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Baycorp and AIA shine in Merrill Lynch study

By Phil Boeyen, ShareChat Business News Editor

Thursday 30th November 2000

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Two New Zealand companies - Baycorp (NZSE: BCH) and Auckland International Airport (NZSE: AIA) - have been named among the top Australasian companies with sustainable competitive advantage by global financial advisor Merrill Lynch.

'Sustainable competitive advantage' is a term popularised by investment guru Warren Buffett, where a company's prosperity is driven by how powerful and enduring its competitive advantages are.

Merrill Lynch's Australasian research team applied five principles to identify the companies. These were rivalry among existing competitors, threat of new entrants, threat of substitute products, bargaining power of buyers and bargaining power of suppliers.

Its analysis also took into account a range of other factors including market share, economies of scale, proprietary technology, and strong brands.

Other Australian and New Zealand companies that scored the highest in the analysis included Westfield Holdings, Macquarie Infrastructure Group, Auckland International Airport, TAB NSW, Brambles, Australian Provincial Newspapers, Cochlear, Westfield Trust, Rural Press, Transurban, TabCorp, CSL, and Jupiters.

Baycorp spokesman, Paul Stewart, says Baycorp has created sustainable competitive advantage through its long-term commitment to technology development, database enhancement and innovative product development.

"Baycorp's key strength is its ability to leverage core competitive advantages to achieve superior business and financial performance over the long-term."

Mr Stewart says Baycorp has been much more successful in attaining this than many other comparable companies throughout the world.

"It is our progressive corporate strategy that has enabled Baycorp to evolve from a small New Zealand-based credit services provider, to being acknowledged as an internationally competitive technology solutions and business intelligence company."

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