-Modes of Entry (FDI & Licensing) -Business Strategy -Lesson Learned

1. Prepared for: Dr Liu Yao (KPB2913-IB)
SKA International Business Entry Mode
Prepared by:
UMP, MBA.
Esther Mingel Kba 15026
Haisah Bt Muhammad kba 15035
Siti Noraini Bt Abdul Malek Kba 15011
Khaled Bark Muhimdana Shantof kba 14034
Nor Amirah Azmatun Bt Burhanuddin Kba 15029 1

2.  Siti Khadijah Apparel (SKA)known as
Telekung Siti Khadijah.
 Tagline “Lambang Cinta Abadi”
 SKA leading brand in women prayer outfit
with its unique and innovative design.
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3.  Owner of (SKA) is Puan Padzilah
Enda Binti Sulaiman
 Start business - 2008 and 2009;
brand name Siti Khadijah
 18 outlets including Jakarta and
London
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4.  Collection SKA
Classic
Harmony
The prayer
outfit
(TPO)
White and black colour
Grey , pink and almond
colour
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5. Women
Men
Accessories
Baju kurung, jubah, hijab
Belt Hajj, kemeja adam and t-
shirt Ihram
Bag, Al-Quran, handsocks,
brooch, sejadah and shoes
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6.  SKA –Indonesia (July 2015) located at
FX Lifestyle Center, Senayan
 “Mukena Siti Khadijah”
 Corporate Social Responsibility
(CSR)=create enduring consumer and
employee values
 Eg:distributed almost 1000 pairs the
prayer outfit to victim flood
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7. Activities of SKA
 Primary activities
 Research & development
 Production
 Marketing and sales-local media and
social media platforms
Hold principle by Philip Kotler “Sell value,
not price”
 Customer services
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8.  SKA : (1) Foreign Direct
Investment
(2) Licensing
 Need to deal with “Badan
Koordinasi Penanaman Modal
(BKPM)”
 Four stages in the process of
application the license
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9. .
Initial
Stage
Preparation
Stage
Setting-Up
Stage
Final Stage
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11. MARKET
ENTRY
CHOICE
Cost
Factor
High
Demand
Firm
Strategy
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12. Market
screening
Investigate
the regulatory
environment
Understanding
the business
culture
Investigate
the trends
Plan and
execute
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13. • Suitable &
proper market
• Introduced
TPO label
• Cooperated
with Indonesia
businessman
The Prayer
outfit
• 15,000 pieces
sold
• Rp 400
thousand to Rp
1,250 million
• Patented &
ISO 90001
Sales • Muslim women
aged between
25 to 50 years
• Traditional &
social market
Target
market
Findings: SKA selected market entry mode
is successful.
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14. • Government support and ongoing trade
negotiations with the EU.
• GDP was Rp139.4trn ($10.2bn) in 2015.
Apparel
Industry
• Large economies of scale
• Lower cost strategy
• Customer taste and preferences
• Aggressive marketing strategy
Transnational
strategy
• Design the head
• After sales services
Positioning
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15. 1) Influence of Social Media
o Indonesia is the world’s third largest
Facebook market and fifth largest Twitter
market.
o Consumers in Indonesia are trusting
consumers and highly receptive.
o Promote its products through social media
platforms.
o Quickly disseminate all of the information.
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16. 2) Populations
o Indonesia has the one of the largest Muslim
populations.
o Elevate fashion to the international heritage
of the archipelago” and share the Malaysia
culture there.
3) Growth in Economy
o Cater more consumers from middle class
income.
o Booster the sales, profit and build their brand
name. 16

17. 1) Imitation of Siti Khadijah Products
o destroy the company image and reputation.
o low quality and low price.
o SKA products more soft rather than fake
products.
2) Intellectual Property
o failure to effectively protect and not take
seriously.
o not conclusive evidence of ownership and
complicated.
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18. 3) Poor Government Coordination
o take long time and lack of coordination at
the ministries level.
o New regulations are at times difficult to
decipher and often lack sufficient.
o Redundant and slow processes.
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19. Business culture Indo-Msia, similarities in norms,
beliefs. Specific demographic factor; which is the
Muslim being the majority of the population in the
country
Political risks: national governments and hostility to
foreign business
• follow the local government jurisdiction whereby the
benefits are can avoid unnecessary fines, can avoid
potential bribery and provides more access to new clients
Differences in costs that is manufacturing and labor cost in Indonesia is
cheaper than in Malaysia, currency values; Indonesian rupiah fluctuates
causing product price to become expensive and market size, that is big
market size in Malaysia and Indonesia.
Innovation of the apparel itself and entrepreneurship for the long term
growth, second, a strong market economy that is the strong purchasing power
for Muslim prayer outfit especially in Malaysia, Indonesia
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20. Economic risks that Siti Khadijah outlets have to
face in three countries; Malaysia, Indonesia and
London are the currency rate, the economic and
regulatory policies.
According to (Kawazu, 2013), due to the increase
of population in Asia, subsequently has improved
the economy overall. It was shown that in 2011,
nominal Gross Domestic Product of Asian has
exceed of North America and European Union, at
the increased of 8.4 percent. In addition, Malaysia
has shown a high rate of growth.
(Kawazu, N. (2013). Consumer Trends and Expansion
of Consumer Trends and Expansion of, (182). )
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21. The advantages of FDI inflows, where the
investment of Siti Khadijah in the Indonesian and
London market can provide products, skills that is
designing for local business.
As we know, Siti Khadijah has incorporated with
textile company in Bandung, Indonesia.
Subsequently, Siti Khadijah also get local suppliers;
from textile (raw material) supplier, manufacturer,
to sales.
On the other hand, we had seen the advantages of
FDI outflows towards home country, Malaysia.
First, it created more job opportunities to the
local, bring in more new technologies to meet the
global demand.
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23. To cope with competition, Siti Khadijah
apparel Malaysia must understand the
implications of globalization to their
business which includes, the needs for
increase usage of technology, to
understand the cross border trade in
which raw material and labour will be
utilize in Indonesia, development of
services to create non price benefits
including customer loyalty, be aware and
prepare for changing of political
situations and government policies
including in Indonesia and London.
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