Introduction on the 5th October 2004 and has been

Introduction

Neelofa, a Malaysian entrepreneur, entertainer and founder of
Naelofar Hijab (NH).

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While going through her own personal transformation to dress
modestly, NH was created in 2014 making their breakthrough online. Stockist
were appointed to handle the increasing demands of the instant shawls. Today, NH
acquire more than 100 stockiest located in Malaysia, Brunei and Singapore. Two
of their first flagship store in Taman Tun Dr. Ismail (TTDI) and Publika
Shopping Mall, Kuala Lumpur house their NH collections.

NH has revolutionized modest fashion with aims to help Muslim women
across the world to don the hijab hassle-free. They are popular for their
instant and semi-instant shawls that are unique and are of high quality. This attracted
high volume of consumers worldwide.

With NH success, Neelofa, founder of NH houses two other labels;
Naelofar Abaya a modern and stylish abaya and Lofalens, a brand offering a wide
range of fashionable contact lenses. Alongside her successful line of business
ventures, she was featured by Forbes under the Forbes 30 under 30 Asia 2017.

PLES Analysis

PLES analysis of Singapore which has allowed Naelofar Hijab
to penetrate into market.

Political

Singapore is
a unicameral parliament and members are voted in the regular General Elections.
Mr Lee Hsien Loong states that they need to keep interest of citizens to remain
open while fostering multi-racialism. With high collectivism in the political
system, it emphasizes the importance of society.

A democratic
political system is also prominent where citizens participate in general
elections to select an individual to represent them in the government.

Legal

Based on common law1.
 Also, Singapore adopts civil law in
various statutes such as the Competition Act 2004 (No 46 of 2004), Consumer
Protection (Fair Trading) Act) (Cap 52A, 2004 Rev Ed) and Protection from Harassment
Act 2014 (No 17 of 2014). However, civil laws usually place less weight as
compared to common laws.

 

Tax Treaties

1. Avoidance of Double Taxation
Agreement (DTA)

Singapore
and Malaysia have signed an Avoidance of DTA on the 5th October 2004
and has been effective since 1st January 2007. (Annex A) . DTA is applicable to persons residing
in one or both state. This
agreement is applicable to all taxes imposed2
on income in both states.

2. ASEAN
Free Trade Area (FTA)3

ASEAN FTA
agreement successfully lowered the intra-regional tariffs through the Common
Effective Preferential Tariff (CEPT). By 1st January 2010, ASEAN-64
is a complete free trade area, eliminating import duties on 99% of products.

Antitrust Law

Singapore Competition Act (SCA) was enacted in
2004 protect consumers and businesses from anti-competitive practices. SCA
promotes an efficient market while strengthening competitiveness of the
economy. Applicable to both commercial and economic activities by private
sector entities.

 

Foreign Corrupt Practises

International Corruption Perception
Index 2016, ranked Singapore 7th as the world’s least corrupted
country (Annex B). The Corrupt Practices Investigation
Bureau (CPIB)5
is an independent government agency responsible for the prevention of
corruption in Singapore.

 

Economic                    

Mixed Economy

In favourable of business
developments in the country, SME6
continues to be the backbone of Singapore’s economy, 99% of which contribute to
nearly half of the country’s GDP.

 

As a free-market system, business respond
to market signals and adjust strategies accordingly. With openness, Singapore
has earned their title as a business hub. This is evident through government
interventions in major factors of
production7 while
providing legislative framework for business to operate in Singapore. Creating
a stable business environment and provide investment in infrastructure and
manpower. (Annex C)

 

Singapore’s overall GDP in 2017
projected growth by 3.5% from 2016, forecasting continuous growth by 1.5%-3.5%
in 2018.

 

Singapore dollar is one of the
strongest currency in Southeast Asian in 2017. 1 Singapore Dollar (S$1) is
equivalent to 2.98 Malaysian Ringgit (RM 2.98) today.

 

Social-Culture Structure

Determinants of Culture

Religion

Singapore guarantees freedom in religion practices.
In 2015, Muslims account 14% of total percentage of religion in Singapore. (Annex D)

 

Though Muslims are the minority, the demands for
modest fashion is rising. Consumer
spending on clothing is expected to reach $368 billion by 2021, thus
positioning NH internationally can generate more profit.

 

language

English is the spoken language. Nevertheless, Singaporeans
are bilingual. Official languages are English, Malay, Chinese (Mandarin) and
Tamil. Business language would be English. Thus, business transaction can run
smoothly with similarity of language used.

 

social structure

Class division is observed with
globalization. The upper class, working class and middle class represent the
different level of household. These segregations of class affect motivation for
one’s success. Thus, the government has reached out to minimize the gaps
between these groups to foster integration in the country. Class can also be categorized
by their social networks.

NH products are priced within the range
of $20-$50. NH can predict that most of their customers will be between the
upper and middle class because of their buying power.(Annex E)

education

Singaporeans are educated in English
followed by their Mother Tongue. Compulsory Education 8 was
implemented with objectives in providing strong knowledge foundation for their
educational journey. Lifelong learning was established to foster continuous
learning.(Annex F). With the robust and holistic education system, the
nation has shaped great talents being able to rank in 13th in
world’s talent competitiveness. (Annex G)

NH will be able to hire the best pools
of talents for the organization.

Conclusion PLES

After
analysing the political, legal, economic and social-culture structure of
Singapore, NH penetrating in Singapore will drive NH to grater heights. Favourability
condition of PLES encourage business development and enhancement while having
smooth business transaction within the two countries.

mode of entry

Exporting.
With rising demands, stockists were appointed in Singapore. (Annex H)

Through
exporting, NH can avoid hefty cost in establishing manufacturing operations in
Singapore, where they can achieve location economies of scale. This enables
central production in Malaysia to export them internationally. They create greater
control of their brand and operations overseas.

However, high
transportation cost could be incurred due to bulky items. Trade barriers can
also be a potential issue in host nations. Nevertheless, with trade agreements,
tariffs can be reduced upon exporting goods. Exporting can cause NH to lose
some control in marketing their product. Some stockist will be aggressively
market their products while some may not.

naelofar hijab
organizational structure

Vertical Differentiation

Centralisation

NH Prima International Sdn Bhd
Board of Directors

Chairman

Datin Nor Kartini

Director and Founder

Noor Neelofa Mohd Noor

Managing Director

Noor Nabila Mohd Noor

Sales Director

Noor Sara Dinna

 

NH decision
making powers lies amongst the upper-level managers. To ensure decisions are
consistent while maintaining standards and quality of scarves produced. Centralisation
further enhance coordination of innovation in their fashion line.

Decentralisation

Stockist
responsible in each market were given autonomy to facilitate marketing strategy.
They can be more flexible in responding and adapting to the changing
environment as they are experiencing it first-hand.

Horizontal Differentiation

International Division structure.  Headquartered in Malaysia, NH structure the organization
by its functions and international sub-unit. Person responsible for both
Singapore and Malaysia would be the stockists, in this case the sub-units.
These stockists have individual decision in marketing their products.

 

recommendation

Aspiring to
make NH an international brand, a recommended international business strategy
would be International Strategy. NH is still able to produce their products in
Malaysia while selling them internationally. Since NH product focus is on headwear,
it is part of a necessity for the Muslim community. Thus, they able to position
themselves as a product of universal needs in the Muslim community.

Muslim women
spent US$44 billion (S$58.4 billion) in 2015 on modest wear, according to the
2016-2017 State of the Global Islamic Economy Report. NH can expect that sales
will likely to climb.

Other recommendation includes:

1.     
Flagship
store in Singapore. Being recognized
as a Muslim-friendly destination for travellers9,
flagship store can boost sales and international presence to both locals and travellers.
They can accommodate a wider volume of collection while experiencing their products
first-hand10.

 

2.     
Sponsoring
local dramas or editorial shoots. With local artist and influencer styling NH, this
can increase brand awareness and recognition.

 

3.     
Adopting
a marketing medium in host country enables a focused marketing platform for
local consumers, ensuring standardization of products both domestically and
internationally. Instagram11
is one of their prominent marketing medium. NH utilize this platform to
communicate with their consumers worldwide.

 

Conclusion

Upon
analysing NH international presence, Singapore is seen as one of the market
where they can yearn a profitable outcome looking at how strategically the
nation is. With government intervention and rising expenditure from the Muslim
community, NH can see a promising future if they were to implement the
recommended suggestion, thus positioning them closer to be an international brand