Formulating A Global Business Strategy for Nordstrom In Malaysia
The purpose of this post is to provide a cultural and leadership assessment for opening a new US manufacturing plant in a foreign country. It seeks to outline the steps of the global strategic planning process for a US clothing retailer (Nordstrom) to do business in Malaysia.
The piece assumes that Nordstrom is going to launch a new brand and creates the following:
- Brand Name
- Brand Mission Statement
- PESTLE Analysis
- Hofstede Framework
- Strategic Plan
New Brand Name:
YONGING
Brand Mission Statement:
“To reignite in you, the energies of youth through clothes that make you do what you enjoy without fear or prejudice. -The opportunity to be you”
YONGING means ‘youth’ in Jamaican street slang; but it also appears to evoke Asian sentiments, especially that of a Japanese nature. The Mission of this brand, YONGING, is “To reignite in you, the energies of youth through clothes that make you do what you enjoy without fear or prejudice. -The opportunity to be you”
This mission communicates to the new youthful buyer that Nordstrom knows what it means to be young, and free, without judgment and criticism. The mission is selling Nordstrom as understanding the youth, and extremely open to the new cultural changes and diversity, sweeping across the world. The mission takes into consideration whom the target market is, the product being offered and the general philosophies of the company. It further builds on the already established household name and offers a kind of alternative path for the customer; away from what Nordstrom is perceived to be.
Finally, the mission statement is very plain about what is supports, that is, diversity and the ‘free to be you culture’, thus resonating with the youngsters ‘discovering’ themselves.
Pestle Analysis (for Malaysia):
Political
Malaysia has had its fair share of global criticisms, mainly due to the ruling party’s approach to its crackdown on Freedom of speech, strong-arming the opposition and influencing the populace with its political agenda through the state-owned media. Asides these prolonged issues, the nation has enjoyed political stability and very little government influence on private business.
Economic
The Malaysian economy has maintained a consistency that many nations have difficulty with. The cost of doing business in Malaysia is also stable, and this means more and more brands are relocating their manufacturing outlets to Malaysia to maximize profits. Labour Productivity is also astonishingly high as compared to many neighboring states. It is ranked as one of the most competitive economies in the world.
Social
Malaysia is predominantly Muslim; however, the society shares a lot of similar societal traits to the nations in its region, predominantly Indonesia, Philippines, and Singapore. This is evident in the food, dance, and music. Malaysia is a touristy country and records a great number of tourists due to their very congenial visa policies with many nations and the developments made to the tourist industry. The people are generally receptive to foreign products even though fashion in the predominantly Muslim areas is conservative. The cost of living is very low, though the standard of living is high. Wikipedia. (n.d.) Culture of Malaysia
Technology
Malaysia is technologically advanced, with the country having taken many bold strides towards embracing growth and advancement in its formative years. Internet infrastructure is comparable to most parts of the Western world, with many global IT firms having regional headquarters in the country.
Legal
Malaysia’s is a robust system based on the British Common Law Legal System.
Environmental
Malaysia is strategically situated in the peninsula and has a beautiful coastline, teeming wildlife and a very cosmopolitan capital city. Malaysia is bustling with natural resources and wildlife.
Hofstede Framework: Six Parameters (Analysis on Malaysia):
Power Distance
From Hofstede Insights (n.d.), Malaysia at 100 scores highly on this dimension, meaning that since this parameter highlights the awareness that all people will not expect power to be distributed equally, the general understanding of the Malaysian people is that inequality and superior-subject relations exist. People are comfortable with accepting a tiered system where everyone has a place -case closed. Also, the predominantly Muslim population may be a contributing factor due to the teachings of the religion on respect and authority.
Individualism
Malaysian culture values collectivism over individualism. This means that there is a high degree of interdependence among the members of a group. Family is a big thing in Malaysia, and this spills over into other aspects of society, including work and school.
Masculinity
Malaysian society is very masculine. This implies that the average Malaysian is success-oriented and inarguably driven by competition and achievement. This is probably a reaction to the Malaysian-Indonesian rivalry that has long existed between the two nations.
Uncertainty Avoidance
Malaysians are a relaxed lot. The general attitude is part to do with the strides made by the nation in the last 50 years, in many aspects of the economy. Thus, deviance from the usual is not frowned upon and technological innovation is almost always welcomed and encouraged.
Long-Term Orientation
Malaysia has a low score on this scale. The people are normative in their approach to life. They enjoy the essentials of life, uphold age-old traditions as absolute, and desire quick results.
Indulgence
Malaysians are like most southeast Asian states and enjoy the good things of life. Malaysia scores a high of 57. This means that Malaysians may tend to splurge on leisure than most other Asian states.
Strategic Plan:
What International Business Strategy is to be used in Malaysia?
From the analyses above, we can easily deduce that the Business Strategy most adequate for Nordstrom’s Plant Business in Malaysian would be a Global Strategy. This is due to the High Global Integration of factory practices in many garments and footwear entities global that use Malaysia’s resources and how these practices have almost become standardized as opposed to the varying dimensions of operating a retail end. (Reference for Busness, n.d.)
Also, because Malaysians generally are tolerant people, who are very aware of the superior-subject relations that exist in a society, the hub-and-spoke system of running a business is not foreign to them. They willingly embrace the technological improvements that have made it possible to run such a system and do it successfully too.
Finally, since a manufacturing plant will be churning out products not necessarily for the local market but the entire global chain, it is imperative that standardization of processes and cultures be established to ensure the seamless integration of this new plant unto the existing channels.
What is to be done to ensure that the selected strategy is implemented effectively?
- By communicating the objectives clearly to all stakeholders, we ensure that the mission is communicated clearly to all concerned.
- Next, it is relevant that we set benchmarks that help us measure KPIs and data metrics. The factory is not a lossmaking venture, and this truth must be communicated every.
- The resources for production and healthy oversight must be made available during the course of the company’s existence
- Data received must be analyzed for differences against similar company plants in different regions, and against the rival companies in the same region.
- Deviations and differences must be evaluated, and measures put in place to address them. Some corrective measures could include re-training of equipment operators, etc… or the evaluation of the general company culture.
