International Business From Domestic Business Commerce Essay

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Scope: International business is a huge business around the world. It not only merchandise exports but also in trade services, franchising licensing and foreign investment as well. But Domestic business different, it is a limited territory. The firm only establishes a lot of business in different locations but in single boundary.

Benefits: compare with the Domestic business, International business is more advance, we can compare from,

To the nations: International business more efficient used domestic resources, better way prospects of growth and creates employment opportunities. Domestic business would be no much involve of foreign currency, because Domestic business only conduct locally.

To the firms: The benefits to the firms who carry global business are get higher profits, better utalisation of production capacities, way out to strongly competition in domestic business and also improved business vision and mission. Advantages in domestic market always lesser when compare to the firms who dealing global business.

Market Fluctuations: From the viewpoint, people always think that international business will face in huge losses when market fluctuation and the thinking always the opposite. The loss in an area doesn't mean involved another area, they may cover back the losses from other areas and this provides stabilize during seasonal market fluctuations. For the firms who carrying out domestic business have to face the losses or low profit during this seasonal.

Modes of entry: International business has to face for the import or export of the entry such as franchising, licensing, joint ventures, set up owned subsidiaries and etc. Each mode of entry has the advantages and disadvantages. For the Domestic business does not have option for the modes of entry, because the business only runs in local and certain areas only.

To establish an International business, firms have to complete a lot of formality which obviously a boring task. The formalities for the Domestic business are always simple and not complicated compare with International business, so that, to firm up a Domestic business always easy than International business.

Share of Technology: International business always provide share of latest technology in the market, this is to provide the better mode of the technology that use by the firm to provide the better quality of the product to the customer in the market. E.g.: Apple Inc.

1.0 INTRODUCTION

There are some global processes in the petroleum industry such as exploration, extraction, refining, and transporting and market petroleum product. From the research, fuel oul and gasoline is the largest volume products in the petroleum industry. Petroleum is a raw material for many chemical products such as plastics, pesticides, solvents, pharmaceuticals and etc. The petroleum industry usually divide into three components which is upstream, midstream and downstream.

PETRONAS

PETRONAS is the largest oil and gas company in Malaysia, PETRONAS short for Petroliam Nasional Berhad and it founded on year 1974, August 17 and wholly owned by government Malaysia. PETRONAS has large spectrum of petroleum activities, and the gas business activities had cover the entire value from upstream exploration and production of oil and gas. Downstream is to refining, and the oil and gas is send from upstream; distribution and marketing of petroleum products; petrochemical manufacturing and marketing; gas transmission pipeline network operations and etc.

Technology and Engineering

The efforts for PETRONAS in upstream are focus on developing technologies to increase hydrocarbon resources, and to increase the productivity therefore can cover all the fields. In downstream, PETRONAS seek to maximize throughput and productivity in the oil, gas and petrochemical operations thru the applicant of technology.

SHELL

Shell Oil Company origin from United State, and is the one of America's largest oil and gas natural producer, natural gas marketer, petrochemical manufactures and gasoline marketers. Shell Oil Company also has upstream and downstream business. The upstream business is to explore and extract cure oil and gas, often in joint ventures with international or national oil companies. The oil is liquefy with natural gas by cooling and transport it and delivers to customer not even local but around the world. The upstream business of Shell Oil Company include convert natural gas to liquids (GLT), this is to provide cleaner burning fuels.

Projects and Technology

The technical services and capability in upstream and downstream activities are providing by Projects and Technology organization, this is to improve the performance of the company across the world. Shell Oil Company also deliver differentiate technical information of technology.

In conducting this research, the researcher established the following objectives:

To identify the general perceptions of consumer about local petrol against foreign petrol.

To identify the attributes of foreign and local petroleum brand that influence consumers' preferences.

To determine the demographic influences on consumers' preferences for the petrol oil.

Specifically, the objectives of this study are to answer the following questions:

What are the consumers' perceptions of petrol in Malaysia with respect to certain multi-attribute criteria?

What are the main attributes such as services, benefits, friendliness, price, and items that influence consumers' preferences for choosing the petrol station?

Do consumers' demographic profiles such as gender, age group, occupation, and income level differ in the attributes that influenced their preferences for type of petrol?

2.0 LITERATURE REVIEW

The petroleum industry:

According Peter Davies (1999) the petroleum industry can then be simply defined as the set of private sector companies who explore for and produce crude oil and natural gas and refine and market oil products as their main source of business. Some companies undertake all of the above functions - the integrated companies. Others undertake only one or some of them; these are usually referred to as independents. Some integrated companies are also involved in other areas of business. For example, many, but not all, are producers of petrochemicals and other chemical products. Baharun (1997) states that the world's petroleum story began on 28 August 1859, when Colonel Edwin Laurentine Drake driled the world's first commercially successful oil well near a small American vilage called Titusvile in northwestern Pennsylvania. Titusvile became the site of the world's first oil well and the true potential of petroleum was discovered, thus giving rise to the birth of the petroleum industry.

The petrol in Malaysia play a very important role, are mainly consumed by local industry, transport and household sectors, which absorbed nearly one-half of the total production. Malaysia's national oil company, Petroliam Nasional Berhad (Petronas), dominate upstream and downstream activities in the country's oil sector. Petronas is the only remaining wholly state-owned enterprise in Malaysia, and is the single-largest contributor of Government revenues. Petronas holds exclusive ownership rights to all exploration and production projects in Malaysia, and all foreign and private companies must operate through Production Sharing Contracts (PSCs) with the national oil company. Shell Malaysia engages in three businesses namely Upstream International, Downstream and Projects & Technology and Shell also established several hub businesses in Malaysia, which provide services and expertise to the Asia Pacific region and, in some cases, globally.

This industry is gain rapidly during this few years, due to the automobile keep increasing time to the time. For this industry target audience is the category age around 16th and above, and they have their buying behaviour and the style of purchasing. Each consumer makes a discrete choice among possible sources of gasoline and has preferences over product characteristics including price, product location and product type where a product's grade and service level.

The factors of consumers' perceptions

Conveniences

Convenience is a point that for the consumer perception on the petrol. The petrol is the necessity thing for the consumer. Even the have few choices for the petrol , but when in the rushing time the consumer will not think too much to find the petrol station that they like and they will find the nearest place.

Value and Quality

Value refers to the perceptions a consumer has of a product's benefits when weighed against its cost. Value can be measured both qualitatively--the emotional or psychological pleasure a consumer derives from a product or service--and quantitatively, in terms of the actual financial gain it wins them. Quality can be related to value, and may be taken into account when measuring the value of a product or service. More formally, it refers to the way in which a product or service relates to its competitors, or else conforms to a set of measurable standards. Some of the consumer will depend for the value before purchase the petrol, like the value and the quality will be the consumption for them. Beside that, they will do the few searches to find out that what the petrol that will make them maximum utility is.

Choices

Making decisions is like speaking prose-people do it all the time, knowingly or unknowingly. Due to petrol stations provide few products; the consumer can make some choices.

Brand

According to Kotabe and Helsen (1988), a global brand is one that is available in many nations and, though it may differ from one country to another, the localized versions have a common goal and a similar identity. In another words, global brands carry one brand name and/or logo. The brands is also as a consumer perception of the product , some consumer will purchase the product due to the brand of the product , normally consumer will purchase the famous brand compare with the local brand. Beside that, the consumer also will consume the product by the attractive of the advertisements.

Demands

The demand can be define as consumer's desire and willingness to pay a price for a specific good or service. Holding all other factors constant, the price of a good or service increases as its demand increases and vice versa. Due to the price of the petrol is control by government, there was did not have any the price issue for the petrol so that consumer even not happy with the pricing issue but due to the necessity of the petrol they will willingness to paid of the product.

Purpose

To identify the general perceptions of consumer about local petrol against foreign petrol.

To identify the attributes of foreign and local petroleum brand that influence consumer preferences.

Demographics from income, age, occupation and gender.

3.0 METHODOLOGY

This is the part that we carry out the research using secondary research and primary research for our global business vs. local business.

Primary Research

Based on the questionnaire that we have give out, we can see that a lot of people choosing SHELL rather than PETRONAS as their petroleum for their vehicles.

Besides, we also carried out through face to face interviews, telephone interview, website survey and also discussion group.

Secondary Research

From secondary research we can find out that the data from books, magazine, journals, websites, and news that also show out that consumer will rather choose SHELL.

Methodology refers the skills that choosing the suitable methods to find out the research. American Heritage Dictionary defines the branch of information or data, study methods and the principles of the body, in particular, the suitable method of theoretical analysis. Therefore methodology is an opposition to a consumer survey to allocating with the suitability of the methods used in the survey. Methodology also refer to the tools to determine that how to deployed and explain the principles. The research of methodology also includes the collection of analysis to the relevant materials research such as define why and what are the researcher doing, analysis of the research and collecting data.

There are two types of research methodology which are Qualitative Research and Quantitative Research.

Quantitative research is a numerical data or information that can be converted into numbers. Qualitative Research generates non-numerical data. Measurable data are being gathered and analyse in quantitative research only.

Qualitative research focuses only on verbal data rather than measurement. Gathered information is then analyzed in an interpretative manner, subjective, impressionistic or even diagnostic.

The five comparison between the two types of research quantitative and qualitative.

1. Goal or Aim of the Research

The main purpose of a Qualitative research is to provide completed, detailed information of the research topic to the researcher.

Quantitative Research on the other hand focuses more in counting and systematic features and constructing statistical model and figures to explain what have observed.

 

Qualitative

Quantitative

Hypothesis

Broad

Narrow

Description

Whole picture

Focused

Type of Research

Exploratory

Conclusive

2. Usage

Qualitative Research is ideal for earlier phases of research projects while for the latter part of the research project, but Quantitative Research is highly recommended.

Quantitative Research provides the researcher a clearer picture when compared to Qualitative Research.

 

Qualitative

Quantitative

Phase

Early

Late

3. Data Gathering Instrument

The researcher is like a primary data gathering tools in Qualitative Research. Therefore, the researcher makes use of various data gathering strategies, depending upon the thrust or the method of his research. Such as data gathering strategies used in qualitative research are individual in depth interviews, structured and non structured interviews, focus group, narratives, contents or documentaries analysis, participant observation and archival research

On the other hand, Quantitative Research makes use of tools such as questionnaires, surveys, measurements and other equipment to collect numerical or measurable data.

4. Type of Data

The data in Qualitative Research is in the form of words, such as interviews and images, such as video or objects, such as artifacts. If conducting a Qualitative Research what will most likely appear in the discussion are figures in the form of graphs.

However, if you are conducting a Quantitative Research, what will most likely appear in the discussion are tables containing data in the form of numbers and statistics.

5. Approach

Qualitative Research subjective in approach as it seeks to understand human behavior and reasons that govern such behavior. Researchers have the tendency to become subjectively immersed in the subject matter in this type of research method.

In Quantitative Research, researchers approach to remain objectively separated from the subject matter. This is because Quantitative Research is objective in approach in the sense that it only seeks accurate measurements and analysis of target concepts to answer the inquiry.

For this research, our group will choose quantitative research as our methodology. The reason that we choose quantitative because it will give us the accurate data and analysis from the measurement and the analyze data. The quantitative research also has the source materials that effectively translate data into charts or graphs.

On the hand, using this method also can save a lot of time and money to collect the data/survey compare to the other methodology (qualitative research). To conduct the quantitative research, we are chosen questionnaire tool for us to obtain data about the problem statement. A questionnaire can use statement or question to present the answer from a large group of people. The other reason for used questionnaire is to control the population, eliminate bias or ambiguous results, avoid irritating, leading to a final answer and etc. For obtain the results of the problem statement have been incur in the franchises delivery business, we will create 25 suitable question that related to the research. After that, we will distribute it to 20-25 person at area of offices, house area, shopping mall, petrol station in order to continues proceed measure and analyse step before get the accurate results.

4.0 ANALYSIS OF THE QUESTIONNAIRE

Age

Base on the survey of 20 peoples, 18 persons who are in age group 20 - 29 and 2 persons are 30 - 39.

Gender

Based on the survey of 20 peoples, the gender for Male is 50% and Female is 50% also.

Occupation

Base on the survey of 20 peoples, the occupations for Sales Person have 3 people, Professional have four people, Education Consultant has 1 person, follow by student have 4 people, Chef has 1 person, Production has 1 person, Secretary 2 people, Executive 1 person and Administrative have 3 people.

Brand of Vehicle

Base on the survey of 20 people, most people choose for Perodua car which is 9 people, Proton have 5 people, Honda have 2 people and follow by Toyota, Hyundai, Mini Copper and Chevrolet is 1 person.

Engine CC for the vehicle

Base on the survey of 20 people, the engine cc for 1.0 - 1.3 cc is 55% and 1.5 - 2.0 cc is 45%.

Often of consumer visit to petrol station

Base on the survey of 20 peoples, there are 12 people visit to petrol station 1 week and above, 4 people visit to petrol station 1-3 days per week and 4 people visit to petrol station 3-5 days per week.

Which Petrol Station you will choose?

Base on the survey of 20 peoples, 65% of consumers will choose for Shell, follow by 10% for Petronas and others and 15% for Esso / Petron.

Which petrol type you will choose?

Base on the survey of 20 peoples, there are 95% of the consumers choose for RON 95 petrol due to the reason cheaper than RON 97, and only 5% choose for RON 97 because of good condition.

How about the cleanliness of the petrol station?

Base on the survey of 20 people, that 3 people think about the cleanliness of the petrol station is excellent and 14 people think is average and 2 people think is poor.

Does the petrol station provide a better customer service?

Base on the survey of 20 people, 8 people agree that petrol station had provided a good customer service, and 12 people disagree.

Which petrol station that bring more benefits?

Base on the survey of 20 people, 85% consumer think Shell are bring more benefits and follow by 10% for Esso /Petron and last 5% for others.

Does the petrol station have a lot of promotion?

Base on the survey of 20 people, 8 people think that petrol station has a lot of promotion and 12 people do not think so.

Which petrol station that often sees?

Base on the survey of 20 people, that 80% people often see Shell petrol station and 20 % people see Petronas petrol station.

If you are driving in the highway and there was a long journey, you discover the fuel indicator left ¼ tank. In the same time, you can't see the petrol station that you often go, will you go for the others petrol station?

Base on the survey of 20 peoples, that 15 people will go for others petrol station and 5 people would not go for others petrol station even the fuel indicator left ¼ tank.

How do you catagorise the price you pay for the petrol?

Base on the survey of 20 peoples, that 15 people categories the price in expensive level and 5 people categories the price in fair level.

How much would you predict a petrol engine?

Base on the survey of 20 peoples, that 8 people predict less than RM100 petrol engine, 5 people predict RM100-RM200 petrol engine, 4 people predict RM200-RM300 petrol engine, 2 people predict RM300-RM400 petro engine and 1 person predict for more than RM500 petrol engine.

Would you consider to take public transport to minimize you weekly outgoings on fuel?

Base on the survey of 20 peoples, only 4 people will consider taking public transport to minimize the outgoing on fuel and the rest would not consider.

5.0 CONCLUSION AND RECOMMENDATION

The research has shown that the general perceptions of consumer about local petrol against foreign petrol, the attributes of foreign and local petroleum brand the influence consumers' favorites and the demographic influences on consumers' preferences for the petrol oil. As we learnt that PETRONAS Dagangan Berhad (PDB), a majority-owned subsidiary, which markets a wide-ranging of petroleum products, including gasoline, Liquefied Petroleum Gas (LPG), jet fuel, kerosene, diesel, fuel oil, asphalt and lubricants. On the other hand, Shell Oil Company is the United States-based subsidiary of Royal Dutch Shell, a multinational oil company of Anglo-Dutch origins, which is amongst the largest oil companies in the world. The U.S. head office is in Houston, Texas. Shell Oil Company, including its consolidated companies and its share in equity companies, is one of America's leading oil and natural gas producers, natural gas marketers, gasoline marketers and petrochemical manufacturers. In the research, we have chosen quantitative research as our methodology due to the accurate date after measure and analyze date. After gone through the entire research questionnaire process, result shown that Shell (60%) is rather preferable Oil Company compare to the local brand PETRONAS (10%).

There are several advantages that make Shell the best petroleum in the local market. We would say this is because Shell's marketing is doing great job with all the promotion and advertisement, they have successfully capture consumer's attention and build up a good reputation and credibility. For instance, spend RM60 fuel to participate in the RM20,000 lucky draw contest, Shell associate with BonusLink which benefit to customer for the point collection, they also provide car wash, hygienic toilet and etc. Besides, many customer believe that Shell provide a better fuel consumption.

However, PETRONAS has not been ranked as the best petroleum although it is a local group. The weakness could be the marketing is not as strong as Shell as we seldom notice promotion or advertisement by PETRONAS. Moreover, PETRONAS is non-autonomy which wholly owned by the Government of Malaysia. PETRONAS has lost its autonomy because politician may interfere in the daily operation of the company. Effectiveness of PETRONAS will be influenced since PETRONAS is dependent on the government for taking essential policy decision. Besides, officers of the company are least interested in operational undertakings which lead to lack of motivation to work. This is because they get the fixed salary without any share in the profit or without any responsibility for losses. In order to achieve better award among the petroleum market, we have discussed a number of recommendation which PETRONAS should invest part of its research or fuel exploration budget into research of other more natural and sustainable energy foundations and technology such as wind farms and solar. PETRONAS should form strategic partnerships with electricity producers in Malaysia and abroad to use PETRONAS's new technology to generate electricity.

The benefits for PETRONAS is by forming early partnerships with electricity producers and link them with its technology, PETRONAS can ensure it has a great competitive advantage over other "energy sellers" and make sure it can continually be profitable while being a sustaining corporation. Furthermore, another recommendations for PETRONAS to be a "Sustaining Corporation":- it should openly share its research findings on sustainable technology and best practices such as substitute energy sources and management & leadership techniques to promote sustainability with the institutes it is running which include Universiti Teknologi PETRONAS (UTP), Institut Teknologi Petroleum PETRONAS (INSTEP) and PETRONAS Management Training. It should also provide financial funding and expertise help for these institutions to conduct their own independent research on "alternative energy" technology.

The benefits for PETRONAS (and Malaysia) is that this will help the institutions to achieve academic and research excellence and this will help the Malaysian government's aspirations to make Malaysian an educational hub in this region. This will in turn help PETRONAS and its institution to attract world class talents into its fold. In terms of Corporate Social Responsibility activities, PETRONAS is doing well. But it focuses more on non-direct activities. In order to become a sustaining corporation, PETRONAS should start practicing "real" corporate social responsibility by decreasing and stopping environmental damage caused by its operations and actively strives for renewable and sustainable energy sources. To move into sustaining stage, PETRONAS must first treat the Environment as its definite stakeholder.

After all, we found that most people choose one global brand over another because of differences in the brands' global qualities. Rather than overlook the global characteristics of their brands, firms must learn to manage those characteristics. That's critical, because future growth for most companies will possible come from overseas markets.

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