Ricky’s Online Business Blog

I recently wrote a paper on whether globalization is good for Malaysia or not, as an assignment for the subject International Business Management & Policy in my MBA study.

To complete the 4000-word essay (I managed to write 2800 words only), I thought of 10 points and expanded from there. I published in Facebook before and have drawn many comments.  Here are the 10 points for sharing to all.

Welcome to comment and criticize. I’d like to discuss and learn from your viewpoints. Contact me if you would like to have the full paper.

Introduction

The question “Is globalization good or bad for Malaysia?” is not relevant any more. Globalization will happen and is happening to all countries including Malaysia, no matter it’s good or bad.

Quoting an unusual example – The late Qing dynasty in China in late 19th century and early 20th century. They locked the country out from the rest of the world. Unlike the Meiji Restoration that propelled their neighbour Japan into a world power in just a few decades, the Qing dynasty eventually fell in 1911.  Refuse to follow the world trend? It’s either downfall or extinction.

The 10 Points

#1 Malaysian businesses need the global market. The local market is just too small. It’s a matter of survival in the globalized 21st century. Don’t be content with just being a jaguh kampung (champion in home country).

#2 Malaysia needs to specialize. Want to get out of the middle income trap? Do something new, something different. Don’t insist on attracting FDI in labor-intensive businesses. Move up the value chain.

#3 We have been trying to “prepare” for globalization for too long time, even decades. It’s true some of us, some industries, some businesses are not ready. But when will we be ready? Perhaps when we are truly ready, we are irrelevant in the world economy any more.

#4 Globalization raises our competitiveness. Being a frog in a well (Malay proverb: katak dalam tempurung) does not improve our competitiveness. In business, it’s only when we face the real challenges that we grow. Just open up and the competition will hasten up our readiness.

#5 Globalization raises our human capital. Yes, brain drain is a real problem. But don’t dwell on it too long. How about using these “drained brain” in overseas for our advantage instead? How about getting foreign talents into our country instead? Who say Malaysia can’t attract talents? Learn from Mind Valley, the Google workplace of Malaysia.

#6 When we close ourselves out, people will not admire us. When we become an open book and have transparency, investors will come. A 81% drop in FDI is a wake-up call, much too late. Learn the lesson and open up.

#7 Communities in Malaysia have been sharing the same country, yet living segregated. But our diversity should be a great blessing to foray into the largest markets in world. Globalized Malaysian businesses with true partnership among different races and spirit of 1Malaysia can help national unity.

#8 We are living in an integrating, interdependent world economy. We need to keep up this reality. Want to close our market? Check the fate of Qing dynasty.

#9 We are good in many areas. We have leadership in many markets, such as Islamic finance and palm oil. Why can’t we excel in other areas as well? Malaysia Boleh (Malaysia can)? Don’t be defeatist. Think boleh and we boleh!

#10 I never advocate opening up 100% completely without reservation. There are limits. But we need to embrace globalization and even be an advocate in it. Globalization will change us, for the better.

Have you been invited to join various specialized Facebook groups lately?  For example, “Malaysia Badminton Network” for badminton lovers and “Malaysia Web Designers” for web professionals?

Yes, I have been joining some of these groups. Also learning about this new way of making money – building recommender community groups on Facebook.

Correct me if I’m wrong. But it works like this:

1. Decide on your passion, such as table-tennis or reading books.
2. Create a Facebook group around your passion, such as “Malaysia Table-Tennis Network”. Decide on what you can offer your group members.
3. Invite your friends on and off Facebook to join your group. Aim for the number.
4. Keep posting useful messages to group members to build your credibility, and make sure they get something beneficial out of joining your group!
5. Once you have reached a critical mass, such as 1000 members in your group, start leveraging the number to make money!

For example, you can contact sport organizations and companies to sponsor events, contests and prizes for your table-tennis sport group. You can help these sponsors sell their products. In return, you may get a cut of the profit.

Another example I’ve witnessed a book love group are doing. They leverage on their high number of members to negotiate with MPH to gain discount for their members.

I don’t know exactly yet how to translate number of members into profits, since I’m not there yet. But since you are leading your many group members now, you have the influence over the group members and “recommendation power” to talk to businesses interested in your group as their target customers.

And once you have achieved success with one niche group, start another group (better be related, I supposed), and leverage on the first group to promote the second!

Just announce to the first group that you have created a second group, then many of them will join you since they already trust you!

Does this business model work? I don’t know. But according to one Internet guru, building recommender community groups is one of the most profitable ventures on the Internet.

And what do you think?

When one comes to developing an online business, which is more important?  Profit first, or market share first?

I heard some say that market share, or “mind share”, is first and foremost important.  When many people have got to know a dotcom brand, they will visit the web site,  the “eyeballs” will be so increased, the “critical mass” will be so achieved, the “branding” will be so built up, and naturally the profit will come.

On the other hand, others think that profit should be the first to focus on, not market share.  A business can grow its market share so much that it is still not profitable.  It can command a large market share yet sacrifice the profits that could have been earned during the growth.

One typical example is a membership business online.  Shall we first focus on market share by giving out free member accounts in order to first attract the mass, and then try to sell some premium services later to them?  Or shall we start with a chargeable membership so that we can starting earning right from the first day?

Perhaps profit should be our first objective.  And as we do things the right way towards the objective, market share is a natural result.  What do you think?