MPIB7103 Final Assessment on Malaysian Trade Policies

Question 1

Critically discuss the administrative policies implemented by the Malaysian government to deter foreign products and services. Justify your insights from the perspective of the automotive industry.

Question 2

Critically analyze THREE (3) push factors that compel internationalization and THREE (3) pull factors that attract businesses to expand into foreign markets. Support your analysis with relevant industry examples.

Question 3

Debate the relative merits of fixed and floating exchange rate regimes. From an international business perspective, discuss the key criteria for choosing between the two systems and determine which is most desirable for international businesses.

Question 4

(a) Assuming you are the marketing manager for a local food products company considering entry into the Indian market. The retail system in India tends to be highly fragmented with retailers and wholesalers maintaining long-term ties with Indian food companies, making access to distribution channels challenging. Propose a distribution strategy for the company and justify your recommendations.

(a) Imagine you are the marketing manager for a U.S. manufacturer of disposable diapers. Your firm is considering entering the Brazilian market. Your CEO believes the advertising message that has been effective in the United States will also suffice in Brazil. Outline some possible objections to;’ this. Additionally, your CEO believes that pricing decisions in Brazil can be delegated entirely to local managers. Why might this assumption be incorrect?

Question 5

Critically discuss the economic and political arguments supporting regional economic integration. Considering these arguments, explain how China’s Belt and Road Initiative (BRI) has influenced regional economic integration in Asia and Africa.

Experts Answer on Above Questions on International Management

Malaysian government policies to deter foreign products and services

Administrative policies – the Malaysian government policies indicates that it has approved permit system that limits the import of foreign vehicles, import duties and excise taxes that levies higher taxes on imported completely built up vehicles, national Automotive policy that supports local manufacturing in terms of incentives, and local content requirements that requires manufacturers to source components from Malaysian suppliers. These policies are highly beneficial to Proton regaining its market shares after its partnership with Geely, along with support to Perodua’s dominance, and created local employment and strengthened Malaysia’s automotive supply chain. But at the same time, they have also reduced the competition and resulted into limited choices available to Consumers.

Push and pull factors for internationalisation

The push factors are Market saturation which is evident from the slow in the domestic demand leading to companies like Nestle Malaysia expanding overseas. Another push factor is rising cost of production which encourages companies to manufacture their products in countries like Vietnam and finally, intense domestic competition.

The pull factors are a large customer base as the population is significantly huge in India, government incentives such as Vietnam providing tax incentives to foreign investors. Another pull factor is resource availability, as countries like Indonesia attract manufacturers with abundant nickel for Ev battery production.

Fixed versus floating exchange rate regime

The fixed exchange rate offers stable exchange rate which helps in reducing business uncertainty, and facilitates long term trade contracts, whereas the floating exchange rate makes adjustments according to market conditions, and offers greater flexibility in responding to economic shocks. The most desirable one is the floating exchange rate because it provides flexibility, and it is highly supportive to countries like Malaysia in their trade and investment.

Distribution strategy for Indian market

The strategy recommended is to partner with established distributors such as Reliance retail, DMart, and make entry into the metropolitan cities before performing expansion to Nationwide. It is also wise to utilise eCommerce platforms like Amazon India and Flipkart, and perform establishment of local warehousing and logistics partners for faster deliveries.

Disposable diapers in Brazil

Objections to utilizing the US advertising message – Difference in cultural values and family lifestyles of Brazilian consumers is a major factor behind the objections, and advertising should be in Portuguese not in English. Brazil also supports product demonstration and celebrity endorsement.
Why local managers should not make pricing decisions alone – The fluctuation in the exchange rate between Brazilian real and US dollars have a direct implication on cost, and the final prices are significantly affected by import tariffs and taxes. It is important to maintain consistent international pricing strategies across the markets.

Recently economic integration and China belt and road initiative

The economic arguments supporting the initiative are its support to an increase in the trade among member countries, reduction in tariffs and transportation costs, attracting foreign direct investment and improving economies of scale. The political arguments are the promotion of regional stability and cooperation, strengthening diplomatic relationships, and reducing the chances of any kind of conflict.
Impact of China’s BRI – on Malaysia, the impact is positive as the east coast rail link improves Logistics and trade connectivity. For Pakistan, the Pakistan economic corridor enhances transport and energy infrastructure, and for Kenya, the standard Gauge Railway improves the movement of cargo between Mombasa and Nairobi. Finally for Greece, the investment in Piraeus port improves trade between Asia and Europe.

Want Detailed Answers with References?

The analysis of the Malaysian trade policies including automotive industry protection, internationalization factors, exchange rate systems, India and Brazil Market entry strategies and China’s Belt and Road initiative revealed important findings about International Management strategies. With our international management experts in Malaysia, you can get help with your international business management assignment easily. Simply visit our Malaysian assignment help page for best support with your assignment, or explore recently solved assignments from City University Malaysia to learn our experts’ writing style.