As a small country on the island of the southwestern Pacific Ocean, New Zealand (NZ) has two main islands namely the north and south island. Apart these two islands, NZ has about 600 other smaller islands. The majority of these islands are volcanic and glacises. Moreover, the country’s expansive topography, Sharp Mountain peaks including the Southern Alps, the great landscape starting from the mountain ranges and the extensive coastlines New Zealand is indeed a perfect tourist destination! NZ is situated 1,500 kilometers east of Australia and about 1,000 kilometers from the Pacific Islands. Apart from the fact that it is water locked, it has remained remote, and this can explain the reason why it was among the last countries to be discovered and settled by early settlers. The capital city of New Zealand is Wellington which is situated on the North Island. Te Papa Tongarewa, an expansive national museum is located in the capital. According to statistics conducted by the World Bank in 2015, the population in New Zealand is about 4.596 million. The most populated city is Auckland followed by capital city Wellington and the South Island City of Christchurch. Approximately two-thirds of the population in New Zealand live in the North Island while the rest live in the South Island.
The majority of the New Zealand’s population is of European decent while Auckland happens to be the largest city in New Zealand. The official language in use is English and Maori
Queen Elizabeth II is the country’s head of state and is represented by a governor-general who is currently Dame Patsy Reddy. Ideally, the country has about 11 regional councils and 67 territorial authorities. Surprisingly enough, New Zealand is a constitutional monarchy under England whereby administration is effected through the parliamentary system manned by the Prime Minister. The two most traditional political parties include the National Party and the Labour Party. However, the green party and New Zealand first party are relatively young as compared to the former two parties. Voting is conducted after three years, and it is not a wonder that New Zealand was among the first countries to grant women the right to vote in 1893. The prime minister is appointed to set up a cabinet as well as control most of the Parliament especially after a general election. As a result of its close ties with the British Blue Ensign, New Zealand has held the different four stars flag representing the Southern Cross flag since the year 1902. New Zealand is among the top countries with a high human development Index of 0.915. Additionally, its GDP/PPP as per 2013 estimation was $114.9billion, per capita $30,400.
Ideally, this report aims at providing valuable advice on why it is advisable to establish woolen clothes, particularly in New Zealand. The report will analyze the political, social, economic and technological factors affecting the woolen industry and help in the formulation of an appropriate business strategy to venture scenes in the country. Ideally, the reason why people love visiting and residing in New Zealand is that of its rich biodiversity. The amount of plant cover, flora and fauna are indeed massive. The large plan cover and extensive green plantations must have blossomed during the period which NZ remained isolated and unaffected by human activity. The thousand species of animals, beautiful marine life as well as the rich diversity of the plant cover paints a dramatic picture of how great New Zealand is an opportune country to invest! Much of the arable land in New Zealand is used for the agricultural purpose and thus, establishing a woolen clothes industry in the country would be a good idea due to the bountiful supply of raw products.
New Zealand is recognized as a leader in several sectors especially in the textile industry. It is a major producer and exporter of wool alongside countries such as Australia. The primary agricultural products traded include wheat, barley, cotton, potatoes, pulses, fruits, vegetables as well as dairy products. The availability of raw materials, ready market, favorable government policies, and regulations, as well as the freedom of entry and exit into the market, makes it attractive to establish the woolen business in New Zealand. Erdos Company is the organization that will be mandated to analyze the market and investment opportunity of venturing business in New Zealand.
While in the pursuit of running the woolen clothes business in New Zealand, the company will face several regulations put in place by the local authorities as a means of overseeing business operations. Even with the presence of laws, New Zealand is ranked fifth in the world for political stability and is thus suitable to carry out the woolen clothes business. The labor party has since been the ruling party, and though the local government does not possess much governmental power, they are vested with lots of civic responsibilities one of them including the imposition of taxes. Based on the British model, the New Zealand’s political system is democratically based. The judicial systems, on the other hand, are robust, independent and vigorous.
The presence of a sound legal framework together with an independent media and transparent government has been the reason why business enterprises have continued blossoming. The presence of political and economic stability which renders a favorable climate to conduct business is an enough reason to establish retail operations in NZ. Moreover, the low levels of corruption, worldwide international recognition validate the reason why opening the woolen clothes business would be a good idea. In New Zealand, bribery is illegal and is indeed a total offense. Though the threat of terrorism in New Zealand is small, pertinent risks caused by natural disasters such as severe are still a threat! Such threats not only cause massive destruction but also threaten lives.
New Zealand has some laws and regulations in place all aimed at keeping the animals in and around the country safe from poaching among other illegal activities. Over the years, the tariffs have been gradually removed. By 2009, the tariff was about 10percent. Textile innovation is the feature of the clothing industry. The rapid developments in the manufacturing process, as well as processing of fine merino wool fabrics including of possum fur and wool, has placed New Zealand on high rankings especially regarding exports. Some of the administrative acts governing the textile industry include the commodities levies Act (1990) as well as the animal welfare regulations. Most of New Zealand’s wool exports is ‘strong wool’ and is widely used in woolen carpets. Beautiful yarn such as the Merino wool is used in the manufacture of garments.
Economic Factors
New Zealand is a developed country and ranks highly in performance in sectors such as health, education, economic freedom as well as the quality of life. Since the 1980s, New Zealand has transformed from an agrarian, regulated to a market economy. As a member of the United Nations, Commonwealth of Nations, ANZUS, Organisation for Economic Cooperation and Development, Pacific Islands Forum and Asia-Pacific Economic Cooperation, New Zealand operates on a mixed economy with free trade economy dependent on International trade. The principal export industries are agriculture, horticulture, fishing, forestry, and mining while the major business partners with New Zealand is Australia, USA, United Kingdom, China, and Japan.
The growth rate of the population in New Zealand is 0.83percent. The birth rate is 13.4 per every 1000 while the infant mortality is 4.59 per 1000 while the life expectancy in 80.93. Since 2014, NZ has recorded a real growth rate of 2.5percent while the inflation rate has remained relatively at 1.3percent. However, the unemployment rate has remained high and remained at 6.43 percent. It is worth noting that the major industries in New Zealand are food processing, wood, and paper industries, textiles, machinery, transportation equipment, banking and insurance, tourism, mining. As such, investing in the textile industry is highly recommendable since it is not only a significant activity in NZ but also an established business. Moreover, the openness of NZ to global trade and investment has helped NZ regain quickly from the global recession.
New Zealand has enjoyed a strong GDP growth of 3.3 percent since 2014 ( ). Moreover, the sizeable manufacturing and service sectors are highly competitive and productive, especially in the agricultural and forestry sector. Thus, investing in the areas will require the formulation of strategic and unique techniques to gain a significant market share. The fiscal policy involving the actions by the government have seen the commitment by the Federal Reserve in maintaining a budget surplus. However, the government has always been in pursuit of borrowing additional finances to fund projects. In recent years, the budget balance has registered small deficits over the past years, but the gross public debt has been kept under control. With the monetary policy, however, the reserve bank of New Zealand has continued relying on monetary policy in determining price stability. The uneven domestic recovery, high exchange rate as well as the fluctuating asset and property market, have not shaken the Federal Reserve.
Though the economic climate is favorable, the woolen industry is much smaller and less widely distributed, and thus, the demand in the sparsely populated New Zealand has remained to be less ( ). With the supply of water, wool and natural grease, the market remains to be limited. The reason why the unemployment rate remains high is that there exist no enough qualified and skilled laborers to work in the industry. The woolen industry is rather complex and complicated, and skill, experience, tradition and technical efficiency is required. The proximity to power supplies, the market as well as access to raw materials is still low especially because New Zealand still manufactures less than 5 percent of the woven fabrics.
Social Factors
The people of New Zealand are hard working, problem solvers and innovative. They are adventurers, and they love exploring different fields including the sports field, business world as well as the political arenas. A majority of them are the young generations while the proportion of the older adults is relatively constant now that NZ has a high life expectancy of 82. Thus, the primary target market is the young generation between the years of 16 and 65. Knowing this fact is used as it will help fashion the woolen products to these particular age group. The young generation loves being flashy and classic. Fashion to them is adorable, and this means that they will buy a variety of different collections of woolen products over and over again ( ). Moreover, the European are the dominant population with a 71.2percent while Maori follows next with 14.1percent. Regarding religion, Christians are the majority with a total of 44.3 percent proportion followed by Hindu, Islam, and others. Getting to know the demographics of the population helps fashion the products to suit the needs of the target market and in this case, the business will target the Europeans, Christians youths. Knowing the culture of the population will also help establish how the company will supply the products.
Technological
In New Zealand, the most popular means of transportation is the use of roads including railways. Rail networks account for about 94,160 kilometers. Though waterways are used, they are less popular. Ports and harbors such as those in Auckland, Lyttelton, Manukau Harbor, Marsden Point, Tauranga, and Wellington serve as an efficient means of transporting the products. There is also an established network of airports. For the business, road traffic is most desirable and effective ways to carry the wool products. Rail transport is also a favorable means. Given that the cargo is not perishable, it can stay and through the use of modes of transport such as road, goods can reach their destination in time. Considering the traditional broadcast media in NZ, state-owned Television and Radio stations are a common means of advertising, and thus, it would be best to market the company’s products through such means. Internet connectivity in New Zealand is also advanced, and this means that there is a potential massive traffic of online users which should be tapped through websites and social media.
Conclusion
Conducting business in New Zealand is indeed a great fortune! From the favorable economic conditions of the favorable political climate, NZ is indeed the destination of all companies. Establishing Erdos Company in the textile industry dealing with woolen clothes is a noble idea. The proximity to Asia and Australia, touristic appeal and large agricultural sector, public debt under control as well as the changing demographics are justifying reasons as to why the preferred location to establish Erdos is in New Zealand. In business, New Zealand ranks high in integrity, honesty, and trust. There are cases of small cases of corruption, and these cases make headlines for they are rare. But unlike cotton textile industry, there has been no shift of woolen industry to the raw material areas because wool manufacturing is more complicated and requires great skill and experience as compared to cotton. However, the things to watch out for a while establishing Erdos in NZ is the national debt and budget deficit data, the policy response as well as the changing weather patterns.