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Business Strategy Based on Yeo Malaysia - Case Study Example

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This case report analyses the business strategies at Yeo company. Yeo’s is a strong company and it still has a chance to expand the market. However, the company needs to conduct extensive research to develop more products that are more aligned with customer needs…
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Business Strategy Based on Yeo Malaysia
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Download file to see previous pages The political environment in Malaysia provides a safe and stable environment for Yeo’s operate in. There are regulations, tariffs, and requirements international businesses must conform to operate in Malaysia. Even though the government is liberalizing its tariff regime progressively, products that are in competition with products that are manufactured locally are still highly protected and the company benefits greatly from this. Malaysia is a high export-oriented economy and this provides an ideal economic environment for Yeo’s Malaysia to operate in because the company relies both on local and export markets.
The country’s economy is well-performing and the business regulations, tariffs, and requirements are more favorable for local manufacturers. The government also identified food and agribusinesses as the nation’s key opportunities and this has motivated large companies like Yeo’s to develop strong brands and distribution networks. These have led to the accumulation of large economic resources for the company. There are also bilateral trade agreements between Malaysia and some of its major markets like Australia and this makes business more favorable to the company.
The Asian community and the larger Yeo’s market are highly conscious about health and strongly emphasize on safety. In Malaysia specifically, foods and beverages undergo strict inspection to ensure they comply with the stringiest standards. The company uses no preservatives in its culinary brands and the most minimal in its beverages. Soy products are identified as healthy food. This has favored the operation of the company in Malaysia and ensured the company’s products are on the highest demand. Yeo’s Malaysia has made and maintained a courageous commitment to technology. The company has undertaken a notable computer development and training as one its major human resource agenda.
Porter (1998) identifies five forces that influence an industry. These are supplier power, the threat of new entrants, the threat of substitutes, rivalry and buyer power. One of the things that present a threat from substitutes in the beverage industry is packaging. Despite the contents remaining the same, customers are sensitive to the packaging of these products and so the Yeo’s company has had to stick to Tetra Brik aseptic packs and other health-friendly when packaging its beverages. Threat from substitutes is also higher due to low switching costs and higher price to ratio performance. This force is very strong in indicating to firms the impact of changing packaging materials and other things that impact on brand quality to its competitiveness.
The beverage industry experiences a high threat of new entrants. it has minimal entry barriers due to common technology, easy access to distribution channels, little brand franchise and low scale threshold. It also has easy exit due to low exit costs and is characterized by saleable assets and independent businesses. New entrants normally come in when profits are high in an effort to benefit from the high-profit levels. This force is fairly effective in determining the degree to which the company faces a threat from new entrants.
Buyers in the beverage company have a strong purchasing power because of high buyer concentration, low switching costs, buyers suffer from low profitability, and the risks and consequences of the product failure are low to them. ...Download file to see next pagesRead More
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