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The Australian financial system

Paper type: Essay
Pages: 7 (1746 words)
Categories: Australia, Business, Business Management, Business Success, Economy, Finance
Downloads: 7
Views: 2

An upturn in the economy was the result of the 1983 deregulation in Australia and the expansion of the Australian financial system was the push for Billabong to become a publicly listed company. Billabong states that they restructured their strategy to capitalise on the growing global opportunities which led to an initial public offering in mid 2000 and they were publicly listed on the Australian Securities Exchange by August, 2000.

This gave the company a boost and the financial capacity to expand.

Fashion trends

Although surfing is becoming more popular people are not necessarily looking to purchase surf wear these days. This is due to the style of the clothing having little variation from year to year and therefore it becomes boring and familiar to people. These days consumers want to be edgy and different from everyone else and new fashion trends are evolving such as the “hipster” look with vintage and thrift store clothing or high end looks with bright colours and bold shapes.

While many argue Billabong does not have a lot of potential to create new looks as their fashion in Summer is limited to beach wear and Winter fashion limited to snow wear it would be useful for the company to ensure products are still different year to year. In particular to surfing trends, the emergence of sporting goods has increased. Pro surfers are turning away from surf brands to wear well known sporting brands especially when in competitions. For example pro surfer Laura Enever wears Nike when competing.

Increased popularity of other sports

Skateboarding has also become more popular which has diversified the product range. It is a popular sport because, like surfing, it requires little skill and can be attempted at almost any age. Skateboarding however is more popular as it is more accessible and people can practice or take part almost anywhere such as in their own driveway. It is estimated that today there are at least 20 million people who take part in skateboarding in America alone. These statistics have affected Billabong as they have spread into umbrella companies as discussed before.

One of these brands, Element, focuses on skateboarding only and is currently even more successful than the Billabong brand.


Urbanisation is increasing globally as there are generally higher economic opportunities in cities raised through careers, education, housing and more accessible transportation options. Urbanisation is threat for Billabong as people move away from the beach they are less likely to utilise Billabong products.

Although some major cities are still located on the coast, such as Sydney, Australia, not all areas have this accessibility- especially in America which is Billabongs highest consumer. The top three growing cities in America include Raleigh, N. C. , jumping 4. 9% from 2007 to 2008, Austin, Texas, with a 3. 77% increase and Charlotte, N. C., which moved up 3. 36%. Both North Carolina cities are approximately 3 hours from the coastline and Austin, Texas, is even further being a 4-5 hour drive.

Although these transitions cause a negative impact for Billabong there are some which create an opportunity, such as many people moving to Denver in Colarado with a 2. 17% increase from 2007 to 2008. This opens an opportunity for Billabong to sell their snow products, something which is very limited in Australia due to the hot climate.

Political and Legal

Reduce export barriers Over recent years the Australian Government has decided to become more lenient on the terms of international trade and investment flows by lowering the trade barrier.

This has allowed for more imports and exports to transfer between Australia and the Euromarket which works both negatively and positively for Billabong. It is negative as there is higher competition through this force as other companies come in and sell their products within Australia, however the benefits outweigh this. Positive results include using cheaper and more accessible outsourcing for Billabong products and mainly that Billabong can export to other countries for increased sales.

Deregulation of financial markets

The deregulation which occurred in Australian in the 1980s was a positive thing for Billabong as it allowed for Billabong to expand into the overseas market and put the company on the international radar. In turn this boosted the sales and reputation of Billabong allowing it to become a publicly listed company in 2000. – Aust. government protection of domestic manufacturers Another positive legal factor is the protection offered by the Australian government to Billabong.

This is because of the continued protection of domestic clothing and manufacturing which supports local companies and in turn boosts the Australian economy. This protection is carried out through the maintenance of tariff barriers which increase the price of goods produced by Billabong’s foreign competitors so that they are not at a hugely reduced price when compared to Billabong. Environmental Billabong has adopted “Be The Change You Want In The World” as a guiding statement in their offices.

This is to help promote a more responsible world and act as a philosophical challenge for their staff members individual decisions when inside and outside the workforce. To operate with this statement Billabong has implemented several environmental strategies including carbon reduction, recycling and sustainable products.

Carbon reduction

Billabong began a carbon reduction plan at the beginning of 2012 which aims to reduce 15% of their emissions over the next five years.

This is expected to be achieved through the introduction of energy efficient lighting technologies within retail stores. Other initiatives are implemented at a workplace level such as use of videoconferencing instead of overseas travel, phasing out of paper-based procedures, reductions in packaging and including environmental performance as a target which is tracked.


Recycling takes place in the office and also in the products. Billabong uses a new innovative fabric known as eco-suede which is made from recycled plastic bottles, as well as all the pricing tags being made from recycled stock.

Over the 2010-2011 financial year period Billabong recycled over 49 tonnes of their packaging and technological supplies, which meant they used 35% less paper and 17% less cardboard packaging to ship goods.

Sustainable products

Billabong is currently using innovative and environmentally friendly materials, as previously mentioned the eco-seude is an example. This project has diverted an estimated 40 million plastic bottles from landfill over the 2007 to 2011 period so far. Another sustainable material utilised is organic cotton which is a natural fibre so has a lower impact on the environment.

Pesticides and fertilizers are also eliminated in the process of growing the cotton and crop rotation is practiced to minimise watering the plants. Further into the process Billabong ensures water-based inks and dyes are used in the printing of their garments which are not as harmful to the environment as synthetic or chemical based techniques used in most companies.

Technological – Innovative designs

Billabong stays ahead of the competitive market with continual technological advances in both their product designs and in store experiences.

An example of the in store experience was tested in Manly on the Corso store in 2011, with GoSea touch screens allowing customers browse surfing holidays and lessons then book them on the spot for discounted prices. This provided a tangible experience for the company which improved customers shopping experience by utilising the senses. With their product designs Billabong has created many revolutionary wetsuits and boards, however a most notable innovation is the Billabong V1 wetsuit with a built-in instantly inflatable air bladder.

This is only available to competitive surfers currently to help save lives when surfing on extremely large waves.. These technologies allow Billabong to stay ahead of their competitors, such as Quicksilver, as it gives them an advantage and shows the customers that their design team is continually working to produce the best products available at this time.

Media e. g. web

Facebook Today’s retailers have to make the most of media opportunities as customers have become tech savvy and are looking for a constant flow of information through social media sources.

These networks are a major influence on customers as they shape behaviour, styles, purchasing, word of mouth and more. Billabong utilises several of these outlets although could change the way they operate them to increase potential. Billabongs’ Facebook page is the most popular of their social media sites with 2,094,528 followers and their twitter page is also quite popular with 33,893 followers. The problem with these sites for Billabong is that the updates are mostly about issues related to their products, such as surfing competitions, though do not focus or update on their products regularly enough.

In turn their social media sites act as a newsfeed for international surfing updates, which is great for those who participate in surfing and follow the sport however it loses the attention of their customers who just buy the products. Opportunities Increased popularity in other sports allows for new sub-brands. Urbanisation: more people moving to snow areas. Environmental movements: attracts environmentally aware customers. Export barriers reduced make it easier for trade.

Government protection of domestic manufacturers increases profit. Advertising through social media. Innovative designs which gives competitive advantage. Threats Rising levels of living costs and decreased consumer income. Exchange rates causing consumers to buy overseas. Fashion trends which surf and snow wear cannot keep up with. Urbanisation: less people living on the coast. Emergence of sporting brands which pro-surfers prefer. Industry structure Bargaining power of suppliers The cost of items bought from suppliers has a significant impact on profitability for Billabong.

Since Billabong became international they outsourced manufacturing to small or mid-range sized companies who are all located in third world countries. Unlike other companies however Billabong follows the SA8000 Accountability standard and therefore no forced labour or child labour is practiced. Due to the location of these companies they have no actual bargaining powers and it is unlikely that they would try to integrate vertically anyway.

Bargaining power of customers

The bargaining power of customers is also slim due to the product range. In generic retail it is easier for customers to have bargaining power as department stores can offer similar products for a much lower price than branded stores, however with surf and snow gear common companies cannot copy these designs as they do not have the budget or resources e. g. to produce wetsuits. It is also unlikely that in the first world economies Billabong sells their products to that consumers would be able to find a retailor to product a similar personalised product at a cheaper price.

Cite this essay

The Australian financial system. (2020, Jun 02). Retrieved from https://studymoose.com/the-cost-of-items-13827-new-essay

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