François Perrot Walter Rha Adrian Wozniakiewicz Walter Rha, François Perrot, Adrian Wozniakiewicz.
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Transcript of François Perrot Walter Rha Adrian Wozniakiewicz Walter Rha, François Perrot, Adrian Wozniakiewicz.
François PerrotWalter RhaAdrian Wozniakiewicz
Walter Rha, François Perrot, Adrian Wozniakiewicz
AUSTRALIA Capital City
Canberra named capital city in 1908 Population
22 million 60% concentrate in Sydney, Melbourne, Brisbane, Perth and
Adelaide. Free-Market Economy
High GDP per capita Low rate of poverty
13th largest economy in the world Recognized for its human development, quality of life,
health care, public education & economic freedom International Presence
Member of the UN, G-20, Commonwealth of Nations, OECD, APEC, WTO
Industries Agriculture, Dairy, Banking, Mining, Wool & Cotton, Wine,
Fisheries
HISTORY
The Commonwealth of Australia First discovered by Dutch explorers in 1606
North Western Australia Captain James Cook discovers eastern Australia in 1770
Establishes a new penal colony for Britain Since the European settlements in the late 18th century
Australia experiences significant population growth Victorian Gold Rush 1851-1860’s (population tripled) Convict labor System 1787-1852
Continent was set up into parliamentary governing crown colonies
Six colonies Western Australia, Northern Territory, South- Australia, Queensland, New
South Wales
In 1901 the six colonies unite and become the federation Commonwealth of Australia
In 1908 Canberra is named the capital city of Australia As a compromise between rivals Melbourne and Sydney
MINING
Worlds Largest Producer of Leads, Diamonds Uranium
Worlds largest Uranium reserves 23% 3rd larges producer Exports valued at $1.1 billion annually
Coal Worlds largest net exporter of coal accounting for 29% Dubbed the “Saudi Arabia of Coal!”
Bauxite Worlds largest producer of Bauxite 33% of global production Highest grade deposits of Alumina
Aluminum 5th largest aluminum producer
Zinc Large reserves
Nickel Large reserves
AGRICULTURE & FISHING Agriculture:
12% share of GDP $155 billion a year industry 134,996 farms covering - 61% of countries
landmass Dry-land farming & Irrigation Mix
Due to the dry and infertile soil Horticulture & Viticulture
Fishing: $2.3 billion a year industry Aqua farming sector
Accounts for 32% of the total industry Fish exports roughly $1.84 bullion a year
WOOL AND DAIRY
Wool Export oriented
90% of production is exported Accounts for 9% of world production Market Leader in fine quality wool sector
Producing 50% of worlds Merino wool
Dairy Fourth most valuable agricultural export $3.4 billion a year industry Employs over 40 000 people 1.6 million cows producing on average 9023
million liters of milk per year
WINE & TOURISM Wine
Over 2000 wine companies Employs roughly 31 000 people $2.8 billion industry Exports over 722 million liters a year Tradition
Rich tradition of winemaking dating back to 1788
Tourism 3.9% of Australia’s GDP $32 billion a year industry 5.7 million visitors in 2010 Decline in Tourism between 2001- 2003
Due to external events (Ex 9/11, SARS)
BANKING & STOCK EXCHANGE
Banking 2009: Total banking sector assets $2.59 trillion Government regulated
Prohibits merger between two major (AUS) banks in order to preserve competitiveness
Stock Exchange: 1861 First Exchange – Melbourne ASX (Australian Securities Exchange)
Formed in 2006 Merger of ASK and Sydney Futures Exchange
Diverse international and Domestic Customer base
ECONOMIC PERFORMANCE Services: main component of GDP Constant Real GDP growth
Doubled in last 20 years
INTERNATIONAL TRADE & REGION
China: Australia’s major business partnerTop exporting destination (20%)Top import origin (15%)
US: use to be the major one in 2007 with $47bnRegional trade
Exports: Japan 2nd, India 3rd. East Asia (incl. ASEAN) = 67%
Imports: US 2nd, Japan 3rd. East Asia = 52%
NO “TWIN-DEFICIT”
The CAD is growing fast but is of no concern Fiscal deficit only during the 2008 global
crisis
FOREIGN DIRECT INVESTMENT
Strongly growing net FDI inflows since 2000
2010 Dun&Bradstreet top rank fors safe FDI
A.T. Kearney FDI Confidence index: 6th
Mining accounts for 25% of the FDI inflows
STIMULATE FDI
Government Eliminate distortions: Strong financial and regulatory enforcement Corruption perception index: 8th least corrupted country
(=Switzerland) Social context: social security, unemployment benefits,
educational Skilled migration program: point based system, adjustable to
the needs Macroeconomics stability:
RBA stabilizes inflation around 2-3% by keeping interest rates high in “normal” times
2008 Global finance economic crisis: Monetary policy: RBA sharp cut on rates (from 7.5% to 3% in 6
months) Ease financial pressure on indebted households and businesses Stimulate consumption RBA guaranteed bank deposits and wholesale’s funding of
Australian banks Fiscal policy:
US$8bn stimulus package (1% GDP): pensioners and low-income families (bonuses), housing construction, trainings
Feb 2009: US$26bn package for nation-building (education, infrastructure, tax break for SME, $ for workers, farmers, students)
MACROECONOMIC COMPETITIVENESS:SOCIAL INFRASTRUCTURE
Basic Education: Overview Education is compulsory from 6 to 16 years of age Literacy rate is 99% for men and women Government expenditure on education as a percentage of GDP
was 4.8% in 2009 Government initiated the Building the Education Revolution (BER)
program in 2009 BER Proposes to provide infrastructure funding worth $14.7 billion
to Australia’s 9,540 schools
MACROECONOMIC COMPETITIVENESS:SOCIAL INFRASTRUCTURE
Healthcare: Overview In 2009, Healthcare expenditure of Australia stood
at around $51.6 billion, representing 5.5% of GDP OECD average of 8.4%
70% of Australia’s healthcare expenditure is funded by the government
MACROECONOMIC COMPETITIVENESS:POLITICAL INFRASTRUCTURE
Legal Landscape: Performance Australia ranks in the 96.7 percentile on the government
effectiveness parameter. measures quality of public services, civil service and degree of
independence Australia ranks in the 95.2 percentile on the rule of law
parameter. measures extent to which agents have confidence in the rules of the
society and particularly at the quality of contract enforcement, the police and the courts.
Australia ranks in the 96.1 percentile in the control of corruption parameter.
measures the extent to which public power is exercised for private gain, especially corruption, as well as the private and elite influence over the state
BUILDING THE DIAMOND:FACTOR CONDITIONS
Assimilating Foreign Technology: India-Australia Strategic Research Fund in
science and technology China-Australia Special Fund for advanced
science and technology development. Australia also entered into scientific bilateral
collaborations with the US, Canada, South Korea and Japan.
Administrative Infrastructure 1st: OECD listed Australia as most open economy 2nd lowest levels of red tape in terms of
business procedures
BUILDING THE DIAMOND:FACTOR CONDITIONS
Improving Efficiencies: The Australian government has funded
projects supporting: telecommunication and IT infrastructure broadband services for local and rural areas the development of green
telecommunications carbon trading.
The government has also been successful in setting up Tele-education in remote areas
BUILDING THE DIAMOND:CONTEXT FOR FIRM STRATEGY AND RIVALRY
Reducing Impediments to Competition: Australia has transformed itself from an inward-
looking, highly protected and regulated economy to an open and export-oriented economy
Australia is a member of various international
organizations including: Asia Pacific Economic Cooperation (APEC) ANZ Certa (1983 FTA with New Zealand) Common Wealth Cairns Group International Monetary Fund (IMF) Organization for Economic Co-Operation and
Development
Effective Competition Policy: The Australian government will take measures
targeted at promoting competition and cracking down on anticompetitive practices
Trade Practices Act (TP Act) 1974 include moves to further defend small business from predatory pricing
Effective Intellectual Property Protection Mechanisms: Australian patent law prohibits double
patenting. It does not prohibit two patents for the same
invention but of differing claim scope.
BUILDING THE DIAMOND:CONTEXT FOR FIRM STRATEGY AND RIVALRY
MARKET OVERVIEW Market value
The Australian metals & mining industry shrank by 5.6% in 2009 to reach a value of $63,613.2 million.
Market value forecast In 2014, the Australian metals & mining industry is forecast to
have a value of $96,280.9 million an increase of 51.4% since 2009.
Market segmentation Coal is the largest segment of the metals & mining Accounts for 52.9% of the industry's total value.
MAPPING THE CLUSTER Buyer Power
Average buyer is large company > Boosts Power Low level of product differentiation > Boosts Power Large number of customers > Reduces Power Mining necessity for many buyer’s business > Reduces Power
OVERALL ASSESMENT = MODERATE LEVEL OF POWER
Supplier Power Mining companies are vertically integrated > Boosts Power Mining equipment specialized and specific > Reduces Power Availability concerns of future commodities > Boosts Power
OVERALL ASSESSMENT = MEDIUM - HIGH LEVEL OF POWER
MAPPING THE CLUSTER
Threat of New Entrants Very high initial investment costs > Reduces Threat Increasingly stringent environmental regulations
> Reduces Threat Resource Super Profit Tax > Reduces Threat Criminal Penalties for violating environmental laws
> Reduces ThreatOVERALL ASSESSMENT = WEAK THREAT
Threat of Substitutes No direct substitutes for metals and minerals
> Reduces Threat Indirect Substitutes require changing technologies
> Reduces Threat Very High Switching Costs > Reduces Threat
OVERALL ASSESSMENT = LOW THREAT
MAPPING THE CLUSTER
Rivalry Scale economies favor large companies Mergers and acquisitions are expected to increase
competitiveness > Boosts Rivalry Exit barriers are high thus major players are
strongly motivated to remain in industry > Boosts Rivalry
Industry margins are susceptible to changes in prices and growth is hard to sustain> Boosts Rivalry
OVERALL ASSESSMENT = STRONG LEVEL OF RIVALRY
KEY COMPANIES
BHP Billiton Group BHP Billiton is a diversified natural
resources group. The group exports coal, iron ore, copper,
nickel, manganese ore, primary aluminums, and manganese and chrome ferroalloys.
The group has a global presence with more than 100 operations in 25 countries.
Market Capitalization of $249 Billion USD
MINING CLUSTER: HISTORY OF DEMAND
History of major mining booms 1850 gold rush Late 19th mineral 1960s mineral & energy boom Late 1970s, early 1980s energy boom
Today: commodity boom Strong growth of developing countries: growing demand for
commodities Australia: coal, iron & steel, aluminum, copper, etc. Strong world demand: minerals and ores China: top destination for Australia’s exports Growing demand for uranium until January 2011 World trend
MINING CLUSTER: PERFORMANCE
Employment and InvestmentWorld growing demand for metals, previous
metals and ore (China, India) – growing investments
Growing technology requiring less man-laborMining booms: investment, value added
GOVERNMENT SUBSIDIES?
Subsidies in 2006 (research by Institute for Sustainable Futures for Greenpeace Australia):Electricity: US$ 2bnTransport: US$ 7.5bnStrong Aluminum subsidies too
COMPARISON WITH INDONESIA
Indonesia has a similar profile in mineral resources: coal, precious metals, uranium, iron, etc.
What is different?Barriers to trade, political instability,
corruption, lack of financial and regulatory laws enforcement, >750 dialects, thousands of islands
Indonesian boat people seeking asylum in Australia