Michael Porter's Value Chain and Canada's Competitiveness

Michael Porter's Value Chain and Canada's Competitiveness

Finance: The Royal Bank of Canada ranks as Canada’s safest bank listing and comes in at 17th out of 50 in 2007 World’s Safest Banks at Global Finance with a Standard and Poor’s AA-, Moody’s Aaa, Fitch’s AA and total assets of 503 billion USD. Wells Fargo scores significantly higher with fewer assets.

Toronto Dominion comes in at 27th with a Standard and Poor’s AA-, Moody’s Aaa, and Fitch’s AA- and total assets of 368 billion USD. The Commonwealth Bank of Australia scores higher with fewer performing assets.

Bank of Nova Scotia ranks 38th Standard and Poor’s AA-, Moody’s Aa1, and Fitch’s AA- with 355 billion USD in performing assets. The Australia and New Zealand Banking Group is ranked higher with fewer performing assets.

Finally Bank of Montreal squeaks in at 48th with Standard and Poor’s A+, Moody’s Aa1 and Fitch’s AA- and 300 billion performing assets. Svenska Handelsbanken of Sweden performs better with fewer assets. At the same time Canada is considered a low-risk nation politically, socially and economically.

The World’s Safest Banks 2007

http://www.gfmag.com/index.php?idPage=612

Human Relations: May be interpreted as CSR or industrial or labour relations. However the ILO or International Labour Organization has seen significantly higher complaints tabled from Canada since 1982 possibly as the result of exclusion of labour rights in the Canadian Charter of Rights and Freedoms. The large number and variety of Canadian labour jurisdictions are described as a source of multiplicity of complaints carried over to the ILO as compared to other developed nations which have fully centralized labour legislation such as the USA, the UK and Australia. Legislation concerning collective bargaining, right to strike and freedom of association are considered regional political issues rather than national judicial ones as they are in comparative developed nations. (Blaike, 2002) Such regional disparities in legislation might contribute to Canada’s Human Development Index 4th place ranking for 2007/2008. Iceland comes first, Norway comes second and Australia comes third. These issues may be considered cultural issues: negotiations, marketing, barriers

Canada and the ILO

http://www.cec-cce.ca/research/canada_and_the_ilo.doc

United Nations Human Development Index

http://hdrstats.undp.org/countries/data_sheets/cty_ds_CAN.html

Planning: The Competition Policy Review Panel released its report, “Compete to Win” on June 26, 2008 recommends lowered taxes across the board from corporate to personal incomes, generous support for excellence in higher education, higher foreign students volumes and reformed immigration policies, greater tax controls for cities, increased venture capital for small businesses, elimination of regional barriers to the flows of goods, services and people between provinces, reversal of border thickening with the USA, conclusion of trade agreements with priority list trading partners, assessment of regulations reducing competitiveness, increased innovation and research & development policies which result in growth. The report concludes, “that Canada must raise its productivity through greater openness to talent, capital and innovation, through vigorous competition, and through a more ambitious mindset.” These issues could be considered negotiations, marketing, and barriers-based opportunities for improvement.

Compete to Win

http://www.ic.gc.ca/epic/site/cprp-gepmc.nsf/en/home

Technology: Canada ranks 14th place or a D Grade in Innovation in the study of 17 OECD nations which is ripe for improvement according to the Conference Board of Canada and the Canadian Advanced Technology Alliance (CATAAlliance). The CATA recommends development of a national brand (Eg. Denmark: Milk also something I fully recommend), creation of an industrial strategy covering virtually every trade sector in the nation, removal of all trade barriers, attraction and retention of the world’s best talent, encouraging continued executive leadership training and commitments to lifetime learning among managers, development of special IT training incentives for women, advancement of ICT adoption in small businesses. "We are also challenging all the political parties to evaluate their respective platforms against those of Canada's High Tech Party . . . CATAAlliance. For Canada to prosper we must adopt an Innovation Nation mindset and culture. Let's set the gold standard." (Reid, 2007) These issues could be considered negotiations, marketing, and barriers-based opportunities for improvement.

Innovation Nation

http://www.cata.ca/Media_and_Events/Press_Releases/cata_pr10180601.html

Procurement: Imports primarily sourced in the USA at 54.9%, the EU at 12.3%, China at 8.7%, Mexico at 4% and other nations aggregated as 20.1% with no other nation exceeding Mexico’s 4%. However overall proclivity to trade is seen as 17th place globally out of 118 nations. Canada’s procurement policies are lagging in terms of breadth of international markets indicating a greater opening to the world from 26th place and could learn much from a study of Germany’s leading position in this area. Regional sales are not a significant problem. However great weakness in terms of multilateral trade rules openness at 53rd place indicates much could be learned from Hungary in terms of how to negotiate trade terms with foreign nations. (The Global Enabling Trade Report 2008).

The Global Enabling Trade Report 2008

http://www.weforum.org/documents/getr08_browser/index.html

After Sales Service: Very few pages turn up on google when the key words Canada and “global after sales service” are entered leading to a suspicion that local distributors spend a lot of time sitting next to a dusty telephone on Canadian global after-sales services.

Marketing and Sales: Few global marketing and sales agencies.

Operations: "canadian global operations" on google comes up with four pages.

Inbound/Outbound Logistics: The 2008 Global Economic Forum Global Enabling Trade Report scores Canada in availability and quality of transport infrastructure and transport services as two of ten essential pillars to global trade. Designed by Michael Porter this index is useful in assessment in concert with the Global Competitiveness Index.

The Global Enabling Trade Report 2008

http://www.weforum.org/documents/getr08_browser/index.html

In terms of transport infrastructure Canada scores 3rd overall out of 118 member nations covered in the study. However Canada’s weaknesses in infrastructure are displayed in its score of road traffic congestion ranked 49th out of 118 nations with Bangladesh leading in least congested roads. Canada’s airport density is only second to that of Norway which suggests one underutilized cargo shipping method prohibitive due to soaring fuel costs. Transshipment connectivity is ranked 17th but the range in scores between Canada’s 523 and the UK’s 580 indicates that the range of differentiation in ranking is slight among the top competitors. Airport infrastructure is also very narrowly ranged in global scores while Canadian railroad planners might look to Switzerland to increase rail transport quality. Similarly Canadian road planners might look to France to improve road quality. Finally Canadian port planners might seek quality improvement of port infrastructure examples in examining Singapore. Canada’s logistics capabilities are excellent.

In terms of transport services Canada places 15th overall out of 118 member nations covered in the study. Weaknesses are revealed in liner shipping connectivity and Canada could be taking lessons on this in China. Ease and affordability of shipment and competence in logistics are scored quite close to world leader The Netherlands. Ability and ease of tracking as well as timeliness of delivery to destination also closely follow world leader Singapore. Postal service efficiency remains strong in relation to world leader Japan. Canada’s logistics providers could learn more from global leaders.

Production: Canada manufactures 55.6% of its exports, and only 27.4% could be considered natural resources or raw materials, along with agricultural products at 11.4%.

In conclusion The Conference Board of Canada has issued a report card on Canadian competitiveness.

Economy: B

Innovation: D

Environment: C

Education and Skills: B

Health: B

Society: B

“By benchmarking Canada’s performance against its international peers, Canada can learn what it can do to sustain a high quality of life and also what should be avoided.” (A Report Card on Canada, 2008)

How Canada Performs: A Report Card on Canada

http://sso.conferenceboard.ca/HCP.aspx