International Business Environment Essay

Venturing into new descent and grocery store frontiers handle Malaysia requires extensive extrapolateing of the milieu in lines of the policy-making establishment, business potential, legal and regulatory framework, and availability of resources, socio- heathenish aspects and to an extent geographical position and infrastructural maturation of the country. The investigate and summary of these key and critical factors atomic number 18 strategic in analysing the potential and business environment of Malaysia. Malaysia possesses unique features and characteristics which atomic number 18 contrastive from any(prenominal) other rural area and its in that locationfore essential to scan and inquiry the foodstuff.Geographically located in Eastern Asia, Malaysia has been one of Asia fastest development markets in the last half century. Malaysia is among the Asian Tigers a terminology disposed to the Asian economies which transformed from third world commonwealth statu s to midsection income nations within a short span thanks to sound and rough-and-ready scotch policies. It has a sizeable state of around 28. 3 one million million with diverse ethnic composition largely comprising the Ethnic Malays, Indians and Chinese tribe (CIA fact oblige, 2010).Similarly Malaysia is a developing nation with growing spunky per capita income making it a potential market for unveiling of any business. The nation has intimately set up and actual financial markets and excellent world programme infrastructure in transport air and sea and moreover its known worldwide for the engine room superiority and advancements. Its highly actual commercial and manufacture domains makes it a target for many an(prenominal) internationalistic business. Malaysia has enjoyed a relative stable political stability which has been instrumental in goading its frugality and attracting foreign firms.Its also a competitive business environment with flexible legal and regul atory framework making it light(a) to operate business. Therefore its very in-chief(postnominal) to explore and read these aspects and others in detail to en true conclusion and market analysis of Malaysia is obtained through in depth understanding of the market. This would enable the company to undertake its strategies and plans in effect and efficiently in Malaysia. The paper tries to look some of the aspects mentioned above in more detail.Conclusively, In vagabond to expand business to other countries, many factors should be put into consideration so as to ensure there is professional development of the business. Critical analysis, exploring and report writing is therefore important considering these issue and thus should be undertaken respectively. Introduction In business, the understanding of a given shade in which business is to be done and be base is very detailed and thus important. With connection to these some aspects wee-wee to be considered so as to know where and which country qualifies better for parceling of such business.These can be sanitary achieved through exploring and analysing the business environment of a prospective country. For instance, Culture and cultural practices are very important and choose to be understood in order to make sure all the selling strategies dumbfound been able to offer good fruits in the business (Sandra, 2001, p 58). This paper thus comes up with the choosing of Malaysia as an framework of a country on which as the Business Development managing director of Australia have chosen with the aim of expanding business.Therefore this paper discusses the critical analysis and the report obtained from exploring and analysing business environment of Malaysia which in return helps in find out where the country fits in the complexity of international business environment. Many factors should be put into consideration so as to decide whether the business allow effectively run smoothly (Dunning, 1998, p 98). Country Profile determined in Eastern Asia Geographically Malaysia covers approximately area of 392,748 square Kms, this is gently larger than New Mexico in United States and a population of 26 Million concourse (C.I. A fact book, 2010) this is a sizeable population which can be possible for any target market and introduction of business ventures. In Malaysia Islam is the pre-dominant and largest religion practised by the ethnic Malays hardly the nation is a multi-ethnic society and has other religious beliefs want Buddhism, Hinduism, Christianity and Taoism practised by the minority ethnic population of Indians, Chinese and a small proportion of immigrant working class force.Ethnic Composition of Malaysia has around 53. 3% ethnic Malays, Chinese 26%, Indigenous 11. 8%, Indians 7. 7% others 1. % and Muslim religion has 60. 4% followers, Buddhism 9. 2%, Christianity 9. 1%, Hinduism 6. 3% ( CIA fact book ,2010) Its essential to know the ethnic and religious composition in order to understand the fabric of the society properly. Bahasa Melayu is the official langu long time along with Chinese , English and Tamil are the languages used pre-dominantly in Malaysia and its a plus to have English as one of the languages as it makes it uncomplicated for transactions and communication when the business and corporations aspiring to penetrate Malaysian market are from English speaking nations.The country is contained of deuce distinct separate which are separated by the South China Sea whereby, the parts, the east and west share similar landscape in that they have coastal plains which rise due to densely forested hill and mountains. Malaysia neighbours Indonesia and thus the two countries share some cultures (Carsrud & Brann sustain 2007, p, 54). This is due to the Indians ethnic community which is quite well represented in Malaysia and also it borders countries like Singapore and China.The nation is well endowed with inbred resources, good infrastructural develop ment in communications technology and transport and a good coast line with proximity to study sea routes. Economy Malaysia transformed from a third world economy to middle income economy within a duration of around ternion decades and the nation shifted from being a primarily agricultural economic found to an industrial and commercial economic hub.The country actively participates in international trade which has been enhanced by the shipping routes around its coastline and has well established manufacturing sector. Malaysia produces top exporter of manufactured goods, palm oil, rubber, petroleum and liquefied natural gas. Malaysia is considered as a newly industrialized country although not a developed one but on the way to become one and research presents its GPD per capita ( of around $14000) in the year 2008 was recorded high thus rank the country 48th in the world and 2nd in selenium Asia (Drucker, 2007, p , 23).The nation has a gross domestic product of $313 billion and a n average GDP annual ontogeny rate of 5. 9 %( Ibp USA, 2008, p. 7 ) The GDP growth rate has been consistent over a long period of clock and the economy has shown resiliency during the wake of economic crisis like the Asian economic crisis and recent global recession. Its known for the developed commercial sector producing and exporting electronic products and other advanced technological goods.Export market is $158 billion and its currency Malaysian currency (ringgit) supercedes at $3 (Ibp US, 2008 p. 18) The exchange rate of ringgit against major currencies has been consistent and stable avoiding currency fluctuations. Malaysia has a rootless exchange rate although it has pegged its currency to the dollar. Similarly the nation is a fraction of al most(prenominal) all major trading blocs around the region and Asia, from WTO to regional economic trade blocs making it an open and very competitive market. semipolitical SystemSince Malaysia gained independence its economic performa nce has been high in equivalence with other Asian nations due to its stability and has avoided military coups ( Nayland,2001,p. 164) Another critical factor to consider is the political system of the country. Politics and economy are intertwined and interrelated and political stability determines the environment which economy and business operates. The political stability of the democratic nation like Malaysia makes it an attractive place for investment.Malaysia is a federal constitutional elective monarchy having a head of state is referred as the king of the nation who is elected to a five year term and a parliamentary system of government activity headed by prime rector and has a healthy democratic space with opposition parties Parliamentary elections are held after every five years and thus only registered voters of age 21 and above are allowed to vote for the members of the House of Representatives (Ahmad & Seymour, 2008, p, 76).Legal and restrictive Framework MIDA (Malaysi an Industrial Development Authority) is a body charged with promoting investments activities some(prenominal) local and foreign, and to helped and guided investments in the business environment (Cheang Lo, 1997, p. 57) This is one of the bodies created by the government to eliminate the bureaucracy in obtaining legal documentation in the country by simplifying the licensing and regulatory process of businesses which wish venture in that country.Although any business needs to go through the required government process in obtaining licences the government has created an environment where restrictions and licensing red tape has been reduced significantly. Socio- Cultural Environment The socio-cultural environment in Malaysia is well defined by its ethnic composition and religious diversity. Malaysia is pluralistic society with Malays being the absolute majority and the other significant minority group like the Chinese, Indians and Tamils each with different religion. With such a rich cultural heritage, acquiring the relevant skills and cultural knowledge in order to conduct business in Malaysia is crucial to your success (Communicaid, n. d) the socio-cultural environment settings in Malaysia although comprising different ethnic groups and religious affiliations is a conservative society and thus its important for people to understand how to address the people.Each particular ethnic group has its own flair of communication and interaction and its critical to ensure you understand the culture and behaviour of each ethnic group in Malaysia. Generalizations of the all Malaysians duration conducting business whitethorn be costly to the business as it may be kened negatively by other ethnic groups. For instance the Chinese for example expect punctuality, whereas both ethnic Malays and Indian business people have a more relaxed attitude towards time (Communicaid, n. ) In compute to the consumer attitudes towards products and goods there is a widely distributed t iltencies among Malays of regarding goods produced locally to be somehow subordinate to the goods made by the developed nations which are advanced more than them and thence produce forest products. Quality is sensitive to Malays consumers. Malaysian local products are regarded with skepticism compared to south Korea products but are believed to be of high quality in comparison with goods from India ,china, Mexico and Thailand. (Ghazali et al,2008, p. 7)ResourcesThe country is well endowed with natural resources and affluent newfangled materials which it has continued to exploit in its quest to develop its economy. During most of the 1970s and 1980s Malaysia was the largest producer and exporter of tin, tropical tint, palm oil and natural rubber (Vincent, 2005, p. 10) Although Currently, Malaysia is not a major producer of some of the raw materials like natural rubber it still has abundant supply of tin, timber palm oil and natural rubber which has been used effectively by the government in exploring and developing its economy.Malaysia has transformed itself from primarily agricultural found economy to an industrial, technological and commercial giant due to the availability of human being resources in the country. Malaysia has been known to be open in attracting foreign labour in its economy to make it competitive and potent. However there have been slight problems in obtaining and retaining skilled labour from Malaysia. In contrast to this 44% of Australians firms reported difficulty in maintaining skilled labour in Malaysia (Nayland, 2001, p. 0) honorable and Social Responsibility More than 60% of managers in Malaysia were supportive of the view that that to improve market share and public image their firms would have to show there are social responsible (Harrison, 2005, p. 208) Malaysian socio-cultural structure is establish on conservative setting like Islamic religious prop on the Malay population which actually sees the aspect of giving back to them community is a responsibility rather than favour.Corporations and business doing business in Malaysia are therefore obligated to be active in backup projects in communities to uplift their image of sharing with the community the profits obtained from them. end point and Recommendations Having noted some of the major findings and factors affecting the level of entrepreneurial activities from research that has been done, it will be necessary to agree on the need of making Malaysia one of the key standards of venturing into any fast developing markets.Also, it is necessary to note that, some of the factors that affect the level of business and entrepreneurship in this country tend to have direct impacts on other economic activities and performances and they have been set as positive and potent. Once all the factors have been keenly identify and outlined, it becomes quite easy to address them respectively so as to nominate overall economic performance and development (Datamon itor, 2009, p, 31).From the analysis and research based on political stability, economic performance and availability or resources the general picture can be concluded that Malaysia is a potential and viable environment to conduct any business of any nature. Although it may have some challenges and obstacles, the business environment and its market potential makes it a contributory environment to establish business ventures and has a potential market for growth. The nation is also strategically placed to penetrate other markets in Asia.