PESTEL and SWOT Analysis of Malaysian Business Essay


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I have study the topic of concern in context 4. I learned about the globalisation. Globalization means the people, companies and authoritiess are interaction and integrating in different states, a procedure driven by trade and investing and aided by information engineering. The increasing of the international trade, fiscal transportations, and foreign direct investing, so that the economic system is progressively internationally interconnected. Everyday have about $ 3million in foreign exchange minutess happened in the universe. Malaysia entire trade in 2012 was valued at RM1.310 trillion, an addition of 8.7 % from RM1.271 trillion in 2011. This was contributed by exports of RM702.19 billion and import of RM607.36 billion. Export expanded by 0.6 % while import rose 8.6 % compared with 2011.

China has emerged as the 4th largest trading spouse of Malaysia since 2001. Malaysia ‘s trade with China has grown enormously, to account for 8.8 % of entire trade in 2005. Malaysia and China trade grew mean one-year rare of 16.8 per centum significantly from 1974-2008. It showed that less than $ 100 million to $ 40 billion ( Li, 2006 ). Coffee concern is a immense economic, societal and environmental significance in Malaysia. It represents an of import portion of Malaysia’s revenue enhancement income and gross domestic merchandise. The old town white java is the largest eating house concatenation in Malaysia. The central office is in Ipoh, Perak, Malaysia it is a franchise company ( Nalina, 2013 ).

Therefore, Malaysia old town white java are continue to spread out its operation to the international market. Now the inquiry is how Malaysia old town white java can spread out to different planetary markets such as China. China have over 1.3 billion population which is a immense market if possible to acquire in. Recently there is a turning java demand in China. This is one of the best chances to notice. For this ground, this study will concentrate on analyzing of Chinese possible market for Malaysia old town white java.

Culture profile

Malaysia old town white java go the signifier of the retail concatenation of cafe mercantile establishments which has expanded into the nutrient and drink concern. ( old town company, 2011 ) in my sentiment, i choose shenzhen, China to be my first mark market. The ground why I choose shenzhen is shenzhen is a immense potency and positive market.


China as the 3rd largest state in the universe which the regional economic geographics include E to west and south to north. Along the South China sea, the East China sea, the Yellow Sea, and the Bo Sea, east China has about 14,500 kilometers coastline, with ports and seaports for sea transit to many developed western economic systems. There are over 160 metropoliss in China with a population over one million. Such as shenzhen. Shenzhen is located on a southern tip of the Chinese mainland and on the eastern bank of the Pearl River. An it is belong a portion of guangdong state and merely North of hong kong. Shenzhen has busying 199164 square kilometres, and have 10.47 million lasting occupants in 2011.


In 2014, Chinese’s population is 1,392,472,656.So ; about half of all Chinese live in urban countries today. there are 90 metropoliss in China which define the urban country, with a population of more than 1 million people. ( World population reappraisal online, 2014 ) Such as shenzhen, By the terminal of 2011, the lasting occupant population reached 10.47 million. Today, China is considered a middle-income state by Western criterions. And they are 56 different cultural groups ain China, 91.51 % of Chinese are Han Chinese. Most of people who are populating shenzhen is Han Chinese. ( World population reappraisal online, 2014 )


Tea is an old traditional drink in China which has been an of import portion of life style. It has developed a alone civilization in the state. As old traditional drinks, tea was first grown in China and spread to other states and has ever popular in the universe. Even though presents has increasing many sort of drink such as java, soft drinks and vino, but tea has ne’er decreased its popularity. Particularly in recent old ages, modern people realize the importance of organic nutrients and drinks, tea is being considered one of the most natural and healthy drinks which is promoted by more and more people around the universe.

Hofstede ‘s cultural dimensions

Harmonizing the Hofstede’s cross cultural theoretical account to understand the Chinese civilization profile. Power distance stated that the power inequality in the society. It will impact hierarchy and dependance relationships in the household and organisational contexts. In individualistic societies, people are look after themselves and their direct household merely. High individuality societies allow a big grade of freedom and show loose integrating. Low IDV societies show tight integrating. Dominant values in masculine states are achievement and success and in feminine states are caring for others and quality of life. Uncertainty turning away means that people feel threatened by uncertainness and ambiguity and seek to avoid these state of affairss.

It is necessary to compare the different cultural of Malaysia and China when old town white java privation into the China selling. It wills east they to do the selling schemes. Therefore, the comparison the different dimensions of Malaysia and China in order to do the differentiation between these two civilizations which will be following.

Culture dimensions




Individuality 26 20

Power distance 100 80

Uncertainty turning away 30 30

maleness 50 66

Table 1: Cultural differences between Malaysia and China ( )

HofstedeaˆYs theoretical account has a graduated table from 0 to 100, and is based on quantitative research ( Hofstede, 1994 ). Harmonizing this tabular array, we can acquire Malaysia and Chinas do n’t hold really large different civilization. Malaya and china both of them are extremely collectivized civilization. China are more collectivized than Malaya that is means people have a high sense of individuality to the traditional nutrient and drink. Malayan and Chinese they are accept the Power Inequality. The relationship between the subsidiary and superior is polarized. The formal authorization and countenances will impact the person. Peoples do non hold the desire to transcend their societal rank. Therefore, many people in China see the relationship between the monetary values of consumer topographic points and the personal visual aspect earnestly. Malaysia and China has a low mark on uncertainness turning away. Both of states are comfy with ambiguity and they are adaptable and entrepreneurial. China and malaysia both are masculine society which are success oriented and driven. Because of the influence of traditional ideological in the antediluvian Chinese, so the China are more masculine.

Entry of theoretical account

I chose the best manner of entry that is franchising. Franchising is the perfect manner to get down a concern. First, It through payment of franchise fees to runing the concern with old ages of support and turn out success of a well-known trade name. That the franchiser enjoys are reduced operating, distribution and advertisement costs. Besides that, the processs of franchising are uniformity. And which showed a consistence, increase productiveness degrees and good quality. The franchisee is frequently invested much clip and money in the concern, so that it will convey better organizational and pecuniary consequences, which is shown more clients satisfaction and increase gross revenues. Furthermore, Franchising is through other people investing by multiplying the figure of locations to distributing the hazards. That means it concentrate on altering market demands so that it besides cut down the rival. Finally,

Old town has maintain a leader in the industry and have suited tools for success as equipment. And it maintain with franchisees to develop a successful program which is client base and increase net incomes. Old town franchisees spouse can acquire a well- known trade name which people know before and trust, receive good preparation and support.

Businessman who has developed a successful concern frequently chose the manner of franchise to spread out their operations. It is no uncertainty that franchising is one of the popular concern enlargement systems in the universe. I have been look into how the franchises are efficaciously utilizing the concern and how successful other franchises. Because of the Franchises offer national advertisement runs that are included in your franchise fee, so that one benefit to cut down the advertisement fees and I besides benefit from any advertisement by the proprietor. And the most of import thing is one get the support tanning from the franchise. Franchise Head Quarters will develop me in everything from the engineering involved, to the accounting, to standing behind the counter and taking money. So that it makes the concern may be easier ( Daszkowski, 2014 )

Unlike the foreign direct investing manner need high cost path, and more exposure to economic and political hazards jobs of pull offing the subordinate at a distancei??Tim, 2014 ). Unlike joint venture have the hazard of losing control over its engineering to its venture spouse.

It ‘s a batch harder to introduce with franchising than if you own your ain mercantile establishments. With franchising, if you come up with a new thought, you have to negociate with your franchisees to acquire them to accept the new merchandise or whatever invention you want to present, alternatively of merely seting the new thought in topographic point on your ain.

Franchising besides has some drawbacks. It is hard to introduce with franchising. For illustration, if i have some thought for my mercantile establishments, Is have to negociate with my franchisees to acquire them to accept the new thought or service. It will cut down the passion for to make the invention on merchandise and service ( Shane, 2013 ). Sometimes, name acknowledgment besides will go a barrier for the concern. Particularly if other franchises has having bad imperativeness or enduring from hapless public perceptual experience. That will do my concern get problem.

PESTEL analysis

I use the PESTEL manner to analysis the concern environment in shenzhen to understand the concern enlargement.

Politicalthe corporate revenue enhancement of foreign companies are lessening.

EconomicGDP, financial gross, foreign trade are addition.

Socialdiverse mix civilization

TechnologyHigh-Tech park in Shenzhen

EnvironmentalIncrease java ingestion

LegalFee trade zone bring many benefit.


Shenzhen authorities encourages foreign investing which they want more foreign companies to come in the Shenzhen market, and promote more foreign financess to put in assorted Fieldss. The corporate income revenue enhancement for the foreign invested company is decreased from the original 30 % down to the present 15 %. At the same clip, the local income revenue enhancement levied at the rate of 3 % is exempted. Shenzhen have regulated new revenue enhancement jurisprudence which is The foreign invested company have 2 old ages of corporate income revenue enhancement freedom and half decrease for the resulting 3 old ages. ( Shenzhen authorities online, 2012 ). Therefore, this policy will assist us to cut down our cost which can increase the benefits.


The economic of shenzhen is maintained a healthy impulse of development in 2012. GDP grew by 10 per centum to 1.295 trillion kwais. The ingestion of retail gross revenues increasing from 16.5 per centum to 400.88 billion kwais wholly. The volume of foreign trade increased 12.8 per centum to 466.8 $ billion. The volume of export has maintained stayed at the top of China. In 2012, shenzhen authorities has reported the fiacal gross is 148.6 billion kwais, up to 10.6 per centum from 2011 ( shenzhen authorities online, 2012 ). shenzhen is ranking 4th on the Chinese mainland which have strong economic power. And shenzhen is one of the metropoliss that has produced the biggest economic efficiency. The economic system is great strong in Shenzhen. Shenzhen people’s incomes besides are really high. They have strong buying power and devouring ability. It makes my concern become easy.


Shenzhen is modern metropolis which filled of people from all over the universe. Shenzhen civilization is non home grown and traditional. It is a diverse mix and a refreshing alteration compared to many metropoliss worldwide. Such as java is popular in shenzhen. Coffee civilization in shenzhen is more a symbol of life style. It represents the ingestion of the immature, hip, emerging in-between category. Most java drinkers are all open-minded and thought, they think java is a Western civilization, and through the java to warrant their credence of Western civilization. In other words, tea is for the traditional and java is for the cognoscente.


Half October 2008, the enlargement of the current High-Tech park in Shenzhen officially started. The 3 billion kwais ( US $ 439 million ) package base, which covers 150,000 square metres and will be funded by the Shenzhen authorities, will be put into operation in 2010. Shenzhen built a package park in the hi-tech park 10 twelvemonth ago. It is home to more than 400 companies with 40,000 employees. The end product of the city’s package industry reached 86 billion kwais in 2007, accounting for 15 per centum of the country’s sum. Software exports reached US $ 4.5 billion last twelvemonth. ( Shenzhen authorities online, 2012 ).


Harmonizing to International Coffee Organization, it is estimated that China ‘s java ingestion will turn by about 15 per centum per twelvemonth, far above the planetary norm of 2 per centum. However, most of this growing is based on China ‘s alone java civilization, stand foring a stylish symbol instead than accustomed use. Nowadays, There are many white-collar workers in Shenzhen, Coffee has already been the immature people and white- neckband workers’ the indispensable thing in their life. So, we will be able to be successful in the background of Shenzhen.


shenzhen have established a free trade free zone which the economice countries of shenzhen futian, shatoujiao and yantian port bonded countries with Perfect substructure and go a mature investing environment ( Shenzhen Government Online, 2012 ). Goods transported from outside the boundary into the free trade zone or transported from the fee trade zone outside the boundary are free of imposts responsibilities and licences, and it will carries out the file awaying system direction by the imposts and to be as particular policies apply. In the free zone, they are allow the concern to fabrication, processing, repositing, and exhibition. Because of that, we can believe the free trade zone to import natural stuffs, it can cut down cost and acquire more benefits.

SWOT analysis

I use the grind theoretical account to analysis the old town white java state of affairs.


High net income

Offers other productInnovation is easy

Difficult to diversify their merchandise.


Expand to planetary market

Re-brandsPrice addition

Many rival


The old town white java get high net income in Malaysia. And it no merely sell java but besides they are offer others nutrient. It have a lots subdivisions in Malaysia.


The old town white java ever depends on the java so that it do them hard to diversity their merchandise and invention merchandise is easy.


The old town white javas are ready to spread out market to planetary market and they are able to re-brands to pull new consumer.


There are many rivals which are Starbucks, the java bean and so on.

Because of the stuffs cost are increase so that the merchandise monetary value besides will do lost some consumer.


The old town white java should be does the merchandise invention to stay the old consumer and pull new consumer. And they need to concentrate on new parts traveling frontward to turn to market impregnation concerns.


To sum up, the old town white java company is big concatenation eating house in Malaysia. I chose the od town white java with the best entry manner of franchising to spread out to shenzhen ( China ). I apply the cross-culture theoretical accounts of Hofstede to depict shenzhen ( CHINA ) ’s cultural profile. And one analysis what is the factor will act upon my concern when one start my concern in shenzhen. Which include political, economic, societal, engineering, environmental and legal. Harmonizing to my findings, Is have explained why the concern expand to shenzhen is suited. Shenzhen is really positive and possible market. With the developed of economic, people have strong buying power and devouring ability. I have assurance to confront the rival and work out the job to acquire success.


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