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Australian Business & International Trade: Be

readySteve Brown

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Do Not Assume AnythingInternational markets are not necessarily the same as the Australian Market

Differences

Laws

Culture

Currency

Political Environment

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?Competition and Consumer Act

?Tax

? Work Health &

Safety

?Intellectual Property

?Privacy

?Environmental Issues

? Marketing

? Specific Laws for the particular business, transport, food

? Contracts

?Industrial Relations

Different Law?

Fund raisingR E G U L A T O R Y

E N V I R O N M E N T

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Examples of Different Laws

Western Nations Treatment of Interest cf Islamic Nations

Copyright must be registered in USA to be effective not so for Australia

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Examples of Different Laws

Intellectual Property - Portugal Not a Member to IP treaties

The Sorry story of the Surfboards……….

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Different Cultures

Business card culture Australia cf China and Japan

Handshakes

InShaAllah

Honesty and frankness cf loss of face

Different Market preferences

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Example of Different Market Preferences

Will the product or service sell in the overseas country?

Is the target market familiar with the product or service?

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Different Currencies

Currency Risk

Hedging Arrangements

Default Risk - Foreign Trade Insurance - Bills of exchange, bills of lading

Recovery costs

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International Trade Challenges

Supplier of Goods or Services In

Indonesia

Buyer of Goods or Services In US

Supplier’s Plant

Buyer’s Location

Buyer’s Challenges – Risk of delay from inaccurate

documentation or risk – Working capital tied up in long

lead time and buffer inventory – Risk of supplier not delivering

against terms and conditions

Supplier’s Challenge – Purchase raw materials –

large upfront expense – Fund labor for production – Very long cash-to-cash cycles -

90 days from shipment to payment

– Risk of buyer not paying

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Different Political Environments

Country Risk - not all countries as stable as Australia

China prima facie market driven; but political forces underlie all actions

Change of laws even in the most stable of countries. Systemic risk.

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What it takes to succeedSignificant management time and strong management commitment

Strength in the Australian market

The resources to succeed

Business and export planning

Etienne Lawyers/Austrade’s

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Planning to Go International

Step 1 - Decide on your strategy

What are the global trends

Do your market research

1

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Choose the CountryStep 2

Political climate

Local tax and regulatory environment

Legal system

innovation and set up incentive

Cultural issues

local workforce (skills and wages)

2

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Doing Business

Step 3 have in place

Get your IP secured and in place

Establish overseas management team (local + OS)

Have the financial resources

choose the operating structure

put in place foreign exchange risk controls

Arrange supply chain, transfer pricing

3