'Australia in a Business Context Essay\r'

'1.1 Introduction\r\nIn straightoutside’s world, inter provincealization is inevitable for companies competing in the spheric world, where their production, target mercenaryize, melodic line thinksl were integrated crossways different frontiers (Robins 2000) and between different people in different countries (Schulte 2000)\r\nIn this report, we forget discuss nigh Fraser and Neave and the potential of a crossroads hazard with University of Queensland, Brisbane to induce student clubs deep down the university’s premises. The entry mode pass on be suggested based on pecuniary back uping context and compevery analysis. Predicted impact of action lead be envisi matchlessd and suggestions for upgrade expansion of the university social club grocery infra the name of Fraser and Neave will similarly be do.\r\n2.1 Context Analysis\r\n2.1.1 Australia in billet context\r\nAustralia, being an open economy with open policies for batch and enthronizat ions, she has attracted m whatsoever foreign investors without the imp everyplaceishment of providing any excess incentives (Euromonitor business environment: Australia 2013). Reaching a $986.7 one thousand thousand of summarize GDP in division 2013, $618.9 billion comes from FDI alone.\r\nDue to harsh contractions in mining financial tightening by both the maintain and federal presidential term activitys and the inviolable Australian dollar, the country’s scotch growth will assuagement in the form 2013. (Euromonitor Australia Country Profile 2013)\r\n2.1.2 Australia: ethnic Analysis\r\n destination is a ‘powerful social construct’ (Boyacigiller, 2004) in diverse multicultural workforces, government agencyicularly vital in the sustainability and success for any world(prenominal) business (Doney, 1998).\r\n through with(predicate) a series of empirical studies, Australia being a country of low\r\ncontext kitchen-gardening (Markus G 2011, 75) has 4 main characteristics identified of their community (Australia knowledge base View, 2001) and (Communicaid: Doing note in Australia):\r\n1. Linear, logical, individua angleic, and action-oriented people. Australians are gener solelyy results orientated. and then when dealing business with Australians, statistics and figures are subjective for a successful deal. Since they fuel be seen to curb confrontational and strong opinions, business dealings with them would need to back up with research or evidence in order to convince them.\r\n2. Community likes to avoid uncertainties\r\nAs Australians are people who like to avoid uncertainties, they tend to be very straight to the point with their dustup with the intention of having them taken literally. To avoid any fault or future conflicts, business dealings with them would put up to be very literal with all conditions on the table for discussion. Implicit messages will most in all likelihood go un noniced.\r\n3. Adopts a very egalitarian finale\r\nAustralians avoids differentiation between individuals and are often favored to be impartial, modest and bring on mutual celebrate for some separates. Therefore they prefer a more than overmaster to earth blast to business. They are similarly completely more receptive to innovation, fresh ideas and encourage restless discussions or debates.\r\n4. Appreciates privacy\r\nWhen dealing with Australian business counterparts, it would be wise to stay within the lines and negotiate attempts at exploitation interpersonal relationships with much caution.\r\n2.1.3 Australia: legitimate surroundingss\r\nIn relation to the gimmick of belongings, we would be feel at laws that are relevant. As a knock think is suggested for the expression of the\r\nstudent hostel, we would capture to consider the complications of contract law besides the obvious property law, employment and industry relations, and general tax issues. As the land that we are proposing to construct is within the University’s premises, a confederacy with the university will give Fraser and Neave introduction to the land without any legislation to bind or cripple the secure. Nevertheless, thither would be a need to attain acclaim for increment through the unified Development perspicacity System (IDAS) under the sustainable Planning Act 2009. An application would have to be submitted in order to get a phylogeny permit for the construction of the hotels. Required information for the approval will be as checks: * Material apply\r\n* Any impacts to the surrounding environment\r\n* Completed ontogenesis look\r\n(Queensland presidential term: Development Approvals, 2013)\r\nFurther heavy issues will be discussed at a by and by date when the university of Queensland accepts the joint threaten intention.\r\n2.1.4 Australia: Political Environments\r\nThe Australian’s political environment have been consistently stable since the year 1996 to 2011 with a small land in the year 2009 according to the political perceptual constancy index ( globe Governance Indicators, 2011). rank top 50 worldwide, Australia’s political environment has do the nation an attractive location for business pull backrs to invest in.\r\nIn order to protect Australia’s AU$15 billion global education industry from competition, the government have made its commitment to quicken endorse bear upon for inter bailiwickist students and release a list of policies universities, international education and research ( sustain to board on foreign students, 2013). Although concrete releases of these policies are not cognise yet, we can expect better support from the government on Australia’s international education industry. This would mean the future outlook of industry sees potential for further educational outgrowth. With\r\na faster visa processing for international students, the get for accommodation will subjoin and there will be our commercialise.\r\n2.1.5 securities industry surface and Growth\r\nWe outset identify the primary market for student hostels as internal and international students, those in which plans on residing away from their homes in pursuit of their pedantics.\r\n found on the take apart by Government of Australia and take for granted 20% of the Domestic drill-age childs and 80% of the International g body politic hostel accommodation, Australia Universities will request hostels to accommodate close to 450,000 students:\r\nAustralia| Domestic| International| Full Time|\r\nStudents enrolled| 934,110| 323,612| 884,179|\r\nStudents(estimated) needing Accomodation | 20%| 80%| |\r\nRooms Required| 186,822| 258,890| 445,712|\r\nStudy through by Government of Australia ( division of Industry, Innovation, clime Change, Science, Research and ordinal gentility) in 2012\r\nLooking at the amount reflected above, the inquire for student accommodations is substantial, especially am ong international students where accommodation serves abundant importance as it puts their respective parents at ease of sending their Children abroad. Students commencing would overly be a dogmatic indicator for high occupancy turn over rates.\r\nAlthough reports have sh birth that Australia is one of the most expensive countries to ponder abroad in (Cost of studying in Australia move off international students, it is claimed, 2013), Australia remains optimistic or so the future of international education program as part of their GDP contributor. In the report by International culture Advisory Council (Australia †Educating Globally), there would be an estimated increase in total number of international students by 30% in the year 2020. foodstuff growth in this market would be project to be escalating even if it might\r\nbe tour periods where the growth might temporarily slowed down (Australia focussed on international student inventory growth, 2013).\r\n3.1 gild A nalysis\r\n3.1.1 Fraser and Neave\r\nFormed in the year 1883, Fraser and Neave have flourished into a imperfection that is ranked as one of the most successful and established organization in the Asia peaceful region. With a remarkable array of famous brands that relish strong market leadership, Fraser and Neave traditionally made its reputation through the production and distribution from its own F&N range and several(prenominal) other international brands. In the recent decades, Fraser and Neave have moved on to property knowledge and produce with ravishing results.\r\nOperating at S$32 billion worth of shareholders’ funds and total assets, Fraser and Neave is beat over 20 countries spreading across Europe, Asia Pacific and the USA. Leveraging on its strength in brand and financial management, research and increment, marketing and distribution, as come up as many years of acquisition experience, its adjunct companies across the cardinal industries are able t o fulfill strategic directions and key resources to ensure sustainability and success. 3.1.2 Fraser and Neave: Properties\r\nAs part of the business diversification, Fraser and Neave developed the topographic point Industry as a sensitive core business. Since 1990 from a champion mall operator, Fraser and Neave have blossomed into a full-fledge real estate group, Frasers Centrepoint Limited (â€Å"FCL”), which achieved a total of $1,345 million dollars sound in year 2012.\r\nThe group’s overseas property subsidiary in Australia, Fraser Property Australia, has made outstanding success in the Australia property market with the very prosperous development of residential and commercial projects. Involved in joint speculation partnership with Sekisui House Australia Holdings Pty Limited, Fraser Property Australia has established its brand and reputation as a property developer in Australia having their projects spoil across Perth, Western Australia and largely in Sydn ey. past from just\r\nproperty development, the group have also developed and runs a service apartment under their Fraser Hospitality where they own full management rights.\r\n3.2.3 University of Queensland\r\nRanked in the top 100 universities in the world, University of Queensland is the first university that opened in the state and the largest university in Queensland. With a total of 4 major campuses †St Lucia and Herston in Brisbane and Ipswich and Gatton in South-East Queensland, the University have invested significantly in development and construction providing students with conducive environments for studies, research and other schooling activities.\r\nCovering a total of 1376 hectares of land 754,500 m2 (gross report area) of which occupied by 764 buildings holding 522 teaching retinue and 1588 laboratories. 10 of which are residential colleges that go forths student accommodations and places academic activity in a community put of students and faculty. All resid ential colleges are located at the main St Lucia Campus. We note that there are no other student accommodations located in the other 3 campuses †Herston Ipswich and Gatton. Students studying in these campuses are promote to look for accommodations that are near the schools.\r\nIn the University of Queensland, there are more than 46,863 students including 11,389 international students from 142 nations around the world. Of the total 46,863 students, there are presently precisely 2,955 cortege available within the University as follows:\r\nCollege with mansion house| Student with Residence at the College| Cromwell College| 247|\r\nDuchess College| 200|\r\nEmmanuel College| 340|\r\nGrace College| clxxx|\r\n planetary houses of Residences| 440|\r\nInternational House| 238|\r\nKings College| 298|\r\nSt. John College| 263|\r\nSt Leo’s College| 212|\r\nUnion College| 334|\r\nWoman’s College| 203|\r\nTotal Residence| 2,955|\r\nAssuming 80% of the International and 20% of the Australian Students desire accommodation within the University, the University of Queensland will require an additional of 13,000 cortege that it does not have straightaway! Based on an average AU$4,500 per year per residence fee, we estimate a line of business authorization of AU$58 million per annum if all 13,000 rooms are contributed.\r\n4.1 Entry Mode\r\n4.1.1 International pin Venture\r\nWe proposed that the entry mode for Fraser and Neave in developing and managing Hostel Accommodation within the University be an international joint venture with University of Queensland. This entry mode is proposed in general due to the ownership rights for the land within University. This also simplifies the challenges of property rights and taxes. This Joint Venture is formed on the basis of University of Queensland providing the land while Fraser and Neave will provide the resources to build and operate the Hostel, which is the key strength of Fraser Property Australia.\r\nThr ough the company analysis, it can be seen that University of Queensland has a potential shortage of 13,000 student accommodation. Therefore the construction of a student hostel in the campuses will increase the attractiveness and reliability of the school to domestic or international students. In the initial phase, the proposed hostel construction would take place in campuses in South-East Queensland (Ipswich and Gatton) as these campuses are far away from the only campus in Brisbane that provides student accommodations.\r\nBased on the current capacity of only 2,955 residences within the University, we are confident that there will be strong student occupancy rates to uphold the sustainability of the hostels.\r\nWe take that the University of Queensland would be able to attract and house more domestic and international students with the value addition of these hostels while receiving percentage of it earnings. Fraser and Neave could also benefit by go in the market of student hos tels through this singular joint venture. If prove to be a success, Fraser and Neave could move into the development of student hostels in Australia and the rest of the world that offers international studies aside from residential and commercial buildings. This is a corner market that has not been developed by any multinational companies and has the potential worth looking into.\r\nAs Fraser and Neave is already in a joint venture with Sekisui House Australia Holdings Pty Limited with its subsidiary Fraser Property Australia, it would be wise to approach this new joint venture as partners. This would allow Fraser and Neave to once again accost onto the expertise of its local partner and mitigate the development cost between its partners. Therefore the joint venture will be proposed to run three ways. 5.1 exfoliation Analysis: International Joint Venture\r\n5.1.1 subdue of Entry\r\nSince construction and management of student hostels in a University is considered to be a new d enotation of Fraser and Neave’s properties development, we would propose a conservative approach in the scale of market entry. We would propose an initial accommodation for 500 students, which will generate AU $2.25 million per annum, and this can be subsequently spread out to more accommodations depending on the availability of land within the University of Queensland.\r\nAlthough small, it allows Fraser and Neave more time to learn about this market. As this particular market is very niche with only small players traditionally, it will take time for Fraser and Neave to study the\r\ncharacteristics of the market and develop the most effective and working(a) way to progress this into a large-scale international hostel construction business. This also limits Fraser and Neave’s movie to the monetary and economic losses that might follow if this project is a failure.\r\n5.1.2 Risk Levels and control\r\n give that the hostel is only for 500 students, the risks in this p roject are also relatively low in relation to the small scale of entry. Nonetheless, these are the realistic risks involved and how to mitigate them:\r\n emergent project backdown from the University of Queensland Land owned by the school involve for the hostel constructions may be needed for other University purposes. To avoid this risk, conditions for the withdrawal of the joint venture have to be carefully constructed in the contract to ensure a high penalty cost if any party were to decide to withdraw.\r\nDisapproval of property development by local authorities or state government agencies To avoid last minute disapproval, Fraser and Neave mustiness ensure that all conditions posed by the authorities are fulfilled before filing for approval.\r\nSudden hike of interest rates for the properties building orbit Although this is a risk that cannot be mitigated substantially, a contingent way to minimize it would be to make payments in full. This would however increase the fina ncial investment for the project in a shorter time frame. A more prudent approach is to ensure unflinching interest rates are negotiated prior to the come to the fore of the projects.\r\nSudden drop in student numbers in the proposed campuses\r\nOpening the rooms for rent to students of schools near could mitigate this risk however; it would have to be based on cartel with University of Queensland. Students from the university will also be given priority in this case.\r\n5.1.3 fruit Levels\r\nReturn of investments for the proposed project will be 17% †20% per annum for each hostel. Payback period for the hostels will be at approximately of 4 years. 5.1.4 contain Levels\r\nControl levels for this form of entry mode is visit due to the number of parties involved. As this is a three way partnership proposed, Fraser and Neave must ensure that it has all the management decision for construction and management of the hostel thereafter. The agreement with the other 2 joint vent ure partners is needed and should be detailed in the agreement prior to project start.\r\n5.1.5 Integration Levels\r\nWith a semipermanent joint venture partner (Sekisui House Australia Holdings Pty Limited), integrating with the local construction environment will not pose a great threat to Fraser and Neave. on with the past experiences of commercial and residential properties in Australia, the integration of their construction contribution in this project is anticipate to be positive.\r\nOn the other hand, partnership with a University is a first for Fraser and Neave and they might be hindered by the new rules and regulations that are imposed by the school. This can be mitigated by understanding the limitations of the school and its school grounds before the commencement of the construction.\r\n6.1 purpose\r\nThere is a great potential in extending Fraser and Neave construction line towards hostels construction with the increasing demand of international education in Australia .\r\nBeing an undermined market, hostels construction will give Fraser and Neave competitive advantage as one of the first multinational company to\r\n command this business. A joint venture with a renowned University worldwide gives the group an exposure to other Universities if proven to be successful. The joint venture would also provide the group with reliable knowledge and information essential for bringing this business into international grounds. A possible development can also arise from this business plan with the introduction of a brand new brand extension ‘Frasers Hostels’, the management of all the Fraser and Neave hostels across the globe.\r\nTotal Word Count: 2750\r\nReferences:\r\nWebsites\r\nFraser and Neave. Our Business. visible(prenominal): http://www.fraserandneave.com/FN_ourbusiness_properties.asp. resist accessed seventeenth Aug 2013.\r\nCentral Intelligence Agency (2013). The World Fact Book: Australia. on hand(predicate) at: https://www.cia.go v/ subroutine library/publications/the-world-factbook/geos/as.html. put out Accessed: 17th Aug 2013.\r\nFraser and Neave. Fraser Property. Available: http://www.frasersproperty.com.au/. exit accessed 23th Aug 2013.\r\nAlvin Chua. (2011). Fraser and Neave. Available: http://infopedia.nl.sg/articles/SIP_1792_2011-03-04.html. Last accessed 23th Aug 2013.\r\nCommunicaid. (2009). Doing Business In Australia, Australian fond and Business Culture. Available: http://www.communicaid.com/access/pdf/library/ civilization/doing-business-in/Doing%20Business%20in%20Australia.pdf. Last accessed 20th Aug 2013.\r\nCollege of Marin. High-context and Low-context Culture Styles, Available at: http://www.marin.edu/buscom/index_files/Page605.htm. Last Accessed: 18th Aug 2013.\r\nhttp://acad.depauw.edu/ (2001). Australia World View. Available at: http://acad.depauw.edu/~mkfinney/teaching/Com227/culturalportfolios/australia/WorldView.htm. Last Accessed: 18th Aug 2013.\r\nAustralian Government section o f Foreign Affairs and Trade (2012). efficacious Systems. Available at: http://www.dfat.gov.au/facts/legal_system.html. Last Accessed: 22th Aug 2013.\r\nIntead International Education Advantage, LLC (2013). Australia focused on international student enrolment growth. Available at: http://www.intead.com/australia-focus/. Last Accessed: 23th Aug 2013.\r\nQueensland Government Department of State Development. Infrastructure and Planning (2013). Development Applications. Available at: http://www.dsdip.qld.gov.au/development-applications/development-application-process.html. Last Accessed: 25th Aug 2013.\r\nQueensland Government Department of State Development. Infrastructure and Planning (2013). Development Assessment Process. Available at: http://www.dsdip.qld.gov.au/development-applications/development-assessment-process.html. Last Accessed: 25th Aug 2013.\r\n widely distributed Governance Indicators. Australia. Available at: http://info.worldbank.org/governance/wgi/sc_chart.asp#. Las t Accessed: 25th Aug 2013.\r\nNewspaper Article\r\nAndrew Trouson and Bernard Lane (2013). ‘Back to board on foreign students’. The Australian, 04 September, Available at: http://www.theaustralian.com.au/national-affairs/election-2013/back-to-board-\r\non-foreign-students/story-fn9qr68y-1226710079478. Last Accessed: 4th Sep 2013\r\nBooks / Peer reviewed journals\r\nJan Aart Scholte (2000). globalisation: A Critical Introduction Second Edition. vast Britain: Creative Print and Design (Wales), Ebbw Vale.\r\nRobins Kevins (2000). ‘Encountering Globalisation’ by David Held & Anthony McGrew. The Global Transformations Reader. Great Britain. TJ International, Padstow, Cornwall. pg 239 †245.\r\nMarkus G. Kittler, David Rygl and Alex Mackinnon. (2011). Beyond culture or beyond control? Reviewing the use of Hall’s high-/low-context concept. International Journal of Cross Cultural management. 11 (1), pg 63-82.\r\nDoney PM, Cannon JP, and Mullen MR (1998). Understanding the influence of national culture on the development of trust. Academy of Management Review 23: 601â€20.\r\nBoyacigiller NA, Kleinberg J, Phillips ME, and Sackmann SA (2004). Conceptualizing culture: elucidating the streams of research in international cross-cultural management. In: Punnett BJ, Shenkar O (eds) enchiridion for International Management Research. Ann Arbor, MI: University of Michigan barrack 99â€167.\r\nReports\r\nFraser and Neave (2012). F&N yearly Report 2012. Fraser and Neave. Singapore. Last accessed 17th Aug 2013\r\nInternational aver for Reconstruction and Development / The World Bank (2013). Doing Business 2013. The World Bank and the International Finance Corporation. working capital Dc. Last accessed 17th Aug 2013.\r\nEuromonitor International (2013). Business Environment: Australia. Euromonitor International. Last accessed 17th August 2013. Global Market Information Database\r\nEuromonitor International (2013). Australia Cou ntry Profile. Euromonitor International. Last accessed 17th August 2013. Global Market Information Database Clayton UTZ (2012). Doing Business in Australia. Clayton UTZ. Last accessed 22nd Aug 2013\r\nInternational Education Advisory Council (2013). Australia †Educating Globally. International Education Advisory Council. Australia. Last accessed 23th Aug 2013.\r\nGovernment of Australia Department of Industry, Innovation, Climate Change, Science, Research and ordinal Education (2012). Summary of the 2012 full year high education student statistics. Government of Australia Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education. Australia. Last accessed 23th Aug 2013.\r\n'