 |
Introduction
Project objective:
Establishing a business office of Todo Moda in the province of Ontario, Canada (firstly); searching the opportunity to expand all over the country.
Todo Moda is a retail company from Argentina that sells the latest fashion women accesories such as rings, earrings, collars, bracelets, make up, sunglasses, watches, bags and belts. It offers reasonable prices by unique designs made from natural materials like wood, stones, shell, silver and other materials.
The target is women between 12-29 years.
Besides of having stores at Shopping Centers, Todo Moda is going to use the internet as a tool for business in order to sell and offer product information.
This is the process to use it:
1. Getting a business database of the target segment from business directory source.
2. Distributing brochures by e-mail.
3. Handing the product by a freight services company.
4. Collecting from de customers.
Country overiew
Canada remains a preferred investment location for investors requiring an extremely stable due to its relatively risk-free political and economic environment .
Canada´s economy overview
Canada has a marke t-oriented economic system, pattern of production, and high living standards.
Real growth averaged nearly 3% during 1993-2000, but declined in 2001, with moderate recovery in 2002. Unemployment is up, with contraction in the manufacturing and natural resource sectors.
Nevertheless, given its great natural resources, skilled labor force, and modern capital plant Canada enjoys solid economic prospects.
Canada´s inflation rate is locked between 1% to 3%.
Canada is a low cost country for business:
Elimination of capital tax = advantage to 3.4% points by 2008.
Corporate Income Tax Rates
Ontario´s economy overview
Ontario is the most populous (38% of Canada) and dynamic province. It´s share of Canada´s GDP for 2002 was 42.33%.
Ontario has long been a favourite location for foreign investment in Canada because of its proximity to markets, highly diversified economic base and sophisticated labour markets.
Ontario´s administrative risk.
Fiscal reforms: Regulations to the creation of new businesses are flexible (2 procedures, 3 days).
Ontario´s macroeconomic stability
Inflation in Ontario was 2.0 % in 2002, and is forecast to average 3.0 % in 2003, and 2.0 % in 2004.
Ontario´s macroeconomic stability
Internationalization Strategy
At the beginnig of 2004, Todo Moda decided to internationalize its brand and chose the City of Toronto to open three stores. A business office will be stablished and carts and kiosks are going to be leased at Shopping Centers:
Don Mills Center
Yorkdale Shopping Center
Markville Shopping Center
Expected date to open: second quarter of 2005
| % of female between 12-29 years |
53%
|
| Expected monthly sales by store |
6,100 CanD
|
| Expected expenses by store:
|
|
| Initial inventory and release costs |
7,200 CanD |
| Average monthly rent |
1,800 CanD |
| Labor |
2,300 CanD |
| e-advertising |
200 CanD |
| Others |
2,000 CanD |
According with this budget, another three stores could be openned at the last quarter of 2005 at Ottawa City.
Canada´s trade with China
Chinese Foreign Direct Investment in Canada:
Cumulative Total CAD $224 million (2002)
In December 2001, China joined the WTO´s principles of fair treatment of trading partners, non-discrimination, transparency, predictability, and uniform application of laws and regulations . The terms of trade come in the immediate as well as longer term from reduction in tariffs of interest .
Transportation
Airports and heliports
Railways
Highways
Waterways (St. Lawrence
and seaway system) and ports
St. Lawrence, U.S. and
Atlantic Ocean)
Pipelines
The product is going to be transported by plane and vans so it´s important to consider the access to this infraestructure. It´s easy to do business anywhere in the world from Ontario.
There is an international airport and a Fedex office at Toronto
Transferability of capital
Canada has a free market mixed economy and open financial markets. There are no legal constraints on the transfer of profits, royalties or fees from Canada, or on the repatriation of invested capital. As in most other countries, interest, dividends, rents and royalties, and certain other payments to non-residents are subject to a federal withholding tax of 25 per cent, which is generally reduced to 5 to 15 per cent by a tax treaty depending on where the non-resident recipient resides.
Risks
The feeling that a particular city might be receptive to a product is not in itself a guarantee of success .
We will get st o ck with all manner of good products that no one within the clientele will have any interest in buy .
The stores are not benefit from a good visibility.
There is a competitor who sales similar accesories.
There is no entry barriers.
Changes in world economic environment
Conclussions
Canada could be an ideal choice for investment. With a lower cost of living, high quality of life.
Canada's solid fiscal commitment is the basis upon which important steps have been taken to stimulate the economy and make key strategic investments that will promote long-term prosperity.
Canada's excellent economic fundamentals, elimination of the deficitt, and the implementation of permanent and comprehensive tax reductions.
Canada of today has accomplished a lot and the plan is to take further steps to promote productivity, innovation, economic growth and job creation thus strengthening the advantage for investing and doing business in Canada.
|
|
Download this file:
|
|
