dell. Mid 2015, Jin was offered the job to overlook and design a

stronger security structure for Lenovo after its security concerns during February of that year. Jin

has since based his operations in Shanghai, China.

Jack Wolfe is in charge of the Finance department, overlooking all financial aspects of

the company. Wolfe holds a master’s degree in international economics and finance as well as a

bachelor’s in accountancy. Wolfe had sat on the board of directors for the Bank of Montreal,

with multiple accounting positions within the company. Wolfe has experience in both consumer

banking as well as executive banking while working for BMO.

Annie London is in charge of the Marketing department, overlooking all marketing and

research aspects of the company. London holds a master’s degree in marketing research, a

bachelor’s degree in industrial design and another bachelor’s degree in applied psychology

Thé Store Inc. 5

during her time at the University of British Columbia. After completing graduate school, London

was taken on as a Brand Manager for TELUS Corp, and later as its Market Research Director.

During her time at TELUS, London had come to know every aspect of the company’s interests

and brand outlook, from advertising to media relations to product development. For her expertise

and excellent achievements in shaping TELUS in the public eye, she has since leaving, been

offered a seat at the board of TELUS Corp.

Human Resources Summary

The analysis of competencies in the company’s executive and structural strength show

that the company has the necessary know-how and talent in order to survive in the U.S. market.

The company’s core and CEO, Henry Huxley, will be integral to leading the executives into the

new market, utilizing their experience and talents to their fullest potential.

Table 1 – SWOT Analysis

STRENGTHS WEAKNESSESFinancial Stability Limited Human Resources

Highly Effi cient EIS Lack of Inventory Manager

ReputationOPPORTUNITIES THREATS

High Market Demand Untrustworthy Business Relations

New Business PartnerShips Exchange Rate

Competitors

SWOT ANALYSIS

A SWOT analysis (above) shows that Thé Store at its current state does not have enough

human resources to be prepared to operate at maximum efficiency in the U.S. The greatest

weakness of the current structure is the lack of an Inventory Manager, a role that would be

crucial to liaising with the outsourced logistics and customs broking partners as well as

managing stock levels at warehouses to prevent loss of sales. To hire an Inventory Manager will

address the need for monitoring of stock levels at warehouses and merchandise shipment

schedules. The recruitment of a new Inventory Manager will need to consider the following:

Thé Store Inc. 6

Table 2 – Qualifications for New Hire

Qualifications for the Position

Technical Skills

Managerial Skills

Flexibility

Tolerance

Willingness to learn new things

Ability to deal with ambiguity

Interest in other people and their cultures

With the weakness filled by the new position, Thé Store will be able to advance into the U.S.

market without difficulty.

4.0 Target Market and Environmental ScanMany market characteristics of the U.S. will be vital to determine its value in an export

venture. Its economic, environmental, technological, cultural, political and legal factors are

examined extensively to explore the possibility of exporting to the U.S.

The U.S. is a country that has a strong democracy, with an effective rule of law. Its

elections are seen as fair and transparent, leading to a rather stable a government. Its citizens

enjoy freedom of expression, belief, and press, which are major factors for actively controlling

corruption. As a leading superpower, the U.S. has massive political and economic influence over

national and global policy making.

In the past, the U.S. held great portions of the world’s share of GDP from its services and

manufacturing industries. Today, the U.S. is still home to the largest economy in the world with

a GDP of $16.8 trillion U.S. dollars. Its economy is seen as the most robust and stable that its

currency is deemed as the standard trusted global currency. Despite the increasing budget deficit

and the 2009 recession, the U.S. economy had bounced back in 2014 with a steady decline in

unemployment rate and a growth in becoming a more open economy for free trade.

The U.S. has a racially and ethnically diverse population. A majority of White

Americans; African American as the largest racial minority; and Hispanic or Latino as the largest

Thé Store Inc. 7

ethnic minority. This translates to the languages most spoken in the country, namely English and

Spanish. The U.S. has the similar problem as other developed countries of an aging population

and a decline in birth rate. This issue will bring about a serious labour shortage, as well as rising

tax rates. The U.S. health and education systems are regarded as one of the best in the world,

with a growing life expectancy, more spending on healthcare, and 39 out of 100 top universities

in the world. In recent years, the U.S. has been experiencing an increase in illegal immigration,

and an unfortunate rise in racial intolerance despite a majority liberal mindset.

The arrival of the Second World War sparked a tremendous increase in spending on

science and technology in the U.S. as the advantage of a scientifically and technologically

advanced country was all too evident. Ever since, the U.S. has been a leader in enhancing and

developing innovative and emerging technologies. The Cold War triggered a “race to space” that

founded the U.S.’s space research organization, NASA. These outside pressures incentivizing

scientific investment has brought about the advent of the personal computer, the mobile phone,

as well as the World Wide Web. Internet users account for 84.2 percent of the total U.S.

population and 98.4 percent of the total population possess cell phones. According to a recent

survey, approximately 73 percent of U.S. internet users had purchased products online. More

than 61 percent of those who performed the transaction through the internet were using a mobile

device, whether a smartphone, tablet computer, or other connected devices. This number is

expected to grow to 80 percent by 2018. E-Commerce in the North America accounted for more

than one third of global B2C e-commerce sales in 2013. By 2014, retail e-commerce sales

amounted to over 305 billion U.S. dollars with projections to grow to 548 billion U.S. dollars by

2019.

The U.S. is a country with 50 states covering much of North America. Each state has

their own history, local culture, political and legal structure. The political and legal structure of

the U.S. entails that the federal, state, and local governments have power to create their own laws

and hold their own courts. This means that each government can have their own tax laws, tax

forms, and tax administration. Federal law is uniformly applied throughout most states, but state

and local laws can also affect business laws and taxes. The Canada-United States Income Tax

Treaty is to avoid double taxation and prevent fiscal evasion with respect to income taxes. A

Canadian company can file an IRS form 1120-F and claim exemption from paying the U.S.

federal tax under the tax treaty; however, it will still have to comply with U.S. filing

Thé Store Inc. 8

requirements. This will change if the company sets up a U.S. permanent establishment in the

future, by which the company will declare a non-taxable income on line 256 to the CRA. There

is still the possibility of a state income tax obligation even if the company does not have a PE, as

the federal treaty does not bind state laws. If a business owner, executive or other employee

travels to and authorizes contracts within the U.S., there is the possibility the IRS can perceive

this as earning income through a PE on U.S. territory. Outsourcing to an independent agent,

subsidiary, branch or other means can have different tax implications.

Projected Revenues

All three customers (Walmart, Costco, Target) brought on by Merlyn - Thé Store’s

outsourced trade agent - have delivered upon agreement of business to work in tandem with the

agent, and produce the analysis of market demand in major cities of interest in which they are

open.

Table 3 – Target Markets from Demand Analysis

Demand is high in major populated and urbanized areas in all states, amongst them New

York, Florida, Texas, and California are of great interest. Based on estimates of demand and

scale, initial annual revenues are forecasted to be around $4M USD suggesting an export venture

as reasonably profitable, as seen in table 4 and table 5 below.

Thé Store Inc. 9

State City Walmart Costco Target Population Pop. Density Unemployment % Sales Tax Income/Capita HouseHold IncomeNew York 1 1 8,491,079 10761.82 7.40% 8.88% 31.6K 51.9KYonkers 1 200,667 3816.41 5.70% 8.38% 29.5K 56.8K

Rochester 3 1 4 209,983 2185.27 7.40% 8.00% 18.7K 30.7KBuffalo 2 2 258,703 1902.23 7.20% 8.75% 20.2K 30.5K

Syracuse 1 1 1 144,263 2093.80 6.30% 8.00% 18.8K 31.5KJacksonville 19 1 7 853,382 372.33 5.90% 7.00% 25.4K 48.1K

Miami 19 3 7 430,332 3007.21 7.80% 7.00% 20.9K 29.8KTampa 14 6 358,699 811.72 6.00% 7.00% 28.8K 43.5KOrlando 16 1 6 262,372 915.14 5.20% 6.50% 25.6K 42.4KHouston 20 3 15 2,239,558 1378.19 4.70% 8.25% 27.0K 44.6K

San Antonio 23 2 12 1,436,697 1192.28 4.30% 8.25% 22.6K 44.9KDallas 13 7 1,281,047 1281.94 5.10% 8.25% 27.0K 42.4KAustin 7 2 8 912,791 1296.58 3.50% 8.25% 31.4K 52.4K

Los Angeles 6 1 5 3,928,864 3017.56 8.50% 9.00% 28.0K 49.7KSan Diego 17 5 1 1,381,069 1431.90 6.00% 6.00% 33.0K 64.0KSan Jose 8 3 8 1,015,785 2179.33 5.90% 8.75% 33.8K 81.3KSan Fran 3 4 852,469 7021.99 4.40% 8.75% 47.3K 73.8K

Sacramento 14 2 6 485,199 1871.19 8.40% 8.50% 25.6K 50.7K

TX

CA

FL

Target Markets

NY

Table 4 – Projected Revenues from Demand Analysis

# 1001 # 1002 # 1003 # 1004 # 1005 # 1006 # 1007 # 1008 # 1009

1100011 1,294.63$ 1,854.47$ 3,184.09$ 3,114.11$ 3,044.13$ 2,134.39$ 1,574.55$ 4,163.81$ 2,379.32$ 1100111 659.67$ 579.71$ 2,218.89$ 2,298.85$ 1,519.24$ 1,019.49$ 1,459.27$ 2,298.85$ 1,979.01$ 1100211 1,585.85$ 413.70$ 551.60$ 1,323.84$ 482.65$ 1,158.36$ 1,075.62$ 786.03$ 1,447.95$ 1100311 411.95$ 464.38$ 381.99$ 471.87$ 861.35$ 554.26$ 561.75$ 531.79$ 599.20$ 1100012 2,939.16$ 3,324.05$ 1,014.71$ 2,064.41$ 1,994.43$ 1,259.64$ 2,764.21$ 1,154.67$ 1,539.56$ 1100112 1,699.15$ 1,279.36$ 1,079.46$ 1,179.41$ 2,358.82$ 1,339.33$ 959.52$ 579.71$ 2,078.96$ 1100212 565.39$ 648.13$ 1,241.10$ 1,447.95$ 468.86$ 1,103.20$ 1,489.32$ 648.13$ 1,075.62$ 1100312 606.69$ 741.51$ 838.88$ 756.49$ 404.46$ 486.85$ 823.90$ 689.08$ 569.24$ Total 9,762.49$ 9,305.31$ 10,510.72$ 12,656.93$ 11,133.94$ 9,055.52$ 10,708.14$ 10,852.07$ 11,668.86$

# 1028 # 1029 # 1030 # 1031 # 1032 # 1033 # 1034 # 1035 # 10361100011 1,609.54$ 2,379.32$ 1,119.68$ 2,589.26$ 1,539.56$ 1,504.57$ 1,539.56$ 1,854.47$ 2,449.30$ 1100111 979.51$ 939.53$ 1,119.44$ 1,379.31$ 759.62$ 619.69$ 699.65$ 1,559.22$ 1,399.30$ 1100211 689.50$ 1,006.67$ 275.80$ 399.91$ 772.24$ 565.39$ 427.49$ 289.59$ 799.82$ 1100311 1,439.28$ 569.24$ 337.05$ 449.40$ 374.50$ 396.97$ 359.52$ 494.34$ 269.64$ 1100012 2,239.36$ 1,714.51$ 1,854.47$ 769.78$ 2,589.26$ 769.78$ 2,414.31$ 804.77$ 1,329.62$ 1100112 1,319.34$ 459.77$ 1,159.42$ 1,179.41$ 1,379.31$ 1,519.24$ 1,499.25$ 1,359.32$ 559.72$ 1100212 648.13$ 330.96$ 620.55$ 537.81$ 979.09$ 482.65$ 786.03$ 813.61$ 786.03$ 1100312 501.83$ 254.66$ 471.87$ 434.42$ 501.83$ 247.17$ 314.58$ 299.60$ 344.54$ Total 9,426.49$ 7,654.66$ 6,958.28$ 7,739.30$ 8,895.41$ 6,105.46$ 8,040.39$ 7,474.92$ 7,937.97$

# 1019 # 1020 # 1021 # 1022 # 1023 # 1024 # 1025 # 1026 # 10271100011 1,294.63$ 2,659.24$ 1,434.59$ 734.79$ 1,504.57$ 1,609.54$ 1,994.43$ 1,469.58$ 2,659.24$ 1100111 1,219.39$ 1,899.05$ 1,359.32$ 1,639.18$ 1,619.19$ 1,059.47$ 739.63$ 659.67$ 859.57$ 1100211 344.75$ 910.14$ 979.09$ 730.87$ 455.07$ 910.14$ 1,020.46$ 565.39$ 648.13$ 1100311 644.14$ 464.38$ 411.95$ 584.22$ 367.01$ 419.44$ 307.09$ 689.08$ 629.16$ 1100012 1,609.54$ 2,064.41$ 2,519.28$ 1,609.54$ 2,414.31$ 979.72$ 2,624.25$ 2,764.21$ 2,484.29$ 1100112 1,099.45$ 639.68$ 499.75$ 539.73$ 1,399.30$ 939.53$ 879.56$ 699.65$ 1,219.39$ 1100212 303.38$ 468.86$ 1,158.36$ 1,199.73$ 1,323.84$ 289.59$ 537.81$ 1,048.04$ 1,061.83$ 1100312 516.81$ 247.17$ 749.00$ 179.76$ 711.55$ 172.27$ 501.83$ 479.36$ 172.27$ Total 7,032.09$ 9,352.93$ 9,111.34$ 7,217.82$ 9,794.84$ 6,379.70$ 8,605.06$ 8,374.98$ 9,733.88$

# 1010 # 1011 # 1012 # 1013 # 1014 # 1015 # 1016 # 1017 # 10181100011 3,673.95$ 1,084.69$ 734.79$ 2,274.35$ 3,464.01$ 2,064.41$ 2,029.42$ 3,429.02$ 2,939.16$ 1100111 1,999.00$ 2,358.82$ 1,419.29$ 2,278.86$ 1,619.19$ 2,298.85$ 2,398.80$ 1,019.49$ 2,058.97$ 1100211 620.55$ 717.08$ 1,447.95$ 358.54$ 1,310.05$ 551.60$ 1,089.41$ 730.87$ 841.19$ 1100311 2,158.92$ 499.75$ 1,339.33$ 1,259.37$ 1,159.42$ 2,158.92$ 1,079.46$ 659.67$ 2,158.92$ 1100012 2,344.33$ 2,519.28$ 3,883.89$ 3,394.03$ 3,883.89$ 1,959.44$ 2,554.27$ 4,058.84$ 2,029.42$ 1100112 1,019.49$ 2,198.90$ 2,298.85$ 1,539.23$ 2,038.98$ 2,198.90$ 1,239.38$ 1,039.48$ 599.70$ 1100212 772.24$ 910.14$ 1,282.47$ 1,241.10$ 1,585.85$ 386.12$ 813.61$ 896.35$ 813.61$ 1100312 2,218.89$ 651.63$ 396.97$ 719.04$ 389.48$ 187.25$ 389.48$ 838.88$ 187.25$ Total 14,807.37$ 10,940.29$ 12,803.54$ 13,064.52$ 15,450.87$ 11,805.49$ 11,593.83$ 12,672.60$ 11,628.22$

Costco Target

Target

Projected Revenues by State, by Customer, by ProductWalmart

FL

TX

Costco Target

Walmart Costco Target

Walmart Costco

NY

CA Walmart

Table 5 – Total U.S. Projected Annual Revenue

The projected revenue every month from each state in

terms of most profitable location to least are California, to New

York, to Texas, and lastly Florida. The annual projected revenues

come to an impressive 4 million U.S. dollars in its starting year,

and expected to grow in the following years.

Thé Store Inc. 10

New York 93,316.54$ Florida 67,453.93$ Texas 84,512.93$

California 110,804.67$

By Month 356,088.07$ By Year 4,273,056.84$

TOTAL US REVENUE

Walmart is the biggest wholesale retail brand in the U.S. According to Walmart, their

focus is on logistics. They have invested millions of dollars into satellite tracking and warehouse

systems, including a recent change to a fast/slow approach to merchandise, where the faster

selling products are stocked closer to their physical stores and the slower selling products are

stocked further. This greatly improves efficiency and ensures products that are in demand are

never out of stock for customers. Among the distribution centers that Walmart has, there are

"Import Distribution Centers" where foreign exporters are able to ship to these specific

distribution centers and let Walmart take control of the shipping of the inventory to the other

distribution centers. This lets Walmart have total knowledge and control of their products.

Costco is crucial to the expansion as undercutting industry pricing Thé Store can appeal to other

business owners like teahouses, hotels, restaurants, and catering services etc. This will greatly

push the products of Thé Store into the public eye.

Competition

The larger market competitors in the U.S. are indicated as Bigelow Tea, Stash Tea, as

well as a Teavana under Starbucks.

Teavana

Based in Atlanta, Georgia in 1997, Teavana has over 400+ locations throughout the U.S.,

Canada, Mexico, Puerto Rico, and the Middle East. In 2012 Teavana was acquired by Starbucks

around 620 million U.S. dollars. Teavana features a rich array of innovative blends across each

type of tea, consistently promoting cross blending of different types of tea. Teavana sells tea

products like teapots, cups, kettles and tea makers in addition to tea. The company also offers

individual, to go cups of tea, in conjunction to their otherwise packaged products. Thé Store

structure is designed to be “part tea bar, part tea emporium”, and usually located in upscale

shopping malls.

Stash Tea

Founded in 1972, originally selling loose herbal teas, the company later broadened its

merchandise to include bagged teas and traditional specialty blends. Stash tea was acquired by

Yamamotoyama Tea Company in 1993, and has since grown to become one of the largest

Thé Store Inc. 11

specialty tea and herbal tea companies in the U.S. Stash tea offers their products in what is

shown to be the largest in product sizes, ranging from a mere 8g of loose leaf to 1 lb., and 10 in a

box of teabags to as high as 1000 in a box.

Bigelow

Based in Fairfield, Connecticut in the late 1940s by Ruth C. Bigelow. Bigelow Tea Company

owns the U.S.’s only tea plantation in Charleston, South Carolina, supplying over 50 varieties of

tea including black, green, as well as herbal teas.

Competitor Pricing

The pricing of the teas that relate and compare to the product line Thé Store is prepared

to bring initially to the U.S. are collected and tabularized for analysis below.

Table 6 – U.S. Competition Pricing

Company Blend Form Size Price /g, /ctThe Store Competition Pricing (USD)

Stash Tea English Breakfast teabag 10ct 2.50$ 10 0.25$ teabag 30ct 5.45$ 30 0.18$ teabag 90ct 14.95$ 90 0.17$ teabag 150ct 22.95$ 150 0.15$ teabag 240ct 34.95$ 240 0.15$ teabag 1000ct 125.00$ 1000 0.13$

loose 8g 2.50$ 8 0.31$ loose 50g 5.00$ 50 0.10$ loose 100g 7.50$ 100 0.08$ loose 1 lb 24.00$ 453.592 0.05$

Earl Grey teabag 10ct 2.50$ 10 0.25$ teabag 30ct 5.45$ 30 0.18$ teabag 90ct 14.95$ 90 0.17$ teabag 150ct 22.95$ 150 0.15$ teabag 240ct 34.95$ 240 0.15$ teabag 1000ct 125.00$ 1000 0.13$

loose 8g 2.50$ 8 0.31$ loose 50g 5.00$ 50 0.10$ loose 100g 7.50$ 100 0.08$ loose 1 lb 24.00$ 453.592 0.05$

Teavana English Breakfast loose 2oz 4.98$ 56.699 0.09$ loose 1 lb 31.84$ 453.592 0.07$

Earl Grey loose 2oz 4.98$ 56.699 0.09$ loose 1 lb 39.84$ 453.592 0.09$

Thé Store Inc. 12

Bigelow Tea English Breakfast teabag 120ct 18.95$ 120 0.16$ teabag 240ct 30.95$ 240 0.13$

loose 113g 6.95$ 113 0.06$ Earl Grey teabag 120ct 18.95$ 120 0.16$

teabag 240ct 30.95$ 240 0.13$ loose 120g 6.95$ 120 0.06$

Table 7 – Analysis of Competitor Pricing

These figures are formulated

from competitor pricing and

tabularized to compare mean

and median pricing in

relation to similar sizes for

The Store. The suggested

pricing to undercut

competitors are 20 U.S.

dollars for the 250-gram

loose-leaf package, 35 U.S.

dollars for the 500-gram

loose-leaf package, 7.5 U.S.

dollars for the 50 in teabag

package, and 13.75 U.S.

dollars for the 100 in teabag

package. Table 8 – U.S. Pricing Analysis for Thé Store

The Store English Breakfast teabag 50ct 6.99$ 50 0.14$ teabag 100ct 12.99$ 100 0.13$

loose 250g 17.49$ 250 0.07$ loose 500g 29.99$ 500 0.06$

Earl Grey teabag 50ct 6.99$ 50 0.14$ teabag 100ct 12.99$ 100 0.13$

loose 250g 17.49$ 250 0.07$ loose 500g 29.99$ 500 0.06$

Target Market Summary in relation to Internationalization

Thé Store can benefit from the environmental similarities between Canada and the U.S.

Knowing how to utilize Thé Store’s strengths and weaknesses will be vital to the survival of the

Thé Store Inc. 13

Loose Bag 250g 27.50$ 0.09$ 0.16$ 500g 55.00$ 0.07$ 0.13$ 50ct 8.25$ 0.09$ 0.16$ 100ct 16.50$ 0.09$ 0.13$ 0.06$ 0.25$ 0.06$ 0.18$ 250g 21.25$ 0.31$ 0.17$ 500g 42.50$ 0.10$ 0.15$ 50ct 8.00$ 0.08$ 0.15$ 100ct 16.00$ 0.05$ 0.13$ 0.31$ 0.25$ 0.10$ 0.18$ 250g 20.00$ 0.08$ 0.17$ 500g 35.00$ 0.05$ 0.15$ 50ct 7.50$

0.15$ 100ct 13.75$ 0.13$

Mean 0.11$ 0.17$ Median 0.09$ 0.16$

Analysis Mean

MSRP

Median

company in the new market. From the competitor analysis, market penetration pricing would be

an effective way to quickly gaining market share in the foreign market.

Table 9 – Internationalization Requirements

Customer Relationship Management Software (CRM)Automated Web-based Procurement and Logistics

Graphics or Desktop Publishing Software

www.thestore.ca/usApplicable to bothApplicable to bothApplicable to bothApplicable to bothApplicable to bothApplicable to both

Canadian & U.S. MarketCompany Requirements for International TradeCompany Website

Web-based Catalogue, Ordering and Payment SystemAutomated Answering System

Translation Software

5.0 Market Entry and Market StrategyMarket Strategy

Market penetration, remain renowned brand quality but undercut competitor prices. Invest

heavily into advertising, and innovative promotions.

Logistics

All three clients have their own distribution centers, of which SLA’s will show the agreement of

shipping to these either from Canada or straight from manufacturing using FOB. DeDroit is a

Canadian based company that deals with international logistics, specializing in supply chain

management systems in China and the U.S. DeDroit will take on the task of distributing Thé

Store’s merchandise straight from the manufacturing warehouses to the distribution centers of

the clients, Walmart, Costco, and Target. The outsourced trade agent Merlyn oversaw the

negotiations process outlined below with these customers on the matter of the terms of SLA and

payment, agreeing to FOB destination transportation and net 90 for payment terms in agreeance

to economies of scale.

Thé Store Inc. 14

Table 10 – Thé Store Negotiation Process

Negotiations in the U.S.

Preparation

Relationship Building

Exchange Information and First Offer

Persuasion

Concessions

Agreements

Post-agreement

Formulate one position Research situation and likely tactics of other side

Focus on getting to know each other personally Develop a sense of characters, goals, trustworthiness of other side

Put relevant information on the table Stake out initial positions

Attempt to get the other side to agree to your position

Relax demands as needed to close in on an agreement

Conclude the agreement

Meet with the other side to evaluate the negotiation and improve understanding of what the agreement means

Product

Black Teas, specifically English Breakfast and Earl Grey were the most popular of the Northern

teas, and will be perfect in a country with similar cultural attitudes in food and beverages. The

tea leaves are imported from China and India where the best tea leaves grow and are harvested.

Thé Store offers each product line in 250 grams or 500 grams of loose leaf, as well as 25 or 50

count in box for teabags. Thé Store is prepared to export its top sellers in various sizes:

English Breakfast in four available size/forms (500g, 250g, 50ct, 25ct)

Earl Grey in four available size/forms (500g, 250g, 50ct, 25ct)

The labelling of course shows nutrition facts and ingredients, but overall kept within the lines of

the company’s design philosophy of simplicity. The packaging will be white with the company’s

logo centered in the middle of the bag or box, and the UPC barcode underneath it as part of the

design. The tea leaves go through the natural processes that create all other tea types: plucking,

withering, disruption, oxidation, fixation, sweltering, rolling, drying, and aging.

Thé Store Inc. 15

Price

Tea pricing in the U.S. market varies greatly, depending on the packing of the tea. Popular prices

approximate at ₵9 per gram for loose leaf, and ₵16 per teabag. By lowering margins and

undercutting using market penetration pricing, and pricing in enticing product sizes will help

give Thé Store a chance to gain favour in the U.S. markets.Table 11 – U.S. Market Pricing List

Number Item Number Item Name Item Description Item UPC Packaging Price500g Loose Leaf 1 1100011 Black Tea English Breakfast 111357000011 500g 34.99$

2 1100012 Black Tea Earl Grey 111357000012 500g 34.99$ 250g Loose Leaf 11 1100111 Black Tea English Breakfast 111357000021 250g 19.99$

12 1100112 Black Tea Earl Grey 111357000022 250g 19.99$ 50 Tea Sachets 21 1100211 Black Tea English Breakfast 111357000031 100 ct 13.79$

22 1100212 Black Tea Earl Grey 111357000032 100 ct 13.79$ 25 Tea Sachets 31 1100311 Black Tea English Breakfast 111357000041 50 ct 7.49$

32 1100312 Black Tea Earl Grey 111357000042 50 ct 7.49$

Price list for the United States Market ($USD)

Place

Table 12 – U.S. Store List from Market Demand Analysis

State Store# Customer City AddressNY # 1001 Walmart Syracuse 6438 Basile Rowe

# 1002 Walmart Buffalo 100 Thruway Plaza Dr TBA 2586# 1003 Walmart Rochester 1200 Marketplace Dr# 1004 Costco Manhattan 517 E 117th St# 1005 Costco Yonkers 20 Stew Leonard Dr# 1006 Costco Syracuse 120 Township Blvd# 1007 Target Harlem 517 E 117th S# 1008 Target Chili 3181 Chili Ave# 1009 Target Buffalo 2626 Delaware Ave

Store List

FL # 1010 Walmart Jacksonville 4250 Philips Hwy# 1011 Walmart Miami 6991 SW 8th St# 1012 Walmart Orlando 3300-, 3320 Vineland Rd# 1013 Costco Miami 8300 Park Blvd

# 1014 Costco Orlando 2101 Waterbridge Blvd# 1015 Costco Jacksonville 4901 Gate Pkwy# 1016 Target Jacksonville 444 Monument Rd

# 1017 Target Miami 3401 N Miami Ave# 1018 Target Orlando 120 W Grant St

Thé Store Inc. 16

TX # 1019 Walmart Houston 2391 Wayside Dr# 1020 Walmart Dallas 2305 N Central Expy# 1021 Walmart San Antonio 5025 Nw Loop 410

# 1022 Costco Houston 3836 Richmond Ave# 1023 Costco Austin 10401 Research Blvd# 1024 Costco San Antonio 1201 N. Loop 1604 East# 1025 Target Houston 2580 Shearn St# 1026 Target San Antonio 1223 Austin Hwy

# 1027 Target Austin 5621 N I H 35

CA # 1028 Walmart Los Angeles 701 W Cesar E Chavez Ave

# 1029 Walmart San Diego 2121 Imperial Ave# 1030 Walmart Sacramento 755 Riverpoint C# 1031 Costco San Diego 650 Gateway Center Dr

# 1032 Costco San Francisco 450 10th St# 1033 Costco San Jose 2201 Senter Road# 1034 Target Los Angeles 735 S Figueroa St

# 1035 Target San Francisco 789 Mission St# 1036 Target San Jose 2161 Monterey Hwy

New York does not have a significant amount of population in the state but its advantage is that

it has the city with the largest condensed population in the U.S. Because of this though, New

York City is a hard city to expand large warehouse stores into, as land is scarce and expensive.

There is no known indicator whether or not Walmart will expand into this city, but Costco and

Target have surprisingly planted a presence there, and will be used by Thé Store to market to the

city. New York as a state is very close to the home office Toronto. This greatly reduces the need

for setting up a dedicated warehouse and Thé Store distribution center within the state.

Expanding into New York State will be the first step of the expansion. Florida despite its lower

population density relative to its land has the second highest amount of Walmart’s in its state.

California is a state that already has a very large amount of Walmart’s, Costco’s and Targets

selling to the dense population. Texas out of the other states does not have the highest population

density, because of its vast amounts of land. However, because of the vast amounts of land and

its relative vast amount of population, Texas has the highest number of Walmart’s in any state.

This could also be attributed to being the first big market for Walmart as they were expanding in

the south.

Promotion

Thé Store Inc. 17

The reputation of Thé Store has been shown to leak from Canada to the U.S. markets and

excitement of import into the U.S. is openly discussed amongst U.S. tea lovers. The advertising

budget will be spent mainly on online and television advertising. Commercials and short ads on

Youtube as well as displaying of the products on social media will be the major efforts of the

Advertising team.

PeopleIn order to maximize the potential for success in the U.S. market, outsourcing to experienced

partners will be a critical instrument in supporting the goal of internationalization.

Table 13 – Outsourced Partners

Name Thé Store DeDroit Flex Merlyn

Nature of Business Manufacturing Logistics Customs Broking Trage Agent

Annual Sales 37M 78M 64M 170M

Number of Employees 21 200 70 55

Competitive Advantages IT Systems Supply Chain Network Supply Chain Network Close Relations with Major Retailers

Experience Since 2010 Since 1907 Since 1921 Since 1994

Networks Canada World-wide Canada & United States World-wide

Strengths Products, Financial Stability Established Routes, Infrastructure

Experience in Customs Law Knowledge of U.S. Market

Weaknesses Lack of Human Resources None Inexperienced in Global Customs

None

Technical Skills Very Good Excellent Good Excellent

Outsourced Partners

Thé Store holds a working relationship with DeDroit ever since the inception of the company,

and pays DeDroit handsomely of 300,000 U.S. dollars for its continued efficient and top-level

service. Flex is a company introduced through DeDroit with high recommendations, being an

affiliate of the trusted logistics company. After a review of the customs broking company’s

history and past performance, Thé Store is willing to entrust it the task of gaining access for Thé

Store to the U.S., and will pay the customs broking agency a hefty 190,000 U.S. dollars in the

first year of market entry. Merlyn Trade Agency is ready to bring to Thé Store the business of

three of North America’s largest retailers, Walmart, Costco, and Target. The contract with

Merlyn is 95,000 U.S. dollars for the first 5 years, with adjustments within 10,000 U.S. dollars

for any contract amendments with the clients, and 2% of all revenues gained from these clients

for 20 years thereafter.

Thé Store Inc. 18

6.0 Operational Overview and Analysis

Figure 3: Operation and Logistics Model

The entire company operations rely heavily on its Information Management System to

record and analyze all incoming and outgoing data to not only ensure the utmost efficiency in

business, but also provide a chance for analysis of all departments.

Figure 4: Information Management Cycle

Thé Store Inc. 19

The IT team under the COO’s supervision manages the EIS, a system that will benefit all

departments of the company, controlling ERP, WMS, CRM, and logging of finance, and

logistics.

The finance department is able to analyze all data of revenue and expense, which aids

them in managing financial risk, forecast business results, and better financial planning and

analysis, as well as processing orders through EDI systems. The Operations department will be

able to track all inventories through WMS. All heads of departments will report their findings to

the ERP system, and the executive team will be able to come up with a viable business strategy.

The outsourced logistics company offering competitive pricing for FOB freight

forwarding to the U.S. for clients Costco and Target. Walmart on the other hand, famous for their

need of control will be dealt in FOB origin, handing over title of goods at the U.S. seaports,

giving them full control in tracking and distribution of the products there on. All customers agree

to order with open account at net 90.

7.0 Financial and Risk Management Strategy

Financial Strategy

Thé Store has become a financially strong company due to the cohesive devotion for

excellence from its experienced and talented executives. Thé Store’s financial goals are to

increase market share to 10 percent in the U.S. by end of 2017, with an annual revenue of 12

million U.S. dollar. The operational expenses include marketing, administrative, travel, and pay

for outsourced partners.Table 14 – Projected Expenses

Projected Expenses Year 1 Year 2 Year 3

Marketing/Advertising 820,000.00$ 800,000.00$ 850,000.00$ Admin Expenses 150,000.00$ 160,000.00$ 140,000.00$ Travel Ceo, VP Marketing 78,000.00$ 82,000.00$ 90,000.00$

Logistics 300,000.00$ 330,000.00$ 350,000.00$ Customs Broker 190,000.00$ 210,000.00$ 250,000.00$ Agents Salary 95,000.00$ 92,000.00$ 98,000.00$ Outsourced Production 1,250,000.00$ 1,500,000.00$ 1,800,000.00$

TOTAL 2,883,000.00$ 3,174,000.00$ 3,578,000.00$

Internal

Outsource

Thé Store Inc. 20

Risk Management

The U.S. has what is regarded as one of the leading economies in stability, with little

fluctuation in currency exchange, but to ensure the validity and profitability of each order,

forward contracting will be put in order on the SLA’s. There is the possibility of loopholes in

security of all data incoming and outgoing from the EIS. Better maintenance and update of

security systems in place to protect all corporate information must be a priority.

Key considerations in company risks are centered on the company’s goals, customers, products, and processes, outlined in the Risk Considerations figure below.

Figure 5: Risk Considerations Relative to Thé Store’s Corporate Goals

Goals

Customers

Products

Processes

Information QualitySecurity

Ethical Behaviour

Market FailuresAccidents

Regulatory Climate

InfrastructureAssets & Resources Country Characteristics

Intra-Corporate External Environment

Internal Risks External Risks

Thé Store Inc. 21

8.0 Conclusion and RecommendationsThé Store is a Canadian manufacturer and distributor of specialty teas, incorporated in

2010. The company has shown great promise since its inception and has seen rapid exponential

growth, with current annual revenues of $4 million U.S. dollars. Among its simple product line,

the English Breakfast and Earl Grey black teas are the best-sellers in the Canadian market. The

manufacturing of these teas are based in China, where they are also packaged at the warehouses

and shipped directly from the Chinese ports to the clientele’s warehouse and distribution centers.

Thé Store has become one of the most successful and well-known brands in Canada and the U.S.

for its commitment to quality and thirst for innovation. The achievements in Canada has given

Thé Store optimism in pursuing a larger U.S. market, of which apparently data has shown, is

enthused by the idea. Upon research, the U.S. is unsurprisingly perfect in all aspects of

economic, political, cultural, legal and technological factors. Researching the U.S. environment

and reviewing the company through SWOT analysis has shown that the strengths of the company

are ideal in maximizing the profits of current opportunities in the U.S. market. Thé Store is

recommended to enter the U.S. market with market penetration. The data compiled from clients

have shown high demand, with estimates only from major cities in the next 3 years to amount to

$12.9 million U.S. dollars.

Recommendations:

Fill the new position of inventory manager for the purposes of the U.S. expansion

Continually monitor the market and competitors

Review and amend supplier contracts as well as company strategies

Openly seek out partnership opportunities in the U.S.

Thé Store Inc. 22

9.0 Bibliography1. www.teausa.com

2. www.euromonitor.com

3. www.worldbank.org

4. www.cia.gov

5. www.statista.com

6. www.teavana.com

7. www.stashtea.com

8. www.bigelowtea.com

9. www.walmart.com

10. www.target.com

11. www.costco.com

Thé Store Inc. 23

http://www.target.com/

http://www.walmart.com/

http://www.bigelowtea.com/

http://www.stashtea.com/

http://www.teavana.com/

http://www.statista.com/

http://www.cia.gov/

http://www.worldbank.org/

http://www.euromonitor.com/

http://www.teausa.com/

Appendix A – Branding

Vision Our vision is to become a household name in the specialty teas industry worldwide

Mission Our mission is to find talent that can help us deliver a tea drinking experience of great value to all of North America

Values Simple Innovative Reliable

Thé Store Inc. 24

Appendix B – Canadian Price List

Number Item Number Item Name Item Description Item UPC Packaging Price500g Loose Leaf 1 1100011 Black Tea English Breakfast 111357000011 500g 44.99$

2 1100012 Black Tea Earl Grey 111357000012 500g 44.99$ 3 1100021 Green Tea Dragonwell 111357000013 500g 44.99$ 4 1100022 Green Tea Gunpowder 111357000014 500g 44.99$ 5 1100031 Oolong Tea Darjeeling 111357000015 500g 44.99$ 6 1100032 Oolong Tea Ti Kuan Yin 111357000016 500g 44.99$ 7 1100041 Herbal Tea Chamomile 111357000017 500g 44.99$ 8 1100042 Herbal Tea Peppermint 111357000018 500g 44.99$ 9 1100051 Pu-erh Tea Sheng (Raw) 111357000019 500g 44.99$

10 1100052 Pu-erh Tea Shou (Ripe) 111357000020 500g 44.99$ 250g Loose Leaf 11 1100111 Black Tea English Breakfast 111357000021 250g 24.99$

12 1100112 Black Tea Earl Grey 111357000022 250g 24.99$ 13 1100121 Green Tea Dragonwell 111357000023 250g 24.99$ 14 1100122 Green Tea Gunpowder 111357000024 250g 24.99$ 15 1100131 Oolong Tea Darjeeling 111357000025 250g 24.99$ 16 1100132 Oolong Tea Ti Kuan Yin 111357000026 250g 24.99$ 17 1100141 Herbal Tea Chamomile 111357000027 250g 24.99$ 18 1100142 Herbal Tea Peppermint 111357000028 250g 24.99$ 19 1100151 Pu-erh Tea Sheng (Raw) 111357000029 250g 24.99$ 20 1100152 Pu-erh Tea Shou (Ripe) 111357000030 250g 24.99$

20 Tea Sachets 21 1100211 Black Tea English Breakfast 111357000031 100 ct 44.99$ 22 1100212 Black Tea Earl Grey 111357000032 100 ct 44.99$ 23 1100221 Green Tea Dragonwell 111357000033 100 ct 44.99$ 24 1100222 Green Tea Gunpowder 111357000034 100 ct 44.99$ 25 1100231 Oolong Tea Darjeeling 111357000035 100 ct 44.99$ 26 1100232 Oolong Tea Ti Kuan Yin 111357000036 100 ct 44.99$ 27 1100241 Herbal Tea Chamomile 111357000037 100 ct 44.99$ 28 1100242 Herbal Tea Peppermint 111357000038 100 ct 44.99$ 29 1100251 Pu-erh Tea Sheng (Raw) 111357000039 100 ct 44.99$ 30 1100252 Pu-erh Tea Shou (Ripe) 111357000040 100 ct 44.99$

10 Tea Sachets 31 1100311 Black Tea English Breakfast 111357000041 50 ct 24.99$ 32 1100312 Black Tea Earl Grey 111357000042 50 ct 24.99$ 33 1100321 Green Tea Dragonwell 111357000043 50 ct 24.99$ 34 1100322 Green Tea Gunpowder 111357000044 50 ct 24.99$ 35 1100331 Oolong Tea Darjeeling 111357000045 50 ct 24.99$ 36 1100332 Oolong Tea Ti Kuan Yin 111357000046 50 ct 24.99$ 37 1100341 Herbal Tea Chamomile 111357000047 50 ct 24.99$ 38 1100342 Herbal Tea Peppermint 111357000048 50 ct 24.99$ 39 1100351 Pu-erh Tea Sheng (Raw) 111357000049 50 ct 24.99$ 40 1100352 Pu-erh Tea Shou (Ripe) 111357000050 50 ct 24.99$

Price list for Canadian Market ($CAD)

Thé Store Inc. 25

Appendix C – Balance Sheets

Cash 430,960.00$ Current Borrowing 521,496.00$ Accounts Receivable 778,216.00$ Accounts Payable 756,125.00$ Inventories 542,456.00$ Other Current Liabilities 855,631.00$ Deposits 105,966.00$ 1,611,756.00$

1,857,598.00$

Future Income Taxes 290,156.00$ Long Term Assets 10,277,604.00$ Shareholder's Loan 5,497,373.00$ Accumulated Depreciation 172,500.00$ 5,787,529.00$

10,450,104.00$

Shareholder's Equity 1,641,915.00$ Shareholder's Capital 1,576,281.00$ Retained Earnings 1,168,725.00$

4,386,921.00$

Total Assets 12,307,702.00$ Total Liabilities and Equity 11,786,206.00$

Assets Liabilities and Shareholer's EquityThe Store Inc., Balance Sheet 2013

Current Assets Current Liabilities

Long-term Liabilities

Shareholder's Equity

Long Term Assets

Cash 525,374.00$ Current Borrowing 481,496.00$ Accounts Receivable 1,054,560.00$ Accounts Payable 523,458.00$ Inventories 821,534.00$ Other Current Liabilities 975,631.00$ Deposits 359,155.00$ 1,980,585.00$

2,760,623.00$

Future Income Taxes 552,489.00$ Long Term Assets 12,294,358.00$ Shareholder's Loan 5,750,182.00$ Accumulated Depreciation 135,200.00$ 6,302,671.00$

12,429,558.00$


6,906,925.00$


Liabilities and Shareholer's EquityAssetsCurrent Liabilities



The Store Inc., Balance Sheet 2014

Current Assets

Long Term Assets

Thé Store Inc. 26

Cash 868,320.00$ Current Borrowing 661,486.00$ Accounts Receivable 1,562,583.00$ Accounts Payable 756,185.00$ Inventories 956,201.00$ Other Current Liabilities 1,534,786.00$ Deposits 515,893.00$ 2,952,457.00$

3,902,997.00$

Future Income Taxes 1,281,624.00$ Long Term Assets 13,525,989.00$ Shareholder's Loan 6,315,834.00$ Accumulated Depreciation 131,500.00$ 7,597,458.00$

13,657,489.00$


7,010,571.00$



Assets Liabilities and Shareholer's EquityCurrent Assets

Long Term Assets

Current Liabilities


The Store Inc., Balance Sheet 2015

Thé Store Inc. 27

Appendix D – Income Statements

Gross Sales 924,684.00$ Less-Returns 6,915.00-$

Net Sales 917,769.00$ Cost of Sales 143,263.00-$

Gross Profit 774,506.00$ Operations and Logistics 213,112.00-$ Finance and Administration 123,056.00-$ Sales and Marketing 165,234.00-$

EBITDA 273,104.00$ Taxes 346.00$ Depreciation/Amortization 1,323.00$

Net Income 274,773.00$

Thé Store Income Statement 2014

Gross Sales 1,145,645.00$ Less-Returns 7,621.00-$

Net Sales 1,138,024.00$ Cost of Sales 162,348.00-$


EBITDA 437,636.00$ Taxes 312.00-$ Depreciation/Amortization 12,865.00-$



Thé Store Inc. 28

Gross Sales 786,346.00$ Less-Returns 6,456.00-$

Net Sales 779,890.00$ Cost of Sales 121,823.00-$


EBITDA 141,375.00$ Taxes 265.00-$ Depreciation/Amortization 1,132.00-$



Appendix E – Annual Cash Flow Statements

Thé Store Inc. 29

Fiscal Year End 2013 2014 2015Cash On Hand 430,960.00$ 525,374.00$ 868,320.00$ Incoming Cash 107,443.00$ 151,733.00$ 122,799.00$ Expenses Paid 47,753.00-$ 24,999.00-$ 21,303.00-$ Asset Purchases 12,609.00-$ 59,527.00-$ 25,711.00-$ Cash Remaining 478,041.00$ 592,581.00$ 944,105.00$ Financing Necessary? No No No

The Store Inc., Cash Flow Statement

Thé Store Inc. 30

Monthly

JanuaryFebruary

March

AprilM

ayJune

JulyAugust

September

October

Novem

berDecem

berCash O

n Hand158,021.00

$ 262,176.00

$ 335,253.00

$ 327,378.00

$ 380,685.00

$ 357,157.00

$ 347,498.00

$ 365,111.00

$ 379,677.00

$ 359,508.00

$ 349,102.00

$ 430,960.00

$ Incom

ing Cash167,700.00

$ 172,394.00

$ 82,417.00

$ 118,954.00

$ 134,914.00

$ 58,119.00

$ 123,704.00

$ 118,506.00

$ 97,524.00

$ 56,501.00

$ 122,399.00

$ 107,443.00

$ Expenses Paid

39,255.00-$

20,955.00-$

54,629.00-$

11,487.00-$

89,247.00-$

23,986.00-$

57,048.00-$

41,496.00-$

94,250.00-$

33,328.00-$

27,723.00-$

47,753.00-$

Asset Purchases24,290.00

-$ 78,362.00

-$ 35,663.00

-$ 54,160.00

-$ 69,195.00

-$ 43,792.00

-$ 49,043.00

-$ 62,444.00

-$ 23,443.00

-$ 33,579.00

-$ 12,818.00

-$ 12,609.00

-$ Cash Rem

aining262,176.00

$ 335,253.00

$ 327,378.00

$ 380,685.00

$ 357,157.00

$ 347,498.00

$ 365,111.00

$ 379,677.00

$ 359,508.00

$ 349,102.00

$ 430,960.00

$ 478,041.00

$ Financing N

ecessary?N

oN

oN

oN

oN

oN

oN

oN

oN

oN

oN

oN

o

Monthly

JanuaryFebruary

March

AprilM

ayJune

JulyAugust

September

October

Novem

berDecem

berCash O

n Hand478,041.00

$ 584,790.00

$ 540,039.00

$ 480,865.00

$ 590,427.00

$ 517,285.00

$ 575,145.00

$ 545,599.00

$ 431,680.00

$ 508,581.00

$ 470,048.00

$ 525,374.00

$ Incom

ing Cash176,664.00

$ 85,572.00

$ 109,385.00

$ 199,843.00

$ 53,096.00

$ 128,240.00

$ 136,800.00

$ 67,673.00

$ 116,980.00

$ 95,771.00

$ 105,530.00

$ 151,733.00

$ Expenses Paid

40,567.00-$

78,481.00-$

70,146.00-$

72,169.00-$

33,594.00-$

40,631.00-$

84,347.00-$

98,976.00-$

13,875.00-$

53,519.00-$

23,277.00-$

24,999.00-$


-$ 51,842.00

-$ 98,413.00

-$ 18,112.00

-$ 92,644.00

-$ 29,749.00

-$ 81,999.00

-$ 82,616.00

-$ 26,204.00

-$ 80,785.00

-$ 26,927.00

-$ 59,527.00

-$ Cash Rem

aining584,790.00

$ 540,039.00

$ 480,865.00

$ 590,427.00

$ 517,285.00

$ 575,145.00

$ 545,599.00

$ 431,680.00

$ 508,581.00

$ 470,048.00

$ 525,374.00

$ 592,581.00

$ Financing N

ecessary?N

oN

oN

oN

oN

oN

oN

oN

oN

oN

oN

oN

o

Monthly

JanuaryFebruary

March

AprilM

ayJune

JulyAugust

September

October

Novem

berDecem

berCash O

n Hand592,581.00

$ 626,091.00

$ 650,748.00

$ 603,675.00

$ 681,187.00

$ 683,462.00

$ 653,736.00

$ 737,363.00

$ 807,068.00

$ 775,621.00

$ 795,503.00

$ 868,320.00

$ Incom

ing Cash199,237.00

$ 135,022.00

$ 118,378.00

$ 164,176.00

$ 137,154.00

$ 52,789.00

$ 195,295.00

$ 153,800.00

$ 74,053.00

$ 72,768.00

$ 171,773.00

$ 122,799.00

$ Expenses Paid

72,193.00-$

82,044.00-$

66,095.00-$

55,293.00-$

91,977.00-$

29,445.00-$

15,189.00-$

25,989.00-$

16,253.00-$

11,257.00-$

42,145.00-$

21,303.00-$


-$ 28,321.00

-$ 99,356.00

-$ 31,371.00

-$ 42,902.00

-$ 53,070.00

-$ 96,479.00

-$ 58,106.00

-$ 89,247.00

-$ 41,629.00

-$ 56,811.00

-$ 25,711.00

-$ Cash Rem

aining626,091.00

$ 650,748.00

$ 603,675.00

$ 681,187.00

$ 683,462.00

$ 653,736.00

$ 737,363.00

$ 807,068.00

$ 775,621.00

$ 795,503.00

$ 868,320.00

$ 944,105.00

$ Financing N

ecessary?N

oN

oN

oN

oN

oN

oN

oN

oN

oN

oN

oN

o

The Store Inc., Cash Flow Statem

ent 2014


ent 2013


ent 2015

Appendix F – Monthly Cash Flow Statements

Documents

International Trade Management