Old Town Embark in Australia Essay

1.0 Introduction of seam in Malayansia aged(prenominal) town vacuous hot chocolate stemma is chosen for implementing its subsidiaries in resistent terra firma finished globalisation. The farm animal itself as a restaurant marketing nutrient and beverages atomic payoff 18 focused, but non their products of instant(a) coffee berry (although the product exit be sold in Australia in the introduce too, but the store is what we should focus on). hoary township etiolated deep brown is complete and incorpo topical anestheticized in 1999 but undetermined its first chain of liberations in 2005. The handicraft is always in leading sen epochnt after its success and in 2012 it is soothe proudly the biggest kopitiam restaurant in Malaysia ( of age(predicate) township, 2013). Kopitiam foot be defiend as a coffee shop which the word kopi is a Malay word that has the meaning of coffee spot the word tiam is the Hokkien dialect word for a shop.The outlets of grizzl y townsfolk pureness umber atomic number 18 based on the tralatitious Ipoh coffee shop setting. The vexation widen rapidly in the years and its outlets argon accessible in nationwide Malaysia including all in all the states. Each state has lots of outlet and mainly the most of them is Penang, fol pocket-sizeded by Selangor and Kuala Lumpur. later(prenominal) it expands to the stores in both Singapore and In dosia. In 2009, on that point ar around 1348 over retail outlets available in Malaysia, 550 in Singapore and 2100 in Hong Kong ( gray townspeople, 2013). archaic Town White Coffee ope come outs mainly in selling coffee such(prenominal) as Nayang Kopi O and Nayang Kopi C and most importantly its signature drinks Ipoh White Coffee, but the business is also available in other(a) beverages that ar cat valium in Malaysia such as out of date Town White Milk Tea, Old Town Cham and Old Town Enriched Chocolate. acter(a) than the beverages, on that point argon whatsoe ver classic dishes like Old Town Nasi Lemak Special, Mee Java, Old Town Mee Hoon, alter Curry Mee, Old Town Assam Laksa, Old Town Lum Mee, Old Town Ipoh yellowish Hor Fun and etc (Old Town, 2013). in that location are intimately local favorites and sweet delight such as Kaya and Butter toast and Old Town Signature Ice Cream. These sustenance and beverages are all local food and beverages that are popular among the Malaysians.Old Town White Coffee target be said as successful as it grow from a pocket-size business to a large corporation nowadays, and it is hale known in Malaysia. Since the market in Malaysia is matured it should cave in search to expand its business in the other countries and it is proved in both Singapore and Indonesia by its revenue and time they survived. Old Town White Coffee is well alert to access to the world by dint of globalization and try to dominate the market available to them.2.0 PESTLE ingredients of country selected Pestle constituents is a framework of macro-environmental factors which to be used in strategic management environmental scan component. Political factor, economic factor, social factor, expert factor, environmental factor is included in Pestle (Byars, 1991).2.1 Political factorThe factor includes intellectual about the political system, and some key figures that are relevant to authorities indicators and the business in the country (Jan, 2002). trade policies in Australia with its neighbor countries is good and in brotherly condition. Pressure groups in Australia will let new business to run across and practice Corporate Social right and Ethics. Australia political environment can be consider as sound as it does non involve in every form of war inside or outside the country. Besides, the government of Australia is work in the policy that encourage international businesses to enclothe in. Political environment in Australia is sound, as on that point are voting elections held in every 3 years (Australia profile, 2007). however when new government is form in that respect aptitude be revising the regulations of business.2.2 economical factorThe factor provides understanding about the economic story of the country that gives meaningful macro-economic issues a balanced assessment (Jan, 2002). In Australia the economy is facing a recession, with 2-3% pomposity rate and approximately 6% unemployment rate. gross sales evaluate, progressive income tax, corporate tax rate and etc are implied on Australia. It is very emulous for the corporate tax rate in Australia comparing to some major economies. The modality in Australia is pleasant and loving for businesses. opposite than that, Australia trade focused more in Asia and some pacific countries. The interest rate in Australia is approximately 3% and is favorable for sendors as the business can be finance in a rase cost.2.3 Social factorThe factor deals with node demographics involves income distribution, healthcare , educational scenario, rural-urban segmentation and c interposes of affluence (Jan, 2002). The media in Australia has a great impact on the peoples life.99% of the population in Australia is educated. Quality goods are more favorable among them as they are all bluely educated. Religious are pretty modify in Australia and on that point is a small percentage of them do not run through beef, and small percentage of them is vegetarians. early(a) than that at that place is also Muslim that does not wear pork. Furthermore, the Australian has high buying authority which is good for trading over thither (Australia profile, 2007).2.4 Technological factorThe factor enables understanding of strategic information on proficient integritys and policies, patents, technology and telecom, technological gaps and opportunity sectors in the country (Jan, 2002). There is a number exceeding $30 million of original value of intellectual property in Australia (Australia profile, 2007). The tran sportation infrastructure of Australia is well formed in the country and the business can serve their client in a best way through transportation.2.5 juristic factorThe factor enables study of profound structure, rectitudes to start a business, corporate laws and the tax regime (Jan, 2002). Australia Law system is not binding but influential to distributively other. Law is passed by the Parliaments and both common law and equity, and constitutional and statute law are used. There are Australia secure law and Australian contract law which governed the businesses trading in Australia.2.6 Environmental factorThe factor is considering the countrys process on environmental policies and indicators (Jan, 2002). Australia is a country that supports environmental protection. When the business is operated in Australia, in that location should be assumption of no ban impact on the environmental issues and Australia charge regarding environmental issues should be supported.3.0 Benefits , Cost and Risks in the business endeavorTo pose a business, there are always benefits the business can earn and there are also cost whether high or low the business has to pay off. When there is an investing of business there are always perils associated with.The benefits of implementing Old Town stores in Australia involves providing food and beverages that are local, Malaysian room to those students who are studying in Australia, or some Malaysian that has immigrated to Australia. Instead of Malaysian, Singaporean, Indonesian and Bruneian are also wide available in Australia. They always try on Chinese foods that are unavailable in Australia but in the only street, Chinatown. enterprisingness stores in Australia will definitely support a pleased welcome of them. Other than that, through this the culture in Malaysia, the local delights of Malaysia can be spread to Australia through this method. As there are the unavoidably from those students and immigrated Malaysian, Sing aporean, Indonesian and Bruneian, opening Old Town stores in Australia will make profit.However, the cost of opening stores of Old Town White Coffee in Australia is not insolent as there are a need of large capacity for the resources including dim materials, comminute forces, and etc. Moreover, the raw materials and labor forces in Australia is not cheap consequently the cost is highly expensive. Other than that, Old Town White Coffee has exported its 3 in one instant Old Town White Coffee world-wide so in this time they go through to implement their store which is the restaurant selling food. This made them cannot give up it to be done exporting but the other form of method of launch. This made the costs higher.When there are higher costs there are always associated with higher risks. However, a higher risk always gives a higher return. Investments are like gambol all the time. There should have eliminate strategic management assessing all the risks and bewitch whether it is worth it to invest. It is definitely worth it to invest when there are already customer sources. However, the people are distributed in divers(a) places, to cut cost there have to be less opening of stores and this will make the people cannot access to the stores and therefore less customers. Other than that, the Australian might not like Old Town food and beverages due to different tastes.4.0 Proposed manner of Entry The proposed mode of origination is the types of entry modes that to enter into foreign market which is spilt up to two major types of entry modes which are equity and non-equity mode. Equity modes involve conjunction approximate and in all owned subsidiaries piece of music non-equity modes involve export and contractual agreements. The entry methods are not similar and differ in degree of risk they present, the resource commitment and chasteness they required and the enthronization return they promise (Agarwal & Ramaswami, 1992). The finding on wh at method chosen to enter a foreign will have a significant impact on the results therefore it should be careful when doing the selections.As it is a restaurant and caf based store it is impossible for Old Town White Coffee to enter the Australia market through exporting. There should be a try of contractual agreements like licensing and franchising, joint venture or direct investment which wholly owned the subsidiaries. In our view, as the costs are very high to invest in Australia and high risks associated in it, contractual agreement should be chosen as this method has provided the least of risks and costs other than exporting among all the choices of methods of entry.The advantages of licensing and franchising include minimizes risk and investment, having the susceptibility of circumventing trade barriers, speed of entry, and high return on investment. Furthermore, there are low political risks, low costs and simultaneous expansion is allowed across the world. In an opposite wa y, the disadvantages of licensing and franchising involve lack of control of assets use, and the licenses or franchises might become a competitor later, the knowledge of the business is spillovers and the time period of license and franchise is limited. There might be wrong expectation of franchiser or licensor that ruin the business shit or reputation (Agarwal & Ramaswami, 1992).Overall, there should have a use in licensing and franchising when there are import and investment barriers that are high but it is not appropriate in Australia as it is low in Australia. Other than that, there is no possible protection of legal in Australia environment which made licensing and franchising further not appropriate. However, there are large heathenish distance and low potential of sales in Australia that estimated therefore using licensing and franchising is appropriated. Other than that is has to be assured that the licensee and franchisee has less ability to turn up to be a competitor . Old Town White Coffee should try joint ventures and direct investment but for cost and risk minimizing, they will have to choose licensing and franchising.