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From: | "David & Jill Stevenson" <djstevo@quicksilver.net.nz> |
Date: | Wed, 10 Dec 2003 14:42:45 +1300 |
Look at Cole`s to get an idea of just how tough the
retail market is in Oz. Sir Ron Brierley through Premier Investments holds an
investment in CML of approx. $A 60 million , present market value . He has held
those shares for over 10 years hamstrung to make a worthwhile play.
He of all people would be sensitive to the fact that they are burning a hole in
his pocket, watched by his own shareholders.Imagine how many times he could have
turned overthose funds in normal course of events. Yet he cannot get
CML totally on track to capitalise . Always something adverse crops up. . I
suspect his undue loyalty to Solomon Lew has prevented him making a proper
business decision. Just as he stuck by friend Rodney Price in that
man`s attempts to get Australis off the ground in the 1980`s which, right
or wrong , was no hard-nosed business decision. Not typicalof the man. Or is
that assessment unfair ?
Successful NZ businesses
should not automatically think the next step is Australia simply because of it`s
vastly larger market size . The market may be bigger, but there is,
to balance, proportionately greater and perhaps more street-wise
competition.
Buying into existing
unsuccessful businesses is doubtful strategy . That is why Eric Watson`s foray
into a failed supermarket chain in UK will prove his mettle. What has he seen
that other`s cannot ?
In an expansionary move abroad
there are at least two challenges-
(1) Ask yourself why the heck
you as a newcomer on the block should think that you can offer something special
to turn around a failing business . Don`t think that there are not enough local
competitors , already familiar with the local scene , that won`t have sized up
the challenge before you did and walked away. In a sense the same question
should be asked when we are offered a high power job . Why did not others apply
for the position or exactly why did the previous office holder quit the
job. Seldom will you get a correct answer to the last question !
(2) The second challenge is - how do
you evaluate, before committing yourself to a move -- in the particular
industry, what would be the Aussie parochialism against a NZ newcomer ?
Obviously in some industries it will not be as much a factor as in
others.
When
Lion Nathan moved their product into Australia the local beer drinker had a
strong pre existing brand loyalty that one would have thought impossible to
sway. A loyalty (bias ) equivalent to entrenched belief structure of an IRA
Catholic. Yet somehow Lion over time whittled away that brand loyalty.
Well Done Lion ! But somehow I suspect you were a rare
exception.
The
Warehouse by contrast has had a relatively push-over march to success in NZ . It
had a unique,until then, formula. Part of it`s philosophy ,wittingly or
not, to supplant the small business - though callous, is a unique factor in
it`s success story. That success story may have made it cocksure about Australia
. Or do I underestimate Tindall .
David Stevenson
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