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Internationalization of Malaysian Foodservice Firms

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Internationalization of Malaysian Foodservice Firms INTERNATIONALIZATION OF MALAYSIAN FOODSERVICE FIRMS LIM KUANG LONG THESIS SUBMITTED IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY FACULTY OF BUSINESS AND ACCOUNTANCY UNIVERSITY OF MALAYA KUALA LUMPUR 2013 UNIVERSITI MALAYA ORIGINAL LITERARY WORK DECLARATION Name of Candidate: Lim Kuang Long (I.C/Passport No: 740821-02-5971 ) Registration/Matric No: CHA060022 Name of Degree: Doctor of Philosophy Title of Project Paper/Research Report/Dissertation/Thesis (“this Work”): Internationalization of Malaysian Foodservice Firms Field of Study: International Business I do solemnly and sincerely declare that: (1) I am the sole author/writer of this Work; (2) This Work is original; (3) Any use of any work in which copyright exists was done by way of fair dealing and for permitted purposes and any excerpt or extract from, or reference to or reproduction of any copyright work has been disclosed expressly and sufficiently and the title of the Work and its authorship have been acknowledged in this Work; (4) I do not have any actual knowledge nor do I ought reasonably to know that the making of this work constitutes an infringement of any copyright work; (5) I hereby assign all and every rights in the copyright to this Work to the University of Malaya (“UM”), who henceforth shall be owner of the copyright in this Work and that any reproduction or use in any form or by any means whatsoever is prohibited without the written consent of UM having been first had and obtained; (6) I am fully aware that if in the course of making this Work I have infringed any copyright whether intentionally or otherwise, I may be subject to legal action or any other action as may be determined by UM. 11 August 2013 Candidate’s Signature Date Subscribed and solemnly declared before, Witness’s Signature Date Name: Designation: ABSTRACT This thesis undertakes the research project from an inductive position to shape the result by adopting the qualitative research process. It challenges the existing theory of internationalization process. This study will compare and contrast the sequential and non-sequential stage in internationalization process. The research tries to explore the facilitation of internationalization process that allows the acceleration of Malaysian foodservice firms to expand globally. By using behavioral approach, this study identifies and delineates the components of strategies adopted in the internationalization process. Based on the case study of the three selected Malaysian foodservice firms, the new model was proposed. It asserted that the intention to expand business overseas requires a firm to undergo (1) pre-internationalization stage; (2) international entry stage; and (3) post-internationalization stage. These three stages were affected by two themes at each stage. These two themes, namely “Western Embeddedness” and “Government Influence” were in turn, formulated on the basis of twelve concepts of internationalization process in cross-case analysis. These twelve concepts were the strategies that accelerated the foreign markets penetration of Malaysian foodservice firms. It was also contended that foodservice firms expand overseas first by franchising, then exporting, and eventually setting up their plant abroad. The newly proposed model of internationalization process was then debated with the existing literature. The limitations and future directions of this model were also discussed. ii ABSTRAK Tesis ini menjalankan projek penyelidikan dari sudut induktif untuk menghasilkan penemuan baru dengan menggunakan proses penyelidikan kualitatif. Ia mencabar teori proses internasionalisasi sedia ada. Kajian ini membanding dan membezakan peringkat turutan dan bukan turutan dalam proses internasionalisasi. Penyelidikan ini cuba mendedahkan pemudahcaraan proses internasionalisasi yang mempercepatkan firma-firma perkhidmatan makanan Malaysia untuk berkembang secara global. Dengan menggunakan pendekatan gelagat, kajian ini mengenalpasti dan menghuraikan komponen strategi yang digunakan dalam proses internasionalisasi. Berdasarkan kepada kajian kes tiga firma perkhidmatan makanan Malaysia yang dipilih, model baru dicadangkan. Ia menegaskan bahawa rancangan untuk mengembangkan perniagaan ke luar negara memerlukan sesebuah firma melalui (1) peringkat pra-internasionalisasi; (2) peringkat kemasukan internasionalisasi; dan (3) peringkat pasca-internasionalisasi. Ketiga-tiga peringkat ini dipengaruhi oleh dua tema di setiap peringkat. Dua tema ini, iaitu, “Penerapan Barat” dan “Pengaruh Kerajaan” seterusnya dihasilkan berdasarkan dua belas konsep proses internasionalisasi dalam analisis silangan kes. Dua belas konsep ini adalah strategi firma-firma perkhidmatan makanan Malaysia yang mempercepatkan penembusan pasaran asing. Ia turut menghujahkan bahawa firma perkhidmatan makanan mengembang ke luar negara melalui francais, diikuti dengan eksport, dan akhirnya membina kilang pengeluaran sendiri di luar negara. Model terbaru proses internasionalisasi yang dicadangkan akan dibahaskan dengan teori yang sedia ada. Batasan-batasan penyelidikan dan kajian masa depan untuk model ini turut dibincangkan. iii ACKNOWLEDGEMENT First of all, thank god for the completion of this thesis. I wish to thank those many individuals who provided encouragement and support in the completion of this dissertation: Sincere thank to Professor Dr. Mohd Nazari bin Ismail, my supervisor, for his support, contributions, and willingness to spend a considerable amount of time with me. I will always remember him for his approval of progress report every semester and allowing me to attend international conferences in order to fulfill the requirement to submit this research. Unfortunately, my late father, Lim Tian Teik, is unable to see my success. He passed away when I was about to complete my thesis writing last year. At one point, I had to cancel my interview appointment with one of the firms, Firm B, due to my father‘s illness. However, I managed to convince the firm to give me second chance. My wife, Yue Jing Yih, has been helping me in arranging my travel programs in order to attend two international conferences. The attendance of these two conferences is one of the requirements to complete my PhD study. The first was the proceeding of International Conference on “Asia: The Engine for Development and Growth of Economy (AEDGE)”, 2010, March 4 to 6, held in Mumbai, India, The second was Proceeding of International Conference on Business and Economics, 2010, March 15 to 16, held in Kuching, Malaysia. iv I would also like to thank those who live with me, my son, Lim Ming Ern; my daughter, Lim Min Huei; and my father in-law, Yue Siew Khuen for their love and understanding. Not forgotten, my mother, sisters and brothers who have always been supporting me for whatever I do especially in education. In my six-year struggle for completing this thesis, I have been able to maintain my momentum as a result of the expectation of my employer, Tunku Abdul Rahman College. As public higher learning institution which will be upgraded to the status of university college, it puts high pressure on me to pursue PhD. During my study, I was promoted as Program Supervisor in year 2010. Holding both positions as lecturer and Program Supervisor has posed challenges to me in completing this thesis. I appreciate the college support as well as my students and colleagues’ who have gone through with me during my difficult time. v TABLE OF CONTENTS PAGE Abstract ii Abstrak iii Acknowledgement iv Table of Contents vi List of Figures ix List Tables x List of Symbols and Abbreviations xi List of Appendices xii CHAPTER 1: INTRODUCTION 1 1.1 Problem Statement 1 1.2 Rationale 2 1.3 Background of the study 3 1.3.1 Malaysian Foodservice Segments 5 1.3.2 Asian Foodservice Concept 8 1.3.3 Western Foodservice Concept 9 1.4 Purpose of the Study 10 1.5 Importance of the Study 11 1.6 The Organization of Research 12 CHAPTER 2: LITERATURE REVIEW 14 2.1 Introduction 14 2.2 The Sequential Stage 15 2.2.1 Experience and Knowledge 20 2.2.2 Psychic Distance 22 2.2.3 Entry Mode 24 2.2.4 The Criticism of Sequential Stage 25 2.3 The Non-Sequential Stage 27 2.3.1 Experience and Knowledge 30 2.3.2 Characteristics of Industry 32 2.3.3 Characteristics of Firm 34 2.3.4 Characteristics of Entrepreneur 36 2.3.5 Home Market 40 2.3.6 Innovativeness and Technology 41 2.3.7 Networking 45 2.4 Internationalization of Malaysian Foodservice Firms 49 2.5 Global Consumer Culture 50 2.6 Summary 53 CHAPTER 3: RESEARCH METHODOLOGY 54 3.1 Introduction 54 3.2 Qualitative Research 54 3.3 Rationale for Case Study Research 56 3.4 The Pilot Case Study 58 3.5 Data Collection 61 3.6 Within- and Cross-Case Analysis 66 3.7 Open Coding 68 3.8 Axial Coding 69 3.9 Selective Coding 70 3.10 Theory Building 70 3.11 Collecting Other Primary Sources 72 vi 3.12 Validity and Reliability 74 CHAPTER 4: CASE STUDY 78 4.1 Case Study 1: Firm A 78 4.1.1 Theme 1: Background 78 4.1.2 Theme 2: Brand Name 80 4.1.3 Theme 3: Foodservice Concept 82 4.1.4 Theme 4: Government Supports 86 4.1.5 Theme 5: Franchise System 88 4.1.6 Theme 6: International Expansion to India 95 4.1.7 Theme 7: International Expansion to Middle East 96 4.1.8 Theme 8: Halal Commitment 99 4.1.9 Theme 9: Product Standardization and Adaptation 101 4.2 Case Study 2: Firm B 105 4.2.1 Theme 1: Background 105 4.2.2 Theme 2: Brand Name and Foodservice Concept 107 4.2.3 Theme 3: Competitors 110 4.2.4 Theme 4: Internationalization Strategy 114 4.2.5 Theme 5: Franchise System 118 4.2.6 Theme 6: International
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