Market entry

There are a number of ways a Swedish company can enter into the Canadian market. Whether a company chooses to deliver and distribute their goods by directly importing, licencing the product, or establishing a joint venture with a Canadian company will depend on various factors. The factors that will influence the market entry strategy include, but are not limited to:

• degree of adaptation the product requires

• marketing and transportation costs

• tariff rates

The strategies highlighted below are the most common entry options into the Canadian market.

DISTRIBUTOR

Distributors have established channels that allow Swedish companies to access various local and specific markets in Canada. They purchase goods directly from suppliers and arrange warehousing and storage. This option of entering into the Canadian market can be a cost effective strategy.

AGENT

An agent is a person or company who represents one or several non-competitive lines. The agent is compensated on a commission-only basis for goods shipped or billed from the Swedish company they are representing. Agents control their own time and level of sales effort. The responsibilities and obligations between the agent and company are usually outlined in a written contract between the parties.

DIRECT SALES

There are major advantages to having a direct sales in the form of presence-control. Control over the day-to-day activities of sales staff is appealing to most business owners. Control over checking the inventory and quality of goods shipped directly to consumers is equally appealing. Costs may be reduced significantly in not having to pay agents or distributors, but will increase internally for operations. Costs to consider include but are not limited to: the time required to hire someone in that market, train them, then equip them with sales material and management, if not office space and equipment. These costs may be prohibitive for most small businesses looking to expand internationally in the early stages.

Each market within Canada may have its own unique laws, cultures and customs that are essential to know if your company wants to establish a successful sales presence.

For most businesses expanding into new markets, especially international markets like Canada, hiring a distributor is common until there is enough return from the market to justify building a direct sales presence. It is not as common for Canadian companies to work with small sized foreign producers as they generally prefer brokers or distributors.