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Macroeconomic analysis of Australia

Australias economy is the worlds top 10 and is shown to be stable during the past 20 years.
The GDP growth rate, averages 3.5% and the GDP per capita is increasing, meaning that people
have bigger buying capability and would be willing to purchase B&Os expensive products.
Unemployment rate has grown dramatically, despite declining for several years, it has jumped
to 6.2% in 2014 which was caused by lack of available positions, rather than lack of relevant
experience. Inflation is sustained rather low at a 2.3% in 2014 and the bank system is stable,
which is beneficial for investors. For B&O the overall state of economy is an advantage, since it
hasnt undergone dramatic changes, remained almost unaffected by the recession in 2008 and
is expected to experience further growth. Australia has a free trade agreements with different
countries and is continuing to expand to Europe. Also there is an active Danish-Australian
Chamber of commerce for ease of trade between the two countries. Another benefit is that the
Australian market is open and encouraging foreign investments and doesnt have big limitations
for investors. Since it is a company policy for B&O to completely internationalize with their own
shops, instead of retailing, Australian law wouldnt prevent them of doing that. One of the
countrys biggest imports is technology equipment and the consumer electronics industry is
continuously growing and gaining market share. It would be beneficial for the company to join
CESA- Consumer electronics supplier association, which has a big influence on the market.
Furthermore, in the recent years, relations between Australia and Denmark have strengthened
and Danish investments amounted 6.6 billion DKK which has created an image in the citizens
minds of quality of Danish originating products. Another field for B&O to operate in is the film
industry, selling to businesses, since it has been growing rapidly and a lot of big companies have
promoted themselves via positioning TV series and reality shows, which are extremely popular
in Australia. The biggest struggle for B&O on the market would be establishing a brand image
among the competitors, which are the worlds most famous brands such as Sony, Panasonic,
Dolby, etc. Australian consumers buying behavior is determining the huge importance of
quality and brand reliability. Without so, it will be hard for B&O to gain market share and
sustain on the market. Currency issues will be a disadvantage for B&O, since the Australian
dollar is really unstable and has experienced a massive drop from 0.88 USD to almost 0.06 USD.
With the expectation of the US central bank to raise interest rates, the Australian dollar is
expected to lower even more, despite the forecasts of finishing 2014 with a value of 0.87 USD.
In that matter, the Danish krona is more stable and would be the preferred currency when
doing business in Australia. Overall, Australia is an attractive market for high-class technological
products like B&O if they manage to establish their brand, the market has low entry barriers,
legally-wise and consumers are curious towards innovative technology solutions as long as they
provide value for their price. Looking at the overall fundamentals, Australias economy is stable
and gradually growing, without expectations of dramatic changes in the near future.
Nevertheless, the consumer electronics industry has a trend of declining and demand for
innovation which may be a problem for B&O. They should carefully plan their marketing and
positioning strategy before entering the market, so they would be able to remain in it. Currency
issues should also be considered if they want to establish their wholly-owned shops in Australia.
To conclude, even though the Australian market is attractive and economically stable, B&O
should carefully consider their entry strategy and internationalization plan, otherwise it will be a
risk for them.

Overview:
Advantages
Growth in GDP-3.5%
Low inflation rate-2.3%
Demanding market
Stable banking system and little legal limits

Disadvantages
Growing unemployment rate- 6.2%
Currency drop forecasts
Big market share of established companies

References:
https://www.cia.gov/library/publications/the-world-factbook/geos/as.html
http://cesa.asn.au/
http://en.wikipedia.org/wiki/Australia%E2%80%93Denmark_relations
http://www.tradingeconomics.com/australia/unemployment-rate