The model selected needs to be aligned with what the business wants to achieve in Australia.
- Subsidiary: A subsidiary creates an impression of longevity and substance in Australia whilst providing the parent company with the governance and monitoring ability. This approach can be expensive and ensuring access to established networks is required.
- Distributor network: It is important that a distributor has the necessary product and industry knowledge, and that their incentives are aligned to that of the business. Be mindful of your growth plans for Australia; contractual arrangements and the flexibility of your distributor may affect future opportunities.
- Joint ventures: Joint ventures provide the ability to exploit a synergy of products or to leverage off the business partners’ networks and experiences in market. It is important to ensure the businesses are aligned and share similar aspirations. Tight service level agreements may be useful if there is inequality between the parties.
- Acquisition: Acquisition provides the benefit of a subsidiary but also provides access to knowledge gained from past experiences, understanding the customer base, and providing connections to stakeholders in the market.
Of the companies interviewed 70 percent undertook multiple attempts at establishing their Australian operations. Their models changed either due to; lack of financial resources, lack of capability, inadequate product differentiation, or inefficient structures.
Time in the market was identified as a key factor to developing an effective implementation plan. A business needs to be able to change and adapt in entering a new market, creating a learning environment to ensure they capture the lessons from their experiences.
More information:
For more information on how your business can access opportunities across the ditch, please contact your Client Manager or our Business Services Team on 0800 555 888.
