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International Business Group Assignment(Pelita)

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Tham Sheeloon

on 11 July 2016

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Transcript of International Business Group Assignment(Pelita)

Introduction to International Business
1.0 Company Background Information
Organization History


-Nasi Kandar Pelita operated their first business located at Taman Chai Leng in Peng on 9 June 1995.
-The origin of nasi kandar is an Indian-muslim dish.
-It has developed to a Malaysian biggest nasi kandar restaurant chain in Malaysia.

Competitors
: Nasi Kandar Kayu, Line Clear Nasi Kandar and so on
-Nasi Kandar has operated their business in Peninsular Malaysia, while they have expanded to Chennai and India.

INDIA
Subject: Introduction to International Business
Course: Bachelor of Communication in PR & Marketing
Name: Pang Jia He 0315106
Tham Shee Loon 0314408
Nur Nadiah Ariffin 0315331
Loh Wan Qing Samantha 0313579
Lecturer: Mohd Muttaqin

Mongolia
2.0 New Market Analysis
2.1 Geographic Factors
A large landlocked country in central Asia,
Between Russian Federations (North) and People's Republic of China (South)
Has steppe, desert, mountainous terrains, numerous lakes, rivers, springs and streams.
A big country with small population.
Challenges:
Difficult to satisfy most of the population due to geographical constraint. As we would be operating the restaurant in the main capital,
Ulaanbaatar
.
2.2 Demographic Factors
Mongolia has 2.9 million population
One of the most rapidly growing economies in the world
Challenges:
Low population, it will be challenging in expanding the market.
However, it could be overseen with the high growing rate in population.
Figure 1: Number of Mongolian Population( Age Structure)
Figure 2: Mongolian Population (Percentage)
2.2 Demographic Factors
Mongolia has several ethnic groups:
Mongol (94.9%)
Kazakh (5%)
others (Including Turks, Chinese, and Russians (0.1%)
Religion in Mongolia
Buddhist, Muslim, Christian, Shammaismm, and others.
Language in Mongolia
Most of them speak Khalkha Mongol
Few of them speak Turkic and Russian

2.3 Economic Factors
Mining sector is the main contributing factor to Mongolia economic
Other industry sectors that receive most investment in Mongolia:
transportation
infrastructure
healthcare
communication
mining energy
The 3 main potential sectors are mining, agriculture, and the processing of agricultural products. (Nationsencyclopedia, n.d.)
2.3 Economic Factors
Mongolia's current economic factors:
Economic Freedom Status: Mostly free
Unemployment: 4.8%
Regional Ranking: 22nd in the Asia-Pacific Region
Concerns: Property Rights, Corruption, and Regulatory Efficiency
Benefits
: Due to the abundant agriculture products in Mongolia, Pelita will not face issues in allocating materials for food products.

Most of the Mongolian people spend their expenses on rental and buying groceries on the market.
2.4 Political Factors
Mongolian political system strongly influenced by Russia and China.
Today, Mongolia has become a parliamentary republic country, where its people will determine their President, Parliament, and Government through election.

Overall, the political environment does not affect Pelita as long as the company can understand the government structure while dealing with the correct department.
Constitution of Mongolia
Develop a nation that
respect human rights, independent values, social order, market economy and the regulation of law.
Judiciary system was established: where courts are to be independent and only subject to the constitution.
The Mongolian court system was divided in terms of judicial power.
Oppoturnity
The 2013 investment of Mongolia:
Accept foreign company that
conduct 100% ownership and operation in the market
Law that favors foreign investment with lower rate of taxation
2.6 Sociocultural Factors
Food
Festival
Nomadic based culture
Meat and dairy products are very prominent for the Mongolians.
Cooking is simple and basic; do not use many spices, flavoring and sauces.
During ceremonial occasions, there are several foods that are served upon guest arrivals.
Benefits
: The Mongolian eat few meats that are not sold in Pelita's menu. This an opportunity for expand product choice to accommodate the host market
Several festivals that are celebrated, one of which is the
Naadam Festival
is taken placed at capital.
Well known festival that consists of three mainly sports; hose riding, wrestling and archery.
The event is accompanies by eating and drinking (Emphasize on socializing)
Tsagaan Sar(Mongolian Lunar New Year); celebrated the end of January and February.
Mongolia is well known for their hospitality.

Traditional treats are served: dairy products and meat.

Meats are to be delivered during the winter whereas dairy products served during the summer.
Due to the climate and short growing season as well as agriculture, Mongolians practices a
nomadic lifestyle.
Raised several types of animals provide
transportation, meat, dairy products and wool.
Benefits
: Allows Pelita
To recognize the do's and don' ts in Mongolia.
To reduce the risk in conducting accidental offensive act towards the customers.
Entry Modes
Short Term- Joint Venture
4.0 Sustainability Factor
4.1 Product & Price
Localization strategy
is implemented to
increase profitability by customizing the goods to meet the needs and preference of the local market:
Addition of different types of meat onto the menu
Excluding certain menu in Mongolia for early stage
Adjustment in pricing in term of cost
But has low pressure to reduce price
Cost of consumer goods in Ringgit Malaysia.
4.2 Promotion
Promotion plays an important role because Pelita is a new product/service to the Mongolian market.

During the earlier stage, push strategy that generate sales :
1) Redesign of packaging and product display for the Mongolian market.
To stimulate customer demand through delivering values
For example: Having attractive interior design for Pelita restaurant
2) Attractive food presentation and take-away service
To attract customer's attention and to make customers feel curiousity.


Pull Strategy: Pelita could engage in advertising through traditional media.
To sustain in a market with many competitors
Shows differentiation in product (Pelita is a foreign cuisine.)
Besides, rely on radio and television. Pelita can rely on word of mouth referral strategy
To sustain the business, could be easily achieved when Pelita had successfully implement their push strategy.

*Mongolia is slightly different than Malaysia, having a stronger identity is important to allow Pelita to stand out among others and gain higher market share.

4.3 Place
Situated at the main street name
Peace Avenue
(Enkh Taivny Örgön Chölöö)
Direct distribution:
Provide dine in or take away services for the customers
.

Pelita restaurant will be handling all distribution channel
independently
at the retail location

Ulaanbaatar is the world's coldest capital, Pelita should able to address the issue by modifying the food distribution methods.
Thermos technology like water bath method
For take-away system,
To modify the packaging to address the temperature issue.

Substitute of aluminum foil as the container.

Translation of menu into local language is crucial.

With the unique direct distribution strategy, Pelita would be able to sustain the business in a long run.
5.0 Conclusion
Based on the strategies that proposed above, we believe that Pelita Business has an opportunity to enter Mongolia market. This is because Pelita has the product, resources and business strategy similar to the needs and preferences of the host country.


Hence, Pelita would be able to gain high market share in the Mongolia markets.

Joint Venture
Master
Franchising
Short Term
Long Term
UFC Group
Mongolia
Pelita Nasi Kandar
Malaysia
Pelita Restaurant in Mongolia
Pelita Nasi Kandar
Management and Operation

UFC Group
Marketing and Sales
Reasons
Higher market adaptability
Preparation for business development
Pros
Lower cost and risks
Gain insight into host market
Partner's established reputation



Cons
Conflict of interest
Cultural differences
Vulnerable to changing laws



Long term - Master Franchising
UFC Group
Mongolia
Pelita Nasi Kandar
Malaysia
Franchising Pelita Restaurant in Mongolia
Pelita Nasi Kandar
Do nothing

UFC Group
Manage franchise system
Recruit, train and support franchise network
Reasons
Achieve global expansion
Provide fund to penetrate new market

Pros
Minimal cost and effort
High revenue
Rapid market penetration
High brand exposure



Cons
Conflict in goals
Half of profit is shared
Specific requirement:
Established brand name
High capital and expertise




Franchisor
partnership
Master Franchisee
2.5 Legal Factors
Full transcript