The prospects for a UK Firm in the Finance Service Sector, seeking market entry to Canada are the topic of discussion in this report. The report primarily presents a brief on the nature of the financial services sector. This is a sector that is highly competitive and is characterized by more liberalization and fading of functional categories in current times because of the economic recessions. However this liberalization of trading and globalization effects has in general been good for the financial services industry. In this context if the UK based firm was to expand into Canada, it will meet better economic prospectus as Canada is a developed high income country that has a consistently growing GDP. The location advantage analysis of the country also presents a favourable picture.
Location advantage analysis was done using the strategic Porter’s diamond framework. This framework reveals opportunities in the form of Canadian booming financial industry, but also reveals threats in the form of barriers to entry and strong competition. In the context of barriers to entry, one way for the UK firm to launch its presence is through Foreign Direct Investment. The FDI of the country is particularly high and is also sustained, so this is a good option for the UK Firm. In addition the UK firm can better handle the competition by bringing all its resources and internal strengths to the country-Canada. There are challenges in FDI operation management, but this threat is relatively low compared to the advantages that FDI would bring in the long run. An overall analysis reveals that the prospectus for the UK firm expanding into Canada is very good.