The Strong Loonie and Corporate Buying
In this paper I will critique the editorial titled “Strong loonie makes U.S. companies ripe targets” (Berman; 2007). Three main points that the author David Berman address in regards to Canadian companies buying American companies as the rise of the Canadian dollar makes them cheaper are: Canadian companies have a bad track record and should not cross the border, Canadian companies should wait for the dollar to go higher and buy the companies cheaper and lastly the soft state of the U.S. economy might not make it worthwhile in buying American companies.
The stronger loonie does make it a good time to buy American companies and reverse the hollowing out of the Canadian economy to foreign companies which are mainly form the U.S. Even though as mentioned Canadian companies have failed when crossing the border, examples given of Canadian Tire and Le Chateau, buying American companies is a different strategy all together. When purchasing an American company the market and customers are already there, taking the retail industry as an example. The marketing is done, the consumers are aware of the product. Take for example American companies purchasing of Tim Horton and the Hudson Bay Company, the name never changed either did the product. Ownership is the only thing that changed and at the end of the day this has very little affect on the consumer.
There is always the case of patriotism that might deter American consumers form changing form the Canadian bought store to an American owned one. However by keeping the American name this will have less affect. An example would be the Future Shop, owned by Best Buy an American company still markets itself as ...