Governmental Structure - Essay Example

Canada is currently stable politically. The political risk index of Canada on a 1-10 scale is 9.5 (Country Watch, 2011). A high number on the scale is a desirable outcome.

 The nature of the Kudler Fine Foods business and the existence of NAFTA pretty much ensure that there are not going to be any political barriers that might prohibit the entrance of the company into Canada. Food is a first necessity item. Kudler Fine Foods should keep track of the actions of the Federal government of Canada since they are responsible for international relations. A risk factor for Kudler Fine Foods is if the Canadian government decides to impose additional taxes on the corporations or higher sales taxes on food items. There is no risk of tariffs being imposed on US imports due to the existence of NAFTA.

Inflation, currency exchange, and monetary and fiscal policies

The national currency of Canada is the Canadian dollar. The current currency exchange rate between the US dollar and the Canadian dollar is 1: 0.973 (Xe, 2011). The Canadian dollar has been a historically stable currency. A sign of stability in a currency is illustrated by the inflation rate of the country. The inflation rate of Canada between 1915 and 2010 was 3.26% (Trading economics, 2011). Canada has a great business relationship with the United States evidence by the fact that 80% of Canadian exports go to the United States. The monetary and fiscal policies of Canada can influence the decisions of Kudler Fine Foods. If the government reduces the cost of money the company can take advantage of the situation to borrow money at a lower cost. To minimize the risk of loss of purchasing power when interest rates go up the firm should invest in bonds.

Technology factor

Various technologies can help Kudler Fine Foods improve its financial performance and operational efficiency. A technology that can help the company improve its supply chain and logistics is radio frequency identification tags (RFID). RFID tags can be used to track the movement of merchandise while in transit in Canada. The company can provide up to minute updates to their clients about the approximate time when the food items are going to be delivered to the stores. Another technology that can help the company establish a presence in Canada is the internet. The internet can be used to develop an online marketing campaign to attract Canadian customers to purchase our new Too Fresh to Go product line.

Social and demographic factors, diversity

Canada is a bilingual country that speaks both English and French. Kudler Fine Foods must prepare their packaging for Canada in a box that has both English and French instructions and advertising messages. The population of Canada is small in comparison with the size of the country. Canada has a multicultural population that has a different composition than the United States, but both countries are rich in terms of diversity. Diversity can be used by Kudler Fine Foods to improve innovation and creativity among its staff.  To beat the language constraint Kudler Fine Foods will need to hire bilingual employees. The costs associated with acquiring the skills and abilities necessary to establish an operation in Canada include recruiting costs, training and development costs, and educational costs.