CAPITULO IV BIENES

In the previous chapter, it was explained how the triangulated data was going to be analysed and compiled into case studies. The shortened versions of the case studies are available as vignettes in the appendixes section (Appendix 2). The case studies are structured according to the themes which emerged during the analysis with the headings used in these vignettes relating to these themes. Where possible the same structure for all firms is maintained in order to allow cross-case comparisons. The structure of vignettes is as follows:

• Introduction • Products • Core competencies • Barriers • Strategies • Management • Networks • Market Development • Development Agencies • Comments

For a complete overview please see Table 1 5, pp. 335-340 (Appendix 1 3).

Table 1 5 provides an inclusive list of the following information about the participating firms. The first column states the year the firm started its operation. The next columns provide the following details: the staff figures giving full-time and casual! part-time staff, the annual turnover, the year the export started, the export ratio (international business as a percentage of total business volume) in 2004/5, a list of the firms' international markets and a list including the most important market or main markets, and finally the delay in years between start up of the firms and the beginning of their international activities. To help protect firm confidentiality each of the participating firms received an identification number. The firms were grouped according to their industry sectors and products. The vignettes are therefore coded with a letter (identification of the industry): A - Primary Sector, B - Secondary or Manufacturing Sector and C - Tertiary or Service Sector plus a number (identification of the individual firm) in order to be able to trace them through the research.

6.2. 1 Overall results

Firms from the three economic sectors were included in order to be able to find out about barriers they shared regardless of product or service. The sample consisted of firms from the primary sector (Firms A 1 - A 1 0; industries such as produce processing and packing, fresh and frozen meats, wool and hides); firms from the secondary sector (Firms B 1 - B29; industries such as manufacturing of heavy and agricultural machinery, sports equipment, specialist tools and electronics); and businesses from the tertiary sector (Firms C l - C 1 1 ; industries such as IT services, various consulting services, and R&D for sophisticated injection pumps).

The composition of the sample according to industry is aggregated in Table 1 below.

Table 1 Participating Firms by Sector

Sector Number of firms % Sector 1 0 20 29 58 Service Sector 1 1 22 Total 50 1 00 Twenty percent of the participating firms resulted from the primary sector and a slightly higher percentage, exactly twenty-two percent, came from the service sector (eleven businesses). The majority of firms, twenty nine exactly, were manufacturers, making it 58 percent of the sample.

Table 2 below provides insights into the ages of the firms. The frequency (in percentage) of the businesses is listed according to age, measured in years.

Table 2

Age (years) %

Participating Firms by Age

73-50 1 6 Firm 40-25 24- 1 5 1 8 26 1 4-3 40 total 1 00

The age of the firms ranged from seventy-three years (firm B 1 1 established in 1 932) to three years (firms C9 and C 1 0). Most firms (33 firms or 66%) were less than 25 years in operation. They were established after 1 980, twenty-three (46%) of the firms after 1 990.

Table 3 below gives details of the business size in regard to numbers of employees. The table aggregates full-time and part-time staff into full time equivalent employees (FTE) according to the definition of Statistics New Zealand (Statistics New Zealand, 2008) Table 3 Full-time equivalent employees (FTE) %

Firm Size by Full-time Equivalent Employees (FTE)

Firm Size

0-1 0 1 1 -20 2 1 -50 5 1 - 1 00 > 1 00 Total

36 1 8 36 6 4 1 00

Firm size according to the number of employees ranged from very small firms to medium sized firms. The number of full-time staff in this study ranged from one (meaning the business is a one person - owner-manager - firm and has no employees) to 1 50 full-time employees. Thirty six percent of the businesses were very small and had between one and ten employees. Fifty four percent (twenty-seven firms) had between eleven and fifty employees. Ninety six percent of the businesses (forty-eight of the fifty firms) had less than 1 00 full-time employees. In general, New Zealand exporting firms are rather small in staff size compared to those in other countries. Fifty-four percent of the businesses fell into the category of SMEs (0-20 employees). Two firms from the primary sector employed more than 1 00 casual staff; that is during peak harvesting time. The number of their permanent staff however, was small, seven and thirteen staff respectively.

The interviews revealed that the number of fifty employees for a manufacturing firm indicates a critical point in the development of the business. When a firm reaches this size and stage of growth the operation becomes too complex for a single person to manage and a change of the organisational structure from a simple to a more complex one is suggested. This entails the introduction of a further level of sub management and administration. Only three firms in this sample Firm B 1 (75 staff) and B5 ( 1 50

staff) B8 (65) employed more than fifty full-time staff. Firms B5 and B8 had already a

more complex organisational structure separating the functions into departments. Firm B 1 had a simple structure but planned to introduce structural change in the near future. The two firms in the primary sector that relied on a high number of casual

workers during the peak season, bringing the number up to 250 staff, still operated under a simple and lean structure.

Table 4 below shows the range of annual turnover achieved by the firms. Table 4

in millions NZ$

%

Firm Size by Annual Turnover

Annual Turnover 0.1 - 0.5 - 1 .0 - 5.0- 1 0.0 0.5 1 .0 5.0 14 1 2 3 8 1 2 > 1 0.0 CS 1 2 1 2 Total 1 00 Annual turnover ranged from NZ$ l 00,000 to NZ$ 94,000,000. Six firms ( 1 2%) did not supply data on turn-over, citing commercial sensitivity (CS). Thirty-three (66%) of the firms achieved an annual turnover above NZ$ 1 ,000,000.

Table 5 below provides details on export duration achieved by the participating firms.

Table 5 Export Duration of Participating Firms

Number of years in exporting % Duration < 1 0 48 2 1 - 1 1 30 >2 1 total 22 1 00

The earliest firm to begin exporting started in 1 953 (accomplished by AS, a wool export merchant), the youngest two firms began in 2004 (A8 and B29). Most firms started exporting after 1 980, following the opening of the New Zealand market to increased foreign competition with the partial removal of import licensing and monetary exchange controls.

Table 6 below shows the export ratios achieved by the participating firms in 2004.

Table 6 Export Ratio

%

Export Ratios of Participating Firms

< 20 34 Ratio 20- 3 5 40 - 65 70 - 1 00 24 1 6 24 CS 2 Total 1 00 Export ratios ranged from 1 % (firms B7, B26, B27) to 1 00% (firms A7, A9). Nearly a quarter of the businesses (24%) showed high ratios of 70% and over, including seven firms ( 1 4% of the total) that had very high ratios above 90%.

The range of export markets varied from just one export market only to a situation where one firm established itself truly as a global firm. Australia was clearly the most important export market being also the closest. In spite of New Zealand government efforts to promote other export destinations Australia still is the preferred target market. This was true especially for manufacturing firms.

The table below indicates export delay or how long it took for firms (in frequency percentage) to take up exporting after they started their businesses.

Table 7 Export Delay of Participating Firms

Years after Start up % o 40 0-5 22 6- 1 0 1 2 > 1 0 26 Total 1 00

Export delay - meaning the time between start-up of the firm and the year the firm started exporting - varied from zero to sixty-three years. Twenty firms (40% of the total) established their international business right from the beginning or shortly after, fulfilling one condition to qualify as born globals or international new ventures. Another eleven firms (22% of the total) began their exporting within five years of the firm start-up. That brings it to a total of 62% of businesses that started exporting either immediately or within the 5-year-timeframe after start-up.