Major U.S. Brands Now Interested in Canada, Who Will Come to Canada Next? | KENSEL TRACY

by Kensel Tracy

Over the past few articles I have been explaining how Canada’s robust economy has been driving businesses in Canada and with our production tied to the high price of oil Canada becomes a place for business to thrive and prosper. Many brands are now expanding into Canada. The American brands that once seemed so exotic to Canadian shoppers have expanded north. Victoria's Secret and Crate and Barrel have opened flagship stores in Canadian malls in recent years.

In January, TJX Cos., which owns the discount clothing store Marshalls, and Tanger both announced northern expansion plans. Many analysts predict that J. Crew, Macy's, Nordstrom, Kohl's and JC Penny are also on their way into Canada.

So the Canadian economy, and the fact that 35 million new consumers are already attracted to American brands, offers a unique expansion market for most American retailers. However,the biggest change is with Target Stores. Target announced its purchase of 220 Zellers stores in a $1.8-billion deal with the American owner of the Hudson's Bay Co.

Target, which entices thousands of shoppers across the border, will finally cross the border itself. And Target's just the beginning. Like the War of 1812, the date of the last American invasion of Canada, a new invasion is happening only this time it’s an American retail invasion.

As U.S. retailers search for markets outside of their own stagnant economies, many set their sights on Canada. And that may mean trouble for home grown retailers. "Twenty years ago there were 20 U.S. retailers up here," says Toronto-based retail consultant Wendy Evans.

"Today there are, soon to be, over 200. Canada is now in the midst of "a really big wave" of U.S. companies moving in, says Evans. "It should be enough to worry major Canadian retailers, such as Canadian Tire and Loblaw’s. There is going to be a lot more competition. There are nine or ten U.S. retailers, right now, that have announced plans to enter this market, or are actively looking. That's a lot." Evans predicts that 70% of the Canadian retail landscape will be foreign controlled by 2015, up from the about 50% that is foreign controlled today.

Many of the retailers now crossing the border have possibly contemplated the move for years, but it appears were finally pressed into action by the weak U.S. economy. Limited American opportunities in the medium term mean Canadian retailers will likely see competition increase steadily over the next five years, as their American counterparts turn to globalization for growth.

There was no real incentive for retailers to look beyond America's borders when its economy was thriving. The entire population of Canada is roughly the same as the population of California, points out retail consultant John C. Williams. While it makes sense for American companies to consider a Canadian move, a lot of U.S. companies, including Target, have been expanding in the States first.

The first proliferation of U.S. retailers really took off after NAFTA in 1994. That was the year Wal-Mart acquired 122 Woolco stores from Woolworth Canada, allowing it to open dozens of stores at once, in much the same manner Target is planning with its Zellers acquisition. Target spokesperson, Amy Reilly states "The purchase allowed the company to move forward with its plans for international expansion. The timing is really about the excitement about this opportunity, which will allow us to open a meaningful number of stores in Canada."

So it seems as if Canada is a viable market for American companies. However, Tim Horton, the Canadian coffee icon, is the reverse. With the Canadian market well saturated with its iconic brand of coffee and donut stores, their expansion is expected state-side over the next few years. So it’s only a matter of time. Canadian shoppers interested in the unique American brand won’t have to make the trip across the border, fire up the internet or purchase online. Soon a nice big American branded retail outlet will be found in your home town. Just wonder who is going to be next?

Kensel Tracy is the Marketing Coach and Senior Partner with the Corporate Coachworkz Strategic Advisors on Marketing, Leadership and Organizational Analysis with Offices in Ottawa and Chelsea Quebec. Kensel is also the President of Business over Breakfast Clubs of North America rapidly expanding in Canada and the U.S. If you have a story of interest he can be reached at kenselt@sympatico.ca

For more information, please visit Kensel's TNNWC Bio.

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Major U.S. Brands Now Interested in Canada, Who Will Come to Canada Next? | KENSEL TRACY

DOING BUSINESS IN CHINA: Consumer Nation: You May Want to Look at China For Exporting, Not Importing

Doing Business In China with Dan Paulson

Though it has taken some time, the consumer power of China is a force to be reckoned with. Now may be the time to seek opportunities in the Chinese consumer market.

For years now, we have heard about sourcing products to China for low cost manufacturing. Some companies have been very successful with this while others have found it to be a painful process. In either case, importing products leads to exporting jobs and as it turns out, potential opportunities.

As is often the case, we tend to get trapped in our own tunnel vision. The US has been the greatest consumer nation for decades. Cheap money and a credit-based society has allowed a person to “buy now and pay later” which has kept the engine going for quite some time. In recent years this has changed as a weak economy has hit people in the wallet causing them to spend less. The good news is early predictions from this year’s holiday season sales are up substantially, which is a positive sign that consumer confidence is growing here. But what about spending elsewhere?

China is one of the fastest growing consumer populations spurred, in part, by our investment in manufacturing there. While many in China are still working to earn a living wage, many others have taken advantage of this new prosperity. As wealth grows, many Chinese are buying. What do they prefer? Brand names from other countries. With the right product or service, this could be a great time to expand into the Chinese market. Consider the following:

• China’s population exceeds 1.4 billion people with the population transitioning from an agriculture-based to industrial-based society
• There is growth in virtually every sector of spending from housing, to food to electronics to cars
• Until recently, the Chinese rarely purchased virtually everything under one roof. They were more accustomed to specialty shops providing specific goods. Today, department stores and retailers such as Wal-Mart are expanding in China.
• China is still a cash-based society. Most Chinese save at least 30% of their income. They are accustomed to paying cash when they buy. Credit cards and checks are used very differently and are rare occurrences in transactions.
• The youth is where it’s at. A younger, educated workforce wants the brand names and gadgets their parents couldn’t get, or afford. They look to western culture for the trends in fashion, food and technology.
• Brand is important. The Chinese seek brands they can trust because they know what they can expect from it.
• Quality is key. This culture was used to shoddy products that failed to meet expectations. Companies that make products where quality is much higher than what currently exists in the markets will do well.
• Price is still important. The Chinese are still price sensitive. Many work hard for their income and part with it only when there is a true benefit. Being a foreign competitor and remaining price-competitive can be a trick, but if mastered, can lead to great success.
• The need for infrastructure. Cities are growing rapidly. Needs for sustainable energy, water quality, transportation and other services exist. Companies with expertise in these areas can experience profitable growth with decades worth of work ahead of them.

As our own economy begins to bounce back, the growth will be slow. However, more companies are looking for opportunities in the market. As a nation of innovators, it may be time to not only look at opportunity here, but also abroad. While there are no guarantees, with the proper planning, research, and connections, the potential exists for businesses to expand and be profitable. Are you willing to seek out that opportunity?


For more information, please visit Dan's TNNWC Bio.

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DOING BUSINESS IN CHINA: Consumer Nation: You May Want to Look at China For Exporting, Not Importing

BALANCING HEALTHCARE, PUBLIC POLICY AND POLITICS: MIA (Missing in Action) - Leadership in Washington

Balancing Healthcare, Public Policy and Politics with Linda De Seife

Here are some headlines that I read over the last few weeks that have inspired this month’s column:

• “Snow Adds to the Political Drift”
• “Why Washington Is Frozen”
• “America’s Candor Gap”
• “A Year Later, Where did the Hopes for Obama Go?”
• “No Deficit of Cynicism”
• “Stimulus Created Jobs, But No Real Optimism”
• “Debt Ills, Rate Plan Knock U.S. Stocks”
• “Fudging Jobless Statistics”
• “Reid Puts His Bill Before Bipartisanship”
• “White House May Abandon Civilian 9/11 Trial”
• “Economic Data Stirs Fears”
• “America’s Greek Tragedy – Greece’s Crisis Holds Warning for Us”

Now this is quite a list, and I could go on, but you probably get the idea. Is it any wonder that Americans are angry? Is it any wonder that, although technically the economy is in recovery, Americans don’t feel it, and so are not spending on houses, cars, or anything else other than the necessities? Is it any wonder that fear and uncertainty are paralyzing our country and holding back the recovery?

One day the headlines say things are getting better; the next day they’re not. One day we’re trying terrorists in civilian trials in New York City, and the next we’re not sure. One day we need a new agency to study global warming; the next day Florida is freezing, and Washington is literally buried in snow. (Although figuratively it’s been feeding us a snow job for years; that’s the problem!)

America is not working, in more ways than one.

Then we have a State of the Union address that is nothing more than a laundry list of legislative initiatives and a scolding of the Congress, Republicans, the previous Administration, and even of the American people by a President who is above it all, blames everyone else, and takes no responsibility for his actions, or inactions, over the last year.

Where is the clear direction, strategy and transparency that was promised? All we’ve gotten for the past year is drift -- from one issue to the next and back again. Tactics, tactics, tactics! Talk, talk, talk!

Now the Democrats are trying to say, and the media has picked up on it, that America is ungovernable. This is nonsense. What America lacks is leadership -- people who know what it takes to make the system work. We have an inexperienced President who, to use a business analogy, instead of being the CEO, is behaving like a functional vice president or department head.

The concept of leadership is very complex. There are many definitions, but there are some common traits of leadership. Some of these are: defining a vision and translating it into reality; trustworthiness; taking responsibility for your actions; inspiring confidence. The management guru, Peter Drucker, has said that “effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.”

One of President Obama’s problems is that during the campaign he sounded like a leader, but, now after the campaign is over, he has not delivered. He seemed to have the attributes, but there have been no results.

The famous psychologist Carl Jung declared, “The true leader is always led.” Bill Clinton realized this after the 1994 elections and worked with the new Republican majority to reform the welfare system and end the era of big government. Obama, to the contrary, refuses to get the message. So it is likely, that he will get more messages in November. We’ll see if he gets it this time.

And the Congress is no better. The long time Speaker of the House, Sam Rayburn, who was legendary for arm-twisting and jaw-boning believed, “You cannot be a leader and ask other people to follow you, unless you know how to follow too.” Today’s so-called Congressional leaders find it easier to buy votes than to truly negotiate the issues by listening to their members and their constituents.

We all know that another key to leadership is trust, but as I look at Washington, where is the trust? Democrats don’t trust Republicans, and Republicans don’t trust Democrats. The people don’t trust the government, and the government doesn’t trust the people.

The President’s words say one thing, and he does another. Then he called a health care summit, but even before the event, he began posturing to paint the Republicans as obstructionists if they don’t just go along. During the event, he again became the lecturing professor. So, Republicans are right to be suspicious of his motives. Have we forgotten the concept of the loyal opposition? Their role is not to just go along; their role is to oppose that which they do not believe in.

Where are the adults in our country today? It’s not the President, much as he tries to play that role by chastising others. It’s certainly not the Congress. The adults, who are trying to lead their leaders and who understand the challenges we face, are the American people. But we can’t do it alone, especially when paralyzed by the indecision and lack of strategy and vision in Washington. We need to feel confident that our country has direction that we can support. Those who voted for Obama thought that’s what they would get, but they were mistaken.

What we have is paralysis, driven by a lack of strategic direction, confidence and optimism, which could tip us back into recession, or, at the very least, is delaying a strong and sustained recovery.

We need leaders, like Ronald Reagan, who had a vision for America and confidence in the people to make that vision a reality. We need leaders with courage, who fulfill their vision based on their passion, not their position. We need leaders who raise people’s aspirations and energize them to achieve great things.

America is not ungovernable, and government is not broken. America lacks leaders who know how to govern, who respect their constituents, and who can build consensus and work through issues for the good of the whole, the way the Founders intended.

What are your thoughts on the subject?


Quote of the Month

“All the ills of mankind, all the tragic misfortunes that fill history books, all the political blunders, all the failures of the great leaders have arisen merely from a lack of skill at dancing.”
-- Moliere

For more information, please visit Linda's TNNW Bio

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BALANCING HEALTHCARE, PUBLIC POLICY AND POLITICS: MIA (Missing in Action) - Leadership in Washington