1. Universiti Teknikal Malaysia Melaka
Repositioning Strategy for Malaysian Companies Internationalization
ISMI RAJIANI
Universiti Teknikal Malaysia Melaka

2. Progressed socio economically
Malaysia in Brief
Progressed socio economically
Since 1957
First-class network of infrastructure that is comparable to those in developed countries
strategic location in the fastest-growing region with a strong natural resource endowment

3. Xavier, J. A and Ahmad, Z. U. (2012)
Xavier, J. A and Ahmad, Z. U. (2012). Proposed scholarly research agenda for transforming Malaysia into a model developing nation. International Journal of Public Sector Management, 25 (3), 231 – 243.
Stuck in the middle-income trap
Cannot compete with Vietnam and Indonesia in lower costs and labour-intensive production
Unable to compete with high value-added economies

4. Malaysian COMPANIES
Will they all adopt the Overall Cost Leadership Product Strategy co-aligning with their local competitive advantage?
Going Global

5. Proposition 1:
Malaysian exporting companies have a different initial position compared to that of Western companies when starting their export activities as form of internationalization.

6. companies expand first to market which is psychically close
Uppsala model
“psychic distance”
companies expand first to market which is psychically close
move further as their knowledge well-developed

7. Uppsala’s model for Malaysia
culture
language,
religious customs
close distance
Indonesia as potential market

8. Variables Definition
COI : buyer’s attitudes and feelings toward the country , developed through contact, association, or past experience with the country, its people, and its products (Sahin, 2010).
Animosity: the remnants of antipathy related to previous or ongoing military, political, or economic events"(Klein et al, 1998).
Ethnocentrism: believe that buying a foreign product or foreign brand is not patriotic, and they tend to choose local products or local brands, regardless price or quality considerations (Shankarmahesh, 2006).

10. Thus…
The case of Air Asia and Proton (Ahmad and Neal, 2006 ; Ahmed & Humpreys, 2008), and many firms believe that a low-price strategy is the main competitive advantage (Young et al., 1996, ; Ahmed & Humpreys, 2008).

11. There are 15 triggering cues for internationalization motives
Preposition 2:
There are 15 triggering cues for internationalization motives

12. 15 triggering cues for internationalization motives
Gain international experience
Explore own advantages on markets abroad
Increase profit
Increase sales volume
Gain access to internationally experienced management or skilled human resources

13. 15 triggering cues for internationalization motives
Gain international experience
Achieve international reputation and brand recognition
Receive government support or finance
Improve own-product development and innovation ratio
Increase technology content of own products

14. 15 triggering cues for internationalization motives
Improve customer service
Improve quality of products
Improve cost efficiency in production
Search efficient alliance
Maintain domestic positioning

15. Proposition 3:
The 15 triggering cues can be allocated to and distributed between four strategic positions, based on expected importance in securing competitive advantage in each position.

16. Four Strategic Position (Soderman et al., 2008)
3. High Price Low Volume
4. High Price High Volume
2. Low Volume Low Price
1.High volume Low Price
PRICE
Volume

17. Four Strategic Position (Soderman et al., 2008)
3. Focus on innovation
4. Focus on Growth
2. Start up company
1.Focus on cost efficiency
PRICE
Volume

18. Four Strategic Position (Soderman et al., 2008)
3. Focus on innovation
4. Focus on Growth
2. Start up company
1.Focus on cost efficiency
PRICE
Volume

19. None will be willing to stay in position 2!
3. Focus on innovation
4. Focus on Growth
2. Start up company
1.Focus on cost efficiency
PRICE
Volume

20. 1.Focus on cost efficiency
Sales Volume
Cost Efficiency in Production
Explore own advantages
Profit
International Experience
Government Support
Opportunity

21. 3.Focus on innovation International Reputation & Brand Recognition
Product Development and Innovation Ratio
Technology Content of Product
Searching Efficient Alliance
Management and Skilled Human Resources
Internationally Experienced
Maintaining Domestic Position
Profit

22. 4.Focus on Growth
Customer Service
Quality of Product

23. Proposition 4:
Most Malaysian companies will stay in position 1 because of their country-specific advantages, but will reposition by leaving position 1 and aiming for position 3, the high-price/low-volume segment.

24. Data and Methodology
The research questions were operationalized in a questionnaire adapted from Soderman et al., (2008) .
The target population of this study is managers in manufacturing sectors in Selangor, Negeri Sembilan, Malacca and Johore Bahru states.
The survey is targeted to obtain respondents.

25. Conclusion
Uppsala model concept of psychic distance by preference to start exportation to neighboring countries seems to apply also for Malaysian companies

26. Conclusion
As competition increases in their domestic market, great numbers of Malaysian companies will consider Western markets attractive for their products and services thus make the company reposition their strategy

27. Conclusion
Europe does not represent a neighboring or ‘home’ market, as do markets in South-East Asia making the Uppsala model concept of psychic distance and Porter’s overall cost leadership are no longer relevant.

28. THANK YOU FOR BEING ATTENTIVE!