Assignment Taken

STRATEGIES TO DEAL IN NEW BUSINESS ENVIRONMENT AND CERTIFICATIONS NEEDED

Case Understanding

ABOUT THE CASE 1. Ramalingam foods is a restaurant which provides ready to eat food in different variants 2. Ramalingam foods want to expand in the foreign market but have no experience of it. 3. The budget is limited for the expansion 4. To customize the product and add new product according to the selected country culture. 5. To get the required licenses and permissions as soon as possible

BCS Solution Summary

SOLUTION SUMMARY 1.To decide the region for expansion 2.To decide the target segment 3.Competitors in the selected region 4.Business process for transferring the product 5.Food industry analysis of the respective country 6.Strategies to adopt 7.Licenses and documents required

Solution

To select SOUTH EAST ASIA region for international expansion

-As India has Free trade agreement with these countries,

-Huge Indian population residing in these countries.

 

• SINGAPORE
• MALAYSIA
• THAILAND
• INDONESIA
• MYANMAR

Target Segment

1. Indian in those countries

2. Local residents

3. Indian and other tourists

 

Competitors in South-East Asia

MTR Foods        - India

Prime taste        - Singapore

House of taste   - Malaysia

Bentoree           - Malaysia

Belfoods            - Indonesia

Indofoods          - Indonesia

A&N Foods       - Myanmar

Real Thai          - Thailand

 

BUSINESS PROCESS

1. To manufacture the food product in India.
2. To transfer it to export agents.
3. To export the product from the dockyard by water ways.
4. To setup a distributer for the initial stage, as we don’t have the power in the foreign country.
5. The distributer will transfer it to retailers and to the consumers.

 

EXPORT

To expand in international market, we will start with export strategy.

As the company has less available finance and not any running industry in foreign land, exporting will be the best option. Not to open the manufacturing units in the host country, and help to achieve location economies.

 

PARTNERSHIP & STRATEGIC ALLIANCE

To enter the foreign market through partnership and strategic alliance. As local distributers have an established supply chain network, which will help in market coverage.

• To better understand the market
• Lower capital required
• Market coverage

 

FRANCHISING

To open franchising business at the airports of the international airports of these countries. It will help the product to grow and attain more foreign attention.

 

CURRENT CURRENCY EXCHANGE RATE

               

 1 Singapore Dollar            = Rs 53.36

 1 Malaysian Riggit            = Rs 17.40

 1 Thai Baht                       = Rs 2.35

 1 Indonesian Rupiah        = Rs 0.0049

 1 Myanmar Kyat               = Rs 0.052

 

FOOD INDUSTRY PESTEL ANALYSIS OF THE SOUTHEAST ASIAN COUNTRIES

 

SINGAPORE

Political- Government implemented policies against fast food due to the needs of the society. The food which is ultimately high in cholesterol, sodium and fat is taxed and ultimately resulted in the profit of the business. Our product is quite low in fat and cholesterol and will help people to eat more healthy food.

Economic- As inflation of the Singapore is on the rise, they are willing to buy more products. Third highest per capita GDP and among the most competitive business environment.

Social- Singapore has a fast paced life style. People used to have more than 4 to 5 small meals in a day, which will help our product to stand strong.

Technological – To adopt the social media and e-commerce websites, for the promotion of the product. Technology has changed the food industry with the food serving and taking order robots.

Environmental- Singapore imports more than 90% of the food, which can affect its food security.

Legal- Singapore food agency ensures that the food sold in Singapore is safe for consumption. Sale of Food Act in Singapore ensures that the food is fit for human consumption, and is labelled correctly.

 

MALAYSIA-

Political- Malaysia has a stable but corrupt political system, which may affect the business conditions.

Economic- The unemployment rate is low- 3.2%, and people spend almost 30% of the disposable income towards food.

Social- As Malaysian food is not very healthy, as also noted by the Malaysian adult nutrition survey. To conquer over the movement, by using the healthy and nutritious south Indian food

Technological- To improve the productivity growth and functional food products development that lead to rich health

Environmental- Awareness in the people, and due to changing habits, the lifestyle of the people has changed. They are more inclined towards eating healthier diets.

Legal- Malaysia food act 1983, and Food Safety and Quality Division (FSQD) control the food standards, licensing of the specified food substances, and approves food labels.

 

THAILAND-

Political- A free trade agreement with Thailand, which will be helpful in trading.

Economic- A typical Thai family spends about 35% of their total income on food and beverage

Social – Demand for the functional food and beverages is continuously increasing. The market size of the processed food industry in Thailand is 1.7 billion baht.

Technological-   Thailand was the first country in the south east Asia to adopt agriculture biotechnology. There is strong demand for major suppliers for the equipment’s.

Environmental- The country faces problem with soil erosion and water problems which may affect economic growth on the sector.

Legal- The food act of 1979 is aimed at protecting the consumers from hazardous food, which can harm their health.

 

INDONESIA

Political- Uncertainties occur in the political system, but free trade agreement helps for better trade.

Economic- To achieve the growth of 10% in food & beverage industry, which will result to 8 billion dollars. The GDP 5.17% largest share come from food industry -33.98%

Social- Rise in the demand for the ready to eat food, frozen food, and processed food in Indonesia.

Technological- Indonesia food innovation centre (IFIC) aims to act as a hub to help Indonesia in innovating food chains.

Environmental- Consumers are demanding healthy and fresh products. Consumer spending is increase to 53% by 2020.

Legal- Indonesia food ministry – HALAL, to check the quality of the food and its standards.

 

MYANMAR

Political- Free trade agreement, which will be useful in exporting goods from one country to another.

Economic- People spends almost 50% of the income on the food.

Social- Busy lifestyle leads to ready to cook food. Most people eat outside home and don’t cook at their house.

Technological- Food safety quality machines which scale up the level of the food.

Environmental- Weather & climate change plays big role in food industry of Myanmar. It effects directly to consumer behaviour.

Legal- Myanmar food safety and quality standards govern the national food law, and check the quality of the food and its standard.

 

STRATEGIES TO ADOPT IN SOUTH EAST ASIA

GO LOCAL-   

• To sell the product in every retail outlet and shopping mall.
• To venture with the hotels.
• To add more rice products, as according to the south- east Asian culture.
• Also, to move from veg to non-veg items, which will attract them more.

 

GO ONLINE

• To move to all online platforms of the respective countries.
• E- commerce platforms will help to generate a large target segment.
• E-commerce platforms- Lazada, Honest bee, RedMart, Qoo10

 

GO SOCIAL

• Singapore, Malaysia, and Thailand eating habits are more enriched with spicy food, and to customize our product or introduce new product accordingly in the few years.
• In the fast - paced lifestyle, to add ready to eat breakfast.
• To customize the packaging according to the country, behaviour, and taste of the consumer.

 

HIGH VALUE - ADDED FOOD PACKAGING

• A convenient, safe and eco-friendly designed food packaging.
• A healthy product labelled, as people are more concerned about their health issues.

 

INTERNATIONAL STRATEGY – To go for international strategy, as to produce the product in the domestic market and selling them in the international, with minimal customization

• To adopt this strategy for 1-2 years
• It will help in reducing the cost structure.

 

LOCALIZATION STRATEGY- To provide a proper match to their taste and preferences in the international market, by customizing the product to a large extent or by introducing new products,

• To adopt for this strategy after 2 years.
• Add value to the firm in newer markets
• Increase in profitability

 

Licence and Documents Required: -

IMPORT EXPORT CODE(IEC)

• If to import or export anything to outside India, get a valid import export code (IEC).
• Register with the directorate general of foreign trade, to get a 10- digit code.

 

FSSAI LICENSE

To get a license for exporting food outside the country, as the food may not harm anyone or causing any damage to their health. To obtain the license, an exporter must do the following:

• Get a valid import-export code.
• Register yourself with the Directorate General of Foreign Trade.
• Get a license from the Central Licensing Authority for exporting food items outside the country.

 

NOC CERTIFICATE

To get a NOC certificate that allows permission to export your items.

Documents required for NOC-

• Country of origin certificate
• Import export code
• FSSAI License
• Bill of entry

 

RCMC (Registration cum membership certificate)

For availing authorization to import/ export or any other benefit or concession, exporters are required to obtain RCMC granted by the concerned Export Promotion Councils/Commodity Boards/ Authorities.

 

CORPORATE OFFICE

To open a corporate office in each country, to the get track on all the activities and to promote the product.

MALAYSIA    -    KUALA LUMPUR

SINGAPORE   -   TANJONG PAGAR

THAILAND     -   BANGKOK

MYANMAR   -    YANGON

INDONESIA    -   JAKARTA

 

PROCEDURE-

 SINGAPORE

1. To register with accounting and corporate regulatory authority. (ACRA)
2. To comply with the Inland revenue authority of Singapore.
3. Registration fees 100$

 

MALAYSIA

1.To get register with Suruhanjaya Syarikat Malaysia (SSM)

2. For taxation purposes, it is mandatory to follow Inland revenue board of Malaysia

3. Registration fees 500RM

 

THAILAND

1.To get register with the foreign business act and Thailand ministry of commerce.

2.Can also comply with department of business development for more benefits,

3. Registration fees 1000 Thai Baht

 

MYANMAR

1.To get registered with Directorate of Investment and Company Administration (DICA)

2.To confirm the registered office address and permanent permit to trade to DICA.

 

INDONESIA

1.To get register with Indonesia Investment Coordinating Board 

2.To comply with all the procedures.

• Principle license and business license.
• Domicile letter
• Deed of establishment
• Approval of business registration number (NIB)
• Tax identification number (NPWP)

 

TO OPEN FRANCHISE AT THE INTERNATIONAL AIRPORT

 

MALAYSIA    -    KUALA LUMPUR INTERNATIONAL AIRPORT

SINGAPORE   -   SINGAPORE CHANGI AIRPORT

THAILAND     -   SUVARNABHUMI AIRPORT

MYANMAR   -    YANGON INTERNATIONAL AIRPORT

INDONESIA    -   JAKARTA INTERNATIONAL AIRPORT

 

PROCEDURE-

1. A shop on lease should be available at the airport.
2. To make a business proposal to airport authority.
3. To follow the airport minimum standards.

 

Conclusion

CONCLUSION  The region selected is in the ASEAN, free trade agreement applies to all the countries.  Exporting will be the best option, as we cannot open a manufacturing unit in the respective countries because of lack of capital.  Partnership and strategic alliance make it easier to enter the foreign market.  To customize the product according to the lifestyle of the country.  To add more rice products and spicy products which will help to generate more revenue in the respective countries.  Franchise business at the airport will help to attain attention of the international visitors as well.

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