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You are a senior marketing consultant working for Ashanti Marketing Solutions (AMS) Limited. You have just been commissioned by a company that wants to enter a suitable country with a new product or service. The problem is that, they do not know the kind of product or service to offer within the country you will be recommending. Your task is to produce a report on their behalf answering the following questions:

  1. Recommend a product or service and a country and provide a macro Environmental Analysis (PESTEL) explaining the possible opportunities as well as threats your client could face within the market of your recommended country and provide possible solutions.
  2. Critically assess three modes of market-entry that could be suitable to your client. Out the three options, make a recommendation with justification as to the most appropriate one.

  3. Applying the concepts of market segmentation and targeting critically evaluate the potential target market of your client.

  4. Applying Porter’s generic strategy, explain how your client could gain competitive advantage by adopting one of the generic strategies in your recommended market.
PESTEL Analysis

The report throws light on analysing and identifying a suitable new product for entering a suitable new location. As a marketing consultant, the report needs to be prepared for expanding the growth of the particular product in the new location that will be enhancing their brand image and reputation in a successful manner. In the report, the product which has been selected is Organic Flavoured Milkshake or Juice to Malaysian market. In order to expand the business operations in a successful manner, there should be analysis of the external environment which will be conducted through the help of the PESTEL analysis. Moreover, the suitable market entry mode options are required to be generated which will be effective for improving the profitability of the business in a successful manner. With the assistance of market segmentation, targeting and positioning, the most suitable options target customers are required to be identified who will be helpful for making the business successful. Moreover, the Porter’s Generic Strategies will be helpful for gaining competitive advantage and the respective product will be generating high level of sales by being unique in nature and stay ahead of possible competition. The main aim and purpose of the report is to generate a new product which will be successful in a new country and in the respective market after analysis of the external environmental analysis and other aspects that will be providing the company with competitive advantage.

With the help of PESTEL analysis, it is considered to be the major framework which can be influencing the company and product from outside. The macro environmental factors are being identified and the result of which is utilised in identifying opportunities as well as threats that can affect the growth of firm in both positive or negative manner. In the respective scenario, the Organic Flavoured Milkshake will be expanded and entering to the market of Malaysia. The external environment of Malaysia is required to be identified for understanding whether the product will be gaining success and popularity in the market. Moreover, the reasons are required to be analyzed which will helpful for the overall success of the product Organic Milkshake in the Malaysian market.

Political Analysis- A political factor helps in determining the extent to which the government or the political type of situation may influence economy or certain industry in the respective country wherein they are expanding or operating. From the political perspective of Malaysian economy, it can be seen that it is one of the most vibrant as well as peaceful countries and the economy is stable as well as most effective economies in the world for starting or expanding various businesses in a successful manner (Aguinis, Edwards and Bradley 2017). The country is multi-democratic in approach and it makes a prove for the different investors who are planning to expand their business (Baumgartner and Rauter 2017).

Political Analysis

There is change in governmental policies and policies related to trading can be considered as stable that makes Malaysia more stable and the most attractive type of proposition. For Organic Flavoured Milkshake, Malaysia is the most suitable locations which enhances their growth and it will be increasing the level of sales and profitability (Bergh et al. 2016). On the other hand, there are different claims relating to the rate of corruption in the country which can be a drawback for the company to introduce the organic flavoured milkshake in the economy of Malaysia as there is inclusion of bribes or requirement of lobbying. Therefore, before investing in the Malaysian economy, the interested parties need to look for the issues, however, as a whole, Malaysia is politically stable with few drawbacks (Bergh et al. 2017).

Economic Factors- As per the economic aspects, it can be seen that the rate of unemployment in Malaysia has increased to a large extent in the last few years which is around 3.6% till the year 2017. From the survey, the justification which can be gained is that there is large number of individuals who needs job and, in such scenario, the respective company can introduce the Organic Flavoured Milkshake in the respective country and it will be a good opportunity for the individuals who are unemployed (Bromiley, Rau and McShane 2016).


In addition, the FDI of the country is not stable, which can create hindrance in exports in Malaysia. However, the rate of inflation is low and there is consistency in the rate which is about 2%. It will be suitable for attracting foreign investors and it will be covering the drawbacks. As a whole, the business will be working in Malaysian economy and exploit various kinds of advantages which will be making the ventures advantageous. In the current scenario, the different individuals prefer the different kinds of healthy food products which will be tasty and Malaysian economy is one suitable country for expanding and entering (Certo et al. 2018).

Social Factors- The entire culture of Malaysia is vibrant and it is mixed kind of culture which makes them effective. Due to such kind of culture, there are different kinds of cultural festivities which are being followed in Malaysia and it can be beneficial for the companies to be targeted in a suitable manner (Certo et al. 2016). The pattern of buying among the different individuals is changing Malaysian economy and they are switching and preferring the online shopping techniques. In such scenario, the respective company can switch to the online shopping through selling the organic flavoured milkshake to the different customers through online and official website (Chen, Delmas and Lieberman 2015).

Economic Factors

On the other hand, there are few threats which can be inclusive of the high level of alcohol abuse and therefore, it is required for the firms to be aware regarding the different consequences which can be faced by them and impact their growth and brand image in a negative manner. In such scenario, the companies and the products which are being sold in Malaysian economy requires to be very conscious in nature before thinking of expanding in Malaysia (Demir, Wennberg and McKelvie 2017).

Technological Factors- It is inclusive of innovation in technology which can affect the operations of the industry as well as market in a favourable or unfavourable manner. In the year 2015, there are more than 20.6 million internet users that helps in indicating that the information communication technology market has strong kind of fundamentals related to growth, including rise in incomes and high tech focused national development plan (Engert, Rauter and Baumgartner 2016). In the year 2018, Malaysia has the opportunity for generating US$6.2 billion from e-commerce kind of businesses. Malaysia is one of the most funded sectors for different businesses which help the companies in generating high level of sales in the market. Therefore, from the analysis of the technological aspects, it can be analyzed that different firms can be helpful in exploiting the advantages related to Research and Development Program for making innovations for the business successfully (Gallus and Frey 2016)

Legal Factors- The legal factors have different internal and external sides and there are few laws which affects the overall effectiveness of the business environment. As per the employment law of Malaysian economy, it can be analyzed that there is specific and minimum wage which is required to be provided to the employees and it cannot be less than 1000 ringgit (Ginter, Duncan and Swayne 2018). Due to the same, it can affect and impact the foreign investors as they prefer to invest in countries wherein the cost of labour is cheaper and it will be beneficial for the growth of the company. However, there are different laws related to environmental protection which will be enhancing the growth of the company and it will be effective and beneficial for the success of the expansion of business (Hanson et al. 2016).

Environmental Factors- In Malaysian economy, there is high level of deforestation which is taking place in the world and it impacts the effectiveness of the economy in a negative manner. However, in order to reduce the level of threat, the government of Malaysia has taken several steps which are helpful for restoring the natural kind of ecosystem which will be enhancing the investment regarding business in Malaysia and it will be suitable for effectiveness of the company in a positive manner (Höglund et al. 2018).

Social Factors

From the analysis of the PESTEL analysis of Malaysian economy, there are different kinds of opportunities and threats which have been identified. There is high level of political stability, and it is considered to be the most important aspect for expanding a business. On the other hand, there can be different threats in regards to the environmental and legal situation of the country which can create negative impact on the profitability which should have been gained by the individuals in the expansion of the business in the respective economy. As to reduce the different threats in the economy, there are various laws of government which have been introduced by the Malaysian economy for improving their growth prospects in a successful manner. It is recommended that there should be increase in the corporate social responsibility related programs which will be helpful for improving the effectiveness of the companies which are planning to expand.

In order to expand the business and introduce the Organic Flavoured Milkshake in the competitive business environment of Malaysia, there are different market entry modes which can be incorporated by respective company for increasing their effectiveness and improve their growth prospects in a successful manner as well. Market Entry Modes are important for transferring or expanding the business from one country to the other as it will be providing them with appropriate growth successfully (Karadag 2015). No single market entry mode works for different international markets. For expanding the Organic Flavoured Milkshake, the three major entry modes which can be chosen are as follows:

Direct Exporting- It is considered to be one of the most important forms of operating in the international markets. It is considered to be marketing of goods which are being produced in one country to other and the main advantage of using the respective approach is that it is less risky and it provides the seller with the different opportunities to produce the different products in a sustainable manner which will be suitable for the growth prospects of the company (Lasserre 2017). The different distributors as well as agents work in a close manner in representing their interests and they become the face of company.

Licencing and Franchising- These are considered to be the two special modes of entry which constitutes the fact that it is fast mode of entry with low cost and risk. The main aspect which is adapted by the different kinds of entrepreneurs or companies to expand their business and product in other country is the fact that there is low risk of debt and cost of equity. It allows the companies in growing with the utilisation of resources of other companies (Morschett, Schramm-Klein and Zentes 2015).

Technological Factors

Joint Ventures- It is the other technique which can be used by the respective company for expanding and introducing the Organic Flavoured Milkshake in the market. In joint venture, it is considered to be the type of partnership which includes proper creation of third independently managed organization. In the respective approach, there is less risks and the company are seen as the local entity that will be suitable for improving their growth prospects in a successful manner (Trigeorgis and Reuer 2017).

From the analysis of the three appropriate entry mode strategies which can be adapted by the company for expanding and introducing the Organic Flavoured Milkshake in the Malaysian economy. However, from the above, the most appropriate entry mode strategy is Joint Venture as it is the preparation of business in which two or more companies tries to share the partnership. In case of the particular company, the product organic flavoured milkshake is helpful in creating synergy and risks and rewards are being shared in a suitable manner (Wicker et al. 2015). In order to enter in the new Malaysian market, the joint venture with the similar kind of company will be providing them with the scope of sharing risks and understanding the culture of individuals who stay there. Moreover, it is helpful for scaling up with their limited capability and it will be providing the competitive advantage to both organizations and generate the economies of scalability.

In the marketing terms, segmentation, targeting and positioning is considered to be the broad framework which helps in summarizing and simplifying process of the market segmentation. On the other hand, the market targeting is process in order to identify most attractive type of segments from the stage of segmentation which is the most profitable for the business prospects. In case of the respective organization, the expansion and introduction of new product namely Organic Flavoured Milkshake, there should be proper segmentation and targeting needs to be done which will be helpful for improving their growth prospects (Yorio, Willmer and Moore 2015).

Segmentation

Under the demographics section, the product will be mainly targeting the different young generation individuals who are health conscious. Under the psychographic segment, the main motive for the respective segmentation is the fact that in the current scenario, the young generation prefers to consume tasty yet healthy food items and shakes which will be attracting them and satisfying their requirements. From the entire segmentation, it can be analyzed that the respective segment helps in catering to the different customers who look for the different healthier options for consumption and it helps them in improving their brand image and reputation successfully (Yorio, Willmer and Moore 2015). In order to make the customers feel that the brand cares for the needs of the individuals and it will be enhancing their growth.

Legal Factors

Targeting

In the case of targeting, the main target individuals who will be involved the different adults ranging from age group of 21-30 years of age and are always concerned regarding their health. In order to maintain the nutritious diet, the Organic Flavoured Milkshake is the healthiest options which can be adapted by customers for meeting their needs. The respective milkshake is healthy, nutritious as well as tasty which will be preferred by all individuals in a successful manner (Zhao et al. 2017).

Positioning

The global strategy of positioning which can be adapted by company in introducing the Organic Flavoured Milkshake in Malaysian economy is mainly focusing on healthier options and sell the nutritious beverages which will be meeting the different needs of the customers in a positive manner. The company has tried to position themselves as the low price and high-quality product which will be adapted by the different income group individuals and it will be helpful for meeting their requirements strongly (Zhao et al. 2017). The product is gluten free, however, with the usage of different ingredients such as maple syrup and other healthy ingredients, the same can be consumed by different individuals.

As commented by Zhao et al. (2017), porter’s Generic Strategies helps in describing how the organization has been able to pursue competitive advantage across the chosen scope of market. Porter has been capable of suggesting the fact that generic business strategies will be adapted by the companies for gaining competitive advantage. There are four major categories which are included in the aspect which are described as follows:

Cost Leadership- The different firms try to set out by becoming low cost producer in the respective industry and they can exploit all sources of competitive advantage.

Differentiation- In the respective aspect, the firm seeks to become unique in the entire industry along some of the dimensions which can be valued by the different buyers.

Focus- In the respective aspect, there are two parts which includes differentiation focus and cost focus. The cost focus is approaching wherein the companies seek cost advantage in target segment successfully and in differentiation focus, the firms try to seek the proper differentiation in the target segment which will be beneficial for success.

From the respective analysis of the Porter’s generic strategies, the most suitable aspect which can be adapted by the respective company for introducing Organic Flavoured Milkshake in Malaysian market is Cost Leadership Approach. As per the respective approach, the company can be able to attract a large group of customers in the market and improve the overall effectiveness of the company in a suitable manner. The distribution channels are effective and it will be helpful for them in increasing their customer base in Malaysia and it will be able to sustain the competitive advantage and gain the overall efficiency in the market in a proper manner (Lasserre 2017). The company and the new product which has been introduced will be providing new profits for the organization as well as team and it can be capable of increasing the market share of the company successfully. Moreover, there will be improvement in the sustainability of the business of the company that will be effective in gaining the effectiveness of the company and product in a proper and appropriate manner.

Environmental Factors

Conclusion 

Therefore, from the overall analysis of the external environment analysis of the Malaysian economy, it can be inferred that the political stability is one of the main aspects which can be treated as the most efficient approach for the attracting large number of customers successfully. However, there should be proper analysis regarding the environmental and legal factors which impacts the business environment and it impacts the business environment negatively. Additionally, from the market entry strategies, the Joint Venture is the most appropriate strategy for expanding the business in Malaysia and it has been helpful for improving their business prospects in a successful manner. From the analysis of the segmentation, targeting and positioning of the company, it can be concluded that the health-conscious customers are the major groups who will be included in the purchase of the different products and services which are served by them. In the current scenario, the different individuals have become health conscious, however, they prefer to consume the different food items which are nutritious yet tasty and, in such scenario, the Organic Flavoured Milkshake is the most effective element which can be introduced by the company for improving the effectiveness. Lastly, the cost leadership approach is the most appropriate strategy that can be included in the business of Organic Flavoured Milkshake which will be helpful for improving the growth prospects and it will be suitable in improving the overall effectiveness.

References 

Aguinis, H., Edwards, J.R. and Bradley, K.J., 2017. Improving our understanding of moderation and mediation in strategic management research. Organizational Research Methods, 20(4), pp.665-685.

Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting strategic management. Springer.

Baumgartner, R.J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability management to develop a sustainable organization. Journal of Cleaner Production, 140, pp.81-92.

Bergh, D.D., Aguinis, H., Heavey, C., Ketchen, D.J., Boyd, B.K., Su, P., Lau, C.L. and Joo, H., 2016. Using meta?analytic structural equation modeling to advance strategic management research: Guidelines and an empirical illustration via the strategic leadership?performance relationship. Strategic Management Journal, 37(3), pp.477-497.

Bergh, D.D., Sharp, B.M., Aguinis, H. and Li, M., 2017. Is there a credibility crisis in strategic management research? Evidence on the reproducibility of study findings. Strategic Organization, 15(3), pp.423-436.

Bromiley, P., Rau, D. and McShane, M.K., 2016. Can strategic risk management contribute to enterprise risk management? A strategic management perspective. A Strategic Management Perspective (October 20, 2014). Forthcoming: Bromiley, P., Rau, D., and Mcshane, M, pp.140-156.

Carroll, R.J., Primo, D.M. and Richter, B.K., 2016. Using item response theory to improve measurement in strategic management research: An application to corporate social responsibility. Strategic Management Journal, 37(1), pp.66-85.

Certo, S.T., Busenbark, J.R., Kalm, M. and LePine, J.A., 2018. Divided we fall: How ratios undermine research in strategic management. Organizational Research Methods, p.1094428118773455.

Certo, S.T., Busenbark, J.R., Woo, H.S. and Semadeni, M., 2016. Sample selection bias and Heckman models in strategic management research. Strategic Management Journal, 37(13), pp.2639-2657.

Chen, C.M., Delmas, M.A. and Lieberman, M.B., 2015. Production frontier methodologies and efficiency as a performance measure in strategic management research. Strategic Management Journal, 36(1), pp.19-36.

David, F.R. and David, F.R., 2019. Strategic management: A competitive advantage approach, concepts and cases. Pearson.

Demir, R., Wennberg, K. and McKelvie, A., 2017. The strategic management of high-growth firms: A review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.

Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, pp.2833-2850.

Gallus, J. and Frey, B.S., 2016. Awards: A strategic management perspective. Strategic Management Journal, 37(8), pp.1699-1714.

Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care organizations. John Wiley & Sons.

Hanson, D., Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management: Competitiveness and globalisation. Cengage AU.

Höglund, L., Holmgren Caicedo, M., Mårtensson, M. and Svärdsten, F., 2018. Strategic management in the public sector: how tools enable and constrain strategy making. International Public Management Journal, 21(5), pp.822-849.

Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises: A strategic management approach. EMAJ: Emerging Markets Journal, 5(1), pp.26-40.

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Zhao, E.Y., Fisher, G., Lounsbury, M. and Miller, D., 2017. Optimal distinctiveness: Broadening the interface between institutional theory and strategic management. Strategic Management Journal, 38(1), pp.93-113.

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