Sprouts Farmers Market Company’s Entry to Canada

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Introduction

This memorandum contains valuable information to Sprouts Farmers Market, a company that plans to venture into the Canadian market. It gives an outlook of the country’s economy, its political stability, and mandatory legal requirements for starting a business in Canada. This also includes the social and business culture in Canada.

Current economic business climate/market trends

Canada has a very vibrant economy. The main sectors of the economy include energy, insurance, mining, and telecommunication. The country is endowed with abundant natural resources, a skilled workforce, and a stable economic and political environment (Central Intelligence Agency, 2013). The Canadian economic system is market-oriented. Besides, Canada enjoys trade surpluses with countries like the United States and Mexico.

Canada also has a smaller budget deficit in comparison with other jurisdictions. Besides, Canada’s balance-of-payment is smaller than that of its neighbors. The country has maintained a sound monetary policy in recent years, resulting in a strong currency. The inflation rate is also low in Canada (Central Intelligence Agency, 2013).

Current political/economic/social situation

The Canadian economy has benefitted from the country’s political stability. Canada is relatively less volatile, in comparison with its neighbors. Over the years, Canadian society has undergone a major transformation. Specifically, gender relations and roles have undergone the greatest transformation. The modern Canadian woman enjoys the same social and legal equality as her male counterpart.

Canada also has a very diverse family structure. For a long time, the traditional Canadian nuclear family consisting of two parents and their children was the norm. However, this is no longer the case as the number of single-parent households has increased significantly (The World Bank, 2013). Traditionally, most married women in Canada were housewives but today, the majority of them work outside the home. The proportion of older people in Canada is also increasing thanks to improved living standards and access to affordable health care.

Laws/policies governing foreign enterprises

Any foreign entity wishing to do business in Canada ought to take into account issues of liability and tax. In the case of a non-resident who intends to establish a business in Canada, he/she must choose to either do business through a Canadian subsidiary or via a branch operation. Such businesses are expected to file annual returns in line with ITA regulations (Doing Business in Canada, 2013). Failure to file returns attracts severe penalties. A foreign investor has to give short notice on the new business entity. This is normally done within 30 days of starting a business.

Familiarize yourself with tax differences between various types of business, such as a partnership, sole proprietorship, and a corporation. All your expenses and invoices should be paid on time as late payments are likely to attract interest charges.

Register for and acquire all the right business licenses and permits before starting your business. Giving misleading or false information to a customer is a legal offense and as such, you must be fully acquainted with all your business activities. Keep employee and client information confidential and private. Familiarize yourself with the minimum wage requirements in Canada before hiring employees. You will also need to pay Workers’ Compensation cover for such employees.

Cultural orientation – High/Low cultural context

Canadians communicate in a low context culture. This is the equivalent of direct communication. Ina low cultural context communication, the emphasis is on explicit messages. The meaning of the message is communicated verbally. Canadians prefer to use words that articulate the intended meaning. Also, Canadians respect and prefer direct communication, as opposed to indirect communication. As low-context culture communicators, Canadians value facts, straightforwardness, and logic (Doing Business in Canada, 2013). They also value experience and knowledge the same way they do authority.

However, Canadian communication culture does not have clearly defined status levels. While undertaking a given task, Canadians make decisions based on their impact on that task. Moreover, Canadians do not consider relationships while making decisions. Canadians also respect people who voice their opinions, regardless of one’s status. Asking personal questions is also considered as being polite as it is a sign of interest. While communicating, you have to make use of direct communication as it may not be sufficient to relay your message using cues only.

General social practices – Verbal and non-verbal norms

Overall, Canadians are a bit reserved but polite, in comparison with their southern neighbors. Canadians value peace, respect, and good governance.

A handshake is common among both men and women, but Canadian women can also acknowledge you with a nod of the head, as opposed to a handshake. When introducing people in a business setting, rank is used as a basis for the introduction, as opposed to gender (Doing Business in Canada, 2013). One’s responsibility and position are linked to his/her authority. Authority is not tied to one’s status, sex, name, or social class.

A handshake is the most common greeting among Canadians. While conducting business, always maintain eye contact with the other party; otherwise, you are likely to be seen as being disinterested or bored. Make sure that you do not stare at business acquaintances (The World Bank, 2013). Casual touching is hardly present during conversations. Offices are no-smoking zones, as are most bars and restaurants. Always be punctual during business meetings as Canadians do not wait for over 15 minutes after the prearranged time of the meeting. In the case of social invitations, your hostess expects you to arrive not later than 30 minutes after the stated time. if you anticipate being late always call in advance. Never arrive at a meeting without a prior invitation.

General business practices – Decision-making practices & Negotiation strategies

It is important to design and your company’s business cards for handing out to business acquaintances during meetings. Important details to include in your business card include the business name, name and title, your business contacts and address, and business logo.

It is not hard to handle business negotiations in Canada. Canadian business representative is very welcoming and pleasing. Canadians are gracious hosts who are interested in other cultures. Canadians begin negotiations and business meetings in a lighter setting, such as a business lunch (Doing Business in Canada, 2013). The Canadian culture and law dictate that individuals should maintain physical and electronic records of the various business negotiation transactions and dealings. It is important to note that Canadians are not afraid to decline a business deal.

Conclusion

Canada enjoys a stable political and economic system that supports foreign investment. Sprouts Farmers Market should familiarize with the country’s low-context culture and how this affects the business environment. The company should also get to know the customs and etiquette of the Canadians too. Familiarize yourself with the legal requirements of starting a business and understand the business structure and culture too. Finally, know the plight of women in business.

Reference List

Central Intelligence Agency (2013). The World Fact Book: Canada. Web.

Doing Business in Canada. (2013). Navigating Opportunities for Investment and Growth. Web.

The World Bank. (2013). Doing Business 2013: Canada. Web.

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