Roots Canada Case Study

1763 words - 7 pages

1) The Problem(s)/Opportunities/IssuesShould Roots Canada Expand to the EU market?There are many possible outcomes for this measure if Roots Canada does expand in the European Union (EU) some of the problems and opportunities, which can state the desired outcome. A major problem concerning the EU is the competition laws they enforce. What this law does is that it doesn't allow a business or organization to sell products at an extremely low price, which renders competition impossible and used to wipe out competitors. This may led to the outcome "anyone can have their stake in the marketplace" whereas consumers will depict other clothing manufactures over roots because that clothing line has been part of the EU and Roots will be taking a big risk if they bring forth a new trend of clothing. Other brand names Roots might compete with are: Burberry, Louis Vuitton, Chanel, Prada, Nike, Yves St, Armani, and Gucci. With that there will also be higher taxes in the EU, it is roughly 20% compared to the 15% that the Canadians have. This can be a problem because with higher taxes Roots must pay more money. Depending on their situation if they expand in the EU for every clothing they produce that isn't getting sold they must play a certain tax for it. There are disadvantages but advantages as well as expanding in the EU. A major advantage Roots can use is the free trade of goods and services among member states. What this means is that Roots can produce in a cheap economical environment such as Spain and sell to big powerful countries like France. This creates a cheaper tax rate upon Roots. With Spain's unemployment rate currently at 11.7% (highest of the EU) and France's excellent standard of living Roots may consider expanding in one of these countries. The EU also runs on a "single currency" the Euro. The Euro should be beneficial for citizens of the euro area, as increases in trade are historically one of the main driving forces of economic growth. Moreover, this would fit with the long-term purpose of a unified market within the EU. An issue as of 2004 the European Union has generally been suffering stagnant economic growth and low employment (averaged across the Union). In conclusion Roots Canada should expand in the EU because of its free trade, high unemployment, single currency, and an excellent standard of living.2) Facts about Roots Canada:•Established in Toronto in 1973, ROOTS is Canada's leading lifestyle brand, selling a wide range of clothing, leather goods and accessories for men and women of all agesBig Box retailer: Roots will fall into this category because they specialize in one area, which includes clothing and fashion.•To expand its range of offerings, the privately held company has developed relationships with more than 20 licensees, producing shoes, underwear, fashion accessories, fragrances, watches, luggage, linens, home furnishings and more.Licensing: Roots has a series of licensed products. More examples may include...

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