Strategic Planning for International Expansion of Mydin

This report discusses the strategic planning approach for the international expansion of Mydin, a Malaysian supermarket chain, to Indonesia. It explores the benefits of strategic planning, competition in the Indonesian market, and key principles for successful expansion. The report also highlights the importance of market research and relevancy in the expansion decision-making process.

International
Marketing Report

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Point 1:........................................................................................................................................1
Point 2:........................................................................................................................................2
Point 3:........................................................................................................................................3
Point 4:........................................................................................................................................3
Point 5:........................................................................................................................................4
PART 2............................................................................................................................................5
Point 1:........................................................................................................................................5
Point 2:........................................................................................................................................6
Point 3:........................................................................................................................................7
Point 4:........................................................................................................................................7
Point 5:........................................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Marketing is an activity performed by a business organisation so that goods and services
can be sold to the consumers. When business activities are performed in more then one nation
then it is termed as international marketing. In this report Mydin organisation which is operating
in Malaysia is expanded to international market of Indonesia. It is a public organisation founded
in the year 1940 by Mydin Mohamed. The organisation is operating business as Emporiums,
convenience stores, franchises, mini-markets, supermarkets, grocery stores. In the past 80 years
business has expanded to 74 other locations and now planning to expand to Indonesia as one of
their form of supermarkets (Christofi and et.al., 2018). As Mydin is dealing in supermarkets all
the consumer goods which are specifically related to food industry are served by the
organisation. Consumers of all the age are considered as a target market for the products.
PART 1
Point 1:
Strategic planning is termed as a process through which business organisations develops
a long term plan that needs to be achieved through implementing all the required steps. Mydin
organisation is expanding to international markets and various strategic planning models are
applied for this some of them are as follows-
PEST (Market based): In this strategic model external marketing factors such as
political, economical, social and technological of Indonesian market is analysed. This will help
Mydin organisation to expand their supermarket business in more planned and secured manner.
VRIO Framework (Resource based): Availability of resources helps Mydin
organisation to gain competitive advantages in the Indonesian market. Value, rairty, imitability
and organisation of resources must be consideration while making planning for expansion to
international market (Eteokleous, Leonidou and Katsikeas, 2016).
Organic and self-organising: It is a strategic planning model through which more
formal and methodical then other approaches. Each organisation uses a unique approach in order
to bring change and achieve its objective.
Balance Scorecard: It is a performance metric through which all the functions of
business organisation are recorded and performance of business operations are managed.
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Through this target performance is measured with actual performance and feedback is provided
to minimise variance in internation business functions.
In the process of expanding at international level Mydin organisation needs to consider
PEST strategic planning model. Factors such as political, economical, social and technological
will be used by managers of Mydin organisation in order to access business environment of
supermarkets in Indonesian market (Mathews and et.al., 2016). Accessing all the factors will
help in generating well defined expansion plan so that organisational health can be maintained.
Accessing all the external factors available in the international market helps in developing a good
plan for internationalisation.
Point 2:
Mydin organisation operates its business based on “Halal” concepts and stresses on
honesty, sincerity and good discipline in all business aspects. Companies vision is to become
world's leading distributor of competitive “Halal” goods and services. In long run the
organisation is working with a mission to aim for becoming leading wholesale and retail
company by providing best value, wide assortment of goods through excellent business formula.
These mission and vision of Mydin will create a positive effect while expanding to international
markets. As good brand image will be created which is important for expanding businesses to
international markets.
Mydin is operating in the competitive business environment and its strategies of serving
large number of consumers with low pricing is getting affected through high level of competition
in the business. This competitive environment in Malaysia will influence strategies for
international marketing as more and more new markets will be searched and business will be
expanded their (Moon and Oh, 2017). Charging economical prices for the goods offered become
one of the hindrance in the strategic development as due of competition fluctuations were high in
the prices of goods and services in the market.
Mydin expansion and growth strategy was implemented by identifying various countries
where expansion of business can be performed. Analysis on the market of countries are made
and best suitable country favourable as per Mydin strategy is selected for expansion. Success of a
strategy can be measured by monitoring it. Expansion strategy is monitored by creating a
scorecard of set targets for level of achievements. Variations are identified and actions to
minimise them is taken.
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Point 3:
Strategic planning formed by Mydin organisation in order to expand to international
market is available with number of benefits such as-
 It provides a clear direction to all the activities that organisation needs to perform.
 All the actions are made with a common vision of achieving success.
 Strategic planning provides a set standards to all the activities performed as all the plans
are performed on the basis of analysis and standards (Perera and Hewege, 2016).
 Through strategic planning all the activities and their performance method is clearly
defined so the speed of implementation of the plans and strategics increases for Mydin in
relation to expansion.
 Strategic planning is based on true and fair information and all the details are analysed in
effective manner this minimises the risk involved in achievement of goals and objectives
based on set strategies.
Point 4:
Scenario based planning is one of the organisational planning method through which
long-term organisational plans are prepared with some amount of flexibility based on different
scenario. Different scenarios to a particular situation is created and plans are prepared so that
cost can be controlled, disruption can be avoided and competition can be managed. Their is a
slight difference among scenario and strategic planning (Rosson and Ford, 2016). As strategic
planning starts with agreement on vision of the business and scenario planning ends with vision
of the organisation.
Bottom-Up Planning is a method in which plans are initiated with the lower level in the
hierarchy. For example- Targets for employees of Mydin are set at the first place and then the
ultimate goal will be defined. This form of planning is totally different from strategic planning as
employees at the lower level are communicated at the first to encourage them. In strategic
planning all the plans are designed and implemented by mangers at higher level.
Basis Strategic Panning Scenario based
planning
Bottom-Up Planning
Type of industry All form of industries
uses strategic planning
This type of planning
is used by the
This form of planning
is useful in industries
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for operating business. industries which are
involved in the long-
term planning. As
sufficient amount of
flexibility is provided
as per this planning.
where projects tends to
involve new
challenges that
requires innovative
solutions.
Organisational
culture
Strategic planning
approach is least
affected with the
organisational culture
as it is based on the
facts and analysis
made on the
appropriate research
for planning.
Scenario based
planning is also
affected through
organisational culture
because different
scenarios are prepared
for organisational
culture. Preparation of
a plan will be
influenced through
culture of the business
organisation.
Bottom-up planning
approach is quite
influenced through
organisational culture
because all the plans
are implemented at the
lower level and after
that final goals and
actions are made.
Requirement of
speed
Strategic planning
requires highest speed
among all the other
forms of strategic
planning used in the
business organisations.
Scenario based
planning works with
less speed in
comparison to
strategic planning.
Actions taken through
bottom-up planning
approach involved
leads speed then other
forms of strategic
planning while
operating business
activities.
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Point 5:
Strategic planning approach when implemented by Mydin organisation in order to
expand their business operations in Indonesian market the number of benefits will be available to
them. Benefits are such as-
Proper management of resources: Strategic planning defines activities which needs to
be performed and requirements of different types of resources are estimated for performing
defined activities. Analysing resource requirement as per strategic planning helps in determine
requirement of funds and resources. Throughout the project life all the resources are managed as
per strategic planning (Schmid, Grosche and Mayrhofer, 2016).
Allocation of funds: Through strategic planning all the activities and their performance
requirements are identified. This helps in arrangement and allocation of funds to all the activities
in most productive manner.
Quality: Plans for business expansion become well defined and analysed through
strategic planning and this leads to improve and manage quality of business operations by
Mydin.
PART 2
Point 1:
Expansion of Mydin in Indonesia will involve it sharing market space with a lot of
established competitors like 99 Ranch Market, AEON Group,Hypermarket Indonesia etc. There
are a lot of local and foreign supermarket chains in Indonesia for which company will need to
make separate strategies as competition will be different from local and foreign companies. The
ownership structure of corporate giants in Indonesia is in a hierarchical form starting with
shareholders, commissioners and directors which the enterprise needs to follow.
There are equal opportunities available for both public-sector and private-sector entities
in Indonesia which makes it easier for any organisation to expand its business there. As
Indonesia is a developing country with an economy growing at around 5% every year there is
immense potential it offers to new foreign entrants for investment and business (Skarmeas, Zeriti
and Baltas, 2016). Hero is a supermarket chain which has the highest market share and trends in
show that supermarket chains have a high potential to grow in the country.
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For a company like Mydin which is already an established player in Malaysia it can
easily grab atleast 10% market share if it expands to a country like Indonesia by offering quality
products and services to the consumers. There is an emerging market in the country with a young
population which likes to shop in supermarkets which offers attractive upside opportunities to
Mydin. The average expenditure of modern retail customers in hypermarkets in country is
Indonesian Rupee 100-500. Average time which they like to spend there is 1-3 hours.
The competitive landscape of supermarkets shows that there is a high-level of
competition prevalent in Indonesia. The legal requirements to enter the country are minimum
investment of IDR 10 billion and it approximately takes 2-6 months to set up a business there.
Thus, Mydin needs to complete a lot of legal formalities before it can be granted to start its
international operations.
Point 2:
Key approaches and principles for international market of Mydin
There are two approaches for international market namely centralized approach and
decentralized approach. In centralized marketing program, the company does not delegate its
work and decision making power to its lower level of management. All the major decisions are
taken by higher level of management without any sort of consultation from middle or lower level
of management (Souchon and et.al., 2016). This type of approach also de-motivates the work
force as they feel no importance in their company's decision. Also such approach is highly
suitable when the company has highly competent and experience working with international
markets. With respect to the company, Mydin, for expansion the company head quarters team of
marketing takes whole responsibility for its expansion rather than delegate the work to other
team or company. This approach can prove to be a great success when company feels that its
marketing department is competent and experienced enough to work in international markets.
The company's marketing team can also take help from localize marketing team of the country
where they are expanding for guidance. If Mydin practices centralized approach then it needs to
develops in-house marketing capabilities an scalable processes. But, this approach also increases
the cost and consumes the time for company. Cost may include- the travel cost, stay cost, food
cost and the like. And it is time consuming as the company needs to do hell of research work.
Decentralized approach to international marketing- Decentralized approach is when the
company delegate its working to its middle or lower level of management. In decentralized
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marketing program, the company gives this whole marketing work to some other independent
entity. That independent entity has the responsibility for marketing and also exercises full
freedom of decision making. As in case of mydin, the company can hire an independent entity or
firm which engages in marketing work for international marketing of Mydin's expansion. That
independent firm will be allowed to take necessary decisions regarding its marketing problem
with the consultation from Mydin. Also that company would have knowledge about that
country's market very well.
Point 3:
Strategic planning for a business while expanding to the international market is based on
effective market research. Their are number of benefits generated through planning strategically
and relevancy of the market is one of them (Williams and Chaston, 2016). As Mydin is
expanding its business operations in international market it is important to know whether this
expansion is suitable on not. Strategic planning will help to know all the factors of the target
market and decision making for expansion will become smooth. Expansion decision is quite
critical and business organisation needs to access market and product offered to the targeted
market. Analysing the market with financial figures and on the basis of trends it will become
quite clear that supermarkets that will be introduced by the organisation possess scope of success
or not. Analysing a product market fit is a suitable option for securing success of the business
expansion at international level.
Analysing all the resources requirements and availability in strategic manner will help to
access efficiency of the resources available. When resources are estimated on the strategic
planning basis then their availability can be secured. This turns as one of the positive action for
Mydin organisation while expanding their business operations in the international markets.
Point 4:
There are number of planning applied to business organisations while expanding their
business in the international markets. Alternative planning approach in relation to marketing will
help to gain various amount of benefits. Marketing approach will provide quicker market
dominance to Mydin organisation in Indonesia for establishing their business through super
markets. Marketing planning approach is performed through analysing and evaluating target
market of Indonesia. All the opportunities and threats available in the market will be accessed
and level of influence on the business will be analysed in effective manner. When information
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regarding target market and recent trends in the market will be known in detailed manner then it
will serve as an opportunity to get market dominance (Wu, 2016).
Business organisation when expand at international market then acceptance of brand is
quite important in order to gain success. Alternative planning approached for marketing,
resources, financing will help business organisation to gain wider brand acceptance. Working on
the basis of market analysis and providing goods and services as per consumers demand will
help Mydin organisation to establish their supermarkets in Indonesian markets.
Point 5:
Method to enter new market
In present time, each company wants to extend market share and expand business at
global level in order to attain maximum profitability. As mentioned in case study Mydin wants
expand business in Indonesia market in order to provide number of daily and needed consumer
product to large number of audience. There are different ways to enter into new market some of
these are discussed in the context of Mydin.
Joint venture: It is consider to be a specific form of collaboration involving the
development of a third separately run enterprise. Two firms decide to work together in a specific
market, either regional or commodity, and to set up a third entity to do this. They also agree to
share risk and profit equally so that business do not gets impacted and results are always
favourable.
Greenfield Investment: Investing in Greenfield need the largest presence in the global
business. A greenfield project are where you buy the property, create the plant, and on going
manage the company in an international market (Zeneli, 2016). It is definitely the most
expensive and poses the greatest risk, however due to government legislation, freight costs and
the right to access equipment or skilled workers, some industries that allow you to incur the risks
and costs.
Partnering: Partnership can take a number of ways from a straightforward co-marketing
partnership to a complex, industrial strategic partnership. It is one of the most beneficial strategy
in few markets where culture, both business and social, is substantively different.
As high amount of opportunities available in the market of Indonesia and it provides a
suitable choice of expansion in the market through partnering. This will generate more and more
opportunity to become already existing in the market.
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CONCLUSION
From the above project report on international marketing it has been concluded that
strategic planning is one of the important tool that helps in developing various international
marketing approaches. Their are number of models used in the planning so that all the factors
affecting business operations can be analysed. Organisational mission and vision helps in
effective planning and all the plans in long run helps in achieving objectives. Their are number
of potential benefits which helps business while expanding in international markets through
effective strategic planning. Competitor analysis and principles of marketing is analysed so that
expansion to international markets can be made in effective manner. Their are number of
alternative approaches that helps business organisation to become successful while expanding in
international markets. Different options are available to expand business and selection of the best
suitable method is done.
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REFERENCES
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International Marketing Review.
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International Small Business Journal.
Wu, C. W., 2016. The international marketing strategy modeling of leisure farm. Journal of
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Zeneli, V., 2016. Corruption, foreign direct investment, and international marketing in the
Western Balkans. Thunderbird International Business Review. 58(3). pp.277-291.
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