U.S. tools cabinet manufacturer is considering entering the Canadian market. The company will use one of the following approaches to expand its market in Canada:

A. Advertising in different magazines.

B. Selling cabinets to Canadian distributors. The distributors pay the shipping costs on the cabinets from the U.S. port or border crossing closest to them.

C. Direct sales to wholesalers by non-exclusive agents. The agents will represent other suppliers.

D. Direct sales to wholesalers by full-time salespeople in each of the Canadian market. No sales offices will be opened, and the cabinets will be shipped from a warehouse in the U.S. Shipment will be made only after a customer’s credit and contract are approved by the U.S. head office.

E. Direct sales to wholesalers by full-time salespeople who report to a sales office in each of three regions of Canada. The sales offices will co-ordinate marketing and shipping of products from two warehouses located in Canada. However, formal approval of contracts will be administered in the U.S. head office.

F. The sales offices described in Part E would be independent profit centres, with regional credit managers. The four warehouses from which orders are filled will be near the sales offices.

  

Required:

For each expansion approach, assess whether or not the U.S. manufacturer will be deemed to have a permanent establishment in Canada.

Answer rating: 100% (QA)

QUESTION A Advertising in different magazines results in promoting the product in that country Thus ... View the full answer