AS91380 Demonstrate understanding of strategic response to external factors by a business that operates in a global context (2021)

DEFINITION The European Union (EU) is a political and economic union of 27 member states that are located in Europe.

Pirikahu is a New Zealand business that manufactures a wool-based housing insulation product. This innovative product is used to insulate houses from the cold. The wool used by Pirikahu would normally be thrown out, as it is of no use in creating knitting wool for clothing. Most aspects of the business (manufacturing and head office) are located in south Auckland.

The owners of Pirikahu value sustainability. They are particularly pleased that they use wool that would normally be a waste product, but are aware that they need to further develop sustainability around culture inside the business, and also further improve economic sustainability, as their profits have not been as high as expected. Pirikahu has sold its wool insulation product in New Zealand since 2018 and has small sales outlets in Tasmania, Australia, and in the city of Leeds in northern England. Pirikahu is looking to expand globally.

Pirikahu’s presence in the United Kingdom (UK) has been limited, because the UK was a member of the European Union (EU) from 1973 to 2020, meaning trade restrictions have prevented non-EU businesses from setting up large-scale operations in the UK.

By the end of 2020, Pirikahu had become increasingly positive about new opportunities to access the UK market as a result of the UK leaving the EU. The directors at Pirikahu are keen to grow the UK market in response to this change in conditions.

You may choose either Pirikahu or a New Zealand-registered business operating in a global context you have studied in depth.

DEFINITION The European Union (EU) is a political and economic union of 27 member states that are located in Europe.

Pirikahu is a New Zealand business that manufactures a wool-based housing insulation product. This innovative product is used to insulate houses from the cold. The wool used by Pirikahu would normally be thrown out, as it is of no use in creating knitting wool for clothing. Most aspects of the business (manufacturing and head office) are located in south Auckland.

The owners of Pirikahu value sustainability. They are particularly pleased that they use wool that would normally be a waste product, but are aware that they need to further develop sustainability around culture inside the business, and also further improve economic sustainability, as their profits have not been as high as expected. Pirikahu has sold its wool insulation product in New Zealand since 2018 and has small sales outlets in Tasmania, Australia, and in the city of Leeds in northern England. Pirikahu is looking to expand globally.

Pirikahu’s presence in the United Kingdom (UK) has been limited, because the UK was a member of the European Union (EU) from 1973 to 2020, meaning trade restrictions have prevented non-EU businesses from setting up large-scale operations in the UK.

By the end of 2020, Pirikahu had become increasingly positive about new opportunities to access the UK market as a result of the UK leaving the EU. The directors at Pirikahu are keen to grow the UK market in response to this change in conditions.

As a result of the UK market becoming more open to businesses based in non-EU countries, Pirikahu is very keen to expand further into this market, but has decided to initially limit its expansion, from February 2022, to London and Wales.

These areas are part of the existing UK market, but their characteristics are significantly different to those of Leeds, and so Pirikahu’s management will need to research all of the facts before they prepare to launch into these new sub-markets.

Note: A sub-market is a portion or subdivision of a market.

You may choose either Pirikahu or a New Zealand-registered business operating in a global context you have studied in depth.

Evaluate a strategic response that a business has, or could implement, to ensure that it has the necessary facts about a new export market / sub-market before preparing to launch.

A large Scandinavian housing insulation firm, Delf, has been impressed with the success of Pirikahu and has decided to launch its own woollen blended insulation product in the UK market in late November 2021. This has created a difficult situation for Pirikahu, as Delf is able to produce on a very large scale, and it already exports its insulation products to many countries in Europe.

Pirikahu is a New Zealand business that manufactures a wool-based housing insulation product. This innovative product is used to insulate houses from the cold. The wool used by Pirikahu would normally be thrown out, as it is of no use in creating knitting wool for clothing. Most aspects of the business (manufacturing and head office) are located in south Auckland.

The owners of Pirikahu value sustainability. They are particularly pleased that they use wool that would normally be a waste product, but are aware that they need to further develop sustainability around culture inside the business, and also further improve economic sustainability, as their profits have not been as high as expected. Pirikahu has sold its wool insulation product in New Zealand since 2018 and has small sales outlets in Tasmania, Australia, and in the city of Leeds in northern England. Pirikahu is looking to expand globally.

Pirikahu’s presence in the United Kingdom (UK) has been limited, because the UK was a member of the European Union (EU) from 1973 to 2020, meaning trade restrictions have prevented non-EU businesses from setting up large-scale operations in the UK.

By the end of 2020, Pirikahu had become increasingly positive about new opportunities to access the UK market as a result of the UK leaving the EU. The directors at Pirikahu are keen to grow the UK market in response to this change in conditions.

As a result of the threat from Delf, Pirikahu recognised that its south Auckland factory would not be able to cope with the new scale of production required to remain competitive. Management is considering moving all production to a new factory in Shanghai, China. This will solve the volume issues, but may create new problems if the New Zealand managers of the new factory clash with the Chinese workers over cultural issues.

You may choose either Pirikahu or a New Zealand-registered business operating in a global context you have studied in depth.

Evaluate a strategic response that a business has implemented, or could implement, to ensure that the managers in its workplace(s) act in a culturally responsive manner when working with staff from different cultures.