Tokyo Moulding Company in Malaysia
1. 0 Introduction This is a study about the worldwide expansion activity of a firm in Asian region. The basic motive or aim of this study is to gain extra knowledge on international business management throughout the interview with the decision maker of that particular internationalized firm.
Basically, all basic information obtained is generally come from the interviewee. Nevertheless, we had some help from the internet as well in conducting this study to enhance all the missing point that we might not consider during the interview.
Next, from all information we obtain from any resources, we had done an analysis on this internationalized firm, Tokyo Mould Shd. Bhd. The tools used in the analysis include SWOT analysis, CAGE framework and market entry strategy to conduct a full analysis on all aspect regarding the strength, weakness, opportunity, threat, cultural influences, political issue, geographical issue, economical issue, and entry mode or strategy imply.
During analysis by using the tools that mentioned earlier, each tools will explain the issue in detail including the advantages or disadvantages, reason and etc, to ensure reader to have a perfect understanding from all aspect such as strength of company, weakness and etc. All explanation is based on facts and data obtained. Extract from analysis tools, we are able to categorized the priority of this firm in this market or industry, able to identify the problem faced by this firm as well and determine the strategy to overcome the problems or obstacles along the path in international business.
Next, we will conduct some recommendation for this particular company by suggesting some ideas which are able to improve company operations and some idea to fix some of the problems that occur to this company. Also, some personal opinion such as agree in some business strategy done by Tokyo Mould is listed in the recommendation part. Finally, we conduct a conclusion from overall data obtain by inserting brief justification base on analysis, suggestion and recommendation to finalize our case study. 2. 0 Company Background Tokyo Mould Shd.
Bhd is small and medium enterprise which mainly focus on Moulding business. It is currently located at Pulau Pinang, Malaysia. It is establish since the year 1985 according to our interviewee, Mrs. Lim Siew Lee. Mrs. Lim Siew Lee is one of the present owner of this company. She is the wife of the owner of this company and she had worked in this company for 20 over years with her husband. Her main duty in this company are accounting, managing staff, financing and others documentations work task. Basically, Tokyo Mould Shd. Bhd have clients from oversea including Thailand, Japan and U.
K which Japan is the main customer. Japan is the first country Tokyo Mould approach due to the introduction from others business partner. The first deal was made with Japan after the inspection of Tokyo Mould’s product quality by a Japan representative which came to Malaysia to examine not only the product quality but as well as the whole operation environment indeed. Fitting all the requirement of Japan is the main reason of the success of Tokyo Mould to enter the Japan Market. Exporting is the entry mode for Tokyo Mould to internalized the business.
The reason for using such entry mode is because this company had experienced failure by forming joint venture with others before. It was 10 years ago from present that this company is actually form a joint venture with LEE HENG Mould Sdn. Bhd. Back then, business was corrupted due to economic crisis and forming joint venture doesn’t seems to have any help in overcome the problems. Instead, it is a burden when problems occur to the joint venture partner according to Mrs. Lim. Also, Tokyo Plastic Mould Shd. Bhd is the previous company name before the business corrupt due to economic crisis.
In present, Tokyo Mould is now strive to achieve the best services and create the best product quality and aim to expand business by establish own subsidiaries at foreign region in the future. 3. 0 ANALYSIS (Tools) We have interviewed one of the decision makers of Tokyo Mould Sdn Bhd and discovered issues faced by the company. From there, we did a few analyses to help overcome those issues that the company is encountering. Firstly, we started off with the SWOT analysis. 3. 1 SWOT STRENGTHS- most affordable and reasonable price- using U.
S dollar currency for business transaction – experienced (20 years)| WEAKNESSES- brand not famously well-known in the foreign country- manufacture imperfect pattern (loses money)- late payment by the debtor| OPPORTUNITIES- capable for global expansion- growing future revenue| THREATS- competitors (product volatility, competitive prices)- economy crisis| 3. 1. 1 STRENGTHS Tokyo Mould offers the most affordable and reasonable price compared to other companies from the same industry.
The price factor enables Tokyo Mould to compete with other competitors in the market. Not only that, this advantage leads to customer preferences to be in the list of choices for company selection. Many business organization’s aim is to ensure that the profit of the product is more than the cost of the manufacture. Plus, every business transaction that Tokyo Mould deals with the international company is using U. S dollar currency. According The Star Online, 1 U. S Dollar is equivalent to RM3. 1590. (The Star Online, Retrieved 4th November 2011 from Exchange Rate) Website: http://biz. thestar. com. y/business/exchange. asp. It is an advantage for Tokyo Mould because by using U. S Dollar, it is easier to standardize its mould cavity and their values. Not forgetting, one of their strengths of Tokyo Mould is their expertise in this business. Tokyo Mould has been running in the market for 20 years now. This clearly shows that they are experienced and professional in their business line. 3. 1. 2 WEAKNESSES Even though Tokyo Mould has been in the market for 20 years but its name is not widely known by the public especially in the foreign country. This is due to the existing company from the same business line.
Most probably is because of the poor marketing strategy by Tokyo Mould. They mainly focus on the ongoing process and try to maintain their loyal customers. Another one of their weaknesses is that the defect product caused by the worker. Sometimes during the Moulding process, the outcome of the pattern is not perfect as its design. Therefore, the product cannot be used and been rejected. This cause loses of money to the company. Most difficult part of this business is the late payment by the debtor. Tokyo Mould has to tolerate to the policies and procedure of the debtor.
There are companies which apply to the finance policies and procedures of payment after 45 to 180 days depending of the total amount of the product purchased. 3. 1. 3 OPPORTUNITIES By doing this business, it has a great opportunity for Tokyo Mould to expand its business globally. Tokyo Mould’s business has gradually growing and earning profit as the years goes. Many international companies prefer to import products from Asia countries because of lower cost expenditure. Tokyo Mould is capable to fit in the criteria as they have full equipment and labor force to conduct the business.
In conjunction with Tokyo Mould’s objective to gain more profit, fame and resources, going global gives a great opportunity for growing future revenue to expand its company globally. 3. 1. 4 THREATS Most threatening factor that Tokyo Mould is facing frequently is the competitor from the same company such as Sony and Broubybrown. Competitors produce more advanced and creative products seasonally. Not forgetting, competitive prices by the competitors. It is difficult for Tokyo Mould to decide on the best price to compete with others. Plus, the condition of the economy is unpredictable.
Tokyo Mould has encountered economic crisis in the year 1990. That causes them a down fall but fortunately due to the economy stable come back, they are doing fairly well now. 3. 2 CAGE distance framework. CULTURE- Fulfill promises- Prefer things get done on time- Tokyo Mould priorities customers need| ADMINISTRATIVE- management policy not affected- minimal tax charges| GEOGRAPHICAL- prefect courier services so far- forgivable delay if occurs| ECONOMIC- using U. S dollar currency- economic crisis- loses money due to defect | 3. 2. 1 CULTURE
The Japanese customers are quite fussy in making deal. However, it is a good thing for both parties. The Japanese want their products to get done on time and do not give in to any delay and defects of the products. By this culture, the Japanese managed to get their things done in time whereas Tokyo Mould can proceed with other deals. Plus, Tokyo Mould priorities their customer and always try their best to fulfil customer needs. Tokyo Mould is towards allocentric. Tokyo Mould concerned with the interests of others instead of one’s own. 3. 2. 2 ADMINISTRATIVE
For administrative issue, it does not affect the international business in terms of company policy as well as political issue or government invention. Basically, company policy do not affect business in overseas as it’s only affect domestic region. Company policy of Tokyo Mould mainly focuses on employee commitment in aspect of work efficiency and personal attitude. All rules are generally similar with every small-medium enterprise as there will not much affect oversees business. As mention, Tokyo Mould chooses exporting as entry mode but not establish subsidiary in foreign region.
Therefore, company policy doesn’t affect much is because there is no foreign employee exist which they might not familiar with company policy as each company policy different from another especially in different country. As for political issue or government intervention, it is again because of the entry mode is exporting. There are only a few tax might charge along with transportation fee. Otherwise, there is not much issue occur according to our interviewee. 3. 2. 3 GEOGRAPHICAL For Tokyo Mould, there is not much geographical issue to be concern or causes trouble in business operation according to Mrs.
Lim. In fact, she mentioned that she was very please and satisfies with current courier services. The basic exporting method is by using courier services such as FedEx Malaysia. From information obtain, there is seldom mistake happen before till present day. Only some small matter such as delay which is forgivable as it’s mostly causes by unexpected incident such as weather. Generally, geographical issue doesn’t cause much trouble to Tokyo Mould is because Tokyo Mould does not have any subsidiary or forming any joint venture with foreign region.
It is believe that only having subsidiary or joint venture with foreign country will cause troubles such as information delay due to high range of geographical area, transportation issue or delay in recovering data when a subsidiary incur a error of system with all information erased. 3. 2. 4 ECONOMIC Basically, Tokyo Mould uses U. S dollar currency for every business transaction. Tokyo Mould does not have problem with that as it they consider it as one of the advantage to earn more. However there is one threatening issue is the economy crisis.
They have once experienced it and this situation is barely avoidable. It is part of business risk. 3. 3 STRATEGIES One of Tokyo Mould strategies for global expansion is by exporting. They started off with Japan and then followed by the U. K and Thailand. They use courier express such as DHL. So far their record is good and hardly any complaint is filed against the product and services of the end molding products. Tokyo Mould is more to direct exports where direct marketing and selling to the client is practiced. Tokyo Mould would not consider joint venture at this moment due to history.
They have joined venture with LEE HENG Sdn Bhd that focuses on plastic, injection and molding but alas their business failed due to economic crisis. They lose a huge amount of money and forced to shut down the company. It was a crucial time for the Tokyo Mould owner. Currently they are not planning to have subsidiaries in international company because they have insufficient financial aid to set up their company in those respective countries that is dealing with right now. Maybe in the future, Tokyo Mould would consider this strategy once the Penang Company is really stabilized in domestic market.
The co-owner, Ms Lim Siew Lee advised us that networking is the key in doing business internationally. This is so because the help of other big company has help SME Company like Tokyo Mould to experienced a chance to deal with international client. Furthermore, we are advised to be humble when doing business and keep our words with the clients. 4. 0 Recommendation (Analysis) After the SWOT and CAGE framework analysis, in my perspective, there are some plans should be implemented by Tokyo Mould Sdn. Bhd. Firstly, Tokyo Mould an be consider is a very successful although this company does not have a very proficient business website, as Mrs. Lim told us, the most of the customers are introduced by others bigger company or business partner. Business website can be said have the potential for reaching a wider audience, regarding this, Tokyo Mould should upgrade their internet site about own company business, With a more proficient internet site, the product or service is accessible easily, the loyal customers or potential customers can 24 hours a day, 7 days a week update the Tokyo Mould latest information.
These can convenience communications between Tokyo Mould and its customers in order to build a better business relationship around the world. Besides that, the reputation of the company can be increase, gained competitive advantages and can save a lot of money in communication and administrative cost through creating a quality business website. Secondly, after they start up the business, Tokyo Mould already entered their business in certain overseas countries such as Tokyo, Thailand and also UK, we can see the financial for this company can be consider stable.
As Mrs. Lim mention earlier, the prices they offered enable Tokyo Mould to compete with other competitors in the global market and this advantage leads to customers preferences to be in the list of choices for company selection. Hence, Tokyo Mould can expand their business to other foreign country such as Indonesia, China and so on. Since the reason made Tokyo Mould move to international expansion is to gain more profit, fame and resources in the future, the company should take this action in their consideration in order to achieve to goals.
Thirdly, from before till present day, Tokyo Mould only used exporting through courier express as their entry mode to enter international market. As Mrs. Lim mention earlier, this is because previously they tried joint venture with other similar company and it doesn’t work so well. In my perspective, Tokyo Mould should try again joint venture with company that located in foreign countries, joint ventures often relate to the whole enterprise and could be the viable option to grow Tokyo Mould business without sacrificing what they have already built instead of a company may have less control when exporting their product into a foreign market.
However, although joint venture more control is exerted, but the level of risk is also higher compared with through exporting. Last but not least, since the economic crisis issues if one the problem that Tokyo Mould often worrying, the company should control very well in their finance situation and cash flow in order to faced this kind of problem. As a conclusion, these are the suggestion and recommendation we can provide to Tokyo Mould Company after the interview analysis which is to create a more quality business website, expand business to more foreign country and also try to build joint venture with other foreign or local company. . 0 Conclusion As a conclusion, Tokyo Mould is a quite successful company in Moulding industry. Since the performance of the company keep growing in these few years, the company has the potential to become a bigger company in order to gain more profit, fame, and resources and also qualify to compete with their competitors. However, we discovered that are some challenge and obstacles encountered by Mrs. Lim such as economic crisis, Mould dimension defect and also competitors in running the company that are related with boots up the company performance.
Besides that, networking is very important for Tokyo Mould as it is the tools to gain more international business regarding to its company performance. As Mrs. Lim mention earlier, networking, humble, keep the words is the key focus in doing business internationally, with the help of the business partner, Tokyo Mould only will have the chance to deal with international client and also expand the business globally.
Moreover, every company have their strengths to cover up its company weaknesses, hence, Tokyo Mould must maintain its company strengths to conceal its company weaknesses, also keep seeking for the incoming opportunity to growth up their business and be aware of the uncertainty threats that will affect to their company business. By the way, when Tokyo Mould entered in international business, culture, administrative, geographical and economic issues should always in their mind to ensure no misunderstanding, misleading and miscommunication while making business with overseas clients especially Japan clients.
Last, like I mention in recommendation, in order to get a better company performance, the company can create better quality of business website, try to joint venture with other company, and also expand the business to more overseas country. However, there is definitely barriers will incur when wider the business, the company can try to figure out the problem by using suitable strategy in order to overcome such barriers. 6. 0 References 1. (Banking, 2011) Banking, M. (2011). Exchange Rate. Retrieved November 08, 2011, from The Star Online: http://biz. thestar. com. my/business/exchange. sp 2. (Contact :Tokyo Mould Industries, 2002) Contact :Tokyo Mould Industries. (2002, March). Retrieved November 2011, from Tokyo Mould Industries: http://tokyolow. asiaep. com/contact. htm 7. 0 Appendices 7. 1 Verbatim Chris : Good morning madam Mrs.. Lim : Good morning Chris : Can you please introduce yourself? Mrs. Lim : Ok, my name is Lim Siew Lee, I’m one of the owner of this company, I’m 47. I’m also the wife of the company. Chris : Can you briefly tell us that what is your education background and your working experience in this particular company? Mrs.
Lim : Well, my education background is only Form 5, I had worked in this company for 20 over years. My main duty in this company is accounting, managing staff, financing and also some documentation. Chris : Can you briefly tell me your company background? Mrs. Lim : Ok, as you know, my company is Tokyo Mould Shd Bhd. Our company mainly focus on Moulding business. We have clients from overseas like Thailand, Japan and U. K. We had established this company around 20 over years. 10 years back, our company name is Tokyo Plastic Mould Shd Bhd, that time we joint venture with LEE HENG Mould Sdn Bhd, the previously company ainly focus on plastic, injection and Moulding, but during the economic crisis time, we faced some financial problem and forced to shut down the company. After few years, we start up a brand new Mould company which is the current company. Chris : Ok, can you tell me which country is your company first internationalize? Mrs. Lim : Well, Japan is the first company we internationalize, because we get to know the first Japanese client from other business partner. After the Japanese client come to observe our product and service, they deal the first Moulding business with us and so on.
Chris : So what is the reason had made your company move to first international expansion? Mrs. Lim : Because we want to gain more profit, fame and resources and our company now located at Penang, there are so many competitors existing like Sony, Broubybrown and so on. Chris : Which entry mode did your company use to expand internationally? What I mean is through something like exporting? Joint venture? Subsidiary? Or else? Mrs. Lim : Well, we only use export as our entry mode. This because previously we tried joint venture with other company, but it seem doesn’t work so well.
So now we only export our Mould through courier express. Chris : Is there any advantages or disadvantages by using export as your entry mode? Mrs. Lim: For the advantages, can say all of our business transaction currency is using U. S dollar, this is easier to standardize our Mould cavity and their values. For the disadvantages, can say is the duration of receiving payment is longer than the local transaction. Like for example, the duration of receiving payment will normally up to 180 days. Chris : Besides that, to which country your company export too? Mrs. Lim : As I mention earlier, we also export our Mould to Thailand and U.
K too. Chris :Ok, when you expand your business globally, what is the strengths, weaknesses, opportunities and also threats of your company in foreign market?. Mrs. Lim : Well, for the strengths, I can said that our Mould are more cheap compare with other bigger company. For weaknesses, I can said that our company popularity is not high as other bigger company, so sometime the foreigner not even know our company name. for the opportunities, I think our company might have chance to be like other bigger company someday, since this company business is keep growing.
Threats, there are some larger company sometime will lower the market price and this will effect to our selling price as well as our profit. Chris : Is there any cultural or political issue will effect to your business when exporting Mould to foreign market? Mrs. Lim : Ya , sure, like cultural, the Japanese client prefer we can produce Mould to them on time. They might be unhappy if we delay our exporting our Mould to them. For the political issue, not much actually, there is no extra taxes as well. Chris : is there any geographical and economic issues will effect to your business globally?
Mrs. Lim : Well, so far no. we very please with the courier express service, there is no any mistakes happen before. For economic, as I mention earlier, the U. S currency is actually give advantages for me to earn more. Chris : Ok, is the any other problems or challenges that might effect to your business globalize? Mrs. Lim : So far as I mention earlier, the competitors might be the big problems that we faced. Economic crisis also is one of the issue that we always worrying, this is because we faced this kind of experience previously and the company forced to shut down eventually.
There is also sometime the Mould dimension might defect and cannot be use, so we have to redo the Mould, this will increase our cost and reduce our profit. Chris : Last, do you have any suggestion in doing global business or any extra information which like to share with us? Mrs. Lim : I can said networking is the key in doing business internationally, because the help of other big company, our SME company only will have the chance to deal with international client. Besides, we also must be humble when doing business and keep our words with our client. That’s all. 7. 2 Photo Gallery