News update from the Americas
November 5th, 2008
Hollering across the Atlantic from the Americas, Kaila discusses some of the more interesting international business stories from a Canuck perspective.
As I mentioned, I’ve been scouring the North American news media for great international business stories. You know, stuff about going global despite (or because of!) the credit crisis.
Despite all the Obama-McCain hype that fills nearly every section of the paper (somehow even the national sections), the articles were plentiful.
Now I sit in front of the computer with four article clippings that I’ve cut out over the last two weeks. These articles struck me as incredibly relevant to any business looking at global markets. This is my attempt to make a deduction from them.
First I’ll summarise each article:
The Middle East’s Growing Importance (Financial Post)
This article highlights the importance of Canada’s economic relationship with the Middle East. Many Canadian businesses, it says, have an interest in the Middle East. Canada has several economic agreements with Middle East countries including bilateral tax treaties and free trade agreements. Indeed, the National Security Advisor to King Abdullah II journeyed all the way to Canada’s cow capital, Calgary, to outline the prospects for Middle East economic and political relations with Canada. The article predicts Canada’s economic relationship with the Middle East will deepen over time. It ends by stressing the need for Canadians to ensure they don’t neglect their understanding of the region “as it is far more important than we might judge by trade statistics alone.”
Retailers Bite the Price Bullet for Christmas (Globe and Mail)
The Canadian dollar dropped (though it has since made a slight recovery). Canadian retailers, thus, were being forced to hold the line on prices to avoid scaring off anxious consumers at Christmas. It is predicted, however, that the retailers would feel the hit and have to raise retail prices in early 2009. The Loonie (Canada’s dollar) has been on a wild ride, jumping from $1.10 (to the USD) last year, down to 78.5 cents at the end of October. The hope is that the dollar will make a quick recovery in time for Christmas.
Canadian Fries’ Chinese Debut (National Post)
New York Fries is a Canadian fast food chain that brought the taste of thick, juicy American fries to Canada. Err…that’s New York Chips for you Brits. They’re now opening a new Hong Kong-based franchise, scheduled to debut at the end of November. This is a continuation of the firm’s Asian expansion plan, having already opened franchises in Dubai and South Korea. There will be local chip variations to suit Hong Kong tastes, as well as Canadian favourites like Poutine. The company is not worried about launching just as the world is in an economic slowdown because, as they say, “Everybody needs to eat”.
Plans to Embrace the World (National Post) This one’s the kicker….
More and more Canadian entrepreneurs are expanding into foreign markets. A recent study by KMPG LLP shows that despite the slump in the world’s economy, nearly 2/3 of private Canadian companies have plans to go global in the next five years. The article explains that younger companies tend to have an easier time with these sorts of operations since they usually have more flexibility. Over a third of the companies surveyed earn at least 60 percent of their revenue from abroad. Says the VP of KMPG: “When you look at Canada’s prosperity and future prospects, it’s really critical our growing, young private companies and entrepreneurs are able to compete effectively on a global stage. We have to look beyond our borders.”
So what do these four articles have in common, and what do they mean?
I am happy to say that they appear to back up my earlier post about Canada’s global prospects and the need/opportunity for Canada’s companies to go global. Our economic relationship with the Middle East is tightening just as our home market is struggling – the opportunity there is obvious. Food chains like New York Fries aren’t daunted by the economic crisis – they understand that if they can find a market for their product overseas, it takes the pressure off their national operations. And finally, it would appear that most Canadian entrepreneurs understand these points and plan to take advantage of the coming ‘globality’.
Cheers! Kaila
