THE FACILITATION AT PRE-INTERNATIONALISATION STAGE: A STUDY

OF MALAYSIAN FOODSERVICE FIRMS

LIM Kuang Long*
This study challenges the sequential stage of internationalisation process and tries to explore the
facilitation of internationalisation process that allows the acceleration of the firms to expand globally.
Accordingly, this research aims to identify the importance of the pre-internationalisation stage of the
firms and to describe the facilitation factors at this stage. Based on the case study of the seven selected
Malaysian foodservice firms, the new model was proposed and contended that the intention to expand
overseas require firms to first undergo pre internationalisation stage, in order to prepare themselves in
international market. It was found that government role, emphasis on Western food concept, halal
commitment, franchising system, and business trip are the facilitation factors that contribute the
acceleration of internationalisation process. The limitations and future directions of this model were also
discussed.

Field of Research: International Business, Strategic Management, Foodservice Operation.

* Lim Kuang Long, Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur.
Email: limkl@perdana.um.edu.my or limkuanglong@yahoo.com.

1. INTRODUCTION
Food is considered as part of the culture. People prefer certain food reflect their country of origin. Interestingly,
Western foods such as hamburger, hotdog, sandwich, fried chicken, pizza, steak, etc are well accepted in the
international market. Thus, it can be argued that the internationalisation of foodservice firms depends very much
on the acceptability of the food offered in the international market. It is unimaginable how local foods can be
accepted globally if they are not universal. Therefore, this paper tries to examine how foodservice firms are able
to internationalise their business by investigating one of the Asian developing countries, Malaysia. The research
result will contribute to the academic as well as industry on the theory of internationalisation process to prove the
ability of small and still unpopular firms in the global arena.
This study attempt to debate on the existing theory of the internationalisation process and build a new theory that
advocate how new ventures in the third world country compete with well-known giant players such as
McDonalds, KFC, Pizza Hut, Starbucks, etc. Thus, the findings seek to offer contemporary insight which shed
light on possible limitations to conventional model. Accordingly, the research objectives are to: (1) identify the
importance of pre-international stage of Malaysian foodservice firms; and (2) describe the facilitation factors at
each stage.

2.

LITERATURE REVIEW

In the study of international business expansion, it is popularised by the behavioural model of internationalisation
which is based on the theory of the growth of the firm (Penrose, 1959) and the behavioural theory of the firm
(Aharoni, 1966; Cyert and March, 1963). The findings assert that the internationalisation of a firm is an
incremental process (Johanson and Vahlne, 1977). Accordingly, the process of internationalisation has been the

subject of widespread theoretical and empirical research (Johanson and Wiedersheim-Paul 1975; Johanson and
Vahlne, 1977; Bilkey, 1978; Cavusgil, 1980; Turnbull, 1987; Welch and Loustarinen, 1988). The
internationalisation process is described as a gradual development taking place in distinct stages (Melin 1992).
The models initiated by Johanson and Wiedersheim-Paul (1975) and Johanson and Vahlne (1977), which are
referred to as the Uppsala Models (U-Models) thses unique models are significant and always debated.
Subsequently, born global would be discussed to contend the U-Models. By using a case study of Malaysian
foodservice firms, inductive approach would eventually explore the theme and trend in establishing the new
model of internationalisation process.
2.1 The Sequential Stage of U-Models
Uppsala Models or U-Models exhibit a gradual internationalisation in an incremental manner through a series of
evolutionary stages (Johanson and Vahlne, 1990). The incremental learning at the firm level is the main factor
describing a firms international behaviour and decision-making process (Andersson, 2000; Collinson and
Houlden, 2005). Johanson and Vahlne (1977) consider an international expansion as a process that signifies a
gradual increase in commitment to a foreign market in their pioneer study of internationalisation process of firms.
They argue that firms have imperfect access to information and therefore internationalisation is a process of
increasing experiential knowledge. They assume that by operating in the international market, they can acquire
experiential knowledge regarding the market, the clients, the problems, and the opportunities. By doing so, risks
involved in going abroad can be reduced.
The models suggest that when the firms enter new markets, first they exports, followed by establishing a
marketing subsidiary, and eventually foreign production. However, the firms would consider entering foreign
markets at a short psychic distance and later went into more distant markets (Hornell, Vahlne and WiedersheimPaul, 1972; Nordstrom, 1990; Vernon, 1966, Kogut and Singh, 1988; Davidson, 1983; Weinstein, 1977; Erramilli
and Rao, 1993). If the Firms enter new markets with greater psychic distance, they will encounter greater
differences in language, culture, and other factors that hinder the flow of information between the market and the
firm.
As firms increasingly accumulating experiential knowledge, they found that the influence of psychic distance on
the choice of entry mode decreases (Steen and Liech, 2007). Davidson (1980), Franko (1989) and Gatignon and
Anderson (1988) uncover that an increasing tendency to select wholly owned subsidiaries as experiential
knowledge increases. While Davidson (1980), Goodnow and Hansz (1972), and Kogut and Singh (1988) observe
among the American companies, notice that the usage of joint ventures increases with sociocultural distance from
the domestic market.
Although the internationalisation theory offers a plausible explanation of the internationalisation expansion of
firms, the theory has been confronted with various criticisms and disagreements (Hedlund and Kverneland, 1985;
Turnbull, 1987; Melin, 1992; Kutschker, 1995). The main limitation is the small number of cases and confined to
the Scandinavian environment only. Although the models contend that experience is important in the selection of
entry mode, some studies do not yield consistent results. For example, Daniels, Ogram and Radebaugh, (1976)
and Shetty (1979) found that as firms experiential knowledge grew, they shifted from licensing to joint ventures.
Other studies demonstrate that the firms are less dependent on wholly owned subsidiaries when foreign
experience increases (Davidson and McFetridge, 1985; Hedlund and Kverneland, 1985; Bureau of Industry
Economics, 1984; Millington and Bayliss, 1990; Newbould, Buckley and Thurwell, 1978). Furthermore, some
researchers discover that the early stages of foreign market entry adopting wholly owned subsidiaries instead of
export (Erramilli, 1991; Stopford and Wells, 1972).
According to Zahra and George (2002), Hadjikhani (1997), and Anderson (1993), the concept is inconsistent with
theoretical underpinning of the models and empirical validity of the stage theory. On the theoretical level, Reid
(1981), Strandskov (1986), and Turnbull (1987) criticise that the theory is too deterministic and mechanistic in
nature because the progress of internationalisation is in linear fashion from one stage to another. While on the
empirical evidence, researchers found that firms do not always start with occasional exporting and ending up with
a production facilities abroad (Hedlund and Kverneland, 1985; Oviatt and McDougall, 1994). Zander (1994)

emphasises that the firms with large resources do not stick with the consistent pattern in their international
process. Firms may leapfrog the stages and transfer experiential knowledge from one market to another (Benito
and Gripsrud, 1992). Hirch and Meshulach (1991) on the other hand, contend that the models only focus on the
firms internal resources such as market knowledge and experience from foreign activities, and completely ignore
other external factors such as market potential and competitive conditions. Axinn and Matthyssens (2002) further
argue that the theory failed to take current behaviour of firms in the dynamic business environment, for instance,
the impact of global economy and technology development. In addition, recent empirical findings show that firms
which are in a particular stage of internationalisation can shift backward and forward, instead of progressing in an
incremental fashion through stages (Burgel and Murrey, 2000).
2.2 The Non-Sequential Stage of Born Global
The constant arguments against the stage process result in a sharp contrast of the internationalisation process
known as born global, proposed by Cavusgil (1994). Besides the phrase of born global is being used (Cavusgil,
1994; Moen and Servais, 2002; Mort and Weerawardena, 2006), various terms are also popularly for example,
international new ventures (Coviello, 2006; Oviatt and McDougall, 1994), instant internationals (Fillis, 2001;
McAuley, 1999), and global start-ups (Hordes, Clancy and Baddaley, 1995; Oviatt and McDougall, 1995).
According to Oviatt and McDougall (1994), the born global theorises that the growing global competition and
accelerating technological development have speeded up firms to internationalise without necessarily following an
incremental process. It means that firms can expand overseas even from the beginning of the firm establishment
(Madsen and Servais, 1997). These firms usually do not establish domestic sales before starting international
sales. They also select the international market without considering psychically close countries.
The main driver of born global is the information technology which supports real-time information flows. It
accelerates the access to global sources and business opportunities which in turn, facilitate the management of the
international value chains (Quinn, 1992; de La Torre and Moxon, 2001). The fast access to the market through the
speed of technological development results in increasingly irrelevance of the cultural differences and
psychological distance (Knight and Cavusgil, 1996; Rasmussen et al., 2001). The selection of psychically close
countries in U-Model at the early stage of internationalisation process is ignored because firms can skip certain
stages in the born global theory. The global mindset, proactiveness, innovativeness, and risk taking orientation
and experience of an entrepreneur are also the factors that influence the speed of internationalisation (Jones, 1999;
Mort and Weerawardena, 2006).
Although a growing number of firms implement a global strategy from inception, the studies on this phenomenon
is still limited and lacking a comprehensive theoretical explanation and causal models (Moen and Servais, 2002;
Mort and Weerawarden, 2006; Rialp et al., 2005). Therefore, this research contemplates to look into the possible
new model in the internationalisation process by specifically look into Malaysian foodservice firms.

3. METHODOLOGY
Exploratory studies provide information to use in analysing a situation (Zikmund, 2003). Case study is a good tool
for exploratory studies. According to Yin (2002), a case study is an effective strategy for exploring how or
why questions. It allowed direct observation of a phenomenon in its natural setting, thus promoting profound,
realistic understanding (Babbie 1983).
The study of Malaysian foodservice firms is based on a mixture of primary and secondary sources. First, in
determining the stages and facilitation factors of the internationalisation process of Malaysian foodservice firms,
exploratory research with Marrybrown fast food restaurant was conducted using semi-structured interview with
the General Manager on March 2, 2009. This interview helps to crystallise a problem and identify information
needs for later data collection (Zikmund, 2003). Subsequently, the qualitative analysis of Malaysian foodservice
firms by using website visits, longitudinal data from annual reports, company documents, and business press and
magazines were done. This inductive approach would eventually explore the theme and trend in developing the
new model of internationalisation process.

The sampling frame is the domestic foodservice firms in Malaysia published by Euromonitor International (2007).
The four segments with a total of seven foodservice firms that have been successfully expanding internationally at
least to one foreign country were selected as shown in Table 1.

4.

RESEARCH FINDINGS

Based on the selected cases, it was found that pre-internationalisation stage of Malaysian foodservice firms can
analysed by looking into the relationship between foreign market and local market as shown in Figure 1.

In terms of facilitation factors, it was found that government invitation, halal commitment, emphasis of Western
Concept, business trips, and franchise system.
4.1 Government Invitation
The facilitation of internationalisation process started at the stage of pre internationalisation. Malaysian
government welcomed foreign investors to set up their businesses in Malaysia. The government acknowledged

that the healthy growth of foreign business would help prosper the nation, benefiting not only businessmen,
consumers, bankers, supporting service providers, but also citizens and consumers at large. The Malaysian
government clearly was only a facilitative agent that provides a great deal of support to promote the growth of
foodservice industry in the country. The foreign investment friendly strategy had attracted many foreign
franchisors to invest in Malaysian foodservice industry. Through franchising system, foreign franchisors that
contributed capital, technology transfer, expertise, entrepreneurial development, and human resource development
are most welcome. The government recognised that local firms had to learn from the developed countries since
franchising was relatively new in Malaysia. This policy had attracted many American foodservice firms to invest
in Malaysia. It can be proven by over 70% of foreign franchise sales in Malaysia are from American franchisors,
followed by United Kingdom, Taiwan, Singapore and Australia. The universal nature of American food has
rendered the advantage in terms of taste and preference to Malaysians. This can be further ascertained by the
figures in Appendix A.
Since home-grown foodservice firms were still in its infancy stage and to further stimulate it, Malaysian
government encouraged leading foreign franchises to set up operations in Malaysia. The government recognised
the benefits of gaining knowledge and experience from foreign giant foodservice firms, such as KFC,
McDonalds, and Pizza Hut which possessed proven business models and track records.
4.2 Western Concept
The advent of Western foodservice concept has also provided the idea of offering Western food with Westernpronounce brand name to the domestic firms. American products are already well-known and well presented in
the foodservice market. Since an increasing number of American- and European style foodservice firms are
opening in Malaysian market, there is no doubt that Malaysian foodservice firms are also looking at the usage of
Western name in their brand. The following criteria were discovered in regards to Malaysian foodservice brands
that had expanded overseas:
a) The brands created better associations in a Western language, especially English language.
b) The brands indicated high level of quality. The brand sounded like American or European brand gave
advantage of superiority. The perception was that local brands in Malaysia were inferior.
c) The brand would be a well-known and popular among the local customers. Since teenagers and adults were
increasingly adopting American culture and gaining a taste for American food, the brands were expecting to
be accepted as the young generation would be older and still continued to exert the positive attitude toward
the brands.
d) The brands indicated a Western persons name (e.g. Marrybrown and Nelsons)
e) The brands depicted the food offered using English-translated phrase especially foodservice firms that offered
eastern food (e.g. Kyros Kebab and The Chicken Rice Shop).
f) The brands identified the universal name for a food or certain foods (e.g. SugarBun, Secret Recipe and
Nineteen O One)
From the above criteria, it was found that Western foodservice concept plays significant role before
internationalisation takes place. Figure 2 explains how Western food with Western brand name can facilitate
internationalisation.

In order to internationalise food and brand name, ones should be universal and accepted in the international
market. The pressure to internationalisation exerted by the firms pursuing Western-pronounce brand name and
Western food at the same time is very high. This has been proven to be true as Marrybrown offering Americanstyle fried chicken, Secret Recipe offering pastry, Nineteen O One offering hotdog, Nelsons offering corn, and
SugarBun offering chicken have already expanded overseas.
In contrast, Eastern-pronounce brand name with Eastern food offered has so far failed to expand overseas. This
foodservice concept focuses on local market as it does not serve universal need. For example, Tai Thong offers
Chinese food; Sushi King offers Japanese food; while Chakri Palace offers Thai food. There were not competitive
because the country-of-origins such as China, Japan, and Thailand may even offered better quality and concept if
their concepts presented in the international market. Furthermore, the taste and preference from the country to
country were obviously different.
The foodservice firms that try to establish Eastern-pronounce brand name with Western food may intend to offer
universal food to local market only, without targeting international market. Eastern-pronounce brand name may
provide familiarity among the local customers by expecting that the local people will aspire and support local firm
growth. Rasa Ayamas, the subsidiary of KFC Holdings Sdn Bhd fully utilised its strong supply chains to offer
chicken product in its Western foodservice concept. Since KFC Holdings itself is the master franchisee in
Southeast Asia, it depends on KFC brand to expand in the region while Rasa Ayamas focuses only the local
market without being directly competed with KFC.
Interestingly, the foodservice firms that offered Western-pronounce brand name with Eastern food seem to be
quite successful to internationalise their business. Kyros Kebab implies itself the Middle-east home food, uses
Kyros which stands for the word gyros or gyrates, the way kebab is prepared. Kebab seems to be
increasingly popular food in Asia as well as Europe and America, reinforced by its strategic geographical location

of Middle East which is between European and Asian cultures. The Chicken Rice Shop on the other hand,
practically uses very clear message of English language to indicate the Asian food offered. As chicken is the
universal food, it can be easily become international food, but just be depreciated with the offering of rice that
seems to be less universal.
Of course, the question of facilitating in internationalisation is simply based on how much the pressure of the
firms in offering international brand name and food. The more pressure on the both elements, the easier the firms
internationalise.
4.3 The Halal Commitment
Since Malaysia has Muslim population around 60% of total population with Islam is an official religion, it
demands halal products. The foreign foodservice firms invested in Malaysia are necessary and advantageous to
be halal certified in order to include large segment of the population. They must adhere to Malaysian
commercial and contract laws, procedure, and local norms. For instance, pork must not be served at foreign
foodservice outlets especially fast food. The chicken, lamb, and beef must be slaughtered according to Islamic
rites. Although an existing handful of non-fast food firms serve pork, new non-fast food firms with pork on the
menu may face difficulties in obtaining approval.
The commitment of foreign foodservice firms in Malaysia to adopt halal has inspired Malaysian foodservice
firms to pursue the same strategy. This inspiration is not only accepted by local market, but also facilitates the
firms to expand internationally as Malaysian government fully supports the halal foodservice firms in the
internationalisation stage. The firms believed that the halal concept facilitated the export of standardised
product to the host countries. The government would ease the approval of halal food since it realised its mission
to be the halal hub in Asia and turned Malaysian foodservice firms as global halal brand.
4.4 Franchise System
The interest and restless support shown by Malaysian government have encouraged the internationalisation
through franchise system. The can be also evidenced by the effort of Malaysian government to initiate Malaysian
Franchise Association (MFA) in 1994. It is the voice of the industry and to support the implementation of
government programmes in promoting entrepreneurship through franchise industry. MFA is a unique organisation
as it does not only the private sector, but also government agencies, bankers, financial institutions, consultants,
and legal firms. It aims to be the prime mover towards realising Malaysias vision to be the regional hub for
franchising. Besides, it works to unite its members in view of protecting their interests, to cultivate and protect the
image of franchising and encourage ethical business practice and to support the governments efforts in
encouraging Malaysians direct and active involvement in franchising. The most important event organised by
MFA together with Ministry of Entrepreneur and the Corporative Development (MECD) is the Franchise
International Malaysia. This represents the perfect venue to launch new franchise systems, appoint master
franchisee, and identify potential local franchisees.
In the case of international entry mode, franchising has indeed resulted in better delivery of services to society and
in the process fulfilled customers needs more effectively. It also offers an attractive opportunity for spearheading
business expansion in both domestic and international market. The rapid in franchising growth and the emergence
of franchising as a significant force with propels the internationalisation of businesses. The resultant higher value
created from this business globalisation has profited the business people, prospered nations and benefited the
international community as a whole.
Like many services, foodservice cannot be exported. The core investment activities are focused particularly on
providing foodservice operations. The firms focused on their investment activity towards those lines of business
where it already possessed domestic-derived skills and competencies. Malaysian foodservice firms established a
master franchisee in many countries. Typically master franchisee is a joint venture between Malaysian
foodservice firms and local firms.

The rapid international expansion of the firms made it necessary to select reliable joint venture partners in the
respective country. Due to Malaysian foodservice firms lack of internationalisation knowledge and experience, the
selection of reliable local partners is extremely important with regard to providing local access, connection and
knowledge of local market. Among the most important criteria when choosing partners are similarities of their
business strategy to Malaysian foodservice firms, knowledgeable in management know-how, financially sound,
and able to add value to the venture which Malaysian foodservice firms lacks.
4.5 Business Trip
The local foodservice firms that have committed to halal and franchise practice are given opportunity by
Malaysian government to expand their operation overseas through planned business trips. Malaysian government,
through Malaysia External Trade Development Corporation (MATRADE), has always aggressively promoted,
assisted, and encouraged the local firms going abroad by participating in the international conferences and
exhibitions such as Malaysia Service Exhibitions in various countries. As a result of G2G relationship, Malaysian
government has built very close relationship with neighbouring Asian countries and Muslim countries especially
Middle East. Therefore, the business trips organised by MATRADE are mainly focused on these countries.
It was found that the exploitation of bilateral trade relations appeared to be a major determinant of foodservice
firms upsurge in expanding overseas. When the foodservice industry in Malaysia was opened up due to the
pressure of globalisation and market liberalisation, the Malaysian firms such as SugarBun, Marrybrown, Nelsons,
and The Chicken Rice Shop took this opportunity to invest internationally, in line with the promotion of
MATRADE. In 1997, when Asian Financial Crisis struck, new foodservice firms especially Secret Recipe, Kyros
Kebab, and Nineteen O One were invited by Malaysian government to spread their business abroad primarily to
the countries that have bilateral trade relation. This action reduced the probability of bankruptcy among Malaysian
foodservice during economic downturn.
Malaysia is an active member of ASEAN (Association of Southeast Asian Nations), OIC (Organisation of Islamic
Conference), South-South Co-operation, and most recently, EAS (East Asia Summit). Therefore, the members in
these organisations are considered as investment friendly to Malaysia, and majority of them are developing
countries. Although it is contended that the three organisations above in which Malaysia is a member are
psychically close countries, decisions on which countries to invest is still made by the government. Otherwise,
the investment will be detractive without government support. It can be also argued that the markets are mostly
focused on only third world countries. The reason is simply that Malaysian foodservice firms are still at infancy
stage in the international market. They need more time to be popular in order to penetrate developed countries.

5. CONCLUSION
In reviewing the argument in the internationalisation process models, knowledge and experience of
internationalisation is a prominent factor in the internationalisation process of firms. The U-Models rest on the
assumption that firms have imperfect access to information and explain internationalisation as a process of
increasing experiential knowledge. The firm increases its commitment incrementally as it learns about
international markets (Johanson and Vahlne, 1990).
However, in the case of Malaysian foodservice firms, their knowledge and experience of internationalization is
limited. Although their emergence was built on its vast knowledge about the foodservice industry, its capability
was more focused on its domestic market. Surprisingly, they are still able to penetrate foreign market in
considerably short time. Nineteen O One and Secret Recipe require only a year of operation experience to expand
overseas as shown in Appendix B. Other foodservice firms are also quite fast in setting up their businesses abroad.
For example, Kyros Kebab requires only two years; Nelsons, three years; Marrybrown, six year; The Chicken
Rice Shop, seven years; and SugarBun, nine years. For Malaysian foodservice firms, it is unnecessary to
experience the foreign market to gain knowledge and experience about the characteristics of foreign markets. This
is because government served as intermediary in connecting local firms and foreign markets in the area of
learning international business model and also by joining government organised business trips. Furthermore, by

using franchising system, Malaysian franchisors rely on the local franchisee as they have local knowledge. This
can also lead to reduced levels of uncertainty in unfamiliar foreign environments before investing. The Westernpronounce brand name with Western food concept, government support and franchising system have contributed
to the facilitation and rapid internationalisation process instead of gradual incremental stage.
The sequential stage of internationalisation process is unpractical in the case of Malaysian foodservice firms. They
do not set up ubiquitous outlets in Malaysia before expand overseas. The concept of Western food may not be
popular in certain state, for example in east coast of Malaysia. Many people prefer the local food to Western food.
Therefore, the foodservice firms which offer Western concept may have to look for international market as a
result of the local indifference. Besides that, many well-known American foodservice outlets already available in
the local market and Malaysian brands are very difficult to compete with them.
Through franchising system, the firms do not require to fully gain foreign knowledge and experience. Before
expanding overseas, they have already gain knowledge from foreign firms in Malaysia. When they contemplate to
set up subsidiaries in the international market, they just need to deal with the foreign partner through master
franchise. As a franchisor, it can depend on franchisee that has good track record and understand better the local
market. Therefore, it can be contended that the firms do not necessarily follow the sequential stage to gradually
learn the foreign market. This entry mode indeed facilitates the international expansion. Clearly, the indirect
knowledge and experience are sufficient in franchising system.
Malaysian foodservice firms were presumed to begin their international activities via franchising by targeting
psychically close countries, and through confidence, accumulation of business knowledge and acquisition of
international experience, firms committed greater resources and begin to target countries more psychically
distant (Nordstrom, 1990). This model implies that internationalisation in stages in the countries with little
psychological distance. However, the psychically close countries are the friendly countries to Malaysia and have
strong networking which help Malaysian firms venture and succeed overseas. Therefore, these counties are
reinforced by bilateral trade relations seem to be significant in the facilitation of international expansion. This
study highlights that foodservice firms international investment reflects the policy of Malaysian government to
reap the benefits of new market opportunities. The policy towards franchise business also recognises the need and
importance of supporting the development of home-grown franchisors to expand overseas.
As suggested by Lecraw (1993), the desire to escape the constraints of a slow-growing domestic market motivated
some developing country firms to move abroad. As for Malaysian foodservice firms, the saturation of domestic
market and Asian Financial Crisis in 1997 are the key reasons that motivate Malaysian government and
foodservice firms to search new opportunities abroad especially in other developing countries. It is therefore more
accurate to explain Malaysian foodservice firms foreign investment as governments attempt to solve economic
downturn and seek new markets abroad.
The evidence from the case study shows that their international expansion was facilitated through various types of
ownership advantages such as knowledge and experience in foodservice industry in pre internationalisation by
learning from foreign firms in the home country (Dunning, 1988). Their ownership advantage has been
strengthened in terms of Western concept management competence and Western food reputation. The status of
Malaysian foodservice firms as a foreign brand in the home market and looks rather American brand in the host
market have invited attention to how the firm used its brand name and reputation as a specific ownership
advantage in the international market. Like other international foodservice firms, Western-pronoun brand name
carries great weight in regard to its international expansion. This reputation reflects the business stability and
strength in the foodservice industry especially to convince the local partners in the host countries to team up with
Malaysian firms.
In the adoption of halal commitment, it can be argued that the international expansion may be retarded as nonMuslim countries may reject this concept. Fast food giant, such as McDonalds, serves pork and alcoholic drinks
to its customers in non-Muslim Asian countries, Europe, and US. However, the food concepts that offered by
Malaysian foodservice firms do not require pork and alcohol, such as chicken (Marrybrown, SugarBun, and The
Chicken Rice Shop), hotdog (Nineteen O One), corn (Nelsons), cakes (Secret Recipe), and kebab (Kyros Kebab).

Therefore, halal has been the best practice for Malaysian foodservice firms in addition to Malaysia as a Muslim
country. This can be further proven by Marrybrown which has been so far very successful in Muslim countries
especially Middle East. Appendix C shows the total of 60 outlets available in Middle East with the master
franchisee, Al Abbas Group, based in UAE.
The halal commitment has proven to be successful as many Malaysian foodservice firms are successful not only
in Muslim countries such as in Middle East and Southeast Asia (Indonesia and Brunei ), but also other nonMuslim Asian countries (Singapore, The Philippines, China, India, Sri Lanka, etc.).
It is expected that the proposed model carries implications not only for the literature, but also for the international
business practitioners. As this research was based on the practical experience and behaviour of Malaysian
foodservice firms, business practitioners can use these analysis and results as a means of comparing their current
tactical behaviour with that of the similar firms in Malaysia. Corrective action can then be taken in their
international expansion.
Two major limitations exist in this study. First, there is a lack of representative from the Malaysian foodservice
franchisors as they were a handful of firms expanded overseas. It was extremely difficult to secure any interviews
as the managers were reluctant to make appointment for fear of divulging. It is therefore recommended that future
studies examining the internationalisation process involves the partners or master franchisees in the host countries.
Second, the data are contextual in nature and limited to the discussion of those secondary sources such as
companies websites and business press and magazines. Further, only one interview was successful to explore the
theme and trend of the internationalisation process.
The future research must try to examine the relationship among the facilitation factors. In particular, it must
analyse the weight of each factors on the each stage of internationalisation process. Therefore, determining the
relative importance of each factor would constitute an important source for future work in international expansion.
Besides, there should be more in-depth study on the effect that country image on the decision making process of
foodservice firms. In particular, the studies should analyse in which situations country image can contribute to
choosing the countries as an investment destination.
Acknowledgement
As a part time PhD candidate at the Faculty of Business and Accountancy, University of Malaya, I gratefully
acknowledge the support of the university to provide the grant for this presentation. The constructive comments of
the panels in the series of colloquium conducted by the Institute of Graduate Studies have improved this paper
significantly. As a full time lecturer, I received encouragement from my current employer, Tunku Abdul Rahman
College, to attend this conference. The college has also provided a platform to me to present this paper at the
campus.

10

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APPENDIX A: MAJOR AMERICAN FOODSERVICE FIRMS IN MALAYSIA

No.
American Foodservice Brand
No. of Outlets
Year Established
1.
Kentucky Fried Chicken (KFC)
300
1973
2.
Pizza Hut
98
1984
3.
Seattles Best Coffee
3
2001
4.
Kenny Rogers Roasters
34
1994
5.
Roadhouse Grill
3
1994
6.
Starbucks Coffee
24
1998
7.
7-Eleven
188
1984
8.
A&W
33
1967
9.
Gloria Jeans Coffee
15
1999
10.
Dunkin Donuts
25
1986
11.
Baskin Robbins
22
1988
12.
Haagen Dazs
12
1993
13.
Hard Rock Caf
1
1988
14.
Planet Hollywood
1
1999
15.
TGI Fridays
4
1994
16.
Chilis Restaurant
4
1994
17.
McDonalds
167
1982
18.
Burger King
9
1997
19.
Dominos Pizza
20
1997
20.
Shakeys Pizza
27
1988
Source: Opportunity Malaysia (2005)

APPENDIX B: MALAYSIAN FOODSERVICE FIRMS AND THE ADOPTION OF ROLE MODEL

Malaysian Foodservice Firms Countries Invested
Foreign Foodservice Firms as Role Model
Food Concept
(Year of Expanding Overseas) (Year of Establishment in Malaysia)
(Year of Establishment)
1.
SugarBun Fried Chicken
Brunei and Bangladesh (1988)
A&W (1967) and KFC (1973)
(1979)
2.
Marrybrown Fried Chicken
India, Middle East, China, Sri
A&W (1967) and KFC (1973)
(1981)
Lanka, Singapore, Indonesia,
and Tanzania (1987)
3.
Nelsons Corn in Cup (1985) China, Saudi Arabia, Kuwait,
A&W (1967), KFC (1973), and McDonalds
Indonesia, and Brunei (1988)
(1982)
4.
Kyros Kebab Kebab (1996)
Singapore, China, Indonesia
KFC (1973) and McDonalds (1982)
and Brunei (1998)
5.
Secret Recipe Cakes & Caf
Singapore, Indonesia,
Dunkin Donut (1986) and Dlifrance
Baking and Pastry (1997)
Philippines, Thailand, China,
(1990)
and New Zealand (1998)
6.
Nineteen O One Hotdog
Singapore, Indonesia, and
A&W (1967) and McDonalds (1982)
(1997)
China (1998)
7.
The Chicken Rice Shop
Singapore, Indonesia, and
KFC (1973) and Kenny Rogers Roasters
Chicken Rice (2000)
Australia (2007)
(1994)
Source: The quantitative analysis from the companies websites
No.

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APPENDIX C: MARRYBROWNS MARKET IN YEAR 2009

No.
Country
Number of outlets
1
*Malaysia
Over 90
2
India
30
3
UAE
15
4
China
10
5
Qatar
05
6
Iran
05
7
Bahrian
05
8
Syria
05
9
Sri Lanka
03
10
Singapore
01
11
*Indonesia
01
12
Tanzania
01
Middle East
Source: Interview on March 2, 2009
*Note: Malaysia and Indonesia are also Muslim countries.

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