PESTLE analysis
Malaysia
PESTLE analysis
 PEST analysis (Political, Economic, Social and
Technological analysis) describes a framework of
macro-en...
Malaysia (Political analysis)
 Malaysia is a multi-party democracy country.
 The ruling Barisan Nasional party has been ...
Malaysia (Economic analysis)
 Malaysia’s main attraction as a location for business is its
vibrant economy.

 Over the l...
Malaysia (Social analysis)
 The Malaysian population consists of three main groups:
Malay (60%), Chinese (30%) and Indian...
Malaysia (Social analysis)
cont.
 The mixture of religions in the country gives rise to a
large number of religious celeb...
Malaysia (Technological
analysis)
 The Malaysia is still need to develop its technology to enable
it to compete in intern...
Malaysia (Technological
analysis) cont.
 The high levels of investment in training and education,

including the creation...
Malaysia (Legal analysis)
 The Malaysian legal system is based on British common
law, although Islamic law is applied to ...
Malaysia (Environmental
analysis)
 The rapid development of Malaysia has come with high
environmental costs (negative ext...
Malaysia (Environmental
analysis) cont.
 Malaysian environmental impact has been criticised by
environmental groups as it...
Sources
 http://www.cipd.co.uk/hr-resources/factsheets/pestleanalysis.aspx

 http://en.wikipedia.org/wiki/PEST_analysis
...
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Pestle analysis on malaysia

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Pestle analysis on malaysia

  1. 1. PESTLE analysis Malaysia
  2. 2. PESTLE analysis  PEST analysis (Political, Economic, Social and Technological analysis) describes a framework of macro-environmental factors used in the environmental scanning components of strategic management.  The assumption is that if the country is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes.
  3. 3. Malaysia (Political analysis)  Malaysia is a multi-party democracy country.  The ruling Barisan Nasional party has been in power over 25 years. (This fact provided the country with a high degree of stability, which is important factor for businesses investing in the country.)  Corruption does exist in the country. (This fact may become a barrier to foreign businesses as it adds to firms costs and can cause problems).  Transparency International ranks Malaysia 47th of 180 countries in its Corruption Perceptions Index.
  4. 4. Malaysia (Economic analysis)  Malaysia’s main attraction as a location for business is its vibrant economy.  Over the last 10 years, economic growth has averaged 7% per year.  This rate of growth has lead to a large increase in consumer incomes and therefore demand, which has attracted retailers such as IKEA, Tesco and Carrefour.  Malaysian location makes it ideally placed to engage in international trade.  Exports account for 37% of Malaysia’s GDP and the country achieves a healthy current account surplus.
  5. 5. Malaysia (Social analysis)  The Malaysian population consists of three main groups: Malay (60%), Chinese (30%) and Indian (10%).  This mix of populations gives Malaysia a rich and vibrant culture, and the country is seen as an example of racial harmony as the different populations have existed peacefully together for years.  The country is predominately Islamic in its religion but it’s only the Malay muslims who are bound by Islamic laws; the rest of the population are free to practise their own religions.
  6. 6. Malaysia (Social analysis) cont.  The mixture of religions in the country gives rise to a large number of religious celebrations - Malaysia has more public holidays than any other country.  The cultural differences mean that businesses entering the country will have to adapt their products and business practices to suit the needs of the population.
  7. 7. Malaysia (Technological analysis)  The Malaysia is still need to develop its technology to enable it to compete in international markets.  In 1996, the govt. initiated the ‘Multimedia Super Corridor’ (MSC), which is a strip of land stretching from the central business district of Kuala Lumpur to the out-of-town Kuala Lumpur International Airport.  This corridor hosts more than 360 multinationals, including foreign-owned and home-growth Malaysian companies, all focused on multimedia and communications products.  It continue to expand and attract world-leading ICT companies.
  8. 8. Malaysia (Technological analysis) cont.  The high levels of investment in training and education, including the creation of a number of ‘Smart Schools’, and an excellent infrastructure, including a brand new town called Cyberjaya.  Cyberjaya is a ‘self-contained intelligent city with world-class IT infrastructure’.  It’s this level of technological support that makes Malaysia an attractive place for foreign firms to do business.  In fact, Cyberjaya is considered one of the top three destinations for business support services and outsourcing in the world.
  9. 9. Malaysia (Legal analysis)  The Malaysian legal system is based on British common law, although Islamic law is applied to the Muslim population.  The British law element can be seen as an advantage to firms investing in the country as the law will be familiar to them.  However, although the legal basis of the system is British, many of the punishments for those who break the law are far harsher - the death penalty and flogging are still widely used.  Therefore, investing in a foreign country need to be familiar with the laws there and confident that they will be applied fairly.
  10. 10. Malaysia (Environmental analysis)  The rapid development of Malaysia has come with high environmental costs (negative externalities).  According to a data from the UN, Malaysia’s deforestation rate is increasing at a faster rate than other tropical country.  Since 2000, the country has lost an average of 140,200 hectares – 0.65% of its forest area – per year.  Much of the country’s land that was once rainforest is now given over to the production of palm oil, which is used for the processing food we eat and as a source of biofuel.
  11. 11. Malaysia (Environmental analysis) cont.  Malaysian environmental impact has been criticised by environmental groups as it has a devastating effect on the habitats of some rare wildlife.  Malaysians, and particularly the govt. have little time for these criticisms and see them as evidence of Western hypocrisy over environmental issues.  However, Western companies need to be careful that they aren’t seen to be participating in this environmental damage as they may face demonstrations and protests from pressure groups such as Greenpeace and the World Wildlife Fund.
  12. 12. Sources  http://www.cipd.co.uk/hr-resources/factsheets/pestleanalysis.aspx  http://en.wikipedia.org/wiki/PEST_analysis  The article ‘ Emerging markets’ The case for Malaysia. Peter Imeson analysed Malaysia as a destination for foreign direct investment using PESTLE analysis. September 2010.

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