Concept 2: Western Concept

In terms of foodservice concept, Malaysian foodservice firms that expanded internationally have common criteria in foodservice concept. They prefer to offer western foodservice concept as western fast-food firms have set examples in expanding internationally. Western-style fast food chains are doing very well, which numbering more than 1,000 outlets in Malaysia (Euromonitor International, 2011).

Prior to penetrating international market, Malaysian foodservice firms had already adopted strategies to expand overseas. The potential local firms embedded western foodservice concept. The concept of “Western Concept” would be formulated from the combination of the concept of “Western Brand Name” and “Western Food”. First, the concept of “Western Brand Name” was developed based on the cross-case analysis for three firms below:

Firm A: ...We use English-sound name as our brand like other well-known fast food restaurants: KFC, McDonald‟s, [and] Pizza Hut. Many people think we‟re American brand… Our brand name is always perceived to be international brand because we use European sound name. In fact, many customers thought we‟re American brand… Even though it sounds like English lady name, it‟s just a brand name, representing quality fast food chain. It‟s just popped up when our founder wanted to start a fast food business.

It‟s a simple-pronounce brand name with international appeal. It has no meaning but easy to remember...

Firm B: ...We use English word for our brand which is easier to pronounce, easy to remember and associate with... “Firm B” is a brand that is easily acceptable as our products and menus are adaptable in any market. Cakes, though western in origin, are quite universal and easy to relate to…most people and the staff who‟ve just joined-in thought it‟s an American brand because it‟s English name and the ambience is different from other (Malaysia) restaurants….

Firm C: …Our brand is named after our founder himself, “Firm C”…It is important to use a brand name that can be easily remembered and does not carry negative meaning…

when we were introducing “Firm C” in Saudi, the Americans were engaging war with Iraq. Although “Firm C” is a Malaysian brand but the name of “Firm C” can portray American or western influence…It symbolizes the best quality corn kernel sold internationally, over 14 countries worldwide...

The interviews above indicate that western brand name is important for Malaysian foodservice firms, the codes found were “English-sound name” and “American brand‟

in Firm A, “English word, American brand, and English name in Firm B, and “portray American” and “Western influence” in Firm C. These codes were used to establish the concept of “Western Brand Name”. Below is the cross-case analysis to develop the concept for “Western Food”:

Firm A: …We offer fried chicken, burger, French fries, bread, fish and chip as international food. Over 70% of the menu items offered in our outlets are western food…We make it by matching international brand with international food. If we use eastern brand name and offering mostly eastern food instead, we may face difficulty in expanding overseas. It‟s because we‟re competing with international brands which

mostly are strong western brands. International food like pizza, fried chicken, and burger are accepted worldwide. So, if we offer only eastern food, we may not be successful in overseas…

Firm B: …We consider our food as fusion food. For overseas, it‟s about 70% of western food, 30% is Malaysian food. In Malaysia, it‟s 99% (western food) with exception of Nasi Goreng (Malaysian fried rice). Even we offer Tom Yam Fried Rice (Thai fried rice), it‟s still not originated from Malaysia…We‟ve more than 60 types cakes offered to our customers…I consider Western food as international food…It (Délifrance) also offers coffee and spaghetti like us…

Firm C: …Almost all of our foods are western foods. Even our dorayaki (Japanese pancake) is look like American pancake. Our ice-cream potong (sliced ice-cream) is also western food. Our corn cobs, corn kernel can be used with western food serving.

We have already introduced corn in cup to more than 14 overseas countries. Also, our Belgian waffles, dorayaki (Japanese Pancakes), corn juices, corn smoothies, corn soup has found international market. Even our ice-cream potong (sliced ice-cream) has found international market. Most of our food sold locally can be introduced internationally…

Based on the analysis for the concept of “Western Brand Name” and Western Food”

above, the common criteria were discovered in regards to Malaysian foodservice brands that had expanded overseas. First, the brands created were better associated with western language, especially English language. Second, the brand name must represent high level of quality. The brand name must sound and resemble American or European brand that would give advantage of superiority. The general perception was that local-sound brands in Malaysia were inferior.

Third, the brands must be easily recognized and popular among the local customers.

Since many Malaysians had experienced traveling overseas, in addition to teenagers and adults who were increasingly adopting American culture and eating American food, the brands would continue to be accepted because the young generation who become older in future were continued to exert the positive attitude toward the brands. Fourth, the brands indicate a western person‟s name like Firm A and C. This criterion is consistent with the brand name of many international foodservice firms such as McDonald‟s, Kenny Roger, Wendy‟s, Carl‟s, etc. which depicts the person name. Fifth, the brands identify the universal name used for their food and menu offered like Firm B. Likewise, this criterion is also consistent with renowned international foodservice players such as Burger King, Pizza Hut, Domino Pizza, The Coffee Bean & Tea Leaf, and many more.

With this strategy, it inspires local firms to ingeniously apply the brand name that can appeal as international firm and portray global image. Local firms tend to name their brand that resemble western name. Brand name is more important than other criteria such as product offered in Asian countries especially Malaysia compared to the West.

The advent of Western foodservice concept has given idea to Malaysian foodservice firms to offer western food with western brand name. American products are already well-known and well presented in the foodservice market. Since an increasing number of American- and European-style foodservice firms are opening in Malaysian market, there is no doubt that Malaysian foodservice firms are also adopting western names in their brand. The adoption of western foodservice concept is not just brand name alone, it also involves food offered. This is summarized using Figure 5.1.

Figure 5.1: Pressure for International Food and International Brand Name

In Sector 1, the pressure for internationalization exerted by the local firms pursuing western brand name and western food at the same time is very high. In fact western food with western brand name helps the firms to prepare themselves in international market. In order to internationalize, their food and brand name should be universal and accepted in international market. Clearly, western foodservice concept plays significant role before internationalization takes place. The western foodservice concept has facilitated the internationalization of Firm A, B, and C. High pressure for international brand name and international food have resulted in rigorous international expansion for these three firms.

For A for example, has set up its outlets in 16 countries, while Firm B and C are 9 and 17 respectively.

In sector 2, the foodservice firms that offer western brand name may have advantage of being international brand name but if the eastern food is offered, it may be inconsistent with its western brand name. They exert high pressure on international brand name but

low on international food. International market may misperceive the food offered to them as customer may expect western food since the brand name is western name.

Offering eastern food in western brand foodservice outlets may disappoint their customers. This turns to be even more difficult in expanding overseas. In Malaysia, the local firms like SugarBun and Kyros Kebab are doing this, but they face difficulties in maintaining their outlet overseas, SugarBun, for example, has withdraw from China market, and many other outlets in Brunei and Bangladesh are facing problems associated with menu offered and segregation of franchisees in the host countries from franchisor. While for Kyros Kebab, it has been totally withdrawn from its international market in China, Singapore, Brunei, Indonesia and Pakistan since 2007. The strategy of western brand name with eastern food obviously has created unharmonious concept for international market.

Interestingly, in Sector 3, the foodservice firms that try to establish eastern brand name with western food may intend to offer universal food to domestic market only, without targeting international market. Eastern brand name may provide familiarity among the local customers by expecting that the local people will aspire and support local firm growth. Rasamas, for example, the subsidiary of QSR Brands Bhd fully utilizes its strong supply chains to offer western foodservice concept. Since QSR Brands Bhd is also the master franchisee for KFC in Malaysia and 3 other Southeast Asia countries, it depends on KFC brand to expand in the region while Rasamas focuses only the local market without being directly competence with KFC. In this case, it exerts low pressure over international brand name but high pressure over international food.

Lastly in Sector 4, the firms with eastern brand name offering eastern food have low pressure for international brand name and also international food. To date, they are still

not expanding overseas. Since the brand name indicates food offered, customers can expect what is offered. The local foodservice firms like Tai Thong offering Chinese food, Chakri Palace offering Thai food, and Sushi King offering Japanese food are only expanding their business locally. Therefore, the pressure for international brand name is still low. In this case, the eastern brand name with eastern food offered limits the tendency to internationalize.

At pre-internationalization stage, the preparation for internationalization is based on how much the pressure of the firms in offering international brand name and international food. The more pressure on the both elements, the easier the firms internationalize.