Global Business Environment
• Market Entry Plan and Implementation
• SWOT Analysis
• Our company is “Green Harvest Pvt. Ltd.” which
deals in agricultural business. It deals with
agricultural products ,food processing, beverage
processing ,packaging & agricultural machinery
manufacturing . It has its base in Australia & has its
presence worldwide. It is interested in expanding its
business for which it has chose to operate in New
Zealand which is heavily dependent on international
trade, particularly in Agricultural products.
New Zealand (Background)
• Young and growing population and relatively high levels of
• Population of New Zealand: 42,86,500 (November 14, 2008)
• Food processing, tourism, mining, textiles, machinery and
transportation equipment are some of the main industries in
• New Zealand has a modern, prosperous
and developed market economy with an estimated gross
domestic product (GDP) at purchasing power parity (PPP) per
capita between US$27,420 and $US29,352.
New Zealand – Significant Factors
• Ease Of Doing Business Index, ranked 2nd overall in 2008 out of 181
countries, 1st in the sub-category of Starting A Business.
• Political freedom Ratings - Political rights and civil liberties both
rated 1 .
• GDP per capita - 28th highest, at $ 25,531.
• Human Development Index - 20th highest, at 0.933.
• Income Equality - 54th most equal, at 36.2 .
• Literacy Rate - 17th equal at 99.0%.
• Unemployment rate - 48th lowest, at 4.0%.
• Global Peace Index - 1st at 1.202.
• Corruption - Least corrupt, at 9.4 on Corruption Perceptions Index.
• Economic Freedom - 5th freest, at 82 on Index of Economic
• Failed States Index, 171/177, being one of the few "sustainable"
states in the world.
Advantages of setting up a Business in
• In the World Bank ‘Doing Business in 2006’ study of more than 150
economies, New Zealand was ranked the number one place in the world
for ease of doing business.
• Globally Competitive-The World Economic Forum’s ranked New Zealand
16th out of more than 100 economies. New Zealand’s public institutions
ranked top of all countries in areas such as tax collection, judicial
independence, property rights, and absence of corruption and organised
• Ethical-According to Transparency International, New Zealand rated
second equal with Finland, behind Iceland, in its 2005 Corruption
Perceptions Index (CPI) of 159 countries.
• Stable Economy- A stable, open and competitive economy, a businessfriendly government, competitive cost structures including a flexible
labour market, low inflation policy and low corporate tax rates. New
Zealand also has a working day that spans the afternoon on the West
Coast of America and Asia to breakfast in Europe.
• New Zealand is a constitutional monarchy with a parliamentary
• Queen Elizabeth II is the Queen of New Zealand and the head of
• The Queen and Governor-General powers are limited by
constitutional constraints and they normally can not be exercised
without the advice of Cabinet.
• Government is responsible for legislation relevant to business
operations. This includes legislation in areas such as land transfer,
building and construction, land claims, resource management,
competition laws, protection of intellectual property, industrial
relations, accident compensation, taxation, banking and finance,
migration, trade relations and foreign investment.
POLITICAL ANALYSIS (Cont--)
• Elections are held every 3 years in a mixed member
proportional representation (MMP) system.
• Legal rule and regulations are not changed in short
time unless very significant.
• Levels of social unrest are low, except for infrequent
demonstrations by the Maori population.
• International tensions are few, although the
country's strong anti-nuclear stance has periodically
• Highly dependent on international trade, mainly with
Australia, the European Union, the US, China and Japan.
• New Zealand's economy is based on agricultural imports &
• GDP (Current Prices, US Dollars) for New Zealand in year 2010
is US$ 138.003 Billion.
• No restrictions on inflow and outflow of capital.
• No capital gains tax.
• Research and development is 100% tax deductible.
• Tax incentives for activities including motion picture and
• Raw materials may be imported tariff-free.
ECONOMIC ANALYSIS (Cont-----)
• The corporate tax rate in New Zealand is 30 %, for all
companies, domestic and foreign.
• An indirect tax of 15 percent applies to all goods and services.
• For the benefit of investors who take up residency in New
Zealand, credits are unilaterally provided to residents for
foreign tax paid on income that is also subject to New Zealand
• In addition, New Zealand has a network of 35 double tax
agreements (DTAs) with our main trading and investment
partners which eliminate certain forms of double taxation.
ECONOMIC ANALYSIS (Cont-----)
• As the first country to start each day, business has a jump start in
• Business day covers the afternoon on the USA west coast, much of
Asia’s business day, the morning in Europe. This offers considerable
benefits in managing global workflows and transactions.
• New Zealand offers close access to international markets through
free trade and economic co-operation agreements with a number
of countries including Australia, China, Singapore, Thailand, Chile
• After successfully establishing business in New Zealand for at least
two years, one can apply for residence under
the Entrepreneur category based on the investment of a minimum
of NZ$10 million for at least three years.
ECONOMIC ANALYSIS (Cont-----)
• Business here is supported by robust public infrastructure and
world-class telecommunications, efficient ports, high capacity fibreoptic cables and global airlines servicing 27 cities.
• The Reserve Bank of New Zealand, whose main function is to
implement Government monetary policy according to annual
directives, supervises New Zealand's banking system. It also
registers and supervises other banks.
• Just under 88 percent of New Zealand exports by value are
transported by sea. Four ports (Auckland, Tauranga, Port Chalmers,
and Lyttleton) accounted for 64 percent of exports by value.
• Country has established a comprehensive network of roads (around
93,100 kms) and railways (4,000 kms) linked to ports and airports.
• Most of the 4 million New Zealanders are of British origin.
• About 15% claim descent from the indigenous Maori
population, which is of Polynesian origin.
• Ethnic groups - European 67.6%, Maori 14.6%, Asian 9.2%,
Pacific Peoples 6.9%, Other 1.7%, Other ethnicity – 11.2%
• Religions - No religion 31.1%, Anglican 13.3%, Catholic 12.2%,
Presbyterian 9.3%, Methodist 2.8%, Hindu 1.5%, Baptist 1.3%,
Buddhist 1.3%, (2006 census).
• 99.0 % of population is literate .
• Age structure-0-14 years: 21.5%
15-64 years: 66.2%
65 years and over: 12.3% (2006 Census).
• Life expectancy- Men: 77.9 years
Women: 81.9 years (2006 estimate).
• Languages - English (official), Maori (official).
• Agricultural technology (agritech) developed in New Zealand
has emerged as a key differentiator for the international
farming industry. It is helping to deliver higher yields and
greater consistency in farming outcomes around the globe.
• New Zealand’s agritech sector has created advances in soil
testing, pasture species development, DNA testing, breeding
and farm management technology.
• New Zealand was first in the world to offer genomic selection
technology for use in identifying elite sires as yearlings.
• New Zealand is also widely regarded as leading the
international farming community in animal welfare,
traceability and food safety, and agricultural sustainability.
• Temperate climate and fertile soil, making the
country ideal for agricultural production.
• Waikato Region -The climate and soils make it one of
the most productive grass growing regions in the
• Consistent year-round rainfall and volcanic soils.
• The climate throughout the country is mild and
temperate, mainly maritime, with mean annual
temperatures ranging from 10°C in the south to 16°C
in the north.
• Commerce Act: sets out the types of anti-competitive
practices that are illegal. These include company mergers and
takeovers which lead to a lack of competition.
• Companies Act: sets out the legal framework for forming and
operating a company.
• Consumer Protection: the Fair Trading Act protects
consumers from unfair and misleading practices.
• Employment Relations Act: emphasises good relations
between employers and employees through the good faith
obligation, and promotes collective bargaining, but retains
• Securities Act: protects the investing public by requiring
businesses to provide certain information to investors.
Companies must register prospectuses when offering new
securities to the public.
• The Commerce Commission is responsible for administering
AGRICULTURE & FOOD PROCESSING
INDUSTRY IN NEW ZEALAND
• New Zealand is one of the world’s most efficient agricultural
economies, with a reputation for producing internationally
significant research, agriculture practices and products.
• New Zealand has a temperate climate and fertile soil, making
the country ideal for agricultural production. Together with its
support and processing components, the agriculture industry
regularly contributes almost a quarter of New Zealand’s Gross
Domestic Product (GDP).
• New Zealand is widely regarded as leading the international
farming community in food safety, and agricultural
AGRICULTURE & FOOD PROCESSING
INDUSTRY IN NEW ZEALAND(Cont--)
• Agriculture is one of New Zealand's largest industries,
employing more than 114,000 people in full-time equivalent
• New Zealand has developed world-leading expertise in food
processing and packaging technology over many years of
adding maximum value to primary sector produce.
• Food and beverage manufacturing is a major industry in New
Zealand accounting for around one-third of exports and
contributing just under 5 percent of GDP.
• Food processing is New Zealand’s largest manufacturing
industry employer with nearly 75,000 people working in the
industry in 2008.
OUR COMPANY EXPERTISE
Agricultural Products Cultivation.
Agricultural Food Processing.
Beverage Products Cultivation.
Beverage Products Processing.
Packaging of Agricultural Processed Goods.
World wide presence.
Strong distribution network all over the world.
• STRENGTHS:i. Easiest place in the world to start a business.
ii. Adult literacy rate is 17th equal at 99.0%.
iii. Few restrictions on establishing, owning and
operating a business.
iv. Stable political environment .
v. Corruption is virtually unknown.
vi. Long term international competitiveness.
vii. Abundant availability of raw material.
viii.Variety of business expertise to offer.
ix. Wide international presence.
x. Worldwide distribution network.
xi. Financially stable.
SWOT ANALYSIS (Cont---)
Restricted range of export products. This dependence on
the income from so few commodities makes the economy
vulnerable to fluctuations in their world prices, and sharp
drops in these prices, as have occurred periodically,
inevitably result in the restriction of imports or a
substantial trade deficit.
ii. Transportation costs to other parts of world.
iii. Machinery costs bit high.
SWOT ANALYSIS (Cont---)
i. High potential of machinery import.
ii. Ease of establishing one’s own business after
entering the country.
iii. Establishment of both internal as well as external
iv. Establishment in new untapped areas.
v. Stronghold in Oceania region.
SWOT ANALYSIS (Cont---)
i. Entry of low cost competitors.
ii. Economy vulnerable to fluctuations in their
iii. Short Government ruling duration of 3 years
which could lead to frequent change of
MICHAEL PORTER 5 FORCE MODEL
Potential New Entrants
(Threat of Substitutes)
THREAT OF NEW COMPETITORS
• Agricultural industry in New Zealand is observing
very good growth, hence large number of players
want to enter in to this industry.
• Low Entry Barriers available.
• Favourable Conditions for business set up.
• Industry profitability.
• Capital requirements are low.
INTENSITY OF COMPETITIVE RIVALRY
• Sustainable competitive advantage
through innovation will be always there.
• Powerful competitive strategy will be
• Level of advertising expense.
• Competition between online and offline
THREAT OF SUBSTITUTE PRODUCTS OR
• Buyer propensity to substitute as various
• Relative price performance of substitute
product or company.
• Ease of substitution of products.
• Number of substitute processed food
products, agricultural machinery etc. available
in the market
BARGAINING POWER OF CUSTOMERS
• Bargaining leverage, particularly in agricultural
industries with high fixed costs.
• Buyer information availability about the
processed foods, machinery etc.
• Availability of existing substitute products.
• Buyer price sensitivity.
BARGAINING POWER OF SUPPLIERS
• Supplier competition due to large agricultural
• Supplier switching costs are not that high in
• Strength of distribution channel.
• Supplier switching costs relative
to firm’s switching costs.
MARKET ENTRY STRATEGIES
• Buying an established business or certain franchises Investing in a proven business model or an existing business
with established customers and cash flow, will offer some
advantages to start a business from scratch.
• Consulting Professional Advisor. -The major New Zealand law
firms and accounting companies can provide the necessary
legal and financial services. They may also have useful
contacts and information on potential business dealings.
• Partnerships are most common in the farming industry. This
can be an effective way to share business operation costs
where, for example, several professional people operate out
of a joint office.
MARKET ENTRY STRATEGIES(Cont--)
• Direct export: In this case market research, market
contact, pricing, export documentation etc. are done by
manufacture who actually exports.
• Publicly listed company- Generally, listed companies
have been in business before listing on either the NZX or
NZAX. When company decides to list, a specific NZX
Listing Team will be appointed to work with company
one on one, to ensure that the listing process runs
smoothly and our business objectives for listing are met.
• Print advertisement in all leading national & local
• Ads in B2B dailies & magazines.
• Direct marketing at various Industries for B2B
• Various Conferences for agricultural business
houses for our introduction & services we offer.
• TV ads for specific period to get reach masses just
• Online marketing .
• Direct emails.
• Sampling or product promotional events for
• Radio ads.
• Trade shows for showing our products & services.
• Testimonials by our previous alliances & clients.
• Sales agent who could provide necessary information
to our customers.
• A set of locations that store, ship, or receive
materials (such as factories, warehouses, retail
• A set of routes (land, sea, air, satellite, cable,
Internet) that connect these locations.
• Intermediates- Brokers, Wholesalers, Retailers.