Malaysia boasts one of south-east Asia’s most vibrant economies, the fruit of decades of industrial growth and political stability. Its multi-ethnic, multi-religious society encompasses a majority Muslim population in most of its states and an economically-powerful. ( see page )
The phenomenon of information sharing is usually associated with social cultural factors beyond information technology. An understanding of information sharing across cultures is still a major challenge and is likely to be more important as global systems are developed. Byars, L.( 1991) In some local cultures the survival of highly competitive organizations is dependent upon having trade secrets. A very good example of this is Malaysia. ( see page )
The technology used within the Malaysia has improved dramatically this has happened especially within the information technology sector with more and more people being trained on how to use these sorts of technology (see page)
Apple Inc as a successful company in the world wide market today and the strategies they applied in order to conduct their business smoothly. On which the study details will be based on. SWOT analysis Corporation which is the strength, weakness, opportunity, and threats. and applied to the problems facing Apple Inc, include the Porters five forces (see page )
Introductions Perhaps one of the most observations that grabbed my attention in the world was the phenomenon of the open trade or free trade. The simplest definition of free trade is; Trade between nations without protective customs tariffs. It is largely known that America is the biggest market in the world. Technology is the mother of trade. Where there are a high number of digits in a market, there we see technology and prosperity.
Life becomes more easy and safer. This creates Tech-Consumptive generation; a quick look at our recycling pin would proof that. Year after year the technology of the mobile industry has changed our life. We, for example without being completely aware of the social change that happened, became a subject of what the market want. Before, we were the force that lead the market. Now TV commercials, billboards and media bombardment are the ones own our paychecks .( Griffin, 2009)
Year after year the technology of the mobile industry has changed our life. We, for example without being completely aware of the social change that happened, became a subject of what the market want. Before, we were the force that lead the market.
As I have mentioned before, technology is the master of our life. The world had become small village. Time is the impending master not the distance any more. This constitute a huge change every where we look. My social relations and how it’s shaped is totally different ten years ago.
America and Japan were the biggest labs which used to fill the global market with that abundance of inventions. It was G6 then G7 then G8 those are Group of the biggest economies in the world. This tells us that the global economy is boosting so does the individual’s life changes within.( Scholnick,2009)
If we take Apple Inc company and I phone as a commodity and its general effect, this would be an endless study. Why? The dimensional effect of it is incalculable. Psychological, social, and economical effects would or have shaped generations. This tiny magical device shaped lives.
Whereas, Malaysia as an ideal market for this product through Apple company. So the simplest definitions of this assignment is a multi-national company called Global Ventures PLC
In the above situation, Global Venture Plc has chosen to sell the product (I phone).Now we are looking for the right country (Malaysia) to identify and justify the most appropriate for expanding this company.
About Malaysia Malaysia is located in Southeast Asia, surrounded by Indonesia in the south Thailand in the north, and the Philippines in the east. The country has an area of 127,320 square mile; the region of Malaysia is a larger than the state of New Mexico, the fourth-largest state in the US. The Federation of Malaysia consists of 13 states, 11 states are situated in Peninsular Malaysia. (Appendx2)
It is destinations of the region’s key tourist, offering brilliant scenery, Dense rainforests and excellent beaches .in the eastern states of Sabah, on the island of Borneo, are a refuge for tribal traditions and wildlife Although since 1971 it is have benefited from positive discrimination in business civil service, and education. Ethnic Chinese continue to hold the wealthiest community and economic power .while Indians are among the poorest and the Malaysia remain the dominant group in politics. (BBC 2010)
Justification of chosen a country( Malaysia) My choice of Malaysia as an ideal market is based on many reasons. Firstly, Malaysia has many competitive advantages including a productive workforce, low wage rates and a large labor supply. Buyers of products with low purchase price are sure to find a wide range of Malaysian manufacturers, who are able to give attractive offers and depend on the huge. Secondly, as in all developed countries, the expanding existence of advanced technology in Malaysia is causing the average person to become more and more dependent on it .( BBC 2010) The following paragraphs consider the, political, economic, social, and technological factors (PEST) that impact on foreign business in Malaysia and assess how these factors can best be managed.
Politically suitable country
Many Asian countries are politically stable because of the government systems found in these countries. Examples of these are India, China, Malaysia, Singapore and Taiwan. These countries enjoy a high degree of internal peace.
Although Malaysian politics has been relatively stable, “the government, ruling party, has engaged with few countervailing forces. However, in 2008 General Election, media’s coverage on country’s politics has been noticeably increased, making the politics more transparent to the citizens
Malaysia practises Parliamentary Democracy with Constitutional Monarchy and his Royal Highness is the Paramount Ruler. The Federal Constitution was legislated with the setting up of conditions for this system to exist. One of the Conditions of Parliamentary Democracy is the division of the administrative Power into three parts â€ legislative, judiciary and administrative or executive. Malaysia is also a country that practises a system of democracy based on the Federation system. Accordingly, all of the states have agreed to form the country of Malaysia. Each state has surrendered part of its power, such as finance, defence,
education, foreign affairs and others, as stated in the Malaysian constitution, and which is administered by the central government. There are matters that are under the power of the state and each state administers power over those matters. The Parliament also serves as the forum for criticism and focus of public opinion on national affairs. (Hassan, 2009)
Malaysian’s government has protected and control the currency and other restrictions employed to defend themselves against the negative effects of the new global economy, were in place for several years. These financial controls do have caused on the value of investments in Malaysia, whereas controls have been established to target currency for the foreign investments.
Malaysia is a stable and fast-growing economy in South East Asia. It has a newly industrialized market economy and relatively open state-oriented. The Pacific region has done well despite the setback of the financial crisis. Malaysia has low inflation and unemployment rates. With a per capital GDP growth rate was 7% over the last half decades. While this growth was driven by growth in the manufacturing sector, it helped to take up women and Malays into the modern labor market and helped to alleviate poverty. The raise in real GDP has been strong, rising from M$1,932 in 1970 to M$15,380 in 2003. (See the appendix1) The economic expanded to become a multi-sector and raw materials producer. It has rich natural resources and developments in agriculture,
One of three countries that control the Strait of Malacca, which is an important international shipping trade plays a large role in it is the largest producer of, palm oil rubber and tin in the world. Manufacturing has a large influence in the economy. Also is the largest Islamic banking and financial centre in the world.
Political and economic stability have been complemented by the effective lack of the main natural disasters. The geographical location of Malaysia has protected it from volcanic eruptions, typhoons, earthquakes famines and droughts. Floods have thus far only affected a small part of the country. ( Economy watch 2010)
Social Economic growth needs to be knowledgeable by social and culture justice and social stability. These things are the basics for sustainable and largely based development in business environment. The social policy in Malaysia is very similar to the formulation of economic and other policies. All policy is developed in the same institutional framework and same system. The procedure of formulating social policy comprises political, legal, and parliamentary components all connected decision-making is restricted by the main principles of the equitable growth (The free library)
While the beginning of history, Malaysia has been a gathering place for a different range of external religions and cultures. As effect of these external influences, the original unified however great Malay culture has emerged modern Malaysia represents a unique fusion of Malay, Indian and Chinese, traditions, creating a pluralistic and multicultural country that has its nature strongly rooted in social harmony, faith and pride in its ancestral background. With such a wealthy cultural tradition, acquiring the important skills and cultural knowledge in order to do business in Malaysia is important (Blackman.2000)
Malaysia has been obtained excellent combine between old traditional culture and new
technological innovations. Whereas Malaysian market continues to expand and grow, it is becoming increasingly helpful for those entering into business in Malaysia to be aware of the cultural dimensions that shape the fabric of this country. (Capistrano, 2004).
In general Malaysia is developing country that has devised its hold approach to the condition of socio-economic to growth. This approach has been developed from the late 1950s to the early twenty-first century, whereas a number of improvements have been made to the new social policy in Malaysia, similar to highlighting on the development of services and social as an integrated part of the national development. Also the government has provision of social services; and equitable provision of services to the countryside. (Economy Watch2010)
Furthermore, the Malaysian approach to the social policy and resulted to improve the education, health and has ensured greater employment opportunities for all people, it has made large progress with regard to the eradication of poverty. However, there is always opportunity for improvement. Social policy in Malaysia responds and adapt to new challenges including those posed by globalization. (Peter 2009)
Technology is one of the necessities of the modern world. Almost every aspect of living these days in largely, dependent upon technology. Therefore countries around the world are creating, designing and producing new technology every day. Specifically, in the European countries the concept of liberalization has helped a lot in advanced technology. However, some countries in Asia have made better advances. For example, the technological system of Malaysia has undergone dramatic changes over the years.
From overseas invested multinationals, Malaysia’s performance in hi-tech products has improved dramatically such that in 1985 Malaysia’s global market share of hi tech products. (Ratulangi, 2008)
Malaysia is rising Asian economy aspiring to move towards technology-driven and high-tech production-based pattern of growth and therefore replicate the knowledge of the newly industrializing economies (NIEs) of Asia. In fact, Malaysia has been considered in the group of countries that have the potential to produce new technologies on their own . The fast technological growth of the NIEs over the past two decades has caught the concentration of both developing and developed economies coincidentally. Malaysia and the NIEs are not only located in the same region, but to large extent have similar economic regimes and trade structures. In view of that, Malaysia has a strong basis to consider formulating its own technological development strategy based on those in the NIEs with appropriate adaptations to accommodate the economy’s uniqueness .This suggests that there is no single strategy that can guarantee successful technological upgrading in Malaysia (Kurup, 2006).
The company overview Apple is one of the most established IT brands in the World, it is, manufactures, markets personal computers , mobile communication designs and, media devices, ,as well as applications worldwide. Apple Inc sells its products globally through its retail and on line stores, value-added resellers. Also it sells software third-party Mac ,I phone, I Pod, including accessories through retail stores and its online (Appendix 3) The company sells its products to customer, mid and small -sized business, government, and creative markets. The company, known as Apple Computer Inc, was founded in 1976 the headquarter in California (Yahoo finance2010)
SWOT Analysis of Apple A SWOT analysis of Apple shows the strengths, weakness, opportunities and threats facing the company
SWOT analysis of Apple – Strengths
Apple Inc is one of the most successful and highly valued US Company. It is listed as one of the main companies in the NASDAQ stock exchange with revenues of more than 60 billion dollars.
Apple Inc is the most established and healthy IT cooperation in the world. It has an outstanding reputation for delivering high-Tech products for over 35 years.
Apple Inc will be able to exploit the low labour cost in Malaysia by establishing Factories, therefore creating more jobs and provide training for the Malaysian people to become professionals in this field.
Malaysia is a middle-Income state; therefore consumers will afford to buy the high-Tech products supplied by Apple Inc.
Apple Inc supplies a wide range of High-Tech products ranging from Computers, Computer software, Notebooks and Smart phones such as I phone. Sales of its notebooks products is also very strong, and represents a huge contribution to income for Apple .( Brain Mass)
Weakness:- Apple is bound to reveal several weaknesses. One example, of many, is
Competition from other providers such as Microsoft Inc, which provide Computer software products at a reasonable price.
Apple Inc will face competition from already established cooperation that provides High-tech products, as Apple Mac devices are sold at a very high price. Although Malaysia is hugely targeted by the Japanese investors as well as the proximity in distance; therefore Apple Inc will face challenges from companies like Sony and Toshiba( Brain Mass2010)
Opportunities:- Apple Inc has many opportunities in Malaysia, as it will be able to target the Information technology market and help in the growth of smart phones market segment
Apple Inc will be able to fulfill the continuing growth in demand for mobile PCs
The excellent reputation for the company will allow it to compete strongly in the Malaysian market, as most of its products are highly valued and respected for its high performance.
Threats:- One of the main threats that will face Apple will be companies not seeing Apple products as compatible with their software
Apple products in general are higher than other products from companies like HP and Dell which are major competitors in the Computer market.
Also Apple will face challenges in relation to cheap products that are manufactured in neighboring Asian countries like the Taiwanese company Acer which products are 1/3 the price of Apple Mac books
The popularity of Apple Mac and iPod are subject to demand, and will be affected if Malaysia’s economic begin to falter and demand falls for their products.( Marketing Teacher2010)
Porters five forces at Apple Inc:- This section considers how Porters five forces might be applied to the problems facing Apple Inc, including an investigation of the threat of substitutes from other companies, buyer power in relation to high-tech product purchases and supplier power,
Classical economics predicts that rivalry between companies should drive profits to zero. This is partly down to the threat of substitutes. For instance, Apple Inc has competition from companies like Microsoft and Dell that can provide substitutes for their goods. This drives the price of high-tech products down for customers of both companies.
Buyer power has a direct effect on forcing prices down. If Computers and mobile PCs are sold at a very high price in Apple, buyers will move to other companies like Dell and HP there are few other large Computer and Computer software manufacturers. This means the market is disciplined; therefore the companies have a disciplined approach to price setting. Discipline stops them destroying each other in a profit war.
Supplier power is an important part of this model. Apple Inc is the main supplier of I phone and IPod devices; therefore they will have the power to impose the price that they see as suitable for that product. However they may face competition from other companies, which will try to manufacture a new product with a similar technology. However Apple will be the sole provider for that product.( Mega essay 2001)
Conclusion To sum it up, Apple Inc company became a mass media channel. Malaysia can be the best country for this in various ways, with its strong economic strength, supportive government policies, educated workforce, developed infrastructure, vibrant business environment and quality of life has always been an attractive market for foreign investors. many of which have been covered in this essay. Further studies can yield more ideas.
Public sector disinvestments and implications for Economy
Privatisation of public sector undertakings by selling off a part of the equity of the PSUs to the public is known as Disinvestment. It is the key to survive the ever-changing economic environment, and for the economic progress of the nation.
The economic policies across the world can be broadly classified into
The Stabilisation measures – The short term measures taken up the government to keep sufficient foreign exchange reserves and to keep a check on the rising prices.
The Structural reforms measures – The Long term measures aimed at improving the efficiency of the government which can be further classified into Liberalisation, Privatisation and Globalisation.
The reasons behind divestiture could be varied and inter-linked.
Reducing the public debt that is threatening to assume unmanageable proportions and to mobilise private investments and generate new sources of tax revenue.
Releasing the tax payers’ money that is locked up in the PSUs and is often exposed to risk and trying to channelize it towards welfare items like basic health, family welfare, primary education etc.
Attempt to release certain tangible and intangible resources like manpower and redeploying them in other high priority sectors.
To incorporate financial discipline and facilitate modernization.
Redistribution of wealth by offering shares to investors.
Anticipate an overall beneficial effect on the economy in the long run as the economic activity would increase with an increase in appropriate private investments.
Due to the current expenditure of the government on items such as interest payments, wages to the employees and other subsidies it is hardly left with any money to spend on social infrastructure. To raise capital to be spent on social welfare programs, Law and order etc it becomes highly imperative for the government to disinvest in PSUs even though they enjoyed monopoly in their respective areas.
Though the concept of disinvestment has been floating around since 1762 (Adam Smith coined it), it was tried widely in the mid 1970s. The then Prime Minister of UK, Margaret Thatcher applied disinvestment to reform the ailing UK economy. The UK government let go off a large stake in many of it erstwhile PSUs like British Airways, British Power and Regional water boards etc. They used public offers to transfer the state owned assets to private parties. This resulted in an increase in the shareholding population by 21%. With the privatisation of electricity, gas supply and telephones, the cost of services fell and the quality of performance also improved manifold. This also led to greater competition and it was soon agreed upon that some of the natural resources should have remained under the government to prevent duplication of resources.
Germany privatised 13500 companies in a span of two years. Ukraine, Taiwan, Hungary, Poland, West Asia, Vietnam, France and China marched ahead with their disinvestment programs and were successful in improving their foreign direct investments. Apart from Ukraine all the other countries used their disinvestment proceeds to meet their budget deficits.
In India the disinvestment process started in 1991-92 when the Congress government offered up to 20% of the equity in selected PSUs to mutual funds and investment institutions. The Disinvestment commission set up in 1996 came up with a classification of PSUs into Strategic and Non Strategic.
Defence related organisations
Atomic energy related organisations
All the other organisations would fall under Non-Strategic PSUs where the government stake would be reduced to 26% to release the trapped resources. In the 2000 – 2001 budget, Indian government reassured the work force of the PUS’s that the disinvestment proceeds would be used to provide restructuring assistance to the PSUs and to provide a safety net to the workers.
Indian government realised Rs.47671.62 crores as disinvestment proceeds during 1991-2000 and Rs.36007.20 crores during 2000-01 from the sale of majority shares of Kochi Refineries Limited (KRL), Chennai Petroleum Corporation Limited (CPCL) and Bongaigaon Refineries and
Petrochemicals Limited (BRPL). Indian government has also decided to constitute a National Investment Fund into which the realized proceeds from the sale of PSUs would be transferred and monitored such that the proceeds are used to achieve the primary objectives laid down in the policy of disinvestment.
Corruptions and Malpractice The scandalous nature of disinvestments cannot be discounted especially in an economy like India which is marred by red tapism. The extent of damage that can be seen on the exterior is only the tip of an ice berg with deep ramifications wrenching out the hard earned tax-payer’s money in yet another form. Instances of favouring preferred buyers, incomplete contracts, under pricing of assets, non compliance of agreement have been widely reported.
The best example of such grave losses can be seen during the tenure of NDA government in 1999 when the government decided to off load major stakes in PSUs to so called “strategic partners”. The government proceeded to disinvest with undue haste, ignoring warnings of grave losses to the exchequer. Starting in January 2000 the government sold control in nine companies and 19 hotels belonging to ITDC. The government earned Rs.5,544 crores from the strategic sale of the nine enterprises. Each of this was dubious to say the least. The major issue was non valuation of surplus land in most cases, which brought a real estate angle to the whole episode. In all, disinvestment scandals could supposedly amount to thousands of crores, and, could very well be a devil in disguise.
While the more obvious economic impact of such malpractices amount to siphoning out the tax payer’s money the story doesn’t end there. Often the disinvestment has been seen to turn in sick in less than a year which results in closing down of the operations. Hence an otherwise successfully running enterprise was forced to an early demise due to the corruption of a few men in power. This not only resulted in loss of production but also to loss of jobs and livelihood of those who were successfully running the enterprise with their blood and sweat.
While there have been other explanations which highlight the zealous nature in which the governments tried to disinvest. This ideology-driven disinvestment in any case is a poor decision by the government.
Fiscal Deficit Implications Disinvestment of PSUs can be used to reduce the Fiscal Deficit of the government. This is a better way to reduce the deficit than by deficit financing or the printing of new notes. Deficit Financing has known to cause crowding out in private investment and is also a cause of inflation and increased rates of interests which discourage private investments. Hence, if disinvestments are carried out in a fair manner it could be a good tool to reduce Fiscal Deficits.
A reduced Fiscal Deficit increases the credit worthiness of the home country. The safeguard against a Sovereign Debt default cannot be overemphasized more specially in a developing economy. The Sovereign Debt default by Argentina had caused its bonds to lose value in the foreign market. As a result of which the Argentine government was unable to raise further capital from foreign markets. In developing markets like India it is essential that the government maintains a strong global image to garner collaboration from foreign markets. The present Fiscal deficit is at a worrisome 6.8 percent of GDP in India. Besides adding the state deficits of 3.5 percent the total deficit would go around 10 percent. This is creating a huge debt burden for the future generations of the country.
Core Competency View the government as an organization who has two major goals
To uplift the country by providing services in health care, education and other social areas.
To safeguard the financial system.
A primary motive for an organization to disinvest is to concentrate on its core activities, while the second one is obvious fallout from the system by reducing Fiscal Deficit (as was earlier mentioned), the second one is more utopian. Indeed a desired implication and reason for huge disinvestments of PSUs would be that the government focuses more of its energies into developing the economy while reducing the income inequalities. Disinvestments would help the government to get rid of any extra baggage that sick units may have and instead focus on the development of the education system and improve the spite of healthcare in India.
Creating Monopolies Another implication of disinvestment is the creation of monopolies in capital intensive sectors. Disinvestment in sectors such as power generation, distribution, natural resource extraction like coal, iron ore and petroleum would pave way for monopolies in these sectors. These high capital industries with a high learning curve have high barriers of entry along with regulatory restrictions due to their potentially exploitative nature. Divesting in these areas would risk the transfer of power to the private sector which by default works on the goal of profit maximization. These sectors are the back bone of an economy and the products and services are used by the poorest of the poor. Transferring the onus of such sectors to the private sector could be a risky affair.
Conclusion The rationale for disinvestment lies in improved efficiency and raising government revenues to reduce fiscal deficit. However this could also be cloaked in increased income inequalities as a result of natural monopolies being created by disinvestments in key sectors. While the government can indeed concentrate on development activities which are its core competency, extreme caution must be taken to monitor and account for the disinvestment procedure in order to eliminate malpractices during the process of disinvestment.