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Running Head: COMPREHENSIVE OUTLINE 1
2
Running Head: COMPREHENSIVE OUTLINE
Learning Team Comprehensive Outline
MGT/448 Global Business Strategies
Learning Team Comprehensive Outline
Introduction
Learning Team C has selected nutritional granola bars and the
country Canada to enter into a global business venture with.
This outline will document pertinent regional, country, and
product analysis information which justifies why this new
global business venture would be a sound idea for Team C to
enter into.
Region Analysis
Canada has regional alliances with numerous countries and has
free trade agreements in place with more than 10 countries.
These free trade agreements “provide a competitive advantage
across a wide range of sectors” states (Foreign Affairs, Trade,
and Development Canada, 2014). “Under an FTA, a range of
Canadian goods and services benefit from the reduction or
elimination of tariff and non-tariff barriers to trade, such as
quotas or technical barriers” states (Foreign Affairs, trade, and
Development Canada, 2014).
Canada’s Prime Minister Mulroney signed and implemented the
North American Free Trade Agreement (NAFTA) with Mexico
and the United States in January 1994. “NAFTA has generated
economic growth and rising standards of living for the people of
all three member countries” states (Foreign Affairs, Trade, and
Development Canada, 2014).
Canada has many physical environmental features that effect
trade. Canada has the largest border with any other country
sharing this with the United States which allows for more trade
of farming goods near the borders. Canada also links to three
oceans: Artic, Pacific, and Atlantic. This allows for Canada to
be a leader in exporting fish (Slideshare.com, 2014). The Great
Lakes and St. Lawrence River help to create fertile land for
farming in Southern Canada. Here they produce and export
canola, wheat, and grain across the globe (Slideshare.com,
2014).
Political stability can be considered as a state of peace that is
experienced in a country. This can be caused in large part to the
activities of the government keeping in mind the best interests
of the people. Thanks to Canada’s political stability, the
country can be considered a natural playground. The United
Nations ranked Canada one of the best countries in the world in
which to live and Canada has also been globally recognized for
its outstanding quality of life. It is also known for having a
stable, progressive political environment and one of the
healthiest economies in the world.
Economic conditions in Canada in 2013 throughout the current
year 2014 indicate that Canadians have become more careful
with their spending habits. Canadians as a whole appear to be
holding on to their funds which have resulted in slow financial
growth for the Canadian economy. One way to improve the
economic growth would be by having an increase in the demand
in exports and business investments which could improve the
Canadian economy. The Central Bank in Canada believes “that a
revival in the U.S. economy will eventually lead to an increase
in demand for Canadian products, but due to competitive
pressures and continuing weak demand, it is taking longer than
expected” states (Beltrame, 2013).
There is a wide range of financing options available in Canada
for new and expanding businesses. These options can range
from shareholder infusions of capital to sophisticated
institutional financing. Most Canadian chartered banks have a
highly developed network of branch operations throughout the
country. Since some of them also have a presence in the U.S.
and internationally, these banks can be a useful liaison for a
foreign investor establishing a business in Canada (Osler,
2009).
Canada is known for its good social and health conditions of its
citizens. Canadians are proud people and work together to keep
their lands clean and safe. They also receive publicly funded
healthcare which helps the people to stay healthier. Their
environmental conditions are much the same with plentiful
water and rich soils for farming.
While Canada has not often been directly targeted for terrorist
attacks it is still nonetheless susceptible and vulnerable to
terrorism. Examples of terrorism threats to Canada include
graduates of terrorist training camps in countries such as
Afghanistan are living in Canada. Other threats include
Canadians being involved in planning terrorist attacks in other
countries, either while residing in or outside Canada. One other
key terrorist threat to Canada came from “Osama bin Laden,
whereas he had indicated that Canada was a designated target
for terrorism because of Canada's role in Afghanistan following
September 11, 2001” states (Canadian Security Intelligence
Service, 2014). Canada as a whole should continue to be
vigilant and take counter terrorism measures to ensure safety
against these terrorism vulnerabilities.
Country Analysis
Canada is politically very stable by any standards. In relation to
any other jurisdiction its budget deficit is moderate. They have
a small balance of payments deficit as well. Their most
important trading partner is the United States, followed by
China and Mexico. A large surplus in its trade with the U.S. is
what Canada prefers. Since the country has maintained a sound
monetary policy, Canada faces very little inflation risk.
Volatility seems considerably less in Canada than in the U.S.
Over the past four years of financial crises, Canada has had the
smallest downturn of any of the G7 countries” states
(Trapunski, 2014).
Canada’s economic freedom score is 80.2, making its economy
the 6th freest in the 2014 Index. Its overall score is 0.8 point
better than last year, reflecting improvements in investment
freedom, the management of government spending, and
monetary freedom. Canada continues to be the freest economy
in the North America region (The Heritage Foundation, 2014).
Canada is one of the world’s most attractive investment
destinations due to their transparent and stable business climate.
With the economic conditions, team c is well aware that Canada
is the best choice for their product. Global trade and commerce
is greatly accepted. The financial system has remained stable,
and cautious and wise regulations have allowed banks to survive
the worldwide financial confusion with little disruption.
Many new businesses are financed through their owner’s
pockets while others may need an infusion of funds from
additional sources in order to start up. Canada offers small
business loans for those not self-funding or using the help of
their family or friends. These small business loans can be one of
the best choices simply because the federal government
sponsors programs which can make funding the start of a
business a priority. Other financing options include seeking
private investors and searching for grants or subsidies provided
by the Canadian federal and provincial governments.
The physical environment in Canada is located in the Northern
and Western hemisphere. From the Atlantic Ocean, The Great
Lakes and the St. Lawrence River are important trade routes.
There are three coastlines that surround Canada and they the
Arctic from the North, Pacific from the West, and Atlantic from
the East. In Canada’s East they have a large rocky area. The
Rocky Mountains are located in Canada’s West. Canada’s Great
Lakes and St. Lawrence River are import because they provide a
way to import and export goods. The Northern area of Canada is
called the Tundra which, is very cold and plain. The
temperature makes it unsuitable to live there. Canada’s climate
in the southern part of the region is good for farming.
The social, health and environment in Canada can be dependent
on social status. Canadians with more money are said to live
longer than Canadians with lower incomes. Individual lifestyles
are influenced by the socioeconomic environment, which has a
huge important role in Canada. Although genetics are
considered to be a determinant of health, Social and physical
environments, have strongly moderated their effects. Canada is
considered to have a positive social environment however, only
one in three Canadians will experience a period of going
through poverty in their lifetime. Canada’s health status is
considered to be one of the highest in the world.
Canada’s cultural considerations are known to be informal and
relaxed. Communication in Canada is known to be moderately
indirect. When speaking, Canadians prefer to be at arm’s length,
as personal space is important. Canada is innovative and the
people there display hard work, education and experience as
well-regarded qualities in that country. In Canada, it is very
critical to build rapport when conducting successful business
affairs. Canada has a multicultural character, which offers many
cultural experiences and possibilities.
Organization and Product Analysis
Quaker is an extremely profitable company that was acquired by
PepsiCo in 2001. The PepsiCo organization wanted to take a
stab in the isotonic sports beverage market and add Gatorade to
its lineup of beverages. By this acquisition Quaker opened up a
new segment that PepsiCo did not have.
Quakers cereal, snack, and health foods have expanded the
market and added nutrition bars to its lineup. In Canada there is
a major production facility that operates and produces for
Quaker. This facility produces multiple products including
Quaker granola bars and now adding healthier ingredients to its
breakfast nutrition bars that are in demand and the new trend in
Canada.
In Canada, since 2005, the snack bars food category has grown
5 percent every year and is estimated to be worth 750 million
dollars (Weeks, 2012). Since 2008 through 2010 the number of
granola bars eaten by consumers a day rose 32 percent (Weeks,
2012). This growth is believed to be due to the health conscious
consumers of Canada and consumers who are always on the go
and don’t have time to sit down for a healthy breakfast.
The new nutritious bar that Quaker is introducing to the health
conscious consumer now has fiber and omega 3 fatty acids. The
price for the nutrition bars is adequate and the prices to create
them are low making the analysis of the product profitable. The
need for a quick nutritious bite allows for Quaker to enter
Canada and have a competitive advantage. This product will not
only thrive in Canada but will expand in other areas of the
region.
References
Beltrame, J. (2013). Bank of Canada: Economy not growing fast
enough. Retrieved January 19, 2014, from
http://www.huffingtonpost.ca/2013/10/01/bank-of-canada-
economy_n_4023848.html
Canadian Security Intelligence Service. (2014). Examples of the
terrorist threat to Canada. Retrieved January 19, 2014, from
https://www.csis-scrs.gc.ca/prrts/trrrsm/xmpls-eng.asp
"Canada physical features natural resources and climate 1011."
Canada physical features natural resources and climate 1011.
N.p., n.d. Web. Retrieved January 18, 2014, from
http://www.slideshare.net/patrick_pitts/canada-physical-
features-natural-resources-and-climate-1011
"Common menu bar links." Cultural Information. N.p., n.d.
Web. Retrieved January 18, 2014, from,
http://www.intercultures.ca/cil-cai/ci-ic-eng.asp?iso=ca
Foreign Affairs, Trade, and Development Canada. (2014).
Opening new markets: trade negotiations and agreements.
Retrieved January 19, 2014, from
http://www.international.gc.ca/trade-agreements-accords-
commerciaux/index.aspx
Foreign Affairs, Trade, and Development Canada. (2014).
Canada’s free trade agreements. Retrieved January 19, 2014,
from http://www.international.gc.ca/trade-agreements-accords-
commerciaux/agr-acc/fta-ale.aspx?lang=eng
"Health Impacts of Social and Economic Conditions:." Health
Impacts of Social and Economic Conditions:. N.p., n.d. Web.
Retrieved January 17, 2014, from
http://www.cpha.ca/uploads/policy/health
Osler, Hoskin & Harcourt. (March, 2009). Financing a Foreign
Business Operating in Canada.
Osler.com. Retrieved January 19, 2014, from
http://www.osler.com/newsresources/details.aspx?id=2415&lang
type=4105
The Heritage Foundation. (2014). 2014 Index of Economic
Freedom. Retrieved January 19, 2014, from
http://www.heritage.org/index/country/canada
Trapunski, E. (2014). The Globe and Mail. Retrieved January
19, 2014, from
http://www.theglobeandmail.com/globe-investor/investor-
community/trading-
shots/seven-reasons-to-invest-in-canada-now/article9470686/
Weeks, C. (2012) Granola Bars: A healthy snack or dressed-up
junk food? Retrieved on January 16, 2014 from
http://www.theglobeandmail.com/life/health-and-
fitness/granola-bars-a-healthy-snack-or-dressed--up-junk-
food/article572493/
Learning Team Comprehensive Outline
Learning Team C
MGT/448 Global Business Strategies
January 20, 2014
1
Hello. During the next 10-minutes we will be providing you
with an interesting presentation that focuses on why Learning
Team C has decided upon entering into a global venture with
Canada, the company Quaker in an effort to sell nutritional
granola bars.
Agenda
Introduction
Region Analysis
Regional Alliances, Economic Conditions,
Terrorist Threats
Physical Environment, Political Stability
Finance Options, Health
Country Analysis
Physical Environment, Social, Health
Environment Conditions, Cultural Considerations
Political Stability, Economic Conditions
Finance Options
Organization and Product Analysis
Organization Description
Products Needs Assessement & Description
References
2
Learning Team C has selected nutritional granola bars and the
country Canada to enter into a global business venture with.
This presentation will document pertinent regional, country, and
product analysis information which justifies why this new
global business venture would be a sound idea for Team C to
enter into. We will then conclude our presentation and gladly
answer any questions that you may have.
We appreciate your time today and hope that it will be a
valuable learning experience for all.
Thank you!
Region Analysis
Regional Alliances
Regional Alliances & FTA’s with Numerous Countries
Provides Competitive Advantages
NAFTA with Canada, Mexico & United States 1994
Economic Growth
Economic Conditions
Cautious Spending, Slow Financial Growth
Increase in Export Demands & Business Investments
Terrorist Threats
Canadians Planning attacks in other Countries
Bin Ladin Threats due to September 11
3
Canada has regional alliances and free trade agreements
(FTA’s) with more than 10 countries. These free trade
agreements “provide a competitive advantage across a wide
range of sectors” states (Foreign Affairs, Trade, and
Development Canada, 2014). Canada’s Prime Minister
Mulroney implemented the North American Free Trade
Agreement (NAFTA) with Mexico and the United States in
January 1994. “NAFTA has generated economic growth and
rising standards of living for the people of all three member
countries” states (Foreign Affairs, Trade, and Development
Canada, 2014).
Economic conditions in Canada indicate that Canadians have
become more carutious with spending their money. As a result
of this cautious spending it has resulted in slower financial
growth for Canada. Canadians as a whole appear to be holding
on to their funds which have resulted in slow financial growth
for the Canadian economy. One way to improve the economic
growth would be by having an increase in the demand in exports
and business investments which could improve the Canadian
economy.
While Canada has not often been directly targeted for terrorist
attacks it is still vulnerable to terrorism. Examples of terrorism
threats include Canadians being involved in planning terrorist
attacks in other countries, either while residing in or outside
Canada. One other key terrorist threat to Canada came from
“Osama bin Laden, whereas he had indicated that Canada was a
designated target for terrorism because of Canada's role in
Afghanistan following September 11, 2001” states (Canadian
Security Intelligence Service, 2014). Canada as a whole should
continue to be vigilant and take counter terrorism measures to
ensure safety against these terrorism vulnerabilities.
Region Analysis
Physical Environment & Trade
Access to 3 Oceans
Rich Farmland
Political Stability
Cautious Spending, Slow Financial Growth
Increase in Export Demands & Business Investments
Finance Options
Institutional
Social, Health & Environmental
Conditions
Public Healthcare
Proud Citizines
The physical environment has a major effect on trade in Canada.
Because Canada touches three different oceans it is a leader in
the export of fish. These water ways also allow for easier
transportation of goods in and out of Canada. The Great Lakes
and St. Lawrence River create rich and fertile land for farming
in Southern Canada where they share the largest border between
two countries with the United States. This allows for much trade
to occur around the border.
The political stability in Canada is among the best in the world
and the United Nations ranked them one of the best countries in
the world to live. Canada is recognized as having an outstanding
quality of life.
Finance options in Canada can come in many ranges and most
Canadian chartered banks have a highly developed network of
branch operations throughout the country. Since some of them
also have a presence in the U.S. and internationally, these banks
can be a useful liaison for a foreign investor establishing a
business in Canada.
Canada is known for its good social and health conditions of its
citizens. Canadians are proud people and work together to keep
their lands clean and safe. They also receive publicly funded
healthcare which helps the people to stay healthier. Their
environmental conditions are much the same with plentiful
water and rich soils for farming.
4
Country Analysis
Political Stability
Very stable
Partner United States
Low inflation risk
Economic Conditions
Freest economy in North America
Attractive investment destination
Global trade and commerce
Finance Options
Grants
Private Investors
Third-Party Financing
5
Canada is a very stable country. Their most important trading
partner is the United States, followed by China and Mexico.
Canada prefers a large surplus in its trade with the U.S. Canada
faces very little inflation risk due to its maintained monetary
policy.
Canada has been listed as the sixth freest in the 2014 Index.
They show reflecting improvements in investment freedom, the
management of government spending, and monetary freedom.
This country is one of the world’s most attractive investment
destinations due to their transparent and stable business climate.
There are many financing options in the country of Canada.
Depending on the business type there is anything from small
business loans to any type of third party financing such as term
loans on a unsecured or secured basis.
Country Analysis
Physical Environment
Northern & Western Hemisphere
Arctic, Pacific and Atlantic
Key Trade Routes
Great Lakes & St. Lawrence
Social, Health & Environment
Dependent on Social Status
Socio Economic Environment
Highest Health Status in the World
Cultural Considerations
Informal & Relaxed
Innovative, Hard Workers, Education
6
Canada is located in the Northern and Western hemisphere.
From the Atlantic Ocean, The Great Lakes and the St. Lawrence
River are important trade routes for Canada. There are three
coastlines that surround Canada and they include the Arctic
from the North, Pacific from the West, and Atlantic from the
East. Canada’s Great Lakes and St. Lawrence River are
important because they provide a way to import and export
goods. The Northern area of Canada is called the Tundra which,
is very cold and plain. The temperature makes it unsuitable to
live there. Canada’s climate in the southern part of the region is
good for farming.
The social, health and environment in Canada can be dependent
on social status. Canadians with more money are said to live
longer than Canadians with lower incomes. Individual lifestyles
are influenced by the socioeconomic environment, which has a
huge important role in Canada. Although genetics are
considered to be a determinant of health, Social and physical
environments, have strongly moderated their effects. Canada is
considered to have a positive social environment however, only
one in three Canadians will experience a period of going
through poverty in their lifetime. Canada’s health status is
considered to be one of the highest in the world.
Canada’s cultural considerations are known to be informal and
relaxed. Communication in Canada is known to be moderately
indirect. When speaking, Canadians prefer to be at arm’s length,
as personal space is important. Canada is innovative and the
people there display hard work, education and experience as
well-regarded qualities in that country. In Canada, it is very
critical to build rapport when conducting successful business
affairs. Canada has a multicultural character, which offers many
cultural experiences and possibilities.
Organization and Product Analysis
Quaker - Extremely Profitable Company
Acquired by Pepsico in 2001
Leverage use of Quaker Facility in Canada
Quaker Nutritional Bars Expanding Market
Increase in Demand in Canada for Healthy Snack Bars
New Healthy Nutritous Bar
Health Conscious Consumers
Includes Fiber and Omega 3 Fatty Acids
Low price to make product & Profitable Product
7
Quaker is an extremely profitable company that was acquired by
PepsiCo in 2001. Pepsico’s purchase of Quaker opened up a
new segment that PepsiCo did not have.
Quakers cereal, snack, and health foods have expanded the
market and added nutrition bars to their product lineup. In
Canada there is a major production facility that operates and
produces for Quaker. This facility produces multiple products
including Quaker granola bars and now adding healthier
ingredients to its breakfast nutrition bars that are in demand and
the new trend in Canada.
In Canada, since 2005, the snack bars food category has grown
5 percent every year and is estimated to be worth 750 million
dollars (Weeks, 2012). Since 2008 through 2010 the number of
granola bars eaten by consumers a day rose 32 percent (Weeks,
2012). This growth is believed to be due to the health conscious
consumers of Canada and consumers who are always on the go
and don’t have time to sit down for a healthy breakfast.
The new nutritious bar that Quaker is introducing to the health
conscious consumer now has fiber and omega 3 fatty acids. The
price for the nutrition bars is adequate and the prices to create
them are low making the analysis of the product profitable. The
need for a quick nutritious bite allows for Quaker to enter
Canada and have a competitive advantage. This product will not
only thrive in Canada but will expand in other areas of the
region.
References
Beltrame, J. (2013). Bank of Canada: Economy not growing fast
enough. Retrieved January 19, 2014, from
http://www.huffingtonpost.ca/2013/10/01/bank-of-canada-
economy_n_4023848.html
Canadian Security Intelligence Service. (2014). Examples of the
terrorist threat to Canada. Retrieved January 19, 2014, from
https://www.csis-scrs.gc.ca/prrts/trrrsm/xmpls-eng.asp
"Canada physical features natural resources and climate 1011."
Canada physical features natural resources and climate 1011.
N.p., n.d. Web. Retrieved January 18, 2014, from
http://www.slideshare.net/patrick_pitts/canada-physical-
features-natural-resources-and-climate-1011
"Common menu bar links." Cultural Information. N.p., n.d.
Web. Retrieved January 18, 2014, from,
http://www.intercultures.ca/cil-cai/ci-ic-eng.asp?iso=ca
Foreign Affairs, Trade, and Development Canada. (2014).
Opening new markets: trade negotiations and agreements.
Retrieved January 19, 2014, from
http://www.international.gc.ca/trade-agreements-accords-
commerciaux/index.aspx
Foreign Affairs, Trade, and Development Canada. (2014).
Canada’s free trade agreements. Retrieved January 19, 2014,
from http://www.international.gc.ca/trade-agreements-accords-
commerciaux/agr-acc/fta-ale.aspx?lang=eng
"Health Impacts of Social and Economic Conditions:." Health
Impacts of Social and Economic Conditions:. N.p., n.d. Web.
Retrieved January 17, 2014, from
http://www.cpha.ca/uploads/policy/health
Weeks, C. (2012) Granola Bars: A healthy snack or dressed-up
junk food? Retrieved on January 16, 2014 from
http://www.theglobeandmail.com/life/health-and-
fitness/granola-bars-a-healthy-snack-or-dressed--up-junk-
food/article572493/
8
Running Head: LEARNING TEAM COUNTRY RISK 1
13
Running Head: LEARNING TEAM COUNTRY RISK
Learning Team Country Risk and Strategic Planning Analysis
Paper
MGT/448 Global Business Strategies
February 2, 2014
Learning Team Country Risk and Strategic Planning Analysis
Paper
Political, Legal, and Regulatory Risks
“Political risk refers to the risk that a host country will make
political decisions that will prove to have adverse effects on the
multinational’s profits and or goals” states (Phung, 2009).
There are two types of political risk which include macro risk
and micro risk. A macro risk is a type of political
risk companies’ face when doing business in foreign countries
(a macro risk refers to any broad based risk for example an
economic recession or major climate change; this type of risk
can impact businesses in both a domestic setting and/or an
international one). An example of a common macro risk is the
changing value of a country’s currency. A micro risk refers to
“adverse actions that will only affect a certain industrial sector
or business, such as corruption and prejudicial actions against
companies from foreign countries” states (Wisegeek, 2014).
Political risk insurance can be purchased by Quaker (who is
Quaker, what is the business proposal and where is it planning
to operate? These questions should be resolved in an
introduction so that the action discussed can be understood in
the proper context)to assist with protecting themselves from the
potential political risk of doing business in Canada. “Political
risk insurance helps companies ensure banks, lenders or private
investors that they have taken precautions when starting
operations in foreign countries” states (Wisegeek, 2014).
“Legal and regulatory risks refer to the chance that a
government or institutional change will have a negative impact
on an investment, a particular business, or an entire industry”
states (Wisegeek, 2014). Negative effects can occur if new
regulations are proposed or implemented, including profit
losses, operational difficulties, and decreased investor
interest. ( As stated previously, definitions are unnecessary. The
paper should focus on the problems as they relate to the
business proposal and discuss only those actions necessary as
they specifically relate to the business within the proposed
country)
Adhering to regulatory compliance is critical to managing risk
and increasing shareholder worth for Quaker. BDO Compliance
(2014) states “legislators in both Canada and the United States
are demanding increased management accountability through
the establishment of an effective system of internal controls”.
To assist in following legal, regulatory and compliance laws
Quaker can work with specific firms that possess expertise in
these areas to best assist them with meeting these legal
requirements. These firms will perform quality assurance
reviews, perform internal audits, perform corporate government
assessments and perform Sarbanes-Oxley and Bill 198
Readiness assessments to ensure legal and regulatory
compliance is being met.
Exchange and repatriation of funds risks
Exchange and repatriation of funds refers to the process of
converting a foreign currency into the currency of one's own
country. The amount that the investor will yield depends on the
exchange rate between the two currencies being traded at the
settlement time (Investopedia, 2014). This can create a foreign-
exchange risk for Quaker doing business in Canada since they
are an American company. The main risk stems from the
investment's value changing due to changes in currency
exchange rates between the U.S. and Canada. How will Quaker
protect itself from the exchange rate risk. The repatriation risk
usually refers to host country regulations limiting the amount of
profit a company can repatriate to the home country. Is there
such a risk between Canada and the US?
Competitive risk assessment
With Quaker being fairly competitive in the foods market,
adding a healthier and nutritious bar (?) to their product line
will sustain their competiveness. Other food brands such as
Nature Valley thatwho is owned by General Mills or Balance
Bar thatwho makes itstheir own nutrition bars have already
established themselves in the health food market. With this
being said Quaker can use what has worked and what has not for
them and implement a strategy that will keep Quaker’s
competitive risk assessment under control. Our product entering
Canada will keep a competitive advantage due to reality that our
distribution site will be in Canada thus keeping our costs down
that will allow for lower prices for Quaker customers (?).
Taxation and double taxation risks
The double taxation treaty is an international treaty that
establishes the rules for double taxation between two countries
(Hill, 2009). Canada does have a double taxation treaty with the
United States but since the business resides in Canada and
initially Quaker will be only selling to the people of Canada
thereir will only be one tax (You misunderstand, double
taxation refers to a tax on the profits made in Canada and then a
second tax on the profits from the US. The treaty protects the
firm from this.). Moving forward when and if the nutrition bars
goes global and Quaker is selling to other countries such as
Mexico or the United Kingdom, there will be a double taxation.
In any case Quaker has consulted over these rules and has
prepared to indefinitely comply with these terms and conditions.
Market risks (four Ps)
There are four market risks also known as the four Ps which
include products, place, price and promotion. Quaker’s new
product will be their new healthier and nutritional granola bar
which will be sold to throughout their target market of Canada.
When developing Quaker’s new granola bar the design, quality,
customer service, packaging, and after sales service of their
product should be considered.
Place refers to the “distribution, location and methods of getting
the product to the customer” states (Small Biz Connect, 2014).
Place includes the location of the company, distributors, and the
potential use of the internet to sell products directly to
consumers. Price is indicative of the amount of money that
customers will pay in order to purchase Quaker’s new granola
bars. “There are a number of considerations in relation to price
including price setting, discounting, credit and cash purchases
as well as credit collection” states (Small Biz Connection,
2014).
Promotion refers to the act of conveying the benefits and value
of the product to customers. Promotion entails convincing
customers to become customers of your business by “using
methods such as advertising, direct marketing, personal selling
and sales promotion” states (Small Biz Connection, 2014). You
have provided a series of definitions instead of solutions.
Distribution and supply chain risks
The distribution risk is low due to the retail concentration,
channel length, channel exclusivity, and channel quality (Hill,
2009). By residing in Canada the product will have a shorter
time getting to the customer as well as exploring the latest
products of health bars that Quaker has to offer.
The supply chain risk will play a huge part (this is not a unique
challenge given the relationship between Canada and the US
and the high probability that Quaker already has operations in
country.) entering this market in Canada. Quaker has
established themselves within the foods market so there is
already a developed operation in terms of the supply chain.
With the addition of the new ingredients that will be used for
the new nutritious bars Quaker will need to look for a supplier
that will be cost effective. Quaker will create a relationship
with the supplier and aim for continuity moving forward. By
establishing an open and honest relationship with the new
supplier the supply risk can be monitored and ultimately under
control. Quaker is a massive foods company, it should be fairly
straight forward to establish the needed relationships.
Physical and environmental challenges to entering and operating
in target market
When entering a target market in a foreign country there are
always some physical and environmental challenges. This is
true with Quaker entering the Canadian market. Some of these
challenges include the locations of the dense amount of
consumers. (but these locations are well documented) These
locations are based on environmental jobs such as timber
logging, mining, and commercial fishing. Some of the risks
involved are that acid rain around the Ggreat Llakes can cause
fish to die; clear-cutting the forests leaves large areas with no
growth and the population of consumers on the move, and
Canadian Shield mining, which employs around 1.5 million
workers, depleting (Slideshare, 2104). These are all important
risks to consider when entering a target market in Canada (how
are these things a risk to the business proposal, acid rain will
not come down on the product and ruin it during delivery).
Social and cultural risks
In order for Quaker to build and maintain successful business
partnerships, it is prudent for them to be aware of the social,
customs, history and value system that exists within Canada.
“French Canadians frequently use firm handshakes as a means
of professional greeting, with men expecting women to extend
their hand for a handshake first” states (Chakerian, 2010). When
interacting with Canadian business associates it is essential to
steer away from conversations that relate to health care,
religion, politics, economic and foreign policy, and sexual
orientation as both countries tend to have a difference of
opinion on these topics. (are there some serious cultural risk, it
is probably not a good idea to put down a local hockey team
either)
Use of the English language is most common for Canada.
However, French is spoken in Quebec, in some areas of New
Brunswick and in Nova Scotia. Quaker should have resources
that speak both English and French in order to do business in
Canada. Quaker should also produce their marketing content
and materials in both French and English in order to reach all
Canadian potential customers. Being timely for meetings in
Canada is also very important; “even if it is not always
reciprocated in French areas of Canada where attention to
schedules can be less strict” states (Chakerian, 2010).
Cyber or technology
The internet and other networked technologies have
changed many aspects of how businesses operate within Canada.
The ability to store and share data across interconnected
networks has created new efficiencies in sales and marketing,
data access and retrieval, and vendor relations and interaction
(Marsh, 2014). While these benefits of the internet and other
technologies are plentiful, so are the risks created. These risks
include theft or manipulation of private information, computer
viruses that can destroy important data and damage hardware,
and computer fraud. In order for companies to protect
themselves against these risks there are other companies like
Marsh Canada who offer risk management and insurance
solutions to address these complex technological risks (Marsh,
2014).
Define and clarify mission and objectives
Canada is a country rich in every possible resource that makes
the people of its country experience a great living. Its economic
and political standards are quite balanced which makes the
country survive in the worst of conditions and making the
people safe and secure (source? What does this statement have
to do with clarify mission and objectives?).
The country follows a general mentality of coordinating with all
its partners which help the country grow and prosper. The
partners comprise the local government, the dealers, the
contractors, national and military force, manufacturers and the
global partners that help in both internal and external trade and
commerce with focus on health care. (source?)
Canada’s objectives include promoting national security, health
services, social and ethical responsibility, enhance education
and bring in growth through increase in behavioral, economic
and financial characteristics. Promoting globalization through
mutual coordination among the private and the public sectors
are the key objectives. (the objectives you should be discussing
are those of the business. You have no direct knowledge of
Canadian political policy)
SWOTT Analysis of Canada
The major strengths, weakness, threats and competition can be
summarized as follows:
Strengths: Great market for goods and services (why) and
adheres to NAFTA, huge collection of renewable and non-
renewable resources and is one of the strongest economies in
the world with the best in military services (source). Great
educational background, opportunities for coordination and
collaboration of the companies, increasing standards of
workforce and workplace environments are used to bring in
growth to the country. Once again you are making general
statements that have little to do with the potential for the
proposal. Is there a large potential market? How strong is the
competition for this particular product? Is the Quaker brand
recognition particularly strong?
Weaknesses: Failure in bringing global level health standards,
weakness in maritime resources and disadvantages in road and
rail transport. (?)
Threats: External threats from crimes and terrorist attacks from
other countries, division of the Canadian culture into sub
cultures and traditions are often are challenge for each other
and in spite of organizations step to make changes to the
workplace benefits employees often protest and are unsatisfied.
Also due to unemployment and less job opportunities,
newcomers indulge themselves in criminal activities.(please,
what are the potential threats to this business proposal?)
Competition: The major competition it faces is from external
organizations that do business in the Canadian markets and are
becoming challenge for the local companies and with increased
inflation and recession its workforce is migrating to other
countries thatwho provide more benefits and in turn is causing
skilled workforce reduction in the country. What does any of
this have to do with competition to the proposed product?
Make strategy selection
The country has associated itself to NAFTA and this has helped
the country grow its economy through trade and commerce with
other countries and the companies are investing on resources
that are the fuels and source of energy for the future
(relevance?). Moreover they are enhancing on advertising and
promotional activities to make the products popular in both
domestics and international market (what does this general
statement mean?).
Considering the psychographic, demographic, behavioral and
geographic characteristics are of major concern that will help
create a strong influence on the people demands and needs (this
is not a proper sentence and even if it was you have not defined
these conditions and have little direct knowledge of what is
being discussed.). Industries like fashion, beauty, cooking and
other fields that were not popular in the past have started to
gain worldwide influence (source). Export, ethnic and
multicultural strategies and making things more digitalized
through use of internet as the main medium has been the key
points of success (?). Giving opportunities to the individuals,
groups and organizations inside the country and also to outside
companies and firm to bring in growth to the economy are some
of the deployed strategies (the strategies being referred to are
strategies to create success for the business proposal not
strategies for expanding the national economy.).
Select and justify an appropriate mode of entry for your global
product or service
The Selected mode of entry into Canada for our nutrition bars
that is most appropriate would be licensing foreign production.
Licensing involves a firm in one country the right to allow
another firm in another country to use manufacturing,
trademark, processing, know-how, and any other necessary
skills that is provided by the licensor to produce their product
(the definition of licensing is unnecessary). The justification to
license the product with the foreign partner is not only based on
its regional alliance and the free trade agreements (free trade
agreement is not necessary to license production it would be
relevant if you were shipping across the border) in place with a
number of other countries but, also because of the competitive
advantage we would have by licensing in the country (how does
this provide a competitive advantage). Further, licensing our
product to the Canadians would lower our company’s risk as
Quaker production facilities are already in-place in the region
(if Quaker production facilities are already in place why would
you license the product instead of using the company’s own
facilities where product control is much easier?).
Control and evaluation
Control and evaluation of the country (a business can not
control a country) we chose to do business with not only can
affect our product, it can also affect our relationship in that
region. Since we would have our product licensed in Canada,
evaluating and choosing the foreign distribution company that
works best for our needs is important. When evaluating we
should already know the reputation of the distributor. Their
trade and banking references will give us some insight into their
track record and also give us knowledge to any risk factors. As
we evaluate our distributor, we must ensure all facts are
discussed and all specifics answered. Controlling our product in
Canada does not appear to be as difficult as it would be in a
country that did not have the regional structure already in place.
The Canadian work ethic and ways of doing business with other
countries is positive and also reflects in the country’s wealth
and government rating as one of the nation’s healthiest
economies.
Devise contingency plan
Devising a contingency plan is necessary for any business.
Contingency plans give businesses a “plan B” in case of such
factors like natural disasters, distributor shortfalls, illnesses,
any disorder or interruptions that will affect the day-to-day
operations. Our contingency plan will begin with a risk
assessment the will address any critical business operations.
This will help keep any losses at a minimum. As we begin to
identify each risk we may face, we will conduct a risk analysis
to ensure we know what may significantly disrupt the business.
After we have identified all of our risk, we will prioritize. It is
important for us to not over think possible situations that may
never occur, however, prioritizing what will affect the company
most will help us respond more quickly and efficiently in case
any situations occur. Our contingency plan will contain the
following information; what the necessary minimums are to
continue business, what will need to happen immediately once
the contingency plan is active, will any capabilities be reduced
because of the contingency plan, what the employees need to
continue operations, how to manage our risk during and after
the contingency, and finally what we will need to do to
successfully get back to day-to-day operations.
References
BDO Compliance. (2014). Regulatory and compliance.
Retrieved January 26, 2014, from
http://www.bdo.ca/en/Services/Advisory/Risk-
Advisory/Regulatory-and-Compliance/pages/default.aspx
Canadian Social Economy Hub Center Canadian d'economic
sociale, Retrieved from:
http://socialeconomyhub.ca/content/our-mission-and-objectives
Chakerian, P. (2010). Cultural differences to expect when doing
business in Canada. Retrieved January 26, 2014, from
http://voices.yahoo.com/cultural-differences-expect-doing-
business-5814712.html?cat=3
"Chapter 7: Market Entry Strategies." Chapter 7: Market Entry
Strategies. N.p., n.d. Web. 26 Jan. 2014.
<http://www.fao.org/docrep/w5973e/w5973e0b.htm>.
"Contingency Planning." - Developing a Good Plan B. N.p., n.d.
Web. 26 Jan. 2014.
<http://www.mindtools.com/pages/article/newLDR_51.htm>.
"Evaluating Foreign Distributors." Evaluating Foreign
Distributors. N.p., n.d. Web. 26 Jan. 2014. <http://www.going-
global.com/articles/evaluating_foreign_dist
Hill, C. W. (2009). International business. Competing in the
global marketplace (7th ed.). Boston, MA: McGraw-Hill.
Investopedia. (2014). Repatriation. Investopedia.com. Retrieved
January 26, 2014 from
http://www.investopedia.com/terms/r/repatriation.asp
Marsh. (2014). Cyber Risk. Marsh.com. Retrieved January 26,
2014 from
http://canada.marsh.com/RiskIssues/CyberRisk.aspx
Robert Lloyd, (2013). The Canadian Trade Commissioner
Service. Retrieved from:
http://www.international.gc.ca/investors-
investisseurs/advantage-avantage/advantage-avantage.aspx
Phung, A. (2009). Political risk. Retrieved January 26, 2014,
from
http://www.investopedia.com/ask/answers/06/politicalrisk.asp
Slideshare. (2014). Environmental Concerns of Canada.
Slideshare.net. Retrieved January 26, 2014 from
http://www.slideshare.net/HeatherP/canada-environmental-
concerns
Small Biz Connect. (2014). The Four P’s of Marketing.
Retrieved January 26, 2014, from
http://toolkit.smallbiz.nsw.gov.au/part/3/12/56
Strategic Management and Business Policy-Entering the 21st
century Global Society, Thomas L. Wheelen & J. David Hunger,
Addison Wesley, 1998.
Wisegeek. (2014). What is a macro risk? Retrieved January 26,
2014, from http://www.wisegeek.com/what-is-a-macro-risk.htm
Wisegeek. (2014). What is regulatory risk? Retrieved January
26, 2014, from http://www.wisegeek.com/what-is-regulatory-
risk.htm
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Running Head COMPREHENSIVE OUTLINE12Running Head COMPREH.docx

  • 1. Running Head: COMPREHENSIVE OUTLINE 1 2 Running Head: COMPREHENSIVE OUTLINE Learning Team Comprehensive Outline MGT/448 Global Business Strategies Learning Team Comprehensive Outline Introduction Learning Team C has selected nutritional granola bars and the country Canada to enter into a global business venture with. This outline will document pertinent regional, country, and product analysis information which justifies why this new global business venture would be a sound idea for Team C to
  • 2. enter into. Region Analysis Canada has regional alliances with numerous countries and has free trade agreements in place with more than 10 countries. These free trade agreements “provide a competitive advantage across a wide range of sectors” states (Foreign Affairs, Trade, and Development Canada, 2014). “Under an FTA, a range of Canadian goods and services benefit from the reduction or elimination of tariff and non-tariff barriers to trade, such as quotas or technical barriers” states (Foreign Affairs, trade, and Development Canada, 2014). Canada’s Prime Minister Mulroney signed and implemented the North American Free Trade Agreement (NAFTA) with Mexico and the United States in January 1994. “NAFTA has generated economic growth and rising standards of living for the people of all three member countries” states (Foreign Affairs, Trade, and Development Canada, 2014). Canada has many physical environmental features that effect trade. Canada has the largest border with any other country sharing this with the United States which allows for more trade of farming goods near the borders. Canada also links to three oceans: Artic, Pacific, and Atlantic. This allows for Canada to be a leader in exporting fish (Slideshare.com, 2014). The Great Lakes and St. Lawrence River help to create fertile land for farming in Southern Canada. Here they produce and export canola, wheat, and grain across the globe (Slideshare.com, 2014). Political stability can be considered as a state of peace that is experienced in a country. This can be caused in large part to the activities of the government keeping in mind the best interests of the people. Thanks to Canada’s political stability, the country can be considered a natural playground. The United Nations ranked Canada one of the best countries in the world in which to live and Canada has also been globally recognized for its outstanding quality of life. It is also known for having a stable, progressive political environment and one of the
  • 3. healthiest economies in the world. Economic conditions in Canada in 2013 throughout the current year 2014 indicate that Canadians have become more careful with their spending habits. Canadians as a whole appear to be holding on to their funds which have resulted in slow financial growth for the Canadian economy. One way to improve the economic growth would be by having an increase in the demand in exports and business investments which could improve the Canadian economy. The Central Bank in Canada believes “that a revival in the U.S. economy will eventually lead to an increase in demand for Canadian products, but due to competitive pressures and continuing weak demand, it is taking longer than expected” states (Beltrame, 2013). There is a wide range of financing options available in Canada for new and expanding businesses. These options can range from shareholder infusions of capital to sophisticated institutional financing. Most Canadian chartered banks have a highly developed network of branch operations throughout the country. Since some of them also have a presence in the U.S. and internationally, these banks can be a useful liaison for a foreign investor establishing a business in Canada (Osler, 2009). Canada is known for its good social and health conditions of its citizens. Canadians are proud people and work together to keep their lands clean and safe. They also receive publicly funded healthcare which helps the people to stay healthier. Their environmental conditions are much the same with plentiful water and rich soils for farming. While Canada has not often been directly targeted for terrorist attacks it is still nonetheless susceptible and vulnerable to terrorism. Examples of terrorism threats to Canada include graduates of terrorist training camps in countries such as Afghanistan are living in Canada. Other threats include Canadians being involved in planning terrorist attacks in other countries, either while residing in or outside Canada. One other key terrorist threat to Canada came from “Osama bin Laden,
  • 4. whereas he had indicated that Canada was a designated target for terrorism because of Canada's role in Afghanistan following September 11, 2001” states (Canadian Security Intelligence Service, 2014). Canada as a whole should continue to be vigilant and take counter terrorism measures to ensure safety against these terrorism vulnerabilities. Country Analysis Canada is politically very stable by any standards. In relation to any other jurisdiction its budget deficit is moderate. They have a small balance of payments deficit as well. Their most important trading partner is the United States, followed by China and Mexico. A large surplus in its trade with the U.S. is what Canada prefers. Since the country has maintained a sound monetary policy, Canada faces very little inflation risk. Volatility seems considerably less in Canada than in the U.S. Over the past four years of financial crises, Canada has had the smallest downturn of any of the G7 countries” states (Trapunski, 2014). Canada’s economic freedom score is 80.2, making its economy the 6th freest in the 2014 Index. Its overall score is 0.8 point better than last year, reflecting improvements in investment freedom, the management of government spending, and monetary freedom. Canada continues to be the freest economy in the North America region (The Heritage Foundation, 2014). Canada is one of the world’s most attractive investment destinations due to their transparent and stable business climate. With the economic conditions, team c is well aware that Canada is the best choice for their product. Global trade and commerce is greatly accepted. The financial system has remained stable, and cautious and wise regulations have allowed banks to survive the worldwide financial confusion with little disruption. Many new businesses are financed through their owner’s pockets while others may need an infusion of funds from additional sources in order to start up. Canada offers small business loans for those not self-funding or using the help of their family or friends. These small business loans can be one of
  • 5. the best choices simply because the federal government sponsors programs which can make funding the start of a business a priority. Other financing options include seeking private investors and searching for grants or subsidies provided by the Canadian federal and provincial governments. The physical environment in Canada is located in the Northern and Western hemisphere. From the Atlantic Ocean, The Great Lakes and the St. Lawrence River are important trade routes. There are three coastlines that surround Canada and they the Arctic from the North, Pacific from the West, and Atlantic from the East. In Canada’s East they have a large rocky area. The Rocky Mountains are located in Canada’s West. Canada’s Great Lakes and St. Lawrence River are import because they provide a way to import and export goods. The Northern area of Canada is called the Tundra which, is very cold and plain. The temperature makes it unsuitable to live there. Canada’s climate in the southern part of the region is good for farming. The social, health and environment in Canada can be dependent on social status. Canadians with more money are said to live longer than Canadians with lower incomes. Individual lifestyles are influenced by the socioeconomic environment, which has a huge important role in Canada. Although genetics are considered to be a determinant of health, Social and physical environments, have strongly moderated their effects. Canada is considered to have a positive social environment however, only one in three Canadians will experience a period of going through poverty in their lifetime. Canada’s health status is considered to be one of the highest in the world. Canada’s cultural considerations are known to be informal and relaxed. Communication in Canada is known to be moderately indirect. When speaking, Canadians prefer to be at arm’s length, as personal space is important. Canada is innovative and the people there display hard work, education and experience as well-regarded qualities in that country. In Canada, it is very critical to build rapport when conducting successful business affairs. Canada has a multicultural character, which offers many
  • 6. cultural experiences and possibilities. Organization and Product Analysis Quaker is an extremely profitable company that was acquired by PepsiCo in 2001. The PepsiCo organization wanted to take a stab in the isotonic sports beverage market and add Gatorade to its lineup of beverages. By this acquisition Quaker opened up a new segment that PepsiCo did not have. Quakers cereal, snack, and health foods have expanded the market and added nutrition bars to its lineup. In Canada there is a major production facility that operates and produces for Quaker. This facility produces multiple products including Quaker granola bars and now adding healthier ingredients to its breakfast nutrition bars that are in demand and the new trend in Canada. In Canada, since 2005, the snack bars food category has grown 5 percent every year and is estimated to be worth 750 million dollars (Weeks, 2012). Since 2008 through 2010 the number of granola bars eaten by consumers a day rose 32 percent (Weeks, 2012). This growth is believed to be due to the health conscious consumers of Canada and consumers who are always on the go and don’t have time to sit down for a healthy breakfast. The new nutritious bar that Quaker is introducing to the health conscious consumer now has fiber and omega 3 fatty acids. The price for the nutrition bars is adequate and the prices to create them are low making the analysis of the product profitable. The need for a quick nutritious bite allows for Quaker to enter Canada and have a competitive advantage. This product will not only thrive in Canada but will expand in other areas of the region. References Beltrame, J. (2013). Bank of Canada: Economy not growing fast enough. Retrieved January 19, 2014, from http://www.huffingtonpost.ca/2013/10/01/bank-of-canada- economy_n_4023848.html
  • 7. Canadian Security Intelligence Service. (2014). Examples of the terrorist threat to Canada. Retrieved January 19, 2014, from https://www.csis-scrs.gc.ca/prrts/trrrsm/xmpls-eng.asp "Canada physical features natural resources and climate 1011." Canada physical features natural resources and climate 1011. N.p., n.d. Web. Retrieved January 18, 2014, from http://www.slideshare.net/patrick_pitts/canada-physical- features-natural-resources-and-climate-1011 "Common menu bar links." Cultural Information. N.p., n.d. Web. Retrieved January 18, 2014, from, http://www.intercultures.ca/cil-cai/ci-ic-eng.asp?iso=ca Foreign Affairs, Trade, and Development Canada. (2014). Opening new markets: trade negotiations and agreements. Retrieved January 19, 2014, from http://www.international.gc.ca/trade-agreements-accords- commerciaux/index.aspx Foreign Affairs, Trade, and Development Canada. (2014). Canada’s free trade agreements. Retrieved January 19, 2014, from http://www.international.gc.ca/trade-agreements-accords- commerciaux/agr-acc/fta-ale.aspx?lang=eng "Health Impacts of Social and Economic Conditions:." Health Impacts of Social and Economic Conditions:. N.p., n.d. Web. Retrieved January 17, 2014, from http://www.cpha.ca/uploads/policy/health Osler, Hoskin & Harcourt. (March, 2009). Financing a Foreign Business Operating in Canada. Osler.com. Retrieved January 19, 2014, from http://www.osler.com/newsresources/details.aspx?id=2415&lang type=4105 The Heritage Foundation. (2014). 2014 Index of Economic Freedom. Retrieved January 19, 2014, from http://www.heritage.org/index/country/canada Trapunski, E. (2014). The Globe and Mail. Retrieved January 19, 2014, from http://www.theglobeandmail.com/globe-investor/investor- community/trading-
  • 8. shots/seven-reasons-to-invest-in-canada-now/article9470686/ Weeks, C. (2012) Granola Bars: A healthy snack or dressed-up junk food? Retrieved on January 16, 2014 from http://www.theglobeandmail.com/life/health-and- fitness/granola-bars-a-healthy-snack-or-dressed--up-junk- food/article572493/ Learning Team Comprehensive Outline Learning Team C MGT/448 Global Business Strategies January 20, 2014
  • 9. 1 Hello. During the next 10-minutes we will be providing you with an interesting presentation that focuses on why Learning Team C has decided upon entering into a global venture with Canada, the company Quaker in an effort to sell nutritional granola bars. Agenda Introduction Region Analysis Regional Alliances, Economic Conditions, Terrorist Threats Physical Environment, Political Stability Finance Options, Health Country Analysis Physical Environment, Social, Health Environment Conditions, Cultural Considerations Political Stability, Economic Conditions Finance Options Organization and Product Analysis Organization Description Products Needs Assessement & Description References
  • 10. 2 Learning Team C has selected nutritional granola bars and the country Canada to enter into a global business venture with. This presentation will document pertinent regional, country, and product analysis information which justifies why this new global business venture would be a sound idea for Team C to enter into. We will then conclude our presentation and gladly answer any questions that you may have. We appreciate your time today and hope that it will be a valuable learning experience for all. Thank you! Region Analysis Regional Alliances Regional Alliances & FTA’s with Numerous Countries Provides Competitive Advantages
  • 11. NAFTA with Canada, Mexico & United States 1994 Economic Growth Economic Conditions Cautious Spending, Slow Financial Growth Increase in Export Demands & Business Investments Terrorist Threats Canadians Planning attacks in other Countries Bin Ladin Threats due to September 11 3 Canada has regional alliances and free trade agreements (FTA’s) with more than 10 countries. These free trade agreements “provide a competitive advantage across a wide range of sectors” states (Foreign Affairs, Trade, and Development Canada, 2014). Canada’s Prime Minister Mulroney implemented the North American Free Trade Agreement (NAFTA) with Mexico and the United States in January 1994. “NAFTA has generated economic growth and rising standards of living for the people of all three member countries” states (Foreign Affairs, Trade, and Development
  • 12. Canada, 2014). Economic conditions in Canada indicate that Canadians have become more carutious with spending their money. As a result of this cautious spending it has resulted in slower financial growth for Canada. Canadians as a whole appear to be holding on to their funds which have resulted in slow financial growth for the Canadian economy. One way to improve the economic growth would be by having an increase in the demand in exports and business investments which could improve the Canadian economy. While Canada has not often been directly targeted for terrorist attacks it is still vulnerable to terrorism. Examples of terrorism threats include Canadians being involved in planning terrorist attacks in other countries, either while residing in or outside Canada. One other key terrorist threat to Canada came from “Osama bin Laden, whereas he had indicated that Canada was a designated target for terrorism because of Canada's role in Afghanistan following September 11, 2001” states (Canadian Security Intelligence Service, 2014). Canada as a whole should continue to be vigilant and take counter terrorism measures to ensure safety against these terrorism vulnerabilities. Region Analysis Physical Environment & Trade Access to 3 Oceans Rich Farmland Political Stability Cautious Spending, Slow Financial Growth Increase in Export Demands & Business Investments
  • 13. Finance Options Institutional Social, Health & Environmental Conditions Public Healthcare Proud Citizines The physical environment has a major effect on trade in Canada. Because Canada touches three different oceans it is a leader in the export of fish. These water ways also allow for easier transportation of goods in and out of Canada. The Great Lakes and St. Lawrence River create rich and fertile land for farming in Southern Canada where they share the largest border between two countries with the United States. This allows for much trade to occur around the border. The political stability in Canada is among the best in the world and the United Nations ranked them one of the best countries in the world to live. Canada is recognized as having an outstanding quality of life. Finance options in Canada can come in many ranges and most Canadian chartered banks have a highly developed network of branch operations throughout the country. Since some of them
  • 14. also have a presence in the U.S. and internationally, these banks can be a useful liaison for a foreign investor establishing a business in Canada. Canada is known for its good social and health conditions of its citizens. Canadians are proud people and work together to keep their lands clean and safe. They also receive publicly funded healthcare which helps the people to stay healthier. Their environmental conditions are much the same with plentiful water and rich soils for farming. 4 Country Analysis Political Stability Very stable Partner United States Low inflation risk Economic Conditions Freest economy in North America Attractive investment destination Global trade and commerce Finance Options Grants Private Investors Third-Party Financing
  • 15. 5 Canada is a very stable country. Their most important trading partner is the United States, followed by China and Mexico. Canada prefers a large surplus in its trade with the U.S. Canada faces very little inflation risk due to its maintained monetary policy. Canada has been listed as the sixth freest in the 2014 Index. They show reflecting improvements in investment freedom, the management of government spending, and monetary freedom. This country is one of the world’s most attractive investment destinations due to their transparent and stable business climate. There are many financing options in the country of Canada. Depending on the business type there is anything from small business loans to any type of third party financing such as term loans on a unsecured or secured basis. Country Analysis Physical Environment Northern & Western Hemisphere Arctic, Pacific and Atlantic Key Trade Routes Great Lakes & St. Lawrence
  • 16. Social, Health & Environment Dependent on Social Status Socio Economic Environment Highest Health Status in the World Cultural Considerations Informal & Relaxed Innovative, Hard Workers, Education 6 Canada is located in the Northern and Western hemisphere. From the Atlantic Ocean, The Great Lakes and the St. Lawrence River are important trade routes for Canada. There are three coastlines that surround Canada and they include the Arctic from the North, Pacific from the West, and Atlantic from the East. Canada’s Great Lakes and St. Lawrence River are important because they provide a way to import and export goods. The Northern area of Canada is called the Tundra which, is very cold and plain. The temperature makes it unsuitable to live there. Canada’s climate in the southern part of the region is good for farming. The social, health and environment in Canada can be dependent on social status. Canadians with more money are said to live
  • 17. longer than Canadians with lower incomes. Individual lifestyles are influenced by the socioeconomic environment, which has a huge important role in Canada. Although genetics are considered to be a determinant of health, Social and physical environments, have strongly moderated their effects. Canada is considered to have a positive social environment however, only one in three Canadians will experience a period of going through poverty in their lifetime. Canada’s health status is considered to be one of the highest in the world. Canada’s cultural considerations are known to be informal and relaxed. Communication in Canada is known to be moderately indirect. When speaking, Canadians prefer to be at arm’s length, as personal space is important. Canada is innovative and the people there display hard work, education and experience as well-regarded qualities in that country. In Canada, it is very critical to build rapport when conducting successful business affairs. Canada has a multicultural character, which offers many cultural experiences and possibilities. Organization and Product Analysis Quaker - Extremely Profitable Company Acquired by Pepsico in 2001 Leverage use of Quaker Facility in Canada Quaker Nutritional Bars Expanding Market Increase in Demand in Canada for Healthy Snack Bars New Healthy Nutritous Bar Health Conscious Consumers Includes Fiber and Omega 3 Fatty Acids Low price to make product & Profitable Product
  • 18. 7 Quaker is an extremely profitable company that was acquired by PepsiCo in 2001. Pepsico’s purchase of Quaker opened up a new segment that PepsiCo did not have. Quakers cereal, snack, and health foods have expanded the market and added nutrition bars to their product lineup. In Canada there is a major production facility that operates and produces for Quaker. This facility produces multiple products including Quaker granola bars and now adding healthier ingredients to its breakfast nutrition bars that are in demand and the new trend in Canada. In Canada, since 2005, the snack bars food category has grown 5 percent every year and is estimated to be worth 750 million dollars (Weeks, 2012). Since 2008 through 2010 the number of granola bars eaten by consumers a day rose 32 percent (Weeks, 2012). This growth is believed to be due to the health conscious consumers of Canada and consumers who are always on the go and don’t have time to sit down for a healthy breakfast. The new nutritious bar that Quaker is introducing to the health conscious consumer now has fiber and omega 3 fatty acids. The price for the nutrition bars is adequate and the prices to create
  • 19. them are low making the analysis of the product profitable. The need for a quick nutritious bite allows for Quaker to enter Canada and have a competitive advantage. This product will not only thrive in Canada but will expand in other areas of the region. References Beltrame, J. (2013). Bank of Canada: Economy not growing fast enough. Retrieved January 19, 2014, from http://www.huffingtonpost.ca/2013/10/01/bank-of-canada- economy_n_4023848.html Canadian Security Intelligence Service. (2014). Examples of the terrorist threat to Canada. Retrieved January 19, 2014, from https://www.csis-scrs.gc.ca/prrts/trrrsm/xmpls-eng.asp
  • 20. "Canada physical features natural resources and climate 1011." Canada physical features natural resources and climate 1011. N.p., n.d. Web. Retrieved January 18, 2014, from http://www.slideshare.net/patrick_pitts/canada-physical- features-natural-resources-and-climate-1011 "Common menu bar links." Cultural Information. N.p., n.d. Web. Retrieved January 18, 2014, from, http://www.intercultures.ca/cil-cai/ci-ic-eng.asp?iso=ca Foreign Affairs, Trade, and Development Canada. (2014). Opening new markets: trade negotiations and agreements. Retrieved January 19, 2014, from http://www.international.gc.ca/trade-agreements-accords- commerciaux/index.aspx Foreign Affairs, Trade, and Development Canada. (2014). Canada’s free trade agreements. Retrieved January 19, 2014, from http://www.international.gc.ca/trade-agreements-accords- commerciaux/agr-acc/fta-ale.aspx?lang=eng "Health Impacts of Social and Economic Conditions:." Health Impacts of Social and Economic Conditions:. N.p., n.d. Web. Retrieved January 17, 2014, from http://www.cpha.ca/uploads/policy/health Weeks, C. (2012) Granola Bars: A healthy snack or dressed-up junk food? Retrieved on January 16, 2014 from http://www.theglobeandmail.com/life/health-and- fitness/granola-bars-a-healthy-snack-or-dressed--up-junk- food/article572493/
  • 21. 8 Running Head: LEARNING TEAM COUNTRY RISK 1 13 Running Head: LEARNING TEAM COUNTRY RISK Learning Team Country Risk and Strategic Planning Analysis Paper MGT/448 Global Business Strategies February 2, 2014
  • 22. Learning Team Country Risk and Strategic Planning Analysis Paper Political, Legal, and Regulatory Risks “Political risk refers to the risk that a host country will make political decisions that will prove to have adverse effects on the multinational’s profits and or goals” states (Phung, 2009). There are two types of political risk which include macro risk and micro risk. A macro risk is a type of political risk companies’ face when doing business in foreign countries (a macro risk refers to any broad based risk for example an economic recession or major climate change; this type of risk can impact businesses in both a domestic setting and/or an international one). An example of a common macro risk is the changing value of a country’s currency. A micro risk refers to “adverse actions that will only affect a certain industrial sector or business, such as corruption and prejudicial actions against companies from foreign countries” states (Wisegeek, 2014). Political risk insurance can be purchased by Quaker (who is Quaker, what is the business proposal and where is it planning to operate? These questions should be resolved in an introduction so that the action discussed can be understood in the proper context)to assist with protecting themselves from the potential political risk of doing business in Canada. “Political risk insurance helps companies ensure banks, lenders or private investors that they have taken precautions when starting operations in foreign countries” states (Wisegeek, 2014). “Legal and regulatory risks refer to the chance that a government or institutional change will have a negative impact on an investment, a particular business, or an entire industry” states (Wisegeek, 2014). Negative effects can occur if new regulations are proposed or implemented, including profit losses, operational difficulties, and decreased investor interest. ( As stated previously, definitions are unnecessary. The paper should focus on the problems as they relate to the business proposal and discuss only those actions necessary as
  • 23. they specifically relate to the business within the proposed country) Adhering to regulatory compliance is critical to managing risk and increasing shareholder worth for Quaker. BDO Compliance (2014) states “legislators in both Canada and the United States are demanding increased management accountability through the establishment of an effective system of internal controls”. To assist in following legal, regulatory and compliance laws Quaker can work with specific firms that possess expertise in these areas to best assist them with meeting these legal requirements. These firms will perform quality assurance reviews, perform internal audits, perform corporate government assessments and perform Sarbanes-Oxley and Bill 198 Readiness assessments to ensure legal and regulatory compliance is being met. Exchange and repatriation of funds risks Exchange and repatriation of funds refers to the process of converting a foreign currency into the currency of one's own country. The amount that the investor will yield depends on the exchange rate between the two currencies being traded at the settlement time (Investopedia, 2014). This can create a foreign- exchange risk for Quaker doing business in Canada since they are an American company. The main risk stems from the investment's value changing due to changes in currency exchange rates between the U.S. and Canada. How will Quaker protect itself from the exchange rate risk. The repatriation risk usually refers to host country regulations limiting the amount of profit a company can repatriate to the home country. Is there such a risk between Canada and the US? Competitive risk assessment With Quaker being fairly competitive in the foods market, adding a healthier and nutritious bar (?) to their product line will sustain their competiveness. Other food brands such as Nature Valley thatwho is owned by General Mills or Balance Bar thatwho makes itstheir own nutrition bars have already established themselves in the health food market. With this
  • 24. being said Quaker can use what has worked and what has not for them and implement a strategy that will keep Quaker’s competitive risk assessment under control. Our product entering Canada will keep a competitive advantage due to reality that our distribution site will be in Canada thus keeping our costs down that will allow for lower prices for Quaker customers (?). Taxation and double taxation risks The double taxation treaty is an international treaty that establishes the rules for double taxation between two countries (Hill, 2009). Canada does have a double taxation treaty with the United States but since the business resides in Canada and initially Quaker will be only selling to the people of Canada thereir will only be one tax (You misunderstand, double taxation refers to a tax on the profits made in Canada and then a second tax on the profits from the US. The treaty protects the firm from this.). Moving forward when and if the nutrition bars goes global and Quaker is selling to other countries such as Mexico or the United Kingdom, there will be a double taxation. In any case Quaker has consulted over these rules and has prepared to indefinitely comply with these terms and conditions. Market risks (four Ps) There are four market risks also known as the four Ps which include products, place, price and promotion. Quaker’s new product will be their new healthier and nutritional granola bar which will be sold to throughout their target market of Canada. When developing Quaker’s new granola bar the design, quality, customer service, packaging, and after sales service of their product should be considered. Place refers to the “distribution, location and methods of getting the product to the customer” states (Small Biz Connect, 2014). Place includes the location of the company, distributors, and the potential use of the internet to sell products directly to consumers. Price is indicative of the amount of money that customers will pay in order to purchase Quaker’s new granola bars. “There are a number of considerations in relation to price including price setting, discounting, credit and cash purchases
  • 25. as well as credit collection” states (Small Biz Connection, 2014). Promotion refers to the act of conveying the benefits and value of the product to customers. Promotion entails convincing customers to become customers of your business by “using methods such as advertising, direct marketing, personal selling and sales promotion” states (Small Biz Connection, 2014). You have provided a series of definitions instead of solutions. Distribution and supply chain risks The distribution risk is low due to the retail concentration, channel length, channel exclusivity, and channel quality (Hill, 2009). By residing in Canada the product will have a shorter time getting to the customer as well as exploring the latest products of health bars that Quaker has to offer. The supply chain risk will play a huge part (this is not a unique challenge given the relationship between Canada and the US and the high probability that Quaker already has operations in country.) entering this market in Canada. Quaker has established themselves within the foods market so there is already a developed operation in terms of the supply chain. With the addition of the new ingredients that will be used for the new nutritious bars Quaker will need to look for a supplier that will be cost effective. Quaker will create a relationship with the supplier and aim for continuity moving forward. By establishing an open and honest relationship with the new supplier the supply risk can be monitored and ultimately under control. Quaker is a massive foods company, it should be fairly straight forward to establish the needed relationships. Physical and environmental challenges to entering and operating in target market When entering a target market in a foreign country there are always some physical and environmental challenges. This is true with Quaker entering the Canadian market. Some of these challenges include the locations of the dense amount of consumers. (but these locations are well documented) These locations are based on environmental jobs such as timber
  • 26. logging, mining, and commercial fishing. Some of the risks involved are that acid rain around the Ggreat Llakes can cause fish to die; clear-cutting the forests leaves large areas with no growth and the population of consumers on the move, and Canadian Shield mining, which employs around 1.5 million workers, depleting (Slideshare, 2104). These are all important risks to consider when entering a target market in Canada (how are these things a risk to the business proposal, acid rain will not come down on the product and ruin it during delivery). Social and cultural risks In order for Quaker to build and maintain successful business partnerships, it is prudent for them to be aware of the social, customs, history and value system that exists within Canada. “French Canadians frequently use firm handshakes as a means of professional greeting, with men expecting women to extend their hand for a handshake first” states (Chakerian, 2010). When interacting with Canadian business associates it is essential to steer away from conversations that relate to health care, religion, politics, economic and foreign policy, and sexual orientation as both countries tend to have a difference of opinion on these topics. (are there some serious cultural risk, it is probably not a good idea to put down a local hockey team either) Use of the English language is most common for Canada. However, French is spoken in Quebec, in some areas of New Brunswick and in Nova Scotia. Quaker should have resources that speak both English and French in order to do business in Canada. Quaker should also produce their marketing content and materials in both French and English in order to reach all Canadian potential customers. Being timely for meetings in Canada is also very important; “even if it is not always reciprocated in French areas of Canada where attention to schedules can be less strict” states (Chakerian, 2010). Cyber or technology The internet and other networked technologies have changed many aspects of how businesses operate within Canada.
  • 27. The ability to store and share data across interconnected networks has created new efficiencies in sales and marketing, data access and retrieval, and vendor relations and interaction (Marsh, 2014). While these benefits of the internet and other technologies are plentiful, so are the risks created. These risks include theft or manipulation of private information, computer viruses that can destroy important data and damage hardware, and computer fraud. In order for companies to protect themselves against these risks there are other companies like Marsh Canada who offer risk management and insurance solutions to address these complex technological risks (Marsh, 2014). Define and clarify mission and objectives Canada is a country rich in every possible resource that makes the people of its country experience a great living. Its economic and political standards are quite balanced which makes the country survive in the worst of conditions and making the people safe and secure (source? What does this statement have to do with clarify mission and objectives?). The country follows a general mentality of coordinating with all its partners which help the country grow and prosper. The partners comprise the local government, the dealers, the contractors, national and military force, manufacturers and the global partners that help in both internal and external trade and commerce with focus on health care. (source?) Canada’s objectives include promoting national security, health services, social and ethical responsibility, enhance education and bring in growth through increase in behavioral, economic and financial characteristics. Promoting globalization through mutual coordination among the private and the public sectors are the key objectives. (the objectives you should be discussing are those of the business. You have no direct knowledge of Canadian political policy) SWOTT Analysis of Canada The major strengths, weakness, threats and competition can be summarized as follows:
  • 28. Strengths: Great market for goods and services (why) and adheres to NAFTA, huge collection of renewable and non- renewable resources and is one of the strongest economies in the world with the best in military services (source). Great educational background, opportunities for coordination and collaboration of the companies, increasing standards of workforce and workplace environments are used to bring in growth to the country. Once again you are making general statements that have little to do with the potential for the proposal. Is there a large potential market? How strong is the competition for this particular product? Is the Quaker brand recognition particularly strong? Weaknesses: Failure in bringing global level health standards, weakness in maritime resources and disadvantages in road and rail transport. (?) Threats: External threats from crimes and terrorist attacks from other countries, division of the Canadian culture into sub cultures and traditions are often are challenge for each other and in spite of organizations step to make changes to the workplace benefits employees often protest and are unsatisfied. Also due to unemployment and less job opportunities, newcomers indulge themselves in criminal activities.(please, what are the potential threats to this business proposal?) Competition: The major competition it faces is from external organizations that do business in the Canadian markets and are becoming challenge for the local companies and with increased inflation and recession its workforce is migrating to other countries thatwho provide more benefits and in turn is causing skilled workforce reduction in the country. What does any of this have to do with competition to the proposed product? Make strategy selection The country has associated itself to NAFTA and this has helped the country grow its economy through trade and commerce with other countries and the companies are investing on resources that are the fuels and source of energy for the future (relevance?). Moreover they are enhancing on advertising and
  • 29. promotional activities to make the products popular in both domestics and international market (what does this general statement mean?). Considering the psychographic, demographic, behavioral and geographic characteristics are of major concern that will help create a strong influence on the people demands and needs (this is not a proper sentence and even if it was you have not defined these conditions and have little direct knowledge of what is being discussed.). Industries like fashion, beauty, cooking and other fields that were not popular in the past have started to gain worldwide influence (source). Export, ethnic and multicultural strategies and making things more digitalized through use of internet as the main medium has been the key points of success (?). Giving opportunities to the individuals, groups and organizations inside the country and also to outside companies and firm to bring in growth to the economy are some of the deployed strategies (the strategies being referred to are strategies to create success for the business proposal not strategies for expanding the national economy.). Select and justify an appropriate mode of entry for your global product or service The Selected mode of entry into Canada for our nutrition bars that is most appropriate would be licensing foreign production. Licensing involves a firm in one country the right to allow another firm in another country to use manufacturing, trademark, processing, know-how, and any other necessary skills that is provided by the licensor to produce their product (the definition of licensing is unnecessary). The justification to license the product with the foreign partner is not only based on its regional alliance and the free trade agreements (free trade agreement is not necessary to license production it would be relevant if you were shipping across the border) in place with a number of other countries but, also because of the competitive advantage we would have by licensing in the country (how does this provide a competitive advantage). Further, licensing our product to the Canadians would lower our company’s risk as
  • 30. Quaker production facilities are already in-place in the region (if Quaker production facilities are already in place why would you license the product instead of using the company’s own facilities where product control is much easier?). Control and evaluation Control and evaluation of the country (a business can not control a country) we chose to do business with not only can affect our product, it can also affect our relationship in that region. Since we would have our product licensed in Canada, evaluating and choosing the foreign distribution company that works best for our needs is important. When evaluating we should already know the reputation of the distributor. Their trade and banking references will give us some insight into their track record and also give us knowledge to any risk factors. As we evaluate our distributor, we must ensure all facts are discussed and all specifics answered. Controlling our product in Canada does not appear to be as difficult as it would be in a country that did not have the regional structure already in place. The Canadian work ethic and ways of doing business with other countries is positive and also reflects in the country’s wealth and government rating as one of the nation’s healthiest economies. Devise contingency plan Devising a contingency plan is necessary for any business. Contingency plans give businesses a “plan B” in case of such factors like natural disasters, distributor shortfalls, illnesses, any disorder or interruptions that will affect the day-to-day operations. Our contingency plan will begin with a risk assessment the will address any critical business operations. This will help keep any losses at a minimum. As we begin to identify each risk we may face, we will conduct a risk analysis to ensure we know what may significantly disrupt the business. After we have identified all of our risk, we will prioritize. It is important for us to not over think possible situations that may never occur, however, prioritizing what will affect the company most will help us respond more quickly and efficiently in case
  • 31. any situations occur. Our contingency plan will contain the following information; what the necessary minimums are to continue business, what will need to happen immediately once the contingency plan is active, will any capabilities be reduced because of the contingency plan, what the employees need to continue operations, how to manage our risk during and after the contingency, and finally what we will need to do to successfully get back to day-to-day operations. References BDO Compliance. (2014). Regulatory and compliance. Retrieved January 26, 2014, from http://www.bdo.ca/en/Services/Advisory/Risk- Advisory/Regulatory-and-Compliance/pages/default.aspx Canadian Social Economy Hub Center Canadian d'economic sociale, Retrieved from: http://socialeconomyhub.ca/content/our-mission-and-objectives Chakerian, P. (2010). Cultural differences to expect when doing business in Canada. Retrieved January 26, 2014, from http://voices.yahoo.com/cultural-differences-expect-doing- business-5814712.html?cat=3 "Chapter 7: Market Entry Strategies." Chapter 7: Market Entry Strategies. N.p., n.d. Web. 26 Jan. 2014. <http://www.fao.org/docrep/w5973e/w5973e0b.htm>. "Contingency Planning." - Developing a Good Plan B. N.p., n.d. Web. 26 Jan. 2014. <http://www.mindtools.com/pages/article/newLDR_51.htm>. "Evaluating Foreign Distributors." Evaluating Foreign Distributors. N.p., n.d. Web. 26 Jan. 2014. <http://www.going- global.com/articles/evaluating_foreign_dist Hill, C. W. (2009). International business. Competing in the global marketplace (7th ed.). Boston, MA: McGraw-Hill. Investopedia. (2014). Repatriation. Investopedia.com. Retrieved January 26, 2014 from http://www.investopedia.com/terms/r/repatriation.asp
  • 32. Marsh. (2014). Cyber Risk. Marsh.com. Retrieved January 26, 2014 from http://canada.marsh.com/RiskIssues/CyberRisk.aspx Robert Lloyd, (2013). The Canadian Trade Commissioner Service. Retrieved from: http://www.international.gc.ca/investors- investisseurs/advantage-avantage/advantage-avantage.aspx Phung, A. (2009). Political risk. Retrieved January 26, 2014, from http://www.investopedia.com/ask/answers/06/politicalrisk.asp Slideshare. (2014). Environmental Concerns of Canada. Slideshare.net. Retrieved January 26, 2014 from http://www.slideshare.net/HeatherP/canada-environmental- concerns Small Biz Connect. (2014). The Four P’s of Marketing. Retrieved January 26, 2014, from http://toolkit.smallbiz.nsw.gov.au/part/3/12/56 Strategic Management and Business Policy-Entering the 21st century Global Society, Thomas L. Wheelen & J. David Hunger, Addison Wesley, 1998. Wisegeek. (2014). What is a macro risk? Retrieved January 26, 2014, from http://www.wisegeek.com/what-is-a-macro-risk.htm Wisegeek. (2014). What is regulatory risk? Retrieved January 26, 2014, from http://www.wisegeek.com/what-is-regulatory- risk.htm