Tariff threats and the disruptions from American policies underscore the challenges faced by Canadian businesses.

For a long time, Canadian exporters have preferred a low exchange rate against the US dollar to ensure an advantageous positioning.

We know that Canada has a productivity problem (see Notes below). This, combined with our dependence on the American economy, puts businesses at risk when the economic environment is disrupted.

The current issues remind Canadian and European businesses to focus on value creation and the importance of a strategy to support a competitive advantage.

Is your offer unique, and can it withstand tariff pressures?

Think in terms of value levers from your customers' perspective. Have you developed an offer that targets specific competitive criteria other than price? The answer to this question can express your degree of exposure to the current risk.

If you hold a competitive advantage, it should be materialized in the income statement. However, have you complexified the sources to defend it? Go beyond the product element and combine the elements of the business model differently from your competition.

A classic example is Apple's ecosystem, which fosters a more cohesive environment for the user and enhances the use of various products, irrespective of the evolution of each product.

Are your operations aligned and consistent toward value creation?

Value creation must be significant for the customer and originate from the coherence of the strategic choices. Operations must be aligned and should integrate different partners to maximize the value generated by the supply chain.

Beyond this coherence, the ability to be productive allows us to maintain and increase this value. As mentioned, we have a significant issue at this level. Gains must be made quickly.

Let's think in terms of performance improvement and innovation. It's not just about working harder; we need to work smarter.

How can you accelerate the levers of transformation?

Organizations have the ability to improve performance and create value. Understanding customers’ value criteria and excelling in essential operational elements is indeed part of the daily routine.

However, the issue more often concerns the ability to implement, whether through culture and key competencies (ability to change) or the availability of team members (execution capacity).

Claude Émond spoke to us during a podcast episode about the need to adapt iterative and learning loops to the extent of the risks. We must choose the right levers and, above all, have the "space" to explore and implement solutions!

Remember

The current (and probably future) disruptions are a brutal awakening that highlights the importance of adapting quickly.

Pay attention to the different levels of value creation (customers, value chain) and especially, to your implementation capacity.

Your strategy must allow you to identify the most significant choices.

Is this the case?

It might be time to reassess your strategy.

Next Steps

Consulting and Advisory Services

When the time comes, we can help you clarify your strategic choices and support you in implementing your business ambitions.

Schedule a call here to move forward!

Community

You prefer to develop the levers for strategic action and explore tools and approaches in the company of leaders, entrepreneurs, and experts who, like you, want to have an impact on their organization.

The Innovation, Agility and Professional Excellence Community is for you (available in French).

More details soon on the March launch.

Thank you for being with us, and have a good week,

References

Notes (via Gemini Advanced 1.5 Pro with Deep Research)

For reference and perspective, here is some data:

Canada vs United States

• Canada has lagged behind the United States in productivity growth for several decades, and this gap has widened since the pandemic.
• While the United States recorded productivity growth of 1.6% per year in the business sector since the pandemic, Canada has experienced no growth.
• From 2019 to 2022, the United States surpassed Canada in most major sectors of activity.

Canada vs Europe

• The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union came into effect in 2017. Before the pandemic, total merchandise trade between Canada and the EU reached a record level of €66.8 billion in 2019, an increase of 27% compared to the 2016 level.
• During the same period, Canada's trade with the world increased by only 13.7%, while the EU's trade with the world increased by 17.4%.
• Since the implementation of CETA, the average annual growth rate of bilateral trade between Canada and the EU has almost doubled, from 4.4% in the 2011-2016 period to 7.9% in 2018-2019.