SWOT analysis of Canada discusses the tilting Canadian dollar, the concern for existing corporations, the oil industry, and the stability of the economy.
Canada is the country of multiculturalism, gorgeous forestry landscapes, and a generous supply of oil. In this short SWOT analysis, information related to the country’s niche markets, exports, and the biggest cause of economic concern will be addressed by examining Strengths, Weaknesses, Opportunities, and Threats of Canada.
Canada's Strengths
Entrepreneurial support
The Canadian government supports entrepreneurship. With multiple avenues of tax reductions and tax breaks, Canadian entrepreneurs feel more confident (reporting less fear of failure) in building small businesses or labeling themselves “self-employed [1].
Niche market growth
Canada has seen an increase of profit through exporting in niche markets, including the development of Canadian diamonds, but particularly within the ice wine industry. In 2014, ice wine made up 29% of their total export value. And the numbers continue to grow.
Close to Americans
As the United States’ neighbor, Canada has seen the benefits of substantial trade surplus with America. This accounts for roughly three-fourths of Canadian merchandise exports each year [2].
Canada's Weaknesses
Dependency on the US
While the closeness to America serves as a benefit to Canada, the dependency can be a weakness. A large percentage of Canadian exports (over 74%) go to America. During the US recession, Canadian exports were hurt. So if the US markets suffer, Canada may also.
The fluctuating Canadian dollar
The Canadian dollar has been up and down (mostly down) which has slowly caused a rift throughout the country [3]. Unfortunately, thousands have lost jobs while the dollar continues to dip.
Canada's Opportunities
Emerging markets
Since exporting is big for Canada, there is much opportunity with exporting to international markets. While the US was Canada’s biggest export market of ice wine in 2007, Asian markets have a growing demand and Canada is stepping up to fulfill it. And the Canada-Indonesia Business Council desires medical services, technologies, and medications Canada can supply [4].
Canada's Threats
The closing of stores
The low Canadian dollar has threatened the livelihood of many stores (particularly Canadian businesses). For example, Dollarama has threatened to raise their prices in the next couple of years because the dollar is too low to sustain current prices. Additional stores, such as Future Shop, Target in Canada, and recently Aeropostale, have also closed their Canadian doors due to the poor economic growth.
Loonie connected to oil
The dollar (a.k.a a loonie) has a correlation with the oil industry. While the country has an abundance of oil supplies, it’s believed the higher the oil prices, the bigger the increase in the Canadian dollar. But recently oil prices have dropped and it has negatively affected the dollar [5]. Such a close relationship could make or break the Canadian economy.
The truth is, Canada is developing small businesses, startups, and entrepreneurs with the government supporting their growth. And over the last ten years, the country has also seen the impacts of exporting niche merchandise to grow the economy. But with the tilting Canadian dollar, there’s concern for existing corporations, the oil industry, and the stability of Canada’s economy.
[2] CIA. (n.d.) World Fact Book: Canada.
[3] http://ca.reuters.com/article/businessNews/idCAKCN0XX2BJ
[5] http://www.cbc.ca/news/business/oil-loonie-markets-1.3516421
