INTERNATIONAL BUSINESS ENVIRONMENT

Comments 3/5 Contents should be in form of Porters diamond theory

ASSIGNMENT -1

GROWING INDUSTRIES IN CANADA

PRESENTED BY: SUMIT SONI (52) SWATI TIWARI (53) SYED TALIB ALI (54)

INTERNATIONAL BUSINESS ENVIRONMENT

CANADA
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west and northward into the Arctic Ocean. It is the world's second largest country by total area. Canada's common border with the United States to the south and northwest is the longest in the world. Canada is a federation that is governed as a parliamentary democracy and a constitutional monarchy with Queen Elizabeth II as its head of state. It is a bilingual nation with both English and French as official languages at the federal level. One of the world's highly developed countries, Canada has a diversified economy that is reliant upon its abundant natural resources and upon trade particularly with the United States, with which Canada has had along and complex relationship. With the eighth-highest Human Development Index globally, it has one of the highest standards of living in the world. Canada has the tenth largest economy in the world, is one of the worlds wealthiest nations, has one of the highest levels of economic freedom in the world and is a member of the Organization for Economic Co-operation and Development (OECD) and the Group of Eight (G8). Canada, the second largest country in the world, is a collection of ten fairly large provinces and three territories. The total area of Canada is 9,984,670square kilometers. Initially Canada was a colony of the United Kingdom but today it is a free nation. The National Flag of Canada holds a large red maple leaf in the middle with thick red borders on the two sides. Canada represents Federal Constitutional Monarchy with Parliamentary democracy. Toronto is the largest city of the country. The capital is Ottawa. The official languages of the country are English and French. Canada is one of the richest countries of the world. And it is also one of the leading producers of several minerals. The total population of the country is 32,878,900, according to the 2007 census. Incidentally Canada has the largest number of lakes in the world, hence an important accumulation of the world's fresh water.

INTERNATIONAL BUSINESS ENVIRONMENT

GROWING CANADA:
Canada excels in multiple sectors, as diverse as our vast country. As one of the worlds most competitive investment locationswith regional clusters of industrial excellence and indispensable connections to global value chains Canada has clear advantages for the sophisticated investor seeking new opportunities. Canada has created a unique business environment that allows companies to grow on the world stage. To attract the best and brightest, Canada has focused its policies, business incentives and university support around key industries.

CANADAS GROWING INDUSTRIES:

AEROSPACE SECTOR
Canadas aerospace industry is winging its way to unprecedented profitability. Canadian firms have earned loyal customers around the world for delivering leading-edge and advanced technology solutions on time and at a competitive cost. Canadas aerospace leaders are renowned for civil and military aircraft, flight simulators, airborne defense systems and aftermarket services. The countrys global share of aerospace activity has tripled in the last 20 years, making Canada the worlds 5th largest aerospace producer. The future looks equally bright thanks to Canadas low business costs and sophisticated R&D infrastructure, including rich tax credits and a national Institute for Aerospace Research. Canada also enjoys a knowledge advantage, with one of the best educated workforces in the world. Throw in a business friendly regulatory environment, 20-year patent protection and industry clusters in cosmopolitan urban centres offering an exceptionally high quality of life, and the sky is the limit for the next generation of aerospace innovation.

Look what Canada has to offer: 400 firms employ a highly skilled workforce of 82,000 people 80% of domestic production is exported 60% of it to the U.S. 80% of industry output is non- military 20 universities offer advanced degrees in aerospace and aerospace engineering 3,000 aerospace graduates stream out of Canadian universities and colleges each year

INTERNATIONAL BUSINESS ENVIRONMENT

Canadian Aerospace Excellence Regional and corporate aircraft Canadian-based Bombardier is a global leader in regional and business aircraft. Its CRJ Regional Jet is used by over 60 airlines worldwide, with over 1500 in active service. Gas Turbine Engines Canadian firms satisfy one-third of global demand for small gas turbine engines. Pratt & Whitney Canada announced a $1.5 billion five-year R&D initiative in December 2006 to support new product development. Commercial Flight Simulators/Visual Simulation Canadian-made products hold a 70% world market share for visual simulators. Canadian firms are global leaders in the design and manufacture of large flight simulators, visual systems and flight training devices. Commercial Helicopters Canada represents one quarter of the world market for civil helicopters. Bell Helicopter Textron, based in Montreal, is the worlds leading producer of rotary wing aircraft. Euro copter Canada Ltd., a division of EADS, has manufactured helicopters at Fort Erie, Ontario since 1984. Landing Gear Manufacturing Canada has nearly one-third of the world market for landing gear, including manufacturing 60% of new large aircraft landing gear. The sector is one of the largest in the world, made up of Canadian-owned, foreign-owned and multinational aircraft landing gear companies. The vast majority of their products and services are exported. Aircraft, engine and component Maintenance, Repair and Overhaul (MRO) More than 1,100 certified Aircraft Maintenance Organizations generate over $3B in annual revenues and employ 17,000 highly skilled workers. Canadian firms have developed a comprehensive array of MRO service capabilities for rotary wing aircraft spanning virtually all models of helicopters produced in North America and Europe.

INTERNATIONAL BUSINESS ENVIRONMENT

Clusters of Creativity Centers of aerospace excellence can be found in all corners of the country. British Columbia is gaining global notice for program management, engineering, maintenance, material and information systems support for military fleets; maintenance, repair and overhaul to rotary and all fixed-wing aircraft; helicopter services. Alberta and Saskatchewan boast expertise in the maintenance, repair and overhaul sector; an emerging centre for unmanned vehicle systems; and, excellence in after-market products and services. The two provinces are also home to a number of world class defense electronics companies and have strong capabilities in satellite systems. And Canadas Atlantic region is recognized for maintenance, repair and overhaul sector, helicopter services; gas turbines; software development, system integration, training and simulation. World renowned industry clusters are found in: Montreal: Montral is the hub of Canadas largest aerospace sector. In 2007 alone, Montrals aerospace exports totaled over $9.8 billion. The city is globally recognized for its expertise in aircraft assembly, engine manufacturing, maintenance overhaul and repair, avionics and landing gear. Over 42,400 employees work in Qubecs aerospace sector at such firms as Bombardier Aerospace, Bell Helicopter Textron Canada, Pratt & Whitney Canada, Rolls-Royce Canada, and CAE. Montral is also the site of more than ten aerospace research centers, including the Canadian Space Agency, the Aerospace Manufacturing Technology It is also headquarters for international organizations such as the International Air Transport Association (IATA), the International Business Aviation Council (IBAC) and the Organization of International Civil Aviation (ICAO). Toronto: Toronto is the core of Canadas second largest aerospace cluster, centered in southwestern Ontario. More than 200 companies employ in excess of 20,000 skilled workers. Toronto hosts world-leading aerospace firms such as Bombardier Aerospace, Pratt & Whitney Canada, Honeywell Canada, L-3 Electronic Systems, Magellan and Northstar Aerospace, recognized globally for their strengths in aircraft parts manufacturing, aircraft systems development, and maintenance and overhaul. The University of Toronto Institute for Aerospace Study and Ryerson Universitys Institute for Aerospace Design and Innovation collaborate with industry partners on numerous R&D projects and develop the next generation of skilled sector workers to generate ongoing industry innovations.

INTERNATIONAL BUSINESS ENVIRONMENT

Winnipeg: Winnipeg is home to the largest aerospace cluster in Western Canada and a major centre within North America for composite aircraft component manufacturing, and aircraft maintenance, repair and overhaul. The cluster directly employs 5,300 people. It is led by four world-class firms, Boeing Technology Canada, Standard Aero, Magellan Aerospace Limited and Aveos, as well as 23 established regional and national firms. Winnipeg is also one of Boeings ten major global sites for commercial aircraft, one of only three such sites outside the U.S. Boeings composite manufacturing facility, located in Winnipeg, is the largest such facility in North America.

AUTO SECTOR:
Engine of Economic Growth Its no wonder that the Economist Intelligence Unit rates Canadas business environment as the best in the world among auto-producing nations. Canadian assembly plants enjoy a 6.4% cost advantage over the U.S. and stronger labor productivity scores than American or Mexican facilities. Canadian plants have won one-third of all J.D. Power plant quality awards for North America, double Canadas share of continental production, and Toyota and GM plants in Canada were rated the best in the hemisphere for five of the last six years. Canada also has the second lowest corporate tax rate among the worlds Top 10 automotive countries falling from 19% to 15% by 2012, less than half the U.S. rate and recent federal budgets provided over $1 billion in tax cuts for the sector. Then theres the smart factor. R&D spending in the motor vehicle and parts industries has more than doubled in the last decade, thanks to rich federal tax credits. And Canadas highly-educated population ensures skilled workers, with many universities and colleges offering auto-related programs. To top it off, Canada offers the highest quality of life among the Top 10 automotive countries 1st in the G7. Investors, start your engines!

Look what Canada has to offer 3rd largest exporter of automotive products after Japan and the U.S., accounting for 16.7% of North American vehicle production 168,730 employed in manufacturing and 343,300 in distribution and aftermarket 84% of Canadian-built vehicles are exported, primarily to the U.S. Annual capital investment in auto manufacturing has averaged $3.5 billion over the past 10 years

INTERNATIONAL BUSINESS ENVIRONMENT

o o o o

Among the worlds Top 10 automotive countries, Canada is ranked: 1st for percentage of the population with post-secondary education; 2nd for availability of qualified engineers; 2nd for knowledge transfer and commercialization systems between companies and universities; and, 3rd for technological infrastructure A snapshot of Canadas Auto Sector Manufacturing If you can drive it, Canada produces it. The Canadian automotive industry manufactures light duty vehicles such as cars, vans and pickup trucks. It makes heavy duty vehicles, including trucks, transit buses, school buses and military vehicles as well. All of the light vehicle assembly plants are located in southern Ontario while commercial truck and bus plants are located in Ontario, Quebec and Manitoba. Canadas auto production also includes a wide range of parts, components and systems used in all these vehicles. The Automotive Sector represents Canadas largest manufacturing sector, responsible for 14% of manufacturing GDP in 2007. Vehicle Assembly Canada is home to 22 passenger and commercial vehicle plants that produce 2.6 million units annually, with shipments valued at $60.8 billion. Canadas production-to-sales ratio = 1.5:1.There are 36 high-volume assembly plants within a 500 km radius of the Windsor-Detroit border, which produced 6.98 million vehicles in 2007. Canada is also close to all major U.S. auto R&D centers. Vehicle assemblers have access to supply chains in the U.S. and Mexico. Automotive Components Canadas 650+ automotive parts sector, with shipments valued at $32.7 billion in 2006, employs over 92,000 people. In addition to providing components for new vehicle manufacturing, the industry supplies replacement parts and accessories to Canadas well-developed vehicle dealer network, which is recognized for aftermarket sales and service. Canadian areas of expertise Metal Processing

Advanced casting of light metals Cutting and machining Sheet and tube forming Welding and joining Powder metallurgy

INTERNATIONAL BUSINESS ENVIRONMENT

Advanced Materials

Lightweight materials Nano-materials Bio-materials Advanced Design, Visualization & Manufacturing

Inspection and vision systems Laser imaging Tooling and robotics Stereo-lithography, laser deposition Virtual design Advanced Technologies

Mechatronics Powertrain engineering Clean diesels Fuel cells, hydrogen & alternative fuels Homogenous charge compression ignition Driving Innovation Canada is a great place for product development and testing, and commercialization of new technologies. Companies operating in or locating to Canada benefit from generous R&D investment tax credits and funding and vibrant R&D clusters, including:

AUTO21- Canadas national network of centers of excellence for automotive R&D. Over 120 industry, government and institutional partners support over 230 top researchers at more than 35 academic institutions, government research facilities and private sector research labs across Canada. Automotive Innovation Fund - A $250 million program to support strategic, large-scale R&D projects in the automotive sector to develop innovative, greener and more fuel-efficient vehicles. Automotive Research and Development Centre - A $500M R&D program focused on alternative fuel, mechanical engineering design, and engine/transmission design, advanced materials, emissions, bio-mechanics and vehicle safety among others. Automotive R&D Partnership Initiative A $145M program designed to foster an innovative and competitive auto industry through industry-driven research.

INTERNATIONAL BUSINESS ENVIRONMENT

Partnership for the Advancement of Collaborative Engineering Education - A $240-million program that focuses R&D in computer-aided design, manufacturing, engineering software, hardware and training.

AGRICULTURE INDUSTRY
Food for Thought Investors with an appetite for high-quality products and matching profitability will satisfy their craving in Canadas highly competitive food processing and bioindustrial sectors. Canadian advances in science, technology and government policy have spearheaded advanced food processing, organics, health and wellness, innovations in nanotechnology, genetic engineering, and the development of environmentally friendly, industrial products. It all starts with Canadas vast agricultural land base that provides ready access to a rich supply of raw materials and fresh ingredients. Add in abundant energy, water and natural resources, streamlined corporate taxes and regulations, internationally-respected inspection systems and an integrated transportation network that assures rapid distribution across the continent and around the globe. Put them all together and you have the ingredients for a vibrant agri-food manufacturing industry that offers investors rewards as tantalizing as the safe, delicious, nutritious foods it produces.

Look what Canada has to offer: Canadas business environment is ranked 1st among G7 countries Lower R&D costs than other OECD countries - 0.4% vs. 1.1% in the U.S. and 2% in Japan 2nd among OECD countries in tax relief per R&D dollars spent World-class product testing/pilot facilities, with flexibility for small trials and production runs Canadas geographic and ethnic diversity offers opportunities for test marketing and clinical trials Intermodal freight transport connected to all points on the continent, unique access to Asia-Pacific with the closest port to Shanghai and the closest port to Europe Agri-food clusters closer to major U.S. border cities than the nearest U.S. hubs Areas of agri-excellence Healthy products Canadian companies are developing and implementing cutting-edge technologies to produce nutrient- rich natural health products, innovative functional foods and trustworthy health ingredients. Canadian

INTERNATIONAL BUSINESS ENVIRONMENT

breakthroughs include: healthier canola oils, flax bio-actives, oat and barley betaglucans, berry-based polyphenolic antioxidants, phystosterols and stanols, and fibre-based prebiotics. Healthy alternatives As a world leader in grain and oilseed production, Canadas bio-industrial sector is at the forefront of mining new bio-materials and fuels, and converting agriculture bio-waste into viable, alternative industrial and consumer products. Canadian innovations include: grain-based ethanol and biodiesel, soy-based polyurethane foam, natural fibre composite resins, compostable bio-plastics and bio-based lubricants.

A snapshot of the industry 2nd largest manufacturing industry Employs 291,000 Canadians 14% of all Canadian manufacturing shipments worth $83.3B or 2% GDP Exports of $31B 69% to the U.S., followed by Japan and China 6,700 food and beverage processing firms across the country Planned investments in machinery and equipment of $1.8B in 2008 Operating profit margins range from 4%-6% Sub-sectors Meat, dairy, bakeries and tortilla, fruit and vegetables, grain and oil seed, animal food, breweries, sugar and confections, seafood, soft drinks and ice, distilleries and wineries. Growth Opportunities in North America's Biscuit and Bakery Markets Rise to the Top in Canada Canada's business environment is among the best in the world. Indeed, given its openness to foreign trade and capital investment, superb infrastructure and ready access to American and Mexican markets, Canada is the location of choice for manufacturers of biscuit and bakery products wishing to supply the whole of North America. The North American Free Trade Agreement (NAFTA) makes Canadian, American and Mexican markets a single trade entity. This provides Canadian-based businesses access to a market of more than 435 million consumers. U.S. markets can be supplied quickly and efficiently, as most Canadian food manufacturing centres are less than 90 minutes from the border and 50 percent of American consumers live within a one-day's drive.

INTERNATIONAL BUSINESS ENVIRONMENT

Canada's thriving biscuit and bakery industry continues to experience tremendous growth and is poised for even greater market expansion. In 2005, Canadian bakery exports to the U.S. (particularly frozen and par-baked), totalled US$ 1.49 billion, resulting in a trade surplus of US$ 499 million. Canada's share of the U.S. biscuits and bakery imports continues to lead the world at 52 percent, over five-times that of the next largest exporter - Mexico. An increasing number of leading biscuit and bakery manufacturers continue to expand their operations in Canada. Many others have chosen to have their products co-packed in Canada, where agricultural inputs and packaging materials are readily available at competitive costs. Firms seeking to invest in North America should consider Canada first. Major Exporters of Biscuit & Bakery Products to the U.S.-2005 ($ '000s US)

Source: U.S. Department of Agriculture Foreign Agricultural Service

The Key Ingredients for Success

World-Renowned Wheat Canada is famous for the high quality of both its hard and soft wheats, which are

INTERNATIONAL BUSINESS ENVIRONMENT

the choice of many flour millers and bakers worldwide. Both types are competitively priced in North America and Canadian millers work closely with bakery and biscuit manufacturers to match flour requirements to their specific needs. Sugar Refiners Import the Vast Majority of their Raw Materials at World Prices Canadian sugar users have traditionally enjoyed a price advantage over the U.S. Canada has historically offered companies a reliable source of high quality refined sugar at prices lower than those prevailing in the U.S Specially Priced Dairy Ingredients Bakery and biscuits companies benefit through access to competitive dairy prices administered by the Canadian Dairy Commission (CDC) under five year agreements with the sector. Information can be found on the CDC Web site, referenced as Class 5b" under the Special Milk Class Permit Program. Visit:www.milkingredients.ca Import for Re-export Biscuit and bakery manufacturers that produce products destined for exports market such as the U.S. may import any ingredient used in the manufacturing process, duty free. Skilled Workers and Competitive Labour Costs Canada leads the world in the percentage of citizens with a university or college education. Canada's multilingual work force gives employers valuable resources to succeed in global markets. Canada's public health care system helps businesses maintain a healthy work force while providing an international competitive edge by virtue of its system of universal medical benefits. Competitive Energy, Land and Building Costs Canadian electricity and gas costs are lower than those prevailing in the U.S. and most of Western Europe. Canada's serviced industrial land and factory construction

INTERNATIONAL BUSINESS ENVIRONMENT

costs are lower than those in Western Europe and competitive with those of the U.S.* Pure & Natural Build on Canada's pure and natural advantages clean air, pristine water, wide open spaces and make the maple leaf your symbol of success.

BIOTECHNOLOGY SECTOR
Canada Ahead of the Curve Canadas position as a biotechnology leaderone of the top five countries in the worldis a reflection of the countrys world-class credentials. The biotech industry also benefits from powerful partnerships that strengthen government research dollars through collaboration with universities and industry, as well as progressive financing and venture capital programs for Canadian biotech enterprises.

Proven Research Strengths in Genomics Proteomics Bio-informatics Immuno-therapies Protein engineering New drug delivery systems Vaccines Regenerative medicine (stem cells) Neuroscience Cardiovascular Canada provides broad access to early-stage capital, world-class scientific research and progressive universities. This combination offers all kinds of opportunities for entrepreneurship in biotechnology. Ian McBeath, Inflazyme Pharmaceuticals Ltd. Cutting-Edge R&D President and CEO

INTERNATIONAL BUSINESS ENVIRONMENT

Canada recognizes the economic potential of the biotech industry and has formally committed itself to become one of the top five countries in the world for biotech research and development. A snapshot of the Canadian biotechnology sector, 2003:
o o o

496 biotechnology companies, public firms making up 17% $3.8 billion in biotech revenues, a 96% increase over 1999 17,065 products/processes at all stages of development; of these, nearly 2/3 on the market $1.5 billion in R&D spending by industry, an 80% increase over 1999 Public biotechnology firms increased R&D spending by 224% over 1998. Annual federal biotechnology spending $791 million, 96% of it on R&D (200405). Human health dominates the Canadian biotechnology scene, accounting for 53% of firms: Biopharmaceutical sales$2.1 Billion Over 78% of all biotechnology-related jobs are in this sector. (176 bio-pharmaceutical firms2006) Nearly 90% of R&D investments in biotech is dedicated solely to this sector. ( Biopharma R&D$1.3 Million) Toronto has the largest faculty of medicine in North America and the output of peer-reviewed publications from this area is greater than any other medical centre in the world. Research Successes A team from the Faculty of Medicine at Centre Hospitalier universitie de Qubec at Universit Laval recently discovered a natural defense mechanism in the body deployed to combat nerve cell degeneration observed in people with Alzheimers disease. The discovery could lead to a new therapeutic approach to Alzheimers disease. University of Toronto biomedical scientists have pioneered the genetic mechanisms for several diseases and discovered a way to increase the yield of stem calls from umbilical cord blood by removing unwanted cells that inhibit stem cell growth. Scientists at McGill University have discovered a gene that controls the speed at which patients develop tuberculosis. This is a breakthrough in understanding how a gene can control the time frame between initial infection and the disease. A BC neuroscientist developed the worlds first diagnostic blood test to detect diseases such as Alzheimers, Parkinsons, Lou Gehrigs and CJV. The test could be available within two years.

INTERNATIONAL BUSINESS ENVIRONMENT

An international team led by three University of British Columbia microbiologists has completed the mapping of the genetic makeup of a soil bacterium (RHA 1), the first organism of its kind to be completely sequenced. This work illuminates how the soil organism breaks down PCBs and other toxic wastes, and adapts to the environment around it.

THANK YOU!