Scenario 1 Australia and New Zealand Markets
Scenario 1: Australia and New Zealand Markets
Introduction
Australia and New Zealand are among the easiest places in the world to do business. According to reports by the World Bank, in 2020, New Zealand ranked 1st as the easiest country to do business globally, while Australia ranked 14th. It is easy to start and register a business, gain credit, access highly skilled labour, and develop a customer base in these countries. Globalisation provides a broader market for companies striving to stand out and achieve success. However, it is essential to understand the business culture, market conditions, and regulations in different countries before venturing into business. This report evaluates the business culture and factors influencing business entrants in the New Zealand and Australia market.
Factors to consider for successful entrance in New Zealand and Australia Market
Cross-Cultural Management: The labour market in New Zealand and the Australian market is very diverse due to many migrant workers; hence, the need for companies to invest in cross-cultural management (Kang et al., 2019). Cross-cultural management is essential in understanding and dealing with individuals from different cultures and encouraging a favourable working environment necessary for successful business operations in a diverse workforce.
Business Culture: The business culture in Australia and New Zealand differs from many countries globally; thus, businesses must understand and incorporate various work environment practices before venturing into these markets. For instance, work balance is essential in New Zealand and Australian markets; entrants should develop a flexible work schedule for employee motivation (Pecotich and Shultz, 2016). Also, honesty and etiquettes such as punctuality are critical in successfully operating a business in New Zealand and Australia.
Innovation: Unlike countries where businesses build a customer base and loyalty to enhance a competitive business edge in the market, New Zealand and Australian consumers are receptive to changes and new ideas (Kang et al., 2019). Companies joining these markets should constantly innovate new products and be extra cautious in operations to gain an edge and increase profitability and growth.
Government policies and legal systems: Although these countries have legal and government policies that encourage trade, Australia and New Zealand are the least corrupt countries globally (Selvanathan et al., 2016). Therefore, compliance with all laws and regulations is paramount for companies joining these markets.
Australia and New Zealand Business Culture and Market.
Expanding business to Australia and New Zealand can unlock huge opportunities for business and offer a significant business return on investment. These countries are among the easiest countries to expand business globally. However, substantial differences and similarities exist in their markets receptiveness, import and export market, availability and cost of labour, work environment cultural sensitivity, and government and legal system.
The market in Australia and New Zealand is very receptive. Unlike most global countries, customer relationships do not play a significant role in doing business in Australia and New Zealand. Consumers in these countries are receptive to new ideas and changes, making it easy for new business entrants to get customers for their products and services (Pecotich and Shultz, 2016). The absence of customer loyalty in these two countries’ markets makes it easy for international firms to establish and do business, as customer loyalty is a significant barrier to a new business entrant.
There is a lucrative import and export market in Australia and New Zealand; a lucrative import and export market signifies a market that encourages trade, providing international businesses an opportunity to join these markets. Exports constitute a huge part of New Zealand and Australia’s market, opening these countries and signifying a significant revenue potential (Selvanathan et al., 2016). However, New Zealand experiences a trade deficit, making it a lucrative export market, while Australia experiences a trade surplus making it a lucrative import market.
Additionally, businesses can exploit a large base of skilled workforce in Australia and New Zealand to maximise returns. New Zealand and Australia are among the preferred migrant destination globally, providing a large workforce for business planning to expand in these countries (Pecotich and Shultz, 2016). Labour is a significant resource in business operations; therefore, readily available labour in these countries is an opportunity for international companies. However, the cost of labour is cheaper in New Zealand than in Australia. The average salary in Australia is $90,000, while the average salary in New Zealand is $60,785, making New Zealand a perfect destination for international companies in tight budgets.
New Zealand and Australia’s work environment is very culturally sensitive due to their diverse workforce. These countries have a vast migrant workforce, implying that business operations and policies should consider the differences in cultural beliefs and practices (Selvanathan et al., 2016). Similarly, the diverse workforce opens up the business for international entrants due to access to cheap labour, huge market and industry opportunities, and an option to become permanent residents. It is less challenging to apply for permanent resident and international visas in New Zealand and Australia, making it easy for international entrepreneurs and investors to join these markets.
Furthermore, these countries’ strong government and legal systems open them for business expansion. Government policies in these two countries encourage international business developments and provide flexible business startup and operations regulations. For instance, according to World Bank, New Zealand is the easiest country worldwide to register and start a business, access credit, second-best in minority investors protection, and among the top ten in dealing with construction business permits and taxes (Pecotich and Shultz, 2016). While Australia is among the top 10 countries with ease in dealing with construction permits, enforcing contracts, giving credit and registration, and business startups. However, the government policies in New Zealand are more favourable; the country overs low custom tariffs, competitive ownership costs, free movement of capital, and fair capital policy, making it a better destination for international business.
Additionally, the legal systems in these countries enforce honest and prudent business operations limiting chances of corrupt business deals, making it easy to do business. The global Corruption Perception Index ranks Australia 11th as the least corrupt nation globally, while New Zealand ranks 1st as the least corrupt nation in the world. The infallible legal systems and flexible government regulations make expanding business in these countries easy.
Conclusion
New Zealand and Australia are among global countries that are easy to do business within. The countries have a strong government and legal system, lucrative import and export opportunities, a cheap and highly skilled workforce, and a receptive market that encourages business operations. However, businesses joining these markets should consider its diverse workforce, sensitive business culture, and constantly changing customers preferences to run business operations successfully. Globalisation widens business markets. However, businesses must understand the culture and the market of different countries to gain a competitive edge effectively.
Reference
Kang, K., Burdon, S., & Mooney, G. (2019). Innovation Cultural Factors in Australian Business Environment: IT Organisations in Australia. In Handbook of Research on Contemporary Approaches in Management and Organizational Strategy (pp. 129-145). IGI Global.
Pecotich, A., & Shultz, C. J. (2016). Handbook of Markets and Economies: East Asia, Southeast Asia, Australia, New Zealand: East Asia, Southeast Asia, Australia, New Zealand. Routledge.
Selvanathan, E. A., Selvanathan, S., & Keller, G. (2016). Business Statistics: Australia New Zealand with Online Study Tools 12 Mo Nths. Cengage AU.
