1 Country Analysis: Malaysia Group Project: Part II Prepared for: Professor Tong Prepared by: Langston Hines Rhonda Ridgell Alisa Derks AbdullahAlshetwi Date: October 2, 2014 Introduction Many companies that enter foreign markets fail because they do not understand the culture of the people. We at Dick’s Sports Goods have done our research and are ready to enter Malaysia! The process was long but in the end it will be well worth it. Some of the steps we had to take to understand the Malaysian culture were learning the consumer market, economic profile, business culture, and political environment. Our target market for Malaysia is sports enthusiast, marketing efforts directed towards young children all the way to adults who are interested in athletic and outdoor activities. We plan to target a similar market in Malaysia as our market in the United States. We feel that using the same target market as in the United States can be successful with some adaptations to our products. Demographics play a major role when trying to learn the culture of a foreign market. As of July 2014 Malaysia had an estimated population of greater than thirty million. That thirty million is divided into several different ethnic groups such as 50% Malay, 23% Chinese and 16% other. Most of the population (72.8%) is located in urban areas in cities such as Kuala Lumpur (capital), Klang and Johor Bahru. Next thing was to figure out the consumer market. As in recent news articles Malaysia has become one of the wealthiest emerging economies. Which means the country is making more money and the consumers have more money to spend. When looking at the market we had to find out where some of our potential customers shop. One example, Klang Valley, which has an estimated population of about seven million people, is the most developed retail market. As in the United States, Malaysia has shopping malls and different types of shopping centers. We think these shopping malls will be a great way to enter the foreign market. Klang Valley is home to some of the best available malls in Malaysia, and getting into one of them will be very beneficial to our business. One thing we researched and will be aware of is the two main consumer groups they have and we are ready to implement different strategies for each group. The one group, “The Bumiputera,” which describes the Malay race and other people indigenous people, and the other is Malaysian-Chinese. Both groups have different buying patterns. Economic Profile Malaysia first started out solely producing raw materials and is now an emerging multi-sector economy. “By 2020, Malaysia wants to have high-income status and move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services.” (Index Mundi) The Prime Minister, NajibRazak, created a program called the Economic Transformation Program (ETP), which strives to increase Malaysia’s economic gro.

1. 1
Country Analysis: Malaysia
Group Project: Part II
Prepared for:
Professor Tong
Prepared by:
Langston Hines
Rhonda Ridgell
Alisa Derks
AbdullahAlshetwi
Date:
October 2, 2014
Introduction
Many companies that enter foreign markets fail because they do
not understand the culture of the people. We at Dick’s Sports
Goods have done our research and are ready to enter Malaysia!
The process was long but in the end it will be well worth it.
Some of the steps we had to take to understand the Malaysian
culture were learning the consumer market, economic profile,
business culture, and political environment.
Our target market for Malaysia is sports enthusiast, marketing
efforts directed towards young children all the way to adults

2. who are interested in athletic and outdoor activities. We plan to
target a similar market in Malaysia as our market in the United
States. We feel that using the same target market as in the
United States can be successful with some adaptations to our
products. Demographics play a major role when trying to learn
the culture of a foreign market. As of July 2014 Malaysia had
an estimated population of greater than thirty million. That
thirty million is divided into several different ethnic groups
such as 50% Malay, 23% Chinese and 16% other. Most of the
population (72.8%) is located in urban areas in cities such as
Kuala Lumpur (capital), Klang and Johor Bahru.
Next thing was to figure out the consumer market. As in recent
news articles Malaysia has become one of the wealthiest
emerging economies. Which means the country is making more
money and the consumers have more money to spend. When
looking at the market we had to find out where some of our
potential customers shop. One example, Klang Valley, which
has an estimated population of about seven million people, is
the most developed retail market. As in the United States,
Malaysia has shopping malls and different types of shopping
centers. We think these shopping malls will be a great way to
enter the foreign market. Klang Valley is home to some of the
best available malls in Malaysia, and getting into one of them
will be very beneficial to our business. One thing we researched
and will be aware of is the two main consumer groups they have
and we are ready to implement different strategies for each
group. The one group, “The Bumiputera,” which describes the
Malay race and other people indigenous people, and the other is
Malaysian-Chinese. Both groups have different buying patterns.
Economic Profile
Malaysia first started out solely producing raw materials and is
now an emerging multi-sector economy. “By 2020, Malaysia
wants to have high-income status and move farther up the value-
added production chain by attracting investments in Islamic

3. finance, high technology industries, biotechnology, and
services.” (Index Mundi) The Prime Minister, NajibRazak,
created a program called the Economic Transformation Program
(ETP), which strives to increase Malaysia’s economic growth.
Main exports that are very important in Malaysia’s economy are
electronics, oil, gas, palm oil, and rubber. “As an oil and gas
exporter, Malaysia has profited from higher world energy
prices, although the rising cost of domestic gasoline and diesel
fuel, combined with sustained budget deficits, has forced Kuala
Lumpur (Malaysia’s capital) to begin to address fiscal
shortfalls, through initial reductions in energy and sugar
subsidies and the announcement of the 2015 implementation of
a 6% goods and services tax. The oil an gas sector supplies
about 32% of government revenue in 2013.” (Index Mundi) The
central bank of Malaysia, Bank Negra, has substantiated foreign
exchange reserves, and has decreased the risks of being exposed
to the global financial crisis. To help the Malaysian economy,
“Najib launched the new Bumiputra Economic Empowerment
Program (BEEP), policies that favor and advance the economic
condition of ethnic Malays.” (Index Mundi)
Below, is a table including Malaysia’s GDP, GNP, and PPP:
(Trading Economics)
As you can see from the table above the GDP for Malaysia is
312.44 billion, which increased from the previous year. The
GNP is 186.70 billion, which decreased from the previous year.
The GDP per capita (PPP) is 22,555.79 dollars, which increased
from the previous year. The wealthiest in the Malaysia
community are the ethnic Chinese and they hold most of the
economic power in Malaysia. Malaysia has had some trouble
with the economic downturn, which affected the exporting of
goods significantly. Overall, Malaysia is ranked number six on
Bloomberg’s Top 20 Emerging Markets Ranking, which means
they are in good standing in the emerging markets category.
(Bloomberg)
Business Overview

4. Doing business in Malaysia is very different then doing it here
in the United States. There are several aspects you need to take
into consideration when doing business with people from other
countries. Malaysia is a country filled with diversity and the
people there are said to usually be very polite and honest. A
major concept is “face,” which embraces good qualities and
character (Destination Malaysia, 2014). Face can be lost by
insulting, criticizing or putting a group to shame, but can easily
be redeemed with courteous acts. When meeting and greeting
new people it is essential that they shake your hand first. Their
traditional handshake or Salam consists of both hands but
without the grasp. Hugging and kissing unless it is to your
spouse is considered inappropriate, and doesn’t take place in a
work setting. When dressing for success it is important that not
too much skin is showing. Since Malaysia is mainly a Muslim
country they tend to dress very modestly. Business cards are
usually exchanged after you are introduced; it is considered
good mannered to have it translated to the preferred language.
Inspecting the business card before putting it into your wallet or
purse is considered proper and respectful. Most business is done
at restaurants or followed up for a lunch or dinner. It is
expected that you reciprocate any dinner with a dinner in the
future of equal or greater value. Usually spouses are not
involved in business deals or meetings because it is reflected as
unprofessional (Destination Malaysia, 2014).
Business Do’s and Don’ts
There are certain Do’s and Don’ts you must be aware of
when coming into Malaysia. When meeting new people from
Malaysia it is extremely valuable to smile (Destination
Malaysia, 2014). Another common gesture is placing the right
hand over the left breast signifying “I greet you from the heart.”
Also pay close attention to attire and make sure it is always
appropriate. The color yellow should be evaded because it
indicates royalty. Using your right hand is essential, the left
hand is considered dirty and can be impolite. Typically men
and women do not shake hands, rather nod or bow. When

5. entering a person’s home taking your shoes off is required and a
simple form of reverence. Ethnic relations or political systems
are a very touchy topic and should typically be avoided. Even
if someone was to make a comment regarding one of those
matters, it is important that you do not pick sides. When
planning a business meeting try and stay away from Fridays that
is the day reserved for Muslim’s to spend praying. Lastly,
names and titles, address Malaysians by their title and surname.
Some individuals don’t have surnames and therefore take their
fathers name as a title (Destination Malaysia, 2014). If you
follow the guidelines on what is appropriate regarding business
etiquette, Malaysians are great and loyal people to do business
with.
General U.S. relationships with Malaysia
The present period shows the U.S-Malaysia relationship is at its
deepest level when compared to prior years. Their partnership is
strongest on the political arena, especially in combating
terrorism. Malaysia has reciprocated in many ways such as
providing grounds for training of the US Navy Seals in their
territory. Counter-terrorism, socio-cultural ties; due to the ever
budding cultural and educational links between the two
sovereignties’, and economic ties; fostered by the role US can
and is playing in helping Malaysia in achieving first-world
status are the most dominant themes in the bilateral-relationship
(Sodhy, 2007).
The economic tie is the most constant theme; foreign investment
has grown by leaps and bounds bolstered by the private sector
especially with the US and this has encouraged US companies to
invest in the country. We as Dick’s Sporting Goods saw a niche
in the sports and fitness market and decided to invest in the
sector. The decision was widely influenced by the country’s
relation with the US and reassured by President Obama’s recent
visit to bolster trade relations; elevating the bilateral relations
to a comprehensive partnership and securing the economic ring.
Export prospects to Malaysia
For future prospects, both President Barrack Obama and Prime

6. Minister Datuk Seri NajibTunRazak will have to be on the same
page. Malaysia is at its strongest vis-à-vis the US in its
economy. But the relative positions and strengths’ of markets
can change. There is a possibility that other leaders may assume
power in the near future and the relationship may thus not be so
cordial (Chandran, Pandiyan&Madhavan, 2004).
We have laid up strategies to adjust to the future if the policies
change but if both nations maintain their cordial relationship;
there will be fewer problems with anti-free trade policies. We
expect to expand and diversify our products through adapting to
the ever changing trends in football, athletics and outdoor
activities to widen our scope in the country and increase our
profit margins.
Malaysia’s Restrictions on Imports
The state requires an import license handed out by the pertinent
bureau. Import tax on sports equipment is 10% and the duties
are vary on consumption and composition. There is also a20%
import tax and 10% sales tax on any fabrics subject to quantity
and fabric type. An import tax of 15% and a 10% sales tax is
imposed on shoes; a key commodity for us. A list containing the
packages, with a hallmark of the pertinent company is
compulsory (Athukorala&Menon, 1995).
Conclusion
Overall, Malaysia is an appealing market to open a business in.
Malaysia is ranked on Bloomberg’s Top 20 list of emerging
markets, and is an easier country to start a business in.
Obstacles could happen with the economic downturn, but we
can manage through the difficulties. With the programs that the
Prime Minister has established and Malaysia’s emerging market
we believe that Dicks Sporting Goods would be a huge success
in the Malaysian community.
References
· Athukorala, P., &Menon, J. (1995). Developing with foreign

7. investment: Malaysia. Australian Economic Review, 28(1), 9-
22.
· Chandran, V. G. R., Pandiyan, V., &Madhavan, K. (2004,
April). Malaysia’s export market: trends, prospects and
challenges. In National Conference on Research Findings,
Riviera Bay Resort, Malacca, Malaysia (February).
· Destination Asia. Destination Malaysia. (2014) Retrieved on
30, September 2014 from http://www.destination-
asia.com/malaysia/about/etiquette/
· Sodhy, P. (2007). Malaysia-US Relations. Malaysia’s Foreign
Policy, Continuity & Change,ShahAlam: Marshall Cavendish
(Malaysia) Sdn Bhd.
· Trading Economics. Malaysia Gross National Income. (2014)
Retrieved on 30, September 2014 from
http://www.tradingeconomics.com/malaysia/gross-national-
product
· Index Mundi. Malaysia Economy Profile 2014. (2014)
Retrieved on 30, September 2014 from
http://www.indexmundi.com/malaysia/economy_profile.html
· BBC News Asia. Malaysia Profile. (2014) Retrieved on 30,
September 2014 from http://www.bbc.com/news/world-asia-
pacific-15356257
· Bloomberg. The Top 20 Emerging Markets. Retrieved on 30,
September 2014 from
http://www.bloomberg.com/slideshow/2013-01-30/the-top-20-
emerging-markets.html#slide16
· "Malaysia." - Country Profile. N.p., n.d. Web. 01 Oct.
2014http://www.indexmundi.com/malaysia/#Demographics
· "Malaysia: Opportunities in Its Dynamic and Diversified
Consumer Market HKTDC." Malaysia: Opportunities in Its
Dynamic and Diversified Consumer Market HKTDC. N.p., n.d.
Web. 01 Oct. 2014.
1

8. Part III: Strategy Recommendation
-What entry mode will you choose? Justify
-Include regulation issues
-Your brand name in both English and target country language
-Your product design (e.g. package, webpage… if applicable)
-Your distribution strategy
-Your pricing strategy
-Your promotional strategy.
Standardization or Adaptation ?! Justify
Outline for Part III: Group Project
WE ARE ADAPTING*****
I. Introduction (RHONDA)
II. Entry Mode:Direct Investment (RHONDA)
a. Regulation Issues
b. Pros and Cons of Entry Mode we choose (CITE WHERE
YOU FOUND AND MAKE IT IS ALLOWED)
III. Brand Name(ABDULLAH )
a. In both English and target country language
b. Translate the brand name into the language that is the most
popular
c. Adaptation meaning in the brand name
d. BRAND NAME: In “Malay” language DICKS BARANGAN
SUKAN –this was on a Google translator (CITE)
IV. Product Design(ABDULLAH )
a. Package
b. Webpage (Add an option to select type of language)
c. Infrastructure of the building type and layout of the store
d. Instead of using plastic bags use paper bags with logo of the
company
e. Emphasize on sports that Malaysia is popular in (take out
golfing products maybe)
f. Decrease clothing line, alter to what the women and men

9. would wear
V. Distribution Strategy (LANGSTON )
a. Transportation Methods
b. Where our products are made
c. Maybe Eco-Friendly?
d. How we are going to reach our customer
e. How do we deliver our products/services to the customer
f. Establish Dicks Sporting Goods in Malaysian Mall?
g. http://www.wonderfulmalaysia.com/faq/top10-shopping-
malls-in-kuala-lumpur.htm
h. USE Pertama Complex(mall) to put the Dicks Store at
VI. Pricing Strategy(ALISA )
a. Currency Situation
b. Adapt the pricing strategy to the economic profile of
consumers in Malaysia
VII. Promotional Strategy(ALISA D)
a. Popular Malaysia Sport Celebrities
b. Commercials
ADD PAGE TO PART III THAT SAYS WHO DID WHAT!
AND SIGNATURES******