Synergy With Foreign Partners Essay Example

investment, Proton will benefit from new technologies, designs, and potentially new profitable models. The new ally of Proton can achieve maximum synergy by engaging in these actions and cooperating with the company. As for determining parts of Proton to be developed and deciding on operations to relocate or close down, broad considerations should be taken into account when making these decisions.

Proton dominates the Malaysian car industry, specifically in consumer cars, and commands a significant market share. The company is primarily focused on upgrading its capabilities and enhancing its value chain. Currently, they are also working on designing sophisticated car manufacturing systems, in line with the Industry Master plan (IMP).

The focus of product development lies in research and placement strategies, specifically in the implementation of new in-car software applications to reduce carbon dioxide emissions. Additionally, Proton is incorporating the latest car technology to introduce innovations that enhance convenience, promote CEO-green products, develop hybrid and electric vehicles, and improve safety through features such as automatic parking, pre-scan technology, collision warning system, and vehicle-to-vehicle technology. However, the company's major challenge remains the poor quality control of its products.

Proton has received numerous complaints regarding power windows, doors, and alarm systems. These issues have contributed to the public's perception of Proton's poor vehicle quality and have negatively impacted the company's financial performance. This includes significant decreases in sales and market share, ultimately resulting in a substantial erosion of profit margin.

Proton has two distribution channels: Proton Dear and Eon. In order to reduce costs, the number of outlets has been decreased by 24% to 302 outlets, compared to 397 outlets in 2007 (FRR 2008). However, while the

current distribution channels are adequate, there is a need to relocate them in order to increase accessibility in major towns throughout Malaysia, especially in rural areas.

To succeed, Proton needs to rely on its experience, be aware of the risks involved, and mitigate them through prudent investment and spending. Rather than investing in multiple platforms, it should focus on streamlining operations and developing a platform strategy. Working with a coal partner in China and sharing technology can further enhance Proton's reputation as a provider of technology to the global investor community. This partnership can also help in educating and developing personnel skills to improve product familiarity and understanding of the Asian domestic market despite limited operations.

In reviewing the 2009 National Automotive Policy, it appears that there may be opportunities for collaboration between Proton and other industry stakeholders. While a full merger or takeover may not be necessary, it is possible to form strategic alliances to help Proton benefit from the liberalization of the policy. Despite the complexity of the issues involved, the trend towards increased competition in Malaysia's automotive industry is seen as a positive development.

A strategic alliance is when two companies collaborate and pool resources to work on a project that is advantageous to both parties.

Proton benefits from certain levels of protection against foreign competition, thanks to the implementation of tariff and non-tariff barriers, as the country's national car maker.

Collaborating with Proton could be a viable solution for avoiding import duty. Foreign automakers could establish a long-term partnership with Proton. Proton has maintained its market standing through the backing of its distribution dealers, suppliers, and vendors. Furthermore, according

to the National Automotive Policy (NAP), manufacturers of critical and high value-added parts components are given incentives.

In order to remain competitive in the global market, Proton could collaborate with high value-automotive-part manufacturers. These manufacturers would receive incentives such as 10-year 100% fiscal deduction Pioneer Status (AS) or 5-year 100% tax exempted Investment Tax Allowance. By providing their advanced technology, they could contribute to the improvement of research and development (R&D) and the design of automotive component modules or systems. Additionally, this collaboration would be eligible for incentives related to strategic projects with Malaysian entities. These projects would involve products or activities with national importance.

In general, industries that necessitate substantial capital investments and lengthy gestation periods incorporate high levels of technology, are integrated, generate extensive linkages, and exercise significant impact on the economy. The creation of collaborative relationships with suppliers and other entities serves as the cornerstone for generating additional value and enhancing efficiency beyond what is typically achievable. By means of collaboration, both automotive companies can concentrate on core competencies while eliminating redundant processes. Strategic collaboration will bolster the competitiveness of both companies.

Expanding its car lineup and succeeding in the liberalized local assembled luxury passenger market of NAP could be facilitated by Proton through a partnership with a foreign automotive manufacturer.

Expanding its presence in SEAN is part of the plan for some foreign automotive manufacturers.

The recommendation by Useful Alai may be affected by an important factor not mentioned in the case, which is political stability. The stability of politics can greatly influence the stability of the economy, as well as the overall outlook and even

the structure or business strategy of the alliance. For instance, political stability may not necessarily guarantee economic stability, as civil war could still erupt and pose a threat to Malaysia's economy. This condition would impact expert projections of the market outlook, cause a reduction in customers' purchasing power, and restrict banks from extending loans for vehicle purchasing among other consequences.

In order to avoid ruining the alliance's purpose, it is necessary for Useful Alai to consider political stability in their recommendation. This can help potential allies remain aware when investing or collaborating with Proton within any level of the alliance. It is important to gather details on each department to pinpoint areas where collaboration can lead to a successful business model. The primary objectives should be to streamline costs, accelerate market entry, and establish strong partnerships with top performers.