You are on page 1of 51

Case Study: KIRIBATI

1.
2.
3.
4.

NAME
ID
MOHD RIZMAN BIN MD GHAZALI 819435
MARZIANI BT ABD RASHID
819430
ABDUL BAASIT ABDUL RAHIM
819378
BIBI SHAFIQAH AKBAR SHAH
819380

TASK 1

Co-Founder

Organizational Chart &


Goal
Abdul Baasit Abdul Rahim
Head
Head of
of Business
Business
Planning
&
Development
Planning & Development

Bibi Shafiqah Akbar Shah


Business Development
Manager

Marziani bt Abd Rashid


Business Planning &
Performance Manager

Mohd Rizman bin Md


Ghazali
Sales Support Manager

Goal: To expand Atmospheric Water


Generator products into Southeast and
Micronesia countries (Kiribati)

Product proposal

TASK 2

DEMOGRAPHY OF KIRIBATI:

3 Island groups : Gilbert, Phoenix, Line

- 33 atolls with total land area of 811 sq km


- most islands less than two meters above sea level,
making it extremely vulnerable to climate change and
natural hazard

Population: 106,925 people


Ethnic Group : I-Kiribati (Micronesian)
Languages: Speak Gilbertese but English is the official
language, Religion: Mostly Christian

POLITICAL, ECONOMIC AND LEGAL SYSTEM


A) Political (8/12)

Democratic, President of Kiribati : Taneti mamau


Official corruption and abuse are serious problems.
International donors have demanded improvements in
governance and transparency.

ECONOMIC FREEDOM SNAPSHOT


* 2016 Economic Freedom Score: 46.2
*Economic Freedom Status: Repressed
* Global Ranking: 165th
* Regional Ranking: 38th in the AsiaPacific Region
* Notable Successes: Monetary Freedom
* Concerns: Rule of Law, Open Markets, and Regulatory
Efficiency
* Overall Score Change Since 2012: 0.7
The overall score is based on business freedom, trade
freedom, fiscal freedom, government spending, monetary
spending, investment freedom, and financial freed

C) LEGAL

Although Kiribati does not have its own patent


system, a UK patent can be used as the basis for
patent protection in Kiribati
RULES OF LAW (15/16)
The judicial system is modeled on English
common law and provides adequate due process
rights. There is a high court, a court of appeal,
and magistrates courts; final appeals go to the
Privy Council in London.

* HOFSTEDES DIMENSIONS
1) POWER DISTANCE
A high score of 78 indicates that Kiribati has a hierarchical
society. This means that people accept a hierarchical order
in which everybody has a place and which needs no further
justification.
2) INDIVIDUALISM
An incredibly low score of 14 means that Kiribati is
considered a collectivistic society. In collectivist societies:
offence leads to shame and the loss of face,
employer/employee relationships are perceived in moral
terms (like a family link), hiring and promotion decisions
take account of the employees in-group and management is
the management of groups.

3) Masculinity
A high score (Masculine) on this dimension indicates that
the society will be driven by competition, achievement
and success, with success being defined by the winner /
best in field a value system that starts in school and
continues throughout organisational life.
4) Uncertainty Avoidance
With a relatively low score of 48, Kiribati has a fairly
pragmatic culture in terms of Uncertainty Avoidance. This
means that both generalists and experts are needed. There
is a focus on planning, and these plans can be altered at
short notice and improvisations made.

5) Long Term Orientation


There is currently no score available for Kiribati on this
dimension.

6) Indulgence
There is currently no score available for Kiribati on this
dimension.

TASK 3

Porters Diamond
Michael Porter gave the diamond theory of national advantage, which
states that the features of home country are crucial for the success of an
organization in the international markets.

Porters Diamond

Rule
Rule &
& Regulation
Regulation
Policy
Policy

Labor
Labor
Climate
Climate
Infrastructure
Infrastructure

Soft
Soft drink
drink plant
plant
Boat
Boat building
building shop
shop
Local
Local handicraft
handicraft

Water
Water
Education
Education

TASK 4

WHERE ABOUT

CORE COMPETENCIES

Efficient system

Have big team for support


99.9% remove unwanted
source /tanks antibacterial

Customer Intimacy
Operational excellence

customers as much important as


our team and family
tailored problem solving

Least Cost

provide complete services for a


project cycle
-always insert risk assessment

a solar power
Dont need to do piping,
electrical, high life span

Our responsibility

Commit to protect
Best green technology
selling the outcomes not a
project, healthier

GIVING THE BEST


Globally
Recognized
Technological
certified by
recognized
certification
body

Industrial
Excellence

CORE COMPETENCIES

#Restriction Of
Hazardous
Substances
- electrical and electronic
equipments

#Better
Business Bureau
- commitment to
complaints

VALUE CREATION TO SHARE CONCERN


Free training on
product knowledge
and equipment
maintenance
Localizing
the global
product
Improve
education,
Save
resources

OUR STRATEGY I

Min
profit
Margin
Focus
market
positioning

SELLING

OUR STRATEGY I
Phase#1
- Build in
Malaysia &
assemble in
Kiribati

PENETRATE & SUSTAIN


Phase#2
- Build in Malaysia
& Kiribati and
assemble in
Kiribati

Less Is More!!
Joint venture /
develop local
companies
will be a cost centre @ part
of the value chain - the
lesser cost they produce
each year / unit the more
they gain

Both companies will


gain benefit

Promote the participant to


be more cost sensitive and a
push to always do better
over the time

TASK 5

Cost Benefit Analysis


Benefit to enter Kiribati Market
Demand on product
no export duty is charged on exportable
items
Community well being
no restrictions on items for export
Labour availability with lower wages
and job creation opportunity.

Cost Benefit Analysis


Cost to enter Kiribati Market
Remoteness of the islands
Limited transportation services.
Limited land areas and poor
infrastructure
Flight availability (via Fiji) and cargo
space (share with passenger)
Governments monetary and fiscal
policy options are limited.

Cost Benefit Analysis


Should enter the market?
YES
Due to the demand of Kiribati people.
Lot of enhancement and advancement
program plan to Kiribati by Government.

Mode Of Entry
Best Mode : EXPORT
Kiribati government receive grant from other
country too.
Have natural resources that can be exchange
with Malaysia.
healthy foreign reserves, a history of sound
fiscal management, and a strong culture that
promotes social stability and family welfare.

TASK 6

Location Strategy &


Production
Factors
Country Factors
(Differences in political
economy, culture & factor
costs, trade barriers,
location externalities,
exchange rates)

Technological Factors
(Fixed costs, Minimum
efficient scale, Flexibile
manufacturing
technology)

Product Factors
(Value-to-weight ratio,
serves universal needs)

Concentrated
Production

Decentralized
Production

Justification
Substantial (Shortage skilled
workers, weak infrastructure,
remoteness from
international market)
Few
Important in industry
Slightly Unstable
High
High
Available

Medium-high (RM10k25k/150kg-380k)
Yes (Market to Southeast &
Micronesia)

Value Creation Activity


Before
Low-cost strategy
Differentiation strategy

Inhouse

Outsource

Value Creation Activity

NOW

TASK 7

MARKET SEGMENTATION
The market segmentation strategies that our company
choose are:
1)Geographic Segmentation Choose To Export To Kiribati
2)Demographic Segmentation- Babies, children are dying due to the need of safe, clean
water.
-most school dont have toilet, have to go to beach
-Kiribati has one of the highest rates of under-five
mortality in the Pacific region, at 49 deaths per 1000 live
births. This is mainly due to diarrhoeal disease, largely
caused by inadequate access to clean water

CULTURAL DIFFERENCES
* Island sprawl and remote location With its 33 islands spread over
such a vast distance in the middle of the Pacific Ocean, the
transportation of goods can be a challenge because Kiribati only
have 2 International airports and they are located on Tarawa and
Kiritimati Islands.

* Impact of climate change Kiribati is vulnerable to climate change,


given the impact of rising sea levels on this low-lying nation.

* Water is a highly valued commodity Water levels can fluctuate


and much of the processed water must be sourced from
purification.

* Being remote and small in size means a high cost of


freight Fuel and power are relatively expensive, so use of
green energy and low maintenance infrastructure is
advisable.

* Island time Most businesses in Kiribati operate on island


time 8am to 12:30pm and 1:30pm to 4:15pm, Monday to
Friday.

* Dress appropriately In Kiribati, a shirt and smart trousers


or skirt will suit for most business dealings. You only need
to wear a tie or similar on formal occasions.
There is no cultural differences in terms of language and religion

DISTRIBUTION, COMMUNICATION &


PRICING STRATEGY
-Choose CHANNEL QUALITY DISTRIBUTION
-Channel quality refers to the expertise,
competencies, and skills in a nation, and their
ability to sell and support the products of
international businesses.

-Our product is a complex product and we plan to


give training on how to use it and in terms of
maintenance so that there will be easier for them to
handle.

-We will send our product using air


transportation. Approximate travel time from
Kuala Lumpur, Malaysia to Kiritimati, Kiribati is:
14 hrs, 32 mins.

COMMUNICATION STRATEGY

-Our company use direct channel so we chooses


to communicate the product using push
strategy which will emphasizes on personal
selling rather than mass media advertising in
the promotional mix.

-It

will be easier for both parties because we

will

give

training

and

products to the government.

demonstrate

the

PRICING STARTEGY
Our product is a complex product and
we Our company will give two options to
the government of Kiribati that is:
1)Price Escalation Pricing Strategy
2)Countertrade

Price escalation refers to the added costs incurred


as a result of exporting products from one country
to another.
Because we choose to export, costs of exporting:
the term relates to situations in which ultimate
prices are raised by shipping costs, insurance,
packing, tariffs, longer channels of distribution,
larger middlemen margins, special taxes,
administrative
costs,
and
exchange
rate
fluctuations.

The second option is to use Countertrade to gain


rewards when conducting business globally. As we
know, Kiribati is one of the poorest country in the
world.
Countertrade describes many unconventional
trade-financing transactions that involve some
form of non-cash compensation. The most common
forms of countertrade are barters, clearing
arrangements, switch trading, buyback, counter
purchases and offsets.

THANK YOU

You might also like