Selkiik uioup In Asia Page

ABSTRACT
Selkirk Brick is a family business that already run over 100 years in Australia. Selkirk
Brick was establish in 1883 when the gold rush in colonial Victoria. The Selkirk Group of
Companies consisted of the original Selkirk Brick Company founded in 1883. The high
quality of Selkrirk Brick product make their export business doing successfully in Japan.
ISSUES
Selkirk Group had been already successful troughout Australia. When their build
business relationship with Japan and the result comes positive. This make Selkirk want to
further their business expansion to Asian country such as Korea, Thailand, China, Hong
Kong, Taiwan, ndonesia and Malaysia.
The main issue in this case study is how to continue developing their business in Asia
regarding their export strategy. But, concerning to the main issue, there are another issue
that related to the main. The issue is Selkirk Group has unknowledgeable in the foreign
market that they already targeting.
Furthermore, the cost of exporting to the country that they had business with is higher
than had subsidiaries in there and Selkirk Group must review the exchange rates to avoid
losses in financial. Then, the other issue is about managed the organization structure in the
company as the Selkirk is a family-based company, the family member have their own
interest and creates problem.











Selkiik uioup In Asia Page

SOLVING PROBLEMS
SWOT ANALYSS
FavorabIe UnfavorabIe
InternaI

Strength
-This company is already
well- known in Australia
-High quality of product
-Have technological
innovation
- Diversification of products
within the building industry
eakness
-Lack of experience in
producing business in foreign
country
-Lack of Liability of
Foreignness
- Have self interest among
family members
Asian crisis

ExternaI

Opportunity
- Have learning process by
doing joint venture
-Their branding already have
name in the foreign market
- Business opportunities
when doing business trip
Threat
-Have competitors in
national, regional and local
- Collapsing economic
situation in Asia market
-Government policies

Selkiik uioup In Asia Page

From the case study of Selkirk Group in Asia, can make a research of a company
strengths, weaknesses, opportunities, and threats that allow bettering understanding where
the company lays with their esteem to the rest of the market industry. The strength of Selkirk
is this company is already well-known in Australia because they are previously established
from the year 1883.
To maintain their success, Selkirk produced high quality of product such as their clay
bricks and pavers. Although often seen as a low-tech product but in fact, considerable
technical expertise required to produce it. For example, they select right raw material for
firing into bricks and pavers.
The other factors are also needed to achieve consistency in strength and color
characteristics. So, to produce this quality product, the technological innovation was applied
in order to maintain technical superiority and cost efficiency in the market. Thus,
diversification of product will be produce as the company has innovation technology.
The other factor in SWOT analysis is weakness. The weakness of this company is
they lack of experience in producing business such make joint venture, alliance or
subsidiaries in foreign country as all this while they just focusing in Australian market before
doing export. Moreover, the lack of liability of foreignness also is the Selkirk weaknesses.
They do not have liability of foreignness as they do not have experience and they do not
review the country more detail.
Selkirk is family-based company and had managed by the family members, so, this
self interest issue can be making up and make Selkirk reputation going down. Other than that
is Asian crisis that happen spread to create global financial risk from collapsing economies.
Therefore, in this global economic context, the prospects for future export business were
difficult to predict.






Selkiik uioup In Asia Page

Then, the next research is opportunity. The opportunity in the Selkirk is if they
proceed with the options regarding international expansion such as by doing joint venture,
they can have learning process by doing more research about the country market. Moreover,
their branding already have name in the foreign market and this make their have opportunity
to expand business there. The business trips create opportunities when they set up non-
exclusive distributors agents in the markets and had 18 distributors across Asia in the Hong
Kong, Taiwan, Singapore, ndonesia, New Zealand and Malaysia.
The threat in market is they have competitors in national, regional and local such as
Boral, Pioneer, CSR, Futuris and Bricksworks. Their revenues are being competitive to
Selkirk as among them have specialist in clay brick and paver companies. Moreover, the
Pioneer was the dominant player in Victoria with 50 percent market share and this make
Selkirk is in threaten condition and must have strategy to expand their business globally.
The collapsing of economic market also threatens Selkirk as they want to make a
move to Asia. Moreover, the government policies are also a threat because every country
has their own government policies such as their tariff and country law.













Selkiik uioup In Asia Page

ANALYSIS
The analysis of this company is when their make the business expansion is doing the
options with exporting, licensing, joint venture operations or subsidiaries overseas. The
advantage is their can realize location that have economy with cost advantages and
experience curve economy which is a systematic production cost reductions that occur over
the life of the product.
The disadvantages of make exportation are the high transport cost because they
have to ship it. Moreover, the problems with cost linked with local marketing agents because
the taxes and tariff of the exporting will be increases year by year as economic growth and
this make the company facing losses.
Another option that they want take is licensing. Advantages of licensing is it can make
low development costs and risks while the disadvantages of licensing agreements is lack of
control over technology and inability to engage in global strategic conditions which means
that cannot coordinate strategic moves across countries.
Then, by joint venture the advantage is provide companies with the opportunity to
gain new capacity and expertise, allow companies to enter related businesses. The new
geographic markets and gain new technological knowledge can have access to greater
resources, including specialized staff and high technology and also sharing of risks with a
venture partner.
The disadvantages of joint venture are takes time and effort to build the right
relationship and partnering with another business can be challenging as they will build up
their company with Selkirk information's. Other than that, open subsidiaries is also the option
to Selkirk. Theadvantages of subsidiaries are can make protection of technology and quality
standards of Selkirk from their competitors. Moreover, they can have ability to realize location
and experience curve economies. The disadvantages of subsidiaries are it provides high
costs and risk.
The recommendation that think Selkirk should take is at first they should make joint
venture to have learning process in order to know their culture and country market for the
short term process. n long term process, Selkirk should have subsidiaries in their targeting
country to make their business more success and build their name globally.