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This chapter one will discuss about the background of study, background of company where the study is focusing on the factors that influence the determinant that influenced Bumiputera Company's export performance. In addition, in this chapter also will discuss about issues on how to increase company's effectiveness in improving export performance index. Besides that, the study will also show the factors which contribute to export performance. Next, it continued by determinant to show the most significant factor that influence the Bumiputera company's export performance. In ensuring the effectiveness and efficient of this study the researcher has established the scope of study.
Background of Study
This research is about the determinants that influenced export performance by Bumiputera companies exists in Malaysia. Indeed, there are many factors influencing the export performance in a country. Hence, this research could be useful for the new companies to be used as a basic guideline to export their products to a foreign country. With the aim of developing more effective strategy, this research is conducted implicitly to understand the right method and strategies to improve export performance especially by Bumiputera companies exist around Malaysia in future.
Background of Bumiputera and Women Exporter Development Programme, MATRADE. (BWEDP)
MATRADE through Bumiputera and Women Exporters Development Programme (BWEDP) Unit has been assisted over hundred companies in Malaysia to penetrate International market under special programme since it has been operated at year 2004. Generally, BWEDP Unit are promoting Bumiputera Companies to an international promotion activity, special marketing mission, individual business mission, trade conferences, trade promotional visits and other activities which linked the companies to wider business range. Moreover, BWED also assist a company's via trainings, seminars and workshops emphasizing on personnel skills and knowledge in doing business internationally.
1.2 PROBLEM STATEMENT
Problem statement means a clear, precise and succinct statement of the questions or issues that is to be investigated with the goal of finding an answer or solution (Sekaran, 2003).
In this case, challenges for companies to enter a huge export markets is quiet difficult. It is complementary for a company to structure its company's internally before export their goods into foreign markets. Besides, many Small Medium Enterprise (SME) companies around Malaysia had been excellent in export their products and manage to establish brand name into international markets by captured a well business strategic management. For example likes Ramli Burger Sdn. Bhd., Muhibbah Sdn. Bhd. etc.
A part of that, MATRADE assist many of Malaysian company in doing export activities. They are helped through promotional activities and provided with business training, courses, and workshops and so on. For the BWEDP Unit, it is a challenge for this unit to identify the Malaysian companies export activities. They were having problems to determine the factors that contribute towards Bumiputera Company's export performance in specific views. Hence, with conjunction of Malaysia prime minister, Y.A.B Datuk Seri Najib Bin Abdul Razak to double up Malaysia export goods by year 2015 (MATRADE 2012), this study will identify the factors that influenced Bumiputera companies export performance. Besides, it is believed to improve Bumiputera Company's export by advising all companies to follow basic criteria needed before export the goods. Specifically, this study will be conducted to analyze and find the most significant determinants that influence the Bumiputera Companies export performance. There are 4 determinants that can be factors influenced the export performance which are the extent of product adaptation, promotional intensity, price attractiveness, and number of distribution channel (Abdul Rahim, 2012). Besides, Mr. A.B. Teoh the speaker from Exim Consultant also said in his book that the other determinant to be succesful exporter are identified the export potential, export readliness, select product and market strategies, research overseas markets, export business plan, sales and marketing, distribution channel, money matters, and export pricing. All this information are crutial needed for the business uses. Furthermore, the final result can be used for a businessman or researcher to investigate and manipulate the information as a guideline in their future business studies.
1.3 Research Question
1.3.1 What is the factors that influences the Bumiputera Companies export performance?
1.3.2 What Is most significant factors (extent of product adaptation, promotional intensity, price attractiveness, and number of distribution channel) towards variable (the export performance by Bumiputera companies).
1.3.3 What are the strategies that can be adapted improve the export performance by Bumiputera Company?
1.4 Research Objective
1.4.1 To identify the factors influence the export performance by Bumiputera companies.
1.4.2 To identify the most significant factors between independent variable (extent of product adaptation, promotional intensity, price attractiveness, and number of distribution channel) towards dependent variable (the export performance by Bumiputera companies).
1.4.3 To recommend appropriate strategies to increase the Bumiputera company's performance in export activities. .
1.5 The Scope of study
The scope of the study is focused on the determinants that influence the export performance by Bumiputera companies. This study also can help the other companies who are slightly looking for opportunities to export the goods outside Malaysia region to increase company's markets sales.
To accomplish this study, researcher will study the selected companies all around Malaysia that already involved in MATRADE's program and select the sample randomly among them.
50 companies from the overall population will be a sample. This research also examines and explains the relationships that arise from the factors that may influence the export performance of Bumiputera Companies. These factors are the extent of product adaptation, promotional intensity, price attractiveness, and number of distribution channel. It is also being supported by the speaker of Export-Import Exim bank Consultant, Mr A.B. Teoh (2012) when he said in his book that the criteria needed to export is product adaptation, business marketing plan, pricing strategies,distribution channel, and so on. Zou and Stan (1998) suggested in their meta-analysis approach of 50 studies that product adaptation and strength, promotion intensity, channel relationship and price adaptation were the key determinants of export performance.
1.8 Significance of Study
The significance of this study can provide a good idea, information and benefit to the customer, researcher itself and company. They are stated below:
1) The companies
By doing this research, it will benefits to the companies especially a new young companies who are determine to export more various markets. According to AB Teoh(2010) in his International Trade Import and Export book said, most of the Malaysian exporters' income was generated from Asian Markets with almost RM267.5 billion markets values. This research provided a platform for these companies to be used as a information guideline based on the experiences and others information shared. Hence, increased companies profit and achieve economic of scale.
2) The researcher
The researcher hopes that this study can be used as guidelines and guidance for other researchers in conducting similar study. Furthermore, in order to fulfill the requirement of Degree in International Business, thesis is a precondition to graduate. Researcher can apply what they had learned from the subjects of international Business for this study. All the knowledge from this study can be practiced when apply in the real world. At the certain time, the experience and knowledge they gain can be used in the future especially in solving problems. Researcher also will have better understanding regarding challenges of the business activities in the real world. By applying his business knowledge throughout this study, it serves as an opportunity to the researcher enhancing his knowledge which had been gained throughout his university course.
3) The MATRADE
This research is important to MATRADE or others business organization such as MIDA, MITI, SME and so on. It will be additional information for them to be used in managing the import and exports activities among Bumiputera Companies. They can provide right information and company's experiences in improving export performance to raise the company's revenue.
1.9 Limitation of Study
There were several limitations had been identified in the process of preparing this report:
1) Lack of Cooperation from the Respondents
There were difficulties in order to get good cooperation from the respondents in answering the questionnaires. The researcher also required time and patience because some respondent very busy and not give full commitment in answering the questionnaire. The researcher has to give brief explanation and state the purpose of the survey in order to ensure the targeted respondent is achieved.
2) Time Constraints
As a trainee in this company, researcher needs to allocate time to do the tasks that are given by the supervisor. The period given to complete this research is quite short and requires hard work in preparation to search information in ensure that the study is accurate and not misleading. At the same time, the researcher has to complete 20 weeks practical training at the Malaysia Internal Exporter Development Association (MATRADE).
3) Lack of experience
Researcher has never been exposed to conduct any research previously. However it gives valuable knowledge and experience in undertaking this research.
1.10 Definition of Term
The "Bumiputera" term which was introduced in 1971 attempt to exclusively define the indigenous group of Malaysian community with consideration of its' long history since the Malacca era (Shamsul, 2001). Since the discussion of "Bumiputera" identity and definition is particularly complex, thus it should be left to competent scholars of the relevant area. Vejai (2007) highlighted that Bumiputera includes Malays as well as Sabah and Sarawak native groups, whereas the non-Bumiputera refers to the Chinese, Indians and other non-indigenous people.