ASSIGNMENT

On
Launching Aarong in Canada
Course Code: ITB301
Section: 06

Submitted To:
Fariza Binte Mahbub
Lecturer
Dept. of Business Administration
East West University
Submitted By:
Name Id Contribution
Umma Salma Pinky 2017-1-10-050 Doing Business Report,
Incentives
Md. Enjamul Haque 2017-2-10-016 Impact of Cultural
Differences
Md. Toufiq Islam 2017-2-10-240 Entry Modes, Target Market,
editing and merging.
Tasnova Ahmed 2018-1-10-165 Political and Economic
Environment, Trade Barriers
Table of Contents
1.0 Brand Selection......................................................................................................................................3
2.0 The main reasons for selecting Canada:................................................................................................3
The Political Environment in Canada.......................................................................................................4
Risks of the political environment in Canada...........................................................................................4
The Economic Environment in Canada....................................................................................................4
Risks of the economic environment in Canada........................................................................................4
Doing Business Report in Canada............................................................................................................4
Trade barriers we may face from the host country.................................................................................6
The Incentives We Might Get From Canada as a Host Country Government:.........................................6
3.0 The impact of cultural differences on the brand...................................................................................7
Adapting the product for local customers...............................................................................................7
Promotional strategies............................................................................................................................8
4.0 Target Market:.......................................................................................................................................9
Market Segmentation:.............................................................................................................................9
Market Targeting:....................................................................................................................................9
Market Positioning:...............................................................................................................................10
5.0 The entry mode: Joint ventures with Zinnia textiles............................................................................10
The reason behind selecting this entry mode described in below:........................................................11
Reference:.................................................................................................................................................13

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1.0 Brand Selection
The brand that has been selected to launch in Canada is "Aarong”. Foreign direct investment
links Canadian companies, consumers and workers to the new economy. It enhances Canada's
competitiveness by revitalizing the domestic industry and increasing the flow of goods and
services between Canada and its trading partners.
Aarong is an enterprise of BRAC, and it's a CSR based handicraft company established in 1978.
Today, Aarong's reach has spread beyond Manikganj to the rest of the country. At present,
Aarong is operating through 9 domestic outlets and one franchised outlet in London. Aarong has
more than 488 products in their outlets. From a single shop, Aarong has grown into one of
Bangladesh's most prominent retail chains, with eight stores spread across the major
metropolitan areas of the country – in Dhaka, Chittagong, Khulna and Sylhet and one in London,
UK. Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are
women. This is the reason behind choosing Aarong to launch in Canada.

2.0 The main reasons for selecting Canada:

Canada is the country where it offers vast business opportunities for investors. The diversity of
culture in Canada makes it among the world's most popular countries. Low labor costs and high
returns make it an attractive investment destination. Also, it ranks twenty third for the least
barriers to trade investment in the world. The political and economic environment of Canada is
the other reason for selecting this country.

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The Political Environment in Canada
The political environment is the environment of a country that consists of the central
government, the citizens of that country, rules and regulations and international relations.
International trade is an important influence on Canada's economy because it increases the size
of the market in which Canada's business can buy or sell form. Canada is a constitutional
monarchy, in which the monarch is head of state.

Risks of the political environment in Canada

Primary risk factors of the political environment include the threat of war, revolution, strikes, or
other riots. Other risk factors are the main policy instruments that threaten the property,
withdrawal of licenses and seizing someone's property with authority. These risks can cause
drastic changes in the business environment that adversely affects the profit and other goals of
the business enterprise.

The Economic Environment in Canada

The economic environment consists of the factors that include unemployment rates, inflation
rates and labor costs. Canada is a city that thrives in trade and commerce and has a vibrant
culture seeped in commerce. Canada is one of the largest city economies in the world. It has a
world-class education system and economic diversity that made it top of the city in the economy.

Risks of the economic environment in Canada

The major risk can occur when there is any kind of mismanagement in the economy. It will
create a drastic change in the country's business environment that will adversely affect the profit
and other goals of a business enterprise.
Although Canada has economic and political risks, it is more considerate than in other countries.
It is the most investment-friendly and most popular for the work city. It has been called the
world's most powerful country and is considered the number one destination for Foreign Direct
Investment (FDI). So, Canada will be favorable to launch the local brand Aarong.

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Doing Business Report in Canada
Doing Business 2020, a World Bank Group flagship publication is the 17th in a series of annual
studies measuring the regulations that enhance business activity and those that constrain it.
Doing Business presents quantitative indicators on business regulations and the protection of
property rights that can be compared across 190 economies. Doing Business covers 12 areas of
business regulation. Ten of these areas starting a business, dealing with construction permits,
getting electricity, registering property, getting credit, protecting minority investors, paying
taxes, trading across borders, enforcing contracts, and resolving insolvency are included in the
ease of doing business score and ease of doing business ranking. By documenting changes in
regulation in 12 areas of business activity in 190 economies, Doing Business analyzes regulation
that encourages efficiency and supports the freedom to do business. The data collected by Doing
Business address three questions about the government. First, when do governments change
regulation with a view to developing their private sector? Second, what are the characteristics of
reformist governments? Third, what are the effects of regulatory change on different aspects of
economic or investment activity? Answering these questions adds to our knowledge of
development. Data in Doing Business 2020 are current as of May 1, 2
Doing business report in Canada are given below-

Economy Canada

Ease of Doing Business Rank 23

Rank within group 23

Starting a Business 3

Dealing with Construction Permits 64

Getting Electricity 124

Registering Property 36

Getting Credit 15

Protecting Minority Investors 7

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 Paying Taxes 19

Trading across Borders 51

Enforcing Contracts 100

Resolving Insolvency 13

Here, Ease of Doing Business in Canada is expected to reach 24.00 by the end of 2020,
according to Trading Economics global macro models and analysts' expectations. In the long-
term, the Ease of Doing Business in Canada is projected to trend around 25.00 in 2021 and 26.00
in 2022, according to our econometric models.

Trade barriers we may face from the host country

Trade barriers create problems while trading. Basically, trade barriers are government policies
that place restrictions on international trade. Trade barriers cause more economic harm than
economic benefits. These harms can reduce the availability of goods and services, lower
employment, increased prices and many more things. In Canada, we may face some trade
barriers while launching brand Aarong. These trade barriers are-

 First, lengthy customs procedures that are the products we want to locate in the market
can take a longer time to complete policies. 

 Second, the government can apply some restrictions for foreign competitors so that local
businesses get an advantage to win government contracts. 
 Third, there can be added some requirements for goods to be locally produced. A
percentage of products of the company need to be produced domestically. 
 Forth, intellectual property rights may be harmed. Such as the inability to protect the
legislation of patents, trademarks, industrial design, copyright, geographical indications
or sharing trade secrets. 
 Fifth, a barrier regarding the origin of the company can occur. There might be required of
evidence for the goods where it was produced. 
 Sixth, to protect the domestic firms, the government may apply a competition law, which
will be unfair for foreign companies.
 At last, Necessities to utilize neighborhood resources, segments or laborers.

The Incentives We Might Get From Canada as a Host Country Government:

Incentives can be used for attracting new FDI to a particular host country or for making foreign
affiliates in a country undertake functions regarded as desirable, such as training, local sourcing,

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research and development or exporting. Canada, as a host country they give us so many
incentives like-

 Financial incentives: such as, outright grants and loans at concessionary rates.
 Fiscal incentives: Such as tax holidays and reduced tax rates.
 Regulatory incentives:
Lowering of environmental, health, safety or labor standards. Temporary or permanent
exemption from compliance with applicable standards. Stabilization clauses guaranteeing
those existing regulations will not be amended to the detriment of investors.

 Subsidized services :
Subsidized dedicated infrastructure: electricity, water, telecommunication,
transportation/ designated infrastructure at less than commercial price.
 Market privileges:
Preferential government contracts, closing the market to further entry or the granting of
monopoly rights; protection from import competition.
 Foreign exchange privileges:
Special treatment with respect to foreign exchange, including special exchange rates,
special foreign debt-to-equity conversion rates, elimination of exchange risks on foreign
loans, concessions of foreign exchange credits for export earnings, and special
concessions on their partition of earnings and capital.

3.0 The impact of cultural differences on the brand

Significant development occurs only with thorough preparation and close consideration of what
your new customers expect. Expansion into international markets can be a total failure if a brand
takes little effort to adapt to the local culture.

Adapting the product for local customers

Adapt Your Brand from the Top Down: Firstly, brands must be sufficiently versatile to change
everything from language, culture, business practices and human resources management to
comply with local cultural practices. However, this may sound like a massive undertaking,
consistent communication from top to bottom, with support to ensure a cohesive strategy is
preserved by the label.

 Understand the New Consumers Through Research: Then, consider partnering with a
local research company. Research companies can conduct focus groups, shop-along, and
surveys to understand the subtleties of the local market and consumers. This can bring
out unique features of the market and a rich local perspective. These insights can be used

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 to guide product offerings, store design, promotional strategies and messaging
adjustments.
 Cultural Differences Impact Branding: Cultural differences are indeed a major factor
which affects a brand's success or failure. As brands join various cultures, it becomes
crucial for them to move carefully through the process of standardization-customization
through which they seek not only to maintain the inherent brand identity that is the very
reason for consumer acceptance but also to adopt the brand elements (images,
advertising, channels, and others) to appeal to the local tastes and preference of
customers.
 Understand the Consumption Patterns: The two ends of a spectrum tend to be
individualistic and collectivistic societies. Individualistic societies encourage consumers,
at an individual level, to make consumer choices based on their personal preferences. On
the other hand, collectivistic cultures help clients make group-level consumer decisions
(family, extended family, friends' network and even community).
These variations, when entering new markets, hold the key too many a branding strategy. While
globalization and integrated markets give brands a very lucrative deal in terms of untapped
consumer opportunities, increased number of consumers, and wider scope, they also pose some
challenges, such as cultural differences and the resulting patterns of consumption. Brands should
be alert to cultural subtleties and implement them accordingly to optimize the possibilities.
Cultural variations can be turned from a threat to an opportunity as brands learn and adapt their
branding strategies from the many best practices in the industry to accurately represent customer
tastes.

Promotional strategies
Businesses may try to shape or form their company's branding or goods in many ways, including
ads, media, word-of-mouth and interaction with your products or services. A lot of thought and
effort goes into branding, including naming products, creating logos, and ensuring that company-
wide service is standardized. Through continued exposure over time, your brand or your
reputation is formed with potential and existing customers.

 Advertising and Culture: To a large degree, advertisement is a cultural phenomenon that

can affect the popular culture of a country while at the same time, the culture of a host
country can also influence the production and effectiveness of a campaign. Significant
obstacles to address when considering the influence of culture in advertising include
language barriers and how advertisements relate to topics that are culturally important,
such as religion and politics.
 Make sure you can deliver: Ensure you can make your products reliably and consistently
available to your new target markets.
 Packaging: Learn the local standards and ensure your packaging includes any necessary
regulatory information and meets transportation standards.

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  Research: Having done your homework and researched the new foreign markets, and
perhaps engaged the help of a local firm or representative, you have hopeful honed your
domestic branding for this new audience. Be sure to note what the competition and other
businesses are doing.
 Ad Regulations: As stated previously, there are several international regulations
restricting how, where, and why you advertise in a particular country. Until creating a
campaign, carefully study the laws of the country you work in. This will help to prevent
legal consequences and also to waste precious time and resources.
When global marketers develop advertising and promotional campaigns, they need to choose
between a standardized or adapted approach. A standardized approach can be considered a global
campaign that is the same throughout countries. Some of the major benefits of a structured
campaign are to achieve cost-saving economies of scale in ad campaigns, preserving a clear
brand image.

4.0 Target Market:

The purpose of the target market is to identify consumer groups that are most likely to purchase
specific goods and services. The best thing about the target market is sellers can have a
biographical sketch about their consumers. Through having a target market, strategies can be
applied easily to attract that audience. Not knowing who the target market is can cost a lot for the
company. The market we want to target mainly through Aarong is Bangladeshis living in
Canada. Other parts of the target market can be described through three steps:

Market Segmentation:
When a market is divided into distinct groups of buyers with different needs, characteristics
or behaviors, it is called segmentation. As the motive of establishing Aarong is focusing on
Bangladeshi people, fulfilling their utmost desire will be the first priority. A huge number of
Bangladeshi people live abroad. The market for Aarong will be divided into different groups
of people who are from Bangladesh. Canada is one of the most important countries for
investment. So, the outlet of Aarong in Canada will help to reach targeted customers easily.
Aarong carries the culture of Bangladesh that helps to create a brand image on others as well.

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Market Targeting:
Evaluating each market's attractiveness and selecting one or more segments to enter is the
process of targeting the market. The targeted customers of Aarong will be differentiated
through market offering to create superior customer value. Specific offerings for men,
women, kids, boys and other product offerings are created for targeted customers by Aarong.
Another thing that is targeted for launching Aarong in Canada is the middle and higher
economic classes. A number of audiences living abroad miss their home country. So, the
target will be they get their home country products according to their class.
Market Positioning:
Arranging for a product in the mind of consumers with a clear, distinctive and desirable place
relative to competitive products in the market is called market positioning. Aarong is a brand,
so customers who know about it feel comfortable to buy from there. The outlets of Aarong
are very selective and well known. Aarong is very strategic in positioning. Before launching
any outlet of Aarong, they try to get the attention of the targeted customers through social
media and fashion magazines. Even they often have fashion shows for specific products.
People who live in Canada will have a clear, distinctive place of the products of Aarong
through this policy.

5.0 The entry mode: Joint ventures with Zinnia textiles

 A joint venture is a common way of combining resources and expertise of two otherwise
unrelated companies. There are many benefits to this type of partnership.
Based on the barriers we may face from the host country we decide to enter in to foreign market
by joint ventures.
Zinnia textiles: Zinnia was created by Jen Barnes in 2018, she now works with a group of textile
loving women. Their mandate is to work with artists, makers, designers and businesses that are
trying approaches that are an alternative to mass manufacturing. Making items by hand, small
scale production, preserving traditional techniques, locally made. they seek items that we are
going to love, that are well made so we can love them for a long time.
Zinnia features a carefully created collection of ethically made clothing, accessories, artisan
goods and many other treasures from near and far. A stunning collection of items to wear, love
and give. A few of our lines include, Smoking Lily, Nomads Hempwear, Mata Traders, Maiwa
Handprints as well as our own in-house line of up-cycled cashmere accessories and clothing.
We are a body positive, gender inclusive, down to earth group who love supporting individuals
to be themselves. 

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The reason behind selecting this entry mode described in below:

 Knowledge of the market: as Zinnia doing business form 2018. They have quite enough
knowledge of the local market. What the local customer want, how they can influence
and diverts toward a new product.
 Cultural Knowledge: they have the cultural knowledge better than us. As they are
belongs to that culture. So it will help us to do business in Canada

 Political and Business system: They are the familiar with the political and business
system. How to handle all of the political pressure we don't have to bother of thinking
that. They will help us in all sectors as we are in joint ventures.
 Better Resources: Forming a joint venture will give you access to better resources, such
as specialized staff and technology. All the equipment and capital that we needed for our
project can now be used. By taking their technological support we can better our business
operations, we can develop ourselves better. And after joint ventures time limit may
compete their business.
 Risk and cost: the cost and risk opening in a foreign market will be shared. We are not
alone when bearing the costs of it failures. So our risk will be reduced.
 Government hidden soft side: Govt. will not impose strict barriers to our business.
Otherwise Zinnia will also have to face the loss. So it is great advantage for us. We will
get support from government.
 More likely to success: Your chances of success will become higher as you are already
riding with a renowned brand. As a result of this, your credibility will also vastly
improve.

 Less Advertising and marketing cost: Starting a joint venture is a great way to save
money and/or split costs. Our advertising and marketing will be shared. So it will reduce
our cost

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 Exit a joint venture: A joint venture is only a temporary arrangement between your
company and another. By definition, you won't be committing to it long term. In the
timeline of divestiture and consolidation, a joint venture offers a creative way for
companies to escape non-core businesses.

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Unattractive of joint ventures:
Risk of giving control share information, technology, and confidential information automatically
it will create a risk. Profit has been shared. If we are independent we can enjoy the whole benefit.
There may arise a conflict between us if goals and objective different or change over time.
Though we have some risk in joint ventures, but we can get more benefits then risk of joint
ventures. After all we will enjoy their technology, skilled labor, we can develop ourselves. So,
joint ventures will be better decision for us.

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Reference:
 Foreign investment law in Canada. (2020, May 4). Retrieved from
https://www.ilpabogados.com/en/foreign-investment-law-in-Canada/
 https://en.wikipedia.org/wiki/Trade_barrier
 Invest in Canada. Retrieved from https://www.investineu.com/content/invest-canada
 Canda. (2018, May 5). Retrieved from https://www.state.gov/reports/2018-investment-
climate-statements/canada/
 https://www.nordeatrade.com/fi/explore-new-market/canada/investment
 https://www.greenontheinside.net/marketing-mix-of-aarong-essay-example/
 https://globalmarketingtoday.wordpress.com/about/global-marketing-mix-promotion/
 https://worldcomgroup.com/how-to-adapt-your-brand-for-expansion-into-foreign-markets/
 https://www.brandingstrategyinsider.com/the-impact-of-culture-on-branding/
 https://www.slideshare.net/TanvirAbdullahToha/marketing-strategy-of-aarong
 https://www.doingbusiness.org/en/reports/global-reports/doing-business-2020?
fbclid=IwAR1EvZylg849Bx1UMOP8EOdkhCHdX3ZhhpmAsC-
KkmVt42gSKUJCf2q9Kc8

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