Oommen Final Stage

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Country NotebookCountry: New ZealandProduct: Solar Panels

Vinay Prakash Oommen04-Jun-14198388

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Country Notebook New Zealand

1. INTRODUCTION:

The country selected for this project is New Zealand. New

Zealand, also called Aotearoa New Zealand (Ministry for the

Environment), lies about 1,600 km from both Australia and

Polynesia. According to TeAra, (Easton, Economy - Distinctive

features, 2013) New Zealand has about 0.1% of the world’s

population; its economy produces about 0.3% of the world’s

material output. New Zealand’s market economy is generally

strong, but it also depends mainly on the major international

trading countries like Australia, United States, European

Union China and Japan. Out of all the nations, New Zealand

stands the most distant compared to the other economies of the

world geographically, however, this problem has been reduced

because of increased improvements and investments in the

communications and transport sector. New Zealand is an

excellent market for American exporters. It offers the luxury

of an English-speaking culture along with a stable democracy,

rule of law, a transparent market and business practices

similar to those in the United States (McEntire, 2011).

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New Zealand’s primary source of income is gained in exporting

agricultural products such as dairy products, meat, forest

products, fruit and vegetables, and wine. (McEntire, 2011).

This means that many of its imports involve a lot of essential

items including energy. New Zealand is able to extract and

produce crude oil at 47,290 Barrels per day (bbl/day) in a

2010 estimate which puts New Zealand’s export rank at No. 46

in the world but also at the same time imports were recorded

at 99,810 bbl/day of crude oil. Consumption of petroleum

products exceeds the production per day by 39,200 barrels per

day, which requires imports in order to satisfy the demand.

The energy consumption in New Zealand uses 31.7% of total

installed capacity for electricity through fossil fuels, 54.2%

of total installed capacity from hydroelectric plants and 14%

of total installed capacity from other renewable resources

which include solar and wind power (The World Factbook).

The product selected is Solar Panels from the U.S based

company SolarCity. This product was chosen since solar energy,

though not extensively used mainly because of the cost

factors, can now be marketed to the residents in New Zealand

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using SolarCity’s proven marketing strategy in the United

States. As pricing for solar panels overall is decreasing, the

market for such energy is emerging. While New Zealand does get

a good amount of sunshine (approx. 2500 hours yearly) in most

parts of the country (New Zealand’s Sunshine, 2013), the

inclusion of solar panels can help reduce dependence on fossil

fuels aiming towards a greener economy while reducing costs

for the country’s economy as a whole. Nearly a third of the

total energy consumed – including electricity, heat and

transport fuels – comes from renewable sources. About 70% of

all electricity is generated by renewable energy (Meduna,

2013). So market entry into this segment will not be a problem

as the economy is already open to this.

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2. CULTURAL ANALYSIS

I. Introduction

A brief introduction about the SolarCity Corporation. The

company was started on June 21, 2006. SolarCity was funded by

Elon Musk. He also holds the position of Chairman of the Board

(People: SolarCity Corp (SCTY.O)). But the founders are

Lyndon Rive, who serves as the Chief Executive Officer, and

Peter Rive who serves as the Chief Technology Officer and

Director.

The company has found a way to bring solar energy, a renewable

energy source, which can be generated on site, to the houses

of many residents during its operations. As of December 12,

2012, the company served customers in 14 states. SolarCity

provides this product to not only residents but also to many

customers in the business sectors, including technology,

retail, manufacturing, agriculture, nonprofit and houses of

worship. The company has also gained contract agreements from

the government to install solar energy systems for the United

States Air Force, Army, Marines and Navy, and the Department

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of Homeland Security (Profile: SolarCity Corp (SCTY.O)).

SolarCity has purchased many of its products from multiple

manufacturers and have acquired 2 assets, Paramount Energy

Solutions, LLC, now known as Paramount Solar and the entire

interest of Zep Solar Inc.

Some of SolarCity’s products and services are Solar Energy

Products, which include Solar Energy Systems, SolarLease and

power purchase agreement finance products, Energy Efficiency

Products and Services that involves home energy evaluation and

energy efficiency upgrades and other Energy Products and

Services, which comprises of electric vehicle charging and

energy storage. (Profile: SolarCity Corp (SCTY.O)).The

company’s products are essentially renewable energy, created

by using solar panels that convert sunlight into electrical

current.

The company has two methods of payments for those customers

who are interested. They are a SolarLease or a power purchase

agreement. In the lease method of payment, the customer opts

for a fixed monthly installment. In the power purchase

agreement, the customer opts to pay a fee per kilowatt hour

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based on the amount of electricity actually produced by the

solar energy system. However in both structures, the company

also takes a monthly fee for the power produced by its solar

energy systems (Profile: SolarCity Corp (SCTY.O)).

The company has offered home energy efficiency evaluations to

new and existing customers while the company’s energy

efficiency upgrade products and services promoted heating and

cooling, air sealing, duct sealing, water heating, insulation,

furnaces, weatherization, pool pumps and lighting. SolarCity

had managed to complete over 13,000 home energy evaluations

and also perform over and above 2,000 energy efficiency

upgrades, since December 12, 2012 (Profile: SolarCity Corp

(SCTY.O)).

One of the other products offered by SolarCity which is

electric vehicle (or EV) charging equipment that the company

purchases from third party companies and markets or

distributes through retail partnerships. One of the major

companies that SolarCity caters to is Tesla Motors, and its

founder, Elon Musk, who is also the Chairman of the Board,

hence the collaboration. The company also started to develop

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an energy storage and battery management systems built atop

its solar energy monitoring communications backbone. The

company managed to get contracts for more than a 100 energy

storage projects and also managed to sell in excess of 750

charging stations on or after December 12, 2012 (Profile:

SolarCity Corp (SCTY.O)).

SolarCity uses many software applications in order to keep

track of its customers and their requests, management,

projects and also tracking software that can help to

accurately enable a detailed analysis and customized graphical

presentation of each customer’s savings. SolarCity’s software

includes SolarBid Sales Management Platform, SolarWorks

Customer Management Software, Energy Designer, Home

Performance Pro and SolarGuard and PowerGuide Proactive

Monitoring Solutions. SolarBid is a sales management platform,

which incorporates a database of rate information by utility,

sun exposure, roof orientation and a range of other factors to

enable a detailed analysis and customized graphical

presentation of each customer’s savings. SolarWorks is the

software platform the company uses to track and manage

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project. Energy Designer is a software application its field

engineering auditors use to collect pertinent site-specific

design details on a tablet computer. Home Performance Pro is

its energy efficiency evaluation platform that incorporates

the United States Department of Energy’s Energy Plus

simulation engine. Home Performance Pro collects and stores

details of a building’s construction and energy use.

SolarGuard and PowerGuide provide its customers a view of

their homes or business’s energy generation and consumption

(Profile: SolarCity Corp (SCTY.O)).

The company’s overall goal is to promote the usage of

renewable source of energy production and consumption while at

the same time educating and providing the consumers the

service to efficiently manage their consumption of energy in

their own homes in order to generate better savings, both

financially and energy wise. Bringing these products to New

Zealand will be relatively easy mainly because the country is

already open and is currently using renewable sources of

energy, primarily harnessing energy from water sources, wind

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farms and tidal wave energy as these resources are abundant in

the land.

II. Country's Relevant History

New Zealand’s history is short as this island has been the

last land to be settled by a human civilization. A tribe known

as the Māori, settled in New Zealand around the 13th century

and has coexisted there until this day, had ancestors who had

traveled to this land now known as New Zealand (Wilson,

History - Māori arrival and settlement, 2013). New Zealand was

founded by the Dutch navigator and explorer, Abel Tasman, in

1642, followed by British captain, James Cook in 1769

(infoplease). European settlers including the Dutch, French

and British had started approaching the island only around the

16th century (1640s) and in due course of time, many changes

had taken place like social, political and economic changes,

building New Zealand into the multicultural Pacific nation it

is today.

III. Geographical Setting

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A. Location

New Zealand, also called Aotearoa New Zealand (Ministry

for the Environment), lies about 1,600 km from both

Australia and Polynesia. According to TeAra (Easton,

Economy - Distinctive features, 2013).

B. Climate

The climate in New Zealand consists of mild temperatures,

moderately high rainfall, and many hours of sunshine

throughout most of the country. New Zealand's climate is

dominated by two main geographical features, the

mountains and the sea. Depending on one’s location in New

Zealand, the weather for summer, autumn, winter and

spring seasons varies (New Zealand Weather and Climate,

2014).

C. Topography

New Zealand’s geography consists of 3 main islands namely

the North Island, South Island and Stewart Island (or

Rakiura). According to the TeAra website (Walrond, 2013)

New Zealand is an archipelago with over 700 offshore

islands which give the country of New Zealand huge

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economic benefits for its fishing activities. Most of the

area in the north island, consists of a rolling hill

country, and is used for farming. The south island

consists of the Southern Alps, dividing the island with

the rainforests in the west and the farmlands of the

Canterbury plains in the east. Stewart Island is almost

entirely covered by the native vegetation (Walrond,

2013).

IV. Social Institutions

A. Family

1. The Nuclear Family

Families in general have changed a lot since the

history of New Zealand but it still remains as the

foremost source of emotional and material wellbeing

for children and adults. It is also considered to be

the most essential source for each person’s identity

and his or her sense of connectedness to others

(Pool & Plessis, Families: a history - Changing

families, 2012).

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2. The Extended Family

Connections to families beyond the family home have

always been important in New Zealand,

particularly due to the fact that people move around

the country a lot, and many people who were either

immigrants or the descendants of immigrants,

including those who left the country for higher

studies, jobs, life experiences and

establishing/settling down with families in other

parts of the world, tended to keep in touch through

phone calls, texts and email messages, but

increasingly through social networking sites like

Facebook or online voice-call services like Skype

(Pool & Plessis, Families: a history - 21st-century

families, 2013).

3. Dynamics of the Family

a. Parental Roles: In the 21st century, parents

who were presumably in their late 20s or early

30s were at the birth of their first child.

This period also witnessed a problem where one

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income was not enough to live on and parenting

roles changed as a result. The majority of the

women were not prepared to stay at home and

looked to build a career for themselves. Both

parents were more often employed in paid work

than they would have been 30 years before

(Patterson, 2012). Most of the time the

children were placed in early childhood centers

after a certain age. Mothers still remained to

be the primary caregivers of babies and young

children (Pool & Plessis, Families: a history -

21st-century families, 2013).

Fathers worked longer hours than mothers,

though mothers often increased paid working

hours as the children grew older. Fathers took

a more hands-on parenting role than in the past

and were involved in things like cooking,

feeding children and changing nappies

(Patterson, 2012).Although social parenting was

more common compared to biological parents in

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New Zealand parenting roles still remained the

same depending on the situation.

b. Marriage and Courtship: Even though the number

of women of childbearing age rose by 70%, only

a few among them were opting for motherhood.

Women who had a high birthrate were aged

between 30-34 years. This resulted in the size

families getting smaller. Families with one

child constituted 35.3% of the population while

families with 3 children constituted 17.7% of

the population. This also showed a decline in

the number of marriages from 45.5 per 1,000 in

1971 to 16.2 in 1992. It has remained this way

ever since. Those who had made the decision to

get married were fewer compared to the past.

33.3% of brides were in their teens when they

decided to marry in 1971. By 1992 the figure

has become a mere 3% of teens while the divorce

rate has increased steadily. The year 2002 saw

10,000 divorces and less than half of those

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were happy/steady marriages (Wilson, Society -

Families and households, 2013).

4. Female/Male Roles

New Zealand has sometimes been called a ‘man’s

country’. Now it is thought of as a ‘man’s country’

but a woman’s city. Women were generally more

attracted to the city because the city offered wider

educational, work and social opportunities than

rural life. The countryside of New Zealand mostly

had work associated with seasonal agricultural

production while the city had employment

opportunities in factories, shops, and even the

professions which was demanding in nature but did

not require any physical toiling on the land (Daley,

2012). Men and women had to be paid equally by law

for the same work. But in practice women have lower

incomes than men. One example is in 2002 where

payments received were $857 for men and $685 for

women. Women are generally found to be doing more

unpaid work than men primarily because they take

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care of the household, which includes the elderly,

ill or disabled (Wilson, Society - Sex and gender,

2013).

B. Education

1. The Role of Education in Society

Although preschool education is not compulsory, many

New Zealand children below the age of five attend

kindergartens, playcentres or childcare centers. The

playcentres movement involves parents and had an

important social role in the last third of the 20th

century. State primary, intermediate and

secondary schools provide a free, compulsory and

secular education for all young New Zealanders. The

education system provides free education from ages

5-19 and compulsory education from ages 6-16. State

schools have been governed by the boards of

trustees, which have been elected by parents since

1989.Other than state governed schools, private

schools, which are mostly managed by the Catholic

Church and the Evangelical Christian churches,

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receive state funding but are governed by

independent boards. The Māori also receive education

within the state system. Around the 1980s a

kōhangareo (preschool language ‘nests’) was set up

to help the Māori language survive. To this date

many Māori choose to continue their education here

where the Māori language is used and the education

is based on Māori culture and values. This education

is also free and is supported by the state system.

Overall, the education system of New Zealand values

both academic and practical, skill-based

achievements. Young people are encouraged to be

questioning - to see the bigger picture and be open

minded in finding new ways of approaching things

(Wilson, Society - Education, 2013).

a. Primary Education: Primary education focuses

on strong foundation learning, especially in

literacy and numeracy. Primary education starts

at the age of 5 but is only compulsory at age

6. Primary education starts from Year 1 until

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Year 8, with Years 7 and 8 mostly offered at

either a primary, or a separate intermediate

school (Ministry of Education, 2014).

b. Secondary Education: Secondary education

starts with ages 13 to 18 and/or 19, which

means it covers years 9 to 13. The schools that

provide a secondary education are quite

commonly known as secondary schools, high

schools or colleges. Secondary education

incorporates a more vocational nature without

the separation of academic and vocational

streams. The students are given a broad and

balanced curriculum with a specialization in

years 11 to 13, and also giving them

professional career information and guidance

which ultimately wouldn’t give them any problem

to go for work or go for further studies

(Ministry of Education, 2014).

c. Higher Education: Higher education or tertiary

education, as it known, includes polytechnics,

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colleges of education and universities. They

receive state funds but are governed by independent

councils. Only one in eight of the population holds

a university degree as there are still many rural

areas in New Zealand that are still dependent on

agriculture (Wilson, Society - Education, 2013).New

Zealand has eight universities located in Auckland,

Hamilton, Wellington, Christchurch and Dunedin.

There are 18 institutes of technology and

polytechnics in all the main centres and leading

provincial cities as well. There are also 600

private training establishments, including English

language schools, located across the country

(LEADER IN EDUCATION).

2. Literacy Rates

The children in New Zealand rank relatively highly

on international literacy scales. A program known as

the OECD Programme for International Student

Assessment is responsible for measuring the

performance levels of students near the end of

compulsory education in reading, mathematical and

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scientific literacy. The data that was collected has

shown that the children in New Zealand rank seventh

among OECD countries, with comparable data in terms

of the average score across the three scales, behind

Finland, Korea, Japan, Canada, the Netherlands and

Australia. New Zealand rates above the OECD average

on each of the scales – fifth in reading, ninth in

mathematics and seventh in science (New Zealand in

the OECD). London-based think tank The Legatum

Institute goes further. Its 2012 Prosperity Index

survey of 142 countries rates New Zealand No.1 in

world for education (LEADER IN EDUCATION).

C. Political System

1. Political Structure

New Zealand has been known to be a country whose

political culture and structure has changed slowly

over time. It is a country of slow evolution rather

than rapid revolution. Some of the values considered

as the most important in New Zealand are democracy,

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the rule of law, protection by government, fairness

and equality and honesty (Levine, 2012).

2. Political Parties

New Zealand has 8 political parties in the 50th

Parliament namely the New Zealand National Party

(National Party), which is the largest partner in

the National-led Government. It has 59 members of

Parliament (Parliamentary parties-National Party,

2011); New Zealand Labor Party (Labor Party) has 34

members of Parliament. The party is in opposition

(Parliament parties: Labour Party, 2013), The Green

Party of Aotearoa / New Zealand (Green Party) is an

opposition party. The Green Party has 14 members of

Parliament all elected from the party list

(Parliamentary parties: Green Party, 2011), The New

Zealand First Party has seven members of Parliament,

all elected from the party list (Parliamentary

parties: NZ First, 2012), The Māori Party has three

members of Parliament. It has a confidence and

supply arrangement with the National-led government

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(Parliamentary parties: Māori Party, 2011), ACT New

Zealand has one member of Parliament. The party has

a confidence and supply arrangement with the

National-led government (Parliamentary parties: ACT

New Zealand, 2011), Mana has one member of

Parliament. The party is in opposition (Parliament

parties: Mana, 2013), with United Future New Zealand

(United Future), which has one member of Parliament.

It has a confidence and supply agreement with the

National-led government (Parliamentary parties:

United Future, 2013).

3. Stability of Government

In this turbulent world, New Zealand stands out as a

reassuringly sturdy beacon of stability, openness

and fair dealing. New Zealand tops Forbes' 2012 Best

Countries for Business list, which labels New

Zealand as a free market economy that can compete

globally. Its political system is based on the

British model and is stable. There is a single house

of Parliament, and the role of head of state is held

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by Queen Elizabeth II, as Queen of New Zealand.

Democratic engagement is strong. Typically between

75-80% of New Zealanders turn out to vote in general

elections (Stability & Security, 2012).

4. Special Taxes

Taxation in New Zealand is handled by the Inland

Revenue Department (IRD). An IRD number is issued to

individuals and companies alike to serve as a tax

identifier. New Zealand’s tax year runs from 1st

April to 31st March (IRD).

One of the taxes covered in relation to this topic

is the Goods & Services Tax (GST), which is a tax

levied on goods and services in New Zealand and

goods and some services (excluding monetary

transactions or activities) that are imported at the

rate of 12.5%.

There is a separate income tax regulation for

companies, which stands to-date at 28% since 2011 to

encourage and attract foreign investments and

foreign corporations to New Zealand.

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5. Role of Local Government

New Zealand’s government is formed from a

democratically elected House of Representatives. The

government advises the Sovereign (our head of

State). By convention, the Sovereign, the source of

all executive legal authority in New Zealand, acts

on the advice of the government in all but the most

exceptional circumstances. This system is known as a

constitutional monarchy. The system that is followed

is based on the principle that power is distributed

across three branches of government namely, the

Parliament, the Executive, and the Judiciary.

Parliament makes the law. The Executive (Ministers

of the Crown also known as the Government)

administers the law. The Judiciary interprets the

law through the courts (Our system of government).

D. Legal System

1. Organization of the judiciary system

Māori customs are still recognized as part of New

Zealand during the British colonization after the

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signing of the Treaty of Waitangi. The laws of the

Kiwis have been influenced due to the increased

presence of the British during its colonization and

hence New Zealanders follow the Common law and the

Statute law. In the 1960s, international law and its

obligations had an impact on New Zealand law and

have since continued to increase in international

changes (Palmer G. , Law - Legal history, 2012).

Criminal law is influenced by the statute passed by

the Parliament. Trial by jury is a system that was

passed down by the British, who brought this

influence during its colonization. Civil law can be

anything from business matters like contracts,

commercial law, revenue law and property law, to

individual people’s problems or disputes and are

usually presided over by a judge without the jury

(Palmer G. , Trial by jury, 2012).

The Employment Court is constituted by the

Employment Relations Act 2000, and has functions

under that act to regulate industrial relations

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(Palmer G. , Law - Specialist courts, 2012). New

Zealand has been known for being a legal pioneer in

certain areas like the codification of the criminal

law (Palmer G. , Law - Legal innovation, 2013). Any

employee that faces injury or torts can claim or sue

another person for his/her damages (Palmer G. , Law

- Legal innovation, 2013).

2. Code, common, socialist, or Islamic-law country?

Properties, which are considered as part of an

economic activity through the English common law

giving way to a system of property rights so that

the conflicts between individuals, groups and other

entities could be, addressed (Evans, Law and the

economy - Setting the framework, 2012). Economic

activities involve contracts with the appropriate

rules, laws and regulations to allocate the

responsibilities, rewards and property rights among

parties to the contract. Some of the laws that cover

contracts are provisions for compensation like the

Frustrated Contracts Act (where the party suffered a

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loss because of no fault of their own), Contractual

Mistakes Act, Contractual Remedies Act, etc. as

there are contracts with long and short durations,

which need to be designed according to the

requirements of the parties involved. (Evans, Law

and the economy - Contract law, 2012).

Transaction costs needed to manage economic

activities is another important aspect of contracts

that require the intervention of the law in order to

enforce the contracts involving high transactions

like building an automobile manufacturing plant.

These costs involve gaining information, negotiating

with parties and also enforcing the contract (Evans,

Law and the economy - Contract law, 2012).

Employment laws, consisting of the Employment Act of

1991, which gave the freedom and confidentiality of

the contracts made between the employer and the

employee where in both parties could negotiate the

terms and conditions of the contract, and the

Employment Act of 2000, wherein labor unions and not

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individual persons could negotiate contracts with

the employer. Employment law and its developments

are subject to social change in the legal framework

of New Zealand’s economic activities as evident from

the laws passed to end restriction on the women’s

labor force (Evans, Law and the economy - Employment

law, 2012).

3. Participation in Patents, Trademarks and other

Conventions

New Zealand participates in many conventions like

Antarctic Treaty Consultative Meeting, United

Nations Convention on the Rights of Persons with

Disabilities and even constitutional conventions

which are the most unwritten part of the New Zealand

constitution. New Zealand plays host to many

conventions out of which the highest visitors to the

country is still Chinese businessmen (Roberts, 2012)

(Palmer M. , 2012).

E. Social Organizations

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1. Group behavior

There are many ethnic groups in New Zealand where

each one has their own values. The Māori, and also

non-Māori, place a high value on honoring the Treaty

of Waitangi and Māori rights. The people of New

Zealand favor multiculturalism in general but at

times are also at some point become less welcoming

to immigrants (Levine, 2012).

2. Social Classes

Classes are major social groupings where the members

of a group have similar levels of economic

resources, property and status. They are

traditionally defined as working class, middle class

and upper class. The Europeans who settled New

Zealand brought their ideas about class with them.

But though there were wealthy land-owning families,

they often came from middle-class backgrounds. They

were not like the English aristocracy, and worked

running their farms or businesses. Outside of the

rich, there were no distinct classes. Many people

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worked for themselves. Life was better for working

people than in Europe – they were paid more and

worked fewer hours. Many owned property, and it was

possible to move between social classes. From the

1980s the differences between the top income earners

and the lowest became ever greater. In 2001 the top

10% of households held 48% of the wealth. House

prices rose everywhere, but particularly in more

desirable areas. Though New Zealand was less equal,

people were more accepting of this. They were less

interested in examining class. Class had also been

complicated by differences between ethnic groups. In

the 1990s the government began to measure the wealth

of school communities, and also monitored areas to

see where people were poorest (Phillips, 2012).

3. Clubs, other organizations

New Zealand has many different clubs like Men’s

clubs, Women’s Club, Workingmen’s clubs, Gentlemen’s

clubs, Skiing Clubs, Service clubs, Racing clubs,

Pony club, Veterinary clubs, provincial rugby club,

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provincial football club, Car-club motor sport, pet

clubs competitions and breeders, etc. and many more

that give most of the people something to do (Clubs,

2012).

4. Race, ethnicity, and subcultures

The New Zealand culture has an ethnic make-up of New

Zealand European, Maori, other European, Pacific

Islander, Asian and others. Its official language

consist of 3 namely, English, Māori and NZ Sign

Language out of which English is the language of

day-to-day business. New Zealanders are generally

friendly, outgoing, somewhat reserved initially yet

polite, and enjoy extending hospitality

(Kwintessential, 2013).

F. Business Customs & Practices

New Zealanders greet their business counterparts with a

simple handshake and a smile but at times they can be

somewhat reserved, especially with people they do not

know. They usually call another person by their honorific

title or surname. They also respect those who are honest,

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direct and also show a sense of humor. They trust people

but if a breach occurs, especially in business, it can be

hard to repair and would also be difficult to have

business dealings (Kwintessential, 2013).

Appointments are important in the New Zealand business

culture, which should be made 1 week in advance. On time

arrival for the fixed meetings is considered very

important. Meetings tend to be relaxed which includes

small talks even if they are serious events


If the business dealings are with a Māori-tribal group

(Iwi) the welcoming protocols may be practiced through

the process of Powhiri – a formal welcome that takes

place on a Marae. A Powhiri can take between 30 minutes

to 2-3 hours depending on the importance of the event


The negotiation process usually takes time. The kiwis

don’t trust other sellers as they are straight-forward

and expect the same in return. They want value for their

money, and are not usually expected to bargain over

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price. Kiwis are quite focused as they prefer to stick to

the point, and do not run around the bushes during a

negotiation or a deal (Kwintessential, 2013).

V. Religion and Aesthetics

A. Religion

1. Orthodox doctrines and structures

New Zealand’s pattern of religious diversity developed

out of the religious cultures brought by the communities

that migrated to the country. Māori brought religious

customs and practices from Polynesia. European

missionaries and settlers brought varieties of British

Protestantism and French Catholicism. Anglicans,

Methodists and Presbyterians shaped the structure, values

and traditions of the new society. Almost all Māori

adopted forms of Christianity, so New Zealand was

regarded as a Christian nation. Since the early days of

European settlement tiny Jewish, Hindu, Buddhist, Muslim

and Sikh faith groups have existed alongside the

Christian majority. This unified religious identity has

been a significant factor in educational, moral, social

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and cultural policies and debates. In the 2000s New

Zealand’s Christian traditions remained evident in the

2007 decision to retain the Christian prayer in

Parliament, in support for the theistic national anthem

and in the practice of swearing on the Bible in court.

(Wilson, Society - Religion and the churches, 2013)

2. Relationship with the people

These so-called communities were made up of various

ethnic and language groups with very different migrant

experiences. None was represented by a single

organization. There was sometimes considerable dissent

and tension between different faith groups, resulting in

complex relationships both within and between religious

communities. (Wilson, Society - Religion and the

churches, 2013)

3. Which religions are prominent?

New Zealand is home to Christians, Hindus, Buddhists,

Muslims, Sikhs, Jews and a number of newer religious

movements. Most New Zealanders support the value of this

diversity, but some have more negative attitudes – for

example, that religious differences threaten social

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unity. Over half of New Zealanders identify themselves as

being Christian. The main Christian denominations include

Anglican, Catholic and Presbyterian. (Religions

Prevalent, 2013).

4. Membership of each religion

In 2011 Christianity remained the largest single religion

in New Zealand but there were also sizeable Hindu,

Buddhist, Muslim and Sikh communities (Wilson, Society -

Religion and the churches, 2013).

5. Any powerful or influential cults?

No

B. Aesthetics

1. Visual arts (fine arts, plastics, graphics, public

art, colors, etc.)

Creative activities – music, literature, visual

arts, design, architecture and performing arts – are

central to New Zealand’s identity. Telling New

Zealand stories is an accepted part of New Zealand

art, but connecting with ideas from around the world

is an equally strong feature. Cultural exchanges

between New Zealand and other countries have been

37


enriching both ways. (Swarbrick, Creative life - New

Zealand creativity, 2012)

New Zealand creativity arises from distinct

traditions: those of the indigenous Māori people,

the mainly British immigrants who arrived after

1840, and post-Second World War arrivals from

Pacific, Asian and European countries. In recent

years interaction between these cultures within New

Zealand has resulted in some distinctive art.

(Swarbrick, Creative life - New Zealand creativity,

2012)

The history of visual arts, crafts and design in New

Zealand stretches back some 700 years to the first

Māori arrivals from East Polynesia, with their rich

inheritance of carving and weaving. Western arts,

crafts and photography, introduced by 19th-century

settlers, soon adapted to a new land while remaining

open to overseas influences. Wide public

appreciation of both traditions is a relatively

recent phenomenon. A 2002 survey found that 36% of

38


New Zealanders purchased an original work of art or

craft in the previous 12 months, while 48% visited a

gallery or museum. There are many public and private

galleries in New Zealand, catering to the large

audience for visual arts.

2. Music

With regards to Music, amateur orchestral societies,

choirs and brass bands formed in the early days of

European settlement. Touring professionals were

welcomed eagerly and, after the Second World War,

chamber music societies in Hamilton, TeAwamutu and

Tokoroaorganized concerts by national and

international artists. Conductor OssieCheesman,

violinist Vincent Aspey, and opera singer Malvina

Major had Waikato roots. Budding classical musicians

attended the annual Cambridge Music School from 1946

until 1986, and advanced training became available

when a university music department started in 1995.

From the 1980s to the early 2000s Hirini Melbourne

was a leader in Māori music education and the

39


restoration of taongapuoro (Māori instruments).

Light music and musical theatre had a wider

following. The Hamilton Operatic Society, founded in

1913 and revived in the 1920s, still stages

performances of operettas and Broadway musicals to

large audiences. Waikato has nurtured well-known

popular artists and groups. Country music stars have

included the Hamilton County Blue Grass Band and

Putaruru’s Patsy Riggir.

The yodellingTopp Twins hail from Ruawaro, west of

Huntly. Tim and Neil Finn of Split Enz and Crowded

House grew up in TeAwamutu. More recent Waikato

bands include the Datsuns, Katchafire, Cornerstone

Roots, the Deadly Deaths and the Trons. Blues, jazz

and country music arrived from America in the 1920s

and 1930s, while rock and roll made its entrance in

1955 and hip hop in 1985 (Swarbrick, Waikato region

- Arts, culture and heritage, 2012). New Zealand

musicians and songwriters, including artists such as

jazz pianist Mike Nock and popular singer BicRunga,

40


and groups such as Split Enz, The Muttonbirds and

The Datsuns, have contributed to these global

movements. In 2000, the national importance of

popular music was recognized by the establishment of

the government funded New Zealand Music Industry

Commission, which promotes New Zealand music. Folk

music has always had an audience, and folk music

clubs are widespread. World music is also gaining

ground (Swarbrick, Creative life - New Zealand

creativity, 2012).

One of the earliest types of ethnic music introduced

to New Zealand was the Scottish pipe band, and there

are many around the country. New ethnic groups are

bringing their music to New Zealand. Some, like the

group Many Hands, fuse their different cultural

traditions to produce a unique sound. New Zealand

composition has developed since the 1940s, when

composer Douglas Lilburn rose to prominence. It has

been influenced by Asian and Pacific music. Since

1991 the work of composers such as Jack Body,

41


Gillian Whitehead, Gareth Farr and John Psathas has

been promoted by the Centre for New Zealand Music

(SOUNZ) (Swarbrick, Creative life - Music, 2012).

3. Drama, ballet, and other performing arts

Visiting American, English and Australian companies

brought theatrical productions to New Zealand as

early as the 1860s, but professional theatre

developed slowly: it was the 1950s before a full-

time theatre company was formed. Nevertheless, there

have always been amateur dramatic clubs, repertory

theatres and operatic societies throughout the

country (Swarbrick, Creative life - Performing arts,

22).

Before the 1950s, ballet and contemporary dance

tuition was available, but there were no

opportunities for professional dancers. The oldest

professional dance company in New Zealand, The Royal

New Zealand Ballet, was established in 1953. It

performs both traditional ballet and contemporary

works and has nurtured such well-known dancers as

42


Sir Jon Trimmer (Swarbrick, Creative life -

Performing arts, 22).

There are a number of contemporary dance companies,

including Footnote Dance Company (founded in 1985),

Black Grace (1995), Mau Dance (1995), Touch Compass

(1997), and Atamira Dance Collective (2000). An

annual dance festival called Tempo – New Zealand’s

Festival of Dance takes place in Auckland. Dance is

taught at several institutions – notably the New

Zealand School of Dance and UNITEC’s School of

Performing and Screen Arts – and is supported by a

national organization, Dance Aotearoa New Zealand

(DANZ) (Swarbrick, Creative life - Performing arts,

22).

4. Folklore and relevant symbols

Kapahaka is a traditional Māori performance art form

that is unique to New Zealand. It includes haka

(posture dance), poi (dance accompanied by song and

rhythmic movements of the poi, a light ball on a

string) waiata-ā-ringa (action songs) and

43


waiatakoroua (traditional chants). It has undergone

a revival and there are kapahaka groups in many

schools, tertiary education institutions and

workplaces (Swarbrick, Creative life - Performing

arts, 22).

VI. Living Conditions

A. Diet and nutrition

The living conditions New Zealanders have today are based

on the environmental, economic, and social capital built

up or depleted by past activity. Sustainable development

requires that the living standard people seek to enjoy as

a nation should not erode this capital base. Moreover,

while the capital base may be maintained sustainably, it

is also important that individuals and households have

fair access to it. Income and housing are important

determinants of living conditions. Income enables

individuals and households to purchase the goods and

services that contribute to their overall wellbeing.

44


1. Meat and Vegetable Consumption Rates

After New Zealand was settled by Europeans in the

early 19th century, the dominant food culture was

British in origin (meat-based meals accompanied by

vegetables). Traditional Māori foods were not much

eaten by Europeans, though kererū (native wood

pigeon) and kākā (a native parrot) were seen hanging

in butchers’ shops in the early years, and people

trapped and ate weka (a flightless rail). While non-

British immigrants to New Zealand brought their own

foods with them, it wasn’t until the 1960s that New

Zealand’s cuisine started to diversify beyond the

‘meat and three veg’ tradition to embrace other food

cultures, such as those from Mediterranean and Asian

countries.

Vegetarians eat plant-based foods and refrain from

eating meat and seafood, while vegans do not eat any

animal products, including dairy foods. A very small

number of 19th-century settlers were vegetarians and

45


the Canterbury Dietetic Reform Association (founded

in 1882) promoted a vegetarian diet.

2. Typical meals

In the 19th and early 20th centuries, particularly

on farms, meat was eaten three times a day (bacon,

chops or offal for breakfast, sausages or cold meat

for lunch, and roasts or stews for dinner). Since

the 1960s, New Zealanders have tended to restrict

their meat eating to once a day. By 1982, when a

nationwide survey was done, the traditional Sunday

midday roast was virtually a thing of the past.

3. Malnutrition Rates

Over the 20th century consumption of sheep, beef and

poultry gradually declined – from 130 kilograms per

person a year in the 1930s to around 91 kilograms in

the early 2000s. The drop in meat consumption is

associated with growing knowledge about the role of

saturated fats and cholesterol in heart disease and

a growing interest in vegetarian meals. Increased

trimming of fat from red meat cuts since the early

46


1990s has reduced the amount of fat consumed by meat

eaters.

4. Foods Available

In New Zealand, unlike Britain, pork was considered

a special-occasion meat, especially after the price

began to rise in the 1950s. Dairy farmers no longer

kept pigs in order to feed them excess skim milk, as

this was sent off to dairy factories to make milk

powder. Bacon and sausages were cheaper forms of pig

meat. When pigs began to be farmed commercially pork

became more affordable. In 2011 each person ate an

average of 20.6 kilograms of pig meat.

Chicken was formerly a special-occasion meat, and

before the 1950s most chickens for sale were either

cockerels or hens whose egg-laying days were over.

With the advent of mass barn-raised broiler chickens

in 1960 production rose dramatically, from 8,000

tons in 1962 to over 40,000 tons by the mid-1980s.

Chicken became increasingly affordable due to

selective breeding (by 2008 chickens could be grown

47


to maturity in half the time it had taken 25 years

earlier, using half the amount of feed). In 2007

each person ate an average of 36.5 kilograms of

chicken, making it the most popular meat.

Vegetarianism became more popular in the 20th

century. The New Zealand Vegetarian Society was

formed in 1943 and vegetarian recipes appeared more

often in cookbooks from the 1960s. However,

vegetarianism has remained a minority diet. Around

1–2% of New Zealanders were vegetarian in the early

2000s, though more would have regularly eaten

vegetarian dishes alongside meat ones. (Burton, 2)

B. Housing

In the early 21st century government housing policy was

centered on ensuring a sustainable housing supply. In the

early 2000s population growth created a housing shortage,

especially in large cities and resort areas. This led to

skyrocketing prices that made housing unaffordable for

many first-time home-buyers. Rising house prices flowed

through to increased rents, further decreasing housing

48


affordability. To improve affordability the government

provided two major forms of assistance:

Direct assistance in the form of state housing and

income-related rents that provided for people in

greatest need

Indirect assistance in the form of the

accommodation supplement for those whose housing

costs were too high to be met by their own income

alone.

An important aim of government was raising the quality of

New Zealand’s housing stock. Many houses were cold, damp

and energy-inefficient, leading to annual winter spikes

in respiratory and other illnesses. The early 2000s leaky

building crisis, where poorly built new houses developed

leaks and rotted, was partly blamed on insufficient

regulation. In response the government:

Updated regulatory frameworks and building

standards, such as the Building Act 2004

Implemented energy efficiency initiatives

49


Supported innovation in design and development.

(Schrader, 13)

C. Clothing

Clothing is one of the most immediate ways of

communicating identity. European clothing is the dominant

mode in New Zealand, as in many other parts of the world.

With European settlement Māori men and women, especially

those living near mission stations and town settlements,

began wearing European clothing. One way the Māori

obtained European clothing was as payment in land

transactions. Māori men and women wore European clothing

in a variety of ways and on their own terms. Many outfits

blended Māori and European styles. Māori design has had

an impact on European clothing in New Zealand. A widely

used motif is the spiral koru, a form based on the

unfurling fern frond that represents new life. (McKergow,

14)

D. Recreation, Sports and Other Leisure Activities

50


Rugby league is strong and New Zealand (NZ) has their

very own professional team competing in Australia’s NRL

competition.

Football is increasingly popular. It too has a team in

Australia’s professional competition. NZ’s All Whites

qualified for the 2012 Olympics and were the only team to

bow out unbeaten in the 2010 World Cup. Unfortunately,

Mexico has beaten the NZ for a place at Rio.

Netball is the most popular women’s sport, enjoying

strong support from grassroots level right up to NZ’s

world-leading national team, the Silver Ferns.

Men’s basketball is increasingly popular and both men and

women enjoy field hockey.

In the warmer months, cricket takes the spotlight -

men’s, women’s and the beach variety, a distinctive part

of the typical Kiwi summer.

Many other sports are catered for year round - touch

rugby, tennis, cycling, swimming, horse racing and

equestrian, boating, fishing, diving, kayaking and

canoeing, windsurfing, kite boarding and motorsport are

51


some of the few that New Zealand has in terms of

activities. Athletics are also just as important in New

Zealand as the country has produced many world champion

runners especially in the longer distances (SPORTS).

E. Social Security

To be able to receive one’s New Zealand pension one must:

Be entitled to receive the New Zealand pension

before leaving New Zealand, and

Be entitled to the New Zealand pension in your own

right. Non-qualified partners (e.g. those under 65

years) have no entitlement overseas, and

Be going to live in one of these Pacific countries

for more than 52 weeks, and

Be resident in one of these Pacific countries when

each payment is made to you, and

Be residing in and present in New Zealand on the

date of application for special portability

F. Healthcare

Public health means health and medical initiatives that

focus on:

52


the prevention of disease

the promotion of good health

Populations rather than individuals.

The substantial improvements in health since the 19th

century have been largely attributed to public health

initiatives and disease control rather than medical

interventions (prevention has been more effective than

cure).

The term ‘public health’ is sometimes used (by lay

people) to describe health services that are funded by

government through taxation – the public health system.

In the early 2000s GPs and other health professionals

grouped together as primary health organizations (PHOs).

PHOs with high-need enrolled populations (Māori and

Pacific people and residents of deprived neighborhoods)

received more funding per person than those with less

needy populations. The formation of PHOs resulted in

lower fees for most people, though some low-income people

living in better-off areas paid more. Prescription

charges were reduced to $3 per item for most people in

53


the early 2000s, and then raised to $5 in 2013. (Pollock,

2013)

VII. Language

A. Official language(s)

New Zealand has three ‘official’ languages: English; Māori and

New Zealand Sign Language.

B. Spoken versus written language(s)

English is the most widely spoken language in New

Zealand. It is the language commonly used in the courts,

parliament, in the education system and by the public

sector.

C. Dialects

Māori and New Zealand Sign languages have been formally

designated as ‘official languages’ and have special

status under the law. People have the right to speak in

Maori or New Zealand Sign Language and they can be used

in legal proceedings with interpreters. Māori is also

taught in most schools and there are Māori immersion

54


educational facilities.

3. ECONOMIC ANALYSIS

I. Introduction

According to TeAra (Easton, Economy - Distinctive features,

2013), New Zealand has managed to score 81.2 as the 5th freest

economy in the world in the 2014 Index and ranked 4th among the

42 countries in the Asia–Pacific region. This index is based

on 10 economic freedoms including Business Freedom, Investment

Freedom, Freedom From Corruption, Property Rights, Monetary

Freedom, Labor Freedom, Financial Freedom, Government

Spending, Trade Freedom, and Fiscal Freedom have enabled New

Zealand to move from “mostly free” almost 20 years ago to

“free” today.

II. Population

The population of New Zealand is over 4.5 million according to

the World Population Review (United Nations, New Zealand

Population 2014, 2014).

A. Total

55


1. Growth Rates

New Zealand’s natural growth element is seen as

extremely healthy and shows no signs of changing in

the next four years, well into 2016’s population

census (United Nations, New Zealand Population 2014,

2014).

2. Number of live births

In the year 1962, the number of births recorded in

the country was 66,000 but by 2001 the number had

dropped to 56,221. This was because even though the

number of women of childbearing age rose by 70%,

only a few among them were opting for motherhood.

Women who had a high birthrate were aged between 30-

34 years. This resulted in the size families getting

smaller.

3. Birthrates

Families with one child constituted 35.3% of the

population while families with 3 children

constituted 17.7% of the population. This also

showed a decline in the number of marriages from

56


45.5 per 1,000 in 1971 to 16.2 in 1992. It has

remained this way ever since. Those who had made the

decision to get married were fewer compared to the

past. Numerical figures of 33.3% of brides were in

their teens when they decided to marry in 1971. By

1992 the figure has become a mere 3% of teens while

the divorce rate has increased steadily. The year

2002 saw 10,000 divorces and less than half of that

were happy/steady marriages (Wilson, Society -

Families and households, 2013).

The estimate from December 2011 to the present is –

One birth every eight minutes and nineteen

seconds

One death every nineteen minutes and thirty

seven seconds

One net migration loss of one citizen every 2

hours, 47 minutes, and 55 seconds.

B. Distribution of Population

1. Age

0-14 years: 20.1% (male 449,850/female 427,934)

57





65 years and over: 14% (male 280,569/female 328,835)

(2013 est.) (New Zealand, 2014)

2. Sex





65 years and over: 14% (male 280,569/female 328,835)

(2013 est.) (New Zealand, 2014)

3. Geographic Areas

In 2006, the nationwide census declared a total of

4,027,947 residents with 76% of the New Zealand

population living in the North Island. With a land

mass of 103,734 square miles that therefore

translates into a population density of around 39

citizens living in every square mile of New Zealand

territory (New Zealand, 2014).

58


4. Migration Rates and Patterns

The main urban areas in New Zealand consists of a

population of more than 30,000 with 69% of

Europeans, 65% Māori, 92% Pacific peoples, 94% Asian

and 91% of other nationalities. The secondary urban

area in New Zealand consists of a population around

10,000-29,999 with 7% of Europeans, 7% Māori, 3%

Pacific peoples, 2% Asian and 2% of other

nationalities. The minor urban area in New Zealand

consists of a population around 1,000-9,999 with 9%

of Europeans, 13% Māori, 2% Pacific peoples, 2%

Asian and 3% of other nationalities. This gives us a

total figure of 84% of Europeans, 84% Māori, 97%

Pacific peoples98% Asian and 96% of other

nationalities in the urban areas of New Zealand. The

Rural areas show 16% of Europeans, 16% Māori, 2%

Pacific peoples, 2% Asian and 4% of other

nationalities (Statistics New Zealand, 2006). The

net migration figures are indeed very interesting

and they ultimately equate to one resident New

59


Zealander leaving the country every three hours or

so. The natural growth element is extremely healthy

however and there are no reasons to suggest that

this is likely to change in the next four years (New

Zealand, 2014).

5. Ethnic Groups

There are many ethnic groups in New Zealand where

each one has their own values. The Māori, and also

non-Māori, place a high value on honoring the Treaty

of Waitangi and Māori rights. The people of New

Zealand favor multiculturalism in general but at

times are also at some point become less welcoming

to immigrants (Levine, 2012).

The New Zealand culture has an ethnic make-up of New

Zealand European, Maori, other European, Pacific

Islander, Asian and others. Its official language

consist of 3 namely, English, Māori and NZ Sign

Language out of which English is the language of

day-to-day business. New Zealanders are generally

friendly, outgoing, somewhat reserved initially yet

60


polite, and enjoy extending hospitality


III. Economic statistics & Activity

New Zealand’s market economy is generally strong, but it also

depends mainly on the major international trading countries

like Australia, United States, European Union China and Japan.

Out of all the nations New Zealand stands the most distant

compared to the other economies of the world, however, this

problem has been reduced because of increased improvements and

investments in the communications and transport sector.

New Zealand has a comparative advantage where a phenomenon

known as “inter-industry trade” in which they could exchange

sheep meat for general utilities, which is possible because

New Zealand has almost 40 million sheep – 10 for each person.

Sheep farming has been crucial in the development of the

economy, and for 130 years was the most important agricultural

industry (Peden, 2013). The service sector in this economy is

quite dominant compared to the other sectors like production,

employment, manufacturing (including prestige industries like

61


jet aircraft construction), ultimately lacking a

technologically sophisticated skilled workforce (Easton,

Economy - Distinctive features, 2013).

A. Gross National Product (GNP or GDP)

1. Total

New Zealand’s GDP in 2012, according to the World

Bank, was $171.3 billion (World, 2014)

2. Rate of Growth (GNP or GDP)

New Zealand’s GDP in 2012 was recorded to be a 3%

annual GDP growth. Their GNI per capita GNI per

capita based on purchasing power parity (PPP) was

recorded at $32,620 (World Bank, 2014). New Zealand

has about 0.1% of the world’s population; its

economy produces about 0.3% of the world’s material

output.

The Commerce Act formed to support competition using

fair trade practices was formed and was undergoing a

revision in 2008 (Evans, Law and the economy -

Regulation of economic activities, 2012). There is a

strong commitment to open-market policies that

62


facilitate engagement in global commerce and also

providing great flexibility to start-up companies.

Flexibility in labor regulations help to facilitate

a vigorous labor market thus increasing the overall

productivity (2014 Index of Economic Freedom, 2014).

B. Personal income per capita

Personal income in a 289,000 population is recorded at

$128,556 million with a 255,000 median (Cheung,

Rashbrooke, Raad, & Scobie, 2007)

C. Average Family Income

Household consumption is around 60.3%. By the end of

March, 2012 household expenditure increases by 2.2%

(Gross Domestic Product: March 2012 quarter, 2012).

D. Distribution of Wealth

1. Income Classes

The income classes in New Zealand consist of the

rich 1%, very little medium classes at an estimate

of 40% and the remaining live in the rural areas in

New Zealand (Easton, Income and wealth distribution

- Wealth, 13).

63


2. Proportion of the Population in each class

Wealth is much more unequally distributed than

income. The 2003/4 SoFIE (Survey of Family, Income

and Employment) survey found that the top 10% of

economic units owned 51.8% of the net wealth of

households. They averaged $835,000 each in 2001. The

top 1% owned 16.4% of wealth, averaging $2.6 million

each. The bottom 20% of economic units had zero or

little wealth – some were in debt (Easton, Income

and wealth distribution - Wealth, 13).

3. Is the distribution distorted?

The distribution of family income is 36.2 on the

Gini index and ranked 84 by country in 1997 (New

Zealand Economy 2014 , 2014). Financial assets such

as bank deposits, superannuation, life assurance and

family trusts together amounted to about a quarter

of the total assets. Shares and managed funds were

6.9%, and possessions such as motor vehicles and

household goods were just over 8% (Easton, Income

and wealth distribution - Wealth, 13).

64


E. Minerals and resources

New Zealand contains a wide variety of mineral deposits

both onshore and offshore that reflect its dynamic

tectonic history. The main minerals include coal, gold,

silver, ironsand, aggregate, limestone, clay, dolomite,

pumice, salt, serpentinite, zeolite and bentonite. In

addition, there are resources or potential for deposits

of titanium (ilmenite beachsands), sulphur, phosphate,

silica, platinum and mercury.

Extensive metallogenic mapping has documented a range of

deposit types including epithermal gold-silver, orogenic

gold, porphyry copper-gold and molybnenum, lead-zinc

skarns, placer gold, and shoreline placer iron-vanadium

and titanium (New Zealand's minerals, 1995).

F. Surface Transportation

1. Modes

Transport in New Zealand, with its mountainous

topography and relatively small population, mostly

located close to the long coastline, has always

faced many transport challenges. Before Europeans

65


arrived, Māori either walked or used watercraft on

rivers or along the coasts. Later on, European

shipping and railways revolutionized the way of

transporting goods and people, before being

themselves overtaken by road and air, which are

nowadays the dominant forms of transport. However,

bulk freight continues to be transported by coastal

shipping and by rail transport (New Zealand

Transportation, 2009).

2. Availability, cost and user rates I asked for

these to be separated

Highways: The New Zealand State Highway

network, which provides the backbone

infrastructure between towns, is administered

by Transit New Zealand. While its origins are

earlier, the system was strongly extended after

World War II. Other roads and streets are

managed by city or district councils. Some

roads are under the control of the New Zealand

Department of Conservation.

66


All funding for state highways and around 50%

of funding for local roads comes directly from

road users through the National Land Transport

Fund. The remainder of funding for local city

and district roads primarily comes from local

authority property rates. The maximum speed

limit on the open road is 100 km/h, with 50

km/h the common limit in residential areas.

Speed limits of 60, 70, and 80 km/h are also

used. Speeds are often reduced to 30 km/h

beside road works (New Zealand Transportation,

2009).

Railways: There is a total of 3,898 km of

railway line in New Zealand, built to the

narrow gauge of 1067 mm. Of this, 506 km is

electrified (2002 data). The national network

is owned by the New Zealand Railways

Corporation, trading as ONTRACK, a state-owned

enterprise. The national network consists of

three main trunk lines, seven secondary main

67


lines and during its peak in the 1950s, around

ninety branch lines. The majority of the

latter are now closed. Most lines were

constructed by government, but a few were of

private origin, later nationalized (New

Zealand Transportation, 2009).

Water transport: New Zealand has a long

history of international and coastal shipping.

Both Maori and the European settlers arrived

from overseas, and during the early European

settler years, coastal shipping was one of the

main methods of transportation. The two main

islands are separated by Cook Strait, 24 km

wide at its narrowest point, but requiring a

70-km ferry trip to cross. This is the only

large-scale long-distance car / passenger

shipping service left, with all others

restricted to short ferry routes to islands

like Stewart Island or Great Barrier Island.

New Zealand has 1,609 km of navigable inland

68


waterways; however these are no longer

significant transport routes (New Zealand


Ferry services: Regular roll-on roll-off

ferry services link the North and South

Islands between Wellington and Picton. Toll

NZ, a division of Australian firm Toll

Holdings, owns the main inter-island ferry

service, the Interislander. Two of the three

ferries used by the Interislander, the Arahura

and the Aratere, are rail ferries with special

rail decks. The largest and newest ferry,

Challenger (marketed as Kaitaki) came into

operation in September 2005 (New Zealand


Airports: There are 113 airports in New

Zealand (2002 EST.). The main international

airport is Auckland Airport, which handled

about 11 million passengers in 2005.

Christchurch Airport and Wellington Airport

69


each handle about 4 million passengers per

year (New Zealand Transportation, 2009).

3. Usage Rates??

4. Ports??

G. Communication Systems

1. Types

New Zealand communication systems include

Telephones, Radio, Television and Internet

(Telecommunications in New Zealand, 2014).

2. Availability and Usage Rates I asked for these to be

separated

New Zealand’s calling code is 64. The same code is

also used to reach Scott Base in Antarctica and the

United States base McMurdo Station nearby. There are

approximately 4.7 million mobile connections in 2010

alone. The communications coverage is available to

97% of the population. The fixed line connections

cover 1.2 million of the populations.

There is even a telecommunications levy where the

government charges $50 million annually to fund

70


improvements to the communications infrastructure.

This is necessary because New Zealand is the

farthest country and requires advanced

telecommunications and maintenance to keep the

country in touch with the rest of the world


H. Working Conditions

1. Employer-Employee Relations

Relations with between are usually cordial. A union

and bargaining system is allowed there by giving the

employee the opportunity to be covered by the union

in terms of negotiating an employment agreement

(Employment conditions).

2. Employee Participation

The occupational and safety laws entail all the

employers to provide a safe working environment, but

employees are also entitled to follow the safety

procedures (Employment conditions).

3. Salaries and Benefits

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The working conditions and environment are generally

good in both public and private sectors. The

employee is entitled to receive minimum wages by law

if one is 16 or older. But there are exemptions in

terms of an internship or apprenticeship (Employment

conditions).

I. Principal Industries

1. What Proportion of the GNP does each industry

contribute

Tourism: Being an isolated country, tourism in

New Zealand is considered a very important

contributor to country’s economy, way of life and

its GDP. Tourism in New Zealand contributes 9% to

the GDP, which still remains as the country’s second

largest foreign exchange earner while directly or

indirectly employing 1 in 9 New Zealand citizens

(The Power of Tourism). According to the

International Visitor Arrivals report of 2013,

visitors come from many countries out of which the

highest is 45.5% of Italians followed by 36.2% of

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Chinese visitors. Reasons for their visit has shown

a 40.4% visiting for conferences & conventions and

only 14.6% visiting friends & relatives. Majority of

the visitors are shown to be between the age groups

of 54 and above (Aotearoa, 2013).

Other Industries: Until the 1980s much industrial,

interior, graphic, jewelry and fashion design in New

Zealand was heavily influenced by international

trends. In addition, New Zealand’s geographical

isolation and import restrictions, which limited the

availability of new technology, meant that local

design had a somewhat home- grown feeling.

Mechanical inventions such as the Hamilton jet boat

engine and the John Britten motorcycle, along with

clothing, backpacks and equipment for the outdoors,

revealed an innovative side to New Zealand design.

By the mid-1990s, there was a new feeling of

confidence as designers used Māori, Pacific and New

Zealand images and materials in their work, and a

style called ‘Pacific minimalism’ emerged.

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Various organizations were established to foster New

Zealand design from 1949 onwards. The New Zealand

Industrial Design Council operated from 1967 until

the late 1980s. Finally in 1991 the remaining

organizations merged to form the Designers Institute

of New Zealand, promoting graphic, spatial,

industrial, fashion and craft design, and the

management and teaching of these disciplines.

The architecture of New Zealand has been strongly

influenced by overseas trends. In the mid-19th

century British immigrants favored the building

types they had left behind. Later European and

American styles became fashionable. Some notable

examples of imported architectural ideas include the

Gothic revival style of the 1840s–1860s, as

interpreted by English architects Benjamin Mountfort

and Frederick Thatcher, and the modernist aesthetic

introduced in the 1930s by European architects such

as Ernst Plischke. (Swarbrick, Creative life -

Music, 2012).

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GDP by industry – primary, goods-producing, and

services all up

Agriculture at highest level in five years:

Activity in the primary industries increased 2.4

percent in the March 2012 quarter. This is the

largest increase in the primary industries since a

3.8 percent rise in the September 2009 quarter. The

largest contributor to the latest rise was a 2.1

percent increase in agriculture, forestry, and

fishing activity, driven by a 2.3 percent increase

in the agriculture industry. Higher milk production,

due to continued good growing conditions throughout

the March 2012 quarter, was the main contributor to

the latest increase in agriculture. Activity in the

agriculture industry is now at its highest level

since the December 2006 quarter, and is 7.5 percent

higher than in the March 2011 quarter.

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Forestry and logging falls: Partly offsetting the

increase in agriculture activity was a 1.4 percent

fall in forestry and logging activity. This is its

second consecutive quarterly decline, following a

0.6 percent fall in the December 2011 quarter and

after 11 consecutive quarters of growth. In the

March 2012 quarter, exports of forestry primary

products declined, reflecting the fall in activity.

Mining activity increased 3.4 percent in the March

2012 quarter, following increases in the December

2011 and September 2011 quarters (2.1 percent and

3.2 percent, respectively). The latest increase in

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activity was due to a rise in exploration and other

services to mining. Despite mining increasing over

the three quarters, the level of activity in the

March 2012 quarter is still 2.4 percent lower than

in the March 2011 quarter.

Primary industries fall for year due to mining: For

the year ended March 2012, primary industry activity

was down 0.5 percent, when compared with the year

ended March 2011. This was mainly due to the mining

industry, where activity in the year ended March

2012 was down 12.7 percent when compared with the

year ended March 2011.

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Manufacturing pushes up activity in goods-producing

industries: In the March 2012 quarter, activity in

the goods-producing industries rose 1.0 percent.

This followed declines in all four quarters of 2011.

Activity in the goods-producing industries declined

in 13 of the past 17 quarters. These decreases have

resulted in activity in the March 2012 quarter being

11.6 percent lower than the peak level, which was in

the December 2007 quarter. The main driver to the

rise in goods-producing activity this quarter was a

1.8 percent increase in the manufacturing industry.

Other goods-producing industries recorded declines

in the March 2012 quarter, with electricity, gas,

water, and waste services falling 0.7 percent, and

construction declining 0.1 percent.

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Increased activity in manufacturing followed a

decline of 1.9 percent in the December 2011 quarter.

A 3.2 percent increase in food, beverage, and

tobacco manufacturing was the main contributor to

the latest rise, mainly driven by an increase in

dairy product manufacturing. Meat product

manufacturing also increased. Both of these rises

are consistent with increased exports of these

products this quarter.

The Economic Survey of Manufacturing: March 2012

quarter reported a 0.9 percent fall in the volume of

meat and dairy sales. The ESM measures sales, while

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GDP measures production. Direct volume measures are

used to estimate meat and dairy production in

GDP. The indicator for meat manufacturing in GDP is

livestock slaughters, while for dairy the physical

volume of dairy products produced is used.

Also contributing to the rise in manufacturing was a

6.1 percent increase in metal product manufacturing.

This is the largest increase since a 10.0 percent

rise in the June 2001 quarter. Exports of metal

products, machinery, and equipment declined this

quarter contributing to the build-up in

manufacturing inventories.

Partly offsetting these increases in manufacturing

were declines in:

petroleum, chemical, polymer, and rubber

product manufacturing, down 1.4 percent

Transport equipment, machinery, and equipment

product manufacturing, down 1.5 percent

Electricity, gas, water, and waste services decline:

Activity in electricity, gas, water, and waste

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services was down 0.7 percent in the March 2012

quarter. This is the fourth consecutive quarterly

fall for the industry, which has resulted in

activity for the year ended March 2012 being 2.3

percent lower than the year ended March 2011. This

is the largest annual decline for this industry in a

March year since a 3.4 percent fall in the year

ended March 2002. The fall in the latest quarter is

due to a decline in electricity generation and on-

selling value added.

Construction activity remains low: Construction

activity was flat in the March 2012 quarter, down

0.1 percent or $1 million, following a 2.5 percent

increase in the December 2011 quarter. Within

construction, residential building activity

declined, with this almost being fully offset by a

rise in non-residential building construction. Both

of these movements are consistent with investment as

shown in gross fixed capital formation, with

investment in residential buildings declining, and

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investment in non-residential buildings increasing

this quarter. Additionally, the level of activity in

the construction industry this quarter is 25.0

percent below the peak in the December 2007 quarter,

and is similar to levels last recorded in the

December 2003 quarter.

The Value of Building Work Put in Place: March 2012

quarter information release reported that Canterbury

showed increased signs of post-earthquake rebuild

activity, particularly for non-residential work. The

indicators for the rest of New Zealand showed

moderately reduced building activity.

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Goods-producing industries down for year due to

construction: For the year ended March 2012,

activity in the goods-producing industries was down

0.6 percent compared with the year ended March 2011.

An 8.1 percent fall in construction activity for the

year ended March 2012, when compared with the

previous year, was the main contributor to this

fall. Activity in manufacturing was up 3.1 percent

over the same period, partly offsetting the fall in

construction. This is the first time manufacturing

activity has risen in a March year since March 2008.

Services industries up: In the March 2012 quarter

activity in the service industries rose 0.4 percent,

following a 0.8 percent rise in the December 2011

quarter.

Professional, scientific, technical, administrative,

and support services activity increased 2.0 percent

in the March 2012 quarter, the largest contributor

to the overall increase in services activity. This

industry includes business services, such as legal

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and accounting, scientific research, and

advertising. The latest rise is the fifth

consecutive quarterly increase, and follows a 2.1

percent increase in the December 2011 quarter.

Health care and social assistance, wholesale trade,

and public administration and safety up: Health

care and social assistance activity increased 1.3

percent in the March 2012 quarter, following

increases of 1.0 percent and 1.5 percent in the

December 2011 and September 2011 quarters,

respectively. The increase in the latest quarter is

reflected in the household consumption expenditure

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component on the expenditure measure of GDP, where

the volume of spending on health increased.

Wholesale trade activity (up 1.2 percent) also

contributed to the increase in service activity this

quarter.

Public administration and safety activity increased

1.4 percent in the March 2012 quarter, following a

revised 0.6 percent decline in the December 2011

quarter. Within public administration and safety,

both local government administration (up 1.5

percent), and central government administration,

defense, and public safety (up 1.4 percent)

contributed to the latest rise. The latest rise in

central government administration, defense, and

public safety follows a revised 0.3 percent fall in

the December 2011 quarter.

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Information media and telecommunications, and retail

trade and accommodation down: Partly offsetting the

increases in health care and social assistance,

wholesale trade, and public administration and

safety was lower activity in information media and

telecommunication services (down 3.0 percent), and

retail trade and accommodation (down 0.6 percent).

The latest decline in information media and

telecommunications is the largest since a 3.4

percent fall in the March 2006 quarter. The fall

this quarter was driven by a fall in

telecommunication services. This is reflected in

lower expenditure on telecommunication services by

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households, as measured in household consumption

expenditure. Under the new industry classification

(Australian and New Zealand Standard Industrial

Classification 2006 or ANZSIC06), the information

media and telecommunication services series is not

seasonally adjusted as it has no seasonal pattern.

The previous series for communication services was

seasonally adjusted as it had a stronger seasonal

pattern due to postal services also being included

in the industry.

The 0.6 percent fall in retail trade and

accommodation activity is the first decline since a

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0.9 percent fall in the December 2010 quarter. The

level of activity for retail trade and accommodation

reached a record-high in the December 2011 quarter,

with the 2011 Rugby World Cup tournament

contributing to this. Despite the fall in the latest

quarter, the level of activity still remains high,

with activity in the March 2012 quarter 0.7 percent

higher than the previous peak in the March 2007

quarter. The fall in the latest quarter was mainly

driven by a 1.8 percent decline in accommodation and

food services, while retail trade activity was flat.

In the year ended March 2012, activity for retail

trade and accommodation was 4.5 percent higher than

the year ended March 2011. This was mainly due to

large quarterly increases in the December 2011, and

September 2011 quarters, with the 2011 Rugby World

Cup tournament spanning across these two quarters.

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Annual increase in services strong: For the year

ended March 2012, activity in the service industries

increased 2.2 percent. This is the largest annual

growth in the service industries since a 2.4 percent

increase in the year ended June 2008. The main

contribution to the latest rise was a 7.8

percent rise in professional, scientific, technical,

administrative, and support services. This is the

largest annual increase in this industry since an

8.1 percent increase in the year ended December

2002.

Expenditure on GDP up 0.8 percent

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Expenditure on GDP increased 0.8 percent in the

March 2012 quarter, following an increase of 0.4

percent in the December 2011 quarter.

While the production-based measure and the

expenditure-based measures are both official series,

the production-based measure historically shows less

volatility and is the preferred series for quarter-

on-quarter changes.

For the year ended March 2012, expenditure on GDP

increased 1.0 percent compared with the year ended

March 2011 (Gross domestic product (GDP): March

2012, 2012).

Ratio of Private to Publicly Owned Industries:

State-owned enterprises are government-owned

companies created by the State-Owned Enterprises Act

1986. They are often referred to by the acronym SOE.

In the government's accounts for the year to June

2010, 17 state-owned enterprises plus Air New

Zealand had combined total assets of $53 billion and

revenues of over $13 billion. Air New Zealand is not

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technically a state-owned enterprise, but is treated

as one in the government accounts (Laking, 2012)

In 2011 the biggest state-owned enterprises were:

KiwiRail.

New Zealand Post (including Kiwibank).

Genesis Power and Mighty River Power, which

generated and sold electricity.

Transpower, which operated the national

electricity grid.

Landcorp, the farming and land sales business.

Solid Energy, which mined and sold coal

(Laking, 2012)

J. Foreign investment

1. Opportunities?

New Zealand's stable economy and political system,

reputation for innovation and the ease of doing

business make it an attractive place to invest.

New Zealand has many industries that provide

opportunities for a foreign investment (Sectors of

opportunity).

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2. Which Industries?

Some of the industries that provide opportunities

for a foreign investments are clean technology, food

and beverage, fund investment, high-value

manufacturing, information and communications

technology, infrastructure, life sciences, petroleum

and minerals, resource manufacturing (Sectors of

opportunity).

K. International Trade Statistics

1. Major exports

With annual exports in excess of NZ$13.7 billion,

the dairy industry is New Zealand’s biggest export

earner, accounting for more than 29% by value of the

country’s merchandise exports (Dairying Today).

a. Dollar value: New Zealand’s dollar climbed to

within 0.7 percent of a post-float record after

stronger-than-expected exports added to the

currency’s allure amid signs of an uneven

recovery in the U.S. economy.

New Zealand’s currency rose this month after

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Reserve Bank Governor Graeme Wheeler increased

interest rates for a third time in 2014 (Aquino

& Buckland, 2014).

b. Trends: China has overtaken Australia as New

Zealand's biggest export market for the first

time, buying more meat, dairy products and pine

logs; while shipments across the Tasman have

fallen (China overtakes Australia as NZ's top

export market, 2013).

The top 5 Products exported by New Zealand are

Concentrated Milk (14%), Sheep and Goat

Meat (6.3%), Crude Petroleum

(5.1%), Butter (4.9%), and Rough Wood (4.1%).

The top 5 Export destinations of New Zealand

are Australia (20%), China (12%), United

States (8.1%), Japan (7.7%), and South

Korea (3.6%) (New Zealand).

2. Major imports

a. Dollar value: China is the largest trading

partner for New Zealand and Australia and the

93


drop may weigh on the Australasian currencies

(NZ dollar little changed, may fall on drop in

Chinese imports, 2014).

b. Trends: China has recently become New

Zealand's largest import provider, rising from

6.2% of total merchandise imports in 2000 to

16.3% in 2012, ahead of Australia at 15.2%. The

major imports from China are machinery,

clothing, furniture and toys. New Zealand's

imports from China have arguably had a greater

impact on the New Zealand economy than its

exports to China as the total value of

merchandise imports has exceeded exports since

1990 (New Zealand's imports from China, 2012).

Top 5 Products imported by New Zealand are

Crude Petroleum (11%), Cars (5.6%), Refined

Petroleum (5.1%), Computers (2.6%),

and Packaged Medicaments (1.9%)

Top 5 Import origins of New Zealand are

Australia (16%), China (16%), United

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States (9.9%), Japan (6.1%), and

Singapore (4.8%) (New Zealand).

3. Balance-of-payments situation

a. Surplus or deficit?: New Zealand's seasonally

adjusted current account balance was a deficit

of $0.6 billion in the March 2014 quarter. An

increase in the value of goods exports,

combined with higher spending by overseas

visitors to New Zealand contributed to the fall

in the current account deficit this quarter

(Gordon & MacPherson, 2014).

b. Recent trends: Record dairy exports have seen

New Zealand's current account deficit slashed

to just $837 million in the December quarter.

The deficit is $1.7 billion smaller than in the

September quarter.

The annual current account deficit had improved

massively from 4.1 per cent of gross domestic

product for the 12 months to the end of

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September to just 3.4 per cent to the end of

December (Weir).

4. Exchange Rates

a. Single or Multiple Exchange Rates: Single

b. Current Rate of Exchange:

c. Trends: The New Zealand Dollar was initially

pegged to the US Dollar at a rate of 1.62 USD

to 1 NZD. The peg rate changed multiple times

until 1985, when the currency began to freely

float in the market. In 1979, a new design for

the New Zealand Dollar was released in an

attempt to modernize, with the new bills being

made of polymer. Since that year, there have

been no coins under the value of five cents and

the values of cash transactions are rounded

(NZD - New Zealand Dollar, 2014). New Zealand’s

currency is known as the New Zealand Dollar

96


(NZD) or informally known as the “kiwi dollar”

(New Zealand: Country And Foreign Investment).

As per recent stats, NZD had strengthened 5.5%

compared to the U.S. Dollars (USD)

(thestar.com-BUSINESS).

L. Trade Restrictions

1. Embargoes

N/A

2. Quotas

N/A

3. Import Taxes

N/A

4. Tariffs

N/A

5. Licensing

N/A

6. Customs Duties

N/A

Trade is critical for New Zealand’s economic well-being

and growth prospects. Only by selling goods and services

97


to other countries can New Zealand pay for the goods and

services it imports from overseas. International trade

(exports and imports) accounts for around 60 percent of

New Zealand’s total economic activity. In 2013,

New Zealand’s merchandise exports totaled $48 billion,

while service exports totaled $16 billion (Trade

Relationships and Agreements, 2014).

Free trade agreements (FTAs) are designed to assist New

Zealand traders (exporters and importers) by providing

improved access to partner markets, and reducing trade

barriers in those markets.

An FTA establishes:

preferential tariff rates for goods when imported

into the countries party to that Agreement

rules by which goods can qualify for those

preferential tariffs (rules of origin)

customs procedures for claiming preferential tariff

rates (rules of origin procedures)

General principles for customs procedures among the

countries party to an Agreement: these commit each

98


country to facilitate trade by providing customs

procedures which are always predictable, transparent

and fair.

NZ Exporters looking to trade into a country we have

a free trade agreement with should first make sure

that they:

Read the relevant Agreement before exporting

Understand the preferential tariff rates that apply

specifically to their products (most tariff rates

will be phased out over time and gradually reduced

to zero)

Establish whether or not their products qualify as

originating in New Zealand as set out in the Rules

of Origin Chapter and the Product Specific Rules

Schedule

Fully understand the procedures that should be

followed including documentary requirements when

claiming preference

Check all of the above for the specific Agreement

for the market in question (tariff rates, rules of

99


origin and procedures vary between agreements).

(Free Trade Agreements)

M. Extent of economic Activity not included in cash income

activities

1. Countertrades

New Zealand have required countertrade in government

procurement although not to the same degree

Australia requires offsets for major government

procurements with foreign suppliers 5 New Zealand

encourages countertrade proposals in all government

tenders where the bid exceeds $2 million Canada has

also required offsets in the procurement of major

weapons systems

a. Products generally offered for countertrading

b. Types of countertrades requested

2. Foreign Aid Requested

New Zealand can be seen as a land of innovations

because of its geographical location. The people had

to get creative which made New Zealand as a

recognized place for innovations, education and

100


other activities that may or may not give them an

inflow of cash.

N. Labor Force

1. Size

The number of employed persons in New Zealand is

recorded to be 231,800 while Labor Force

Participation Rate is recorded at 69.3%. Wages paid

is known to be 28.20 NZD per hour (New Zealand |

Economic Indicators, 2014).

2. Unemployment Rates

Unemployment rate in January, 2014 alone is was

147,000, showing a 6% unemployment rate. The

retirement age for both men and women is at 65 years

of age (New Zealand | Economic Indicators, 2014).

O. Inflation Rates

The inflation rate of New Zealand up to march 2014 was

noted at 1.5% (New Zealand Inflation Rate History - 2004

to 2014, 2014).

IV. Developments in Science and Technology

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A. Current technology available

There is large number of technology available in New

Zealand. The graphic computers in New Zealand have helped

in the production of many huge Hollywood animation movies

like Boogeyman and special animations in lord of the

rings.

Information and technology has been growing at a fast

rate with the total estimation of 1.5 billion in the

previous year. The software industry had a growth rate of

66% in four years. Almost all of the houses have

personal computers and Internet.

B. Percentage of GNP invested in research and development

New Zealand spends a lot on information and technology.

Around 14.4% of GDP is spending on information and

technology, which is higher than the United States.

C. Technological skills of the labor force and general

population

The population of New Zealand has well knowledge about

the technologies available in the country. They make

perfect use of the technology available and are trying

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further to innovate new technologies (New Zealand Embassy

Beijing, China).

V. Channels of distribution (macro analysis)

A. Retailers

1. Number of Retailers

N/A

2. Typical Size of Retail Outlets

N/A

3. Customary Markup for Various Classes of Goods

N/A

4. Methods of Operation

N/A

5. Scale of Operation

N/A

6. Role of Chain Stores, Department Stores and

Specialty Shops

There are numerous retailers operating in New

Zealand. Life Pharmacy Ltd, New World and Neol

Leeming are some of the retail outlets having chain

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of retail outlets. All the transactions are made on

cash basis in retail outlets (Retail Chains).

B. Wholesale Middlemen

1. Number and Size

N/A

2. Customary Markup for Various Classes of Goods

N/A

3. Methods of Operation

N/A

C. Import/Export Agents

N/A

D. Warehousing

There are a few companies who take care of the ware house

needs of the company as when required.

E. Penetration of Urban and Rural Markets

While New Zealand does get a good amount of sunshine

(approx. 2500 hours yearly) in most parts of the country

(New Zealand’s Sunshine, 2013), the inclusion of solar

panels can help reduce dependence on fossil fuels aiming

towards a greener economy while reducing costs for the

104


country’s economy as a whole. Nearly a third of the total

energy consumed – including electricity, heat and

transport fuels – comes from renewable sources. About 70%

of all electricity is generated by renewable energy

(Meduna, 2013). So market entry into this segment will

not be a problem as the economy is already open to this.

Only about 0.2% of homes have grid connected PV (Photo

Voltaic) systems, but the use of PV is increasing (Solar,

2014).

VI. Media

A. Availability of Media

New Zealand communication systems include Telephones,

Radio, Television and Internet (Telecommunications in New

Zealand, 2014).

B. Costs

1. Television

New Zealand television spot rates (for 30 seconds);

range from

$200 to $19,000. Pay TV in New Zealand is the domain

of SKY TV. First founded in 1987 it now has close to

105


722,000 subscribers nationwide. Mainstream channels

on SKY are Sports, Movies, News and Sky1 on the UHF

frequency. In late 1998, a further service was

launched utilizing satellite delivery, which beams

in further channels to subscribers - (Sport2, Rugby

Channel, ESPN, CNN, CNBC Asia, Hallmark, TNT, Juice,

Animal Planet, National Geographic, Discovery,

Living Channel, Movie, Movies Great, Food TV,

History, Vibe, Cartoon Network, E!, CI and UKTV).

More than 80% of subscribers to SKY are now on the

digital delivery system (new ealand television,

2012).

2. Radio

Radio broadcast stations: AM 124, FM 290, shortwave

4 (1998), 4 on Free view digital satellite. Radios:

3.75 million (1997) (Telecommunications in New

Zealand, 2014).

3. Print

Newspaper coverage costs $1.70 on Monday to Friday

and $3.00 on Saturday. To calculate the cost of

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advertisement multiplies the depth of the

advertisement by the width of advertisement (no. of

columns) by the appropriate rate. E.g.; 20 cm x 3

columns x $17.97 = $1078.20. All rates are exclusive

of GST. The Average Issue circulation is shown at

194,000 and a weekly Coverage is shown at 341,000

(The Press, 2014).

4. Other Media

Social media can be used as it is one of the most

extensively used platforms.

C. Agency Assistance

There are many advertising agencies in New Zealand some

of the best ones include True, Y&R NZ, Colenso BBDO,

Barnes Catmur& Friends, WHYBIN TBWA and TEQUILA& Ogilvy &

Mather New Zealand each of whom has different creative

ways of advertising products (WILL, 2013).

D. Coverage of Various Media

Television broadcast stations: 41 (plus 52 medium-power

repeaters and over 650 low-power repeaters) (1997).

Radio broadcast stations: AM 124, FM 290, shortwave 4

107


(1998), 4 on Free view digital satellite. Radios: 3.75

million (1997) (Telecommunications in New Zealand, 2014).

E. Percentage of population reached by each medium

There are transmissions of 4 nationwide free-to-air

networks and a few regional or local single transmitter

stations. Analogue to be phased out by end of 2013.

Digital Satellite pay TV is also available and carries

most terrestrial networks. Free view digital free

satellite with a dozen SD channels, with SD feeds of the

terrestrial HD free view channels. Free view, free-to-air

digital terrestrial HD and SD content. Cable TV is

available in some urban areas in conjunction with

telephone services. The internet usage recorded in 2002

was 2.11 million, Radios: 3.75 million


4. MARKET AUDIT AND COMPETITIVE MARKET ANALYSIS

I. Introduction:

A brief introduction about the SolarCity Corporation. The

company was started on June 21, 2006. SolarCity was funded by

108


Elon Musk. He also holds the position of Chairman of the Board

(People: SolarCity Corp (SCTY.O)). But the founders are

Lyndon Rive, who serves as the Chief Executive Officer, and

Peter Rive who serves as the Chief Technology Officer and

Director.

The company’s overall goal is to promote the usage of

renewable source of energy production and consumption while at

the same time educating and providing the consumers the

service to efficiently manage their consumption of energy in

their own homes in order to generate better savings, both

financially and energy wise. Bringing these products to New

Zealand will be relatively easy mainly because the country is

already open and is currently using renewable sources of

energy, primarily harnessing energy from water sources, wind

farms and tidal wave energy as these resources are abundant in

the land.

II. The Product

A. Evaluate the product as an innovation it is perceived by the

intended market:

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The product that I have chosen is Solar panels that would

help bring a trend encouraging energy production from a

renewable source of energy.

1. Relative Advantage:

The company has found a way to bring solar energy, a

renewable energy source, which can be generated on

site, to the houses of many residents during its

operations. As of December 12, 2012, the company

served customers in 14 states. SolarCity provides

this product to not only residents but also to many

customers in the business sectors, including

technology, retail, manufacturing, agriculture,

nonprofit and houses of worship. The company has

also gained contract agreements from the government

to install solar energy systems for the United

States Air Force, Army, Marines and Navy, and the

Department of Homeland Security (Profile: SolarCity

Corp (SCTY.O)). The same strategy could be applied

to New Zealand as it is relatively a smaller country

and SolarCity can accomplish the same feat faster.

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2. Compatibility

New Zealand is a strong supporter of renewable sources

of energy. Nearly a third of the total energy consumed

– including electricity, heat and transport fuels –

comes from renewable sources. About 70% of all

electricity is generated by renewable energy (Meduna,

2013). So market entry into this segment will not be a

problem as the economy is already open to this.

3. Complexity

The company’s products are essentially renewable

energy, created by using solar panels that convert

sunlight into electrical current. SolarCity had managed

to complete over 13,000 home energy evaluations and

also perform over and above 2,000 energy efficiency

upgrades, since December 12, 2012 (Profile: SolarCity

Corp (SCTY.O)).

4. Trialability

SolarCity uses many software applications in order to

keep track of its customers and their requests,

management, projects and also tracking software that

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can help to accurately enable a detailed analysis and

customized graphical presentation of each customer’s

savings (People: SolarCity Corp (SCTY.O)).

5. Observability:

One can observe SolarCity’s panels in action once the

installation of the gauges that read the amount of

electricity produced or a sample of this in the

SolarCity’s few retail or company sites. Another way to

truly observe and receive the benefit of this product

is when the owner of this product notices a significant

amount of savings in his utilities bill every month for

the foreseeable future.

B. Major problems and resistances to product acceptance based

on the preceding evaluation


(approx. 2500 hours yearly) in most parts of the country

(New Zealand’s Sunshine, 2013), the inclusion of solar

panels can help reduce dependence on fossil fuels aiming

towards a greener economy while reducing costs for the

country’s economy as a whole. Nearly a third of the total

112


energy consumed – including electricity, heat and transport

fuels – comes from renewable sources. About 70% of all

electricity is generated by renewable energy (Meduna, 2013).

Since New Zealand is already committed to using more

renewable resources, the acceptance of SolarCity’s solar

panels will not have much resistance.

III. The market

A. Describe the market(s) in which the product is to be sold

1. Geographical region(s)

New Zealand, also called Aotearoa New Zealand

(Ministry for the Environment), lies about 1,600 km

from both Australia and Polynesia. According to

TeAra (Easton, Economy - Distinctive features,

2013). The climate in New Zealand consists of mild

temperatures, moderately high rainfall, and many

hours of sunshine throughout most of the country.

New Zealand's climate is dominated by two main

geographical features, the mountains and the sea.

Depending on one’s location in New Zealand, the

113


weather for summer, autumn, winter and spring

seasons varies (New Zealand Weather and Climate,

2014).

2. Forms of transportation and communication available

in that (those) region(s)

Transport in New Zealand, with its mountainous

topography and relatively small population, mostly

located close to the long coastline, has always

faced many transport challenges. Before Europeans

arrived, Māori either walked or used watercraft on

rivers or along the coasts. Later on, European

shipping and railways revolutionized the way of

transporting goods and people, before being

themselves overtaken by road and air, which are

nowadays the dominant forms of transport. However,

bulk freight continues to be transported by coastal

shipping and by rail transport (New Zealand


New Zealand communication systems include

telephones, radio, television and Internet. New

114


Zealand’s calling code is 64. The same code is also

used to reach Scott Base in Antarctica and the

United States base McMurdo Station nearby. There are

approximately 4.7 million mobile connections in 2010

alone. The communications coverage is available to

97% of the population. The fixed line connections

cover 1.2 million of the populations.

There is even a telecommunications levy where the

government charges $50 million annually to fund

improvements to the communications infrastructure.

This is necessary because New Zealand is the

farthest country and requires advanced

telecommunications and maintenance to keep the

country in touch with the rest of the world


3. Consumer buying habits

a. Product-use patterns: Solar energy is not yet

extensively used. Less than 2% of homes had a

solar water-heater in 2004, but interest is

growing (Meduna, 2013). Only about 0.2% of homes

115


have grid connected PV systems, but uptake of PV

is increasing (Solar, 2014).

b. Product feature preferences: About 2% of

homeowners in New Zealand have solar water heating

systems (Solar, 2014). Therefore this seems to be

the only preference at this time. But generating

electricity in their own homes for their own

houses can be a preferred investment in a way that

would only help each consumer.

c. Shopping habits: The solar market has yet to

fully open up before the shopping habits of this

product can have proper patterns.

4. Distribution of the product

a. Typical retail outlets: SolarCity uses a method

where it makes the customers aware by opening

retail shops in the malls, as it is a place that

is the most visited by consumers. The company

would also set up few shops in other places that

attract the crowd.

116


b. Product sales by other middlemen: SolarCity as a

company has never used any middlemen as it

believes in dealing directly with the customers.

As mentioned above, the company would find ways to

make the consumer aware of its product and

primarily educate them on the benefits of using

its product as compared to its competitors.

5. Advertising and promotion

a. Advertising media usually used to reach your

target market(s): The first form of media used to

reach the target customers will be through social

media as it is the best and easiest way to connect

with the customers. This is the age of the social

media and the best form of connections that any

individual or business can enjoy. It is

inexpensive and easy to maintain. Other than that

the traditional forms can be used like the

newspapers, magazines, radio, television,

promotional SMS, and bill boards.

117


b. Sales promotions customarily used (sampling,

coupons, etc.): The sales promotions for this

could include a lucky draw during the launch event

which would require the people to attend a casual

outing on a good day and 5 lucky winners would get

free installation and energy consumption for up to

a year after which the normal charges would

resume. Seasonal discounts on their products could

apply. Along with this, SolarCity provides

insurance in protection against damage and theft,

which means one can use his or her energy savings

on what he or she wants, not insurance (Why

SolarCity, 2014).

6. Pricing strategy

a. Customary markups: The installation of the panels

for this product is free. The company has two

methods of payments for those customers who are

interested. They are a SolarLease or a power

purchase agreement. In the lease method of

payment, the customer opts for a fixed monthly

118


installment. In the power purchase agreement, the

customer opts to pay a fee per kilowatt hour based

on the amount of electricity actually produced by

the solar energy system. However in both

structures, the company also takes a monthly fee

for the power produced by its solar energy systems

(Profile: SolarCity Corp (SCTY.O)).

b. Types of discounts available: Discounts cannot

always be given for this product as it is an

investment for a life time which may only include

minor maintenance schedules and fees. SolarCity

could opt to give discounts through well known

online services like Groupon, which is an

ecommerce company that looks to give limited deals

on products and services to give a boost to the

sales and brand name of the company (SolarCity

Discount, 2014).

B. Compare and contrast your product and the competition's

product(s)

1. Competitors' product(s)

119


a. Brand name: The competitor for SolarCity is

PowerSmart solar electricity.

b. Features: The solar panels provided by this

company are more or less the same. The services

however would differ based on the offers. Some of

the features given are GRID CONNECTED SOLAR

ELECTRICITY & BACK UP SYSTEM, PRE-WIRE, OFF GRID

SOLAR ELECTRICITY SYSTEM, Building integrated PV

systems (BIPV), ASSURANCE &WARRANTY (OUR POWERFUL

SOLAR ELECTRICITY SYSTEMS., 2014).

c. Package: The packages provided by the solar

companies are never definite as this product

requires a fully customized approach as no two

houses are the same. This would mean that the

company would require a specialist to assess the

house and its surroundings. The only difference is

the add-on services which the company provides

(For Home, 2014).

2. Competitors' prices

120


A price range is decided based on the amount of the

consumer’s electricity bill. Based on the consumers

decision on the amount he/she wants save, the

appropriate amount of electricity power production

panels would be proposed to them.

3. Competitors' promotion and advertising methods

The company’s prevailing marketing method is found

on Facebook. (Powersmart Solar, 2014).

4. Competitors' distribution channels

The competitor’s method of distribution is again

direct to the customers without middlemen. The solar

panels are made in-house by a specialized team of

engineers who customize the panels to suit the needs

of the consumer and tailor made for their homes (OUR

POWERFUL SOLAR ELECTRICITY SYSTEMS., 2014).

C. Market size

1. Estimated industry sales for the planning year

The sale for solar panels has just started picking

up as New Zealand so therefore an estimate of

between 200,000 and 700,000 New Zealand Dollars.

121


2. Estimated sales for your company for the planning

year

Estimated Sales for the beginning year would be at

least 300,000 New Zealand dollars.

D. Government participation in the marketplace

1. Agencies that can help you

EECA (Energy Efficiency and Conservation Authority)

is the office that guards the energy and is also the

entity set up by the New Zealand government to

encourage, support and promote energy efficiency,

energy conservation, and the use of renewable

sources of energy. EECA's goal is to maximize the

cost-effective benefits from energy savings for all

New Zealanders, and stimulate the uptake of both

large and small-scale renewable energy where

economic (Solar, 2014).

2. Regulations you must follow

There are currently no written rules or regulations

except for steps and information given to the

consumer and to make this product more affordable

122


for all New Zealanders. There is a step known as

“Designing for the sun” which will give you a home

that keeps one warm and comfortable in a more cost-

effective and environmentally friendly way. With the

right balance of elements one’s home can soak up

free heat from the sun and keep you warm day and

night (Designing for the sun, 2014). No other

regulations exist on this product.

123


5. PRELIMINARY MARKETING PLAN

I. Introduction

The motive of the company is to enter a market segment that

has just started becoming more affordable and provides a

cheaper form of generating electricity in the homes, business

and government establishments.

A. Marketing objectives

1. Target market

The target market would be the general residences,

schools, churches, businesses and government

124


establishments giving them the chance to rely less

on fossil fuels and creating a greener future.

2. Expected sales

Estimated Sales for the beginning year would be at

least 300,000 New Zealand dollars.

3. Profit expectations

The expected profits would be around 4% to 5% of the

overall sales

4. Market penetration and coverage


(approx. 2500 hours yearly) in most parts of the

country (New Zealand’s Sunshine, 2013), the

inclusion of solar panels can help reduce dependence

on fossil fuels aiming towards a greener economy

while reducing costs for the country’s economy as a

whole. Nearly a third of the total energy consumed –

including electricity, heat and transport fuels –

comes from renewable sources. About 70% of all

electricity is generated by renewable energy

(Meduna, 2013). So market entry into this segment

125


will not be a problem as the economy is already open

to this. Only about 0.2% of homes have grid

connected PV (Photo Voltaic) systems, but the use of

PV is increasing (Solar, 2014).

B. Product adaptation or modification

1. Core component

Power generated photovoltaically is produced by the

effect of sunlight on a semiconductor material,

silicon. Raw silicon is processed into wafers and

then cells, the basic building blocks of a

photovoltaic system. The cells are then assembled

and connected to one another to create photovoltaic

modules. These modules, or panels, are the core

components of photovoltaic systems, whether on-grid

or off (Photovoltaic cells, 2013).

2. Packaging component

The solar panels would be packaged in customized

expanded foams that are tailor made for solar

collectors, inverters and photovoltaic modules. But

these components are never handled by the consumer

126


but by the specialized team of installers provided

by the company after assessing the home and roof

style of the concerned customer.

3. Support Services Component

The company has excellent support services which

includes a yearly maintenance and system monitoring

so that the customer can be notified should a

problem arise.

C. Promotion Mix

1. Advertising

a. Objectives: The objective of advertising would be

to reach the potential customers who would want to

make savings on their utility bills in the long

run.

b. Message: The message that is given out is

evidently supporting renewable sources of energy

generation.

c. Costs: The costs for spreading the message will be

relatively inexpensive as these companies can rely

on social media and word-of-mouth which is the

127


most powerful form of advertising. On other forms

of media, the company would mostly advertise

seasonal discounts if any are given.

2. Sales promotions

Sales promotions would be given during periods from

June to August as this is New Zealand’s winter

season.

3. Personal selling

The company wouldn’t use personal selling in this

business but would try to educate the customer on

the benefits of using their products. The customer

can get a free quotation for their residence or

place of business.

4. Other promotional methods

SolarCity can opt to give discounts through well

known online services like Groupon, which is an

ecommerce company that looks to give limited deals

on products and services to give a boost to the

sales and brand name of the company (SolarCity

Discount, 2014).

128


D. Distribution

1. Port Selection

a. Origin of port: N/A

b. Destination port: N/A

2. Mode Selection

a. Railroads: This mode of transport would be used to

deliver the product to the company warehouses or

distributed after an order is made.

b. Air carriers: New Zealand is a small country and

wouldn’t require the assistance of the airways in

their deliveries.

c. Ocean carriers: This mode of transport would be

slow and unnecessary. but since New Zealand is

covered on all sides by water, it would be a

better choice compared to NZ’s road system. But

this mode could be better classified as ferries

that transport goods around with minimal

paperwork.

d. Motor carriers: This mode of transport would be

the most extensively used.

129


Packing

a. Marketing and labeling: Both are done by the

company, itself, with the help of a few

subcontractors.

b. Containerization: N/A

c. Costs: < could not find the information>

4. Documentation required

a. Bill of lading: N/A

b. Dock receipt: N/A

c. Air bill: N/A

d. Commercial invoice: N/A

e. Pro forma invoice: N/A

f. Shipper’s export declaration: N/A

g. Statement of origin: N/A

h. Special documentation: N/A

This product can be made locally using the mineral

resources and also by partnering with the local

businesses to help create their product.

3. Insurance claims

130


N/A

4. Freight forwarder

N/A

E. Channels of distribution

1. Retailers

a. Type and number of retail stores: The company will

set up may be one retail store in each city but

would be primarily to educate the customers rather

than just promote sales. These will mostly be

situated in the malls or any other place where the

crowds are high. Majority of the sales will occur

online giving the people the freedom to order the

product from the comfort of their homes.

b. Retail markups for products for each types: Each

markup will depend on the house or businesses that

require the installation, wiring etc. Though the

company would have certain standards of pricing,

the majority of the operations consist of

customization as no two houses are the same and

the same goes for the wiring and other

131


installation requirements.

c. Methods of operation for each type: The method of

operation goes in a way where the customer

contacts the company through the website; the

company sends one of its experts to assess the

house or building, its design, its surroundings

and will then give the customer the full detailed

summary and a quotation of the price, installation

dates, etc.

d. Scale of operations: The scale of operations in

their launch year could be comparatively small but

still a good one.

2. Wholesale middlemen

This product does not require wholesales as it is a

customizable product and will be used in bulk if the

projects involving government establishments.

3. Import/Export Agents

N/A

4. Warehousing

a. Type: This can be outsourced to Contract

132


Warehousing Ltd, a general storage and import

storage company, to take care of the company’s

storage needs which also include the delivery of

the components to the company’s engineering

department when orders are placed (Home, 2014).

b. Location: Their location is in 10A Stonedon Dr,

East Tamaki, New Zealand.

F. Price determination

The price is set based on the price of the components

required for the job. As mentioned above this product is one

that requires customization to get the full benefit.

Transportation costs would be handled by the company and

most of this would be inclusive in the product price.

(There aren’t any specific prices given in these sites.

Handling costs are not applicable in for this product as the

installation charges are usually free)

G. Terms of sale

a. Ex works: Photovoltaic (PV) solar power generation

has made enormous advances. The cost of panels and

assorted gear has fallen dramatically so that in

133


NZ grid tie solar systems in the 3.0 KW peak power

range can be purchased from NZ$10,500.00

(including GST) installed. (This depends on the

difficulty of the installation) (Photovoltaic

(PV), 2012)

b. FOB: A trade term requiring the seller to deliver

goods on board a vessel designated by the buyer.

The seller fulfills its obligations to deliver

when the goods have passed over the ship's rail

(Free On Board - FOB). This would be applied if

the company decides to ferry its orders which is a

very slim chance as the population of New Zealand

does not involve any island dwellers or places of

residences on the islands.

c. CIF (Cost, Insurance and Freight): A trade term

requiring the seller to arrange for the carriage

of goods by sea to a port of destination, and

provide the buyer with the documents necessary to

obtain the goods from the carrier (Cost, Insurance

and Freight - CIF).

134


H. Methods of payment

The mode of payment will include loans and personal finance

solutions to help and encourage the use of renewable sources

of energy generation. This was an initiative taken by the

Kiwibank in 2012 (Vaughan, 2012)

1. Cash in advance

The company provides does not take any cash in

advance but has two methods of payments for those

customers who are interested. They are a SolarLease

or a power purchase agreement. In the lease method

of payment, the customer opts for a fixed monthly

installment (Profile: SolarCity Corp (SCTY.O)).

2. Open accounts

The company does not keep open accounts because as

mentioned above there are easier methods of payments

provided by them.

3. Consignment Sales

This can be defined as Trading arrangement in which

a seller sends goods to a buyer or reseller

who pays the seller only as and when the goods are

135


sold. The seller remains the owner (title holder) of

the goods until they are paid for in full and, after a

certain period, takes back the unsold goods.

Also called sale or return, or goods on consignment

(consignment sale). SolarCity sells directly to the

customer, either on lease or on a fixed monthly

installment system.

II. Pro forma financial statements and budgets

A. Marketing budget

1. Selling expense

SolarCity receives anywhere from $50-$100 NZD as

lease and power produced by its solar energy systems

(Profile: SolarCity Corp (SCTY.O)) per customer and

higher for large businesses and government entities.

2. Advertising/promotion expense

SolarCity would spend a minimum of $50,000 NZD -

$100,000 NZD. But this may mostly be during periods

of seasonal discounts as many would already aware of

SolarCity and its products in a few months.

3. Product cost

136


The cost of panels and assorted gear has fallen

dramatically so that in NZ grid tie solar systems in

the 3.0 KW peak power range can be purchased from

NZ$10,500.00 installed. This depends on the

difficulty of the installation (GRID TIE SOLAR IS

BECOMING MAIN STREAM, 2011).

III. Resource requirements

At the initial stage for resource requirements business set up

would be a lot as there is a need for building up relations

with storage or warehouse companies, component requirements,

advertising experts, etc. Since the market already has 3 other

solar panel and photo voltaic generation systems (PVs), there

may not be a major requirement of advertising, but there must

be more attention given to raw material suppliers and anything

else that is vital to SolarCity’s operational activities.

A. Finance ???

B. Personnel ???

C. Production Capacity ???

137


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Beautiful Notebook! Some excellent work here!

There are a couple of things missing and there were some formatting issues in Parts 4 and 5

Also, your Table of Contents and Executive Summary are missing.

But, overall, I’m very pleased with this!

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