← Strategic response to external factors
Operating overseas: opportunities and threats (every paper)
One of each, tied to a named measure — and always the one the resource points at.| External factor | Threat / opportunity | A strategic response |
|---|---|---|
| Multinational enters | Price undercutting, share loss | Differentiate or focus on a niche |
| NZD appreciates | Export revenue falls in NZD | Hedge with forward contracts; move upmarket |
| Tariff or customs duty rises | Landed cost rises, competitiveness falls | Shift to an FTA market; manufacture locally |
| A free trade agreement signed | Cheaper access to a new market | Enter the market with NZTE support |
| New technology available | Supply-chain and cost advantage | Invest and retrain; digitise distribution |
| Demographic / consumer change | Demand shifts away from the range | Reposition the product portfolio |
Distance is New Zealand's permanent external factor: freight cost and lead time shape almost every response a NZ exporter can make.
Exam-style An opportunity that carries a negative economic-sustainability impact A NZ exporter expands into a fast-growing Asian market. OPPORTUNITY: a far larger customer base than the domestic market, supporting revenue growth. ECONOMIC SUSTAINABILITY RISK: rapid expansion may require the business to take on debt or stretch working capital to meet new-market demand, so a downturn or currency swing in that single market could threaten long-term profitability. This is the exact shape recent papers ask for: the same opportunity that helps the business can also expose it to a new, concentrated risk. ✓ Naming how an opportunity creates a NEW risk to sustainability — not just repeating the opportunity — is what the (ii) parts of these questions are testing.