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Table of content

1.0 Introduction
2.0 A description of the product and service
3.0 A description of the organizational context
4.0 A description of host country
4.1 General description
4.2 PESTLE analysis
4.2.1 Political
4.2.2 Economic
4.2.3 Social
4.2.4 Technological
4.2.5 Legal
4.2.6 Environmental
5.0 An analysis of how the product and service fits with the environment of the host
country
5.1 Product
5.2 Price
5.3 Promotion
5.4 Place
6.0 An analysis of how the product and service fits with the environment of the host
country
7.0 Conclusion and recommendation
8.0 References
9.0 Appendix

1.0 Introduction
Our company is a start-up company in China for few years and we have a mutual market
and profit was increasing year by year. As our companys product is still new, so we have
planned to expand our business to over-sea such like Malaysia before other company
produce similar product. This report is going to analyse the product and service, the
organisation context, description of host country, how the product fits with environment
and how to enter the host country.

2.0 A description of the product and service


Our company is producing 4-in-1 bed furniture and we focus in furniture industry as our
business. We provide 4-in-1 bed to our customers to enjoy their life.
We are focusing on selling place saving furniture products especially is multi-functional
4-in-1 bed. This special furniture product is multi-functional manual-based and electricbased modern furniture as our advantages to compete with those competitors.
Basically, we provide this kind of furniture for customer because we hope that they have
a spacious place to rest with a smaller house as this product are flexible to flip up and
down. The product is multi-functional 4-in-1 bed with the combination bed, cabinet,
drawer, and sofa. It is a very convenient product for customer and they can get a fashion
and better lifestyle. Moreover, 4-in1 bed furniture is to provide better quality, products
feature and services are our dominant condition in competitive advantage.
Lastly, our business operates based on the better lifestyle concept which providing more
enjoyable to our customer. This product is known as non-premium product and also
unique with no homogenous product in Malaysia market, so consumer will flock to our
product. The uniqueness of our products would suitable for flat or apartment and most
importantly are not expensive. This allows our company maximizes brand recognition
due to our product is creative and innovative. We could hire up an artist to advertise the
product to let much people aware in the market, this would also improve companys
reputation. We believe that our company can gain more profits and success in our
business.

3.0 A description of the organizational context


Our company has applying one of the strategies emerging from the integration
responsiveness framework which is transnational strategy. Its show that our company
combines the major advantages of multi-domestic and global strategies to minimize our
disadvantages (Wall,S, Mlnocha,S and Rees, B, 2010). The reason why we using this
strategy is because its involves global reach, coordination of operations and leveraging
unique advantages of local markets to drives sales to make our company profit and
market share growth faster (Hill, n.d.). Simultaneously it can achieve cost efficiencies,
global warning, and local responsiveness by customize product due to our product is
made by reclaimed wood.
The major operation of our company is based on better lifestyle concept which
providing more enjoyable to our customer. We also provide professional team to suggest
customer few of choices to let them choose which style they like. Moreover, we have
repair services to help customer repair the furniture when in warranty time but we refuse
to repair which deliberate destruction product.
Besides, our company is centralized corporation which decision are made and resources
allocated by central authority. It is because we want to ensure that control is maintained
(Riley, 2012). Lastly, we dont just want to fill jobs but want to partner with people who
share our values as our company core value like togetherness, slimplicity and respect.
The heart is with us in everything we do, to keep our concept successful, we work to
keep our value close to our heart. Those values are to make sure our company moving
forward on the right path and achieve business goals.
Mission

Provide multi-functional furniture for those who have limited living place.
To promote a multi-function furniture products that the prices are affordable all
the customers.

Vision

To provide a better lifestyle to customer with place saving furniture which easy to
use, saving place and our customers can be able to enjoy in their life.

4.0 A description of host country


4.1 General description
Today, Malaysian furniture industry has transformed a strong position in the global
industry. We are going to analyse the external business environment of host country by
using PESTLE analysis.
4.2 PESTLE Analysis
4.2.1 Political
Political is a process by groups of people to do the rightness decisions. As a new
government policy starting in 2013, resident individual income tax rate be reduced by 1%
point for chargeable income and the company income tax rate be reduced by 1% point to
7% point at all chargeable income (The Star, 2012a). As a result, customers have more
money to spend and furniture industry income tax will be reduced, and the profit will
increase to make the business expansion purposes.
For instance, the government will allocate RM1.9 billion to build 123,000
affordable housing units in strategic location in 2013 to ensure that Malaysian have the
opportunity to own a house (The Star, 2012a). In addition, government also provides the
income limit for individual loans for their first residential property. This is an
opportunity for furniture industry to sell more furniture products.
Last but not least, political stability represent important role, we choose Malaysia
as our host country not only political stability but also the growth are very speedy (New
Straits Times, 2013). So, with stable politics and growth rapidly, it will increase the sales
for our 4-in-1 bed furniture product.

4.2.2 Economic
Economic conditions can affect customer purchasing power. If Malaysia economy
is strong, peoples purchasing power will increase. Based on the CIA world fact book,
Malaysia real GDP growth rate decreased -1.5% in 2009 because the moment of global
economical crisis (CIA World Fact Book, 2013). However, economic started to recover
increased 7.2% in 2010and 5.1% in 2011. The EPU reports also estimate the real GPD
growth rate will grow 4.5 to 5.5 in 2012 and 2013 (Economic Planning Unit, 2012). We
assume that Malaysias economic will increase in 2013. Therefore, people purchasing
power will also increase and they will be able to spend more money in furniture industry.

Moreover, the EPU also estimates that inflation rate in Malaysia in between 2 to
2.5% in 2013. This is showing Malaysia has keeping increase the price level of goods and
services. The per capita income of Malaysians also increased from RM 29661 in 2011 to
RM30956 in 2012 (Economic Planning Unit, 2012). Based on the EPU, the per capita
income will increase in 2013. With the low inflation and increase the income, Malaysians
will able to afford and purchase in furniture industry. In future, we estimate furniture
industry will continue to grow and increase our 4-in-1 bed furniture business growth.

4.2.3 Social
Malaysia is a multi- cultural and a multi-racial country. Therefore, there are many
types of lifestyle they have. However, Malaysians are facing the same problems
nowadays, which are the land become lesser and the houses also become smaller. To
enjoy better lifestyles, customers need multi-functional furniture to make their life more
comfortable. At the same time, most of the customers are focus on green, ethical, organic,
fair trade, natural and better quality of goods in their life. This will affect in furniture
industry to provide different multi function of furniture to different customers need.
In a result, customers are increasingly emphasized individuality, pursuit diverse
and new varieties of products in market. However, more people to buy a smaller house
such as flat or apartment. This is due to the house more expensive nowadays. For
example, 350sequare meter house may be to live in a family. So the space utilization
becomes very important. Multi functional furniture combines many functions in one.
There is small footprint, flexibility, easy to use and comfortable. With the new 4-in-1 bed
furniture in Malaysia, we believe that more people will enjoy in their life.

4.2.4 Technological
Technological change plays an important in business market. Furniture industry
has an opportunity to leading to go green concept which using high technological system
to avoid non renewable resources and convenience for our customers. The government of
Malaysia has focus to expand the internet field, so customer can use internet to online
booking furniture produces and to view the latest furniture (Zdnet, 2013).
Moreover, furniture industry can uses point of sale system and management
information system to run the business. With these, furniture companies can analyze sales
and compare data, adjust purchasing levels, control and monitor the management, update

produce information and improve pricing accuracy to make business more successful in
Malaysia.
With the advance technological, furniture industry can use this opportunity to
promote furniture products. With the multifunctional smart phone, customers can get our
furniture information through their smart phone. They can use barcode scanning app to
get relevant offers and information. High technology not only benefit to expansion
business in furniture industry but also useful for customers to get more information.

4.2.5 Legal
There are several rules and regulations that we needed to follow if we want to operate
business in a country. In Malaysia, it practice Patents Act 1983 (Skrine,2004), we must
register our companys name and logo under Patents Registry of the Intellectual Property
Department, we need to protect our invention of using 4-in-1 furniture product. Besides is
Trademarks, it is a sign that to distinguish our product as our design or logo (Intellectual
Property Department, 2004). For Safety Act, Malaysia practices Consumer law 1999
(Mystandard, 2011), so we must make sure that our product is no any harm to consumers
health, we would like to check it very detail in progress to ensure the safety of product.
4.2.6 Environmental
Nowadays, go green concept are actually can affect the consumer buying behaviour, this
can appear in Malaysia (Rezai, et, al, 2013). As we mentioned, the trends is forwards of
go green concept, we definitely using electric-based to replace wood to make furniture
compare to others companies. Our furniture also made with reclaimed materials, the
reclaimed wood usually comes from old furniture that ready for reincarnation (Gordon,
2007). From this, the reclaimed wood can help our companys resource become more
efficiency. By using reclaimed wood as material, our company image could transform
into a good condition to market.

5.0 An analysis of how the product and service fits with the environment
of the host country

5.1 Product
The main product of our shop is Multi-Functional 4-in-1 bed and most of our
products served are place saving furniture. As we noticed, people who living in Kuala
Lumpur are usually stay in flat and apartment due to expensive price to purchase house
(Sahabuddin, n.d.). So, all they need is more spacious and relax to let them feel comfort
in their house. To meet the local needs, we know that Malaysian apartment and flats are
smaller and they required function, so our product would absolutely help them to fix the
problem to make them feel comfortable.
Besides that, people in Malaysia are focusing quality of product nowadays. Our
product are account for little space when flip up, the bed can controlling flip up and down
intelligently and safe utilization. Others, the bed will keep the conform of bed, the bed
has practical and elegant design and durable use. In order to make the customers more
confidence with our Multi-Functional 4-in1 bed, the product has 10 years quality
warranty.

5.2 Price
Pricing is an important aspect of financial modeling and a part of our four Ps. We
know that Malaysian people are very sensitive in pricing, but our product prices are very
low that can suit every family (The Edge, 2011). We have no a fixed price as different
size, quality and design. Besides, we are using penetration pricing strategy rather than
skimming pricing since our product price is not high. Customer would flock to a new
product, it could help us maximizing brand recognition and goodwill.
In addition, there are lower transportation fees charges so customer would not
worry about it if they staying at other state. Our target customers are for whole Malaysia
the term and conditions will apply to our customers. Besides that, we will also have a
different price for special packages which is standard and premium class.
Type of package
Standard class
Premium class

Price of the product


RM 4,000 ~ RM 5,000
RM 5,000 ~ RM 6,000

5.3 Promotion
Promotion is needed for every business to let others know the companys product.
We will be doing promotion through the internet and newspapers advertisement in order
to increase brand awareness. In addition, we also going to make sales promotion as buy 3
free 1 concept when grand opening in Malaysia. To make distinguish advertising, we plan
to work demonstrations how the product using and its function. Hence, this is one of the
ways to introduce our company to the public. To facilitate shopping, our company would
prepare the shopping catalogs and pen to let customer for writing notes.
Other than that, to appreciate customer support for our business, we would give out a
unique water bottle as promotion gift with purchase of our product more than three. We
could also using after-sale customer service strategy, get to know what customer think
after purchase our product so we can always striving to provide the best service and
product.

5.4 Place
Place strategy is about determining where our companys customers are, which is
where our products will be marketed. We choose Malaysia as the host country for our
business.
As we know, Kuala Lumpur is the state of Malaysia, consider as No.2 shopping
paradise in Asia (The Star,2012b), so there have a lots of citizen and visitor can come
visit our outlet. Based on the economic in PESTLE analysis, citizen of Malaysia would
have much purchasing power to spend so that customer would affordable to purchase our
product. The purchasing power is very potential in Malaysia market.
Other than that, our company would provide customer service in every state of Malaysia
to make sure our customer have no worry about spoiled product. Somehow our customer
would able to get benefit from additional service of having furniture installed for them.
Our company noticed that its very important and convenient if there have a fixed
location centre in every state, so customer are easily find us if problems occurred.

6.0 An analysis of how you intend to enter the host country, the critical
risk involved, and how your plan to mitigate the risks
Our company had chosen joint venture as entry strategy. The company that we
would to join is Ikea Corporation, it has located 298 in 26 countries and one store is in
Malaysia. This showed that they were a stable corporate and capable to obtain high
market share. As result, this characteristic may help our company to increase our brand
reputation and visibility in the shortest time. But, we also have an intention to plan
foreign direct investment in future.
From the other side, the reason why Ikea company collaborate with us is because
our product is new to the Malaysia market, people will feel inquisitive to this product and
Ikea have no obtain and product of this kind of place saving furniture product in their
company. This is reason that could attractive Ikea collaborate with us. All these will help
both companies to strengthen and expand new business opportunities (market) in
Malaysia. The reason we choosing joint venture as entry strategy rather than using
foreign direct investment because it able to access new market and can using Ikea
company existing marketing skills and distribute network to help us because we are new
to the Malaysia market. Second, we both companies are sharing risks and reducing losses
as fair to each other (Wall, Mlnocha and Rees, 2010). Our company would export the
product and Ikea company would help us to sell it because our manufacturing is are
China due to labour and material cost are much lower compare to Malaysia. So FDI
would not be used in current due to it need a large finance and investment to invest it.
Indeed, there should have some of the risk involved which the partner could
become a competitor in future. It is a very precarious signal, partner may discover
something that we havent discover it yet than can improve to our product. To conquer
this problem, we would always update the research and feedback from our customer so
that we can notice it and keep invent more unique product. Besides, people who dont
know well of our product function would cause injury. Some of the switches are sensitive
to open the bed will cause injury. To mitigate this problem, we would offer a tutorial class
to teach our customer how to use it to prevent this case happen in future. Lastly, there is a
risk in difference culture and style of business. It may lead both of us to conflict with
each others. To mitigate this problem, our company resist the urge to solve the problem
because we know our partner has good intention to make business become better. All of
us are trying to maximize wealth and profit and conflict does not solve problem.

7.0 Conclusion and Recommendation


If our company and business are stable in Malaysia, we are going to plan foreign
direct investment in future so that we can sell our product to customer directly because
we have strong reputation. In conclusion, we hope that we can achieve our goals and
expand our business rapidly in time.

8.0 References
CIA
World
Fact
Book,
2013
Malaysia.
[online].
Available
at:
<https://www.cia.gov/library/publications/the-world-factbook/geos/my.html> [Accessed
2 December 2013].
Economic Planning Unit, 2012. Basic Statistics, [online], Available at:
<http://www.epu.gov.my/documents/10124/72ac36d7-fe5a-489b-a34c-a2cb2be073a6>
[Accessed 4 November 2013].
Firrdhaus Sahabuddin, (n.d.). Chapter 3: Social Housing in Kuala Lumpur and How It
Relates To Local Environment. [online]. Available at:
<http://www.academia.edu/2377418/Chapter_3_Social_Housing_in_Kuala_Lumpur_and
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Foshan Fully Smart Furniture co., Ltd., 2013. Multi- Functional 4-in-1 bed, [online],
Available at: <http://fullysmart.en.made-in-china.com/productimage/DeMJtiAHbwcq2f0j00RjJEEWatmTqL/China-Multi-Functional-4-in-1-Bed-B15S-.html> [Accessed 2
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Intellectual Property Department, 2004. What is a trademark? [online]. Available at:
<http://www.ipd.gov.hk/eng/intellectual_property/trademarks/whatis.htm> [Accessed 2
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Jacob Gordon, 2007. How to go green: Furniture. [online]. Available at: <
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December 2013].
Joint Venture, n.d. Reason why companies go for a joint venture. [online]. Available at: <
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December 2013].

Malaysian Timber Industry Board, 2011. Furniture Industry in Malaysia- Status and
Market Prospects, (online), Accessed from

< http://www.mtib.gov.my/repository/perdagangan/cik%20rubi%20print.pdf>, [Accessed


2 December 2013].

MyStandard, 2011. Product Safety Malaysia Consumer Product Safety. [online].


Available
at:
<
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New Straits Times, 2013. Political stability a major business draw for Malaysia.
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Rezai, G., et al., 2013. Going Green: Survey of Perceptions and Intentions Among
Malaysian Consumers. International Business and Management, 6(1), pp.104-112.
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http://www.tutor2u.net/business/people/org_centralisation_decentralisation.asp >
[Accessed 5 December 2013].

Skrine, 2004. Doing Business in Malaysia [pdf] PRAC. Available at:


<http://www.prac.org/newsletters/Skrinea_2004.pdf> [Accessed 4 November 2013].
The Edge, 2011. Malaysian shoppers most price-sensitive in Southeast Asia. [online].
Available at: < http://www.theedgemalaysia.com/media-a-advertising/189661-malaysianshoppers-most-price-sensitive-in-southeast-asia.html> [Accessed 5 December 2013].

The Star, 2012a. Budget 2013: Tax Breaks, affordable housing and cash for the needy,
[online]. Available at: <http://thestar.com.my/news/story.asp?
file=/2012/9/28/nation/20120928161303&sec=nation> [Accessed 2 December 2013].

The Star, 2012b. KL ranked No.2 in shopping. [online]. Availably at:


<http://www.thestar.com.my/News/Nation/2012/10/28/KL-ranked-No-2-inshopping.aspx> [Accessed 6 December 2013].

Wesria Corporate, 2009. Welcome to Wesria Food. [online]. Available at:


<http://wesria.com/corporate.html> [ Accessed 6 December 2013].

Wall, S., Mlnocha, S. and Rees, B. (2010) International Business, 3rd edition, Financial
Times/Prentice Hall.

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< http://www.zdnet.com/my/malaysia-to-boost-internet-coverage-in-budget-20147000022488> [Accessed 5 December 2013].

9.0 Appendix

Name of Business:

SELF Furniture Sdn. Bhd.

Company Logo

Life Simple
The meaning of our company name: Saving Place
Elegant Looking
Lifestyle
Flexibility