Published on February 25, 2014
Bulldozers or Haircuts – Which one are you? 25 Feb 2014 AS 4801 ISO 9001 SAI Global Lic 20363 SAI Global Lic 7451
1. 2. 3. 4. 5. 6. 7. The Australian Defence Market How do SME’s grow? Bulldozers and haircuts What can SMEs do? What can you do with Primes? What can Governments do? Closing remarks
The Australian Defence Market 1. 2. 3. 4. One buyer Cost is king No-one wants to pay to develop capability in Australian companies Global marketplace
That madam is the invisible hand of the market Source: tumblepunkt.tumblr.com
Australia – a long way away and at the end of trade routes Source: en.wikipedia.org
How do SME’s grow? To flourish SMEs need to undertake: 1. R+D 2. Innovation For this there needs to be: 1. Continuity of work 2. Profitable work
Bulldozers and haircuts From the Caterpillar Way: “The prices of internationally traded goods such as oil and bulldozers are set by the interaction of international markets. That’s not true for haircuts. Both companies and nations must recognise the difference when making policy.” Source Bouchard and Koch 2012:
(Bulldozers) Trains International Product (Bulldozers) DNV/Lloyd’s Electrical Panels Specific agricultural equipment Aircraft component fabrication Commodity valves (Haircuts) AS3000 Electrical panels Local Product (Haircuts) Marathon Robots Bisalloy Metals Vehicle maintenance WA Lobsters Plumbing Services Local Market International Market
What can SMEs do? 1. 2. 3. 4. 5. 6. Use the bulldozers and haircuts model Adopt an export mentality Understand your cost structure Work out your niche Diversify into another market Work on becoming more trusting of your industry colleagues 7. Talk to a university 8. Talk to Enterprise Connect
How did H.I.Fraser do it? 1. 2. 3. 4. Selling valves resulted in a pump job Australian standards One job leads to another Behave like an exporter to win work in Australia
What can you do with Primes? 1. Primes will talk to you, but………. 2. How well do you know the Primes business? 3. What part of the Primes business can you derisk?
What Governments can do? 1. Have a vision for what industry could look like 2. Provide certainty of work 3. Change the view from an ongoing hand out to industry to one off seed capital 4. Consider the wider benefits of a dollar spent in Australia verses a dollar exiting the economy SMEs need to thrive despite government, not because of it!
Do SMEs have a future in Defence? 1. 2. 3. 4. Yes A future, but not in the traditional way Are you into bulldozers or haircuts? Consider your business an exporter to Australia as a starting point
Know your niche – Bulldozers or haircuts?
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