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An Analysis of Macro-Environmental Factors and Their Impacton ...... Company in Malaysia

Extracts from this document...

Introduction

An Analysis of Macro-Environmental Factors and Their Impact on ......Company in Malaysia Presented to the Senior Management of Australian Cheese Company On Monday, 10 February 2003. Report researched and prepared by Ergin Senses. S0023583 EXECUTIVE SUMMARY This report analyses the macro environmental factors and their impacts on manufacturing industry in Malaysia. The company's principal activities are producing, manufacturing and marketing of ...................The company distributors its products through wholesalers, national and regional retailers. Because of the globalisation and more intense competition, company find itself planning to begin business in another promising and challengeable country. By analysing carefully and comprehensively, Malaysia becomes the first suitable country for the company, because of the Malaysia's political Stability, economic strength & strategic natural resources, liberal & pro-business government policies, excellent infrastructure, vibrant business environment, quality of life and strategic location makes that country significant for business. In this report, a detailed analysis will help to the company to begin business in Malaysia. This report also offers an entry strategy for the Australian Cheese Company, which has been preparing itself as an overseas entry strategist in Malaysia. The following report analyses macro environmental issues for entering new market in Malaysia and analyses the each macro environmental issues; political environment, business-government relations, economic environment, infrastructure requirements, socio-cultural issues, legal issues and technologic impacts. As we can see from the report Malaysia's strong synergy and co-operation within the country's public and private sectors helps in continuous improvements in efficiency and reliability. Communications links are among the best in Asia. The country is taking a co-ordinated and integrated approach to expand and upgrade its roads and highways, railways, ports, airports and telecommunications systems. Thus, this report concludes that Malaysia still has significant market opportunities and marketing of the manufacturing industry grow slightly. In addition, low inflation, high foreign investment, political stability, liberal pro-business government policies and excellent infrastructure make Malaysia chosen country to make a business. ...read more.

Middle

Market access for Foreign Service providers remains limited in some key services areas, reflecting the government's desire to encourage development of its domestic services sector. Foreign Investments The Malaysian government promotes foreign investments. Malaysia does not discriminate against investors from any country. In order to encourage foreign investments, Malaysia offers many incentives and advantages to the people from the 40 countries with a double taxation agreement with Malaysia. The Malaysian government has designated the manufacturing sector as the key sector of the economy. Foreign investors are encouraged to form joint ventures with Malaysian companies. Malaysia especially welcomes projects that would benefit the country's economy through transfer of high-level technology.Malaysia is also well known for its well-developed infrastructure facilities and physical distribution of goods. 2 Malaysia received strong inflows of foreign direct investment flows in the decade before the regional economic crisis, mainly thanks to considerable investment from multinationals. The Malaysian Government is trying to attract foreign and domestic investors using an attractive range of investment incentives for selected activities. With strong competition for foreign direct investment coming from Vietnam and China, Malaysia has sought to refine the range of promoted activities in order to channel investment into more high technology, capital-intensive manufacturing operations. Malaysia wants to transform its manufacturing base from one which is primarily an assembly operation to one which is capital intensive and generates a higher level of value added per employee, in order to sustain increasing wage costs. Social Analysis * Demographics * Class structure * Education * Culture (gender roles, etc.) * Entrepreneurial spirit * Attitudes (health, environmental consciousness, etc.) * Leisure interests Social and Demographic Structure The Malaysian population, totalling 23 million people, has many origins: Chinese, Indian, Malay and Thai, just to mention some. The earliest of today's inhabitants, however, has none of the above-mentioned origins. The indigenous people of Malaysia mainly consists of different tribes, such as the Orang asli of the Malaya Peninsula, the Penan of Sarawak and the Rungus of Sabah, many of whom still largely pursue a nomadic way of life. ...read more.

Conclusion

* A dynamic ICT development programme is being implemented across all sectors to establish a sound knowledge-based economy in order to add value to all economic sectors. * Malaysia has a well-developed financial and banking sector. Malaysia also enjoys a natural niche market in Islamic banking and finance * Strong synergy and co-operation within the country's public and private sectors helps in continuous improvements in efficiency and reliability. Malaysia - Economic Update * Economic conditions improved further in the first half of 2002 * Driven by strong consumption spending, supported by the Government stimulus packages * Higher capacity utilization in the manufacturing sector * Industrial output has risen and domestic demand strengthened further * Inflation remains low, although pressures are rising due to higher oil price * External sector remains favourable * Interest rate remains low - Loan approvals on the rise * Better position to withstand adverse external developments WHY MALAYSIA ? Political Stability ? Economic strength & strategic natural resources ? Warm & Friendly attitude of welcome ? Liberal & Pro-business government policies ? Excellent infrastructure ? Productive labour force ? Well-developed financial & banking sector ? Vibrant business environment ? Quality of life ? Strategic Location 4. Conclusion In conclusion, it seems clear that every company, which is planning to begin business in a foreign country, needs to analyse macro-environmental factors and their impacts on company's business sector because every sector or industry has its own distinct environment, which changes on a regular basis. The macro environment context is thus made up of all the conditions and factors external to the company that can positively or negatively affect the life, orientations, structures, development and the future of the company. This report analysed .......company's macro environmental factors, and tried to identify the most important factors for the company. These factors include: socio-cultural, economic, international, legal-political and technological elements. For the company, the most important factors that will impact on company are especially country's business environment, political-legal factors, socio-cultural and technologic factors. Thus, by considering these factors, the company could entire and start doing business in Malaysia. ...read more.

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