1. Focus Australia 2010
Lessons from New Zealand companies for New Zealand
companies on market entry into Australia
In June 2009 NZTE ran 20 workshops throughout New Zealand for 250 companies
currently exporting or looking to export to Australia and their trusted advisors.
During the workshops six New Zealand case studies were assessed and
information was also gathered from the participating companies and advisors.
The following is a capture of the key findings from the workshops, highlighting
the dos and don’ts to consider when entering or expanding in the Australian
market.
DO
Stage one: Strategic planning
Make sure you have a clear idea of why you’re entering the Australian market
• Can you describe what success will look like in say 5 years?
• Given your 5 year plan, what does year one look like, year two etc.
• Are you ready to invest the resources required to meet your success
targets?
• Is now the best time?
• Do you have a true point of differentiation in the market?
Stage two: Operational Planning
Know:
• who your customers are
• what they need (not necessarily the same as NZ)
• who your competition is
• your price point - don’t just assume it is the same as NZ, it could be a lot
higher or at a point to low to make the investment worthwhile
• the best location for you to set up in
• what is going to be your best channel to market
• what all your costs will be
Brought to you by New Zealand Trade and Enterprise, the New Zealand government’s economic
development agency.
www.nzte.govt.nz
2. • transportation/logistics
• business regulations
• Intercountry banking/ finance
• tax
• legal implications
Research how your industry operates in the Australian market – what are the
differences with NZ, any regulations/legislation you need to be aware of, how
to customers access your type of product/service in Australia?
Check that the brand you are using in NZ is appropriate for the Australian
market
Consider all the different market entry models available to you (purchasing an
existing, complimentary business, setting up your own office, hiring Australian
sales staff, using agents/distributors, partnering with an Australian company
finding an Australian investor.)
Seek professional advice – particularly around complying with regularities for
you industry, tax and legal
Understand that Australia is a far more litigious country than NZ
Investigate if IP protection would be sensible for your product/service
Stage Three: First Steps
Visit the market as often as possible to get an understanding of the feel of the
location you are considering.
Remember Australia is made up of 8 states each of which can be considered a
market in its own right.
Build relationships in Australia with experts in your industry – they can help to
give you credibility in the market and can provide useful networks
Consider a staged approach, location by location – remember some Australian
cities are the same size as the whole of NZ. In most cases it is better to
tackle one location at a time.
Consider first location carefully- it may be better to look at one of the large
regional towns.
Hire Australian staff or partner with an Australian business – and listen to
their advice about the market. They will bring with them networks and market
knowledge – make use of it
Make sure you understand the legal and tax implications for the type of
operation you wan to set up
Brought to you by New Zealand Trade and Enterprise, the New Zealand government’s economic
development agency.
www.nzte.govt.nz
3. Stage Four: The Commitment
Be prepared to pull back if you are not happy you have all the information you
need.
Ensure you have sufficient funds available to support the setting up of your
Australian presence – allow up to two years and realise that you may not
make money straight away
Ensure you have commitment from your management team – they need to
provide strategic leadership and may also need to work in market for a time
to really build the business
Choose a location close to your customers and/or partners
Assess your progress on a regular basis – are things going to plan/budget? If
not, you may need to adjust your strategy
Think creatively about what networks you have or might be able to tap into
(both in Australia and back in NZ) – including expat kiwis, business and
professional associations
Carry out due diligence on any other party you are going to work with
Make sure you are sending over the right staff for the job and locate them in
the right place
Look at how you can leverage your NZ business and clients – your Australian
operation may provide benefits to your NZ customers
Persevere – becoming successful in the market may take some time
Stage Five: Expansion within Australia
Know who your new customers are.
Reassess your business model (purchasing an existing, complimentary
business, setting up your own office, hiring Australian sales staff, using
agents/distributors, partnering with an Australian company finding an
Australian investor.)
Ensure you have commitment from your management team – they need to
provide strategic leadership in the new state/area and may also need to work
there for a time to really build the business
Understand the issues around transportation/logistics
Brought to you by New Zealand Trade and Enterprise, the New Zealand government’s economic
development agency.
www.nzte.govt.nz
4. DON’T
Make assumptions – in particular, don’t assume your NZ model/operations will
work in Australia
Underestimate the amount of funding required to set up a credible presence in
Australia – don’t forget about the ongoing costs (i.e. it may take some time
before you start making money)
Underestimate the size of Australia – distance between major locations (this
will have cost / time implications)
Take verbal agreements as final confirmation – get everything in writing
Rush in before you have done your market research and are prepared – it will
cost you money and may make the difference as to whether or not you are
successful
Brought to you by New Zealand Trade and Enterprise, the New Zealand government’s economic
development agency.
www.nzte.govt.nz