Durabuild Constructions Ltd

1. INTRODUCTION:
Small and medium-sized enterprises also known as SMEs combine to amount for over 97 per cent of
of total organisation in New Zealand. Small and medium-sized enterprises are major growth driver
because they have a major role in the economy of new Zealand. Small and medium-sized enterprises
provide employment to more than 594,000 people which grabs a pie of thirty percent in total human
workforce of New Zealand. Small and medium-sized enterprises in total amount to nearly twenty eight
per cent of gross domestic product of New Zealand. The way the Small and medium-sized enterprises
are governed depends majorly on what size they are, what structure they follow, the geographies and
economies in which they operate. But the duties which have been laid down for the directors of Small
and medium-sized enterprises, they are very essential and are of huge significance..

Durabuild Constructions Ltd is based out of Warkworth which is in North of Auckland city. Mike
Bronkhurst who was a builder found DuraBuild Construction Ltd. This is a company which is in
construction and is owned locally. The specialization of Durabuild is exhibited in all of their creations
because whatever they build, they give it a personal touch. While in the buildings constructed by
larger builder companies, the lack of personal touch is often felt.

2. Recent economic performance of SMEs in new Zealand including key sources of growth and
their trends:

The total figure of people in New Zealand venturing and founding their own companies to start their
business have constantly been growing above the average since last three years. As per the recent
updates dated Feb 2015, the final figure of small and medium enterprises grew by 1600 whose
number was 7900 in the last year.

To restate certain facts, there is one person in every three persons who is having employment in
Small and medium sized enterprises and consolidating them together they amount to one third of total
third of New Zealand's gross domestic product.

According to the findings of new Zealands first Small and medium sized Business Sector Report,
which is delivered by the New Zealands Ministry of Business, Innovation and Employment. There are
total New Zealand's 460,000 small and medium enterprises (SMEs) in New Zealand. There are more
than 900,000 workers who are employed by Small and Medium sized business with 20 staff or less
employees.

Small and medium scale enterprises add up to ninety per cent of businesses in New Zealand, out of
which seventy per cent are businesses which are having single workers. In comparative to
organizations of larger scale, Small and medium sized businesses devote more time and resources
on safety in workplace but allocate less time, attention and resources over rules and regulations.

3. Macroeconomic issues:
Human resource: Such small and middle size enterprises like Durabuild Constructions limited find it
difficult to have a skilled human force. Since they derive their human resource locally, the skills and
resources available to larger firms they lack the economies of scale necessary in many industries
they are more focussed on day-to-day survival than larger firms, and are therefore less likely to make
long-term investment in research and development they have poor access to finance they are less
stable and more prone to failure

Economy: The gross domestic product of New Zealand has been increasing by 3 percent. It shows us
a upward trend which is significantly important for the construction industry.

Demographics: Population growth trend has been 1percent annually which will boost the demand for
building and construction industry. The population has high standards of living and very small

Percentage of industry. So the proposition of Durabuild constructions limited of providing personal

touch to the houses has a great future prospects thus it poses a bright opportunity for durabuild
constructions limited. Considerable chunk of population is above 43 years of age. By 2025, major
proportion of population would be aged between 44-46 who have more spending capacity and have
more propensity to buy a house.The household income percentage has been increasing at1 %
annually. Thus spending capacity of people has increased significantly.

4. Economic outlook and projections for key indicators critical to Durabuild constructions limited
Investment in technology: They need to invest in technology so that they can maintain parity with their
competitors.

Branding & Marketing: They must invest in marketing efforts so that they can communicate their value
proposition to the customer.

The factors which will be critical:

Government regulations. The kind of industry Durabuild constructions ltd operates in involves high
investment. Any ney government policy can turn the way around. They must keep a watch in the
political scenario so that they can respond in time.

Globalisation: Increased globalization will result in entry of big and foreign players in construction
domain and pose a serious threat to construction company durabuild construction limited. Bigger
foreign enterprises will attempt to subsume the smaller players. So, the small and medium scale
enterprises like durabuild constructions limited need to have a strong hold the niche segment in which
they are operating.

Maturing Demography: New Zealand has a mature demography as the average age of the population
is between 43-46 years. As a result they have a high spending capacity which will be most probably
offering a bright perspective for future growth

5. Implications of Globalisation and Technology:

Increased globalisation and innovative technology=gy poses a threat as well as opens numerous
opportunities for Small and medium sized enterprises. Increased globalization will result in entry of big
and foreign players in construction domain and pose a serious threat to construction company
durabuild construction limited. The innovative technology remains a thrat to the company since. Since
due to rapid advancements in Science & Tech and increased investment of bigger players in
construction domain. Echnology acts a barrier for future growth. So if durabuild Construction
Company has to survive and prosper in the upcoming era of globalisation they have to invest in
advancement of their technology and have to maintain their niche segment in the industry in order to
differentiate themselves. So it is recommended for Durabuild constructions limited to invest in
technology.
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