Mayu LLC Business analysis

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Executive Summary

Mayu LLC is a service and product company dealing in fashion and design.  The company was founded by Kate Robertson.  The company makes use of ecofriendly, modern and unique hand knit products using raw materials from the Peru.  The company’s objective in the event is designing and make it colorful. Currently. This organization is located in the U.S.A and has gained much success. Its popularity and success in the American fashion industry has led to eyeing a possible market in Australia.  There are various motivating factors that make Mayu eye the Australian market for its products.  These factors include social, political and economic factors.

Introduction

Mayu LLC is a company dealing in fashion hand knit accessories created from Peruvian Alpaca Fiber created in 2010 by Kate Robertson.  The company imports then sells accessories like hand knit wraps, hats, shawls, gloves and blankets. The organizations mission statement is striving to first and leading in selling high quality, ultra-classic and unique alpaca accessories.  A major competitive advantage of products from Peru is that they are long lasting and high quality according to an internet and market survey. The organization aims at setting up a branch in Australia due to various reasons.  To start with, the Australian fashion industry has been performing poorly and the manager believes that introducing a new form of design in the fashion and design industry would bring a major success to the company as well as the fashion and design industry (Bjorklund, 2014).  The organization also aims at setting up their firm in Australia since the country provides a good environment for growth of foreign organizations. Additionally, the Australian government offers significant support to small business hence the firm stands an opportunity to grow. However, a major barrier to the company is the already existing fashion and design companies in the region.  However, the company will use hand knit products to its own advantage. The firm also reviewed studies and research on how small companies faired in Australia.  The reports showed that 1000 in every 3000 small businesses succeed in the Australian economy.  This report showed that the firm stood a chance of succeeding in the Australian economy.

Analysis of International Business Opportunity

Economic environment

Australia has had 25 consecutive years of impressive output growth. The gross domestic product per capital is high. In spite of the world product super cycle, the Australian economy still does well.  The equilibrium of the of economic activity from product investment to different activities is advances, and facilitated by fiscal and monetary policies, product markets, flexible labor and currency depreciation. However, the country’s economy shares a universal risk of the “low growth trap”. Alongside most OECD nations, increase in productivity growth slowed since the 1990’s.  In recent decades, Australians economy have heavily relied on trade (Bjorklund, 2014).   Trades role in Australian economy can be observed through the GDP percentage, which has significantly grown in the last two decades to 48%. In 2008, economic development and growth was achieved through the significant rise in the two way trade in services and goods.

The central bank is the regulatory agency obligated for maintaining stability and integrity of Australian Financial System.  In Australians private sector, there are four domestic banks operating nationally and provides various services to their customers.  The increase in size and complication of the Australian financial system has had a rapid increase in the last two decades via factors like technology advancement and financial deregulation. The major characteristics of financial deregulation from international investment are elimination of numerous controls in foreign exchange. Guarantees, loans and other financing tools are often used development of infrastructure. However, the country also provides the funds magnitude required for large scale infrastructural investments and could facilitate partnership of governments to infrastructural. The economic department has offered a single loan and is considering the utilization of financial instruments and further loans that reflect the help policy focus on innovating and collaborating with the private sector.

Multinational organizations perceive Australia as offering the best business environment to set regional headquarters targeting the economically active Asia Pacific region. The vital business centers in the country include: Melbourne, Sydney, Brisbane, and Perth.  The cost of office space in these business centers are low in comparison to other cities in developed states. The nation’s telecommunication cost is among the lowest in this region. Corporate tax in Australia is competitive at 30% in comparison with that of other major economies like Germany, France, United Sates and China. Australia is described as the leading financial place in the Pacific Asian region. The states security Exchange is listed among the 10 largest changes in the universe and has a market capitalization of AU$ 1.5 trillion. The alliance of the nation with markets all through the years has increased the range of financial services and trade in the Asia Pacific Region.     Australia provides advantages in real cost for each business category from the top district offices spaces, industrial land, factory space, low cost utilities and transport infrastructure.

An individual can carry out business in Australia like a sole trader, through partnership, via a trust, a corporation or like a joint venture. Foreign companies that intend to conduct business in Australia may incorporate their organization with a wholly owned or via an Australian Branch or party owned subsidiary. Notable, most foreign organization carry conduct their businesses via party owned subsidiary or via an Australian Branch. Foreign countries could develop an Australian subsidiary via registration of new companies or through acquiring a current incorporated shell organization that hasn’t been involved in trade.  The Australian Securities and Investment Commission (ASIC) is the body that incorporates companies.  Incorporated organizations are provided with a special nine digit number referred to as the Australian Company Number.

Social environment

Australia is made up of a cacophony of already established traditions and influences from other cultures. The nation’s original inhabitants’ are the Toress strait people and Aboriginal. People from this culture have lived in Australia for about 40, 000 years. The rest of the Australian population is made up of immigrants   who arrived in Australia from roughly 200 centuries ago. Australian population is 23 million mainly made up of the aboriginal and Toress strait.  Most immigrants who came to Australia in 1945, were encouraged by family commitment and escaping prosecution, war and poverty (Brammall, 2013). Migrants have had a significant social impact.  This has enriched various factors of the Australian life from art to business, comedy. Science, sporting and cooking. This has led to an enriched life in Australia influenced by different culture and tradition. In Australia, there are various shred values.  They include: respect for individuals, their freedom, dignity and worth.  Freedom of association and speech, freedom of secular government and religion. People are expected to show support for the parliamentary democracy and law.  Australians are also expected to have an egalitarianism spirit through embracing mutual respect, patience and tolerance, religious beliefs and gender. All Australians are motivated to learn their national language to unify the Australian society element. However, there other languages like Greek, Vietnamese, Arabic, Australians, Mandarin and 200 languages. The major clothing worn in Australia nation shows diversity and climatic variations.

Then Australian lifestyle is one of the best in the world.  It is characterized by a life expectancy of 79.7 years for males and 84.2 years for females.  Additionally, Australia has a low living cost, affordable housing, extensive benefit in health care and the best social and education systems in the universe.  Surveys has shown that cities in Australia offer great and lifestyles.

During company incorporation, the corporations Act 2001 requires a company to have either: limited by shares, unlimited with the share capital, limited through guarantee and has no liability. Establishment of an Australian Branch is more preferable compared to incorporating a subsidiary in case the goal is consolidating financial results of all the companies in different countries.  Additionally, in case a company decides to establish a branch in Australia, it has to register under the corporation Acts. Foreign organization have to proffer an application form to the ASIC, with certified documents of present incorporation of the certificate. The organization has to establish an office and appoint a local agent.   The organization should also develop a name.

There are various visa categories given to business individuals who wish to invest in Australia.  There are companies that work in Australia but wish to move their employees or from other countries can sponsor their employees to Australia on subclass 457 visa.

Legal Environment

There are various laws that impact most investing contracts.  The Australian state and government as well as territorial legislation is established to protect the environment, the community, and the consumers as well as promote competition and fair trade.  The laws control the manner in which business associates with customers, suppliers and other businesses. These laws include

Competition Laws

He Australian economy is made up of a statutory framework that ensures that trade is fair for consumers and businesses.  The administration and enforcement of this framework is the Australian Competition and Consumer Commission.

Product Liability regulation

The Australian state also has a framework that regulates products information standards and safety. Territory and state governments are involved in enforcing product safety laws.

Environmental Legislation

The Australian government also puts in place various policies that protect the environment. The Australian government legislation, controls the assessment and approval process of cultural concerns and environmental concerns.

Privacy Laws

Australia entails a state privacy legislation that is controlled by OAIC that controls the manner in which business collects, accesses and stores personal communication and information. There are particular requirements on management of information considered to be sensitive.

Operation of the Proposed Business

Organization

The company is owned by Kate Robertson.  The firm does not support a hierarchy leadership system but instead work as a team. Being a fashion and design firm, the use of teams and collaboration place a significant role in enhancing creativity and improving the design and the quality of services given by the firm. While investing in Australia, there are various start up processes that require to be followed to make the investment successful as well as provide information on the fashion and design market in Australia.  To start with, is seeking advice regarding the investment (Delimatsis, 2016).  This will involve consulting a Chartered accountants to aid in financial advice, starting up and business planning. This could also include seeking mentorship for employees as well as business guides on how to get additional finance. The other step involves development of a business plan.  The business plan is a process that shows how to execute the business idea and is made up of how to execute the idea, market research, the method of delivery and calculating the resources needed. The company is structured to be a limited company.

The third step entails finding investors to fund a project. Despite the factor that the company has been faring well in America and has accrued major profits.  There is still need for additional investors who will aid in the establishment of a better firm that will enable mass production and quality production.

Product

The products produced by the design company include, painted origami flowers, marbled cotton, and placemats and services like designing events.  With various cultural operations in the country, such products can be marketed during events or through creation of events related to the products. Additionally, this products could be supplied in art and fashion ships as well as in house hold shops dealing in flowers, cotton, and placemats.

Transformation

The well connected and developed Australian infrastructure enhances easy transport through road.  Most products will be delivered through roads since it is cheaper, effective and timely.  However, the major risk associated with this cost is lateness and destruction of materials.

Market Entry

The company will make use of indirect exporting which refers to exporting materials and later making up the end product.  The exported material will include, garments, color as well as labor.  The company will make a five years contract with Australian government to get authorization of trading in the country

Marketing strategy Plan

A major marketing strategy that will be used will be the pricing strategy.  The organization will have a fair price on its services and products to lure consumers.  Additionally, the company will also make use of advertisements to show people on the how to use new forms of art. . In order to have profit from their sales (Shankar & Carpenter, 2012). The company shall consult the governments to ensure that it is not highly taxed. The required resources are moved in bulk to minimize the cost of transportation hence enabling a fair price.

Therefore, MAYU Company stands a great chance of succeeding in the Australian economy.  The friendly social, economic and political environment also highly contributes to fathoms that could enhance growth of the country. The fashion industry in Australia still has a gap that Mayu could cover and achieve success hence increasing and expanding their firm.  It is also evident that the Australian government imposes less tariff and taxes that enable foreign countries perform well.