Learning from great companies of Malaysia on going International

1. Repositioning Strategy for
Malaysian Companies
Internationalization
ISMI RAJIANI
Universiti Teknikal Malaysia Melaka
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2. Malaysia in Brief
First-class network of strategic location in
Progressed socio infrastructure that is the fastest-growing
economically comparable to those region with a strong
Since 1957 in developed natural resource
countries endowment
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3. Xavier, J. A and Ahmad, Z. U. (2012). Proposed scholarly research agenda for
transforming Malaysia into a model developing nation. International Journal
of Public Sector Management, 25 (3), 231 – 243.
Cannot compete
with Vietnam and Unable to compete
Stuck in the middle-
Indonesia in lower with high value-
income trap
costs and labour- added economies
intensive production
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Management Research University of Economic Ho Chi Minh
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4. Will they all adopt
the Overall Cost
Leadership Product
Going
Strategy co-aligning Global
with their local
competitive
advantage?
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5. Proposition 1:
Malaysian exporting companies
have a different initial position
compared to that of Western
companies when starting their
export activities as form of
internationalization.
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6. Uppsala model
companies
move further as
“psychic expand first to
their knowledge
distance” market which is
well-developed
psychically close
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7. Uppsala’s model for Malaysia
Indonesia
religious close as
culture language,
customs distance potential
market
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8. Variables Definition
COI : buyer’s attitudes and feelings toward the country
, developed through contact, association, or past
experience with the country, its people, and its
products (Sahin, 2010).
Animosity: the remnants of antipathy related to
previous or ongoing military, political, or economic
events"(Klein et al, 1998).
Ethnocentrism: believe that buying a foreign product
or foreign brand is not patriotic, and they tend to
choose local products or local brands, regardless price
or quality considerations (Shankarmahesh, 2006).
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10. Thus…
The case of Air Asia and
Proton (Ahmad and
Neal, 2006 ; Ahmed &
Humpreys, 2008), and
many firms believe that
a low-price strategy is
the main competitive
advantage (Young et
al., 1996, ; Ahmed &
Humpreys, 2008).
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11. Preposition 2:
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12. 15 triggering cues for internationalization motives
1. Gain international experience
2. Explore own advantages on markets
abroad
3. Increase profit
4. Increase sales volume
5. Gain access to internationally
experienced management or skilled
human resources
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13. 15 triggering cues for internationalization motives
6. Gain international experience
7. Achieve international reputation and
brand recognition
8. Receive government support or finance
9. Improve own-product development and
innovation ratio
10.Increase technology content of own
products
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14. 15 triggering cues for internationalization motives
11.Improve customer service
12.Improve quality of products
13.Improve cost efficiency in production
14.Search efficient alliance
15.Maintain domestic positioning
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15. Proposition 3:
The 15 triggering cues can be
allocated to and distributed
between four strategic
positions, based on expected
importance in securing
competitive advantage in
each position.
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16. Four Strategic Position (Soderman et al.,
2008)
3. High Price 4. High Price
Low Volume High Volume
PRICE
2. Low Volume 1.High volume
Low Price Low Price
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17. Four Strategic Position (Soderman et
al., 2008)
3. Focus on 4. Focus on
innovation Growth
PRICE
2. Start up 1.Focus on
company cost efficiency
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18. Four Strategic Position (Soderman et al.,
2008)
3. Focus on 4. Focus on
innovation Growth
PRICE
2. Start up 1.Focus on
company cost efficiency
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19. None will be willing to stay in position 2!
3. Focus on 4. Focus on
innovation Growth
PRICE
2. Start up 1.Focus on
company cost efficiency
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20. 1.Focus on cost efficiency
1. Sales Volume
2. Cost Efficiency in Production
3. Explore own advantages
4. Profit
5. International Experience
6. Government Support
7. Opportunity
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21. 3.Focus on innovation
1. International Reputation & Brand Recognition
2. Product Development and Innovation Ratio
3. Technology Content of Product
4. Searching Efficient Alliance
5. Management and Skilled Human Resources
6. Internationally Experienced
7. Maintaining Domestic Position
8. Profit
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22. 4.Focus on Growth
1. Customer Service
2. Quality of Product
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23. Proposition 4:
Most Malaysian companies will stay in position 1
because of their country-specific advantages, but
will reposition by leaving position 1 and aiming for
position 3, the high-price/low-volume segment.
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24. Data and Methodology
• The research questions were operationalized
in a questionnaire adapted from Soderman et
al., (2008) .
• The target population of this study is
managers in manufacturing sectors in
Selangor, Negeri Sembilan, Malacca and
Johore Bahru states.
• The survey is targeted to obtain 100
respondents.
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25. Conclusion
• Uppsala model concept of psychic distance by
preference to start exportation to neighboring
countries seems to apply also for Malaysian
companies
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26. Conclusion
• As competition increases in their domestic
market, great numbers of Malaysian
companies will consider Western markets
attractive for their products and services thus
make the company reposition their strategy
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27. Conclusion
• Europe does not represent a neighboring or
‘home’ market, as do markets in South-East
Asia making the Uppsala model concept of
psychic distance and Porter’s overall cost
leadership are no longer relevant.
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28. THANK
YOU FOR
BEING
ATTENTIVE!
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