Openning Trader Joe's in Canada Assignment Example | Topics and Well Written Essays - 500 words

Openning Trader Joe's in Canada - Assignment Example The mode of entry the company is focusing on is acquisition. This report discusses the viability of an international expansion into Canada utilizing the acquisition entry strategy. In order to penetrate a foreign market the managerial staff of a company must perform environmental scanning of the marketplace. Canada is the biggest market that is closest to the United States. The population of Canada is 32.32 million people whose gross domestic product per capita in 2005 was $32,645 (Studentsoftheworld). Canada is part of special trade treaty between the United States, Canada, and Mexico. This trade treaty is called the North American Free Trade Agreement (NAFTA). NAFTA is a trade agreement that began on January 1, 1994 which removes most barriers to trade and investment among the three countries (Usda). The existence of this trade agreement means that Joe’s Trader would not have any problems gaining market entry through the acquisition mechanism. The people of Canada enjoy eating seafood and dairy products. Due to the French influence in its culture cuisine food items such as pea soup, French pastries, breads, crepes, special cheeses, lamb and veal are some of the food items Canadian citizens utilize in their homes on a daily basis (CultureGrams). The eating habits and preference for gourmet items is aligned well with the product offering of Trader Joe’s. The food market in Canada just as in other parts of the world is very competitive and profit margins are very low. Joe Trader has a product selection of upscale organic products, fresh vegetables and dairies, and many other cuisine food items that gives this firm a product differentiation which will enable to attract customer in market saturated with traditional supermarket stores. The chosen strategy for entry into the Canadian marketplace is acquisition. An acquisition is good strategy for Joe Trader because it would enable fast access for the company into Canada. An