Bulldozers or Haircuts –

Which one are you?

25 Feb 2014

AS 4801 SAI Global

Lic 20363

ISO 9001 SAI Global

Lic 7451

1. The Australian Defence Market

2. How do SME’s grow?

3. Bulldozers and haircuts

4. What can SMEs do?

5. What can you do with Primes?

6. What can Governments do?

7. Closing remarks

1. One buyer

2. Cost is king

3. No-one wants to pay to develop capability

in Australian companies

4. Global marketplace

The Australian Defence Market

That madam is the invisible hand of the market

Source: tumblepunkt.tumblr.com

Source: en.wikipedia.org

Australia – a long way away and at the

end of trade routes

How do SME’s grow?

To flourish SMEs need to undertake:

1. R+D

2. Innovation

For this there needs to be:

1. Continuity of work

2. Profitable work

Bulldozers and haircuts

From the Caterpillar Way:

“The prices of internationally traded goods such as oil

and bulldozers are set by the interaction of

international markets. That’s not true for haircuts.

Both companies and nations must recognise the

difference when making policy.”

Source Bouchard and Koch 2012:

International

Product

(Bulldozers)

Trains

Specific agricultural

equipment

(Bulldozers)

DNV/Lloyd’s

Electrical Panels

Aircraft component

fabrication

Commodity valves

Local Product

(Haircuts)

AS3000 Electrical

panels

Vehicle

maintenance

Plumbing Services

(Haircuts)

Marathon Robots

Bisalloy Metals

WA Lobsters

Local Market International

Market

What can SMEs do?

1. Use the bulldozers and haircuts model

2. Adopt an export mentality

3. Understand your cost structure

4. Work out your niche

5. Diversify into another market

6. Work on becoming more trusting of your

industry colleagues

7. Talk to a university

8. Talk to Enterprise Connect

1. Selling valves resulted in a pump job

2. Australian standards

3. One job leads to another

4. Behave like an exporter to win work in Australia

How did H.I.Fraser do it?

What can you do with Primes?

1. Primes will talk to you, but……….

2. How well do you know the Primes business?

3. What part of the Primes business can you de-

risk?

What Governments can do?

1. Have a vision for what industry could look like

2. Provide certainty of work

3. Change the view from an ongoing hand out to

industry to one off seed capital

4. Consider the wider benefits of a dollar spent in

Australia verses a dollar exiting the economy

SMEs need to thrive despite government, not

because of it!

Do SMEs have a future in Defence?

1. Yes

2. A future, but not in the traditional way

3. Are you into bulldozers or haircuts?

4. Consider your business an exporter to Australia

as a starting point

Know your niche – Bulldozers or

haircuts?