Business

Business



Business

Section 1: Country Analysis

The main purpose of this section is to make an analysis on a country, and discuss that is the environment of the country is feasible to open a new business. The country selected for this purpose is Malaysia which is a rising economy. Samsung wants to start its business in any rising economy; therefore, this paper makes analysis on the external environment of Malaysia, and checks that whether the environment of Malaysia is feasible for Samsung to start its operations.

1) Government Stability and Openness to Foreign Investment

The role of Malaysian government is very high in order to increase the encouragement of foreign direct investment, especially in the industries which are export oriented. The government works to retain the optional role for the approval of investment projects of individuals. It is necessary that the Malaysian government should take into account the initiatives which to increase the joint ventures between Malaysian and the foreign companies. The Malaysian government should also design the long-standing policies in order to deal with the policies related to the increase and management of foreign investment. The government of Malaysia actively enhances the foreign investment in Malaysia. The main sector in which the government of Malaysia promotes the foreign direct investment is the information technology industry, mainly in Multimedia Super Corridor (MSC) which is a project by Malaysia. The foreign investors having their investments in this project are exempted from the payment of any tax and any other regulation against the commitment that they will increase the substantial technology, and this will have a profound effect on the local economy. In the service sector too, the main area in which the government works to promote the foreign investment, is the sector of information technology. The areas of service sectors that receive the foreign investments are the hotels, training, research and development, and tourism. The government of Malaysia does not actively promote the foreign investment in the sector of agriculture or construction, and in the sector of financial or professional services. The government of Malaysia has also imposed restrictions in the foreign investment in the sectors of oil and gas. It is the responsibility of Malaysian industrial development authority to have proper screening of all the proposals which are designed to serve the manufacturing projects in Malaysia, both in the foreign and domestic areas. It is the duty of MIDA to monitor the consistency of all these projects with the Second Industrial Master Plan (1996-2005) and the social policies and government strategies.

The Malaysian economy has remained a consistent performer in the ASEAN region, with an average annual growth rate of 5.4% during 2000-06. GDP growth reached a high of 8.8% in 2000, but bottomed out in 2001 at 0.5%. However, with favorable economic policies, the economy rebounded and attained 6.9% growth in 2004. Although this rate was not maintained in 2005, annual average growth remained high at 5.6% during 2005-06. In 2007, the economy grew at a rate of ...