Export of Adabi's Halal Manufactured Food To India As The Host Country and Malaysia As The Home Country

INDIVIDUAL ASSIGNMENT
Fall
Export of Adabis Halal Manufactured Food to India as the

Host Country and Malaysia as the Home Country.
By
Indiran
MBS141104
SEM II 15/16
MBSA2223 Seminars in Global Business Strategy -Section 01
International Business School, UTM
Lecturer Name: Dr. Mohamed A. Ateia El Habib
Submission Date: 5th June 2016
Table of Contents
CHAPTER I: OVERVIEW & COMPANY BACKGROUND......................................4
1.1 Industry Overview................................................................................................4
1.2 Company Background..........................................................................................6
1.3 The Core Services Of Adabi................................................................................7
1.4 Is Adabi Consumer Industry Market Leader ?.....................................................8
1.5 Who/What are Adabis Target Market..................................................................9
08
MBSA 2223 Individual Assignment | UTM
1.6 Adabis List of Products.......................................................................................9

1.7 Adabis List of Expansion..................................................................................10
CHAPTER II: OVERVIEW OF HOME COUNTRY AND HOST COUNTRY FOOD
INDUSTRY..................................................................................................................11
2.1
Home Country: Malaysia Food Manufacturing..............................................11
2.1.1 GDP Contribution...........................................................................................12

2.1.2 Foreign Direct Investment (FDI) Policy.........................................................14
2.2
Host Country: India Food manufacturing.......................................................17
2.2.1 GDP Contribution...........................................................................................19

2.2.2 Indias Foreign Direct Investment (FDI) Policy.............................................22
2.3 Entry Mode........................................................................................................25
2.3.1 Reasons for Distribute....................................................................................26
2.3.2 Malaysia Government support towards international export.........................27
2.3.3 India Government support towards international import...............................28
2.3.4 Procedures to establish import partnership in India.......................................30
2.3.5 Consideration of costs for proposed international business abroad...............32
CHAPTER III: EXTERNAL ENVIRONMENT.........................................................35
3.0 EXTERNAL ANALYSIS...................................................................................35
3.1 Strategic Plan for International Business in the Context of Globalization........35
3.1.1 Porters Five Forces Analysis on FMCG Industry in India.............................35
3.1.2 PESTLE Analysis on FMCG Industry in India...............................................36
3.1.2.1 Politics..........................................................................................................37
3.1.2.2
Economics................................................................................................38
3.1.2.3
Socio-cultural...........................................................................................39
3.1.2.4
Technology...............................................................................................40
3.1.2.5 Legal.............................................................................................................40
3.1.2.6 Environment.................................................................................................41
3.1.3 Competitive analysis.......................................................................................43
3.1.3.1 Competitor Analysis Components...............................................................44
3.1.3.2 External Factor Evaluation (EFE) Matrix for FMCG Industry....................47
3.2
Key Success Factors.......................................................................................47
3.3 Competitors Key Success Factors Analysis.......................................................48

3.4 Competitive Profile Matrix Matrix....................................................................50
3.5 Strategic Group Map..........................................................................................51

3.6 Dealing with Competitors Abroad.....................................................................52
CHAPTER IV: INTERNAL ENVIRONMENT..........................................................53
4.0 INTERNAL ANALYSIS....................................................................................53
4.1 Company Analysis.............................................................................................53
4.2 IFE Matrix..........................................................................................................58
4.3 Value Chain Analysis.........................................................................................58
4.4 Support Activities...............................................................................................60
CHAPTER V: STRATEGY FORMULATION............................................................62
5.1 Internal-External (IE) Matrix.............................................................................62
5.2 SWOT Analysis..................................................................................................63
CHAPTER VI: ORGANIZATION PLANNING.........................................................66
REFERENCES.............................................................................................................67
CHAPTER I: OVERVIEW & COMPANY BACKGROUND

1.1 Industry Overview
Fast moving consumer goods also known as FMCG is an industry that has
quick turnover and relatively low cost, short shelf life. It is a business-to-consumer
industry that provides consumers products of daily necessity from head to toe; such as
shampoo, facial wash, soap, nail polisher, coffee, milk juices, instant noodle and many
more. In lack of better words, it is an industry that feeds 7.6 billion people no matter
what race, color, weight, height of condition that person is; on its products for external
and internal usage. The products varies from size to shapes, ISIC who stands for
International Standard for Industrial Classification have generalized the FMCG into
30 main general categories. Among them are retail and other retail sales of nonspecialized stores, food, beverages and tobaccos in specialized stores, pharmaceutical
and medical goods and many more. End products from FMCG manufacturers are
mostly sold to end consumers via offline marketplace such as hypermarkets,
supermarkets, grocery stores and local mini-marts. FMCG products are usually low
priced in order to reach to the mass consumer market, nevertheless manufacturers
gain profit from benefitting economies of scale (EOS) from the volume of the
produced goods. A very common example is the price of a coke, the coca cola
company produced coke for a base cost of $0.50 with a 30% profit margin, when it
goes down the distribution chain, every segment increase the price with at least a 20%
profit, and at the end; end up at the shelf at a retail price of $1.50. FMCG industry is a
high volume - fast cycle industry that as short product life-span, this makes it tough
for the producers, who have to actively engage in improvising the process of
manufacturing, improving on the raw material sourcing or innovating the products
with variation to sustain its prefer ability among other players. In this 21 st century,
technology and innovation is the only solution for FMCG manufacturers to be
competitive against each other. There are almost more than 50 major players in the
industry who are actively competing in this market share, among them are big
conglomerates such as Procter and Gambler, Nestle, Unilever, Coca-cola, PepsiCo
and the rest of the world. Below is a chart of top 10 FMCG companies in the world by
statistic of 2015 with its net sales and profit.
Most of these renown FMCG players have been in the industry for more than
100 years, and the result is their expansion and foot print around the globe. Listed
below is a brief bar chart with the top 10 FMCG players and its existence around the
world.
Recent study by statista.com shows that the fast moving consumer goods
market in India valued at 11.6 billion in 2003 has shoot up to 33.4 billion USD in
2015.The linear increase in population from year 2000 at 1 billion people till date at
1.3 billion are majorly contributing to the growth of the FMCG industry in India.
(Statistita.com)
1.2 Company Background
Adabi started back in 1984 with a small factory in Batu Caves Light Industrial
Area in Kuala Lumpur. In 1986 they moved from the Batu Caves to a bigger factory
in Taman Kepong Light Industrial Area due to the increase in demand caused by rise
in market growth. In 1990 and 1992, they established two more plants at Taman
Ehsan Light Industrial Area. After the industrialization in Malaysia, Adabi went
through an expanding stage and shifted its operating to another location in Rawang
Integrated Industrial Park. This 4-acre land is home to the companys production sites,
warehouses, corporate office as well as administrative facilities.
Adabi has become a household brand in every Malaysian home. In a span of
two decades, the company is able to make the Malaysian consumers fall in love with
their products. As a growing household name, the Adabi brand is on a continuous
challenge to provide and consistently deliver the highest quality products to the
Malaysian consumers. Despite its established brand, the company is still continuously
trying to grow its market share. We are constantly growing our market share and are
6
applying the latest technological advancements in order to produce the best kind of
food products. We are still riding a moving train towards local and global success.
The successes and achievements thus far can be credited to founder and CEO
of the company, Dato' Syed Manshor Syed Mahmood, who with initial staff strength
of 25 people was able to carry the company to its present status :
"Becoming a leading manufacturer of food based products in Malaysia and the other
regions."
Adabi is now a household name in every home in Malaysia. For almost two
decades, the Malaysian public has heard, seen and fallen in love with the Adabi brand,
whose logo is represented by the traditional Royal Malay Palace of Malacca in the
sixteenth century. The Malay palace denotes the fact that Adabi products have a very
strong heritage, similar with the quality food that was served to the royalties in the
past. True to its image, the Adabi brand has consistently delivered to Malaysian
consumer food products that are 100% Halal, and of the highest quality. It is because
of this that Adabi was recently voted a Superbrand for the year 2002 by the Malaysian
Superbrands Council. Adabi can proudly lay claim to the fact it is one of only a select
few
Superbrands
that
is
purely
homegrow,
through
and
through.
The Adabi brand has also managed to penetrate the minds of consumers outside of
Malaysia, especially those in the Indonesian cosmopolitan areas of Medan and
Jakarta. Some of Adabi's well-known products have been marketed and sold in
Indonesia since 1993, and the Adabi brand has also been promoted consistently in the
mass media over there.
1.3 The Core Services Of Adabi
Adabi Consumer Industries Sdn Bhd. (ACISB) is the parent company and the
main player of Adabi Group. It inspires produces and markets products under the
brand name of Adabi. ACISB is managed and run professionally, fully product-driven
and gives equal emphasis to both Research & Development as well as Sales &
Marketing.
It has a strong and creative pool of research personnel, all of whom are
dedicated to creating new, innovative food products. The rapid growth of the
company, from a staff of 25 and annual sales of RM2 million in 1984, to its current
position of more than 552 personnel and an annual sales of RM200 million can be
attributed to the success of the range of new products it has introduced through the
decades.
New products introductions are effectively supported by dynamic sales and
marketing management teams and continuous mass media promotion of the Adabi
brand. Today, Adabis brand awareness stands at par with other famous international
food product brands sold in Malaysia.
ACISBs continuous commitment in providing consumers with products of the
highest quality is assured through strictest standards of requirements set on the
processes and the quality of the material used. Therefore, all Adabi products are
guaranteed 100% halal, hygienic, wholesome and healthy.
In recognition of this commitment to quality, Adabi has received numerous
awards and accolades. In fact, Adabi products were the first to receive Halal
certification from the Islamic Affairs Division of the Prime Ministers Department.
Among other awards received are Superbrand Status (Readers Digest Malaysia),
International Food & Beverage Award (New Millenium Award Paris) and Anugerah
Kecemerlangan Industri (MITI) and Anugerah Produk Terpuji (Malaysian Institute of
Food Technology).
Today, ADABI has become a prominent household brand in the food
manufacturing business. With the existing products of more than 100 types under
10 main categories Powdered Spice Mix, Processed Paste, Flour Mix, Sauce,
Canned Food and Beverage, Adabi will continuously strive to identify and develop
products to cater households and market needs
1.4 Is Adabi Consumer Industry Market Leader ?
Adabi Consumer Industries Sdn Bhd (ACISB) is categorized as fast moving

consumer goods (FMCG) industries. ACISB aims to take advantage to create new,
innovative food products. The expansion plan offers the company an exciting
opportunity to fill in the gap of packed food manufacturer in Asian region.
Today, ADABI has become a prominent household brand in the food
manufacturing business. With the existing products of more than 100 types under
10 main categories Powdered Spice Mix, Processed Paste, Flour Mix, Sauce,
Canned Food and Beverage, Adabi will continuously strive to identify and develop
products to cater households and market needs.
For now, the company focus on the Malaysian market to build up its image
position and experience. Adabi can be considered as the second market leader in the
packed food manufacturer in Malaysia. But currently, Adabi has expanded their
export market to other 8 countries such as Singapore, Japan, Mongolia, UK, Australia,
Brunei, Indonesia and Jordan.
Adabi is the first products to receive Halal certification from the Islamic
Affairs Division of the Prime Ministers Department. It will be an opportunities for
Adabi to market on their product in this market segment in strengthening its business
roots and establish a strong position. In addition, it will led to the companys
unwavering dedication in providing every consumer with the highest quality food
products.
1.5 Who/What are Adabis Target Market
From the founder or managing director of Adabi, Dato Syed Manshor Syed
Mahmood, Adabi produces quality food products to target the market within
Malaysian market as well as the people from all over the world. He genuinely
believed that consuming great tasting food is one of lifes greatest pleasures. He also
added that the products can give everyone, who have tried and tasted them, the very
same delectable pleasure.
1.6 Adabis List of Products

Adabis product are generally categorized into this 6 category:
1) Curry Products
2) Sauce Products
9
3)
4)
5)
6)
Flour Products
Soup Products
Paste Products
Instant Noodles
Figure 1 below is the illustration of ACISB range of products. They have over
152 products under 10 main categories Powdered Spice Mix, Processed Paste, Flour
Mix, Sauce, Canned Food and Beverage.
Figure 1 List of Products

1.7 Adabis List of Expansion
In order to facilitate the export of Adabi products, the P.T. Multi Alam Prima
Rasa was instituted in January 1994 in Indonesia. This is in compliance with
Indonesias local regulation that requires all food products sold in the country to be
registered and approved by BPOM RI ML or the Health Department of Jakarta.
PT Multi Alam Prima Rasa registered eleven Adabi products, each with a trade
number. The registration allows these products to be exported mainly to Medan
Sumatera in Indonesia. So far, there is an increasing demand for Adabi food items in
the area, which encourages the company to expand its distribution to other parts of
Indonesia. Adabi Consumer Industries Sdn Bhd (ACISB) owns 92% of PT Multi
Alam Prima Rasa.
Country
Exporter / Importer
10
Singapore
Japan
Mongolia
Brunei
Yee Lee Oils & Foodstuffs Pte. Ltd.

Nanyang Trading Co. Ltd., Japan
Delger International Group
Hong Guan Sdn. Bhd., Brunei - acting as agent to Stasuria
Indonesia
Enterprise Sdn. Bhd.

1. PT Multi Alam Prima Rasa as Importer
2. PT Eshan Dima as Distributor
Jordan
3. PT Musti Alam Prime Rasa

Abdullah Ahmad Ayad & Partners Trading company
11
CHAPTER II: OVERVIEW OF HOME COUNTRY AND HOST COUNTRY

FOOD INDUSTRY
2.1 HOME COUNTRY: MALAYSIA FOOD MANUFACTURING
Malaysia is economically and politically establish, and Malaysia is open to foreign
trade. Communication, banking, transportation, manufacturing, and health service are
modern and well developed. About 29 million of populations, Malaysia are one of the
most developed countries in Southeast Asia. About 61% of the residents fall into the
middle and upper-income group of consumers, with GDP per capita income of
$10,500.
Table: Value of imported raw materials vs. domestic produced raw materials (in
$billion)
Below is the overall food processing industry in Malaysia:
Fish processing and canning
Noodles, bread, and other bakery products
Processed meats
Confectionary
Canned fruits and vegetables
Dairy products
Fish processing is the leading food processing in Malaysia. Most of the fish
and fish-based products are for export. Noodle manufacturing is the second leading
food processing and third-largest food processing in Malaysia are meat processing.
For poultry and eggs, Malaysia is self-sufficient but import about 80% of beef for any
processing need. Most of the dairy product ingredients are imported, including whey,
milk powder, and other dairy products. These imported goods are used to produce
yogurt, condensed milk, and milk-related products.
12
Malaysia is the largest cocoa producer in Asia. However, 95% of cocoa beans are
imported. Malaysia also is a major food producer of spices and currently is the world's
6th largest exporter of spices such as pepper, lemongrass, turmeric, clove, coriander,
fennel and pepper-related products.
Table: Import and export of processed foods in Malaysia ($US Billions)
2.1.1 GDP CONTRIBUTION

Malaysias economy has a substantial base that incorporates strong
manufacturing, services, and agricultural sector. Malaysia GDP was growth at 6% in
the year 2014 and projected at 5% in the year 2015 and 4.5% in the year 2016.
About 6000 small-medium enterprises (SME) are involved in food
manufacturing which equivalent to nearly 10% of manufacturing output. Also, some
of the multi-national organizations have production facilities that focused on domestic
demand and export. Malaysia's government has identified the food-manufacturing
sector as one of the important industries and as a potential export contributor in
Malaysia economy.
Malaysia GDP per capita PPP
Gross domestic product (GDP) is the value of all goods and services produced by a
domestic economy over a one-year period while GDP per capita is the countrys GDP
divided by its population to measure a nations income per person. We can express
GDP as follows:
Adabi exports its products to India. The products will be counted towards India Gross
Domestic Product (GDP). However, if Adabi sends their profits back to shareholders
in Malaysia, then this outflow of profit is subtracted from Gross National Product
(GNP), in which Indian nationals do not benefit from this profit.
13
Adabi can makes profit from its companies located in India, then if this profit
is sent back to Malaysia, then this net income from overseas assets will be added to
GNP of Malaysia. This will result in increase of Malaysias GDP as well. However,
the increase in GNP will not be as great as GDP. If a county has similar inflows and
outflows of income from assets, then GNP and GDP will be very similar. However, if
a country has many multinationals that repatriate income from local production, then
GNP will be lower than GDP.
The relationship of GDP and GNP can be shown through below equations
where GDP measures the total market value of all goods and services produced by
domestic residents. GNP includes domestic residents earnings from goods and
services produced and sold abroad, and investments abroad.
GDP = consumption + investment + (government spending) + (exports imports).
GNP = GDP + NR (Net income inflow from assets abroad or Net Income Receipts) NP (Net payment outflow to foreign assets).
Purchasing Power Parity
Inflation rate in Malaysia is expected to be at 3.4% in 2016 while the average inflation
rate in India is 5.39%. Therefore, the inflation rate in Malaysia is expected to be lower
14
than 2% than in India that indicates that price in Malaysia is expected to deplete lower
relative to India. In first year of its operation at India, Adabi is targeting to capture 5%
of the market share. The forecast exchange rate in 2016 by using Purchasing Power
Parity is as follows:
Forecasted India rate of inflation for 5.5%
the next 12 months
Forecasted Malaysian rate of
3.4%
inflation for the next 12 months
Spot Rupee/MYR current
MYR 0.061
1-year change in Spot Rupee/MYR
(X)
Forecasted 1-year Spot Rupee/MYR
Spot Rupee/MYR current x (Inflation

Rupee Inflation MYRf)
=MYR 0.061 x (0.055 0.034)
=(MYR 0.001281)
Spot Rupee/MYR current X
MYR 0.061 - (MYR0.001281)
MYR0.059719
2.1.2 FOREIGN DIRECT INVESTMENT (FDI) POLICY

Foreign sources of investment were from the East Asia economies of Japan,
Hong Kong, India, Korea and Taiwan (RM7.4 billion or 56.4.6%), Americas (RM2.3
billion) and Europe (RM1.9 billion). Investments from East Asia were mainly in the
fabricated metal products, non-metallic mineral products and E&E industries, while
more than 80% of investments from the USA were in E&E. Investments from
European countries were in a wide range of industries, from E&E and machinery
manufacturing to resource based industries of paper products, petroleum products and
food manufacturing.
Minister Mustapa highlighted that Malaysia continues to strengthen the
investment ecosystems within the manufacturing sector to facilitate growth. The
countrys aim is to further attract more quality investments from both local and
foreign sources to encourage new product innovation in the country. These approved
projects are also expected to generate strong multiplier effects which include the
growth
of
domestic
companies/engineering
supporting
industries,
cluster
15
development, local sourcing, strengthening of R&D activities and human capital

development.
Government of Malaysia is promoting policy on FDI, which includes:1. Insurance to cover risks of investment abroad under Export- Import Bank of
Malaysia Berhad (Exim Bank)
a. The Export-Import Bank of Malaysia Berhad (EXIM Bank) merged
with Malaysia Export Credit Insurance Berhad (MECIB) retaining the
name EXIM Bank. EXIM Banks objective is to drive the development
of Malaysian exports and foreign investments abroad by providing a
range of export financing, guarantees and export credit insurance
facility.
2. Grant loan to increase investment abroad
a. Services Export Fund (SEF)
SEF provides assistance to Malaysian Service Providers (MSPs) to
undertake activities to expand and venture into the international
market. The assistance is extended in the form of reimbursable grant.
Eligible activities are:
to promote Malaysian expertise in specific services areas

overseas
to cover related cost in rendering services for projects abroad
establishment of physical commercial presence/office overseas
supplying Made in Malaysia products for Malaysian projects

abroad
3. Market Development Grant (MDG)

a. The Market Development Grant is a scheme introduced to assist the
small and medium enterprises (SMEs), service providers and trade &
industry associations/chambers of commerce & professional bodies in
undertaking export promotional activities. Companies can apply for a
reimbursable grant on the eligible export promotional activities
undertaken, subject to the availability of fund.
4. Tax break on profits earned abroad
16
5. Tax incentives are given for Malaysian companies investing abroad.

Expanding Adabi to India contribute to Malaysia FDI, which related to political,
economic and culture and are defined as:
Political
Adabi existence in India can develop bilateral relationship between

India and Malaysia.
Adabi will become Malaysian ambassador so that outsider or foreigner will
know about Malaysia and this will attract tourist to come to Malaysia and
Economic
indirectly can increase the GDP. By goes abroad, Adabi can contribute to
make Malaysia economic stronger as Adabi will bring back their profit to
Malaysia (cash inflow).
Culture is another barrier that is uniquely problematic for FDI in which
create Cultural distance, that is, the extent of differences between
Culture
countries regarding important cultural value. For example, on the cultural

distance between Malaysia and India, there are possibilities of
communication breakdown, which may cause failure in business agreement
and affect the Malaysia FDI.
17
2.2 HOST COUNTRY: INDIA FOOD MANUFACTURING

Fast moving consumer goods (FMCG) in India is the 4 th biggest sector in their
economy. After pharmaceuticals, FMCG is a vital component in Indias economy
and plays a major role to the growth of the countrys trade balance. Total market
size accounts for almost 33.4 billion USD for 2015 and is expected to grow
linearly across time.
FMCG in India witness an annual increase of 14.7% (CAGR) within year

2010 to 2016. FMCG in India is generally categorised into these 7 main sections
leaded by the food products (43%), followed by Personal Care at 22%, fabric care
at 12% and followed by the rest of the categories such as food service, home
improvement and many more.
According to a recent study in India, 62% FMCG players in India are

multinational companies. Among them are companies like Procter & Gambler, Nestle
and Unilever. Chart below shows a list of the top brands and its performance in India
for the year of 2015.
18
By 2020, the Indian consumer market is expected to reach to USD 20.6 billion
and 65% of the major contributors coming from the urban market and a lot of room
for growth in the rural market as brand penetration are still at the minimal. The
change in lifestyle and growing awareness are the key drivers to the development in
consumer market. Besides that, government intervention in this sector by relaxing
license rules and approval of 51% foreign direct-investment (FDI) in this fast moving
consumer goods industry aids the growth of consumer market in India.
As a conclusion, Indias FMCG market is mature, competitive and crowded
with local and global brands. In this market, innovation is critical for:
To be more competitive in the 21 st century, FMCG brands should focus more

on R&D and innovation as the key to success. It is achievable using consumer
feedback or surveys to understand the needs of the next generation. Trending sectors
in health and wellness is observed across the country and especially in India as the
growing population is more sensitive to the content and process manner of these end
products. Thus, to stay competitive FMCG brands should embrace and focus on this
trend to gain out of this emerging sector.
19
2.2.1 GDP CONTRIBUTION

In recent years India has appeared to be the worlds fastest-growing economy
outpacing China. Indias Gross Domestic Product (GDP) worths 2066.90 billion USD
in 2014 which has reach its all-time high since 1970.
Indias economy mainly concise of these three sectors agriculture, industry

and services as listed in table below:
Agriculture
Crops, horticulture, milk and animal husbandry, aquaculture,
fishing, sericulture, aviculture, forestry and related activities

Accounts for 17 % of GDP and 49% of total workforce
As the Indias is heading towards the first world path, agriculture
has seen a steady decline, however India is generally yields 30%
Industry
to 50% on agriculture output in the world.

India has the worlds 6th largest fishing industry
India is the largest producer of milk in the world with 250 million
animals
India is the 2nd largest producer of rice, wheat, sugarcane, cotton
and nuts
Various manufacturing sub-sectors
Accounts for 26% of GDP and emplys 22% of total workforce
Economic liberalization in 1991, removed import restriction,
brough in Foreign investors, privatizations of certain government
owned public sector, FDI injection, improved infrastructure,
expansion of FMCG industry, improve of technology

Among them are petroleum products and chemicals 34% GDP
Pharmaceuticals
20
Services
Engineering 12th largest producer of engineering equipments
and automobile
Jems, jewelry, textile & mining
Construction, retail, software, IT, communication, hospitality,
infrastructure operations, education, health care, banking and
insurance
Accounts for 57% of GDP in 2012
Nevertheless, in recent years there has been a big slump in the agriculture industry
and significant growth in the service industry.
After liberation, Indias trade has increased exponentially with the total trade
in goods and services contributing to the GDP of the country increase from 16% in
1990 to 47% in 2008. Indias major exports goods are being channel into neighboring
countries such as United Arab Emirates, China, European Union and even Unites
States of America. Major export commodities include engineering goods 25%,
petroleum products 20%, chemical and pharmaceutical 5%, gems and jewelry 13%,
textiles and garments 7%, agriculture products 10%, iron ore and other minerals.
Major import activities include crude oil and related products 37%, machinery
5%, electronic goods 7%, gold and silver 6 %.
21
India as the founding-member of General Agreement on Tariffs and Trade

(GATT) since 1947 have actively participated in general council meetings with WTO
and other national bodies to garner matters such as labor, environment and other nontariff barriers to traded.
Till date, Indias balance of payments on its current account has been negative.
Indias export rose consistently covering 80.3% if its imports of 66.2% from year
2002-03. Since liberalization of economy; Indias reliance on external assistance and
concessional debt has decrease since liberalization of the economy. The debt service
ratio has decreased from 35.3% in 1990 to 4.4% in 2009. The Ministry of Finance
monitors and regulates all investment and fundings through External Commercial
Borrowings (ECB) policy issued by the Reserve Bank of India under the Foreign
Exchange Management Act of 1999. Indias foreign exchange reserves have steadily
risen from $5.8billion in 1991 to $318.6 billion in 2009.
22
2.2.2
INDIAS FOREIGN DIRECT INVESTMENT (FDI) POLICY

Today, India is the fastest growing economy among major Nations. The World
Bank has improved India's ranking by 12 places in the 2016 Study of Ease of Doing
Business. FDI has gone up by 40%. Several Global Institutions have projected India
as the leading destination for FDI in the World. IMF has branded India as the brightest
spot in the Global Economy whereas the World Bank projects India's growth at 7.5%
and even better.
Malaysia is one of the significant investors in India. It is estimated that, if the
Mauritius route is also included, the investment of Malaysia in India could be as high
as US$ 7 billion. However, as per available data, Malaysia is currently the 19th largest
investor in India with FDI inflows of US$ 732 million in the last 15 years. Malaysian
FDI in India is primarily focused on Roads and Highways, Telecommunications, Oil
& Gas, Power plants, Tourism and Human Resources.
On November 24, 2015, the Government of India effected several important
amendments to India's consolidated foreign direct investment policy ("FDI Policy").
These amendments enable higher levels of foreign direct investment ("FDI") in a
number of business sectors and simplify various sector-specific conditions under the
FDI Policy. Key amendments to the FDI Policy are discussed below. Under the FDI
Policy, there are two routes for foreign strategic investors to invest in an Indian
company:
1. Government Approval Route: FDI in activities not covered under the
automatic route requires prior approval of the Government which is
considered by the Foreign Investment Promotion Board (FIPB), Department of
Economic Affairs, Ministry of Finance. Plain paper applications carrying all
relevant details are also accepted. No fee is payable. The Indian company
having received FDI either under the Automatic route or the Government route
is required to comply with provisions of the FDI policy including reporting the
FDI to the Reserve Bank
2. Automatic Approval Route: FDI is allowed under the automatic route
without prior approval either of the Government or the Reserve Bank of India
23
in all activities/sectors as specified in the consolidated FDI Policy, issued by

the Government of India from time to time.
Foreign investment is reckoned as FDI only if the investment is made in
equity shares, fully and mandatorily convertible preference shares and fully and
mandatorily convertible debentures with the pricing being decided upfront as a figure
or based on the formula that is decided upfront. Partly paid equity shares and warrants
issued by an Indian company in accordance with the provision of the Companies Act,
2013 and the SEBI guidelines, as applicable, shall be treated as eligible FDI
instruments subject to compliance with FDI scheme.
For any foreign investment into an instrument issued by an Indian company
which:
i.
ii.
Gives an option to the investor to convert or not to convert it into equity or

Does not involve upfront pricing of the instrument as a date would be
reckoned as ECB and would have to comply with the ECB guidelines.
The FDI policy provides that the price/ conversion formula of convertible capital
instruments should be determined upfront at the time of issue of the instruments. The
price at the time of conversion should not in any case be lower than the fair value
worked out, at the time of issuance of such instruments, in accordance with the extant
FEMA regulations valuation as per any internationally accepted pricing methodology
on arms length basis for the unlisted companies and valuation in terms of SEBI
(ICDR) Regulations, for the listed companies without any assured return.
An Indian company issuing shares /convertible debentures under FDI Scheme
to a person resident outside India shall receive the amount of consideration required to
be paid for such shares /convertible debentures by:
i.
Inward remittance through normal banking channels.
ii.
Debit to NRE / FCNR account of a person concerned maintained with an AD
iii.
category I bank.
Conversion of royalty / lump sum / technical knowhow fee due for payment or
iv.
conversion of ECB, shall be treated as consideration for issue of shares.

Conversion of import payables / pre incorporation expenses / share swap can be
v.
treated as consideration for issue of shares with the approval of FIPB.

Debit to non-interest bearing Escrow account in Indian Rupees in India which is
opened with the approval from AD Category I bank and is maintained with the
AD Category I bank on behalf of residents and non-residents towards payment of
share purchase consideration.
24
If the shares or convertible debentures are not issued within 180 days from the
date of receipt of the inward remittance or date of debit to NRE / FCNR (B) / Escrow
account, the amount shall be refunded. Further, Reserve Bank may on an application
made to it and for sufficient reasons permit an Indian Company to refund / allot shares
for the amount of consideration received towards issue of security if such amount is
outstanding beyond the period of 180 days from the date of receipt.
Expanding Adabi products to India contribute to India FDI which related to
political, economic and culture and are defined as:
Adabi ventured to India will strengthen Malaysia and India bilateral
Political
relationship with more investment from these two countries will be

increased.
Adabi will capitalize the needs for its products in India and in the same
Economic
time provide diversities of product to local citizen. This will create

more sources of income and plenty of product variety to India citizen.
Culture is one of the factors that will impact FDI; the cultural
differences between Malaysia and India will influences the
Culture
cooperation level and successful of venture business between both

countries. For example, the working culture between both countries
will affect the communication and the cultural distance will create
barrier in communication that would affect interaction.
25
2.3 ENTRY MODE

For the India entry mode, Adabi must follow the food manufacturer's requirements
and specifications, purchasing policies, volumes of expected purchase, and products
competitiveness from the alternative suppliers. Adabi also can appoint the local
representative to aware all the import requirements.
Table: Key Entry Strategies for Adabi

Raw food materials are imported either directly by the food manufacturers,
through importers, or agents. Generally, products purchased in high volume are
imported directly by the food manufacturers while those purchased in smaller volume
are imported through importers or agents. Importers and agents in turn sell directly to
the food manufacturers or through distributors. Distributors are generally used to
supply to smaller food manufacturers often located far away from the importers or
agents business operations. Local producers of raw food materials generally sell
26
directly to the food manufacturers but will use distributors to supply to the smaller
food manufacturers.
AdabiAgents or importers
Food Processors
Distributors
Figure: Distribution Channel for Imported Food Ingredients

Both Adabi and Indian companies are active in the sector. Multinational
companies are often joint investments between foreign and Malaysian investments.
India companies produce Adabi brands of food products under license with the rights
to market within specific geographical markets.
Adabi should consider their own resources, previous export or business
experience abroad, and long-term business strategy before entering the India market.
For many companies, representation in India by local agent, distributor, or partner that
can provide local knowledge and contacts will be critical for success. Intellectual
Property rights holders should understand how to protect their IP under Indian law
before entering the India market, and should conduct thorough due diligence on
potential partners or buyers before entering into any transaction. All companies, IP
rights holders and otherwise, should consult closely with lawyers who have extensive
experience with the India market, including lawyers based in the Malaysia and India.
2.3.1
REASONS FOR DISTRIBUTE

Indias economy is projected to grow at a fast clip over the next few years.
With increasing purchasing power and a rising middle class, the fast moving
consumer goods (FMCG) industry is posed to grow dramatically. To leverage
opportunities, FMCG manufacturers and retailers will have to develop and implement
deliberate strategies for gaining market access. The Indian subsidiaries in major
consumer goods company work with more than 1000 distributors which deliver it
products to 1 million outlets across India. It uses the distributor model to get accesses
towards markets in urban and rural areas.
27
Advantages of Distributors:
1. Goods producing sector & services sector are inseparable & complementary
2. Inter-sectorial relationship between goods & services generally show
asymmetrical dependence.
3. Goods producing sector has a great multiplier effect than services
4. Exporting builds trust & cooperation in small populations
5. Exporting volumes reduces that cost of inputs & makes export products more
competitive
2.3.2
MALAYSIA GOVERNMENT SUPPORT TOWARDS

INTERNATIONAL EXPORT
Malaysia's processed food exports are expected to continue their steady
growth this year (2016), despite the challenging economic backdrop. "We hope
processed food exports can grow further, given the continuous promotional efforts in
place," said Malaysia External Trade Development Corp (MATRADE) chief
executive officer Datuk Dzulkifli Mahmud after the soft launch of the 17th Malaysian
International Food and Beverage trade fair (MIFB 2016), here, yesterday.
Dzulkifli said processed food ex ports saw an increase of 8.8 per cent to
RM18.02 billion last year, compared with RM16.56 billion in 2014. He said the
increase was mainly attributed to exports of edible products and preparations, cocoa
and cocoa preparations, cereals and flour.
The top five exports destinations for processed food are Singapore, India,
Indonesia, Australia and Thailand.
Government of Malaysia urged local small and medium enterprises (SMEs) to
tap the ASEAN marketplace and member countries of the Trans-Pacific Partnership
(TPP) to strengthen their market presence and meet international standards for
exports.
He said the agency and related agencies such as SME Corp would nurture the
SMEs to help them grow. "We would like to see more cross border businesses
between Malaysia and other ASEAN countries. Food and beverages can be a strong
sector that we can promote to ASEAN and the TPP countries."
28
2.3.3
INDIA GOVERNMENT SUPPORT TOWARDS INTERNATIONAL

IMPORT
India: Foreign Trade Policy

Although India has steadily opened up its economy, its tariffs continue to be
high when compared with other countries, and its investment norms are still
restrictive. This leads some to see India as a rapid globalizer while others still see it
as a highly protectionist economy.
Till the early 1990s, India was a closed economy: average tariffs exceeded 200
percent, quantitative restrictions on imports were extensive, and there were stringent
restrictions on foreign investment. The country began to cautiously reform in the
1990s, liberalizing only under conditions of extreme necessity.
Since that time, trade reforms have produced remarkable results. Indias trade
to GDP ratio has increased from 15 percent to 35 percent of GDP between 1990 and
2005, and the economy is now among the fastest growing in the world.
Average non-agricultural tariffs have fallen below 15 percent, quantitative
restrictions on imports have been eliminated, and foreign investments norms have
been relaxed for a number of sectors.
India however retains its right to protect when need arises. Agricultural tariffs
average between 30-40 percent, anti-dumping measures have been liberally used to
protect trade, and the country is among the few in the world that continue to ban
foreign investment in retail trade. Although this policy has been somewhat relaxed
recently, it remains considerably restrictive.
Nonetheless, in recent years, the governments stand on trade and investment
policy has displayed a marked shift from protecting producers to benefiting
consumers. This is reflected in itsForeign Trade Policy for 2004/09 which states
that, "For India to become a major player in world trade ...we have also to facilitate
those imports which are required to stimulate our economy."
India is now aggressively pushing for a more liberal global trade regime,
especially in services. It has assumed a leadership role among developing nations in
global trade negotiations, and played a critical part in the Doha negotiations.
29
Regional and Bilateral Trade Agreements

India has recently signed trade agreements with its neighbors and is seeking
new ones with the East Asian countries and the United States. Its regional and
bilateral trade agreements - or variants of them - are at different stages of
development:
India-Sri Lanka Free Trade Agreement,
Trade Agreements with Bangladesh, Bhutan, Sri Lanka, Maldives, China, and
South Korea.
India-Nepal Trade Treaty,
Comprehensive Economic Cooperation Agreement (CECA) with Singapore.
Framework Agreements with the Association of Southeast Asian Nations

(ASEAN), Thailand and Chile.
Preferential Trade Agreements with Afghanista, Chile, and Mercosur (the
latter is a trading zone between Brazil, Argentina, Uruguay, and Paraguay).

World Bank Involvement
As a number of research institutions in the country provide the Government
with good, just-in-time, and low-cost analytical advice on trade-related issues, the
World Bank has focused on providing analysis on specialized subjects at the
Governments request.
In the last three years, the Bank has been working with the Ministry of
Commerce in a participatory manner to help the country develop an informed strategy
for domestic reform and international negotiations.
Given the sensitivity of trade policy and negotiation issues, the Banks role has
been confined to providing better information and analysis than was previously
available to Indias policymakers.
World Bank Reports
Over the last two years, the World Bank has completed two reports:
Sustaining Indias Services Revolution: Access to Foreign Markets, Domestic
Reforms and International Negotiation: The study concludes that to sustain the
dynamism of Indias services sector, the country must address two critical challenges:
externally, the problem of actual and potential protectionism; and domestically, the
30
persistence of restrictions on trade and investment, as well as weaknesses in the

regulatory environment.
From Competition at Home to Competing Abroad: The Case of Horticulture in
India: This study finds that the competitiveness of Indias horticulture sector depends
critically on efficient logistics, domestic competition, and the ability to comply with
international health, safety and quality standards. The study is based on primary
surveys across fifteen Indian States.
A third study, dealing with barriers to the movement of professionals is under
preparation.
The Bank has also held a number of workshops and conferences with a view
to providing different stakeholders with a forum to express their views on traderelated issues.
2.3.4
`
PROCEDURES TO ESTABLISH IMPORT PARTNERSHIP IN INDIA
Key Import Steps

All importers must follow detailed customs clearance formalities when
importing goods into India. A comprehensive overview of EXIM procedures can be
found on the Indian Directorate of General Valuations website.
31
Bill of Entry
Every importer is required to begin by submitting a Bill of Entry under
Section 46. This document certifies the description and value of goods entering the
country. The Bill of Entry should be submitted as follows:
1) The original and duplicate for customs
2) A copy for the importer
3) A copy for the bank
4) A copy for making remittances
Under the Electronic Data Interchange (EDI), no formal Bill of Entry is
required (as it is recorded electronically) but the importer is required to file a cargo
declaration after prescribing particulars required for processing of the entry for
customs clearance. Bills of Entry can be one of three types:
1. Bill of Entry for Home Consumption This form is used when the imported
goods are to be cleared on payment of full duty. Home consumption means use
within India. It is white colored and hence often called the white bill of
entry.
2. Bill of Entry for Housing If the imported goods are not required
immediately, importers may store the goods in a warehouse without the
payment of duty under a bond and then clear them from the warehouse when
required on payment of duty. This will enable the deferment of payment of the
customs duty until goods are actually required. This Bill of Entry is printed on
yellow paper and is thus often called the yellow bill of entry. It is also called
the into bond bill of entry as the bond is executed for the transfer of goods in
a warehouse without paying duty.
3. Bill of Entry for Ex-Bond Clearance The third type is for ex-bond
clearance. This is used for clearance from the warehouse on payment of duty
and is printed on green paper.
It is important to note that the rate of duty applicable is as it exists on the date a
good is removed from a warehouse. Therefore, if the rate changes after goods have
been cleared from a customs port, the customs duty as assessed on a yellow bill of
entry (Bill of Entry for Housing) and paid on the value listed on the green bill of entry
(Bill of Entry for Ex-Bond Clearance) will not be the same.
32
Other non-EDI Documents

If a Bill of Entry is filed without using the Electronic Data Interchange system, the
following documents are also generally required:
Signed invoice
Packing list
Bill of lading or delivery order/air waybill
GATT declaration form
Importer/CHA declaration
Import license wherever necessary
Letter of credit/bank draft
Insurance document
Industrial license, if required
Test report in case of chemicals
Adhoc exemption order
DEEC Book/DEPB in original, where applicable
Catalogue, technical write up, literature in case of machineries, spares or

chemicals as may be applicable
Separately split up value of spares, components, and machinery
Certificate of Origin, if preferential rate of duty is claimed
2.3.5
CONSIDERATION OF COSTS FOR PROPOSED INTERNATIONAL

BUSINESS ABROAD
There is several business cost consideration Adabis need to make to ascertain the
profitability of this venture. First of all is the product cost. This is the direct cost
incurred in the manufacturing of the chocolates. The breakdown of product cost can
be seen as below (Since the product costs are confidential and unknown, the
calculation is not conducted)
Material (spices)
Labor
Plant overhead
Administration
Financing costs
33
Domestic taxes (if applicable)
Furthermore, Adabis will incur other costs such as the cost for preparation of
shipping. These cost are as follows:
Labeling
Packaging
Packing
Tracking, etc.
The FOB cost is the total cost from Adabis factory in Rawang to the nearest port
in Malaysia. Based on the factory location of Adabis, Port Klang is the most strategic
port for Adabis to ship their products. Moving on, there will be Cost, Insurance and
Freight (CIF), which is basically divided into two components:
International freight cost

Shipping insurance coverage
Next, there will be Delivery Duty Paid (DDP) transaction costs which includes the
following:
Customs
Inland Freight
Finally, in the India, there are other costs incurred, which is majorly in marketing.
Since Adabis intends to do direct exporting, they do not have any investment or
capital cost in the country. The foreign market cost maybe summarized as follows:
Travel accommodations
Promotion
Communications
Translation
Professional fees
Agency market costs
Certifications (HALAL and Food Quality certificates)
The exact figure for the cost calculation is not applied, as the information is
confidential and unknown. However, in reality it is important for Adabis to ascertain
these details to allow them to strategically price their product to gain the profit that
they target. Other cost that Adabi should consider as below:
34
Re-branding
Buildings renovation and modification
Cost
Marketing and advertising
Financing
Local financing (mitigate possible financial risks arising from
Costs
fluctuations in foreign exchange rates and uncertain foreign exchange

policies in the host country)
Information
Acquisition of correct information is important to antidote uncertainty,
Costs
the cost incurred in searching, scanning and acquiring necessary

information become fundamental in overcoming liabilities of foreigners
Exchange
Currency exchange is costly and risky: the exchange rate could fluctuate
Rate
within matter of seconds; 1MYR is equivalent 1.63 RMB, they inflation
Conversion
rate is 0.4%.
Tax Rates
Statutory and effective tax rates influence a firms profitability.

Allocation of capital international to maximize the marginal risk-adjusted
after-tax return.
Profit
Repatriation
Repatriation restrictions have a negative impact on the net income or

dividends remitted to foreign headquarters, incl. levying remittance tax
on the cash repatriated to a home country.
Legal
incorporation company cost at host country
Framework
local authority fee
35
CHAPTER III: EXTERNAL ENVIRONMENT
3.0 EXTERNAL ANALYSIS
3.1 STRATEGIC PLAN FOR INTERNATIONAL BUSINESS IN THE

CONTEXT OF GLOBALIZATION.
To market Adabi for international business which is to India, we have made
an evaluation on both external and internal environment for better understanding on
the fast moving consumer goods (FMCG) industry, competitors and companys
strengths or weaknesses towards responding to global business opportunities and
threats.
External
In evaluating the external environment of FMCG industry in India, below
tools are used; (i) Porters Five Forces, (ii) Politic, Economy, Socio-cultural,
Technology, Legal and Environment (PESTLE), (iii) Key Success Factors and (iv)
Competitors Profile Matrix (CPM).
3.1.1 PORTERS FIVE FORCES ANALYSIS ON FMCG INDUSTRY IN

INDIA.
Forces
Impact
Implications
(High/Medium
Threat of New
/ Low)
Medium to
FMCG industry has no measures to control the
Entrants
High
entry of new firms. Resistance is low and the

industry structure is complex makes new firms
easily to enter. High competitive retaliation,
high capital requirements, strong and well
established name and economies of scale.
Involves in the effort and initiative in putting a
clear image of a product, quality and
36
Bargaining
Medium to
uniqueness to target customer demands.

To have a good products differentiation from
power of buyers
High
others with low switching cost. Having a

complete information about the product will
led to customer loyalty. The customers can be
the individuals within the communities and
Bargaining
Low to Medium
have the bargaining power for each product.

There is ample number of substitute suppliers
power of
available in the India. Raw material also is
suppliers
readily available and most of the raw materials

are homogeneous. Suppliers is also competing
among themselves led to no monopoly
Threats of
Medium to
situation.
There are plenty of substitute products
substitute
High
available in India market that can be replaced if
products
consumers in not satisfied with one product.

The wide range of choices and needs give
sufficient room for new product development
that can replace existing goods. This leads to
higher
consumers
expectation.
Periodic
monitoring is needed to prevent the creation of

Rivalry among
High
existing firms
counterfeit similar products.

Fierce competition from other firms may lead
to stealing of profits and market share. Need to
consider on the strategic positioning on the
product. Identify the target market to acquire
the competitive advantage.
3.1.2 PESTLE ANALYSIS ON FMCG INDUSTRY IN INDIA.

India is among the most attractive locations in the world. It has also grown to
become one of the key economic players. This rise boosted international business.
The legal system too has been improved. Foreign investors seek business in India
mainly because of 3 things. They are:
1. Size of the market
37
2. The low cost of labor

3. Availability of English speaking population who are equipped with skills and
abilities
4. Indias growth potential together
India has become increasingly integrated with other parts of the world. It opened
itself to an array of cross- border economic activities. It is not easy to manage
international business in India. India is a founding member of WTO. While Indias
entry into the world market benefits its national economy, it also boosts global
economic growth. The main challenges for businesses in India are:
a) Attaining strategic objectives of cost reduction
b) Local differentiation
c) The strengthening of core competencies in certain areas and business activities
3.1.2.1 POLITICS
No
Description
Opportunities
.
1.
Tax exemption in sales and excise duty
2.
for small scale industries.

Transportation
and
infrastructure
Threats
development in rural areas helps in

3.
4.
distribution network.
1990 Liberazation has induced more
trade
activities
among
neighboring
countries
India government has strong and firm
commitment to increase its service
industry as the literacy rate increase and
5.
killed labors are abundance.

Corruption issues in India. The wealth
gap has not got smaller as the economy
develops: it's grown. Society has not
become any more just and equal, but

worse. Corruption is more severe.
TOTAL
38
3.1.2.2 ECONOMICS
No.
Description
1. The GDP rate of Indian economy is
comparatively better. It is expected in future
Opportunities
Threats
it would be better only in comparison with

2.
other countries.
Inflation rate is increasing across the world
and India is also no exception. The
government and Reserve Bank of India both
are trying to control the inflation rate with
3.
the help of different measures.

Increase in disposable income has taken
place due to higher GDP rate. The per capita
income is increasing so the customers are
having more income to spend for various

4.
reasons.
The GDP rate is adding more values to the
society and it may lead to increasing the
purchasing power of the consumers. The
FMCG sector is a 4th largest sector of Indian

economy with market size of more than
5.
60,000 crores.
Indian FMCG sector recorded 16% sales
growth in last fiscal year and it is expected it
would further improve in the forthcoming
6.
years.
Growth rate of the population in India is
high that contributes to the upscale of the
economy
with
abundance
in
natural
resources
TOTAL
39
3.1.2.3 SOCIO-CULTURAL
No.
Description
1. The demographic of population growth and
Opportunities
Threats
fluctuation in age distribution are changed

and they can play important role on the
social and cultural aspects of the country.

2.
Family size and social behavior often impact

on how decisions are taken.
3.
Other social factors are consumer lifestyles,

religion, education and emigration.
4.
India has attained the literacy rate up to 90%

and it is playing the important role in the
economic development of the country.
Emphasizes on education and majority of

the nation are literate.
5.
Market income mainly wages has been

the driving factor in shaping urban income
inequality since the economic reforms in
India while the widening rural-urban income
gap is due to low salaries for employees.
TOTAL
3.1.2.4 TECHNOLOGY
No
Description
.
1.
Opportunities
Threats
The technology part comes easy to this

sector as the manufacturing setup
required for these kinds of products is
not as high tech as other industries plus

it can be outsourced through a third
party contract which is very common in
40
2.
this industry
India is highly advance in technology as
in par with Unites States and Japan.
Opportunities
Threats
They even have the capabilities to build

their own nuclear power plant.
TOTAL
3.1.2.5 LEGAL
No
.
1.
Description
Government replaced various indirect

taxes imposed on FMCG with a more
direct approach i.e. VAT. This will help
in lowering prices as all the taxes

imposed increase the cost of production
and producer passes it on to customer.
They
cannot
underpay
agricultural
sector for profit maximization, also they

cannot fool customers in any way by
claiming something for their product
2.
which it is incapable of doing in actual.

India is working on the drafting the ecommerce
legislation
on
different
aspects like intellectual property rights
protection and tax.

3.
The law also forbids FMCG industry to

artificially increase prices by making a
product scarce. The law for marketing

products states that one company cannot
mock product of another company by
explicitly taking its name or showing its
picture.
TOTAL
41
3.1.2.6 ENVIRONMENT
No.
Description
1. India is the most attractive and impressive
Opportunities
Threats
market for the companies, which can

understand the macro-environment and it
can work well there.

2.
India has strong environmental policies in

place.
The
country
environmental
increasing
has
protection
corporate
raised
its
standards
by
accountability
regarding the environment. Many standards,

such as environmental accounting and
reporting, have been introduced to tighten
3.
emission levels in the country.

Indian people is currently
have
the
awareness about the environment protection.

Emergence
of
various
technological
development makes everything easy and
speedy. Some of the efforts include setting

up of green houses, use of herbal waste,
supporting rag pickers, establishing green
buildings and procedures that are green,
minimize consumption of clean and fresh
4.
water.
These FMCG manufacture products from
raw materials that are grown in the fields
and are result of agricultural activities in the
region,
5.
therefore
they
are
careful
in
protecting and preserving the environment.

The water resources of India are affected by
both severe water quantity shortages and
severe water quality pollution. An increasing
population and rapid economic growth as
well as lax environmental oversight have
42
increased water demand and pollution.

Government also has made some antidumping
laws
which
prohibits
manufacturing facilities to contaminate any

clean source of water flow.
TOTAL
43
3.1.3 COMPETITIVE ANALYSIS

Fast moving consumer goods (FMCG) industry in India are dominated by the
big names such as ITC Limited, Unilever, Procter & Gambler, and many more. This
chapter will analyze 3 main competitors of Adabi in the FMCG industry: ITC
Limited, Unilever and Procter & Gamble (P&G) on 4 key aspects which are market
capitalization, net sales, profit and countries present as to reference of the group data.
Adabi
ITC Limited
Unilever
P&G
Market Capitalization
Net Sales
Profit
Countries
($) in billions
40
138.11
216.30
($) in billions
100M
8
68.5
83
($) in billions
50M
1.5
7.5
11.6
Present
9
1
180
180
ITC is one of India's foremost multi-business enterprise with a market

capitalisation of US $ 40 billion and a turnover of US $ 8 billion. ITC is rated among
the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable
Companies by Forbes magazine and as 'India's Most Admired Company' in a survey
conducted by Fortune India magazine and Hay Group. ITC also features as one of
world's largest sustainable value creator in the consumer goods industry in a study by
the Boston Consulting Group. ITC has been listed among India's Most Valuable
Companies by Business Today magazine. The Company is among India's '10 Most
Valuable (Company) Brands', according to a study conducted by Brand Finance and
published by the Economic Times. ITC also ranks among Asia's 50 best performing
companies compiled by Business Week. ITCs aspiration to create enduring value for
the nation and its stakeholders is manifest in its robust portfolio of traditional and
greenfield businesses encompassing Fast Moving Consumer Goods (FMCG), Hotels,
Paperboards & Specialty Papers, Packaging, Agri-Business, and Information
Technology. This diversified presence in the businesses of tomorrow is powered by a
strategy to pursue multiple drivers of growth based on its proven competencies,
enterprise strengths and strong synergies between its businesses.
Procter & Gambler established in 1873 by William Procter and James Gamble
have continue to exist in the FMCG market for 143 years and pass through many
turbulences such as the industrial revolution, world wars, economy crisis and digital
44
colonization. Headquarters in Ohio, USA, P&G has 10 products under its umbrella
but has position it into 5 main product category addressed according to the total
turnover produced: 1) Baby, Feminine and Family Care 2) Beauty, Hair and Personal
care 3) Fabric Care and Home Care 4) Health Care and 5) Grooming. P&G has the
strongest position in North America (40%), followed accordingly by Europe (26%),
Latin America (10%) and a fair share of 8% in Asia Pacific, India, Middle East and
Africa and Greater China. P&G is committed to be more focused in its business
portfolio by investing capabilities in understanding customer needs to build a better
brand. P&G has a strong distribution channel using as they have presence in over 180
countries with over 65 brands.
Unilever established since 1930, based in Netherlands have been a player in
the FMCG industry for almost 86 years with 13 brands under its wing focusing on
personal care, home care, foods and refreshment. Unilever has always been in the
league of the FMCG industry for decades after P&G and Nestl. Their mainstream
income comes from Personal Care which contributes 38% of revenue, followed by
Foods-24% revenue, Home care & Refreshments both at 19% each contributing to
Unilever financial statement. Unilever has a competitive advantage on geographical
area as they have stronger position in Asia/AMET (Africa, Middle East, Turkey,
Russia, Ukraine & Belarus) with almost 42% turn over resulting from this region
compared to P&G and Nestl. Followed by The Americas by 33% and Europe by
25%.
3.1.3.1 COMPETITOR ANALYSIS COMPONENTS

Item
Headquarters
ITC Limited
Kolkata, India
P&G
Unilever
Cincinnati, Ohio, United Rotterdam,
Ownership
Multinational
States
Multinational
Netherlands
Multinational
Market
corporation
40
corporation
216.30
corporation
138.11
($ billions)
Countries
192
190
covered
Strength
Capitalization
Diversified product
Has over 300 brands
Have almost 400
45
such as FMCG,
under its product
brands around the
Hotel, paper and
range. Main focus
world. Strong
packaging and Agri
on Baby, feminine
position on
Business
and family care,
Personal care,
beauty, hair and
foods, home care
personal care, fabric
and Refreshment.
care and home care,

health care and
Strong brand
grooming
Strong presence in
Competitive
recognition and
Asia and AMET
pricing level to be
product portfolio
(Africa, Middle East
strong in
Turkey, Russia,
competition
Ukraine & Belarus

with 42% sales from
Excellent R&D
facilities
Weakness
Strong organization
Strategy
Economies of
R&D ($2bil) for
scale with over
product
270 manufacturing
diversification
Active engagement
factory
Second strongest
culture with almost
on marketing, sales
working force
32,000 employee
promotion and
among all brands
Large dependent on
advertisement.
Poor online market
172000 people
Mercury issue in
Tobacco product
this zone
High investment on
Hotel industry has
presence
India has led to
Many imitation
bad publicity
Highly
not been able to
products as with
competition
create a huge
similar brand names
market with bigger
market share
players and local
Entering into less
players.
To meet
To take leadership
competitive or
seriously as it is
consumers
unexplored
their opportunity and
demands and
46
markets.
responsibility to
develop
improve consumer
sustainable
and employees lives
business model.
includes
Cost control
strategy
Plan
Diversification of
communities.
Continue to
Continue to have a
investing in the
better health and
communities in
wellness on the
which they work and
human rights for
serve (brand &
future generation
corporate programs,
to retain better
social policies &
living
practices, and etc.).

Committed to
environment.
To promote
product and market
driving innovative
sustainable action,
differentiation
brands with their
create new
R&D people.
opportunities and
to promote growth
Regular
Focus on areas
on business
Transformational
introduction of new
where they can
change through
product
make the biggest
collaboration with
positive impact
partners ability
(resources,
to promote change
partnering and
on global scale.
pioneering new
ideas).
3.1.3.2 EXTERNAL FACTOR EVALUATION (EFE) MATRIX FOR FMCG

INDUSTRY
Key External Factors
Weight
Rating
Weighted
Score
Opportunities
1. Growing population creates increase in demand
0.15
0.60
47
2. Government encouragement as form of FDI

3. Local players find it hard to keep up due to EOS
4. Increase in M&A allows more variety of products.
5. Trend for more different FMCG goods
Threats
1. Highly competitive market
2. Economic Turbulence across the globe
3. Threat from SME and local industries
4. Political unstable in certain regions (Syria, Israel)
5. Food contamination
TOTAL
0.05
0.10
0.05
0.15
3
4
3
4
0.15
0.40
0.15
0.60
0.15
0.10
0.15
0.05
0.05
1.00
2
2
1
1
2
0.30
0.20
0.15
0.05
0.10
2.64
Based on the industry analysis, enlisted are the opportunities and threats we believe
are viable in the FMCG industry. Thus, based on the intuition we assign weightage to
each opportunities and threat and rate each of it based on the scale of 1 to 4, 4 being
the strongest and very important and 1 being the poorest or as a threat. Each scores
are multiplies to the relative importance factor to result the weighted factor. In general
the organization has a strong external environment position as the all the options have
a rating of more than 2.5. A rating of below 2.5, indicates weak external environment
3.2 KEY SUCCESS FACTORS
CUSTOMERS
Wide accessibility
COMPETITION
Cost leadership
CORPORATION
Low cost operation cost

leadership & labor cost
Price leadership
Attractive prices
Superior quality
Economic of scale &

emerging market
Environment friendly product Packaging attractive
Innovation R&D
labelling & durable
48
Healthy products
Brand equity and awareness
Technology to increase
efficiency
Longevity of products
Healthier options
Large asset base for growth

and investment revenue
Distribution channel and
Copyright patterns
networks
Electronic commerce
Corporate social
responsibility (CSR)
Use of technology
Production output levels

utilization of plant capacity
Advertisement
Relations supplier/buyer
3.3 COMPETITORS KEY SUCCESS FACTORS ANALYSIS
Key
Companies
success
within
factors
industry
Core
Products
Adabi
Facts
Adabi core product is spices such as Chicken and

Meat curry powder, Chicken and Meat Kurma
powder, Prawn or Crab curry powder, fish curry
powder, Meat Rendang powder, Chicken and Meat
Kerutuk powder, Briyani powder and Tumeric
49
powder.
There are over 100 different types of Adabi
Products that are being marketed under 7 main
categories: Curry, Soup, Paste, Flour, Sauce,
Canned Food and Beverages.
Babas
Babas main product are Curry Mixes and Spice

Powders. Their range of over 30 products from
Masala Mixes, Pure Spice Powders, Pure Flours,
and Staple Food Mixes, to Snack and Sweet
Mixes.
Maggi
Maggi main product is instant noodle, seasoning

such as chicken stock cube, Sauces such as Chilli
sauce and Tomato ketchup and also Mixes such as
sweet & sour dishes and Nasi Beriyani mixes.
3 Price
Adabi
Babas
Affordable for all income groups
Best products made from finest quality

ingredients, at the best possible prices
Maggi
Affordable for all income groups
Affordable for all income groups with lower

price point strategy.
Multi pack at cheaper price per noodles.
Quick to prepared, easy to be digested and sold
50
in a low price
Export
Adabi
Healthier product at higher price
Market product to Singapore, Japan, Mongolia,
country
UK, Australia, Brunei, Indonesia and Jordan. The

products exported in these overseas markets vary
per country.
Babas
Babas can be found in North America, Canada,

Europe, South Africa, Australia, most of Southeast
Asia
Maggi
Distribute to Indonesia, Middle east, France,

Germany, Netherlands, United Kingdom and
United States.
3.4 COMPETITIVE PROFILE MATRIX MATRIX

Adabi
Critical Success
Weight
Ratin
Quality Products
0.15
Resources
Fonterra
Unilever
Score
Rating
Score
Ratin
0.6
0.45
0.13
0.13
Attractive Prices
0.13
0.52
Brand Equity
0.15
Distribution
0.15
Factor
P&G
Score
Rating
Score
0.45
0.45
0.39
0.52
0.52
0.39
0.52
0.52
0.32
0.45
0.6
0.6
0.3
0.6
0.45
0.6
Channels
51
Marketing and
0.14
0.14
0.28
0.42
0.56
Innovation &
0.15
0.15
0.3
0.45
0.6
R&D
TOTAL
1.00
Advertising
2.16
2.86
3.41
3.85
Based on the Competitive Profile Matrix (CPM), P&G is the most competitive rival
for FMCGs in India as it dominates in the first position. The CPM is consistent with
the output of Strategy Group Map above. In order to become more competitive and
sustain in India, Adabi needs to strengthen its external factors. On top of that, Adabi
should also exploit more on their strong key success factors such as Product Quality,
Brand Equity & Distribution Channels in order to be more competitive among its
competitors.
3.5 STRATEGIC GROUP MAP

In order to generate the Strategic Group Map, we compared 3 different
competitors in the FMCG industry who are ITC Limited, Unilever and P&G using
three different criteria which is the net sales for year 2015, profits for year 2015 and
market capitalization of year 2015 in billion dollar ($). Using the ranking system of
1(low/poor) to 5(highest/strong) we rank based on the three criteria and draw the
strategic group map where the x-axis is Net Sales ($ in billion), y-axis Profit ($ in
billion) and the size of the pie is based on the market capitalization in $ in billions.
Net Sales
Profit
($) in billions
($) in billions
Adabi
100M
1
50M
1
ITC Limited
8
2 ($) in 1.5
2
Profit
billions
Strategic
Group
Map
Unilever
68.5
3
7.5
4
P&G
83
4
11.6
5
Market Capitalization
($) in billions
1
40
2
138.11
3
216.3
5
52
53
3.6 DEALING WITH COMPETITORS ABROAD
Transfer Core Competencies
Collaborate
Adabi has to build their position as one of
Strategic partnership collaboration with local
the largest manufacturer of quality and
competitors to expand fixed pie for greater
Halal food product in India by transferring
value together.
core capabilities
Adapt to the local culture
Marketing
Customizing Adabi product to meet local
Price, product, placement and promotion will
customers' tastes (marketing in local
be able to put Adabi in the eyes of India
language, the taste of the spices not too
(Appointment of famous India celebrities as
spicy)
Adabi ambassador)
International Partners
Acquisition of local players
Partners, i.e. local food manufacturers, to
Replicating them in each of those new
help facilitate sales in India
organizations.
54
CHAPTER IV: INTERNAL ENVIRONMENT

4.0 INTERNAL ANALYSIS
4.1 COMPANY ANALYSIS

Adabis is a household name in every home in Malaysia. The Malay palace
denotes the fact that Adabis product has a very strong heritage similar with the
quality food that was served to the royalties in the past. Adabi brand has consistently
delivered Malaysian consumer food products that are 100% Halal and of the highest
quality. The Adabi brand has also managed to penetrate the minds of consumers
outside of Malaysia, especially those in the Indonesian cosmopolitans area of Medan
and Jakarta. Some of Adabis well-known product have been marketed and sold in
Indonesia since 1993, and the Adabis brand has also been promoted consistently in
the mass media over there. Their mission is to provide consumers with products of the
highest quality, each Adabi product has undergo very strict process and standard of
requirements. All Adabi products are guaranteed 100% Halal, hygienic wholesome
and healthy. Adabi products were the first to receive Halal certification from the
Islamic Affairds Division of the Prime Ministers Department. Adabi was once of the
first to be awarded the Malaysia Sirim standard of MS890:1984 and was accorded
Superbrand status by the Malaysia Superbrands Council.
Adabis Assessment Table
No
.
1.
Item
Cultural
Values
Description
of the highest quality is assured

All Adabi products are guaranteed
100% halal, hygienic, wholesome
Vision
Weaknesses
ACISBs continuous commitment in

providing consumers with products
Beliefs
Strengths
and healthy
To become the 2nd Largest Packed
Food Manufacturer in Malaysia by
55
2020.
To produce delicious, healthy and
high quality food products that are
100% compliant to international
HALAL standards.
To protect
the welfare of its
employees that involves ensuring
and enhancing their economic status

2.
every year
Management
Planning
To become the largest distributor of
consumer products in Malaysia by
2020
To become a multinational company
in the food and consumer products

Organizing
industry
Management team is made up of a
wide variety of professional with a
vast array of experience in even
Motivating
more businesses.
Give motivation to its employees to
work
better
and
towards
the
assigned tasks, by providing its all
workers with financial and nonfinancial rewards. Furthermore, to

save and keep workers to work with
Staffing
them
Staff training - to provide such
intense training programme is to
ensure the quality of the services
Controlling
provided by manufacturing
Try to maintain devotion to the high
production
standard
to
produce
consumers with products of the

highest quality is assured through
56
strictest standards of requirements

set on the processes and the quality
3.
of the material used

Marketing
Products & Product was established and proven
Services
quality since 30 years ago

Adabi had indirect competition from
the others FMCG products such as

Pricing
BABAS and MAGGI

Cheap price compared to other
Promotion
products available in the market

Continuous mass media promotion
of the Adabi brand. Adabis brand

awareness stands at par with other
famous international food product
Place/
brands sold in Malaysia

Available in almost every mini
Distribution
market, supermarket be it in urban
Packaging
areas and sub-urban areas

Have various nice packaging in
canned and plastic form.

4.
Operations
Process
Adabi
utilizes
automated
manufacturing
Facilities
standardized
processes
to
across
eliminate
inconsistencies and reduce waste.

Adabi operating at current location
in Rawang Integrated Industrial
Park. Its 4-acre land is home to the
companys
production
sites,
warehouses, corporate office as well

Workforce
as administrative facilities
Cost of operation can be lowered
due to the small group of staffs and
higher revenue due to effective
Inventory
pricing strategy.
Fast moving inventory levels as
57
they are more focused on products
that sell in the market

5.
R&D
Facilities
It has a strong and creative pool of

research personnel, all of whom are
dedicated
Technology
to
creating
new,
innovative food products.

With the existing products of more
than 100 types
under 10 main
categories Powdered Spice Mix,

Processed Paste, Flour Mix, Sauce,
Canned Food and Beverage

6.
MIS
Adabi was not really exposed to
MIS They dont have a dedicated
team in IT division. Even very
limited information is available in

their website
Adabi implemented traditional ways
of collecting feedback via telephone
calls, instant message or email

No centralized POS system and have
no integration between their retailers
and partners.
7.
Financial
Adabi is a privately owned company
and it is not listed in any stock
exchange. By virtue of this, they are
not obligated to shareholders and do
not report any financial earning
through annual report. Since their
revenue, net income and expenses is

confidential, there is no way to
ascertain the financial health of
Adabi.
58
Summarize them into the Internal Factor Evaluation (IFE) Matrix.

Table of Strengths & Weaknesses
Internal Analysis
Strengths
Weaknesses
Cultural
Management
Marketing
Operations
R&D
MIS
Financial
Total
19
7
After eliminating possible overlapping of Strengths & Weaknesses, below are the summary
of number of strengths & weaknesses assessed for Adabi Consumer Industries Sdn Bhd
(based on priority):
Table Strengths & Weaknesses for Adabi
Consumer Industries Sdn Bhd
S = 10
W= 4
59
4.2 IFE MATRIX

Key Internal Factors
Weight
Rating
Weighted
Score
Strengths
1. Wide product range
2. Strong market domination and strong presence
3. Reputable brand equity and image
4. Innovative and high R&D outcome
5. Strong market capitalization and resources
Weaknesses
1. Low capital to expand further globally
2. Information Technology to manage inventory and
0.20
0.10
0.15
0.15
0.15
4
3
4
2
2
0.8
0.3
0.6
0.3
0.3
0.15
0.10
3
1
0.45
0.10
operation end to end

TOTAL
1.00
2.85
The IFE Matrix illustrates that Adabis achieve total IFE score of 2.85. Since the total
weighted score is >2.5, Adabis is a strong organization internally. The IFE matrix
also illustrates information and ideas for strategy formulation of Adabis for its export
plan to India. Therefore, Adabis may improve and maximize their competitive
strategy by maximizing the potential of its internal strengths. This will effectively
allow Adabis to penetrate the India market.
4.3 VALUE CHAIN ANALYSIS

The idea of this model is to demonstrate how Adabi Consumer Industries Sdn
Bhd should have the primary activities and the support activities consistent with
achieving the maximum business value. Value Chain analysis was applied to highlight
how this two activities between primary and support activities may affect the Adabi
Consumer Industries Sdn Bhd.
60
Source: www.google.com
Primary Activities
Inbound Logistics
For production and development activities, Adabi need inputs for goods which
are received from suppliers like whole sale, minimarket, restaurant and
customer itself. It is also refers to all the activities such as how to receive
products from supplier, making decision for transporter scheduling, where to
store the product as inventory, how to manage the stock and make the input
ready to use for productions of end product
Operations
Adabi operations activity are more on development activities, production
process, product testing and packaging and all other activities that change the
inputs into finished products.
Outbound Logistics
Process of distributing their finished products or services to distributors or
customers. In Malaysia, the distributions process is preferably servicing in
land transportation (East Malaysia) to ensure the products are in a good shape.
Stocks will be send throughout each Adabi Malaysia branch and also to the
huge distributors (Hypermarket) such as Tesco, Giant and etc.
Marketing and Sales

Adabi promoted their products
through
extensive
promotion
via
advertisement. New products introductions are effectively supported by

dynamic sales and marketing management teams and continuous mass media
promotion of the Adabi brand. Today, Adabis brand awareness stands at par
with other famous international food product brands sold in Malaysia.
Service
61
Adabi should offer the services after the product/ the services after been sold
i.e:feedback. These activities enhance the product value in the form of
customer satisfaction and longevity relationship with customer.
4.4 SUPPORT ACTIVITIES
Procurement
Adabi get their resources from farmers locally in Malaysia. A differentiation
finished products or services theyre making will create a sustainable and
profitable development of Adabi. Adabi will ensure that they source a
specified quality of raw material, in the needed timing with possibly at lowest
cost incurred.
Technology Development
Their products are fully emphasized from the R&D. Adabi has bring the
facility on par with International Standards. Adabi has develop its own
Research and Development centre where this are the key of competitive
advantage for them. Adabi has setting the direction by providing consumers
with products of the highest quality is assured through strictest standards of
requirements set on the processes and the quality of the material used.
Therefore, all Adabi products are guaranteed 100% halal, hygienic,
wholesome and healthy.
Human Resources
The key roles of Adabi Human Resouces are to support attainment of the
overall strategic business plan and the objectives. HR in Adabi has adopted the
strategies to improve success within their organization by implementing
concept of gratitude, clean income (Halal).
Firm Infrastructure
This is include Adabis management planning, legal framework, financial unit
and accounting, public affairs, quality management and also their general
management. These are required to perform the value activities efficiently to
drive Adabi to meet their strategic plan and meeting their organizations
objectives.
62
63
CHAPTER V: STRATEGY FORMULATION

5.1 INTERNAL-EXTERNAL (IE) MATRIX
Company
ADABI
EFE
2.64
IFE
2.85
The above diagram shows the IE matrix of Adabi where it indicates that Adabi
position falls in Quadrant V. Thus, the appropriate broad strategy for the company in
this quadrant is to Maintain or Hold where specific strategies such as Market
Penetration, Product Development may be used.
Before strategy formulation is done, it is important to map all the strengths and
weaknesses identified from internal analysis to the opportunities and threats obtained
from external analysis. The Final SWOT matrix of Adabi is as follows:
64
5.2 SWOT ANALYSIS

The term "SWOT" is an acronym for the words "strengths", "weaknesses",
"threats" and opportunities. SWOT Analysis is the most renowned tool for audit and
analysis of the overall strategic position of the business and its environment. It is a
study undertaken by an organization to identify its internal strengths and weaknesses,
as well as its external opportunities and threats.
No
S1
S2
Strength
Strength of the product - Adabi have strength of the product
in terms of taste is distinctive and nutritious.
Efficient management team
Excellent advertising and visibility - The brand has adopted
S3
SWOT
the distinguished promotion strategies and the branding of

the products and it creates the strong and durable customer
connection
Good product distribution and availability - The company
S4
S5
S6
has well established distribution channel, which can help

the company to provide the products in the local markets.
Adabi have business plan skills in aspects of business
development
Product diversity - 7 main categories: Curry, Soup, Paste,
Flour, Sauce, Canned Food and Beverages.
No
Opportunity
O1
Increase in production capacity in Market Penetration

other countries with high demand.
O2
SO Strategies
(S1,S2,O1,O2)
Adabi can take over food companies To increase the production capacity in
are able to provide a synergistic other countries from the strength of the
O3
effect on development activities

product in terms of taste and its
Further
expansion
through
nutrients.
acquisitions
65
O4
To extend the categories of its food

products
in
market
with
the Cost Leadership
introduction of corn flakes, pickles (S2,S4,O3,O6)

O5
O6
and chips
Establish strong sales through good
Extend the shelf life of the products,
product distribution and availability
as most of the people like to use this
with further expansion through
food product in their meal, as it can
acquisitions.
be prepared in short time
The company is targeting the big
Differentiation
restaurant
chains
with
the
(S3,S6,O3,O4)
customized or special offerings.
Develop other differentiated products
by extending the categories of its food
product
in
market
with
excellent
advertising and visibility.

According to the SO original sentences in SWOT analysis which were chosen based
on IE matrix, the new strategies are as follows:
Corporate Level Strategies:
Market
To increase the production capacity in other countries from the
Penetration
strength of the product in terms of taste and its nutrients.

(S1,S2,O1,O2)
66
Business Level Strategy:

Cost Leadership
Establish strong sales through good product distribution and

availability with further expansion through acquisitions.
(S2,S4,O3,O6)
Differentiation
Develop other differentiated products by extending the categories of

its food product in market with excellent advertising and visibility.
(S3,S6,O3,O4)
67
CHAPTER VI: ORGANIZATION PLANNING

No
1
Plan
Customers
CLS
Focusing on families
BLS
Low-to middle income male and
female consumers
Products or
Introduce new product
Product diversification
Keep on conducting market
To identify strategic location for
research to understand the
market research.
services
3
Markets
changes in market
4
Technologies
Utilize automated production
Explore technology for product
technology to enhance production
diversify.
rate
5
6
7
8
Concern for
Create brand awareness through
Maintain the cost leadership
growth, survival,
interactive social media to catch
pricing to increase the growth of
and profitability
more customers attentions.
sales.
Philosophy
Abide to all food regulations
Abide to all food regulations
especially Halal Standard
especially Halal Standard
Major competitive
Effective utilize the brand to
advantage
penetrate the whole market.
Concern for public
Fulfill Muslim community needs
Fulfill Muslim community needs
image
by abiding to Halal Standard on
by abiding to Halal Standard on
all product range
all product range
Concern for
Maintain and enhance the concern
employees
for employees to generate the
sustainability of creative and

innovative culture (R&D).
68
REFERENCES
1. http://www.adabi.com/export-market/
2. http://www.itcportal.com/about-itc/shareholder-value/key-financials.aspx
3. http://www.itcportal.com/about-itc/shareholder-value/ITC-CorporatePresentation.pdf
4. http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEX
T/EXTSARREGTOPINTECOTRA/0
5. http://freepestelanalysis.com/pestpestel-analysis-of-fmcg-industry-in-india/
6. https://www.fonterra.com/global/en/Our%20Products/Our%20Brands
7. https://view.publitas.com/fonterra/2016-interim-report-pr/page/34-35
8. https://www.unilever.com.cn/about/who-we-are/our-history/
9. http://India.pgcareers.com/about-us/sustainability/
10. http://www.adabi.com/export-market/
11. 6.http://www.lse.ac.uk/intranet/CareersAndVacancies/careersService/International
Careers/CountryProfiles/India/Employers/FMCG.aspx
69

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INDIVIDUAL ASSIGNMENT

Export of Adabis Halal Manufactured Food to India as the

MBSA 2223 Individual Assignment | UTM

1.6 Adabis List of Products.......................................................................................9

Home Country: Malaysia Food Manufacturing..............................................11

2.1.1 GDP Contribution...........................................................................................12

Host Country: India Food manufacturing.......................................................17

2.2.1 GDP Contribution...........................................................................................19

Key Success Factors.......................................................................................47

3.3 Competitors Key Success Factors Analysis.......................................................48

MBSA 2223 Individual Assignment | UTM

3.5 Strategic Group Map..........................................................................................51

MBSA 2223 Individual Assignment | UTM

CHAPTER I: OVERVIEW & COMPANY BACKGROUND

MBSA 2223 Individual Assignment | UTM

MBSA 2223 Individual Assignment | UTM

1.2 Company Background

MBSA 2223 Individual Assignment | UTM

1.3 The Core Services Of Adabi

MBSA 2223 Individual Assignment | UTM

1.4 Is Adabi Consumer Industry Market Leader ?

MBSA 2223 Individual Assignment | UTM

Adabi Consumer Industries Sdn Bhd (ACISB) is categorized as fast moving

1.6 Adabis List of Products

MBSA 2223 Individual Assignment | UTM

Figure 1 List of Products

MBSA 2223 Individual Assignment | UTM

Yee Lee Oils & Foodstuffs Pte. Ltd.

Enterprise Sdn. Bhd.

3. PT Musti Alam Prime Rasa

MBSA 2223 Individual Assignment | UTM

CHAPTER II: OVERVIEW OF HOME COUNTRY AND HOST COUNTRY

Fish processing and canning

Noodles, bread, and other bakery products

Canned fruits and vegetables

MBSA 2223 Individual Assignment | UTM

Table: Import and export of processed foods in Malaysia ($US Billions)

2.1.1 GDP CONTRIBUTION

MBSA 2223 Individual Assignment | UTM

MBSA 2223 Individual Assignment | UTM

Forecasted 1-year Spot Rupee/MYR

Spot Rupee/MYR current x (Inflation

2.1.2 FOREIGN DIRECT INVESTMENT (FDI) POLICY

MBSA 2223 Individual Assignment | UTM

development, local sourcing, strengthening of R&D activities and human capital

to promote Malaysian expertise in specific services areas

to cover related cost in rendering services for projects abroad

establishment of physical commercial presence/office overseas

supplying Made in Malaysia products for Malaysian projects

3. Market Development Grant (MDG)

MBSA 2223 Individual Assignment | UTM

5. Tax incentives are given for Malaysian companies investing abroad.

Adabi existence in India can develop bilateral relationship between

countries regarding important cultural value. For example, on the cultural

MBSA 2223 Individual Assignment | UTM

2.2 HOST COUNTRY: INDIA FOOD MANUFACTURING

FMCG in India witness an annual increase of 14.7% (CAGR) within year

According to a recent study in India, 62% FMCG players in India are

MBSA 2223 Individual Assignment | UTM

To be more competitive in the 21 st century, FMCG brands should focus more

MBSA 2223 Individual Assignment | UTM

2.2.1 GDP CONTRIBUTION

Indias economy mainly concise of these three sectors agriculture, industry