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

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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Owner of (SKA) is Puan PadzilahEnda Binti Sulaiman

Start business - 2008 and 2009; brand name Siti Khadijah

18 outlets including Jakarta and London

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Collection SKA

Classic

Harmony

The prayer outfit (TPO)

White and black colour

Grey , pink and almond colour

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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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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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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 services7

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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. Initial Stage

Preparation Stage

Setting-Up Stage

Final Stage

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MARKET ENTRY CHOICE

Cost Factor

High Demand

Firm Strategy

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Market screening

Investigate the regulatory environment

Understanding the business

culture

Investigate the trends

Plan and execute

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• Suitable & proper market

• Introduced TPO label

• Cooperated with Indonesia businessman

The Prayer outfit

• 15,000 pieces sold

• Rp 400 thousand to Rp1,250 million

• Patented & ISO 90001

Sales • Muslim women aged between 25 to 50 years

• Traditional & social market

Target market

Findings: SKA selected market entry modeis successful.

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• 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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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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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.

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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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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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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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Economic risks that Siti Khadijah outlets have toface in three countries; Malaysia, Indonesia andLondon are the currency rate, the economic andregulatory policies.

According to (Kawazu, 2013), due to the increaseof population in Asia, subsequently has improvedthe economy overall. It was shown that in 2011,nominal Gross Domestic Product of Asian hasexceed of North America and European Union, atthe increased of 8.4 percent. In addition, Malaysiahas shown a high rate of growth.

(Kawazu, N. (2013). Consumer Trends and Expansionof Consumer Trends and Expansion of, (182). )

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The advantages of FDI inflows, where theinvestment of Siti Khadijah in the Indonesian andLondon market can provide products, skills that isdesigning for local business.

As we know, Siti Khadijah has incorporated withtextile 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 ofFDI outflows towards home country, Malaysia.First, it created more job opportunities to thelocal, bring in more new technologies to meet theglobal demand.

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To cope with competition, Siti Khadijahapparel Malaysia must understand theimplications of globalization to theirbusiness which includes, the needs forincrease usage of technology, tounderstand the cross border trade inwhich raw material and labour will beutilize in Indonesia, development ofservices to create non price benefitsincluding customer loyalty, be aware andprepare for changing of politicalsituations and government policiesincluding in Indonesia and London.

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