Question Requirements:
1. Please refer to Boost Juice Article for the background of the case study, and the attached word document for the questions.
2. Please conduct secondary research to substantiate answers.
3. Please use APA style referencing (including in text and end of text referencing)
4. Please do not explain an overview of levels and types of Market Segmentation for question 1a, a brief overview will suffice.
5. Keep answer to within 300 word limit for question 1a, and 400 word limit for question 1b.
ASIAN CASE RESEARCH JOURNAL, VOL. 18, ISSUE 1, 175â197 (2014)
© 2014 by World Scientific Publishing Co. DOI: 10.1142/S0218927514500072
acrj
This case was prepared by Dr. Jane L. Menzies and Professor Stuart C. Orr of Deakin University, Australia, as a basis for classroom dis- cussion rather than to il- lustrate either effective or ineffective handling of an administrative situation.
Please address all correspon- dence to Dr. Jane L. Menzies, Deakin Graduate School of Business, Deakin University, 221 Burwood Hwy, Burwood, VIC 3125, Australia. E-mail: [email protected]
Internationalization of Boost juice to Malaysia
IntroductIon
Janine Allis, the founder and managing director of Boost Juice, sat in her Melbourne-based head office, at Chadstone âThe Fashion Capitalâ1, and pondered the achievements made by Boost Juice in Malaysia. Since 2009, Boost Juice has opened 11 stores, with exciting plans for two more stores in the not too distant future.2 By 2014, a total of 30 stores are planned for opening. She wondered, would the economic fall-out from the European debt crisis have an effect on her Malaysian plans? Was the choice of Master Franchisees the right deci- sion for Boost Juice in Malaysia, and has the process of inter- nationalization for Boost Juice in Malaysia been successful thus far?
Background
Walk into a Boost Juice outlet and you will hear the music pumping, see the staff bopping to the rhythm of making you a fruit juice and you will understand what is meant by the âcustomer experienceâ at Boost Juice3; itâs fun, loud and designed to develop a unique relationship with customers.
The Boost Juice Company commenced operations in Adelaide, South Australia, in 2000; established and run by the entrepreneur, Janine Allis, who wanted to bring healthy fruit juices to Australia.4 Allis was aware of the popularity of juice bars across the globe. She had visited many juice bars in
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the United States where the industry was much more devel- oped than in most other countries.5 Allis built the organi- sation up from its modest beginnings in the Melbourne suburbs where she started mixing up some âwicked juice and smoothie blendsâ in her own garage, she then opened her first retail outlet in Adelaide in 2000.6 In 2004, Janine Allis was awarded Telstraâs Businesswoman of the Year award for her entrepreneurialism.7 Since then, Boost Juice has become an incredible franchising success story and, accordingly, has been awarded a multitude of awards in the Australian business community.8
By 2005, Boost Juice had expanded to 180 retail juice outlets across Australia and its brand awareness had risen to 94%.9 Allisâs success in the Australian market (see Exhibit 1) provided her with much of the motivation to internationalize to other countries and Malaysia. Since 2004, Boost Juice has embarked on an international expansion program and, in 2012, now operates over 240 retail outlets in 15 countries, plus Australia.10 Boost Juiceâs turnover was approximately A$135m in 2011.11 In 2007, Boost Juice acquired a majority holding in the Australian Mexican Food chain, Salsa.12 Then, in 2010, Boost Juice sold a majority stake to a US private equity company, The Riverside Company, for A$65m.13 The purpose of this was to raise the much-needed capital to finance Boost Juiceâs further international expansion plans. See Figure 1 for Boost Juiceâs development timeline.
Boost Juice entered Malaysia in 2009, with its first retail outlet in Suria, Kuala Lumpur (see Exhibit 2). By 2012, it had expanded to 11 retail outlets (mainly located in the Klang Valley, with one in Penang at Gurney Plaza)14. Locational decisions made by Boost Juice are usually based on sound research, foot-traffic, and demographic analysis.15 All Boost Juice outlets in Malaysia have been established in high-end shopping centres. These locations were selected because the
Fig. 1. Boost Juice Company Development Timeline.
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 177
volume of foot-traffic in shopping centres is high, and there is a belief that customers would be willing to pay a premium for juice and other juice products in shopping centres. These are also locations where it is âcoolâ for young people â a major segment of the juice bar market â to hang out. Boost Juice plans to continue to expand in Malaysia and have 30 outlets operating there by 2014.16 The companyâs international expansion is driven by Boostâs global brand strategy; âTo become to juice, what Starbucks is to coffeeâ.17
Industry
The juice bar industry structure in Malaysia is fragmented, incorporating many small single owner/operator businesses. While sophisticated juice bars are becoming more common in Malaysia, especially in shopping malls and new urban areas, Boost Juice must also compete with the local Malaysian road- side drinks and juice stalls that service more than 50% of the market.18 The juice bar industry in Malaysia is in the early stages of development and is characterized by high growth. The two critical influences that apply to the juice bar industry in Malaysia are the economic and socio-cultural forces (Table 1). The economy is performing strongly and there is an increasing need for consumers to be health and weight conscious, thereby driving the consumption of healthy prod- ucts such as fruit juice. These two factors make the juice bar industry in Malaysia attractive.
The juice bar industry is relatively new in Malaysia â juice bars have been popping up over Malaysia since around 2005. Before that, juices tended to be âdo it yourselfâ (DIY), supermarket bought products, or were bought on the side of the road and in hawker centres. Therefore the juice bar industry in Malaysia has a large number of new market entrants. All new entrants, including Boost Juice, have to invest substantially in promoting the juice bar concept to develop the market, especially since juice bars usually charge a premium for their products. In Malaysia, there are a number of branded juice bar competitors for Boost Juice,
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which include âFor Fresh Peopleâ, âNew Zealand Naturalâ, âJuice Worksâ, âJuice Barsâ, âBobalicious Smoothiesâ, âSharing Planet,â âDesserts Barâ and âBlack Canyonâ.19 These competi- tors mainly operate in the same locations as Boost Juice â shopping centres, and high-end urban centres. There are a number of unbranded competitors, which include juice stalls on the side of the road or in hawker centres. An analysis of the competitors in Malaysia suggests that Boost Juice has the most brand awareness.
The degree of rivalry between competitors is quite low and Boost Juice benefits from their size, resources and skills in developing the market. The other rivals competing in a similar manner to Boost Juice are comparable in size and economies of scale, being either a small chain of franchises or just a single independent juice bar. The single independent juice bars do not generate the same level of brand awareness as chains such as Boost Juice. The product ranges and basis of competition are similar for all of the juice bars in this segment of the market; they compete by offering quality to a broad
Table 1. PESTEL Analysis of Boost Juiceâs International Environment
Macro-environmental
Force
Intensity Reason
Political forces Low Government support is strong for FDI
and business development
Economic forces High Malaysia has a relatively positive
economic situation, with moderate
growth, low interest rates, and optimistic
outlook
Socio-cultural forces High Malaysian consumers are becoming more
health-conscious
Technological forces Low Technology has a limited role to play as
the product is produced to demand and
often customized
Natural environment
forces
Low The industryâs environmental impact is
low so it is easily able to comply with
current expectations
Legal forces Medium Franchisees each require a food retail
licence
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 179
market. Competitors do not aggressively use pricing strate- gies to attract a greater market share because of the rapidly developing market opportunities. Customers make frequent low-value purchases (possibly buying a juice every day), or when they visit a shopping centre during the weekend.
The threat of market entry is high as barriers (mainly set-up costs) are low. For example, a Boost Juice fran- chise investment costs between A$240,000 and $300,00020 in Australia, with predicted lower costs in markets such as Malaysia, because of lower factor costs. Furthermore, estab- lishment costs would be significantly lower for independent operators. The barriers to exiting the industry are also low, reflecting the low set-up costs. Malaysian government policy is strongly supportive of the entry of either local or foreign new businesses into its markets.21 Economies of scale are less important to juice bars, except in the area of purchasing and transportation of the fruit. The cost of the raw materials is fairly low, compared to the overall operating costs (site rental, power and labour costs), so economies of scale in purchasing and transportation offer only limited benefits. Otherwise, products are highly customized and, therefore, little benefit results from increased economies of scale in the juice bars themselves. There would be slight product differentiation between competitors, as competitors offer different flavours and blends.
Juice bars rely on a regular and dependable supply of fresh fruit and on the local labour force. The tropical climate contributes to the low cost of fruit in Malaysia where both fruit and vegetables are inexpensive and readily available. As the agricultural industry in Malaysia is fairly fragmented and comprises many small growers22, the range of suppliers avail- able to meet the relatively modest demands of a juice bar is extensive.
Customers in this industry are able to switch easily to another juice bar or substitute products such as fruit juices purchased from supermarkets. From a socio-cultural per- spective, however, Malaysians are becoming more health conscious. One of the reasons for this health-consciousness is reflected in a 2006 national Health and Morbidity Survey
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finding that 43% of Malaysian adults are either overweight or obese.23 Health concerns, therefore, are probably significant motivators for many customers of juice bars such as Boost Juice.
There are many alternatives to fresh fruit juice, including packaged fruit juice, milk drinks, soft drink, alcohol and coffee/tea, although fresh juices are more strongly dif- ferentiated from the health perspective. The threat of substi- tutes varies considerably as the preferences of the customers change, whereas other features of the industry change more slowly. Although the threat of substitutes is not as strong, it is difficult to react to because Boost Juice has a considerable investment in their juice bar systems, franchise and assets. There are a number of brands for fruit juices in Malaysia, which are mainly sold in supermarkets or convenience stores. In 2010, the major brands of fruit juices in Malaysia were Malaysia Milkâs well-known Marigold and Peel Fresh Brands, which have 23% of the market share, and F&n Dairies which have 18% of the market with their Sunkist and Fruit Tree Fresh Brands.24
At present, there is only limited competition in the industry, but many new juice bars are being established. It can be expected that competition will continue to increase in the industry in response to demand for juice bars and because of their profitability. In the short term, Boost Juice will need to keep their customers interested through constant product innovation to make their products more attractive than the substitutes, such as soft drinks. To achieve this, Boost Juice will need to expand its marketing and product innovation skills.
As the industry matures and the rivalry with new entrants increases, Boost Juice will have to respond to the actions of its competitors to maintain its market share. These competitors are also likely to develop their marketing and product innovation skills and will, therefore, be directly com- petitive with Boost Juice. It is also likely that, as the market matures, rivalry will move to predominantly price-based competition and profit margins will reduce. This will require Boost Juice to become more cost-efficient and to utilize more of its internal resources to respond to competitor actions.
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 181
resources
A number of Boost Juiceâs strategic resources have enabled them to internationalize successfully. The framework of people, product, marketing and brand characteristics will be utilized to analyse the resources that Boost Juice has available to transfer to its Malaysian operations.
People
Human resources are an important resource for Boost Juice. For example, the founder and director of Boost Juice, Janine Allis, has extensive business experience both in Australia and abroad in Hong Kong. Allis has been successful in interna- tionalizing Boost Juice to many other international locations thus far. The knowledge developed from these experiences has been a useful resource for both the establishment of the Malaysian operations, and for the advice given to Boost Juice Master Franchisees in Malaysia.
Master Franchisees are usually individuals, an organi- zation or partnership that has had previous retail experience operating multiple outlets. A Master Franchisee also needs to commit to an agreed number of retail outlets to be opened in a country over a period of time, referred to as a development schedule.25 The Master Franchisees in Malaysia for Boost Juice are a husband and wife team who had become fans of the famous Australian smoothies and juices when they lived and worked in Melbourne.26 The husband, nick Tiernan, who is English and his wife, Dr. Soraya Rahim Ismail, a Malay- sian national, decided they wanted to bring Boost Juice to Malaysia when on their honeymoon â which is an indication of their enthusiasm for the product! They then successfully applied to become a Master Franchisee.27
The background, experience and knowledge of both nick and Soraya are valuable resources for Boost Juiceâs inter- nationalization to Malaysia. nick is highly creative and has been a director in the retail industry. His enthusiasm and ideas are important motivators for Boost Juiceâs Malaysian
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operations.28 Both nick and Soraya had worked at Accenture in the United Kingdom (UK) and had been a consultant to multinational organisations across many countries including Europe, Japan, US and Australia.29 Furthermore, Sorayaâs valuable understanding of Malaysian culture and informal institutions is critical for the successful management of staff and development of strategies for the Malaysian market.30
Boost Juice also goes out of its way to develop a com- petitive advantage in its juice bar employees. It selects employees on the basis of their customer service skills, moti- vation, and enthusiasm and they refer to those motivated individuals as a Boostie.31 The employees working at Boost Juice need to be able to function well in a team, provide exceptional customer experiences and have fun along the way.32 Given the power of the customer in this industry, having service staff able to provide a positive customer expe- rience is important in attracting back customers who could easily switch to other juice bars or substitute products.
Product
Obviously, having a âgood productâ is a key requirement for sales in both domestic and international markets. Boost Juice has a healthy, nutritious and good-tasting product range. The range includes fresh fruit juices, crushes and delicious smoothies made with their top secret TD4Âź (To Die For) low-fat frozen yoghurt.33 Boost Juice also produces and sells complementary snacks and yoghurt at their retail outlets, and has a supermarket range, which is currently stocked in Aus- tralia, but not yet in Malaysia. These products are a healthy alternative to fast food. Table 2 displays the range of Boost Juice products.
Boost Juice has an innovation focus and develops new products and tastes to remain ahead of the competition. The products are the result of a sophisticated development process, which is another of Boost Juiceâs competitive advan- tages. A Boost Juice nutritionist assists in the development of all products and everything is at least 98% fat-free and does not contain any artificial flavouring or colours.35 Not only
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internationalization of boost juice to malaysia 183
does the product serve as a source of competitive advantage, the customer experience is also influential, as Soraya explains:
âboost is not just another juice bar â the brand is based on the entire Boost Experience, which takes place every time a customer enters a store.â36
therefore, this broader experience is designed to develop a relationship with customers and ensure that they return, as Soraya further elucidates: âIt is a combination of a fantastic product, served by positive and energetic people who greet you with a smile and are polite enough to call you by your first name, with a bright and colourful store environment to matchâ.37 this
table 2. the range of boost juice Products34
Products
Low-Fat Smoothies
Mango Magic
Strawberry Squeeze
All Berry Bang
Passion Mango
Janineâs Favourite
Blueberry Blast
Banana Buzz
Tropical Storm
Super Smoothies
Energy Lift
Green Tea Mango
Mantra
Gym Junkie
Brekkie to go-go
Skinny Smoothies
Mini-Me Mango
Berry Berry Light
Skinny Minnie
Melon
Indulgence
Smoothies
Raspberry Ripe
King William
Chocolate
Juices
Two & Five Juice
Energiser Juice
Wild Berry Juice
Immunity Juice
Create Your Own
Juice
Choose from a variety
of fruits
Crushes
Mango Tango
Crush
Berry Crush
Lemon Crush
Watermelon Crush
Tropical Crush
Boosters
Vita Booster
Immunity Booster
Energiser Booster
Protein Booster
Complementary
Product Banana Bread
Wraps
Yoghurt
Fruit
Muesli Bars
Supermarket Range
Bottled Juice
Frozen Yoghurt
Healthy Snacks
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relationship is an important source of competitive advantage for Boost Juice. Therefore, as a result of the development of innovative products and customer service to match, Boost Juice is able to compete successfully in the Malaysian market.
Marketing and Branding
Boost Juice marketing and branding is also a source of competitive advantage. It has made a name for itself with brightly-coloured stores, packaging and advertising; per- ceived to be âcoolâ and âfunâ by young consumers. The company has successfully built a well-recognized brand through public relations exercises, the media including radio and television, and it also has a vibrant and exciting website.38 It also approximately eight campaigns per year in the stores to boost the profile of Boost Juice, attract customers and develop the customer experience. They also have an active Facebook page, with a dedicated Boost Juice Malaysia site where they promote various campaigns, specials and offers. Through social media, Boost Juice aims to connect with its customers and assist in developing the customer experi- ence. Promotions tend be fun, for example, a recent promo- tion has been âthe name gameâ, where Boost offer a âFree Boostâ to people with a particular name every weekday for a period of four weeks. Generation Y and X customers are par- ticularly responsive to this type of marketing, branding and promotions. The brand profile is used to Boost Juiceâs com- petitive advantage in its marketing activities.39
The development of Boost Juice’s brand in Malaysia has been necessary for it to continue to innovate its product lines. Introducing innovative products such as âAll Berry Bangâ and âMango Tangoâ, âBrekkie to go-goâ and âEnergy Liftâ has provided Boost Juice with a significant portion of its differentiation from its competitors. It would not be possible to introduce these innovations, however, without a highly enthusiastic customer base. The introduction of such unusual products could easily backfire on Boost Juice if the customers were not already expecting and enthused by this type of innovation.
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InternatIonalIzatIon strategy for MalaysIa
Boost Juice took a planned approach to establishing their operations in Malaysia, deciding that it was the âright time to bring Boost to Malaysiaâ.40 This decision-making process was very consistent with the idea that local conditions in Malaysia must offer an advantage to Boost Juice, and that some of its home country competencies must be available to create a competitive advantage in the local market. Allis considers the relative merits of each potential international market from this perspective as part of Boost Juiceâs overall international- ization expansion plans:
âWe were delighted to open stores throughout Europe and South America, but Asia in particular holds so much potential for a brand and product like ours, so weâre really looking forward to working with nick and Soraya to make this venture a huge success.â41
The high growth of the juice bar industry in Asian markets offers opportunities to innovative businesses such as Boost Juice. The relative proximity of Malaysia to Australia, and time zone similarities (Kuala Lumpur is only 3,000 km from Darwin and is in the same time zone as Perth), combined with the strong trade relationships between Australia and Malaysia, simplified transferring valuable competencies from Boost Australia to Boost Malaysia.
the Process of franchising
Boost Juice was able to expand rapidly in Malaysia through franchises. Sharing the financial load and risk with fran- chisees enabled Boost Juice to expand more rapidly than would have been possible if it had had to rely purely on its own resources and access to capital. The rapid rate of expansion in a number of countries, including Malaysia, has enabled it to build first-mover advantages, with the result that Boost Juice is now a highly internationalized organisa- tion with little evidence of a home country bias.42 To assist
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in internationalization, Boost Juice works with an experi- enced US-based consultancy firm, which assisted Subway and Gloria Jeanâs to enter China.43 Boost Juice operates in Indonesia, Singapore, Malaysia, China, Thailand, Hong Kong, Macau, Kuwait, Chile, Brazil, South Africa, the UK, Estonia, Lithuania, Germany, United Arab Emirates (UAE) and South Korea (Figure 2).44 In 2012, Boost Juice also has plans to open five stores in India, with a total of 30 over the next five years.45 Boost Juice has also aimed to be locally-orientated when internationalizing to different countries, which gives them a better understanding of the local market. For example, choosing Soraya Rahmin Ismail as a Master Franchisee offers Boost Juice two advantages. The first advantage is that because Soraya is a Malaysian national, she understands the Malaysian environment and culture well, and second, having worked and lived in the UK, she also has an international perspective.
Franchising offers Boost Juice an advantage in Malaysia relative to many of the competitors who are not utilising franchising to reduce the amount of capital outlay and risk. Franchising has also been very effective in introducing good quality front-line management, and the development of
Fig. 2. number of Boost Juice Operations across the Globe.
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 187
greater efficiencies than could be achieved by using central- ized staff management practices typical of company-owned juice bars.
Boost Juice aims to select its Master Franchisees from a variety of backgrounds and industries to ensure franchises are varied by personal and professional interests.46 Master Franchisee selection is based on a number of factors, which include prior significant retail experience, previous owner- ship and operation of a successful businesses, experience in driving teams, and exposure to leasing, supply chain man- agement, marketing, sales, training and operations.47 In addi- tion, they need to also share the values of Boost Juice. Master Franchisees are required to have sufficient financial resources to properly support their franchise â a net worth of US$2 million and liquidity of at least US$1 million.48
Boost provides extensive support to its Master Fran- chisees, including a dedicated International Field Support (IFS) team, on-going access to Boost Juice marketing and promotional material, a training and induction program, an operating system and operations manuals, substantial group buying power, and a long-established supplier network.49 A Master Franchisee has exclusive rights to open an agreed number of Boost Juice retail outlets over an agreed time period in their given market. They also have a number of responsibilities50:
1. They are required to own and operate a number of Boost Juice retail outlets (although they are able to grant sub- franchises to third parties for some outlets).
2. They are required to establish infrastructure to support their franchise network in the chosen country, which includes training, marketing, leasing, design and develop- ment, and supply chain management operations.
Master Franchisees are charged a fee, based on the minimum number of retail outlets to be opened in a given market, which is mutually agreed by Boost Juice and the Master Franchisee.51 There is also an on-going royalty fee that ranges between 4% and 6% of gross monthly turnover for the Master Franchise-owned retail outlets.52 Sub-franchise retail outlets
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also generate an on-going royalty fee, which is shared equally between the Master Franchisee and Boost Juice. In addition, there is an International Marketing Levy, which is 3% of gross monthly turnover for the Master Franchise-owned retail outlets.53 One per cent (1%) of this levy is repatriated to Boost Juice Australia, and the 2% balance is to be spent by the Master Franchisee in increasing the brand awareness of Boost Juice in their local market.54 Average retail outlet establish- ment costs in Australia are A$240,000â300,000, although the costs are lower in Malaysia, reflecting the lower costs of mate- rials and equipment. These costs include the signage, fit-out and equipment.
The General Manager and the Training Manager of each Master Franchisee are required to complete a minimum six-week training program prior to opening their first retail outlet. This ensures that the overall management practices associated with operating the franchise network and indi- vidual retail outlets are transferred from Boost Juice to the Master Franchisee. The majority of this training is con- ducted in Australia, and an International Field Consultant (IFC) assists later on when the first retail outlet is opened.55 On-going support is provided by the IFC, and they are a key point of contact for questions, training, support and opera- tional needs. The IFC also visits the Master Franchiseeâs retail outlets twice during the first year of operation. Through the IFC, each Master Franchisee has access to Boost Juiceâs cen- tralized support departments, which include finance, fran- chising, marketing, training, design and development, leasing, operations and purchasing.56
Internationalization through franchising has brought many benefits to Boost Juice. It is not exposed to the full risk nor the capital investment required for wholly-owned foreign subsidiaries. In addition, the franchisees provide Boost Juice with local market knowledge and contacts. These features have enabled Boost to internationalize quickly across the world and in countries such as Malaysia, which has allowed it to rapidly establish economies of scale in its operations there.
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PerforMance
Boost Juice has performed strongly over its 11 years of operation, with an annual turnover of AUD$135m in the 2011 financial year.57 In addition, Boost has been the fastest- growing juice and smoothie bar chain in the Southern Hemisphere, and their achievements have been recognized with a multitude of awards over the years.58 Some notable awards include AMEX Franchisor of the Year in 2005, PWC Franchisor of the Year in 2005, and BRW Fastest-Growing Franchise in 2004.59
a Blended future for Boost juIce
Boost Juice has a relatively aggressive international expansion plan, with The Riverside Group recently purchasing a major stake in the Boost Investment Group, named the Retail zoo (see Figure 3).60 Allisâs vision for the group is to be the next global phenomenon, and it needed the financial backing and expertise of Riverside to do this.
Despite the backing of Riverside, Boost Juice faces a number of threats in the future, which it must learn to deal with. The first of these is the threat of increased local compe- tition in its various markets. For example, Boost Juiceâs local marketing efforts and the visual appeal of its retail outlets
Fig. 3. Organisational Chart for Boost Juice.
Boost Investment Group
(Reg. Bus Name:
The Retail Zoo)
Boost Foundation (Charitable)
Salsa (Mexican Restaurant Chain)
Boost Juice
Supermarket product lines
Retail (Franchised) outlets
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has done much to develop the markets in various countries. This leaves the gates open to increasing competition from rivals offering competitive products in a similar manner. The limited reliance of Boost Juiceâs subsidiaries on the Austra- lian headquarters makes its operations in other countries easy to imitate. Boost Juice will need to find new ways of coun- tering competition in all of its international markets and in Malaysia. Further, can Boost Juice continue with its fran- chising approach in Malaysia, or will too many franchisees cause it to lose differentiation?
Weak economic conditions as a result of the global financial crisis (GFC) and the European debt crisis in many of its markets are another issue that it must grapple with. For much of its development phase, Boost Juice has relied on the positive economic conditions in its international markets to support the establishment of its franchised subsidiaries. This was a satisfactory approach leading up to the GFC in the years 2008 and 2009, but may not be suitable for todayâs envi- ronment, especially if there is another global economic down- turn as a result of the European debt crisis. Will Boost Juice need to find new approaches to continue its global devel- opment? How will it accomplish its global vision if there is another world recession?
references
1. Chadstone is a shopping centre in the south eastern suburbs of Melbourne, Australia. It is claimed to be the largest shopping centee in the southern hemisphere, and it is labeled âThe Fashion Capitalâ as a majority of the stores are fashion based. Chadstone also has office towers where Boost Juiceâs head office is located.
2. Boost Juice, 2011a. Boost Juice in Malaysia, retrieved on 08/03/12 at http://www.boostjuicebars.com.my/Default.aspx#/ about-boost/our-history/.
3. Boost Juice, 2011b. About Us, retrieved on 10/05/11 at http:// www.boostjuicebars.com.my/Home-boost-malaysia.html#/ about-boost/our-history/.
4. Ibid. 5. Loc. cit., Boost Juice, 2011b. 6. Loc. cit., Boost Juice, 2011b.
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 191
7. Telstra Businesswoman Awards, 2004. Janine Allis â Founder and Managing Director of Boost Juice, retrieved on 20/05/11 at http://www.telstrabusinesswomensawards.com/assets/pdf/ winnerbooklets/janine%20allis.pdf.
8. Boost Juice, 2012a. national Awards, retrieved on 22/05/11 at http://www.boostjuice.com.au/national-awards.
9. Loc. cit., Boost Juice, 2011b. 10. Boost Juice, 2011. About Us, retrieved on 08/03/12 on http://
www.boostjuice.com.au/about. 11. Boost Juice, 2012b. Boost Global, accessed on 08/03/12 at http://
www.boostjuice.com.au/boost-global. 12. Smartcompany, 2007. new look Boost Juice ready to expand,
11 September 2007, retrieved on 30/08/11 at http://www. smartcompany.com.au/retail/new-look-boost-juice-ready-to- expand.html.
13. Greenblat, E., 2010. Boost Juice sells majority stake for $65m, The Sydney Morning Herald, retrieved on 14/06/11, at http:// www.smh.com.au/small-business/franchising/boost-juice-sells- majority-stake-for-65m-20100502-u1ez.html.
14. Loc. cit., Boost Juice, 2011a. 15. Boost Juice, 2012c. Investment & FAQ, retrieved on 08/03/12 at
http://www.boostjuice.com.au/investment-faq. 16. Loc. cit., Boost Juice, 2011a. 17. Facebook, 2011. Boost Juice Bars Malaysia, retrieved on 20/05/11
at http://www.facebook.com/boostmalaysia?sk=info. 18. Gan, I., 2011. Personal Communication on 14/05/11. 19. Euromonitor International, 2011. Consumer Food Service
in Malaysia, retrieved on 08/03/12 at http://www. euromonitor.com/consumer-foodservice-in-malaysia/report; Che Wan, R., 2010. Juice Up, Boost Up, retrieved on 15/05/11 at http://thestar.com.my/metro/story.asp?file=/2010/ 2/28/sundaymetro/5749918.
20. Loc. cit., Boost Juice, 2012c. 21. Personal communications with Malaysian small-business
operators, 4/07/11. 22. Economist, 2011. Country Report Malaysia, August 2011. 23. Samy, F. A., 2010. Malaysians getting obese â by eating too heavily at
night, The Star, retrieved on 27/07/11 at http://thestar.com.my/ news/story.asp?file=/2010/4/11/nation/6034589&sec=nation.
24. Euromonitor, 2011. Fruit/Vegetable Juice in Malaysia, http:// www.euromonitor.com/fruit-vegetable-juice-in-malaysia/report, accessed on the 08/03/12.
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25. Boost Juice, 2011c. International Franchising, retrieved on 15/05/11 at http://www.boostjuicebars.com/#/franchising/ international-franchising.
26. Loc. cit., Boost Juice, 2011a. 27. Loc. cit., Boost Juice, 2011b. 28. Loc. cit., Boost Juice, 2011b. 29. Loc. cit., Boost Juice, 2011b. 30. Loc. cit., Boost Juice, 2011b. 31. Boost Juice, 2012d. Whatâs a Boostie? Retrieved on 08/03/12, at
http://www.boostjuice.com.au/whats-a-boostie. 32. Loc. cit., Boost Juice, 2011c. 33. Loc. cit., Boost Juice, 2011a. 34. Boost Juice, 2012d. Study Kit, retrieved on 08/03/12, at http://
www.boostjuice.com.au/study-kit. 35. Loc. cit., Boost Juice, 2011b. 36. Loc. cit., Boost Juice, 2011b. 37. Loc. cit., Boost Juice, 2011b. 38. Loc. cit., Boost Juice, 2012d. 39. Loc. cit., Boost Juice, 2012d. 40. Loc. cit., Boost Juice, 2011b. 41. Loc. cit., Boost Juice, 2011b. 42. Sammartino, A., 2011. International business and strategy blog:
A juicy tale of international expansion, retrieved on 20/05/11 at http://internationalbs.wordpress.com/2009/01/23/a-juicy-tale- of-international-expansion/.
43. Loc. cit., Boost Juice, 2011c. 44. Loc. cit., Boost Juice, 2011c. 45. Boost Juice, 2012e. Global news: Boost to launch in India
2012, accessed 11/03/12, at http://www.boostjuice.com.au/ global-news-2.
46. Loc. cit., Boost Juice, 2011c. 47. Loc. cit., Boost Juice, 2011c. 48. Loc. cit., Boost Juice, 2011c. 49. Loc. cit., Boost Juice, 2011c. 50. Loc. cit., Boost Juice, 2011c. 51. Loc. cit., Boost Juice, 2011c. 52. Loc. cit., Boost Juice, 2011c. 53. Loc. cit., Boost Juice, 2011c. 54. Loc. cit., Boost Juice, 2011c. 55. Loc. cit., Boost Juice, 2011c. 56. Loc. cit., Boost Juice, 2011c.
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 193
57. Greenblat, E., 2010. Boost Juice sells majority stake for $65m, The Sydney Morning Herald, retrieved on 14/06/11, at http:// www.smh.com.au/small-business/franchising/boost-juice-sells- majority-stake-for-65m-20100502-u1ez.html.
58. Loc. cit., Boost Juice, 2012d. 59. Loc. cit., Boost Juice, 2011b. 60. Loc. cit., Boost Juice, 2011b. 61. Datamonitor, 2010. Australia Country Analysis Report â In-
Depth PESTLE Insights, Datamonitor. 62. DFAT, 2011. Australia â Economic Factsheet, retrieved on
02/11/2011, at http://www.dfat.gov.au/geo/fs/aust.pdf. 63. DFAT, 2008. Australia in Brief: A stable and competitive
economy, retrieved on 02/11/2011, at http://www.dfat.gov.au/ aib/competitive_economy.html.
64. Austrade, 2011. Austrade, retrieved on 02/11/2011, at http:// www.austrade.gov.au/.
65. Loc. cit., Datamonitor, 2010. 66. Loc. cit., DFAT, 2011. 67. The Australian, 2011. Aussie hits parity with US dollar, retrieved
on 02/11/11, at http://www.theaustralian.com.au/business/ aussie-hits-parity-with-us-dollar/story-e6frg8zx-1225939430116.
68. RTT news, 2011. AUD/USD Slides After Topping 1.10 Level â Westpac, retrieved on 02/11/11, at http://www.rttnews.com/ ArticleView.aspx?Id=1611446.
69. Loc. cit., DFAT, 2011. 70. Loc. cit., Datamonitor, 2010. 71. Datamonitor, 2010. Malaysia Country Analysis Report â In-Depth
PESTLE Insights, Datamonitor. 72. Ibid. 73. Department of Foreign Affairs and Trade, 2011. Malaysia
Country Brief, retrieved on 2/11/11, at http://www.dfat.gov. au/geo/malaysia/malaysia_brief.html.
74. Loc. cit., Datamonitor, 2010. 75. Loc. cit., DFAT, 2011. 76. Loc. cit., Datamonitor, 2010. 77. Loc. cit., Datamonitor, 2010. 78. Loc. cit., DFAT, 2011. 79. Loc. cit., Datamontior, 2010.
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Exhibit 1
Country background â Australia
Australia is a developed and stable economy with a Parliamentary democracy.61 Its business sector is primarily export-based, and Aus- tralia has traditionally been labelled âthe lucky countryâ because of its huge deposits of natural resources such as coal, iron ore, gold, and petroleum.62 The Australian government realizes that Australia should not be dependent on natural resources, and heavily pro- motes a âknowledge-based economyâ (which reflects Australiaâs significant export of education services and education to interna- tional students in Australia).63 Australia has embraced globalization in the past 30 years, as it has a strong export sector and it encour- ages foreign direct investment (FDI) in and outside of Australia. Austrade, the Governmentâs foreign trade department, actively pro- motes internationalization and supports Australian organisations operating internationally, on a number of levels (i.e., advice, edu- cation, financial assistance, support offices).64 Australia has a small population of 22.4 million and has high GDP per capita ($64,351 in 2011 in real prices).65
Australia has been able to weather the most recent global financial crisis, and currently has a positive economic growth rate, stable and moderate inflation of around 2â3%, low unemployment (6.1%) and its business outlook and confidence is good.66 Australiaâs ability to dodge the true effects of the GFC has been attributed to its natural resource export arrangements with China, the fact that the Australian economy maintains good economic fundamentals, and the economic weaknesses associated with the US and European countries. In 2011, the Australian dollar surpassed parity with the US dollar67, and achieved an all-time high, since it was floated in 1983, of A$1.10 against the greenback.68
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 195
Table 3. Australiaâs Economic Characteristics.69
Annual Data 2011
Population 22.4 million
GDP Growth Rate 3%
GDP (Billions US$, Market Exchange Rate) 1,448.2
GDP (Billions US$, PPP) 918.5
GDP per capita (US$, Market Exchange Rate) 64,351
GDP per capita (US$ PPP) 40,86
Inflation 3.00%
Current Account Balance (Millions US$) â5,529
Unemployment 6.1%
Interest Rates (Cash Rate) 4.50
Table 4. Australiaâs Economic Outlook 2012â2014.70
Annual Data 2012 2013 2014
Population (million) 22 22.3 22.5
GDP Growth Rate 3.6% 3.2% 3.0%
GDP (Billions US$, PPP) 545.1 563.1 580.1
GDP per capita (US$ PPP) 24,782 25,295 25,774
Inflation 2.7% 2.9% 2.7%
Unemployment 5.9% 5.9% 6.0%
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196 ACRJ
Exhibit 2
Country background â Malaysia
Malaysia has had a relatively stable political climate and is ruled by the United Malays national Organisation (UMnO).71 The polit- ical environment is usually described as a democracy, although there are rules that do impinge on free speech and the media.72 The most recently-elected Prime Minister, najib Razak, has set out a number of reforms which are aimed at liberalising the service sector. Malaysia is classified as a high middle-income, export-ori- ented economy, with per capita GDP (in market price) of US$8,235 in 2010. Malaysians have a life expectancy of 74 years.73 Economic growth in Malaysia dropped to 1.4% in 2009; however, the Malay- sian economy has rebounded from the GFC in 2010, supported by a spike in export and import activity with China.74 The Malay- sian government reported a growth rate of 5.5% in 2010.75 In 2010, Malaysia faced a high debt to GDP ratio, which suggests that government spending needs to be reduced otherwise this could severely affect Malaysian business competitiveness.76 Malaysiaâs future strategies and targets, stated in its Vision 2020, are to âmove up the value chainâ, and as a result it has developed attractive FDI policies to attract technology intensive businesses in response. Malaysiaâs outlook looks good, with growth expected to average around 5â6% for the next three years.77
Source: CIA Factbook, 2011.
Figure 4. Map of Malaysia.
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InTERnATIOnALIzATIOn OF BOOST JUICE TO MALAYSIA 197
Table 5. Malaysian Economic Characteristics.78
Annual Data 2011
Population (million) 28.3
GDP Growth Rate 5.5%
GDP (Billions US$, Market Exchange Rate) 247.8
GDP (Billions US$, PPP) 442.0
GDP per capita (US$, Market Exchange Rate) 8,624
GDP per capita (US$ PPP) 15,385
Inflation 2.7%
Current Account Balance (Millions US$) 28,231
Unemployment 3.4%
Interest Rates (Cash Rate) 3.0
Table 6. Malaysian Economic Outlook 2011â2014.79
Annual Data 2012 2013 2014
Population (million) 27.1 27.5 28
GDP Growth Rate (%) 5.6 5.9 6.0
GDP (Billions US$, PPP) 165.0 174.7 185.2
GDP per capita (US$ PPP) 6,096.3 6349.1 6621.9
Inflation 2.3% 2.5% 2.5%
Unemployment 3.3% 3.3% 3.3%
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