SWOT Analysis of the New Zealand Chemical Manufacturing

Local staff working for New Zealand owned companies who may be more committed / loyal to the company. Local staff should have better understanding of market conditions and form better relationships with customers. Faster turn-around of raw materials into finished product resulting in: Fresher product. Reduced quantities to be warehoused. Ability to provide urgent customer requests Set up for smaller batch quantities resulting in: Quick turn-around of production. Reduced batch set up costs.

Superior quality compared to Asian manufacturers Lower costs compared to European manufacturers Proximity to Emerging Asia and Australia Big agricultural sector High political stability WEAKNESSES Local manufacturers have higher cost structure due to: Smaller run size Higher raw materials transport costs due to greater distance from supplier Weak raw eternal buying power due to small batch size (extremely small by international standards) Higher wages costs compared to Asian manufacturers – both: Higher hourly rate and Higher man-hours per keg produced (due to less automation) Higher compliance costs compared to Asian manufacturers Stringent Work Safe regulations Environmental Immigrants may be more familiar with internationally recognized brand names Inability to source or source at viable cost Some materials – tied up to large SOOT Analysis of the New Zealand Chemical Manufacturing Industry By Solicitude Significant household and business debt Shortage of skilled labor Lack of scale limits ability to compete effectively with large players.

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It also reduces the bargaining power of companies Increasing resistance to existing products Research and development of new products is expensive Hard to export to some markets – tariffs, differing regulations Buy into multinationals or partial sale to the multinational – develop relationships for local agency supply of imported products with protection of locally manufactured product. Focus customer attention on: Poor quality competitor imports. E. G. Media attention – 20/20 article on imported Glasshouse no longer working effectively. Higher costs associated with additional treatment / e. G. Second spraying to achieve same effect as locally produced product. Focus production on manufacture of smaller run specialty product manufacturing.

Increasing global population and agricultural markets growing Patents expired – opens doors to generic products New trading agreements being formed opening new markets Adaptable workers needed to create niche markets THREATS Large decline in local chemical manufacturing leading to closure of support industries Dumping of low cost imported products to temporarily kill the sales price thin New Zealand Changes in central or local government regulations that increase the cost of compliance – e. G. Changes to SSH regulations to be implemented in April 2015 due to Pike River disaster Improvements in Asian product quality – regulations being passed in China.

Dumping costs of specialty raw materials purchased at own cost that are later discontinued by the customer – toll manufacturing versus made to order Poor manufacturing can damage customers livelihood Legislation for product stewardship of agricultural containers being discussed More sustainable farming methods being demanded Changes in the agricultural and certain other policies of governments and international organizations may impact chemical business Risks associated with conducting business outside New Zealand Higher costs to dump finished goods damaged in transit New products entering market Increasing resistance to current products on the market Big expansion in China in chemical industry – close proximity Genetically modified crops and seeds affect weed killer industry Lobby groups / No’s power Climate change could affect demand for products New trading partners could mean more cheap imports Industry vulnerable to regulatory changes as highly regulated