Roots Canada Case Study

Essay by Dreamer01High School, 12th grade January 2008

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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...