The introduction of the goods and services tax (GST) in July 2000 has affected many Australian businesses until today. The GST has a major impact on many aspects in which businesses operate, as they are now responsible for collecting tax on behalf of the government.
5.2 Economic Environment
The Economic Survey of Australia 2001 found that Australia is one of the strongest growing economies and this trend will sustain into 2002. Economic growth for 2002-2003 is projected to increase by 3.5-4.0%. This indicates that Australia is a good location for investments. The current inflation rate is at about 2.8%. This low inflation rate also creates an attraction for overseas investments.
In addition, the Australian economy enjoyed positive economic conditions, which promoted consumer confidence and influenced the growing consumption of consumer including soft drinks and fruit juices. This can be seen by the relatively healthy soft drink sales at on-trade, as higher disposable incomes increased expenditure on discretional activities such as entertainment.
5.3 Labour Conditions
Australia is one of the few economies that have growth in labour productivity. Australian labour conditions and productivity is predicted for continued strong performance during 2002-2003. Labour productivity in the market sector rose by 0.8% in June 2001. It is expected to rise by 1.2% throughout the year (Australian Trade Commission). Therefore, businesses that set up production facilities in Australia stand to benefit in the long run.
5.4 Demographic Environment
Growth in two-income families is seeing consumers with higher purchasing power and becoming more sophisticated in their tastes. Consumers are demanding fresher, healthier, and more nutritious food. They are also looking for convenience and fast foods. Whatever the level of processing, consumers also want products with flavour that contain quality and nutritious ingredients.
5.5 Technological Environment
The Australian federal and state governments are now continuously encouraging businesses to spend more money on R&D. Australia has a high Internet penetration and people with high-speed Internet access are growing. By November 2000, about 56% Australian households had access to a computer at home. Therefore, it is quite convenient to advertise our products via the Internet. Despite this trend, the Australian government also protects traditional T.V. broadcasters (ABS).
5.6 Cultural Environment
Australia can be considered as the one of the world’s multicultural nations. Although English is considered the national language, there are more than 200 languages spoken in Australia (Australia Trade Commission 2003). Hence, Australia would be very favourable location to introduce a product that is of Korean origin, particularly when there is a large population of Asians in Australia who would prefer this fruit drink that is based on the similar product which is available in Asia.
5.7 Legal Environment
The processes of deregulation and regulation in Australia, has led to significant changes in the legal framework within which businesses operate. In Australia, there are no anti-trust legislations but there are trade practices for companies to adhere to. The Australian Competition and Consumer Commission (ACCC) are responsible for passing down the laws that prevent unfair competition in the marketplace. This provides a stable business environment in Australia.
On-trade sales of soft drinks and juices would be assisted by strict drink-driving laws, which place a limit on the amount of alcohol someone driving a car might have in their system. This limit is strictly enforced, with constant random breath tests being conducted by police throughout the country. There are strict penalties, including large fines, suspension of licence and even jail terms for those convicted of a drink-driving offence. This atmosphere persuades a large number of people to visit on-trade outlets to purchase soft drinks, such as juices.
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