X-Culture Report Plastic Revolutions Section 4

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Trade regulations[d]

U.S. goods and services trade with Norway totaled $16 billion in 2012 (latest data available for goods and services trade). Exports totaled $7 billion; Imports totaled $9 billion. The U.S. goods and services trade deficit with Norway was $2 billion in 2012.

Norway is currently our 47th largest goods trading partner with $10.0 billion in total (two ways) goods trade during 2013. Goods exports totaled $4.5 billion; Goods imports totaled $5.5 billion. The U.S. goods trade deficit with Norway was $1.0 billion in 2013.

Trade in services with Norway (exports and imports) totaled $5.4 billion in 2012 (latest data available). Services exports were $3.3 billion; Services imports were $2.1 billion. The U.S. services trade surplus with Norway was $1.1 billion in 2012.

Trade Balance

The U.S. goods trade deficit with Norway was $1.0 billion in 2013, a 67.4% decrease ($2.1 billion) over 2012.

The United States has a services trade surplus of $1.1 billion in 2012 (latest data available), down 7.6% from 2011.

Source: https://ustr.gov/countries-regions/europe-middle-east/europe/norway

National policy on packaging waste

• Voluntary agreement between Ministry of Environment and

Industry (as an alternative to taxes)

• National recycling and recovery targets for each material

• Optimizing the use of all packaging

• Material companies for each material

• Municipalities have still the obligation (and the monopoly)

to collect and treat all waste from households.

• Tax on beverage packaging, but tax reduced according to recycling

rate

• Tax on landfill and incineration.

• Ban on landfill of organic waste as of 2009

Customer preferences (and marketing)

In general, Norwegian customers are wealthy and possess a high purchasing power in addition to that wealth is very evenly distributed in Norway which makes to most part of the population enabled customers. In addition to that Norwegians show a very environmental-conscious consume behavior which could prove favorable for Plastic Revolutions. In addition to that, in comparison to other Nordic countries Norwegian customers are not as price sensitive and value the right price-quality relationship[7]. PRI, providing could quality to reasonable prices, at least lower then virgin plastic could profit from that as well. On the other hand, Norwegians are very patriotic and often choose domestic products but if that would have any influence on the purchase of PRIs Product which would essentially be primary products for the local plastic industry is questionable.

Competitive Environment

Main Competitors:[e]

http://www.largestcompanies.com/toplists/norway/largest-companies-by-turnover/industry/manufacture-of-rubber-and-plastic-products

Although Norway is going through a period of economic uncertainty because of falling oil prices, property markets in certain areas, particularly Oslo, continued to boom in 2016. Borrowers are taking advantage of low interest rates by borrowing higher amounts than ever.

Final Decision: Canada

Based on the Assessment of the different countries we made our final decision towards Canada.

Before getting on the main factors leading out decision towards Canada we would like to discuss the reasons leading to the dismissal of Japan, California and Norway.

While being a huge and promising market with well-developed infrastructure on the one hand the environment is extremely competitive and transport costs would be high. Furthermore, doing business in Japan would mean dealing with a language and cultural barrier. Regarding California, the both completive and volatile environment for plastic recyclers made us back away from doing business in this state of the US. Norway looks promising in terms of purchasing power of the population and recycling mentality but might involve certain transport difficulties which could lead to supply chain disruptions during the winter months and possess high competition as well.

By taking these points into consideration and comparing the market success criteria we conclude to choose Canada as our target market. In the following we would like to justify this decision based on the market success criteria.

Infrastructure and location:

Canada possess a very well developed and modern infrastructure. In the Global Competitiveness Index (GCI) Canada is ranking 14th of 140 with regards to infrastructure[8]. Furthermore, the majority of Canadians plastic manufacturers is located in the Ontario region (44.9%)[9]. The Ontario highway network is linked to U.S. routes at 10 commercial border crossings and railway lines at 5 commercial crossings. Many Canadian production sites would in fact be closer and more easy to reach for PRI than comparable sites in US states (such as California). Out of Canada’s 20th largest cities 17 are reachable within less than an hour and a half from the US[10].

Summing up, the Canadas excellent infrastructure in combination with its strategic location would facilitate the transport of PRI products to potential customers and PRI could profit from fast and (relatively) cheap transportation.

Trade Regulations (Government Policy)

Regarding trade regulations Canada seems to be a favorable business environment for Plastic Revolutions as well, as duties on resins of U.S. origin were eliminated out by 1993, and duties on plastic products by 1998[11]. Therefore, our assessment of Canada based on the trade regulations criteria is largely favorable towards Canada.

Customer preferences & tastes towards packaging (and marketing)

Plastic recycling increased by 3 percent from 2013 to 2014[12]. Considering the continues improvement in lightweight