: assignment-2 Academic Essay

Order Description
The course name is International Engineering Management. I will attach the assignment and two examples to read if you want.
 Introduction
Over the past decade, more firms have ventured into the international trade rather than concentrate on local businesses. While there is some evidence that overseas transactions have led to increased revenues and profitability for many foreign entities, adequate planning, and market analysis is vital for a company before it can undertake international trade. TNA Pty. Ltd. is among the businesses that have experienced prosperous international trade.

 Discussion
Since its incorporation, TNA has been providing innovative production solutions to the worldwide food processing and packaging industry. Co-founded by Alf Taylor and Nadia Taylor in 1982, the firm has been a major player in many developed markets, staying abreast in the packaging industry. It has maintained a manufacturing base in Melbourne, Australia with several overseas offices in Dubai, Birmingham, Dallas, and Auckland. Well aware of the benefits of the foreign trade, TNA joined Walkers, a United Kingdom firm that is currently part of the PepsiCo Group. By 1989, it fully entered the UK market by developing revolutionary packaging equipment. After working for the Arnott Biscuit Company, Mr. Taylor had acquired adequate knowledge in the food packaging industry. The experience enabled him to develop packaging machines which exhibited good prospects. Consequently, he decided to participate in the overseas trade. By then, Taylor and his team believed that global trade was straightforward, and therefore, they even felt more encouraged to introduce TNA to the international trade.
Since Australia had a population of only 20 million, the company could sell only a limited amount of snack foods there. The government then provided the company with a grant, which enabled it to set up an office in Europe in 1991. By the year 1995, the firm further expanded its operations to USA—though it encountered technical system compatibility issues. Events like the September 11, 2001, have negatively affected the operations of TNA due to the decrease in the financial capital supply. The number of competitors in the packaging industry has also been insignificant, creating room for entry into various geographical locations (Johnson and Turner 2010, p. 4).
Process of Market Research: Targeting an Attractive MARKET

(Dependent Variables) (Independent variable)

FIGURE 1: Process of Market Research
Source: International journal of humanities and social sciences

Selecting a market entails the consideration of several factors. As shown in the Figure above, TNA should aim at targeting an attractive market. Several factors, therefore, determine the suitability of the market kind of market the firm should select. The market factors it should consider are; big market, stable, has high growth potential, with minimal competitors. Finally, the chosen market should enable the entrepreneur to get profit (Almgren 2016, p 71).

 Assumptions
Given that TNA was initially making packaging machines that targeted snack food production lines, it is assumed that the firm has now widened its scope on the type of machines it is currently planning to supply in Malaysia and Vietnam. The assumption is made because these two countries have a diverse preference regarding the kind of foods they consume; much different from the current European or American markets. Besides, it is important to know the investment potential of TNA and the amount of money they expect to invest in the new market. It is also necessary to learn from TNA the number of employees they plan to work within the new market. The available workforce may help determine the geographical coverage and the population size that TNA will manage to serve effectively.

 Market Analysis
Driven by the desire to amass the profit potential, it would be necessary for TNA to introduce its operations in either Malaysia or Vietnam. Malaysia is a Southeast Asian nation found in the Cape of Malaysia. It is an open middle-income economy with a diversified manufacturing sector that has endured the major financial crisis. The country has a well-developed petroleum export system making up a large proportion of its export sector. It has recorded impressive growth of above 7% per annum for at least 25 years. As reported by the Commission on Growth and Development, the country has also flourished in poverty alleviation among its citizens whereby between 1960 to 2012, there was a drastic fall in the number of households living below the national poverty line. Particularly, those living below USD 8.50 per day reduced from 50% to below 1% presently (Worldbank.org 2016, p. 1).
Similarly, Vietnam is found in the Southeast Asia bordering the South China Sea. The country is known for its beautiful beaches and rivers. It also has several iconic sites that are vital for tourist attraction. For instance, several cities like the Ho Chi Minh City and the capital Hanoi have been crucial for the economic development (World Bank Group 2016, p. 1).
To strategically position itself for universal competitiveness, TNA needs to consolidate its resources and conduct adequate planning so that it can reach the optimum scale necessary for global arena competition. Also, a trend is unfolding towards the full adjustment, as businesses are striving for global standards for adeptness and profitability. It is, therefore, vital for TNA to conduct adequate background checks towards Vietnam and Malaysia so that it can select a country that will ensure the most viable returns and profitability. It is equally wise to conduct a market analysis on the social, political, legal, economic, demographic, and environmental conditions within the two countries to select the most favorable.

a) Market size
Whereas Vietnam had a population of 91.7 million people—according to the 2015 national census—with the trend showing an annual population growth of 1 million inhabitants; Malaysia, on the other hand, had 28.3 million people as at the 2010 statistics. Seventy percent of the population have been living in the urban areas while 30% rural. Therefore, Vietnam has approximately three times the population of Malaysia (Ray et al. 2013, p. 1).
Therefore, these are new markets for the TNA’s products and therefore, the company needs to introduce its goods and services into either of these two countries’ market segments. Typically, higher population means a large market (Wild, Wild and Han 2007, p. 8). It would, therefore, be more advantageous for TNA to select Vietnam instead of Malaysia since; over 90 million people would provide a larger market than approximately 30 million inhabitants would, which is a comparatively smaller market. In Vietnam, therefore, TNA would sale more of its products than in Malaysia, thereby getting higher revenues, leading to higher profits.

b) Economical
Vietnam and Malaysia have diverse economic capabilities. By the year 2015, Vietnam had a gross domestic product (GDP) of $198.8 billion while that of Malaysia was $800.17 billion over the same period. For the sectorial contribution of GDP, services, industry and agriculture are contributing 49.75%, 33.25%, and 17.0% respectively for Vietnam while for Malaysia, Service, industry and agriculture contributed 56.2%, 36.8% and 7.1% of the total national GDP correspondingly. It is, therefore, evident that the agricultural sector in both the countries has been producing proportionally less domestic income as compared to other industries as of the year 2015. In the same year, the labor force in Malaysia was 14.04 million while for Vietnam; it was 54.61 million (World Bank Group 2016, p. 1).
Evidently, Malaysia’s economic growth potential is much higher than that of Vietnam; the $198.8 billion GDP of Vietnam is just 24.8% of the Malaysia’s $800.17 billion GDP. With TNA’s profit motive, it is viable to choose a country whose economic systems have higher income prospect. Thus, economically, Malaysia is more advantageous to select than Vietnam.
The Data Showing Ease of Doing Business Rank (Out of 189 Economies) as Ranked by the World Bank for the Year 2016 :

Doing Business 2016 Rank
Malaysia Vietnam
Starting a Business 14 119
Dealing with Construction Permits 15 12
Getting Electricity 13 108
Registering Property 38 58
Getting credit 28 28
Protecting minority investors 4 122
Paying taxes 31 168
Trading across borders 49 99
Enforcing contracts 44 74
Resolving insolvency 45 123

Average ease of doing business: Rank out of 189 economies

TABLE 1: Ease of Doing Business Rank
Data Source: World Bank Group

It is also necessary to consider other factors like the ease of doing business in both of these countries. Based on the above table, it is evident that given the reforms employed by both Malaysia and Vietnam, Malaysia ranked higher in most of the critical business requirements and thus, having more favorable economic conditions than Vietnam. The most notable component is the trading across borders in which Malaysia ranked number 49 out of 189 while Vietnam only managed number 99 out of 189 (World Bank Group 2016, p. 1). To get higher profits, TNA should select a country in which it is easy to conduct business and having fewer restrictions, in this case, Malaysia.
Table Showing Vietnam and Malaysia Economic Growth Rates
GDP Growth (%) GDP (2010) USD billion GDP per capita (2010) USD
Country 2006 2011 2016
Vietnam 8.3 5.9 7.7 104 1,191
Malaysia 5.8 5.1 5.7 238 7,737

TABLE 2: Vietnam and Malaysia Economic Growth Rates
Source: Economic Intelligence Unit 2010

The above table also indicates that Malaysia had a higher GDP per capita than Vietnam, still meaning that Malaysia has an excellent record of greater economic performance thus more advantageous to venture into than Vietnam.

c) Political Stability
Even though Vietnamese differ in their political viewpoints, there is a far-reaching aspiration amongst the citizens and politicians to see their country and political system liberated from incomprehensible politics controlled by engrained elites. The 12th Party Congress has always vowed to actualize that desire for the citizens over an extended period. Vietnam has been peaceful with little political tensions since the end of the three decades of bitter wars whereby the Communists fought France—the colonial powers—the South and the US. Fortunately, the country has relatively been a peaceful one (Johnson and Turner 2010, p. 7).
Meanwhile, Malaysia is touted as one of the most peaceful and economically stable nations in the South East Asia. The indigenous ethnic groups have enjoyed stable relationships between them leading not only to the political but also economic stability. Therefore, most people are proud to be associated with Malaysia. Over the years, the government has succeeded in the fruitful implantation of the economic reforms leading to national industrialization. Consequently, Malaysia has also experienced peaceful coexistence with its neighbors (Education Malaysia Global Services 2016, p. 1). Peace and political stability create an enabling environment for business to thrive. Malaysia, being more peaceful and more economically stable, is more advantageous than Vietnam

d) Technological
In Vietnam, estimates show that there was an increase from 0.1 percent of household broadband enabled computers to 2.0 percent between 2005 and 2010. The swift uptake ensued due to low connection price. The country has, therefore, been ranked among the top seven Internet users. However, even with the rapid growth observed in the Vietnamese technological markets, the growth is still in its early stages. There is an excellent opportunity for a firm with technical products like the TNA to acquire a substantial market share. Vietnam has also experienced a robust uptake of 3G network and fiber broadband in the year 2015, signifying the expanding predisposition towards both mobile and fixed data use. E-commerce has also been expanding but still at a lower level. In a survey conducted by the Vietnamese Ministry of Trade, out of the 303 firms studied, it was established that 17% did not have internet access while 16% had plans to advance the e-commerce Asia (World Bank Group 2016, p. 1).
For Malaysia, technological advancements have improved enormously over the recent years. The country has strived to emerge between the top Asian technology driven and high-tech based on its developments prospects. Malaysia being geographically closer to the Newly Industrialized Economies (NIEs), shares the same economic regimes and trade structures. Therefore, it is capable of formulating and developing its strategies technologically. As regards the Malaysian telecommunication infrastructure, it is the most advanced network among the South East Asian nations, except Singapore. The improvement has also been facilitated by the private sector participation in transforming and developing Malaysian infrastructure. The modern generation technologies such as the 3G network, VOIP, sensor technology and unified communication have supported the utilization of fiber optic cables, satellites, and the digital technology. Furthermore, there is the availability of technologies like IPV6 and digital television networks. Subsequently, the convergence of technology has enabled businesses to embrace services like the e-commerce, authentication, and billing services (Lai and Yap 2010, p. 53).
Malaysia has more advanced technological development than Vietnam. It is then more efficient for TNA to conduct business in Malaysia than in Vietnam due to more developed facilities like communication and transport systems.

e) Infrastructure
The Vietnamese government established the Ministry of Environment and Natural Resources then approved the environmental protection strategy in 2003. New policies and legislations were also enacted to regulate the level of pollution and environmental sustainability. However, due to the weak commitment by sectorial agencies, there has been slow progress towards the achievement of results. The minimal progress towards achieving environmental stability has been advanced by capacity challenges in different sectors. Hence, there is a need for significant enhancements in the policy outline for environmental sustainability. It is also necessary for the stakeholders to hold government accountable for the experienced weak performance (The World Bank 2010, p. 1). It is then true that if the Vietnamese government successfully develops its infrastructure, the nation will manage to compete effectively in global business undertakings. On the other hand, a look at the Malaysian infrastructure shows a different picture. Malaysia is ranked second in Asia and fifth worldwide according to the Global Infrastructure Investment Index. According to the World Bank report, Malaysia has experienced robust economic performance and increased long-term infrastructure investment. Such developments have made the market conducive for local investment. Some of the notable recent accomplishments are the completion of 93,000 km of new roads that has increased the road network by 68%, and the urban rail has witnessed an improvement of 32% (Johnson and Turner 2010, p. 7). Malaysia, being more advanced in infrastructural development, is more advantageous for TNA to do business in than Vietnam. Less developed infrastructure in Vietnam is an impediment to an efficient business transaction.

f) Legal System
Vietnam lacks independent judiciary because the Communist Party of Vietnam (CPV) selects the judges and vets them, for political consistency. The party also controls the judiciary thereby influencing cases that the government perceives as a threat. Still, the Vietnamese legislation is not strong thus resulting in inadequate and unstable legislation. For Malaysia, the legal system is significantly founded on the British legal system. It also borrows from the British values of common law. The Federal Court is the highest in the country to which cases are submitted from the Court of Appeal. The high court is the third highest court in Malaysia. The judiciary is relatively independent since there is minimal government interference in the legal system (Cateora, Gilly and Graham 2011, p. 37). Malaysia, with its independent judiciary, means that any business dispute can be solved fairly thus better for TNA than Vietnam whose courts are state controlled.

g) Financial Sector
Both Vietnam and Malaysia have a varying number of financial institutions that support business transactions as shown below.
Financial Institutions: Comparison between Malaysia and Vietnam
Financial institutions in Vietnam Number of institutions Financial institutions in Malaysia Number of institutions
Urban Joint-Stock Commercial banks 38 List of Malaysian banks (commercial) 8
Branches of Foreign Banks 8 List of foreign banks (commercial) 19
Joint-Venture banks 4 List of banks with marketing & representative offices in Malaysia 10
List of offshore banks & branches in Labuan 50
Investment Banking Arm (Wholesale Banking) 14
Islamic banks (local & foreign) 18
Development Financial Institutions (Government-owned banks) 11
Money brokers 6
Other Financial Institution 3
Total 50 139

TABLE 3: Comparison between Malaysia and Vietnam
Source: World Bank Group

If TNA selects Malaysia, it will have an opportunity to carry out business transactions in more financial institutions than in Vietnam. The efficiency will result from a larger number of banks, especially the foreign-linked, which are essential for international trade.
 Competition
TNA has always had a strategic mindset that has enabled it to succeed in venturing into the overseas market. Globally, there are approximately 20 competitors in the packaging industry with a total of $1 billion. The company, therefore, need to employ unique strategies that will improve its competitive advantage (Czinkota et al. 2009, p. 2). Most of the competitors in the industry lack vision and have been overrating the geographical limitations. Notably, all the TNA’s competitors are narrow-minded, only conducting their activities within the host country. Having a technical advantage over its competitors, TNA is, therefore, better placed to go global since 95 percent of its revenues come from overseas business. Some of the competitors were found copying TNA’s products forcing it to initiate patent lawsuits. Currently, some highly competitive firms have been trying to dislodge TNA from the industry while others are considering cooperation with it.
Factors Analysis
Critical Factors Non-critical factors

Market size Economic growth rates
Economic factors –
Political stability
Legal system
Financial sector –
TABLE 4: Factors Analysis
Market Analysis Score
Factors Arbitrary score
Vietnam Malaysia
Market size 9 3
Economic factors 3 8
Political stability 4 6
Infrastructure 2 7
Financial sector 3 7
Legal system 3 6
Total Score 24 37
TABLE 5: Market Analysis Score
 Conclusions
Malaysia has a higher potential of higher revenue and therefore profit maximization. Vietnam, with its larger population, possesses a bigger market. However, other factors that are conducive for business are less developed. For instance, given that Malaysia has many financial institutions, it would be easier for TNA to carry out financial transactions with ease. It would be more efficient for TNA if it operates in Malaysia, to access banks and other financial institutions than if it was working in Vietnam. Furthermore, the availability of many international banks makes international trade convenient because accessing foreign currencies are well-organized. Besides, economic stability, more developed infrastructure, and stable political system all create a conducive environment for international trade.

 Recommendations
Accordingly, based on the factors analysis and their scores in the respective countries, it is prudent for TNA Pty. Ltd to select Malaysia as its overseas market. Vietnam has good prospects for future investments but currently, compared to Malaysia, it still needs further improvement starting with the enactment of necessary policies, infrastructure development, government agencies revamping, and financial sector expansion among others. TNA should, therefore, invest in Malaysia because it has more developed economy, more stable political environment, and highly advanced infrastructure, a technology that is more advanced, independent legal system, robust financial sector, and improved economy than Vietnam.
Besides, after choosing Malaysia, TNA should conduct further research to establish the kind of machines that would attract a bigger market share. Further study will be necessary because TNA will be capable of developing the products preferences among the citizens of Malaysia thus making the relevant products as required by the market. It would also enable the firm to establish underlying market risks, which would otherwise be difficult to discover from secondary sources.
 Reference List
Almgren, K 2016, “The Four Factors for Targeting an Attractive Market.” International Journal of Humanities and Social Science, 4(9), pp.71-76.
Cateora, P., Gilly, M. and Graham 2011, International marketing. New York, NY: McGraw-Hill/Irwin.
Czinkota, M., Ronkainen, I., Moffett, M., Ang, S., Shanker, D., Ahmad, A. and Lok, P 2009, Fundamentals of International Business, 1st Asia-Pacific Edition. , John Wiley & Sons Australia.
Education Malaysia Global Services 2016, Safe & Stable Environment. Available from: http://educationmalaysia.gov.my/index.php/living-in-malaysia/safe-stable-environment.html [4 May 2016].
Johnson, D. and Turner 2010, International Business. Milton Park, Abingdon, Oxon: Routledge.
Lai, M. and Yap, S 2010, “Technology Development in Malaysia and the Newly Industrialized Economies: A Comparative Analysis.” Asia-Pacific Development Journal, 11(2), pp.53-80.
Ray, D., Mueller, N., West, P. and Foley 2013, “Yield Trends Are Insufficient to Double Global Crop Production by 2050.” PLoS ONE, 8(6), p.e66428.
The World Bank 2016, Malaysia Overview. Available from: http://www.worldbank.org/en/country/malaysia/overview [3 May 2016].
Wild, J., Wild, K. and Han, H 2007, International Business: The Challenges of Globalisation. Pearson.
World Bank Group 2016, Doing Business in Vietnam. Available from: http://www.doingbusiness.org/data/exploreeconomies/vietnam/ [3 May 2016].

Is this question part of your assignment?

Place order