Billabong Business Report

Billabong transmission line ReportBillabong was formal in Queensland as a private comp whatsoever in 1973. In 2000 it was listed on the Australian carnation Exchange (ASX), becoming a in the macrocosm eye(predicate) company with shargonholders. Over the years it has established operations across 4 continents with distri exception to over 60 countries worldwide. Billabong has firmly established its brand at home and abroad with its focus on innovative yet intentionful outputs. Acquisitions of many other brands such as Von Zipper, Element, Nixon and Honolua have helped the club diversify their result slog. The Company has managed to remain competitive in a receding world-wide economy in the past year aided by pixilated growth gross sales events in the europium and Australasian sectors. Billabong employs over 1750 staff world-wide and has a strong commitment to all their stakeholders in terms of justness and governance. (Cory, 2008, website)IntroductionFounded on A ustralias Gold Coast in 1973 by surf circuit witer and surfboard shaper Gordon and Rena Merchant, Billabong has since established itself as a prominent Australian icon. The Company sprang from humble beginnings, with the couple designing boardshorts in their flat peremptory Burleigh Heads, cutting them out on the kitchen table and then carting the spotless intersection point around to the local surf shop to sell. Gordons no frills, pragmatic approach to boardshort manufacturing paid dividends, as Billabong grew steadily until his little homespun grinder literally burst at the seams. (Pacificshop, 2006, website) From those inauspicious early days the Company has grown rapidly to become a in public listed worldwide company. Today, Billabongs stub stemma is the design, production, marketing, distribution, wholesaling and retailing (through shops and agencies owned by the Company) of surf, skate and skiing outfit accessories and eyewear. This report is an analysis of Billabon g world-wides business framework.Business Model and Organisational FrameworkBy the 1980s, Billabong had firmly cemented its place in Australian surf culture and was international expansion was in its sights. The Companys first international operation was established in the USA in 1983, followed by New Zealand in 1985 and atomic number 63 in 1987. A range of other international operations were established in subsequent years, with Japan opening in 2000 and Brazil in 2001.through and through the 1990s the surf industry grew exponentially and professional surfing gained a bargon-assedfound respectability. The Company overly followed its core nodes into other boardsports markets, including skate and s forthwith, where it replicated its prove business model. By the close of the decade, Billabong had been restructured to capitalise on the growing world(a) opportunities in all boardsports sectors.The restructure set the foundation for an initial public offering in Australia in mid 20 00. The move saw the Companys shares publicly listed on the Australian Stock Exchange in August of that year. concisely after the public float the Company demonstrated its growth plans with a number of acquisitions including Von Zipper sunglasses brand and the emerging Element Skateboards brand.The productive integration of those businesses saw the Company add to its stable of brands in side by side(p) years, with Honolua Surf Company acquired in January 2004, Kustom footwear and Palmers Surf in folk 2004, a controlling interest in the beach culture airport-retail business in November 2005 and Nixon watches and accessories in January 2006. Other businesses were also established, including the Element footwear range, the California-based Beachworks retail business and various branded concept stores around the world. (Global Village Partnerships, 2009, website)Business Mission/VisionBillabong world-wides values remain consistent with its foundation objectives, which embroila comm itment to brand protection and enhancementthe manufacture of design-relevant and usable productsmarketing in the core boardsports channels such as sponsorship of events and athletes, as well as advertising in selected print mediato expand into new geographical marketsto expand the product range, particularly in the core board sports and youth fashion marketsthe professional development of staff and ongoing customer service and relationshipsand to deliver returns to shareholdersLeadershipGordon Merchant has consistently had a active role in the designing, marketing and sales of for the Company and brand. He presently sits on the board of directors along with Derek OHYPERLINK javascriptHYPERLINK javascriptNeill the CEO, and Paul Naude the Executive Director. The other board members consist ofTed KunkelMargaret Jackson ACAllan McDonaldColette PaullTony Froggatt(Billabongcorporate, 2009, website)Financial PositionAccording to Billabongs rich year financial report, the Companys shek els for the year ended31st June 2009 was $160.2 million. This was down 9.2% from the same full stop last year. This is largely in line with the decline in the orbicular stinting activity over the past year. The decrease in sack up profit meant that earnings per share was also down 11.2%.Although net profit decreased, there was a rise in sales revenue. This was largely collectible to new acquisitions made by the Company and the adverse movement of the Australian sawbuck against other major currencies such as the US dollar and the Euro.Operations in North the States felt the heaviest reach from the stinting slowdown. However, this was offset by strong sales growth is the South America sector. Europe was the star performer, with an almost 24% increase in sales revenue. Australasia also managed sales revenue gains of almost 8%, largely helped by the resilience of the Australian retail market and supported by the governments economic stimulus packages.Given the lack of retailer confidence, the steep slowdown in consumer spending in various world(prenominal) economies and the extreme volatility in diversify rates, the Company has performed reasonably well. The forecast for the coming year seems to be conservative in light of the current uncertainty of the global economy. Europe and Australasia are predicted to remain stable, and despite the initial reduction of forward orders in the US, there are promising signs of a recovery. (ONeill D, 2009, website)Human Resources and Stakeholder ManagementBillabong internationalist has a divers(a) group of stakeholders that both influence and are wedge by the operations of the Company. These include employees, shareholders, business associates, athletes, providers, opinion leaders and customers.Billabong International employs over of 1750 staff worldwide, with the greatest concentration of staff in Californias orange tree County, Australias Gold Coast and Hossegor in France. Employees are the main stakeholders in a ny company and building and maintaining relationships with employees is vital to maintaining effective relationships with business partners, customers and the community.Staff are encouraged to expand their skills and potential, and have access to and receive support for win training and to experience opportunities. Programs for managers to develop vital skills with an emphasis on innovation, planning, leaders and teamwork are a focus of the business. The Company also has guidelines and policies for remuneration to ascertain a fair approach to rewarding employees. The Company also has a consultative committee comprising staff representatives and senior managers to dissertate issues and consider improvements to the workplace.Billabong International is also committed to conducting business in an ethical and socially prudent manner. This is defined in employee work agreements that effectively form a tag of ethics that governs acceptable workplace practices. The Companys corporate g overnance policy states that the fear of all environmental, social and health and safety issues is to be the responsibility of the table of Directors.As a public company listed on the Australian Stock Exchange Billabong International is required by law to hold an one-year General Meeting of shareholders to discuss the Companys business. The Company also addresses shareholders at least twice a year to update trading conditions and provide a forward business outlook.The Company also consistently interacts with stakeholders through the re-create of events around the world. These range from the elite World Championship Tour professional surfing contests, through to professional skate and snow competitions and a range of junior and amateur surf, skate and snow events.At a supplier level, the Company undertakes regular factory visits to conduct audits. During these audits, workers from the shop floor are randomly selected for interviews to help understand workplace standards. Large pos ters outlining Billabongs supplier reckon of Conduct are fixed to high profile locations within factories to project workers are alert of their rights.Multi-stakeholder meetings that bring together staff from the Companys geographically diverse regions are also held twice annually. These provide a forum to discuss the direction of the business and gain a better understanding of the pauperization that drives business decisions.International Nature of the BusinessFrom its origins in Australia nearly 30 years ago, Billabong has evolved into a global business that operates on four major continents. Its name-Billabong International Limited-now reflects this focus and the promotion and protection of its brands and name are a major component of the business around the world.The original market for boardshorts and wetsuits was limited in its size, so Billabong (along with several other similar companies) looked to expand their product range to include clothing and accessories. Original ly, these were manufactured in Australia. The drivers for Billabong included the film to expand to new and larger markets in order to increase sales and profits, improvements in technology that led to better production and communication, and the advent of global consumers because of the increasingly popular surf culture and lifestyle. This is essentially a global strategy using global branding in that the same, standardised product is sold in all markets. Deregulation of markets and government influences had minimal impact on Billabong.Billabong also achieved economies of scale through its increase in production, as well as some cushioning of the economic cycle-having operations in both hemispheres, which have opposite seasons, allows the development of products to suit summer in Australia, which can then be sold in the Northern cerebral hemisphere four months later.The globalisation of Billabong was achieved throughseeking cheaper sources for manufacturing (in Hong Kong and China) -factories were established to produce garments for sale in Australiaexporting and distributing in the United States (initially in surf areas, such as California)exporting and distributing in France and then in the rest of Europeestablishing operations in the United States, France, Japan, New Zealand, Canada, Hong Kong and Brazil that are amenable for importing, distributing and wholesaling Billabong products. This is a form of foreign direct investmentthe acquisition of other businesses so that they became wholly owned subsidiaries of Billabong. This occurred with Element and Von Zipper-these companies retain their name (brand) but are wholly owned and controlled by Billabonglicensing, which allows distributors and some retail outlets to use the Billabong name as part of their operations.There are several key out areas which are important in the management of a business at a global scaleFinancial Exposure to foreign exchange is a concern for all global companies as well as metho ds of payment and credit risks. However, the establishment of operations and distributors in various countries ensures that Billabong is in a position to access borrowed funds from overseas if required.Operations In order to reduce production costs the majority of Billabongs manufacturing occurs in China. This is a form of outsourcing and strict procedures are in place to ensure pure tone control. Billabong has offices in Australia (Queensland, New South Wales and Victoria), the United States (California), France, Japan, New Zealand, Canada, Hong Kong and Brazil. By adopting a global web approach and using subsidiaries, Billabong can move products more than easily, avoid some government regulations, be closer to its markets and customers, and avoid some foreign exchange risks.Employment Relations Billabong needs to be aware of differences in labour laws and cope with pressures relating to minimum labour standards. The Company also must adhere to the global standards covering fac tory inspections (on general mankind rights and environmental issues) and laboratory tests.ConclusionThe original Billabong business focused on gear for local surfers, before diversifying into clothing and accessories for surfing, snow skiing and skating. Billabong now has over 2200 product lines and is the leading surfwear brand in Australia with its products being distributed in more than 60 countries internationally. Despite the doom and gloom of the current economic environment, Billabong has managed to largely steer clear of any major short-comings, enjoying success in most of its global sectors. From a small backyard operation in 1973 to todays multi-national publicly floated company, Billabong is certainly an entrepreneurs dream come true.