Term Paper on "Strategic Issues in Business"

Term Paper 5 pages (1732 words) Sources: 1+ Style: APA

[EXCERPT] . . . .

Strategic Issues in Business

New Zealand is located at the Southeast of Australia, and the overall landmass of New Zealand is about 2,102 km. The country has two main islands in the north and in the southern part of the country, and there are other smaller islands scattered across the country. New Zealand is an open economy, and the country is one of the freest capital economies. Compared to other advanced economy, New Zealand has high standard of living with the GDP per capita income slightly above $30.000. New Zealand is ranked as one of the most peaceful country in the world.

The objective of this paper is conduct STEEPL analysis on New Zealand to evaluate its suitability for international business.

STEEPL model refers to Socio-cultural, Technological, Economical, Environmental, Political and Legal. STEEPL model is very good for the country analysis. The economic outlook of New Zealand is very important in the overall analysis. Analysis of the country economy enhances greater understanding on the extent the country could support the international business.

Economic Outlook

The economic development of New Zealand is similar with the economic development of many countries in Europe. The GDP of New Zealand by the end of statistical year 2010 was approximately $126.7 billions with the annual GDP growth rate of 0.73%. The country per capital income is also one of the highest in the world. The per capita income is $29,050, and the country currency exchange rate is U.S. $1 = NZ $1.26. New Zealand is endowed with abundant of natural resources. The country resources include natural gas, iron sand, coal and timber. Agriculture forms 3% of the GDP of New Zealand, and the goods producing industries form 20.5% of the GDP and the service industry is 70%. One of the mainstays of the New Zealand economy is exportation, and the country major trading partners are Australia, USA, Japan and China. Australia is the major trading partner of New Zealand. The trading activities of New Zealand-Australia totalling $7.57 billions. China is the second largest trading partner with the trading activities totalling $3.65 billions. United States is the third largest trading partner of New Zealand. In 2010, New Zealand exportation to U.S. was approximately $2.86 billions which mainly consist of wood, wine, diary, meat and medical services. World Bank rates New Zealand as one of the best country to conduct international business. (World Bank, 2011). New Zealand screens foreign investment under the Overseas Investment Act 2005. The Act specifies that with the acquisition of 25% or more of the significant business assets that worth NZ $100 millions, the government approval is required.

The present global economic crisis affects the country economic development between 2009 and 2010 which makes the country to have balance of payment deficits. (Department of States, 2011). With the present global crisis, the New Zealand international liabilities have exceeded $150 billions, and debts amount to the bulk of the country international liabilities. In 2010, New Zealand was downgraded by the Standard and Poor's and the AA+ foreign currency rating was subjected to negative outlook.

Political

The country political system is based on the parliamentary system of government similar to the system adopted in the United Kingdom. The prime minister is vested with the executive power, and the left-learning Labor Party and conservative National Part have dominated the country political life. Before the Second World War, the labor party dominated the political activities of New Zealand, and the party affected social and economic life of the people. However, National party won in 1949, and the party instituted welfare measures. Since 1970s, the two party shares the seat of government and during their terms in government, each party implements policies that affect the socio-economic and political outlook of the people. In 2008, National Party won the election under the leadership of John Key. Since the new government resumes power in 2008, the economic growth has been the focus of John Key led party. The new government also focuses on the method the country will recover from the economic recession, and the devastating earthquake of February 2011.

Environment

New Zealand is located in the southern hemisphere, and the climate of the country is summer, winter, spring and autumn. Between January and February, the country experiences warm climate, and between March and May the country is subjected to autumn climate while the climate of the country between June and August is winter. Spring is from September to November. The weather depends on the region within the country. In the far north, there is subtropical while the south gets icy wind from the Antarctica.

New Zealand is being affected by series of environmental factors such as climate change, emission of methane, pollution, greenhouse gas emission, carbon dioxide emission and occasionally earthquake. In New Zealand, methane and carbon dioxide emission have grown at significant rates, and gas released in the atmosphere could damage the economic, social, and biophysical system. New Zealand is known for its clean and green image. With the increase in the greenhouse gas emission, investors, and international pressures are enforcing the government to reduce the green house emission in the country. To reduce the carbon dioxide emission, New Zealand is implementing the UN Framework Convection on climate change. The government is addressing environmental sustainable issues to manage the country resources efficiently, and to attract foreign investors. The New Zealand government is aware that environmental issue is one of the major factors that attract foreign investment to the country. To safeguard the integrity of the New Zealand environment and the ecosystem, the government has implemented series of policy that make New Zealand to be environmental friendly. The New Zealand government is implementing good environmental policy for the following reasons:

First, New Zealand is committed to safeguard the integrity of the ecosystem that can maintain health ecological functioning. In addition, government is also making regulations to enhance country resources that could contribute to the national benefits, and encourage the development of marine industry.

Technological

New Zealand technological development is not as advanced compared with many countries in Europe. However, technology is playing important role in the development of New Zealand. Since 1990, New Zealand government is assisting the local businesses to adopt new technology to enhance the country economic development. To enhance technological development "government uses innovation goals to accelerate knowledge creation and the development of human capital, social capital, learning systems and networks in order to enhance New Zealand's capability to innovate" (Link, 2001 P. 9). New Zealand funds research and development to enhance country technological development.

Social Cultural

Culture in New Zealand is similar to the British and European custom, and the New Zealanders are famous for their warm and hospitality, and welcoming manners of meeting people. New Zealanders love sharing food with people. The three official languages in New Zealand are English, Maori, and sign language for the deaf. There is cultural freedom in the country. New Zealanders could be somewhat reserved especially with people they do not know. Once they develop a personal relationship with people they will be friendly, outgoing and social.

Legal

New Zealand legal system is based on the British Westminster model of parliamentary supremacy. There are four main types of court system where civil and criminal matters are heard.

First, the Supreme Court is an apex court in New Zealand, and this is the final court of appeal for the civil and criminal cases. Five Supreme Court judge could sit on a bench to hear substantial cases. The Supreme Court also determines the law that is very significant to the New Zealand legal systems. There is implementation of fair and impartial trail in the New Zealand judicial court system.

Court of appeal is next to the Supreme Court .The court of appeal determines the civil and criminal cases. The court of appeal could hear cases that arise from the high courts, employment court and the district court. The court of appeal could also clarify the conflicting decisions that arise from the lower courts.

High court is next to court of appeal and it deals with criminal cases and significant civil claims. The high court also hears appeals from the lower courts from Auckland, Christchurch, and Wellington. District court is a lower court that is very common in major cities and towns. A district court hears criminal and civil cases.

Lastly, there are specialist courts dealing with employment disputes, family courts dealing with divorce cases, and youth court dealing with offences among young people between the age of 13 and 17. There is also Maori land court dealing with land issues and environment court dealing with the issues such as resources management. In New Zealand, foreign investors are being protected by the New Zealand law. In case, there is a conflict between a foreign investor and the local people or a local business, a foreign investor will receive a fair and impartial trail.

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