Broadcasting and Telecommunications Equipment and Services in Australia: A Strategic Reference, 2007
ICON Group International, July 2007, Pages: 232
How to Strategically Evaluate Australia
Perhaps the most efficient way of evaluating Australia is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to broadcasting and telecommunications equipment and services are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
Latent Demand and Accessibility in Australia
This report provides a detailed overview of factors driving latent demand and accessibility for broadcasting and telecommunications equipment and services in Australia. Latent demand is largely driven by economic fundamentals specific to broadcasting and telecommunications equipment and services. This topic is discussed in Chapter 2 using work carried out in Australia on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for broadcasting and telecommunications equipment and services in Australia. I use the term “micro” since the discussion is focused specifically on broadcasting and telecommunications equipment and services.
Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Australia. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Australia. The numbers are only indicative of an average firm whose primary activity is in Australia. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Australia. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “communications equipment”, as defined in Chapter 3. Again, while “communications equipment” does not exactly equate to “broadcasting and telecommunications equipment and services”, it nevertheless gives an indicator of how Australia compares to other countries for a proxy adjacent category along various dimensions.
Chapter 4 deals with macro-accessibility and covers factors that go beyond broadcasting and telecommunications equipment and services. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Australia:
Openness to Trade in Australia
Openness to Direct Investment in Australia
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Australia. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Australia. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
1 INTRODUCTION & METHODOLOGY 1
1.1 What Does This Report Cover? 1
1.2 How to Strategically Evaluate Australia 1
1.3 Latent Demand and Accessibility in Australia 3
2 BROADCASTING AND TELECOMMUNICATIONS EQUIPMENT AND SERVICES IN AUSTRALIA 5
2.1 Latent Demand and Accessibility: Background 5
2.2 Latent Demand: Market Composition 5
2.3 Latent Demand: Market Data 5
2.4 Latent Demand: Leading Segments 6
2.5 Key Suppliers 7
2.6 Prospective Buyers 7
2.7 Accessibility: Market Entry 8
2.8 Market Issues and Obstacles 8
2.9 Accessibility: Trade Events 9
2.10 Key Contacts 9
3 FINANCIAL INDICATORS: COMMUNICATIONS EQUIPMENT 10
3.1 Overview 10
3.1.1 Financial Returns and Gaps in Australia 11
3.1.2 Labor Productivity Gaps in Australia 13
3.1.3 Limitations and Extensions 14
3.2 Financial Returns in Australia: Asset Structure Ratios 15
3.2.1 Overview 15
3.2.2 Assets - Definitions of Terms 15
3.2.3 Asset Structure: Outlook 18
3.2.4 Large Variances: Assets 19
3.2.5 Key Percentiles and Rankings 22
3.3 Financial Returns in Australia: Liability Structure Ratios 37
3.3.1 Overview 37
3.3.2 Liabilities and Equity - Definitions of Terms 37
3.3.3 Liability Structure: Outlook 39
3.3.4 Large Variances: Liabilities 40
3.3.5 Key Percentiles and Rankings 43
3.4 Financial Returns in Australia: Income Structure Ratios 56
3.4.1 Overview 56
3.4.2 Income Statements - Definitions of Terms 56
3.4.3 Income Structure: Outlook 58
3.4.4 Large Variances: Income 59
3.4.5 Key Percentiles and Rankings 62
3.5 Financial Returns in Australia: Profitability Ratios 77
3.5.1 Overview 77
3.5.2 Ratios - Definitions of Terms 77
3.5.3 Ratio Structure: Outlook 79
3.5.4 Large Variances: Ratios 80
3.5.5 Key Percentiles and Rankings 83
3.6 Productivity in Australia: Asset-Labor Ratios 98
3.6.1 Overview 98
3.6.2 Asset to Labor: Outlook 99
3.6.3 Asset to Labor: International Gaps 100
3.6.4 Key Percentiles and Rankings 103
3.7 Productivity in Australia: Liability-Labor Ratios 118
3.7.1 Overview 118
3.7.2 Liability to Labor: Outlook 119
3.7.3 Liability and Equity to Labor: International Gaps 120
3.7.4 Key Percentiles and Rankings 123
3.8 Productivity in Australia: Income-Labor Ratios 136
3.8.1 Overview 136
3.8.2 Income to Labor: Outlook 137
3.8.3 Income to Labor: Gaps 138
3.8.4 Key Percentiles and Rankings 141
4 MACRO-ACCESSIBILITY IN AUSTRALIA 156
4.1 Executive Summary 156
4.2 Economic Fundamentals and Dynamics 156
4.2.1 Government Intervention Risks 156
4.2.2 Balance of Payments Issues 157
4.2.3 Infrastructure Development 157
4.3 State Summaries 163
4.3.1 New South Wales (NSW) 163
4.3.2 Victoria (VIC) 163
4.3.3 Queensland (QLD) 164
4.3.4 Western Australia (WA) 164
4.3.5 South Australia (SA) 164
4.3.6 Northern Territory (NT) 165
4.3.7 Tasmania (TAS) 165
4.3.8 Australian Capital Territory (ACT) 165
4.4 Political Risks 166
4.4.1 Economic Relationship with the United States 166
4.4.2 Major Political Issues Affecting the Business Climate 167
4.4.3 The Australian Political System 167
4.5 Marketing Strategies 168
4.5.1 Establishing a Local Office 168
4.5.2 Creating a Joint Venture 169
4.5.3 Use of Agents and Distributors 170
4.5.4 Hiring Local Counsel 171
4.5.5 Checking the Bona Fides 173
4.5.6 Distribution Channel Options 173
4.5.7 Franchising Activities 173
4.5.8 Direct Marketing 174
4.5.9 Selling Strategies 175
4.5.10 Product Pricing 175
4.5.11 Licensing 176
4.5.12 Advertising and Trade Promotion 177
4.5.13 Sales Service and Customer Support 178
4.5.14 Government Procurement 178
4.6 Significant Investment Opportunities 178
4.6.1 U.S. Outward Foreign Direct Investment 179
4.7 Trade Regulations 180
4.7.1 Tariffs 180
4.7.2 Non-Tariff Barriers 180
4.7.3 Import Taxes and Sales Taxes 181
4.7.4 Customs Valuation 181
4.7.5 Import Licenses 182
4.7.6 Export Controls 182
4.8 Import/Export Documentation 183
4.8.1 Imports 183
4.8.2 Exports 183
4.8.3 Temporary Entry 183
4.8.4 Food Standards Code 183
4.8.5 Restrictions on Imports 184
4.8.6 Trade Standards 185
4.8.7 Free Trade Zones and Warehouses 185
4.8.8 Special Import Provisions 186
4.8.9 Membership in Free Trade Arrangements 186
4.8.10 Openness to Foreign Investment 186
4.9 Australian Investment Policies 187
4.9.1 The Foreign Investment Review Board 187
4.9.2 Sector-Specific Regulation 188
4.9.3 Incentives for Investment 189
4.9.4 Conversion and Transfer Policies 189
4.9.5 Expropriation and Compensation 190
4.9.6 Dispute Settlement 190
4.9.7 Selling to the Government 190
4.10 Right to Private Ownership and Establishment 191
4.10.1 Protection of Property Rights 192
4.11 Transparency of the Regulatory System 193
4.11.1 Political Violence affecting Investment 194
4.11.2 Corruption 194
4.11.3 Bilateral Investment Agreements 194
4.11.4 OPIC and Other Investment Insurance 194
4.11.5 Labor 195
4.11.6 Free Trade Zones (FTZ) and Free Ports 196
4.12 Trade and Project Financing 196
4.12.1 The Banking System 196
4.12.2 Foreign Exchange Control Risks 197
4.12.3 Financing Export Strategies 197
4.12.4 How to Finance Exports and Methods of Payment 198
4.12.5 Financing Exports 198
4.12.6 Project Financing Available 199
4.12.7 Banks with Correspondent U.S. Banking Arrangements 200
4.13 Travel Issues 200
4.13.1 Local Business Practices 200
4.13.2 Time Zones 201
4.13.3 Visas 201
4.13.4 Infrastructure for Conducting Business 202
4.13.5 Requirements for Temporary Entry of Personal Goods 204
4.13.6 Country-Specific Travel Information Web Sites 204
4.13.7 Commercial Service/U.S. Embassy Contacts 205
4.13.8 U.S. Government Web Sites in Australia 205
4.13.9 Australian Country Data 205
4.14 Key Contacts 206
4.14.1 U.S. Government Organizations 206
4.14.2 AmCham and Bilateral Business Councils 209
4.14.3 Australian Chambers of Commerce (By State) 209
4.14.4 Australian Government Agencies 210
4.14.5 Sources of Market Research and Business Facilitation Services 216
4.14.6 Commercial Banks in Australia 216
4.14.7 Australian Publications and Databases 219
5 DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS 223
5.1 Disclaimers & Safe Harbor 223
5.2 Icon Group International, Inc. User Agreement Provisions 224
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