New Export Region

New Export Region
Name
Institutional affiliate
New Export Region
Introduction
Business organizations across different sectors of the economy worldwide face increasing competition that demands the development and implementation of effective strategies towards maintaining their competitiveness in the market. Such strategies function to maintain an organization's competitive edge leading to sustainable growth and development. Sustainable growth and development of a business organization is a steady generation of profits and value addition in the shareholder's shares. Achieving the said objective in this era of globalization and widespread use of advanced technology requires an organization to secure its existing market share and expanding the same by identifying new markets for its products and services. International Logistics, Inc, a conglomerate based in the United States, seeks to expand its operational base by identifying new markets for its products and services in other countries worldwide. The company specializes in the manufacturing and distribution of high-tech equipment. As the international logistics manager, I am tasked with identifying a new export region and evaluating its viability for the company's sustainable growth and development objective. Provided herein are the identity of the new export country and a description of both its challenges and advantages, an assessment of the supply chain, a transportation plan on how to move the company's goods to the identified country, and proposed recommendations for implementing the transportation plan.
Identity of the New Export Country, Its Challenges, and Advantages
Extensive research on countries or emerging markets for the company's products in the highly competitive global market settled on Malaysia as the new export country. Malaysia is a country in the Asian region with great potential for sustainable growth and development of business organizations across different economic sectors. The country has a multiethnic cultural background due to the different ethnicities characterizing approximately 32 million people. It is located between the South China Sea and the Indian Ocean and a member of the Association of Southeast Asian Nations (ASEAN), making it a strategic location for investment. Its strategic geographical location makes it an intersection of the international trade between the Eastern and Western countries. The nation further stretches across the whole length of the Strait of Malacca, making it one of the most strategic shipping channels in the world. The country's strategic positioning accounts for the remarkable transitions witnessed across the history of the country's economy.
Malaysia, for instance, shifted from being an agricultural and mining economy in the late 20th century to becoming a competitive player in the high-tech industry. According to a survey conducted in 2017, manufacturing and services account for 22% and 51% of the country's GDP, respectively. It is also a producer of oil and gas and thus bound to the effects of price changes in the products. Malaysia has a strong currency, the Ringgit (RM), that performs relatively well against the US dollar. The government implements effective financial policies towards strengthening the same for positive economic outcomes for the nation. According to the World Bank, Malaysia's GDP per capita income was $11,414.20 in 2019, accounting for the country's third-highest per capita purchasing power among the ASEAN block. In 2020, the country's per capita GDP based on the purchasing power parity (PPP) was $27,402. Malaysia recorded an annual growth rate of 4.08 % in the per capita GDP based on its PPP in two decades from 2001 to 2020, highlighting its steady economic growth and equally significant potential for sustainable growth and development of business organizations across the diverse sectors of the country's economy. In essence, stable economic growth functions to increase the demand for different products and services among consumers and business entities. In 2018, the country ranked 24th among 190 economies around the world in the World Bank Global Doing Business report that also highlights some of the challenges faced by investors in the Malaysian market.
Among the challenges faced in the Malaysian market include government policies and regulations on trade that favor the indigenous Malaysians or Bumiputera. Such policies weaken the competition as it makes it difficult for foreign investors to penetrate the market. Entry into the Malaysian market may pose a challenge to new entrants, and thus it is advisable to use local agents or partners to introduce the products. A local agent or distributor oversees various functions, including customs clearance, handling established retailers and wholesalers in high-tech equipment, marketing company products, and offering after-sale services. Additionally, priority in selling products to the government or its affiliate agencies is given to the Bumiputera or the indigenous Malays, reiterating the importance of using local agents to gain entry into the market. Another key challenge in the Malaysian market is the lack of transparency in public procurement processes perpetuated by government policies favoring or protecting domestic manufacturers from foreign competition. The fact that most talented Malaysians move abroad searching for better employment opportunities also poses a significant challenge in identifying and recruiting an effective workforce.
Advantages of exporting to Malaysia include the country's strategic positioning among the ASEAN block. The fact that the country stretches along the Strait of Malacca makes it both a politically and economically strategic location for doing business since it creates a sense of stability for sustainable growth and development of business. It is a gateway to other economies in the region, creating an opportunity for expansive operations within the ASEAN block. Though it is a multiethnic country, Malaysia is an English-speaking country, thus bridging the language barrier gap for ease of doing business. Infrastructural improvements across the nation as outlined in the 11th Malaysian Plan for the period 2016 to 2020 accounts for remarkable improvements as witnessed in the upgrade of Port Klang. Such improvements enhance the transportation and movement of goods and services into the country. The country's financial sector is well-developed and thus promoting the sustainability of business organizations in the market.
Supply Chain Assessment
The supply chain assessment is needed to inform the management of what needs to be done to ensure efficiency. In addition, the supply chain will determine how the organization will capture the new market. The assessment will focus on two major areas; supply chain optimization and supply chain integration.
Supply Chain Optimization
It is crucial to optimize the process by adjusting the supply chain to ensure peak performance. The first step to optimization will entail increasing data insights. Making informed decisions depends largely on the availability of accurate and reliable data (Houhamdi & Athamena, 2018). Data alone does not have much use unless it is analyzed and utilized. Using data, analysts can dig deeper into the supply chain. The analysis of the data will be crucial in improving shipment transparency and visibility. The decision-making process will have adequate support. Transparency, in particular, will ensure the company does not incur hidden costs. The reviewing of invoices and contracts will be critical in avoiding surcharges like extra delivery area fees. The reliance on data will ensure accurate fulfillment of orders and efficient delivery of orders. The data collected will not be meaningful unless it is acted upon. Supply chain analytics will assist in utilizing the data effectively for the organization's benefit (Ittmann, 2015). The human element is needed in the analysis process. Analysts in the supply chain will give the data context and interpretation. People will establish which information is helpful and use it to optimize the chain.
Additionally, the company will need to invest in training the staff members to enhance performance. Employees are the most critical asset an organization has because they are responsible for implementing the goals and objectives of a business (Osborne & Hammoud, 2017). Without their effort, a company cannot function effectively. Supply chain performance remains a real issue for many organizations. With International Logistics, Inc. starting operations in Malaysia, it is critical to select and recruit appropriate staff. The workers need to be trained to understand the "bigger picture." Sometimes employees in the supply chain feel they only need to know the exact duties they perform while remaining ignorant of other operations. However, every staff member should know how their role is critical to the entire supply chain process (Saroha & Yadav, 2013). Training the staff members will make them more productive because they will not view themselves as "cogs in a wheel" but rather valuable team members. Such a sense of belonging will improve their productivity and eventually the performance of the supply chain. Training in supply chain issues will help employees to be innovative in designing solutions for the problems.
Furthermore, International Logistics, Inc. will need to optimize costs. An inefficient supply chain can be challenging to run (Naude & Badenhorst-Weiss, 2011). In an attempt to maintain a high level of efficiency, an organization can incur unnecessary expenses. Setting up the supply chain in Malaysia will be expensive at the beginning. However, this should not continue for long since it would adversely affect the company's profitability. The primary cost driver for the company would be that of investment costs. Setting up the operations in Malaysia would be costly as the organization strives to ensure the efficiency of the supply chain. While the company cannot avoid incurring investment costs, it can invest carefully to avoid losing too much money at the same time. An end-to-end view of the supply chain w...