INTRODUCTION TO MANG INASAL............................................................3
A. COMPANY PROFILE................................................................................................... 3 B. MARKET PROFILE..................................................................................................... 4 C. VALUE CHAIN ANALYSIS............................................................................................ 6 Franchising and Store Operations.......................................................................6 Marketing............................................................................................................ 7 Logistics.............................................................................................................. 7 Sourcing.............................................................................................................. 8 Franchising and Expansion.................................................................................. 8 PROFILE OF TARGET COUNTRY, MALAYSIA................................................9 A. STEP ANALYSIS...................................................................................................... 9 Socio Cultural...................................................................................................... 9 Socio Cultural.................................................................................................... 1 !echnological..................................................................................................... 16 Econo"ic........................................................................................................... 19 #olitics............................................................................................................... $1 B. ANALYSIS OF THE CONSUMER FOOD SERVICE INDUSTRY IN MALAYSIA...............................22 Mala%sia&s Food Ser'ice (ndustr%......................................................................$$ )argaining #o*er o+ )u%ers.............................................................................. $ )argaining #o*er o+ Suppliers........................................................................... $, !hreat o+ -e* Entrants..................................................................................... $6 !hreat o+ Su.stitutes......................................................................................... $7 /i'alr% a"ong Co"petitors............................................................................... $7 C. CONSUMER PREFERENCES, MALAYSIA........................................................................31 Li+est%le0Shopping ha.its.................................................................................. $ )rand0#rice Sensiti'it%...................................................................................... 1ealth +ood2 con'enience +ood and halal +ood.................................................. !he 1alal +actor................................................................................................. SYNTHESIS, WHY MANG INASAL IN MALAYSIA?.......................................35 STRATEGY FORMULATION......................................................................37 MANG INASALS VISION MISSION AND OBECTIVES AND ITS CONGRUENCE TO THE MARKET PENETRATION STRATEGY.............................................................................................. 3! MARKET ENTRY STRATEGY........................................................................................... 3" Store Operations............................................................................................... 8 Sourcing............................................................................................................ 9 #roduction......................................................................................................... ,3 Marketing.......................................................................................................... ,3 Foreign Exchange.............................................................................................. ,1 Introduction to Mang Inasal A. Company Profile Edgar Sia II, then 20 years old, took the entrepreneurial path when he founded Mang Inasal and began its operations in Iloilo City, Philippines on Deceber !2, 200"# $he restaurant initially offered chicken inasal to its clientele which was well% recei&ed by the Ilonggo people# 's tie went on, it offered ore (ilipino%inspired cuisine to the ass arket# 's such, the dri&ing force behind Mang Inasal)s e*ponential growth lies in its uni+uely (ilipino food offerings, its &alue for oney and its ser&ing of unliited rice for custoers# 'll these factors add up to create Mang Inasal)s distinct brand identity, which has led to its becoing one of the country)s fastest growing fastfood chains# (ast forward to se&en years later, the copany currently has 22" branches around the country, with its anageent aiing to e*pand to ,00 branches by the year 20!2, with a hundred new stores opening annually# $he copany offers Paborito Meals and Sulit Meals to its custoers, as well as Palaig Selections, Merienda Meals and other well%lo&ed (ilipino &iands# $he Paborito Meals are categorically ore e*pensi&e copared to the Sulit Meals, whose lowest offering is at an affordable -. pesos# /owe&er, their ser&ing portions are bigger copared to the Sulit Meals# Mang Inasal also offers traditional (ilipino dishes such as the 0eef and 0angus Sinigang, 0angus and Pork Sisig, and Dinuguan, /alo%/alo, aong any others# Mang Inasal prootes sustainable counity li&ing by pro&iding eployent opportunities and by sourcing out local aterials in its business operations 1e*aple, banana lea&es, chicken oil, baboo sticks2# In that atter, the copany takes an acti&e stance in de&eloping li&elihood prograsfor the betterent of the counity it ser&es# $he copany helps preser&e the (ilipino tradition kinamot, which in Ilonggo eans to eat with one)s hands# 's such, Mang Inasal restaurant chains around the country ha&e a designated washing area where custoers can wash their hands prior to dining to aintain sanitary eating standards# During the recent econoic crisis, Mang Inasal anaged to sail through the distress unhared# Sia entioned that the affordability of the copany)s offerings pro&ed to be a copetiti&e ad&antage to the budget%conscious (ilipino % thus, strengthening its foothold in the fastfood consuer arket, enabling the copany to grow in ties of econoic turoil#
B. Market Profile $he target arket ser&ed by Mang Inasal is the iddle class (ilipino faily, with onthly incoe ranging fro !2,000php to "0,000php# Moreo&er, these failies li&e in hoes where ebers of the e*tended faily li&e in the house as well, thereby aking it a large household# /ence, the copany offers eals that range fro -.php for the Sulit Meals, ..php for the Paborito Meals, with the highest priced &iand priced at !,,php 10eef and 0angus Sinigang2# It is reasonably priced considering how its &alue for oney is high, taking into consideration the ser&ing portions, the friendly custoer ser&ice and the war, locali3ed eating abience pro&ided by the copany# /ow the copany achie&es this cost ad&antage is accoplished by sourcing out one hundred percent of its raw aterials locally, unlike other fastfood chains who iport soe of its production aterials fro abroad# In addition, the fastfood chain banks on its traditional (ilipino cuisine, fast ser&ice, and the li&ely dining e*perience it presents to its custoers to attract new and retain recurring custoers# 's such, it is to Mang Inasal4s copetiti&e ad&antage that it has found its niche through (ilipino failies who want to find a truly (ilipino fastfood dining e*perience without going beyond the faily budget# /ence the copany4s slogan, "Hahanap hanapin mo". 's well, the copany4s priary strategy lies in Mang Inasal4s strategically locating its stores in high foot traffic areas to attract ore passers%by to enter the store, eat, and en5oy the Mang Inasal dining e*perience(kinamot)# In particular, ost Mang Inasal branches are situated beside call center copanies, public ser&ice establishents, in alls, and other hea&ily%condensed locations# 's entioned pre&iously, the copany is one of the fastest growing fastfood chains in the country 6 and their speedy rise can further be aplified by choosing an endorser who is an ideal personification of their brand# Mark 0autista, a twenty eight year old (ilipino artist, is Mang Inasal)s priary endorser# $he ost recent $7 ad&ertiseent starred by 0autista shows the an narrating his huble beginnings as to how he has ade it to becoe one of the country4s ost re&ered artists, adding that his o&e to Manilaade hi long for hoe, and how dining at Mang Inasal alle&iates the hoesickness he feels# (urtherore, to +uote Sia as to why 0autista was chosen as the brand)s endorser, 8I think we 1the copany and Mark 0autista2 ha&e soe siilarities# Mark also started in 200-, the sae with Mang Inasal### 'nd we feel that Mark, like Mang Inasal, has a &ery big potential, coing into the ne*t few years as they slowly unfold#9 C. Value Chain Analysis $he rapid e*pansion of Mang Inasal stores throughout the country pro&es to be a copetiti&e ad&antage to the brand# $his ay be attributed to Mang Inasal4s efficiencies in its &alue chain, which will be discussed below: Franchising and Store Operations Mang Inasal is a fastfood brand open for franchising opportunities# Currently, the brand is open for franchising at a cost of ; illion pesos, with franchise ters renewable e&ery se&en years# $he copany pro&ides operational guidance for new franchisees, including training for their tie%tested operations syste, staff support, and other arketing initiati&es# 0efore appro&ing any franchise deal, the copany looks at the site where the store will be built and they would assess whether or not the location is ideal and profitable# Mang Inasal hires pro5ect inspectors, who are ostly architectures and ci&il engineers, to o&ersee the construction of a branch# $hey ensure that the copany is able to locate its stores in high traffic areas, such as alls or near schools# Most Mang Inasal stores are open fro !0:00 a to !0:00 p, and each branch has at least -0 eployees# $hese indi&iduals either take or prepare the custoer4s orders, aintain the cleanliness of the facilities, or perfor other routinary work, super&ised by the store anager# Each of the copany4s eployees recei&e rigorous training before they are considered part of the peranent staff of a branch# 's well, Mang Inasal has anageent trainees who they hone to becoe branch super&isors# 'll this adds up to ensure that each custoer e*periences fast and +uality ser&ice fro the store# Marketing Part of the copany4s arketing strategy in&ol&es ad&ertising through print, billboards, radio and tele&ision ads# $hey bank on prooting further the three defining characteristics of the brand % affordable (ilipino food, a li&ely atosphere to dine in, and the kinamot eating concept# Most print ad&ertiseents of Mang Inasal ephasi3e the copany4s ser&ing of unliited rice to dine%in custoers# $his is a particularly effecti&e arketing strategy considering how (ilipinos are hea&y consuers of rice# Cost%wise, the food at Mang Inasal is affordable which furthers their arketing efforts of affordable +uality food# Logistics Mang Inasal sees to it that that there will not be delays in the deli&ery of the raw aterials that will be prepared then ser&ed to custoers# In urban areas they ha&e a daily deli&ery of raw products by eans of deli&ery &ans# In rural areas, on the other hand, they utili3e two transportation ethods % the daily deli&ery of raw aterials through deli&ery &ans and through public transportation such as the pedicab# $hey utili3e the pedicab to deli&er non%perishable products such as charcoal and baboo sticks, which they source locally in the area# Sourcing <hether in urban or rural regions, Mang Inasal is stiulating econoic acti&ity where their branches are located# $hey purchase their raw aterials % calaansi, charcoal, banana lea&es, sorbetes, &egetables, fish, baboo sticks and other ingredients through local producers of these aterials# /owe&er, these suppliers ha&e to undergo strict +uality check to be conducted by the Purchasing Departent at the copany# In this way, Mang Inasal can ensure that the +uality of food in each of its 22" branches are consistent and of high +uality# $his also pro&ides lesser costs for transportation seeing how each branch sources its aterials in its own counity, thereby lessening production costs incurred# Franchising and Expansion 's for future plans for growth, Mang Inasal, through the holdings in&estent fir In5ap In&estents, Inc#, is planning to 5oin the Philippine Stock E*change 1PSE2 this 20!0# /owe&er, this is still deterinable depending on whether current econoic conditions will ipro&e or not# Sia plans to raise around two billion pesos to fund its e*pansion of copany%owned stores nationwide# Profile of Target Country, Malaysia A. T!P Analysis Socio Cutura Maa!sia "emographics Population" 2,,;!,,=!. 1>uly 200. est#2 Table 1: Malaysia's Population as of July 2009 'ge structure 0%!- years: "!#-? 1ale #ear Population $ank Percent Change %ate of Information 200" 2",0.2,.-0 -@ >uly 200" est# 200- 2",.,",!"@ -@ "#;2 ? >uly 200, est# 200, 2",.,",!"@ -@ 0#00 ? >uly 200, est# 200@ 2-,"=,,=,= -@ !#=! ? >uly 200@ est# 200; 2-,=2!,2=@ -@ !#;. ? >uly 200; est# 200= 2,,2;-,!"2 -@ !#=2 ? >uly 200= est# 200. 2,,;!,,=!. -@ !#;, ? >uly 200. est# 20!0 2,,;!,,=!. -@ 0#00 ? >uly 200. est# Figure 1: Malaysia's population as of July 2009 Figure 2: Malaysia's population -,!,",@2!Afeale ",.!-,.@22 !,%@- years: @"#@? 1ale =,2!0,";"Afeale =,!-",0-"2 @, years and o&er: ,? 1ale ,@.,2-,Afeale ;2-,,;,2 1200. est#2 Median age $otal: 2-#. years Male: 2-#" years (eale: 2,#@ years 1200. est#2 Population growth rate" !#;2"? 1200. est#2 0irth rate" 22#2- birthsA!,000 population 1200. est#2 Death rate:,#02 deathsA!,000 population 1>uly 200. est#2 Brbani3ation Brban population: ;0? of total population 1200=2 Cate of urbani3ation: "? annual rate of change 1200,%!0 est#2 Se* ratio 't birth: !#0; ale1s2Afeale Bnder !, years: !#0@ ale1s2Afeale !,%@- years: !#0! ale1s2Afeale @, years and o&er: 0#;. ale1s2Afeale $otal population: !#0! ale1s2Afeale 1200. est#2 Infant ortality rate $otal: !,#=; deathsA!,000 li&e births Male: !=#"2 deathsA!,000 li&e births (eale: !"#2- deathsA!,000 li&e births 1200. est#2 Dife e*pectancy at birth $otal population: ;"#2. years Male: ;0#,@ years (eale: ;@#2! years 1200. est#2 $otal fertility rate 2#., children bornAwoan 1200. est#2 Ma5or infectious diseases Degree of risk: /igh (ood or waterborne diseases: 0acterial Diarrhea 7ector borne diseases: Dengue fe&er and Malaria Eote: /ighly pathogenic /,E! a&ian influen3a has been identified in this countryF it poses a negligible risk with e*treely rare cases possible aong BS citi3ens who ha&e close contact with birds 1200.2 Eationality Eoun: Malaysian1s2 ad5ecti&e: Malaysian Ethnic groups Malay ,0#-?, Chinese 2"#;?, Indigenous !!?, Indian ;#!?, Gthers ;#=? 1200- est#2 Celigions Musli @0#-?, 0uddhist !.#2?, Christian .#!?, /indu @#"?, Confucianis, $aois, Gther traditional Chinese religions 2#@?, Gther or unknown !#,?, Eone 0#=? 12000 census2 Figure 3: Malaysia's Ethnic roups Figure !: Malaysia's religion Danguages 0ahasa Malaysia 1official2, English, Chinese 1Cantonese, Mandarin, /okkien, /akka, /ainan, (oochow2, $ail, $elugu, Malayala, Pan5abi, $hai &ote" In East Malaysia, there are se&eral indigenous languagesF ost widely spoken are Iban and Hada3a Diteracy ' age !, and o&er can read and write2 $otal population: ==#;? Male: .2? (eale: =,#-? 12000 census2 School life e*pectancy 1priary to tertiary education2 $otal: !" years Male: !2 years (eale: !" years 1200,2 Education e*penditures @#2? of IDP 1200-2 Source# http#$$%%%.indexmundi.com$maa!sia$demographics&pro'ie.htm Socio Cutura 0ecause of the di&ersity of culture in Malaysia, its national identity is still in +uestion# $he country being a ulti%ethnic society coprises ainly of Malays, Chinese, Indians, Eurasian, and other indigenous groups# 'lthough its characteristics are still not as uni+ue as >apan, Horea, and other 'sian or European countries, the fact that it has a colorful array of culture creates a distincti&e ark on Malaysia# 's stated in 'rticle !@0 of the Malaysian Constitution, the Malay population is defined as soeone born to a Malaysian citi3en, who professes to be a Musli, habitually speaks the Malay language, adheres to Malay custos, and is doiciled in Malaysia or Singapore# $his definition is soehow abiguous that it connotes an inclusion of the population fro a wide array of ethnic backgroundF howe&er, it differs fro the anthropological understanding of what encopasses ethnic Malay# 's the definition of a true and legitiate Malay only state that heAshe ust profess to be Musli, it has led to the creation of ethno%religious identity, where it has been suggested that Malay cannot con&ert out of Isla# $his con&ersion to Isla fro /induis and $hera&ada 0uddhis began in the !-00s, largely influenced by the decision of the royal court of Melaka# 's of 200;, Malays ade up an estiated @-#,? of the population of Malaysia# It is predicted that this proportion will rise due to birth rates higher than other ethnic groups# Malays, based on the definition pro&ided in 'rticle !@0 of the Malaysian Constitution, are largely Muslis, which was perhaps the basis for the declaration of Isla as the official religion of the country# 's !00? of ethnic Malays profess this religion, their lifestyle is largely affected by its traditions and custos# Gne of the ain aspects that is affected by their Musli tradition is their diet# Muslis are prohibited to drink alcohol# $hey are also not peritted to consue any product or dish with blood and pork as ain ingredients# If an anial ust be slaughtered, it ust be done so by only a Musli# If there is doubt to anything being regarded as halal 1lawful2 or hara 1unlawful2, Muslis are generally ad&ised to refrain fro consuption until another Musli gi&es clarification or perissi&eness# (oring about 2,? of the population, Malaysian Chinese are the second ost influential culture in Malaysia# Chinese are generally known to be highly entrepreneurial and are &ery recogni3ed for their diligence and keen business sense# $he three sub% groups who speak a different dialect of the Chinese language are the /okkien who li&e predoinantly on the northern island of PenangF the Cantonese who li&e predoinantly in the capital city Huala DupurF and the Mandarin%speaking group who li&e predoinantly in the southern state of >ohor# Most of the Chinese in Malaysia are 0uddhists, which coprises around !.? of the country)s population# Malaysian Indians ake up !0? of the population which akes it the sallest of the three ain ethnic groups#Coing to Malaysia during the 0ritish colonial rule, ost of its descendants are $ails%speaking South Indian iigrants# $hese people ostly cae to the country to break away fro the caste syste in India# Predoinantly /indus, they painted Malaysia with their culture, such as ornate teples, spicy cuisine and e*+uisite sarees# 0eing part of the /indu culture, Malaysian Indians ay choose to follow their dietary law, which prohibits the fro eating beef, water buffalo, and yak# Soe also a&oid pork, crabs, reptiles, aphibians, snails, insects and wors# Soe /indus ay also belie&e that anials that ha&e died of natural causes are considered highly polluting and eating the akes a person untouchable# 'nials that ha&e died of natural causes are considered highly polluting# Eating the akes a person untouchable# 's a result of their eergence of a unified Malaysia, the social distinction becae ore apparent between Malay and non%Malay, which are represented by two classifications: the upper class of Malay and a large portion of the Chinese iddle class population# $he forer doinates the country)s politics and the latter, being a business% oriented cluster, creates a positi&e shift in the consuer society# $his two a5or population ostly li&e in the urban areas of the Malay Peninsula4s west coast and their influences shape the shared life of Malaysia4s citi3ens# Sarawak and Sabah, the two Malaysian states located in north 0orneo, tend to be less influential part of the national culture, and their &ibrant local cultures are shrouded by the bigger, wealthier peninsular society# (echnoogica $he go&ernent of Malaysia encourages technological ad&anceents through establishing a separate agency to handle research and de&elopent in the country# Malaysia $echnology De&elopent Corporation 1M$DC2 was established by the go&ernent in !..2 to lead the de&elopent of technology business in Malaysia# 'ccording to the organi3ation)s website 1http:AAwww#tdc#co#y2, the initial role of this branch was 8to concentrate on the prootion and coercialisation of local research and in&ests in new &entures that can bring in new technologies fro abroad#9 Eerging fro the in&estent acti&ities, M$DC becae the leading &enture capitalist in the country long before the concept becae failiar and accepted in Malaysia# Conse+uently, it encourages ore businesses to in&est in technological inno&ations and breakthroughs# It is the only copany in Malaysia to attain the status of an integrated &enture capital solutions pro&ided# 't present, M$DC is the 8only one%stop agency where financing can be source froF all the way fro laboratory ideas to full coerciali3ation of such ideas#9 $his is e&ident in the nuber of grant that they ha&e appro&ed 1under .th Malaysia Plan2, which totaled to CM!-"#- illion to ., deser&ing local copanies# $hey ha&e also participated in taking up e+uity stakes totaling ore than CM",0 illion in ore than ,0 copanies both locally and internationally# $heir consistent search for highly technological institutions led the agency to in&est Bnited States, Europe and other countries in the region# Moreo&er, counication and transportation in the country is well structured# Since railroads, airports, and highways are strategically constructed in Malaysia, logistics will not be a proble for business and trade# $he following table suari3es the infrastructures for counication and transportation a&ailable in Malaysia# Figure ": Malaysia's transportation syste# Figure $: Malaysia's co##unication syste# Source: CI' <orld (actbook, Malaysia http:AAwww#cia#go&AlibraryApublicationsAthe%world%factbookAgeosAy#htl Economic Malaysia is generally a iddle%incoe country# Its perforance in the early and id%!..0s was strong, howe&er, due to the regional econoic turoil in !..; and !..=, there was a downturn in their de&elopent# 's a result of this crisis, the econoy went down by ;#- percent# 't the start of the new illenniu, the country reco&ered strongly through the aggressi&e efforts of the go&ernent in encouraging a robust e*port sector, as well as an increase in the go&ernent spending# It stabili3ed growth of their econoy, with an a&erage annual growth of ,#., fro 200! to 200; 1@#" percent2# $he ser&ice sector, with its increase in pri&ate consuption and in&estent, ha&e also eerged as key dri&ers of econoic growth# 1'SE'E ($', 200=2 E&en if a5or econoies were negati&ely affected by the global financial crisis, Malaysia reained generally stable# Datest figures re&eal that growth, trade and in&estent ha&e also reained steady, although the country)s stock e*change has endured a bad year# Measures to cushion the ipact of the current global econoic downturn were ipleented by the go&ernent# $his includes a deposit guarantee schee, capital arket support and a stiulus package# Moreo&er, the go&ernent proulgated an ongoing coitent to an open econoy, as well as, the de&elopent of the country)s attracti&eness and copetiti&eness for foreign in&estors as part of its policy response# 1'SE'E ($', 200=2 's aforeentioned, the econoic growth of Malaysia slowed down in 200= but regained its power in 200.# $he Departent of Statistics of the country reported a IDP rate at the fourth +uarter of 200. to be -#, ?, copared to the negati&e &alue at the beginning of the year# Ma5or sectors include agriculture 1!0#!?2, industry 1-2#"?2, and ser&ices 1-;#@?2, according to the estiate set by the Central Intelligent 'gency# Bneployent rate of the country also decreased fro "#;? at the end of 200. to "#@? at the start of 20!0, as well as, inflation rates, which diinished fro ,#-? in 200= to %2#-? in 'ugust 200.# Since the go&ernent is encouraging ore in&estents, interest rates in lending was also reduced# $he ain e*ports of the country include electronic e+uipent, petroleu and li+uefied natural gas, wood and wood products, pal oil, rubber, te*tiles, cheicals, partnering with Singapore 1!-#;?2, Bnited States 1!2#,?2, >apan 1!0#=?2, China 1.#,?2, $hailand 1-#=?2, /ong Hong 1-#"?2, based on 200= study# Electronics, achinery, petroleu products, plastics, &ehicles, iron and steel products, and cheicals are soe of goods that they iport fro China, >apan, Singapore, and Bnited States, to nae a few# )oitics Malaysia, pre&iously known as the 0ritish Malaya, gained its independence fro the 0ritish in !.,;# It was a !;!%year long colonial rule, where the coloni3ing country, 0ritain, founded the 0ritish East India Copany on the Malay Peninsula to engage in trade with the countries in the East Indies 1South and Southeast 'sia2# $his colonial rule influenced Malaysia4s ruling political syste, the federal constitutional onarchy, wherein a head of state and a head of go&ernent preside o&er Malaysia# Its rules and go&erning policies are based on the Constitution of Malaysia, which has been adapted fro the <estinster parliaentary style of go&ernent based in the Bnited Hingdo# $his syste re+uires a head of state, a head of go&ernent, an e*ecuti&e and legislati&e branch, and a lower parliaent house# $he ost recent general elections was held last March =, 200=, where the 0arisan Easional 10E2 party, an ubrella coalition constituting fourteen political parties, won in the elections# 'lthough the turnouts of the elections ruled out in fa&or of 0arisan Easional, it was by far the lowest%rated electoral results for the party, where the pre&ious reigning control of the party fell steeply fro .0? to @"?# E*perts ha&e pointed out that the current eans of sharing inforation has ade the Malaysian public ore astute to ake the right political choices# (or the ne*t general elections, which will be held in 20!", speculations abound for a probable two%party political syste, which eans that the head of state and the head of go&ernent are likely to coe fro differing political parties# B. Analysis of the Consumer (ood er)ice Industry in Malaysia Maa!sia*s Food Ser+ice ,ndustr! Malaysia4s food industry is as di&erse as the ulti%cultures of Malaysia, with a wide range of processed food with 'sian tastes 1Malaysian Industrial De&elopent 'uthority 1MID'2, 20!02# 0ased on the report generated by the Bnited States Departent of 'griculture 1BSD'2 (oreign 'gricultural Ser&ice 1200;2, Malaysia)s food ser&ice sector targets a local population of about 2= illion persons and a large transient population of tourist and business &isitors of alost 2! illion persons annually# $his sector is di&erse and ranges fro low%end food stalls to high%end restaurants# $he Malaysian cuisine is largely influenced by 'sian and Middle Eastern cuisines but has recently been influenced by western cuisines as well# E*porters intending to enter the Malaysian food ser&ice sector will benefit fro its rapid econoic growth as ost iported food and be&erage products attract low to 3ero Custo Duties 1BSD' (oreign 'gricultural Ser&ice, 200;2# /owe&er, since a5ority of Malaysia)s population is Musli, e*porters will ha&e to be haa certified to cater to this segent# -argaining )o%er o' -u!ers 0ased on the report generated by the Bnited States Departent of 'griculture 1BSD'2 (oreign 'gricultural Ser&ice 1200;2, Malaysia)s food ser&ice sector targets a local population of about 2= illion persons and a large transient population of tourist and business &isitors of alost 2! illion persons annually# In ters of buyer group concentration, buyer power is weak as there are any and di&erse consuers who ha&e no particular influence on products and prices# /owe&er, since a5ority of Malaysia)s population is Musli, e*porters entering the Malaysian food ser&ice sector will ha&e to be haa certified to cater to this segent# In ters of buyer)s costs, buyers ha&e a le&erage o&er the food ser&ice sector# 'ccording to 0arringer and Ireland 1200=2, the greater the iportance of an ite is to a buyer, the ore sensiti&e the buyer will be to the price they pay# Since food is a priary necessity, buyers will be ore sensiti&e to the price they ha&e to pay for it# $hus, buyers will bargain hard to get the best price for that coodity# 0ased on the degree of standardi3ation of supplier)s products, buyers ha&e a low bargaining power# Since products offered in the food ser&ice sector are di&erse, ranging fro low%end food stalls to high%end restaurants, the buyer)s bargaining power is inii3ed# Since there are a lot of a&ailable substitutes to the products offered in the food ser&ice sector 1e#g# consuers can opt to eat at hoe2 and the buyers ha&e the ability to backward integrate, the bargaining power of buyers is enhanced# -argaining )o%er o' Suppiers $he $able below suari3es the a5or supply sources for each a5or product and the strengths of the key supply sources and the ad&antages and disad&antages of local copanies that supply to the food ser&ice sector# Table 2: %u##ary of Foo& %er'ice %ector %uppliers as of 200( Source: Departent of Statistics, arket obser&ations and trade coents 0ased on the supplier concentration, the bargaining power of suppliers is weak# Since the suppliers of the food ser&ice sector are not concentrated, the food ser&ice sector has &arious supplier options and can opt to purchase fro a supplier that can offer the best +uality%price cobination# $he input re+uired by the food ser&ice sector is also standardi3ed 1e#g# eat, rice, other consuer goods2, thus the supplier power is weakened since the food ser&ice sector ha&e &arious options a&ailable to the# $he cost of switching fro one supplier to another is also inial, weakening the bargaining power of suppliers in the food ser&ice sector# /owe&er, the supplier power is enhanced since these suppliers ha&e the ability to forward integrate and enter the food ser&ice sector# (hreat o' .e% Entrants Since the food ser&ice arket in Malaysia is rapidly growing, the industry is susceptible to new entrants# 0ased on the report generated by the BSD' (oreign 'gricultural Ser&ice 1200;2, $rade sources estiate that the total food ser&ice arket is &alued between BSJ ,#0 billion and BSJ ,#, billion as of 200;# /owe&er, new entrants also face barriers to entry# Since products in the food ser&ice sector are di&ersified, firs breaking into the industry will ha&e to spend hea&ily on ad&ertising# $he capital re+uireents for the food ser&ice sector are also high since firs would ha&e to in&est in infrastructure# $he new entrant)s access to distribution channels would also hinder it fro entering the industry since the inability to find an area which is not yet concentrated would ake it difficult for the fir to copete# $here are also go&ernent and legal barriers that new entrants ha&e to face# (or e*aple, Malaysia has an iport restriction on whole chicken# 'nother possible barrier faced by new entrants to the Malaysian food ser&ice sector is the haa re+uireent# $he Malaysian go&ernent and any copanies are arketing the haa standards as a new benchark for +uality, hygiene and safety 1BSD' (oreign 'gricultural Ser&ice, 200;2# (hreat o' Substitutes 'nother iportant aspect to consider in analy3ing the Malaysian food ser&ice sector is the threat of substitutes# 'ccording to 0arringer and Ireland 1200=2, the e*tent to which substitutes suppress the profitability of an industry depends on the propensity for buyers to substitute between alternati&es# $he a5or substitute faced by the food ser&ice sector is the consuers alternati&e of dining at hoe# In Malaysia it is not unusual for consuers to ha&e breakfast, lunch and dinner out daily, as well as snacks in between eals 1BSD' (oreign 'gricultural Ser&ice, 200;2# Since it is coon for Malaysians to dine outside, the threat faced by the food ser&ice sector is low# /i+ar! among Competitors $he Malaysian food ser&ice sector is di&erse and ranges fro low end food stalls to high end restaurants# (igure @ shows the structure of the Malaysian (ood Ser&ice Sector as of 200;# Figure (: %tructure of Malaysian Foo& %er'ice %ector in 200( /estaurants in hotes and resorts In Malaysia, the " star to , star hotels usually operate one or ore restaurants within their preises, targeted at the hotel guests although walk%in and regular custoers for a si3eable and iportant proportion of their custoer base 1BSD' (oreign 'gricultural Ser&ice, 200;2# Malaysia)s iddle to high incoe groups as well as corporate custoers are the fre+uent custoers of these restaurants# /estaurants (ull ser&ice restaurants are ade up of id to high end restaurants that target the iddle to high incoe consuers 1BSD' (oreign 'gricultural Ser&ice, 200;2# Most of these full ser&ice restaurants are 'sian restaurants with Chinese Cestaurants doinating the 'sian segent# 'part fro full ser&ice restaurants, fast food restaurant chains are also present in the Malaysian food ser&ice sector# (ast food restaurant chains that operate in Malaysia are fast food or +uick ser&ice chains that operate with an international enu, e#g# McDonald)s, Pi33a /ut, 'K<, 0urger Hing, H(C and Eando)s, or an 'sian enu, e#g# Loshinoya >apanese +uick ser&ice restaurant, Hi Iary /ong Hong%style +uick ser&ice restaurant 1BSD' (oreign 'gricultural Ser&ice, 200;2# Food catering operators $he food%catering sub%sector is ade up of (ood catering businesses and 'irline catering businesses# $he (ood catering business has two types of businesses, the large high end aggressi&e, sophisticated and well organi3ed caterers and the saller less organi3ed id%to%low le&el caterers# $here are currently two a5or airline catering businesses in&ol&ed although saller locali3ed caterers also e*ist to ser&ice Malaysian 'irlines that fly to the saller airports throughout Malaysia: DSI Sky Chefs 0rahi Sdn 0hd and HD 'irport Ser&ices Sdn 0hd 1BSD' (oreign 'gricultural Ser&ice, 200;2# Other 'ood ser+ice estabishments $his sub%sector is ade up of traditional eating places such as cafes, coffee houses and snack bars, food courts, coffee shops, canteens, other food stalls, bars, pubs and alike# $his is a highly fragented segent, nubering se&eral hundred thousand of establishents, with ainly sall businesses and faily owned establishents, eploying a sall nuber of staff as well as unpaid faily ebers 1BSD' (oreign 'gricultural Ser&ice, 200;2# Since there are nuerous copetitors in the Malaysian food ser&ice sector, this intensifies the ri&alry in the industry# 'ccording to 0arringer and Ireland 1200=2, the ore copetitors there are, the ore likely it is that one or ore will try to gain custoers by cutting its price# /owe&er, based on the degree of difference between products, the ri&alry aong copetitors is not high since the products offered in the food ser&ice sector are &aried# $hus, copetitors do not ha&e the need to copete on prices since they are able to deand for high prices gi&en their speciali3ed products# $he growth rate of the industry also affects the ri&alry aong copetitors in a gi&en industry# 'ccording to 0arringer and Ireland 1200=2, the copetition aong firs in a slow%growth industry is stronger than aong those in fast%growth industries# Since the Malaysian food ser&ice sector is a rapidly growing industry, ri&alry aong copetitors is not that high# Dastly, the fir)s le&el of fi*ed costs affects the ri&alry aong copetitors in the industry# (irs that ha&e high fi*ed costs ust sell a higher &olue of their product to reach the break%e&en point than firs with low fi*ed costs 10arringer and Ireland, 200=2# Since the food ser&ice sector is labor%intensi&e and relati&ely does not ha&e high le&els of fi*ed costs, this decreases the ri&alry aong copetitors# C. Consumer Preferences, Malaysia Malaysian consuers are described as price conscious but still deand a high +uality# $here is also the presence for the deand for foreign products brought about by the change in lifestyle and has o&ed fro the basic needs to the leisure thees that ha&e been ade a&ailable in the arket# <ith the growing affluence and changing lifestyle, consuers ha&e becoe ore deandingF not only of the +uality of goods but also the ser&ices they recei&e as well# Malaysians spend a high percentage of their household incoe on food, groceries and personal care ites, ranking third out of the ten a5or econoies in the 'sia%Pacific region# 'ccording to 'CEielsen, Malaysians on a&erage spent MLC,0, per onth on food and groceries, with 5ust under half of that on fresh food like eat fruits and &egetables# Figure ): *o#position of househol& e+pen&iture 199),1999 Li'est!e$Shopping habits Malaysia)s consuer lifestyle has been e&ol&ing and changing due, in part, to rising affluence and education le&els# /igh%profile international retailers and the global edia ha&e also played a hand in shaping consuer%buying beha&iour# Malaysians are becoing ore affluent, sophisticated and cosopolitan# $he Malaysians ha&e o&ed on fro the siple need for sustenance to key leisure thees like health, beauty, lifestyle, and fitness# $hey also ha&e an open deand for foreign brands# It is easy to find products arketed by Procter K Iable, Bnile&er and Eestle on the retail scene# Preference is not only liited to consuer goods, but also to durable goods, such as electrical and electronics aside fro otor &ehicles# Since the eergence of foreign%owned hyperarkets, Malaysians who li&e in urban areas ha&e becoe accustoed to shopping for groceries at hyperarkets and superarkets# Meanwhile rural people continue to purchase fro traditional grocers, con&enience stores and ini%arts# Malaysians also ha&e a strong shopping fetish, especially during the weekends and on public holidays# /owe&er, the consuers coes in three categories: those whose purchasing power is high enough to go on periodic shopping sprees, people who shop for necessities, and bargain hunters# /igh and iddle incoe households spend ost of their oney at hyperarkets, followed by superarkets and traditional grocery stores# $he high%incoe groups has household incoe of ore than MLC",,00 per onth# -rand$)rice Sensiti+it! Malaysian consuers are becoing ore knowledgeable and discerning, and are not easily influenced by ad&ertiseents and prootions# $hey are price conscious, but at the sae tie desire brand +uality# <ith the growing affluence and changing lifestyle, consuers are becoing ore deandingF not only of the +uality of goods but also the ser&ices they recei&e# 'ccording to 'CEielsen, strong brands influenced alost .0? of consuers) purchase decisions# Strong brands were also found to retain at least ;,? of their custoers) loyalty# Heath 'ood0 con+enience 'ood and haa 'ood Difestyle changes ha&e led to an increase in the deand for con&enience food and health food# $he deand for health food inially processed fresh food and organic food is e*pected to increase# Malaysia is o&ing towards organic faring# 0esides organic products, health food includes low calorie, fibre and nutrient%enriched products, fruit 5uices and herbal products# 7alue%added pal oil based specialty products to cater to deand fro health conscious and &egetarian consuers are also targeted for further de&elopent in Malaysia# $here is also an increasing trend towards con&enience food with 'sian recipes in the chilled and fro3en for including pre%cooked products# (ood with halal certification is also better accepted as the a5ority of the population is Musli# (he Haa 'actor <ith a Musli population of @0 percent, the deand for haa foods by Malaysian consuers has increased o&er the years# (oreign eat 1e*cept pork2 and poultry plants intending to e*port to Malaysia ust be accredited by the Malaysian Departent of 7eterinary Ser&ices and the Departent of Islaic De&elopent for halal purposes# $he Malaysian halal standards are percei&ed as stricter than those of other Islaic countries# /ence, opportunities to increase e*ports of eat 1e*cept pork2 and poultry hinges on the halal appro&al# Malaysia)s consuers are characteri3ed by a pool of people who continue to oderni3e their eating habits, leading to increasing consuption of iported food and be&erages# Malaysia iported BSJ ,#! billion of food and be&erage products in 200;# (ood iports ha&e been growing on an a&erage rate of o&er 20 percent per annu o&er the past few years# $rade sources coent that iports of food products will likely continue to grow at siilar rates o&er the ne*t fi&e years# In Malaysia it is not unusual for consuers to ha&e breakfast, lunch and dinner out daily, as well as snacks in between eals# $his is ore coonly practiced by young arried couples or young single adults who are gainfully eployed# It is, howe&er, coon for failies to ha&e dinner out at least once a week, at the street stalls, food court, coffee shops, low%end restaurants and alike# Dining at a id to high end restaurant is reser&ed for special occasions such as birthdays, weddings, anni&ersaries, festi&e celebrations, corporate functions and alike# 's far as eating out is concerned, Malaysia is one of the few countries in the world where a faily can afford to eat out alost e&ery day of the week# Depending on budget, the choice can range fro posh hotels and chic sidewalk cafes to fast%food 5oints and hawker stalls# $he &ariety of international and local cuisines a&ailable in alost all a5or coercial centres has influenced consuers) desires, tastes and preferences# ynthesis, *hy Mang Inasal in Malaysia+ $he researchers of this study propose that the Mang Inasal restaurant concept be e*ported to Malaysia chiefly for these reasons: !# Malaysians and (ilipinos ha&e siilarities when it coes to the predoinant characteristics of cuisines in their respecti&e arkets# (or e*aple, both (ilipinos and Malaysians ha&e the sae staple food included in their eals 6 rice# /owe&er, Malaysian cuisine is uch ore di&erse such that it also priarily ser&es Indian and Musli dishes alongside other cuisines# $he (ilipinos, on the other hand, generally look upon traditional (ilipino or 'erican foods ore fa&orably# Since Malaysia has &ery di&erse tastes, they are ost likely to treat the Mang Inasal eating concept ore fa&orably, seeing how open%indedness to new things they are# 2# In 'sia, Malaysia has the greatest nuber of G&erseas (ilipino <orkers# $his nuber e*ceeds the 2,0,000%population ark# $hat said, bringing the Mang Inasal restaurant concept will entice the (ilipino consuer to dine in the restaurant, a li&ing testaent to the copany)s slogan, 8/ahanap hanapin o9# "# Malaysians and (ilipinos ha&e siilarities when it coes to the predoinant characteristics of cuisines in their respecti&e arkets# 0oth (ilipinos and Malaysians ha&e the sae staple food included in their eals 6 rice# /owe&er, Malaysian cuisine is uch ore di&erse such that it also ser&es Indian and Musli dishes alongside the traditional Malaysian palette and other cuisines# Since Malaysia has &ery di&erse tastes, they are ost likely to treat the kinaot eating concept ore fa&orably# -# It is about tie that Mang Inasal also e*pand internationally 6 that is, to establish branches abroad to e*pand its arket profile# Categorically, Mang Inasal will ser&e the sae target arkets both in the country and in Malaysia# 0y di&ersifying the arket of the copany, it will generate ore re&enues that it can utili3e to facilitate the establishent of new stores here and abroad# ,# Econoically, Malaysia is sound fiscal condition# It is currently reco&ering fro the global financial crisis 1like the Philippines2 but since Malaysians spend a lot of their incoe on dining out, they are not likely to scrip on spending on food, taking into consideration their openness to new ideas 6 thus, if Mang Inasal carries out its arket entry strategy effecti&ely 1to be discussed further below2, it will also be able to capture a piece of the Malaysian arket# trategy (ormulation Mang Inasal,s Vision Mission and -b.ecti)es and its Congruence to the Market Penetration trategy Mang Inasal endea&ors to adhere to eleents that bear a distincti&ely Pinoy stap of grilling with charcoal, rice wrapped in banana lea&es, a arinade concocted out of local spices and herbs, baboo sticks for skewers, and the abiance that encourages kinamot 1the Ilonggo ter of eating with bare hands2 whene&er chicken inasal is ser&ed# 'll these e&oke a rush of nostalgia fro tradition, culture, and ost of all, hoe# Mang Inasal has steadily grown since it offered franchising# Mang Inasal has branches in 0acolod, Iloilo, Co*as, Metro Manila, Cebu, Da&ao, Halibo, $arlac, 0oracay, 'nti+ue, Mindoro, 0atangas, Papanga, Ieneral Santos, $uguegarao, Iligan, 0ulacan, Ca&ite, 0aguio, Daguna, Panabo, Cagayan De Gro, Ducena Surigao, Palawan, 'gusan Del Sur, Malabon, Maboanga Pagadian, Horonadal, Ci3al, Pangasinan, Dipolog, Da Bnion, G3ai3, Habankalan 's of today, Mang Inasal has 22" branches nationwide and counting# Man Inasal)s ob5ecti&e is to ha&e ,00 stores before 20!2# E+uipped with great%tasting (ilipino fa&orites and pocket%friendly prices, Mang Inasal knows that in the end it will win the heart of the asses# In Mang Inasal, 8Pinagsikapan naing laging asarap, laging abilis, at laging abot%kaya9 so that the Pinoy can truly say, 8HBM0IESIEIN9 Ii&en that Mang Inasal)s ain ob5ecti&e is to e*pand its arket in order to win the heart of the asses, the arket penetration strategy is in line with this ob5ecti&e since it will open a new area for Mang Inasal, not only in the Philippines but in a different country as well# Mang Inasal also has a short ter ob5ecti&e of reaching ,00 stores by 20!2# E*panding to the Malaysian arket will allow the copany to reach this ob5ecti&e ore successfully# 0y offering its great tasting products at pocket%friendly prices to the Malaysian arket, Mang Inasal will be able to reach ore consuers who will be con&inced of their products and ser&ices# Market !ntry trategy Store Operations $he Mang Inasal branch would start out in Huala Dupur# Since Huala Dupur is the capital of the country, ost of the doestic and foreign businesses are located there# 'lso a lot of (ilipinos are designated in this location, thus at the beginning of Mang Inasal)s operations it can target (ilipino iigrants, e*patriates, and G(<s# $his will enable Mang Inasal to copensate its daily operation costs since there will be a steady re&enue coing fro (ilipino iigrants# It ay be possible that by attracting (ilipino iigrants, Malaysians and tourists ay ha&e the curiosity to try the place out , thus instant arketing happens# 'lso by targeting (ilipino iigrants, it will help the store lessen their difficulty of ad5usting to a foreign arket, since Mang Inasal wouldn)t need to initially add products that will target foreign consuers, instead they would focus on getting (ilipinos to eat at their store# Bnder this ad5ustent period Mang Inasal can de&eloped through its Cesearch and Dec&elopent 1CnD2 products or enus that caters to the wants and needs of Malaysians# 'fter the CnD tea de&elops products that cater to locals, it is then that Mang Inasal can add additional products to their enu that will cater to Malaysians# $he store will be open fro !0:00 a to !0:00 p, sae as their Philippine stores# $he store will be located in highly populated area in Huala Dupur, 1e#g# shopping all, park2 this will ensure that the store is easily located and accessible to anyone# Since Mang Inasal Malaysia is still a fast food chain, the store will eploy -0 eployees, who will ensure the each custoer e*periences fast and +uality ser&ice fro the store# Most of the eployed ser&ice crew are Malaysians, since it is easier and cheaper for the copany to hire local eployees, than to send (ilipinos to Malaysia# 0y eploying Malaysians, the copany can understand the needs and wants of their Malaysians consuers, since they can easily asks their eployees about the preferences of Malaysians, also by eploying Malaysians Mang Inasal helps lessen the uneployent of the country# /owe&er, the store anager and top anagerial positions of Mang Inasal Malysia ust be (ilipinos, this is to ensure that all production and operations of Mang Inasal are aintained# Sourcing Mang Inasal Malaysia will purchase their raw aterials for their products in both Malaysia and the Philippines# Since Malaysia and the Philippines ha&e alost the sae resources, it is easy for Mang Inasal to ac+uire the ingredients needed for their product# Soe of the products that they can purchase in Malaysia are rice, chicken, charcoal, &egetables, and other spices# Gne of the ingredients that they can ship is calaansi, which is a hoe grown fruit in the Philippines# 0y using calaansi, Mang Inasal can show off its uni+ue (ilipino taste# $he purchasing fro suppliers ust still undergostrict +uality control, to guarantee that the +uality of the food is not o&erlooked# )roduction Mang Inasal Malaysia would ha&e a daily of production of their products to ensure the freshness and +uality of the food that they would ser&e# $he barbe+ue products will be arinated and pre%cooked prior to the store)s daily operations, and are fully cooked or heated up at the tie of the order to ensure that the orders of the custoers are ser&ed as fast as it could# $he production anager should be a (ilipino, to ensure that the proper ingredients and proper procedures of cooking are aintained# Marketing 's what was entioned abo&e, Malaysians are &ery price conscious, Mang Inasal can offer the high +uality food at a low price# 0y ha&ing a &ery reasonable price, Mang Inasal can penetrate not only (ilipino iigrants but locals as well# $hey could proote the store in two siultaneous ways# (irst they should proote the store to (ilipino iigrants, the slogan hahanap hanapin mo will encourage (ilipinos to dine at their store especially if these (ilipinos are longing for a (ilipino taste# Second they could proote the store as a foreign brand to Malaysians and other nationalities as soething that should be tried# It is said that at present, foreign products are in deand by Malaysians# Mang Inasal and its products ha&e a purely (ilipino taste that is soething different to Malaysians# Mang Inasal ay in&est on se&eral ad&ertiseents such as print and radio# 't first Mang Inasal ay the option of not doing tele&ision ad&ertiseents# Mang Inasal is still in their transition and ad5ustent stage of their store in Malaysia# It would be &ery costly for the to in&est in such prootion# 0ut after they penetrate the arket and becoe financially stable in Malaysia, it would be ad&isable for the to ad&ertise through tele&ision, and aybe get celebrity endorseent to endorse their product# It will increase the awareness of their store to the Malaysian arket# Foreign Exchange Since both countries 1Philippines and Malaysia2 ha&e weak currencies, an interediary currency can be used# $he BS dollar can be used as a way of paying initial in&estent and operations costs of the copany# Mang Inasal can open an bank account in Malaysia# $his will be where all transactions will be ade, whether oney transfers, or depositing re&enues fro its branch in Malaysia# $he group thinks that it is better for Mang Inasal to retain ost of its store)s earnings in their Malaysian bank account# $his will enable the to establish ore branches in the country, since they don)t need to buy BS dollars again to establish another branch# 'lso retaining their re&enues in Malaysia would help the in paying their suppliers in Malaysia, they can easily withdraw oney fro their bank accounts in order for the to pay their suppliers# $he store will only accept ringgits, Malaysian currency, fro consuers in paying for their eals# Ceferences: 0arringer, 0#C# K Ireland, C#D# 1200=2# Entrepreneurship# Success'u! aunching ne% +entures 12 nd ed#2# Eew >ersey: Prentice /all# Bnited States Departent of 'griculture (oreign 'gricultural Ser&ice# 1200;2# Malaysia /CI food ser&ice sector# I'IE Ceport, ML.00!, !%""# Malaysian Industrial De&elopent 'uthority# 120!02# Food industr!.Cetrie&ed on 'pril ", 20!0, fro http:AAwww#ida#go&#yAenO&2A# http:AAwww#asean#fta#go&t#n3Aalaysia%econoic%situationA http:AAen#wikipedia#orgAwikiAPoliticsOofOMalaysia http:AAen#wikipedia#orgAwikiA<estinsterOsyste http:AAen#wikipedia#orgAwikiAMalaysia http:AAwww#asean#fta#go&t#n3Aalaysia%political%situationA