Consulting on Ramalingam Foods International Expansion Plan by Infinity Business Consultancy (IBS)

Assignment Taken

Create an IT plan to support the international expansion of Ramalingam Foods

Case Understanding

Ramalingam Foods established by Mr. Ramalingam Venkatesh in South Bombay in 1965, is a successful fast food restaurant. It was famous for their authentic south Indian Freshly cooked food and filter coffee. During 1975, when India went under political turmoil and there was pressure in the market to sell goods at bare minimum price. But, Ramalingam Foods came up with innovative solutions and started selling Dosa-Idli Batter & packets of authentic south Indian chutneys. The next generation took over the business and thereby he thought to expand his business and started working on some innovative ideas to deal with the problem of low shelf life of Idli-Dosa batter. He came up with a wide portfolio: Instant Dosa Mix, Instant Idli Mix, Instant Gulab Jamun Mix, Instant Laddu Mix, instant coffee powder Instant Dhokla mix. They are available in different packaging. Now they are looking for expansion globally. Mr. Vijay has no prior experience of international business and hashired Infinity Business Consultancy for consultancy on international market expansion within a budget of INR 50 Crore for International Business expansion for FY 2019-20. As Ramalingam Foods don’t have enough capital and business acumen to enter more than one foreign region at a time thus they have requested Infinity Business Consultancy to suggest one region to start with international expansion.

BCS Solution Summary

Ramalingam Foods, an Indian company, which has a ready to cook product portfolio including South Indian food mix of idli-dosa instant mix,dhokla, gulab jamun mix and filter coffee asked IBS for advice regarding international expansion. Since Malaysia, Singapore and Indonesia have a huge south Indian population, IBS has suggested that the company should expand in these regions. The company would start by expanding in the Malaysian market because of its higher ranking in ease of doing business ranking, followed by export to Singapore by road and Indonesia by waterways from there. The company would build a production unit in Malaysia to cater the demand of the Malaysian market in the initial phase. After expanding in the Malaysian market, the company will start exporting to the neighbouring countries of Indonesia and Singapore. IBS has even advised Ramalingam Foods to launch current products in these three countries this year with planned product portfolio enhancement over next two years. IBS will draft an IT plan that would focus on 3 main areas: launch and management of "Connect" portal, Consumer feedback analysis and Infrastructure support

Solution

PESTEL Analysis

Political:

Malaysia consists of:

·       Thirteen states

·       Three federal territories

·       A monarchy

Due to this, the prime minister is the decision maker of most of the country’s regulations, therefore the permissions required for Ramalingam Foods to start operations , would have to be done in a centralized way. Malaysia is also a member of various international organizations such as the UN, the Commonwealth of Nations, OIC, ASEAN and this makes it a hub for country tie ups.

The main principles are peace and neutrality in developing and implementing its foreign politics. Corruption rate is low.

As per the World Bank data, Political stability index of Malaysia ,the latest value from 2020 is 0.12 points which indicates that Malaysia’s political stability is medium.

 Economic:

Malaysia is one of the most open economies in the world with a trade to GDP ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth, with about 40% of jobs in Malaysia linked to export activities. 

Malaysia's economy advanced by 16.1% yoy in Q2 of 2021, rebounding sharply from a 0.5% contraction in Q1 and higher than market expectations of a 14.3% gain. This was the fastest growth in the economy since the series began in 2000, due to the reopening of more economic activities and a low base effect last year. Both household consumption (11.6% vs -1.5% in Q1) and fixed investment 16.5% vs -3.3%) recovered sharply. In addition, net external demand contributed positively to the GDP as both exports and imports surged 37.4% and 37.6%, respectively. Also, government spending grew faster (9.0% vs 5.9%). On the production side, output recovered for mining (13.9% vs -5%), services (13.4% vs -2.3%), construction (40.3% vs -10.4%), while manufacturing sectors expanded more (26.6% vs 6.6%). By contrast, production of agriculture fell (-1.5% vs 0.2%). On a seasonally adjusted quarterly basis, the economy shrank by 2.0%, reversing from a 2.7% rise in Q1.

 Social:

As an upper middle-income country Malaysia is both a contributor to the development of low- and middle-income countries, and a beneficiary of global experience in its own journey towards high-income and developed nation status.

The World Bank Group Inclusive Growth and Sustainable Finance Hub in Malaysia (the Hub) serves as a partner to the country and its people in developing and implementing global development solutions.

Technological:

Malaysia’s Prime Minister unveiled the Twelfth Malaysia Plan on 27 September 2021. According to the executive summary states, the Twelfth Plan is anchored on three key themes, namely resetting the economy, strengthening security, wellbeing and inclusivity as well as advancing sustainability.

Four catalytic policy enablers, namely developing future talent, accelerating technology adoption and innovation, enhancing connectivity and transport infrastructure as well as strengthening the public service will support the achievement of these themes.

These policy enablers will form the foundation and building blocks of Malaysia’s development over the next five years and beyond.

The Twelfth Plan will accelerate Malaysia’s adoption and application of digital and advanced technology to create and unlock new opportunities. This will maximise the potential of the digital economy as well as achieve inclusive, responsible and sustainable socio-economic growth.

The talent and skills required to drive both the digital economy and 4IR will be enhanced, while R&D&C&I will be intensified. Malaysia will also aggressively attract investment in the digital economy to become the regional leader. The focus will be on mainstreaming digitalisation for inclusive development, accelerating R&D&C&I as well as capitalising on the potential of advanced technology.

Legal:

The Malaysia Digital Economy Blueprint (MyDigital) initiative launched in February 2021, is expected to be the impetus to position Malaysia as a high-value-added economy and a net exporter of homegrown technologies and digital solutions, at the end of this decade.  

Despite lingering uncertainties brought about by the COVID-19 pandemic, growth prospects look relatively optimistic. World Bank’s Doing Business 2020 report ranks Malaysia 12th amongst 190 global economies, and 2nd in South East Asia. The Malaysian economy is also observed to be on the path to recovery in 2021, with GDP growth projected at 4.4% according to The Economist Intelligence Unit forecast as of 14 June 2021.

 

 

 

 

 

 

Environmental:

Malaysia has a wide range of flora and fauna with 50-70% of the country being made up of tropical rainforests. Due to high exports of palm oil and mining, there have been mass deforestation, forest conversion, river pollution and land reformation leading to change of ecological landscape. So, this nation is not so good from environmental angle. But there are new government laws to control damages to the nature regarding waste disposal, emission from factories etc. and the situation might improve

 

IT Plan:

In the initial stages, Ramalingam Foods will be expanding in Malaysia. So there will be 2 main teams that will be working; one in India and other in Malaysia. Since they fall under one brand, it is important to maintain smooth flow of ideas between both offices for the brand to grow efficiently. Thus, we segregate IT plan into 3 main sections:

1. Launching and Managing "Connect" portal: this will be a centralized portal which will have be accessible to both Indian and Malaysian offices. It will comprise of the following utilities:
     i. Human Resource Management: will assist in employee onboarding by letting candidates upload their documents on the portal which can be validated by HR and other Business Developers. So HR from India can initiate onboarding of Malaysian employees in a virtual setup with all necessary validations.
    ii. Employee Services: this utility will allow employees to receive their payslips and payroll information, apply leaves interact with other employees and raise concerns in Grievance Redressal System available in the same portal.
    iii. Learning and Development: will comprise of learning resources and certifications related to FMCG industries that could be accessed by employees for their value addition.

2. Feedback System for consumers: a portal designed purely for consumers of the products that would collect their timely reviews. The data collected would be analyzed to improve or enhance the existing products and services.

3. Support Services: Both onshore and offshore offices would have support teams that would ensure smooth workflow of business by maintaining the infrastructure. The servers will track all the information related to purchases, sales, returns and receivables that could be accessed by accounting team to track company financials.

 

 

Conclusion

Using the above IT plan, Ramalingam Foods can strive to expand in Malaysia with robust use of technology and leveraging the best use of data, manpower and software infrastructure.

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