MAN304: Case Study - Grants Toothpaste Market Entry Strategy Report

This report provides an analysis of Grants of Australia's international market entry strategy, focusing on its potential expansion into Malaysia. The report begins with an overview of Grants, a producer of natural toothpaste, and its competitive advantages, including its niche market focus and vegan toothpaste offerings. The rationale for choosing Malaysia is presented, highlighting its stable economy, affluent consumers, and technological advancements. A PESTEL analysis is conducted to assess the political, economic, social, technological, environmental, and legal factors influencing Grants' market entry. The report recommends a wholly owned subsidiary as the preferred entry mode, specifically a greenfield investment, and outlines a five-step implementation plan. The conclusion emphasizes Malaysia's suitability for Grants' expansion and the importance of the chosen entry mode for sustainable growth and customer base development. The report uses multiple references to support the analysis.

INTERNATIONAL
BUSINESS OF
GRANTS

INTRODUCTION
• International market entry is considered to be a major aspect related to
the growth of companies in different industries. The firms will be able to
sustain the growth of revenues and profit levels with the support that is
provided by entry into a new market.
• Different organizations use different modes of market entry based on the
country in which they are aiming to start the operations and needs of the
firms as well.
• The firm that has been taken into consideration for the study is Grants
that is medium-sized private firm in Australia (Ahi et al. 2017).

ABOUT THE COMPANY
• Grants is the producer of toothpaste products that is developed
with the help of natural ingredients.
• The organization has been selling its products in Australia since the
year 1894.
• Grants had started its operations in the industry with the sales of
home-made and family-produced toothpastes.
• The management of the organization operates in the health
conscious segment and aims at expanding its operations in Asia
(Grantsofaustralia.com.au 2020).

COMPETITIVE
ADVANTAGE OF THE
FIRM• Grants toothpaste has been able to develop its competitive
advantage in the market with the support that is offered by the
unique products that can fulfill the needs of a niche market
segment.
• The major competitor of Grants in the industry is Colgate. However,
the unique products of the firm have been able to provide the
organization with a different position in the market (Markman et al.
2019).

COMPETITIVE ADVANTAGE OF
THE FIRM CONTINUED …..
• The vegan toothpastes that are provided by Grants are also
considered to be a major aspect related to competitive advantage
that the organization has developed in the industry.
• The niche market segment that has been targeted by Grants has
been able to enhance the position of the firm in the industry.
• The differentiating factors that are a major part of the products
offered by Grants will be able to support the operations of the
organization outside Australia (Hollender, Zapkau and Schwens
2017).

RATIONALE FOR THE
CHOICE OF THE
COUNTRY• The country that can be selected by Grants for the purpose of
expanding its operations is Malaysia.
• Malaysia is considered to be a powerful country and has also
developed a vibrant economy in Southeast Asia.
• Kuala Lumpur is the capital of Malaysia and Putrajaya is considered
to be the seat of federal government.
• The country will be able to offer huge growth opportunities to an
organization like Grants (Markman et al. 2019).

RATIONALE FOR THE CHOICE
OF THE COUNTRY
CONTINUED ……
• Malaysia has been chosen as the country for the expansion plans of
Grants Australia due to the highly stable economy of the country.
• The powerful country will be able to support the company in order
to enhance its profit margins and presence in different countries as
well.
• The affluent consumers and high spending capacities will provide
major growth opportunities to Grants Australia (Hollender, Zapkau
and Schwens 2017).

INFORMATION OF THE
DESTINATION COUNTRY
• The PESTEL framework can be implemented for the purpose of
understanding the suitability of Malaysia as the country for the
expansion operations of Grant Australia.
• The different aspects that will be taken into consideration In the
framework for detailed analysis of the business environment in
Malaysia include the political aspects, economic condition, social
factors, technological factors, environmental condition and legal
factors.
• The detailed analysis of these aspects will be able to provide the
levels of suitability of Malaysia (Ahi et al. 2017).

INFORMATION OF THE DESTINATION
COUNTRY CONTINUED……
• Political factors – Malaysia is considered to be a constitutional monarchy
which mainly comprises of 3 federal territories and 13 states. Prime Minister
is the head of the government and elected monarch is head of the state.
Malaysia is also a politically stable in nature and the country pursues
principles of neutrality and peace. The country has also maintained close
relationships with China and has signed many trade based agreements as
well. Malaysia has gained the 61st rank among 180 countries on the
Transparency International’s Corruption Perceptions Index in the year 2018.
• Economic factors – Malaysia has been ranked 37th based on the global GDP
levels. Malaysia also has developed an industrialized, robust and healthy
economy and the rate of unemployment is around 3%. The diverse economy
of the country will be able to support the growth of an organization like
Grants Australia (Subramaniam and Chelliah 2019).

INFORMATION OF THE DESTINATION
COUNTRY CONTINUED……
• Social factors – Malaysia is a multi-religious and multi-ethnic country.
The religion that is mostly followed in the country is Islam and the other
religions mainly include Taoism, Buddhism, Hinduism, Sikhism and
Christianity. The cultural life in Malaysia is rich in nature and ethnically
diverse as well. The most significant factors that are able to contribute to
the development of affluent lifestyle of Malaysia include free health care
facilities, low levels of income tax, low cost based food and social welfare
based system. The products that are offered by Grants Australia are high
valued and differentiated in nature. The affluent consumers of Malaysia
are a major target consumers of the organization (Subramaniam and
Chelliah 2019).

INFORMATION OF THE DESTINATION
COUNTRY CONTINUED……
• Technological factors – Malaysia has been able to develop one of
the best digitally connected societies in the entire world. Around
80% of the residents have gained access to the internet with the
help of efficient mobile networks. Different organizations like HP,
IBM, Amazon, Google, Cisco and Intel have their operations in
Malaysia. The social media platforms like Twitter, Facebook.
Pinterest, YouTube are widely used in the country. The technological
environment in the country will support the growth of Grants and
the communication process formed with consumers as well (Ahi et
al. 2017).

INFORMATION OF THE DESTINATION
COUNTRY CONTINUED……
• Environmental factors – Malaysia is considered to be a major holiday
destination that is based on the presence of delicious food, dynamic
cities, weather, friendly people and stunning beaches in the country. The
climate changes, deforestation, excessive production waste and natural
disasters have been able to influence the environmental condition of
Malaysia. Grants Australia will be able to gain success in the country as
the organizations develops organic products and its operations have low
impact on the environment.
• Legal factors – The Islamic law based system is mainly implemented
and followed in Malaysia and this has an impact on the business
environment of the country as well (Markman et al. 2019).