Australia boasts a large mixed market economy dominated by a robust service sector. The industries that employ the largest number of people include health care and social assistance, retail trade and construction. The other sectors with high labour dependency include scientific and technical services, manufacturing and the mining industry. In spite of this diversity, the country must do a lot to catch up with countries like the USA and China when it comes to innovation. According to The Conversation Magazine, the new world order relies heavily on the value of the products with intangible inputs like ingenuity rather than the traditional capital or labor inputs.
Lack of scale is also placing Australia at odds because most commercial rewards targeting indigenous innovation are hemorrhaging to overseas countries. The US economy is bolstered by big companies such as Wal-Mart, Apple and Amazon. New figures released by the Australian Bureau of Statistics indicate that the economy is dominated by small business employing between 1 to 19 employees. Medium size businesses employing 20 to 199 workers account for 6% of all businesses while only 0.2% of businesses employ over 200 people. On a positive note, Aussies enjoys a digitally connected workforce and an urbanized and highly educated populace.
Businesses in the country can take advantage of co-creation, a value-based initiative bringing together companies and customers to compete effectively in the international market. Case in point is the long-term business-to-business relationship between the Melbourne aerospace manufacturing industry, Marand and Lockheed Martin. Marand contributes cutting-edge innovation, critical to the development of F-35 fighter jets. According to The Conversation the country can also expand its agricultural and food industries to employ more people, boost export earnings and expand the retail and services industries in order to match peers in the developed world.
As firms look to grow, the concept of globalization is set to have a huge impact on businesses and business practices over the 21st century. However, the whole idea of going global can be challenging for small and emerging businesses in Australia. For instance, wineries embarking on a global scale venture must spend a lot of time and resources planning the move before making any serious commitments. According to Forbes, businesses that want to compete globally need to gain deeper understanding of the targeted market, trends shaping the market and the competition. The following steps are critical in guaranteeing a successful international launch.
- Perform due diligence
Businesses need to understand the impact of going global by performing market segmentation analysis to gauge product attractiveness and product gap analysis to gauge product satisfaction. A SWOT analysis of the competition and market opportunity is also critical.
- Craft a solid strategy and business plan
When crafting a strategy and business plan, you must define the short, medium and long-term strategies. When choosing a business structure, decide whether your business wants to establish a separate company, sales office or branch. Overseas market differences can be studied based on culture, economic conditions and government policies.
- Create a pointed go-to-market strategy
Businesses keen on selling and marketing their products and services as well as creating clear market differentiators need a comprehensive and cohesive strategy. The strategy must focus on areas like sales, marketing, pricing, branding and delivery. When implemented, a good marketing strategy will ensure wide acceptance and drive revenue growth.
- Ensure product and organizational readiness
Product gap analysis can help expanding businesses market products that promise high impact differentiation. To achieve compliance, aspiring businesses can start by reviewing industry and government regulations. Businesses also need to initiate patent and trademark reviews, analyze the local logistics and distribution network and initiate product testing and quality assurance practices for better product placement.
On the issue of organizational readiness, businesses looking to explore the global market must take cognizance of cultural differences, from language to customs and regulations. To adapt to these changes, firms must be flexible in implementing policies and strategies designed to help employees operate effectively internationally. A one fits all mindset should be avoided to prevent net negative effects.
- Ensure Legal, tax and finance readiness
The business thinking of growing overseas, must consider the fact that some countries are more litigious. Ensuring legal readiness will reduce commercial risks and offset costly liabilities. A comprehensive legal strategy for overseas investment may involve creating localized commercial agreements, taking advantage of dispute resolution frameworks, reviewing industry specific regulations and maintaining corporate records.
- Strengthen relationship with local businesses
Due to competition, businesses need a strong, supportive ecosystem that engages complimentary products and services. A sound business relationship can go a long way to help businesses minimize financial risk. The partners can be roped in via third-party relationships that can be established through negotiated partnerships, business model structuring and strategic alliances.
Overview of the Australian Wine Industry
The global wine market is highly lucrative with every country wanting a piece of the pie. The old-world producers include France and Italy. Countries like Australia, USA and Chile form the pack of new world producers looking to make a mark in the industry. According to an excerpt published by the San Francisco State University – College of Business, wines are universally named based on their Appellation and Varietal. The Appellation naming system describes the specific production region. The Most popular Appellations include Burgundy, Champagne and Boudreaux in France; New South Wales in Australia and Sonoma County and Napa Valley in the USA.
The Varietal naming system is formulated based on the type of grape used in the production. The term is widely used in the US as a market segmentation tool. The most common Varietals in the global market include; Cabernet Sauvignon, Chardonnay, Merlot and Burgundy. It is important to note that the quality of the drink is determined by a number of factors, including quality of grapefruit and growth environment. The latter determines everything from the sugar content to flavor. The rich history of wine growing and production dates back many centuries. The grape vines were first introduced in Australia by English immigrants in 1788.
However, the industry was reborn in the 1860’s when skilled laborers were brought in to build commercial infrastructure. In 1960, the local industry made huge leaps, thanks to innovation. The advances made it possible to reduce the cost of production and improve quality. One of the biggest challenges faced by wineries in Australia is the limited domestic market and stiff tax regimen. Wineries have been forced to set their sights on the international market to overcome growth constraints. The “Strategy 2025” was ostensibly established to achieve record annual sales and make the local industry the most profitable and influential in the supply of branded products.
A growing number of investors are trooping into the country to take advantage of the open opportunities available. Buoyed by growth prospects down under, Denis Mackenzie recently made an investment in the country’s wine industry. Denis Mackenzie is a global investor, marketing expert and an authoritative voice in the global wine industry. He is the Chief Operating Officer (COO) of his own winery in the Lake Erie region of Eastern USA. According to WineCompass, Denis Mackenzie has continually used his expertise in the winery business to market wineries in places likes France, Greece and Tuscany in Italy.