International Marketing Report: Nasi Kandar Pelita's Australian Entry

This report provides a comprehensive analysis of the external environment for Nasi Kandar Pelita, a Malaysian food chain company, considering investment in the Australian food industry. The report examines the economic environment, highlighting GDP, inflation, and population growth, indicating a favorable economic climate for investment. It also assesses the socio-cultural factors, including consumer trends, cultural dimensions, and potential threats related to food preferences. The political and legal environments are analyzed, focusing on political stability, corporate tax rates, and relevant laws. Furthermore, the report evaluates the competitive landscape using Porter's Diamond Model and Porter's Five Forces, identifying key competitors and industry dynamics. The analysis suggests that while there are challenges, the Australian market presents significant opportunities for Nasi Kandar Pelita due to favorable food culture, language, and market growth. The report concludes with recommendations for market entry strategies and highlights the importance of adapting to local market conditions.

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INTERNATIONAL MARKETING FOR MANAGERS
[Type the document subtitle]
8/21/2019
Student name

INTERNATIONAL MARKETING FOR MANAGERS 1
1. Executive summary
The purpose of the report is to analyse the external environment of the Australian food chain
company based in Malaysia that decided to consider Australian food industry to invest. Australia
is one of the developed nations where technology has played a major role in past few years and
provided opportunities for various industries like food and beverage industry. Nasi Kandar Pelita
should invest in Australia considering the economic environment of the nation. The social factors
of Australia are providing opportunities for Nasi Kandar Pelita to invest in the nation. Change in
law, pertaining to the acts could be a threat to the company due to a change in conduct of
business.
A major competition for Nasi Kandar Pelita will be papparich in australia, nasi lemak korner,
and my rasa in Australia. The key strength of the company while investing in the Australian
market would be favourable food culture, language and communication due to use of English
language, economic factors that could support customer targeting, industry attractiveness due to
market growth opportunity.

INTERNATIONAL MARKETING FOR MANAGERS 2
Contents
1. Executive summary..................................................................................................................1
2. Introduction..............................................................................................................................3
3. Economic environment analysis of Australia...........................................................................3
4. The socio-cultural environment of Australia...........................................................................5
5. Political and legal environment of Australia............................................................................6
6. Competitive environment of Australia.....................................................................................7
Porters diamond model................................................................................................................7
Porters five force model...............................................................................................................9
7. Swot profile...............................................................................................................................11
8. Mode of entry............................................................................................................................11
9. Conclusion.................................................................................................................................11
References......................................................................................................................................13

INTERNATIONAL MARKETING FOR MANAGERS 3
2. Introduction
Conduct of business is largely dependent on the external environment in which the enterprise
exists. While investing in international business and organization needs to make various
decisions, which are largely dependent on the environment of the host nation. The purpose of the
report is to analyse the external environment of Australian food chain company based in
Malaysia that decided to consider Australian food industry to invest (Puck and Mudambi 2016).
Nasi Kandar Pelita is one of the popular food chains in Malaysia founded in 1995 and has been
serving 3 nations by now that is Malaysia, Saudi Arabia and India. The business idea was based
on the Indian Muslim dishes initially and Nasi is one of the dishes of Malaysia that is Malay for
rice. However the restaurant now uses all old age recopies for delivery of traditional dishes from
the heritage of Malaysia (pelita 2019). The report will discuss economic, social cultural, legal
and political, and competitive environment of Australia to assess the right mood of market entry
in Australia for Nasi Kandar Pelita. Australia is one of the developed nations where technology
have played a major role in past few years and provided opportunity for various industries like
telecommunication industry, food and beverage industry. The key players for food and beverage
industry in Australia are McDonald’s and KFC that is the global food chains (pelita 2019) and
the existing popular Malaysia restaurant chains in Malaysia are Papparich, Nasi lemak korner,
and My Rasa in Australia.
3. Economic environment analysis of Australia
Figure 1:(source: (theglobaleconomy, Australia/gdp_current_local_currency 2019)

INTERNATIONAL MARKETING FOR MANAGERS 4
The evidence suggests that the economic environment of Australia includes GDP as one of the
most relevant element. The statistics as presented above show that the GDP of the country tends
to increase gradually which reflect that the per capita income of the customers in the nation is
also increasing (theglobaleconomy, Australia/gdp_current_local_currency 2019). It also reflects
an opportunity for the company as the buying behaviour of the customers was inclining towards
more amount to spending due to increasing purchasing power of residence of Australia (Cabral
and Mathiason 2015).
Figure 2: (source: (tradingeconomics 2019)
According to the study, the inflation rate of Australia in 2019 is 1.6%. The graph above reflects
that the inflation rate is not very fluctuating, which can depicts that the threat from this element
is not very high for Nasi Kandar Pelita to invest (tradingeconomics 2019). Other than these
elements, the population of the nation is quite high and is increasing with years, which reflect
that the opportunity for the company to target more number of customers is higher in case of the
Australian market (B. Schlegelmilch 2016). Moreover, the growth rate in food and beverage
industry in Australia is increasing due to fast food preference, which could be another reason that
Nasi Kandar Pelita should invest in Australia considering the economic environment of the
nation (theglobaleconomy, Australia/Population_size 2019).

INTERNATIONAL MARKETING FOR MANAGERS 5
4. The socio-cultural environment of Australia
The socio cultural factor includes elements like the standard of living, religion, social trends. The
trend of the nation reflects that people are very much into fast-food eating habits, which could be
one of the opportunities for Nasi Kandar Pelita to invest in Australia. However, one of the trade
considering this factor would be the obesity rates in the nation, which is increasing continuously
and due to changing consumer trends and increase in health concern customers may prefer to
switch to healthier eating options in near future. Considering the Hofstede’s cultural dimension,
the first dimension includes power distance for which the score for Australia is 36 that is quite
low. This reflects that the business environment in Australian organizations include hierarchy
system, which reflects that managers rely largely on their teams for their work done. For
individualism dimension Australia scores high that is 90, which reflects that it is highly
individualistic culture (Baker and Bowen 2015). This depicts that in an organizational
environment the personnel are expected to be taking initiative and be self-reliant. Masculinity
dimensions score for Australia is 61, which reflect that the nation is more towards masculine
society, which shows that the winner is considered to be the key importance. In the
organizational environment, the culture reflects through the success based on achievements in
life and conflicts are resolved on personal level. Indulgence dimension score for Australia is 71,
which reflects that the country is indulgent nation. In an organization, they tend to possess
optimism tendency that is to have a positive attitude and they place importance to leisure time
that will also affect the Nasi Kandar Pelita business while investing in Australia. Therefore, it
can be said that the social factors of Australia are providing opportunities for Nasi Kandar Pelita
to invest in the nation. One of the threats for the company would be the speciality of Nasi Kandar
Pelita is Indian Muslim dish, which could be less preferable as per the Australian food culture
(Bird and Mendenhall 2016).

INTERNATIONAL MARKETING FOR MANAGERS 6
5. Political and legal environment of Australia
Figure 3:( source: (theglobaleconomy, Australia/wb_political_stability 2019)
Political factors include the elements that are most relevant for the conduct of business in a
nation as it is important to have a license from the regulation of the nation in order to conduct
business in a country. Some of the major elements relevant elements include political stability.
As presented above, the political stability of Australia is found to be declined and not so stable.
However, political stability has not reflected any negative outcomes, which depict that the
political stability is not a major opportunity for company to invest in this nation, but it is not a
major threat for the company by now (theglobaleconomy, Australia/wb_political_stability 2019).
Figure 4:( source: (theglobaleconomy, Australia/corporate_tax_rate 2019)

INTERNATIONAL MARKETING FOR MANAGERS 7
Another major factor that will impact the business to be conducted in Australia is a corporate tax.
That is payable amount is one of the major cause for declining profit margins of the company. As
presented above, the tax rate of Australia is constant since 2006; however, it is not as low as
some of the other nations like a Malaysia. Corporate tax in Australia is 30% and since it is
constant, the company may not have any issue regarding the change in profit margins
considering that says a major factor (theglobaleconomy, Australia/corporate_tax_rate 2019).
Other than these elements, legal rules and regulations also play a major role because Nasi Kandar
Pelita is a part of food and beverage industry, the rules are more concern due to health and safety
of the population. Some of the laws pertaining to Nasi Kandar Pelita business will be food and
safety act, employment act, privacy and security act, consumer protection act and laws related to
health and safety. Therefore, from political and legal environment analysis of Australia it can be
said that this sector is one of the threat for the company, as the company needs to abide by each
law and political rule strictly. Moreover, any change in law pertaining to the above discussed
acts, could be a threat to the company due to change in conduct of business (Trivedi 2016).
6. Competitive environment of Australia
Porters diamond model

INTERNATIONAL MARKETING FOR MANAGERS 8
Figure 5: (source: (Betton 2017)
Analysing the competitive advantage of the country one of the key tools used is porters diamond
model. According to this model, there are four determinants. Factor conditions are the first
determinant, which reflects various kinds of resources that could be or could not be presented in
a country. The key resources include knowledge resource, natural resource, capital resources and
infrastructure. According to this factor, the basic resources may not act as a competitive
advantage but the advanced factor conditions could be responsible for generation of competitive
advantage. The advanced factors for Nasi Kandar Pelita include food quality, human resource,
and investment in technology. Since Australia is one of the developed nations, these resources
could be easily available which could be the competitive advantage for the company to invest in
the nation (Betton 2017).
Demand conditions are another determinant that analyse the market demand in Australia. Since
the culture reflects that fast food eating habits are more in the nation, and people prefer to spend
leisure time with your friends and family the market demand in Australia. Since the culture
reflects that the fast food eating habits are more in the nation, and people prefer to spend leisure
time with their friends and family, the demand conditions of Australia can provide an
opportunity for the company to gain competitive advantage for Australia in time (Skudiene,
Auruskeviciene and Sukeviciute 2015).
The third determinant of the model includes supporting and related industries. It has been
observed that the success of the industry could be dependent on another industry. Nasi Kandar
Pelita is a food chain that makes food and beverage industry as its main industry and coffee
chains industry could be one of the related industries that may influence its business (Vellas
2016). The grocery industry could be another supporting industry in Australia that could
positively support Nasi Kandar Pelita business while supplying high-quality raw food products.
Most importantly, travel and tourism industry of Australia will support the food chain business
of Nasi Kandar Pelita. This could turn out to be one of the competitive advantages for Nasi
Kandar Pelita as the right supplier could lead to high profit margin for the company (B.
Schlegelmilch 2016).

INTERNATIONAL MARKETING FOR MANAGERS 9
The fourth determinant of the model includes firm strategy, rivalry and structure. A major
competition for Nasi Kandar Pelita will be Papparich, Nasi lemak korner, and My Rasa that are
the Malaysian restaurants in Australia. By working on innovation through product and services,
that will let the company gain competitive advantage over other competitors (Calboli 2015).
Porters five force model
Figure 6: (Source: (Dobbs 2014)
Competitive advantage analysis the food and beverage industry will be done with the strategy
tool that is porter’s five forces model. According to this model there are five forces that are
influencing the business of the company with an industry. The first force includes threat of new
entrants, according to this force new companies entering into the industry could impact the
business as they could be entering with innovative idea and new sources that could gain
competitive advantage for them (Sohal 2008). Other than this, the food and beverage industry
does not require major investment like in case of other industries, which makes entry into this
industry easier and it could be major threat for Nasi Kandar Pelita business in Australia. In order
to overcome the threat, Nasi Kandar Pelita needs to invest higher in innovation, and inclining the
positioning of the company to the service oriented (Dobbs 2014).

INTERNATIONAL MARKETING FOR MANAGERS 10
Second force includes the power of buyers, according to this force the negotiating power of
buyer’s impact largely to the company’s business. There is large number of options in food and
beverage industry, which has increased the negotiating power of buyers in food industry of
Australia. This could be the major threat for Nasi Kandar Pelita as the switching cost for buyers
is very low and they could switch to another food chain for having meal in case of any factor
unlikely to the buyers offered by Nasi Kandar Pelita (Sun, Yoo and Park 2018).
Third force includes threat of substitute, there is various substitute for a food chain like coffee
shops, restaurants, fast food stalls, five star hotels and packed food. These goods can gain
competitive advantage over Nasi Kandar Pelita in food and beverage industry in Australia. In
order to overcome this threat, Nasi Kandar Pelita needs to consider competitive strategies like
product differentiation in order to retain the customers as the switching cost for the customers is
very high in this industry (He 2017).
Forth force includes power of suppliers, suppliers are one of the major stakeholders who are
responsible for the profit margin for the company as increase in price of raw material that could
lead to increase in price of the product, which will eventually make customers dissatisfied an
impact business of Nasi Kandar Pelita. In order to overcome this threat, Nasi Kandar Pelita must
consider agile supply chain and make relations with large number of suppliers in order to
decrease the power of suppliers (Gencer 2017).
The most important factor is the intensity of competition in the industry. As already discussed,
the competition is due to some of the popular Malaysian restaurant chains in Australia. There are
large number of food chains within a region that will also include global food chains, which has
a global presence and may act as a major threat for Nasi Kandar Pelita to conduct business in
Australia. In order to gain competitive advantage Nasi Kandar Pelita must consider brand
recognition as the major strategy in order to attract more number of customers (Whitaker, Ekman
and Thompson 2017). This could include promotional strategies like sales promotion, social
media marketing, advertisements, popular brand ambassadors, and printed media advertising.
Major competitors for Nasi Kandar Pelita include Papparich, Nasi lemak korner, and My Rasa,
(Ogutu and Mathooko 2015).

INTERNATIONAL MARKETING FOR MANAGERS 11
7. Swot profile
From the above analysis, the key strength of the company while investing in Australian market
would be as per the ranking, are favourable food culture, language and communication due to
use of English language, economic factors that could support customer targeting, industry
attractiveness due to market growth opportunity. The key weakness that the company may face
while entering into the Australian market would be ranked as high competition in the industry,
no brand recognition, negotiating power of buyers, the threat of new entrants, and threat of
substitute goods. The major opportunity for the company, identified through the above analysis
includes new product development, service innovation, market development, and product
differentiation strategy. However, there are various threats that the company could face while
entering into Australian food and beverage industry. It includes change in customer preference,
health concern by customers, and increase power of suppliers (tripadvisor 2019).
8. Mode of entry
There are various market entry mode for a company to enter into an international business for
example direct export, licensing, joint-venture, foreign direct investment, strategic acquisition,
merger and franchisee. All the modes have different advantage, disadvantage, and suitability for
a company. For Nasi Kandar Pelita, after analysing the external environment it can be said that
the most suitable mode of entry will be franchisee, so as to increase the brand recognition across
the globe and having control over the management, lower capital investment, increased customer
recognition and high income opportunity (Kaplan 2015).
9. Conclusion
From the report, it can be concluded that the business idea of Nasi Kandar Pelita was based on
the Indian Muslim dishes initially. The growth rate in food and beverage industry in Australia is
increasing due to fast food preference. Nasi Kandar Pelita should invest in Australia considering
the economic environment of the nation. The culture reflects that fast food eating habits are more
in the nation, and people prefer to spend leisure time with your friends and family the market
demand in Australia. A major competition for Nasi Kandar Pelita will be Papparich, Nasi lemak
korner, and My Rasa that are the Malaysian restaurants in Australia. For Nasi Kandar Pelita,