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Critical thinking #1

Julio Crespo

Centennial College

Business Principles PMGT 707

Joan Rempel

September 22, 2021

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Critical Thinking #1

About 99 percent of the world population live outside Canada, but many Canadian

companies, especially small businesses, still do not engage in global trade. Why not? Do you

think more small businesses will participate in global markets in the future? Why or Why

not?

Canada is a large country with 9.9 millions 𝑘𝑚2 and 38 millions of population (United

Nations Population Division. 2019), compare with United States which have 9.8 millions 𝑘𝑚2

and 329.4 millions of population (United Nations Population Division. 2019), Canada is a

country in growth with a widely necessities attending most likely by national’s companies and

United States companies, according with William G, M. (2019) “we see that we are dependent on

one country, the United States”. So thanks to the great international trade with United States,

Canada export 74.5% and import 67.8% of their products with U.S. William G, M. (2019), open

up to a global trade is unlikely in this times because the most of Canada companies belong to

small company sector as it shows on table 1. With the 97.9% these companies are working

comfy according with their capacity and do not need expand their market.

Figure 1. Small Business Tourism and Marketplace Services. (2020, December 10)
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On the other hand, small businesses will grow along with the country and more and more

will be opening up to the international market. There are some reasons why the degree of

knowledge they have, or perhaps they are so concentrated and busy with the local market that

they have not been able to think about the international market. A study revealed that Sarah

Niedoba. (2019, October 25). that "46% felt they didn’t have the insights needed to identify

markets for expansion, 63% said they didn’t know the steps required, and 24% didn’t even know

where to start." From the above we can deduce that these companies are serving the local market

and that is enough and on the other hand they do not know the steps required to open up to the

international market. For the latter, I do believe that with the country's population growth, small

companies will grow and open up to international markets to support expenses.

What can business do to prevent unexpected problems in dealing with sociocultural,

economic and financial, legal, and physical and environmental forces in global markets?

It is a fact that companies that enter international markets, especially those that decide to

carry out operations in countries other than their origin, could face problems such as Socio-

cultural factors, Economic and Financial factors, Legal and Regulatory factors, Physical and

Environmental factors. As mentioned in the book William G, M. (2019). Understanding

Canadian business (9th ed.). Several companies implement strategic alliances with other

companies located in the destination countries, in order to acquire socio-cultural characteristics

and adapt them to their business model, such is the case of joint ventures, through this strategy

the companies share technology, expertise in marketing and in addition to everything they access

the market as if they were local companies. Some other companies such as MacDonald using the

franchise model have penetrated different markets with strategic alliances, it could be said, but in
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this case they do not change their brand, they have achieved this by adapting their brand to the

customs and characteristics of the countries where they have arrived. In this way you can deal

with problems when you want to penetrate new markets.

Countries like Canada that have a high standard of living are referred to as

industrialized nations. Countries with a low standard of living and quality of life are called

developing countries. (terms formerly used were underdeveloped or less-developed

countries.) What factors prevent developing nations from becoming industrialized nations?

There are many factors that can affect developing countries to become developed

countries, such as the lack of resources such as clean water sources, fertile lands or minerals such

as gold, among other important factors. Although these mentioned are important, there are some

other examples such as China, who do not have an abundance of natural resources but have a

strong economy, that is why the greatest resource and the one that makes the difference between

a developed country and a developing country could be Factors other than natural resources, we

could also talk about good international relations as is the case in the free trade agreement

between the United States, Canada and Mexico. Another example of this is the European Union.

In addition to these factors that affect development, the most disastrous of all must be considered

and that is corruption, I could take the example of South America, where the levels of corruption

are overwhelming, this factor being the main responsible for underdevelopment, because all

South American countries have many natural resources, many of them also with good

international relations, but there are more negative effects that these relations produce than the

benefits, added to the mismanagement of public resources by the political power, have

maintained the South American countries. in underdevelopment.

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How would you justify the use of revenue or protective tariffs in today’s global

market?

The collection of these fees is important because it maintains and protects the domestic

product, not only collecting taxes when importing or exporting but also limiting the quantities,

when a country does not limit the import quantities it puts productive sectors at risk, such as

"China and Taiwan, were found guilty of dumping solar panels in the United States. " William

G, M. (2019). It is precisely what tries to control the collection of taxes or the control of

quantities that imported products are not more economical than those that are produced in the

country, since this would cause a very great disadvantage in the economic growth of the country.

the tariffs (import taxes) charged by the government then justify their existence based on the

concept that they exist to protect the internal market, by applying tariffs the prices of these goods

rise to make domestic products competitive.

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References

United Nations Population Division. (2019). Population, total - Canada. World Bank Open

Data | Data. https://data.worldbank.org/indicator/SP.POP.TOTL?locations=CA

Sarah Niedoba. (2019, October 25). Why are Canadian companies so afraid to go global?

Canadian Business - Your Source for Business

News. https://www.canadianbusiness.com/economy/why-are-canadian-companies-so-

afraid-to-go-global/

William G, M. (2019). Understanding Canadian business (9th ed.). Mc Graw Hill.

Figure 3.5, pag 89.

William G, M. (2019). Understanding Canadian business (9th ed.). Mc Graw Hill.

Chapter 3, pag 104.