An Outlook of New Zealand Business Opportunities; an external analysis of New Zealand industries and potential for enterprise development
An Outlook of New Zealand Business Opportunities; an external analysis of New Zealand industries and potential for enterprise development

Introduction

This report investigates the opportunities available for New Zealand businesses and the strategies needed to exploit them.   Findings have been accumulated through an external analysis of the current situation of various New Zealand industries.  Potential of New Zealand enterprise development was interpreted from this analysis.   The focus of the first half of this report is the New Zealand’s Screen Production Industry, part of the larger the Creative Industry sector.

A definition for Creative Industry generally is individual creativity, skill and talent “create knowledge, goods and services [in creative] fields such as screen production, television, music, design, fashion, publishing, textiles and digital content” (New Zealand Trade and Enterprise, 2012).  Comparatively, a UK website defines the creative industry as those organisations “which have their origin in individual creativity, skill and talent which have a potential for job and wealth creation through the generation and exploitation of intellectual property [IP]” (Local Government Improvement and Development, 2010).  These two definitions demonstrate this industry’s diversity.   In gather valued data the decision was made to focus on an aspect of the Creative Industry; Screen Production.  The Screen Production Industry can be defined as all those businesses who are involved in the creation of film, television, commercials and/or digital production.  This would include cinema-photography, animation, music and costume designers.

The Screen Produciton Industry external analysis and relating strategy findings were completed and presented at Massey University’s Albany campus on 16 May 2012 by David Cormack, Friska, Megan Ellis, Miten Patel, Moss Burmester and myself.  This report covers the current strategies being utilised for the Screen Production Industry as well as the strategies we forecast – image, niche, networking and support – being effective to positively affect enterprise development in this industry.  The second part of this report discusses the various strategies that will be necessary for all industries in New Zealand to remain competitive in the current global environment we work in today.  This is based on nine other team presentations which were simultaneously researched relating to other industries such as; Dairy, Wine, Meat, Tourism, Education, Manufacturing, Apparel, Financial Services and Information Communication Technology (ICT).   I conclude that although there are Industry specific goals and expertise necessary, largely strategies necessary for success in the future are the same and are to do with our New Zealand’s image, ongoing learning, analysis and innovation, networks, government support and serving niches with genuine value.

Screen Production Industry Discussion

PESTLE and SWOT analysis (see Appendix 1.0 and 2.0 respectively), revealed that current Screen Production success has come from combining several strategies.  The main current strategies that we identified were; leveraging from recent film production strengths, attracting foreign film production activities into the country and creating global support and recognition of our contribution to international screen production.

Firstly our recent successes have been leveraged from.  For example New Zealand has proudly flaunted that we have “acquired 13 Oscar nominations and 11 wins” (Anew NZ, 2012).  Secondly, we have enticed foreign screen productions into New Zealand based on our ‘clean green’ image, ability to deliver expertise and friendly culture.  Lastly the New Zealand Screen industry has utilized international expos and formed relationships within the global industry to build support and recognition.  For example, the government giving Hobbit at $20 million tax rebate (Business Desk, 2011)

These three main strategies were supported by other more entrepreneurial strategies.  These were well put by NZ Film as: patience, money, creative freedom, identity, entrepreneurial spirit, thinking globally and government support (Anew NZ, 2012).

Firstly,patienceis needed as the international film market is over-supplied and unforgiving.  Time must be given for awareness to be formed for New Zealand and our high value and competitive capabilities in the screen production industry.  Significant investment moneyis required to produce high quality screen productions.  The government has recently created a “15% rebate on total qualifying expenditure where the expenditure in New Zealand is … over $3 million” to encourage this industry to develop in New Zealand (New Zealand Film Commission, 2011).  Creative freedom critically must remain in the screen industry – not transferred to the likes of investors.  Grants and investments need to be made to allow the Screen Production industry to focus on their creative talent rather than restrict it.   This should be launched from New Zealand’s unique identity.  Our natural, clean-green image and unique multi-cultural environment should inspire … “the creation of unique cinematic images”.  This unique identity is also one of the competitive advantages we offer international ventures who choose to produce here.

These supporting entrepreneurial strategies must be energized by a strong entrepreneurial spirit.  Filmmakers need to have and maintain the determination to be a success.  This success will need to come from an international market to be profitable, due to New Zealand’s small population – we simply cannot support or sustain this industry based on a domestic market alone.  So, thinking globally, being competitive internationally is important.   Being the best in New Zealand is not enough.  New Zealand’s Screen Production industry requires top talent to be recruited in order to be competitive.  Lastly, none of our past or present success would have been possible without government backing.  New Zealand’s government is continuing to invest in innovation and infrastructure to support and develop human capital.  For example a national Film office has been created to assist with awareness, networking (internationally and domestically), and funding.  Film New Zealand is providing professional training and development and is developing community amongst the NZ film industry which cannot but help strengthen New Zealand Screen Industry.  Film New Zealand is an internationally recognized liaison into and amongst the New Zealand film industry (Film New Zealand, 2008).

Recommendations

Going forward based on our external analysis of the current situation, several strategies revealed themselves as important for New Zealand’s Screen Production Industry to be successful internationally.  The strategies were to do with New Zealand’s image, focusing on niches, fostering networks and developing support.

Firstly, New Zealand’s unique advantage has to do with image.  Our ‘clean green’, “100% pure” environment, diverse geographical locations and landscapes need to continue to be promoted amongst the global Film Production Industry.  The image looks to be a critical success factor (CSF) which will be increasingly relevant because up to 25% of consumers globally are now “making buying decisions [based] on environmental concerns” (NZ Business, 2008).  Due to our distant geographical location New Zealand also makes for a safe environment to develop and test new methods of production.  This image also includes our recent history of success and ongoing experience in world-class film production (New Zealand Trade and Enterprise, 2011).  This image strategy means too there is potential to collaborate with many other industries within New Zealand.  For example, advantages could be found from leveraging from Screen Production success within New Zealand.

A second strategy we believe will give New Zealand Screen Production enterprises a competitive advantage is to focus on working within niches.  By focusing on being leaders in niche areas it overcomes the common issues in New Zealand of limited funding and expensive employees.  Already a creative hub (including the likes of Weta Workshop), has formed in Wellington, this should be further fostered to encourage creative people to collaborate with projects.  Once global leadership in niche areas is achieved in the screen production industry it will mean we become recognized and penetrate into international organisations and markets is easier when they are already aware of us.  New Zealand cannot under estimate the importance of harnessing capabilities available from using niche strategies.

Another strategy which will deliver results will be to focus on networking.  Networks need to be developed at an international level as well as domestically to overcome our remote geographical location issue.  New Zealanders, according to Paul Callaghan, “need to resist our occasional little mindedness … our tendency to divide amongst ourselves … to be suspicious of each other” (2009, p. 22).  To utilise networks to their full potential it requires a deliberate approach.  Intrapersonal networks need to be developed with-in New Zealand to enable collaboration of knowledge and resources.  This is possible through recent technological advances – already the Screen Industry sector has had success regarding teams working effectively and efficiently virtually from various and changing geographical locations (Jackson, 2012).  Partnerships and alliances need to be made so parties involved both have access to benefit from the arrangement.  Attending and hosting international Screen Production Expo’s would not only provide an avenue to showcase and clearly communicate our successes, talent and emerging innovations.  Expo’s would give New Zealander’s opportunity to connect globally with those in the screen production industry.  Once a personal connection has been made, contact can be continued to ensure New Zealand remains ‘top of mind’ when they are considering their next screen production venture.

Lastly, New Zealand Screen Production enterprises need to be strategic about seeking support from both the New Zealand Government and independent sources.  For New Zealand enterprises to be a success there is a need for overseas support.  Rob Oram says “foreign finance and distribution … is key to capitalize on the … capabilit[ies] created here (2007, p. 213).  Screen Production enterprises also need to influence the government to continuously educate and groom New Zealanders to be future employees for roles that require highly skilled and specialized world-class workmanship.  This would counter the existing issue of the Screen Production Industry in New Zealand creating jobs but due to the lack of New Zealanders having the right skill-set, overseas specialists are required (Donnell, 2012).  Existing support networks and infrastructure that are currently available need to be used, for their value to be exploited.  For example, NZTE and business incubators like IceHouse who offer globally recognised “guidance, a global network[s], resources, [and] investment capital” (IceHouse New Zealand, 2012).

In line with Dean Joiner’s presentation to our Enterprise Development class at Massey University, New Zealand’s Screen Production needs to continually invest a design-led approach to remain the best globally within their area of expertise (Joiner, 2012).  When the strategies above are implemented in a design-led enterprise environment successes will be maximized.

Brief Discussion on Strategies used in Other Industries

There are some common strategies which will be relevant across multiple industries in New Zealand.   My ‘Overview of Industry Strategies for Future New Zealand Successful Enterprise Development Chart’ analysis was based on investigation and presentations made by fellow students taking Enterprise Development paper at Massey University (see Appendix 3.0).  Interestingly, amongst the strategies that were suggested for multiple industries were all those that were found relevant to the Screen Production Industry.  The discussion continues below of the more popular strategies (in descending popularity order); image, ongoing learning and innovation, networks, government support, serving niches with genuine value.

Image was most frequently mentioned either directly or indirectly, as likely to deliver a distinctive advantage to those enterprises which link their offering to our ‘clean-green’ nation.  Awareness’ of New Zealand’s natural beauty and love for “adventure and sport” is becoming known (Tourism Industry Group, 2012).  For industries like Dairyand Manufacturing, being able to transfer unique image qualities into other exportable products and services looks to provide ongoing distinctive capabilities which can be used advantageously by enterprises.  However, for this strategy to continue to be valuable, a deliberate effort is going to have to be made to protect this asset.  For example, businesses in New Zealand are slow (compared to the rest of the world), to acknowledge the necessity of becoming carbon-neutral!  According to Oram there are real financial benefits to using “carbon offsets [as] a genuine economic tool and business opportunity (2007, p. 155).  Another example is unless monitored and controlled the increasing number of tourists visiting our shores may eventually rob us of the ‘image’ they come to see unless there is careful monitoring and control undertaken (Tourism Industry Group, 2012).

The second most popular strategy was ongoing learning, analysis and innovation.  Maintaining a proactive approach to knowing about markets, customers and competitors is important for any business “to develop business and marketing strategies to seize opportunities and counter threats, and anticipate … the future” (Cravens & Nigel, 2009).  Businesses need to continuously monitor micro and macro environments (Financial Industry Group, 2012).   Ongoing research will help “anticipate demand from a volume and” to preempt trends globally to ensure valued offerings are continually created (Wine Industry Group, 2012).   “Increasing profit from productivity through … technology innovation” is important as efficiencies are sought to maximize the limited available land space for farming (Dairy Industry Group, 2012).  This strategy has obvious relevance to the Education Industry whose accolades come from research and development of ideas (Education Industry Group, 2012).  Into this strategy could be bundled less popular but more specific strategies which are closely linked.  These are speed to market, credibility based on customer experience and international recognition and educational development of New Zealanders to fill the specialist roles available to keep delivering world-class offerings “to create employees with specialist skills” (ICT Industry Group, 2012).

The third most frequent strategy that will affect success was thought to be networks. “Networking with the … tourism associations and private sector … [and] links to other industries [and encourages overseas investment]” are important (Tourism Industry Group, 2012).   Another advantage is being able to “draw on international connections to become superior companies” (Oram, 2007, p. 23).  For example active networks can assist in quickly locating a reliable business to outsource to, either directly to another network member or to a third party (Manufacturing Industry Group, 2012).  Strategic alliances will be great way to create distinctive capabilities which competitors have difficulty in replicating.  To keep growing profits it is necessary to “capitalise on trans-pacific partnerships [and] markets” (Meat Industry Group, 2012).  This networking strategy is closely aligned to investment strategies.  This is in keeping with Callaghan’s comment about New Zealand needing “international partnerships [and networks] in terms of getting access to markets” (2009, p. 152).  When valued networks are established it eases the strain of locating viable and interested investors domestically or internationally, and it aids collaboration between those within the industry (Finance Industry Group, 2012).

The next strategy involves businesses continue to lobby for increased government support.  The recent 2012 Budget from the government increases the amount earmarked for R&D but it “still falls far short of the level of investment … made by other small countries like Singapore and Denmark” (Fletcher & Adams, 2012).  New Zealand’s small population makes securing funding for ventures challenging and this can hinder development speed needed to match emerging markets.  The grants, subsidies and bio-security processes that are offered by the government are key in ensuring that New Zealand enterprises remain market leaders (Meat Industry Group, 2012).  The NZ construction industry says the government also plays a critical role in introducing ISO which ease the processes necessary to export internationally (Construction Industry Group, 2012).  The government also provides domestic laws and enables access and advice in respect of international laws through the organization New Zealand Trade and Enterprise (NZTE).  This ensure IP and copyrights are able to be protected (ICT Industry Group, 2012).  Organisations like NZTE can also help as an intercessor between internationals and government “clarifying [and simplifying] issues for international clients [like] New Zealand tax and legal system” (Financial Industry Group, 2012).

The last two strategies were equal in their popularity and related to serving niches and delivering value internationallyJust as in the Screen Production Industry, the NZ wine industry also stated thatfocusing onniche’s are critical to being able to deliver offerings that are not viewed as commodities.  Serving a niche means it is easier for small firms with limited resources to achieve leadership in a specific area and deliver more value to customers which in turn command higher prices (Mullins & Walker, 2010).  New Zealand can use its indigenous Maori culture and regional land imagery to create superior value propositions.  Marlborough’s Sauvignon Blanc is an example of this (Wine Industry Group, 2012).  Focusing on a small area of expertise allowsworld-class value to be recognized and achieved.  This value needs to be continually delivered to justify premium pricing and to remain profitable.  Resulting profit can then be reinvested into innovation so high [end] value-added dairy product[s globally] [can be created]:  Products like yogurt, cheese … and infant milk powder” (Dairy Industry Group, 2012).  Joiner also confirmed this promoting the need for delivering quirky design and experiences (Joiner, 2012).

Conclusion

In conclusion, it is apparent that despite great diversity between industries there are five overall strategies which should increase growth and profitability of New Zealand enterprises.   These five main strategies identified to assist New Zealand enterprise development are our unique image, being proactive with regard to ongoing learning, analysis and innovation, fostering networks domestically and internationally as well as within and between industries, government support, serving niches with genuine value.

New Zealand enterprises will be internationally recognized when they search out and fully utilize available networks and invest into research and innovation and focus on continually delivering value that delights niche market customers.

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References

Anew NZ. (2012). The Seven Keys to Kiwi Power. Retrieved June 2012, from Anew NZ: http://anewnz.org.nz/vision.asp?id=109

Apparel Group (2012). Apparel Industry in New Zealand. Auckland: Massey University. Apparel-opportunities

Auckland City Council. (2007, May). Blueprint: Growing Auckland’s Creative Industries. Retrieved May 5, 2012, from Auckland City Council: http://www.aucklandcity.govt.nz/council/documents/blueprint/default.asp

Business Desk. (2011, October 31). The Hobbit racks up $20m in tax rebates. Retrieved June 2012, from The New Zealand Herald: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10762948

Callaghan, P. (2009). Wool to Wetal; transforming New Zealand’s culture and economy. Auckland: Auckland Universty Press.

Cravens, D., & Nigel, F. (2009). Strategic Marketing (9th ed.). New York: McGraw-Hil Irwin.

Creative New Zealand. (2010). About Creative New Zealand. Retrieved May 2012, from Creative New Zealand: http://creativenz.govt.nz/en/about-creative-new-zealand

Dairy Group (2012).  Dairy Industry in New Zealand. Auckland: Massey University. Dairy-opportunities

Donnell, H. (2012, April 30). NZers missing out on plum film industry jobs – Labour. Retrieved May 5, 2012, from The New Zealand Herald: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10802577

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Film New Zealand. (2011). Large Budget Screen Production and Post, Digital and Visual Effects Grants. Retrieved May 2012, from Film New Zealand: http://www.filmnz.com/new-zealand-cg-animation-visual-effects-company-launches-plug-in-to-international-acclaim.html

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Finance Group (2012).  Finance Industry in New Zealand. Auckland: Massey University. Finance-opportunities

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Jackson, P. (2012). Videos/Production Video #5: On Location. Retrieved June 2012, from The Hobbit; an unexpected journey: http://www.thehobbitblog.com/?cat=8

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Local Government Improvement and Development. (2010, February 8). What are creative industries? Retrieved May 2012, from Idea UK: industries which have their origin in individual creativity, skill and talent which have a potential for job and wealth creation through the generation and exploitation of intellectual property

Manufacturing Group (2012).  Manufacturing Industry in New Zealand. Auckland: Massey University. Manufacturing-opportunities

Meat Group (2012).  Meat Industry in New Zealand. Auckland: Massey University. Meat-opportunities

Mullins, J., & Walker, O. (2010). Marketing Management; A Strategic Decision-Making Approach. New York: McGraw-Hill Irwin.

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New Zealand Trade and Enterprise. (2011). Creative, film and TV. Retrieved June 2012, from Business New Zealand: http://business.newzealand.com/auspac/en/buy-from-new-zealand/creative-film-and-tv/

NZ Business. (2008, March). A New Level of Consciousness. 22 (2), pp. 28-29.

Oram, R. (2007). Reinventing Paradise; How New Zealand is starting to earn bigger, sustainable living in the world economy. Auckland: Penguin Books.

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Screen Production and Development Association. (2012). SPADA Resources. Retrieved May 2012, from SPADA: http://www.spada.co.nz/resources/resources.html

Tourism Group (2012).  Tourism Industry in New Zealand. Auckland: Massey University. Tourism-opportunities

The New Zealand Herald. (2012, April 25). Peter Jackson unveil Hobbit scenes. Retrieved May 2012, from The New Zealand Herald: http://www.nzherald.co.nz/movies/news/article.cfm?c_id=200&objectid=10801415

Wine Group (2012). Wine Industry in New Zealand. Auckland: Massey University. Wine-opportunities

Appendix (click on image to view)

Appendix 1.0 – Pestle Analysis

 

 

 

 

 

Appendix 2.0 – SWOT Analysis

 

 

 

 

 

Appendix 3.0 – Overview of Industry Strategies for Future New Zealand Successful Enterprise Development Chart

 

 

 

 

NOTE: This report for an Enterprise Development Paper at Massey University, 2012.  The first part to do with ‘Creative Industries’ was a group presentation worth 20%.  The second part, was this report worth 80%.  All participants had to individually prepare a report on their particular Industry as well as New Zealand Industries as a whole.

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