Assignment 3 -AFTER

8/8/2019 Assignment 3 -AFTER

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ROSMIZIE BIN MOHAMED 2009690284

SARIDA BINTI SALLEH 2008508699HAYATI BINTI ABD RAHIM 2009866096

ROSMIZIE BIN MOHAMED

SARIDA BINTI SALLEH

HAYATI BINTI ABD RAHIM

EXTERNAL FACTORS

EVALUATION(FOOD AND BEVERAGES INDUSTRY)





Market Size and Growth Rate

Malaysia's food industry is as diverse as the multi-cultures of

Malaysia, with a wide range of processed food with Asian

tastes.

The industry is expected to grow at an annual rate of 4.8 percent to US$6.4 trillion by 2020.

Malaysia is a pioneer in promoting halal food globally.

Malaysias locally developed halal certification serves as an

example for other nations and has been commended by the

United Nations as a model system.

The growth in demand for dairy products in Malaysia is driven

by the changes in dietary preferences

increased awareness of the health benefits of drinking milk



9291.22

10875.77

12461.76

11703.98

12203.74

0

2000

4000

6000

8000

10000

12000

14000

2006 2007 2008 2009 2010

in million

(USS)

Consumer Expenditure On Food In Malaysia

consumer expenditure

Source: Euromonitor nternational



The presence of Halals market around the

world for food and beverage industry.

Hence, it is important for Nestles long termcompetitive success.

Scope Of Competitive Rivalry



Number of Buyers

Domestic demand for food increased by 3%

Growth in consumer consumption and

spending supported by stable incomeconditions

A low level of inflation improved consumer

spending

Year 2006 2007 2008 2009 2010

Consumer

Expenditure

(million US$) 9291.22 10875.77 12461.76 11703.98 12203.74



Product Innovation

The F&B industry is characterized by rapid

product innovation and long product life cycle.

R&D is important for F&B industry and

product innovation such as HALAL products,product enhancement



Economies of Scale

Malaysian operation will be able to achieve

economies of scale and better resource

utilization via lower cost of capital

The industry is characterized by economies of

scale in purchasing, manufacturing and

assembly, distribution where buying in bulk.



Porters Five Forces

Competitive

Environment



Potential of new competitors

in food and & beverage industry

give vital competition

High barriers reduce

competition vice versa

- barrier: Halal

requirement, food

regulation, capital, tariffs, etc.

Substitute ProductPotential New Entrants

Competitors product in F & B

industry always have similar

products but different taste

The threat of substitute of hot

drinks is high in Malaysia

Market given the propensity of

Malaysian drinkers to prefer

tea.The wide alternatives available

in the form of malt or soy base

drinks



Suppliers Buyer Power

The final user is

consumer, company depend

repeat purchasing from

consumerBargaining power of consumer

is high given that the product is

readily available through various

distribution channels. Both

private individual consumers and

large whole sale buyers have avary wide range of brands to

choose from and will make

comparison

The suppliers for food and

beverage industry would include

cocoa, coffee

bean, milk, flour,sugar,etc.

e.g:Malaysia is the worlds 3rd

largest cocoa producer and amajor exporter of processes

cocoa products

e.g: Brazil, Africa

Indonesia, Vietnam are the

producer of coffee bean

Supplier play important role forproduction in the industry in

term of quality, price and

relation ship with manufacturer



Driving Forces

Changes in the long-

term industry growth

rate

Growing buyer

preference for more

standardized product

instead of stronglydifferentiated product

Documents

Assignment 3 -AFTER