Bringing Yanjing Beer to Canada Case Study
The case displays the challenges of being an immigrant entrepreneur in Canada, and some specific challenges the Shu Guo and Hi-Bridge faced. It also highlights the strategies business owners can use to succeed.
The case data displays there were several mistakes that Guo made and some of them could’ve been solved by a translator and consultant. It also shows that consumers, especially Chinese, are upset by the high cost of Guo’s beer. A data point within the case shows that the retail sales of alcohol have increased by almost 61% from 2000 to 2010.
It is recommended that Guo and Hi-Bridge: Hire a translator and consultant, develop a cheaper beer, and invest more heavily in advertising in the beer market as it is growing quickly and consumers beer consumers care and are influenced heavily by advertising.
Shu Guo, the owner of Hi-Bridge Consulting Corporation ¬introduced Yanjing beer to the Canadian Market. She was unsuccessful in making it an ultra-successful business due to many struggles that immigrant entrepreneurs face like competition, corporate culture, language and accent, financing, and marketing. Despite these many challenges, there are many resources business owners like Shu Guo can use to be successful as an immigrant entrepreneur like the Citizenship and Immigration Canada program, non-government organizations, and the Canadian Small Business Financing program. These general programs are great for any immigrant entrepreneur.
Guo and Hi-Bridge could’ve done many things differently to help their company grow. They could’ve ensured that they were sending the right message with their products, developing a cheaper line of beer, investing more in advertising, and hiring a consultant.
Immigrant Entrepreneurs in Canada face many challenges when setting out to start a business. There are roughly 250,000 immigrants that come to Canada each year and about 40,000 of them (16%) became entrepreneurs after arriving (Howard, WIlliam, & Kaijin, 2017). Because of this, it makes it a lot harder to come up with original ideas or to do things better than other entrepreneurs because the market is almost to a point of oversaturation. It also means that there is a lot of competition, so if one was to set up a company, they must continue to perform at a high level or they will be outdone by other companies.
Dealing with the corporate culture in Canada is another challenge that immigrant entrepreneurs encounter. It’s important to understand that from country to country, and even different regions within countries vary in culture. “Canadians expected punctuality, were direct negotiators and communicators, and hiring was more often based on suitability rather than nepotism and political connections. . . the more an immigrant entrepreneur’s home-country business culture differed from Canada, the more adjustment would be required” (Howard, WIlliam, & Kaijin, 2017). If entrepreneurs don’t understand the notion that business practices can vary drastically from their home countries, they will struggle to create a successful business.
Language and accent can be a large hurdle for those starting to develop their own business in Canada. If one cannot adequately express their business ideas to customers trying to consume their products or for investors that might invest in the business, it is nearly impossible to create a successful business.
Financing can also be a great challenge that entrepreneurs are faced with when trying to start their business. Canada does have a Canadian Small Business Financing (CSBF) program in place, but it is hard to receive financing from them because a business owner must have two years of credit history which people who are just arriving in Canada lack.
Being an Entrepreneur in Canada and finding your customer base is difficult. It requires a good understanding of the different markets within Canada, and what demographics might be willing to purchase those products. Coming from a different culture and background can make this especially difficult.
Despite these many challenges, Canadian entrepreneurs can use many different strategies and resources to be successful in the competitive business environment in Canada. The Citizenship and Immigration Canada (CIC) can help immigrant entrepreneurs by arranging free assistance like, “Language assessments and classes, help finding a job, help with daily life such as finding a place to live and filling out forms and applications [and] information about community services such as mentoring” (Citizenship and Immigration Canada).
Immigrants can also use non-government organizations to help increase chances of success. Organizations like the Catholic Social Services, Metropolitan Immigrant Settlement Association, and the Mennonite Centre for Newcomers can help immigrants get their feet on the ground quickly so they can start their own businesses sooner.
Knowing what to look for in terms of financing is very helpful too. Some people look to private investors like Daniel Grossman said he did in the Wild Planet Video, “I financed the company through angel investors. I raised six or seven rounds of financing over the first ten years, to fund the growth of the company” (Daniel Grossman, Wild Planet Video). This is one approach to financing a startup business, another is through the CSBF. As mentioned earlier in this case study though, it can be difficult to receive financing through them due to the requirement of two years’ credit history for them to review.
One of the costliest mistakes for Guo and Hi-Bridge was their mistake where a high-end hard liquor was translated as “100 Years of Loneliness”. This was such a costly mistake because it made it so hard to sell not only hard liquor to the Canadian Market but anything related to Yanjing products. “It took a year of Guo’s efforts before Yanjing products were sold in liquor stores” (Howard, WIlliam, & Kaijin, 2017). This was an extremely costly loss for Guo and Hi-Bridge because not only did Guo have to put effort into rebuilding the brand after this mix-up, she could’ve been marketing and building upon the Yanjing brand and improving the brand instead of trying to salvage it. One way that Guo and Hi-Bridge could improve their market share is by ensuring that this never happens again. They could do this by meticulously translating text of their alcohol. After they translate the names of their alcohol they could also consult with an English-speaking consultant to ensure that they are sending the message they want to with the name of their alcohol.
Guo and Hi-Bridge could try and develop a cheaper beer around eight to ten dollars because it would be cheaper than the price of one of their competitor’s (Tsingtao) six packs. Not only this, it would address one of Guo’s biggest gripes of Chinese consumers, price. They were upset because of the vast disparity in price from China to Canada, and lowering the price would make Chinese customers more willing to buy their beer. Although it may make fewer profits than the higher quality beer, they could continue to make their “high quality” beer, and just have a cheaper option for those that don’t want to buy high-end beer.
The market for beer, wine, and liquor is continuously growing and it would be worth it for Guo and Hi-Bridge to continue to invest more money in the advertising. If they get the word for their beer and liquor out and continue to grow their customer base, it will only continue to expand as the market expands. From 2000 to 2010 the retail sales of beer, wine, and liquor have grown by almost 61%. Getting a foot in the door of the market before it becomes even bigger will greatly increase their market share as time goes on.
Perhaps one of the most valuable decisions Guo and Hi-Bridge make is to hire a consultant from Canada for their business. The ideal consultant would be a native of Canada, who is familiar with the struggles of immigrants, but also has some experience in the beer industry and understands the patterns of consumers within it. This consultant would help Guo understand the Canadian beer market more fully and make more informed decisions that would better profit the company. The consultant would also help Guo recognize the social climate of Canada, not only from the perspective of an immigrant but the perspective of your average consumer. This could help balance out Guo and Hi-Bridge because Guo has a lot of experience in business and the technical side of things, while she lacks knowledge in the Canadian market. A consultant could also help Guo market better to the Canadian people which is important because, “beer shoppers [are] price and promotion sensitive” (Howard, WIlliam, & Kaijin, 2017). While hiring a consultant is another cost to the company, it is probably the most valuable money Guo and Hi-Bridge can spend in order to increase market share.
Starting out in Canada as an immigrant entrepreneur is very difficult and requires one to overcome many challenges. In the face of these challenges, one must seek help in the varying resources provided by the Canadian government and other non-government organizations. Guo and Hi-Bridge could’ve utilized some of these resources better. Perhaps the most important thing they could’ve done was hired an English-speaking Canadian native to help their business avoid mistakes and flourish.