Foreign Trade: Market Overview, CETA Trade Agreement, and Market Entry

This document provides an overview of the foreign trade market, CETA trade agreement, and market entry strategy for winter jackets in Germany and Netherlands. It includes economic environment, opportunities, purchase process, competition, and non-tariff barriers.

Running head: FOREIGN TRADE
FOREIGN TRADE
Name of the student
Name of the university
Author note

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1. Client name, product and objectives
Client: Voo Store
Product: Winter Jackets
Objective: To export the winter jackets after differentiating market demographics of Germany
and Netherlands
2. Detailed Objectives
 To assess the consumer demographics in Germany and Netherlands
 To identify the wholesalers and distributors in Germany and Netherlands
 To differentiate between the legal and regulatory barriers that might be faced by Canada
while exporting winter jackets to Germany and Netherlands
 To examine the market entry strategy that might be utilized by Canada for exporting
winter jackets to Germany and Netherlands respectively
3. Product
The major proposition of the Canadian organization is puffer winter jackets for both men
and women. The puffer winter jackets provide the customers with insulation against cold. The
concerned organization will also provide certain levels of discounts and offers in order to attract
the attention of most of the target customers in the markets of German and Netherlands.

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4. Market overview
4.1 Economic environment and opportunities in Germany and Netherlands
The GDP of Germany grew by 1.5 % as was computed by the end of the fiscal year 2018
(O’Connor, 2014). The growth in the GDP of the nation has helped in supporting the potentiality
of the citizens. Therefore, it will help the Canadian organization in getting hold of potential
customers. The service sector provided 70% contribution to the national GDP in Germany. On
the other hand, the industrial sectors provided 29.1% to the GDP of Germany (Hernández &
Nieto, 2015). On the other hand, the GDP of Netherlands is $850 billion, computed in the year
2018, which grew by 3.2%. The growth of the GDP has helped in supporting the potentiality of
the customers in making a buy of costly pr5oducts. Therefore, the better GDP condition of
Netherlands will be helping the Canadian organization in making a proficient market entry in the
nation. However, the lower population growth of Netherlands would affect the capabilities of the
concerned organization in finding huge amount of potential buyers.
The developments in the German market will be helping the Canadian organization in
finding potential customers. On the other hand, the different technological developments in the
industrial sectors of Netherlands will be helping the Canadian organization in upholding the
efficiency of the supply chain and logistics operations. However, the primary opportunity will be
based on the product offering of the business to the high number of potential customers which is
present in Germany (Musso & Francioni, 2014). The concerned organization will propose
puffer winter jackets, which will correlate to the needs of the customers in the German markets.
The exclusive technology that will be offered by the organization through the product will ensure
that the jacket will insulate the customers from the heavy cold. The increased rate of employment
in the different private and public sectors in Germany has helped in enhancing the potentiality of

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the target customers (Ebert, 2017). It will act as an opportunity for the Canada based
organization while exporting their product offerings to the German markets.
4.2 CETA trade agreement
The CETA trade agreement is a free trade agreement, which exists between Canada and
the European Union (EU). The exposition of the treaty has helped in eliminating 98% of the
trade tariffs between EU and Canada (Maekelburger, Schwens & Kabst, 2012). The treaty will
be helping Canada in undertaking free trade with Germany or Netherlands through minimal trade
regulations. The development of the trade agreement has helped Canadian markets in
maintaining the efficiency of the exports as per the needs of the German and Netherlands
consumers. The elimination of the trade tariffs will be helping Canada to undertake a suitable
trade relation with Germany and Netherlands while exporting the winter jackets to the foreign
markets.
5. Future research
5.1 Purchase process of the German and Netherlands consumers and competition
It has been reported in a research that around 72% of the German population prefers to
undertake online shopping from different e-Commerce sites (Musso & Francioni, 2014). The
German women prefer buying apparels, beauty products and jewellery. The German customers
specifically appreciate the punctuality of the home delivery services, which is again different
from that of the Canadian customers. Therefore, the specific buying behavior of the German
customers will contribute to the huge amount of consumer base for the Canada based
organization. On the other hand, Laufs and Schwens (2014) stated in a research that 47% of the
Netherlands’ customers make spontaneous purchases from the e-Commerce sites thereby

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displaying an impulsive buying behavior. However, O’Connor (2014) stated in a research that
the 78% of the Netherlands’ customers expect a honest delivery information related to timing.
The identification of the buying behavior and the expectation of the customers will thereby help
the concerned organization in maintaining the efficiency of the export activities. On the other
hand, the organization might face high competition while exporting their product offering in the
Netherlands’ markets due to the higher presence of e-Commerce buying platforms and lower
population rate.
5.2 Non-tariff barriers
Subsidies for domestic goods
The German and Netherlands’ Government provided subsidies for the domestic goods,
which has helped in the growth of the domestic companies in the nation (Mathis, 2012). It will
enhance the rate of competition in German markets. On the other hand, the subsidies to the
domestic companies will challenge the capabilities of the Canadian organization while
undertaking exports.
6. Market entry
Key competitors and the market entry mode
The key competitors of the Canadian organization while exporting their product offerings
in German or Netherlands’ markets are Amazon, Alibaba and the like. The existence of the e-
Commerce giant in the German markets has enhanced the level of market competition, which
challenges the sustenance of the concerned organization while exporting the winter jackets in
Germany. However, after assessing the different customer based information, the Canadian

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government might undertake a merger with a German based organization due to the presence of
higher number of potential customers in the market.

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References
Hernández, V., & Nieto, M. J. (2015). The effect of the magnitude and direction of institutional
distance on the choice of international entry modes. Journal of World Business, 50(1),
122-132.
Laufs, K., & Schwens, C. (2014). Foreign market entry mode choice of small and medium-sized
enterprises: A systematic review and future research agenda. International Business
Review, 23(6), 1109-1126.
Maekelburger, B., Schwens, C., & Kabst, R. (2012). Asset specificity and foreign market entry
mode choice of small and medium-sized enterprises: The moderating influence of
knowledge safeguards and institutional safeguards. Journal of International Business
Studies, 43(5), 458-476.
Mathis, J. (2012). Multilateral aspects of advanced regulatory cooperation: considerations for a
Canada-EU Comprehensive Trade Agreement (CETA). Legal Issues of Economic
Integration, 39(1), 73-91.
Musso, F., & Francioni, B. (2014). International strategy for SMEs: criteria for foreign markets
and entry modes selection. Journal of Small Business and Enterprise Development, 21(2),
301-312.
O’Connor, B. (2014). Geographical indications in CETA, the comprehensive economic and trade
agreement between Canada and the EU. Organization for an international geographical
indicator network. NTCM.

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