Market Analysis Of Malaysia And Philippines For Harvest Box

Introduction to Harvest Box

Harvest Box is an Australian organization which provides a wide range of delicious and nutritious snacks. The company y offers healthy and popular snacks in small packs so that it can be convenient for the customers. Harvest box serves Australia and several other regions with its enormous range of products. The ingredients and products of Harvest box are completely natural and entirely free from any kind of added sugar, additives or preservatives (aussiehealthproducts, 2017). The organisation has a plan to expand its business in one of the overseas nations. For its expansion, it has selected two countries i.e. Malaysia and Philippines. There will be performing analysis of both the countries on the basis of various factors. For determining the most potential opportunities available for expansion, there will be used a weighted index which will offer the answer to the analysis.

Economic Environment

While expanding globally, it is essential to analyze the economic factors of the chosen countries, so that the sustainability and profitability of the business operations can be forecasted.

 Malaysia is one of the fastest developing nations in the world. The continuous economic reforms have upsurge the competitiveness in the nation. The country’s financial sector has experienced various regulatory modifications which have limited the foreign ownership in some of the monetary subsectors. And the domestic equity which were used to restrict the FDIs were eliminated, therefore it give rise to the more number of MNCs to invest in Malaysian industrial sector. There is open trade regime and freedom in trade operations. The labour regulations are also flexible as well as there is no minimum wage structure in the country (focus-economics, 2017). The GDP of Malaysia has been expanded to 4.5 percent in the 2016, fourth quarter. This shows positive indications for performing business in Malaysia (tradingeconomics, 2017).

Philippines is also one of the developing country which enjoys robust growth. There is high and increased arte of exports because of the high demand from China. There are also upsurge imports and the increasing retail sales are the evidence for rapid private consumption, rising FDIs and moderate inflation. There is increasing rate of tax rates and tax collection in the country which helps in raising the revenues for the Government and thus it results in faster infrastructure development. But the labor market has some sort of weaknesses which has declined the rate of investments from FDI (focus-economics, 2017). The GDP of the nation is 5.8 percent which is significantly potential for the MNCs to have investments in the country (heritage, 2017).

Political Environment and Risk

While expanding globally, it is essential to analyze the political environment and risk factors present in the chosen countries, so that the sustainability and profitability of the business operations can be forecasted.

Malaysia is a federal state which comprises of 13 states with the constitutional elective monarchy and the country enjoys a good amount if the federal decentralization. The king i.e. Pramounr Ruler is the head of the state. From the Sultans i.e. the nine hereditary rulers, there has been performed the selection of the king. The king served for the period of five years. Therefore, it can analyze that there is more of federal and king rule in the nation which regulates all the working and industries present in the nation (Banco Santander, 2017).

Economic Environment

Philippines is a nation where there is multi-party system. The country is a republic state grounded upon the presidential government. The running of daily affairs and the power of implementing the laws is in the hands of the President (Lim and McAleer, 2004). The President rules the country of a period of six years. He is also army’s commander of chief. Therefore, it can analyze that there is more of presidential and king rule in the nation which regulates all the working and industries present in the nation (Banco Santander, 2017).

Business Environment

Doing Business in Malaysia 

The primary source of living is agriculture which involves around 12.2 percent of the domestic individuals and contributing a major part of 8.5 percent in the nation’s GDP. The nation is recognized as the world’s key producers of the rubber, cocoa and palm oil. The tropical wood is mainly exported from Malaysia only. Based upon the w materials, the economy of Malaysia have successfully grown and developed such as bauxite, copper, gas, tin and rubber. The total industry of Malaysia contributes for around a total of 36 percent which involves 27.4 percent of the populace.

The nation is also recognized as the exporter of the appliances electronic goods and the semi-conductors (Banco Santander, 2017). The Government has huge plans for developing the nation as the chief producer of the technical products such as software. From the components manufacturing point of view, the nation is regarded as a key outsourcer. There has been fetched attention of the number of foreign direct investments which plays a vital role in the transformation of the Malaysian economy. The country is also one of the most favored tourist destinations in Southeast Asia (Tam and Tan, 2007).

Doing Business in Philippines

The primary source of living is agriculture which involves around 29 percent of the domestic individuals and contributing a major part of 10 percent in the nation’s GDP. The nation is recognized as the world’s key producers of coconuts and rice. There is inadequate infrastructure, weak economies of scale and also low productivity. The country is regarded as one of the richest nations across the globe mainly in minerals. There are extended reserves of zinc, gold and copper in the nation. The total industry of Malaysia contributes for around a total of 30.5 percent which involves 16 percent of the populace (Banco Santander, 2017). The industrial food processing is regarded as the primary manufacturing activities of the nation. The finance, call centers and the telecommunication sectors are the fastest growing industrial sectors of Philippines in the coming future.

(Source: Banco Santander, 2017).

Market Potential

From the business operations point of view for Harvest Box, it can be analyzed that both the countries are rich in agriculture which is a favorable point for the organisation as it is a food processing unit. As there is continuously increasing demand for the fresh and healthy food products, the Harvest box has potential opportunities to get successful in both the markets. Individuals are rapidly switching towards the consumption of healthy and nutritious products so that there can be less health related issues in the nation.

Political Environment and Risk

Malaysia offer improved infrastructure, low cost labour, flexible practices, less regulations with squat population and increased market size. On the other hand, Philippines is a rich country with high population as compared to Malaysia. But there are poor infrastructure facilities, higher regulations, and high amount of taxes. All these factors when compared to Malaysia are less advantageous for the company to expand in Philippines. Therefore from the market potential, Malaysia is a more improved choice (Bowie and Unger, 1997).

Country Choice

Following weighted index will help the company in having an adequate analysis of both the countries and will assist in selected the more opportunistic and potential market place for the business expansion.

Weighted Index

This weighted index table will be used to analyze and compare the marketing opportunities of two different nations i.e. Malaysia and Philippines. The variables are the afctors on the basis of which score will be offered to both the countries in respect with their individual condition.

The above table demonstrates that the various variables which are used for analyzing that which country is more suitable for the Harvest Box. There has been provided a score for every single variable and established on the basis of the weighted variables, there has been identified the adjusted score. Malaysia has an adjusted score of 6.5 and the adjusted score of Philippines is 5. Thus, Harvest box has major developing opportunities in the markets of Malaysia.  

Conclusion

From the overall report and the analysis drawn, it is strongly recommended and concluded that the company, Harvest box must plan its business expansion in Malaysia instead of Philippines because of several identified reasons. The markets of Malaysia are more competent and potential. Thus, they will offer much long term sustainability and success to the organisation. Therefore, it is concluded that on the basis of economic, political environment and business environment factors, the organisation must have its expansion in Malaysia. The weighted index also provides a similar outcome of the analysis and comparison of both the nations on various variables. Therefore, expanding in Malaysia is a better business opportunity for harvest box.

References

Aussiehealthproducts, (2017). Harvest Box, Retrieved on: 4^th May, 2017, Retrieved from: https://www.aussiehealthproducts.com.au/harvest-box.php 

Banco Santander, (2017). MALAYSIA: ECONOMIC AND POLITICAL OUTLINE, Retrieved on: 4^th May, 2017, Retrieved from: https://en.portal.santandertrade.com/analyse-markets/malaysia/economic-political-outline 

Banco Santander, (2017). PHILIPPINES (THE): ECONOMIC AND POLITICAL OUTLINE, Retrieved on: 4^th May, 2017, Retrieved from: https://en.portal.santandertrade.com/analyse-markets/philippines/economic-political-outline 

Bowie, A., & Unger, D. (1997). The politics of open economies: Indonesia, Malaysia, the Philippines, and Thailand (Vol. 4). Cambridge University Press.

focus-economics, (2017). Malaysia Economic Outlook, Retrieved on: 4^th May, 2017, Retrieved from: https://www.focus-economics.com/countries/malaysia 

focus-economics, (2017). Philippines Economic Outlook, Retrieved on: 4^th May, 2017, Retrieved from: https://www.focus-economics.com/countries/philippines 

heritage, (2017). Philippines, Retrieved on: 4^th May, 2017, Retrieved from: https://www.heritage.org/index/country/philippines 

Lim, L. K., & McAleer, M. (2004). Convergence and catching up in ASEAN: a comparative analysis. Applied Economics, 36(2), 137-153.

Tam, O. K., & Tan, M. G. S. (2007). Ownership, governance and firm performance in Malaysia. Corporate Governance: An International Review, 15(2), 208-222.

tradingeconomies, (2017). Malaysia GDP Annual Growth Rate, Retrieved on: 4^th May, 2017, Retrieved from: https://www.tradingeconomics.com/malaysia/gdp-growth-annual.

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