Exporting Education – MBA Program in Malaysia

Exporting Education – MBA Program in Malaysia

INT-610-G2027 Multinational Corporate Environment

Group # 2:
Alonso Cedeno
Eliza King
Luan Nguyen
Kitnara Tongkhan
Dzenana Hanjalic-Zimic

Term: 11TW2

Date: March, 2011

Table of Contents:
Executive Summary – Eliza King
I.

Introduction - Dzenana Hanjalic-Zimic

1.1.

Country Background

1.2.

Company Information

1.3.

Project Specification

II.

Country Attractiveness and Risk - Kitnara Tongkhan

2.1

Political environment

2.2

Economic environment

2.3

The attractiveness of the country

2.4

Overall risk assessment

III.

Industry and Competitive Structure – Eliza King

IV.

Strategy - Luan Nguyen

V.

Plan of Visit - Alonso Cedeno

VI.

Conclusion - Alonso Cedeno, Eliza King, Luan Nguyen, Kitnara Tongkhan & Dzenana

Hanjalic-Zimic
VII.

Appendix

VIII.

References

2

Executive Summary: Southern New Hampshire University is proposing to open an MBA branch in
Putrajaya, Malaysia. Putrajaya is located on the western island and is the administrative capital of
Malaysia. The Putrajaya government is looking to grow the city in a number of ways one of which is
increasing their human capital; they would like to invest in private international universities that would
like to open a branch in Malaysia. They are striving to push the Malaysian economy towards a more
knowledge-based economy. Malaysia is right in the heart of South-East Asia and in-between India and
China. We will be focusing on all of Asia but more specifically China. In the past China has been the
largest contributor to the level of international students studying in Malaysia, we are predicting that
number to increase given China’s economic position and population. We are also focusing on doing
what we do best here at Southern New Hampshire University, we will offer a comprehensive and
recognized MBA degree program at a reasonable rate. With the shift in the global markets and the
ways companies are looking to make profits there is a shift towards more practical goods and services
that meet the needs of the people at a price these mass populations in these emerging and
powerhouse markets can afford. With the down-turn in the US economy the US companies have seen
the number of incoming Asian students joining there companies straight out of college drop by 50%,
Asian company’s are now offering more competitive salaries and Asians are realizing that they can
stay closer to home. Attending graduate school in Malaysia offers an international hub that is in the
middle of a lot of the Asian countries that will also grant students the option to study in the US for a
semester or two.

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4

5

Introduction:
1.1.

Country Background
Malaysia is a fascinating country and a tropical paradise situated seven degrees north of the

Equator in the heart of South-East Asia. Bordering the South China Sea and the Straits of Malacca, the
country is divided into two separate parts: West pat of country called Peninsular Malaysia, lies to the
south of Thailand and north of Singapore and then East Malaysia located across the South China Sea
with the states of Sabah and Sarawak on the island of Borneo. These two regions are separated by
about 531 km of the South China Sea. Malaysia is a constitutional monarchy with an elected federal
parliamentary government and total land area of 330,242 square kilometers. Although larger part of a
country is located on the island of Borneo, most developed region of a country is Peninsular Malaysia
which comprises approximately 40% of the total land area. This part of Malaysia is home to the Capital
Kuala Lumpur and is typically mostly developed and populous. Federation of Malaysia is consisted
from thirteen states (Negeri) and three Federal Territories (Wilayah Persekutuan). Eleven states
(Johor, Melaka, Negeri Sembilan, Selangor, Pahang, Perak, Terengganu, Kelantan, Kedah, Perlis and
Penang) and two federal territories (the capital city of Kuala Lumpur and administrative centre of
Putrajaya) are located on the Malay Peninsula, while remaining two states (Sabah and Sarawak) and
one federal territory (island of Labuan) are on the island of Borneo. Strategic position of a country at
one of the world’s major crossroads and a place with population and interaction of a wide array of
races, traditions and religions dictated Malaysia’s course of history. The aboriginals of the Malaya
Peninsula were a tribe called Orang Asli who settled there in around 2500 BC.
Malaysia has been conquered by the Portuguese in 1511 and later on by the Dutch, British and
Japanese. Malaysia has its origins in the Malay Kingdoms present in the area which, from the 18th
century, became subject to the British Empire. The first British territories were known as the Straits
Settlements, with the other states forming protectorates. The states on Peninsular Malaysia, then
known as Malaya, were first unified as the Malayan Union in 1946. Malaya was reorganized as the
Federation of Malaya in 1948. Negotiated and peaceful independence from the British Empire,
Malaysia got on 31 August in the year 1957 but present-day Federation came into existence in 1965,
when two remaining states Sarawak and Sabah joined the Federation of Malaya. The nation of
Malaysia was formed in the year 1963 and since its independence this country adopted the political
system of a parliamentary democracy. Geopolitically, location of Malaysia at the heart of South East
Asia puts this country in the middle of two economic giants of Asia, China to the East and India to the
West.

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A low cost of living and a year round tropical climate make Malaysia a favorite destination for
travelers all over the world. Eighty percent of population currently lives on the Malaysian Peninsula.
Malaysian government aims for the national population growth to 70 million by the year 2100.
Malaysia is a multicultural and multi-ethnic society. The most important demographic statistics are of
ethnicity in Malaysia: the largest group is consisted from 60 percent of inhabitants declaring
themselves as Malays, 25 percent as of Chinese descent, 10 percent of Indian descent and 5 percent
as others. A colorful country rich in diversities makes Malaysia a truly a racial melting pot where Malay,
Indian, Chinese and smaller ethnic groups live together in respectful harmony. Malaysian diverse
culture is mix of Islam, Hinduism, Buddhism and Malay customs. However, the tradition and customs of
Islam as a majority religion of Malaysia form a fundamental part of this community’s day to day life. The
tenets of Islam observed by around 60 percent of Malaysians can be seen in the language, food and
architecture. Since the freedom of religion is constitutionally guaranteed for non-Muslims, there is
significant number of religions and faiths practiced by a majority of Malaysians. Two most common
religions after Islam in Malaysia are Buddhism which is followed mostly amongst Chinese people and
Hinduism amongst the Indians. Christianity (both Catholic and Protestant) is mostly followed by the
Sabah and Sarawak natives, Chinese, Indians, Kristang people and Eurasians. There are also certain
Indian communities which compose to compose of Tamils, Telugus, Malayalees, Punjabis, Bengalis,
Gujaratis, and Sindhis that profess a number of faiths.
Malaysia is a country that manages the awkward balance of embracing the future while drawing
on the past. Being a place where people strongly believe in respecting each other’s religion and
culture, has definitely declared Malaysia as a country that is known for its rich and cultural heritage.
There is wide range of cultures within Malaysian society: Malaysian, an Indian, a Chinese, Eurasian,
along with the cultures of the indigenous groups as oldest inhabitants of the peninsula and north
Borneo, forming at least 5 percent of the total population. Each community has its own cultural heritage
but there has also been a convergence which has come to be known as true Malaysian culture.
Different races contributed in forming their parts of the culture in the country. Other cultures that greatly
influenced the culture of Malaysia include the Persian, Arabic, and British culture. However, an
important social distinction in the emerging national culture is represented by two national groups: the
Malay and the non-Malay. The Malay elite usually dominate the politics in the country while mostly
Chinese middle class whose prosperous lifestyle leads Malaysia's shift to a consumer society. When
visiting Malaysia it is obvious that the ethnicities preserve their customs, religions and way of life. The
major

religious or traditional festivals are gazette public holidays like Aidil Fitri and Aidil Adha,

Deepavali, Thaipusam, Wesak, Chinese Lunar New Year and Christmas.

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Given their country's linguistic heterogeneity, Malaysians are skilled in learning languages, and
knowing multiple languages is commonplace. The national language is Malay but rapid industrialization
has sustained the importance of English and solidified it as the language of business.
Malaysia is offering incomparable travel opportunities to neighboring countries, including
Thailand, Singapore, Cambodia, Laos, China and Indonesia. Situated on major trade and immigration
routes in the region, where the Indian Ocean meets the South China Sea, Malaysia has become an
export-driven economy spurred on by high technology, knowledge-based and capital-intensive
industries.
Please refer to Appendix 1.1. for the Map of Malaysia
In recent years, many foreigners from all over the world have made Malaysia their second
home, either for retirement or to seek an employment. Being a country that encourages investments
having a significant economic freedom, makes Malaysia integrated part of the global economy.
Malaysia is the third largest economy in South East Asia and 10 th most competitive economy in the
world. Malaysia is the third largest economy in South East Asia (Deutsche Bank Research: Global
growth centres 2020, A guide for long-term analysis and forecasting) and 10 th most competitive
economy

in

the

world.

(International

Institute

for

Management

Development,

the

World

Competitiveness Scoreboard 2010)
Please refer to Appendix 1.2 for the Malaysia Overall Performance Ranking Scheme
The structural transformation of Malaysia's economy over the last 50 years has been
impressive. The Malay Peninsula was a world leader in the production of tin, due to demand for
canned food in Western countries and natural rubber needed in automobile industries, through the
early decades of the twentieth century. The development of Malaysia's industry heightened its
dependence on imports for food and other supplies.
Malaysia's important place in the global economy as one of the world's largest trading nations is a
significant part of its identity as a society. Primary trading partners include Singapore, Japan and the
United States, with Malaysia importing industrial components and exporting finished goods. Rubber,
petroleum products, palm oil and tropical hardwoods are very important commodities.
The population of Malaysia, as recorded by Department of Statistics Malaysia, is estimated to 28.25
million in a year 2010 and throughout its history the territory has been sparsely populated relative to its
land area. Forty percent of total population in Malaysia comprises of young citizens aged between five
and 24 years. From this group, approximately five million are in primary and secondary schools and
800,000 in public and private higher education institutions in the country. (British Council, Market
introductions , Basic information for all UK education providers )Overall, the total adult literacy rate for
Malaysia is 92 percent. (UNICEF, Information by Country and Programme, Malaysia, Statistics)

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Regardless of all challenges and changes over past decades, education is still at the high
position on Malaysia’s agenda. In the previous years, twenty one percent of the total budgets in the
Ninth Malaysia Plan (2006-2010) was allocated for education and training development. Government
of Malaysia also provided financial support, in order to encourage more Malaysians to take up Master’s
and Doctoral programs. Plans in strategies for higher education are recognizable in their aspiration for
Malaysia to become a regional and international centre of education excellence. Tertiary education is
essential part of Malaysian life. However, the universities that are the most influential in the society are
located outside the country. Hundreds of thousands of students have been educated in Australia,
United Kingdom and the United States. The experience of leaving Malaysia for training abroad is an
important practice of passage for many of the elite. Malaysia boasts a growing local university system
that will become substitute the foreign universities. The quality of local educational institutions, often
higher than that of the second and third class foreign universities that many Malaysians attend, is
rarely sufficient to offset the importance of gaining one's degree abroad.
1.2.

Company Information
Southern New Hampshire University is a private, higher education and research institution

which grants academic degrees in a variety of educational programs acceptable for wide range of
interests. It is a corporation that offers both undergraduate education and postgraduate education.
Southern New Hampshire University educates individuals to be successful in their careers and
contribute to their communities. The university was founded in 1932 by Harry A.B. Shapiro and
Gertrude Crockett Shapiro as the New Hampshire School of Accounting and Secretarial Science. In
1961, it was incorporated and renamed New Hampshire College of Accounting and Commerce. The
state of New Hampshire granted the college its charter in 1963, which gave it degree-granting
authority. The first associate's degrees were awarded that year, and the first bachelor's degrees were
conferred in 1966. The college became a nonprofit institution under a board of trustees in September
1968, and its name was shortened to New Hampshire College in 1969. The 1970s were a time of
growth and change. The college moved from its downtown Manchester site to the now 300-acre (120
ha) campus on the Merrimack River in 1971. The college introduced its first Master of Business
Administration program in 1974, and now almost four decades later offers more than a dozen
specialized MBA programs in fields such as Forensic Accounting, Project Management, Information
Technology Management, and Corporate Social Responsibility. Campus expansion began in the mid

9

1990s with the construction of a new residence hall; Webster Hall, home to the School of Business; the
Hospitality Center, home to the Quill (a student-run restaurant) and culinary programs; and Belknap
Hall, now home to the Institute for Language Education, Public Safety, the School of Education and
several university offices, including the Office of Admissions. In 1998 academic offerings expanded to
include the Ph.D. in community economic development and the Doctor of Business Administration.
One of the most important events in the institution's almost 80-year history was when New Hampshire
College became Southern New Hampshire University on July 1, 2001. The Southern New Hampshire
University is one of only a few American educational institutions that is accredited by the European
Council for Business Education (ECBE) in addition to Accreditation Council for Business Schools and
Programs (ACBSP). The Southern New Hampshire University offers over 40 undergraduate majors
including dual majors and over 30 minors, and nearly 20 graduate programs many with concentrations.
It also maintains a leading distance education program through SNHU online. (Southern New
Hampshire 2005-2006 Undergraduate Catalog)
Southern New Hampshire University is currently divided into the following schools:


The School of Arts and Sciences



The School of Business



The School of Education.

The Southern New Hampshire University School of Business develops and implements high-quality,
innovative, leading-edge, competency-based business curricula that meet the changing needs of
students, business, government and society.
Southern New Hampshire University brings both theoretical and practical knowledge into the learning
environment, engages in scholarly activities and provides service to the community. The university
values its students, faculty and staff by establishing and maintaining a supportive environment that
enables creativity, innovation, open communication and mutual respect. University recognizes that its
student populations are diverse and have a wide range of education needs, requiring that it use
different delivery mechanisms and locations and that the faculty is responsible for the academic quality,
integrity and consistency of all School of Business offerings, including continuing and distance
education.
Southern New Hampshire University has developed numerous agreements with overseas universities.
Many are transfer agreements by which we recognize courses delivered at a school overseas for
exemptions from courses required to graduate at Southern New Hampshire University. These

10

agreements can considerably reduce the time and costs of completing a degree in the United States of
America.
Southern New Hampshire University has developed numerous agreements with overseas universities.
Many are transfer agreements by which we recognize courses delivered at a school overseas for
exemptions from courses required to graduate at Southern New Hampshire University. These
agreements can considerably reduce the time and costs of completing a degree in the United States of
America. It brings in an international perspective to its programs through study abroad plans and
partnerships with international universities.
Southern New Hampshire University has an overseas campus in Klang, Malaysia in association with
the HELP International College of Technology (HICT). Students are admitted by Southern New
Hampshire University to take SNHU courses on site at HICT. Full degrees in Business can be
completed entirely in Malaysia. (http://snhu.edu)
1.3.

Project Specification
Malaysia places huge significance on attaining high standards and improved quality in

education and skills. Regardless any suspicion in the economic climate due to global crisis, education
industry in Malaysia is the one which is the least affected. As people tend to look for new opportunities
to improve and prepare themselves with new skills and knowledge in extremely changing labor
demand, education remained one of the strongest industries in the country.
Successful corporations in Malaysia are in search for in-roads to a previously closed
environment hoping to catch a major share of the growing knowledge economy market. Therefore, it is
likely that there is an increase in demand for master’s and doctoral programs from white collar workers
from both the public and private sectors and for short courses leading to certificates and diplomas.
Various strategies are being carried out by local authorities to attract more overseas education
providers in order to make Malaysia internationally desired location for undergraduate and graduate
studies.
The mission of the Southern New Hampshire University MBA Program in Malaysia is to provide
professionals and individuals with a strong knowledgeable foundation and to meet their needs for
expertise and competence in the area of business. The Southern New Hampshire University would
offer its MBA program in Malaysia on both a full-time and part-time basis. This project should be seen
as a partnership between Malaysian Government and Southern New Hampshire University.

As

expected, Malaysian partner in this project would have a better understanding of the local business
practices and a ready network of associates with the education industry and regulatory authorities. On

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the other hand, Southern New Hampshire University will be included in providing academic,
professional and management input. Relationship building between these partners is a key factor for
the project. This program would be complementary in nature and will be well designed to benefit a
variety of audiences. The purpose of this MBA program is to promote education and training in order to
enable Southern New Hampshire University activity to prosper in an exporting education
internationally. Southern New Hampshire University MBA Program assisted by Malaysian government
will be required to improve the international academic program in Malaysia and provide suitable
services to the business community to expand its capacity on a local and global basis. Through idea
exchange between these two countries, this program will reflect the cultural interdependence and
recognize MBA graduates as highly competitive labor force in Malaysia. Both sides will assist in the
development and academic success of its students in Malaysia, establishing resources and services
that will improve the learning environment and support students in broadening their educational
horizons.
Putrajaya is an exceptionally desirable location for Southern New Hampshire University branch
with attractive sites accessible. Situated as it is in the Multimedia Corridor, the highly efficient
broadband IT network set up by government to enhance infrastructure development in Malaysia, the
city is well-placed to provide the best support for this program.
Administrative capital Putrajaya is expected to offer a range of educational institutions that will cover
studies related to government and civil service needs. Malaysia has become a very important
educational hub for international tertiary education, especially in collaboration with UK universities and
it is government policy to promote this development much further. Much of this enlargement has taken
place in Kuala Lumpur and the Klang Valley, but these areas are now overfull and stressed in many
ways. Being part of a growing, new, planned city Putrajaya will be an exciting and worthwhile
experience for Southern New Hampshire University.
The MBA program offered by Southern New Hampshire University in Putrajaya is expected to
be very significant segment of 9th Malaysian plan with an objective of making the country an
international center of excellence in education. Human capital development became the main agenda
of the country mission and their target is to see 40% of the population in the 19-24 age group benefit
from access to higher education by 2020.
In order to achieve the objectives of Vision 2020 (transformation into developed and competitive
country) Malaysia needs quality, intellectual capital output. A commitment to create knowledge based
society through higher education process; use of information technologies and retraining workers has
been seen as a worthwhile investment by Malaysian government. Higher education pursue is key to
the success in a highly competitive market. The ideal multi-cultural and multi-ethnic Asian destination

12

has many to offer and makes it logistically a sound choice to export education services from United
States to Malaysia. Its diverse population, its peaceful political environment, its good public
transportation network, its advanced IT applications, its modern facilities, its warm climate and many
other advantages mean that Southern New Hampshire University has found Malaysia friendly and
welcoming location for exporting education.
Project Objectives
There are various objectives of this project for the Malaysia as a host country. These include:


Building local capacity and education infrastructure;



Becoming a host for the first graduate studies education provider from United States of
America.



Building and adopting good practice widely recognized;



Contributing intellectual richness and skills diversity;



Demonstration of foreign models of teaching and research;



Reducing the outflow of domestic students and attracting international students from
surrounding countries;

Beneficiaries of the project will gain:


The opportunity to obtain an international graduate degree in Malaysia;



Since cost of living in Malaysia is considerably low, a significant saving could be made
o



by a student not paying living expenses in a foreign country;

Since there are no visa restrictions for Malaysian citizens, student taking MBA program
could work full time and study part-time;



Disruption to family and work life, are minor, as compared to those when studying abroad.

The Southern New Hampshire University will benefit by:


An expansion of new areas of research and cooperation through establishment of links with
institutions of higher education and organizations in Malaysia that contribute to the
educational objectives;

13



An improved international reputation and creating opportunities for business in sounding
countries.



Attracting students unable or unwilling to attend some of the Malaysian public or private
universities;



Greater opportunities for student and staff mobility within the university network;



Increased revenue and broader international reach.

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II. Country Attractiveness and Risk:
This section is telling about political, economic, and financial risk of Malaysia. There are
many factors both good and bad affect on MBA project. As education is the most important factor in
the business world, there are much more advantage to operate this business; although SNHU must
have full understanding of the entire business environment. The market is not always stable, so we
should follow the market and generate confident before investing.
2.1 Political environment
Political stability is another important factor that we must consider for the investment. The
country runs by political system; the conflicts in government will make economic slowdown. This
will affect to all investors cannot reach their goal. Political risk can be measured for internal that is
the conflict in the government itself, and external conflict with neighbor countries.
Please refer to Appendix 2.1.for Dynamic Political Risk Index 2010
Structure
Malaysia is a constitutional parliamentary monarchy nominally headed by paramount ruler
(commonly referred to as the King) and a bicameral Parliament consisting of a nonelected upper
house and an elected lower house; all Peninsular Malaysian states have hereditary rulers
(commonly referred to as sultans) except Melaka and Pulau Pinang (Penang); those two states
along with Sabah and Sarawak in East Malaysia have governors appointed by government; powers
of state governments are limited by federal constitution; under terms of federation, Sabah and
Sarawak retain certain constitutional prerogatives (e.g., right to maintain their own immigration
controls) (Central intelligence agency, n.d.).
The King of Malaysia also called “Yang di-Pertuan Agong” translated into English, the words mean
"He who is made Lord". This position is rotated in every 5 years among 9 monarchs from each
state. The current King or Yang di-Pertuan Agong of Malaysia is Sultan Mizan Zainal Abidin from
Terengganu state. The constitution specifies that the executive power of the Federal government is
vested in the King and is exercised by him on the advice of the federal Council of Ministers. The
latter is headed by the Prime Minister, appointed by the Yang di-Pertuan Agong from among the
elected members of Parliament (Malaysia's new king takes office, 2007)

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Risk assessment
Malaysia has some internal problems because of distinction among the various groups of
communities. There are big three groups play major role in the country, which are Malaysian,
Indian, and Chinese. Back in 1969, the worst incident was when Malaysian and Chinese fighting
each other that caused insurgence which lead to hundreds of deaths. After this situation they
learned how to live together and avoid the conflict issues that can happen again in the future. In the
present, it is normal to see different groups of people working and doing things together. The
government of Malaysia consists of UMNO (United Malays National Organization), MCA (Malaysian
Chinese Association), and MIC (Malaysian Indian Congress). These organizations are working
together toward the same goal that is peaceful society. We can see that Malaysia has very good
system to handle and eliminate social racist issue that could affect the country in political,
economic, and financial risk (Political risk in Malaysia, 2009)
The current Prime Minister is Najib Razak since 2009. He faces a tough time to deal with 13-party
coalition. UMNO or The National Front that controlled Malaysia for 25 years was defeated for 5
states in general election; this is big lost of losing control. The group of people which are Chinese
and Indian standing against The National Front and voted for former Deputy Prime Minister Anwar
Ibrahim. However, Anwar Ibrahim has been sued on sodomy charges and waiting for the case
renewed. Right now the political movement is stable but it can be serious if Ibrahim lose the case.
In recent years, the political stability in Malaysia is going down. If this situation still occurs it will
damage to investment and economic of the country (FACTBOX-Five political risks to watch in
Malaysia, 2009)
Political stability in Malaysia is always making a positive image to the country. Even though
Malaysia faced with the Asian financial crisis in 1997, but their political stability remained intact was
one of the best reasons that most of the investors kept faith with Malaysia investment.
2.2 Economic environment
Back in to Independence Day in 1960s, Malaysian produced tin and rubber as a main
product of the country. After that they transformed to be regional manufacturing center. The
government also has a policy to focus on export which leads Malaysia to a newly industrialized
country (NIC) (Economic risk in Malaysia, 2009).

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The Malaysian economy is an open economy; the movement is engaging both domestic and
international. Malaysia is one of the fastest growing economies in South East Asia. They are on the
way to becoming “the fifth tiger”; we can call that newly industrialized economy. These tigers are
Singapore, Hong Kong, Korea, Taiwan, and Malaysia. In 2007, Malaysia ranked the Third largest
economy in South East Asia (Malaysia economy 2010, n.d.). Malaysia located beside the sea; they
have a sea route that connects the Asia to East, Europe and Middle East. This location is very
useful in foreign shipping and trade.
Malaysia GDP
Malaysia Gross Domestic Product is depends on three sectors; service sectors, agricultural
sector, and manufacturing industries. The Agricultural sector had contributed 9.7% in 2008. The
Manufacturing Industries contributions were 44.6% and Service Sectors 45.7% towards GDP. The
goal is to have GDP growth rate of 20% at the end of 20 th century. Another number that shows the
health of economy and liquidity is Purchasing Power Parity (PPP), Malaysia ranked 29 th of the
world (Malaysia economy 2010, n.d.). This number is quite good compare with the others.
The real average GDP of Malaysia in Past 8 years is 9.6% which is best for investment. This
number of growth rate will not drop in the near future because Malaysia has a clear vision of the
goals until year 2020. Malaysia population is now 20 million and these people generate GDP of
$171 billion (William, Michael and Sam, 1997, para. 1).
Malaysia Personal Income
It was an approximation in 2007 that there are 8.7% of 5.8 million households in the country
were having monthly income below RM 1,000. Another 29% were having an average monthly
income between RM 1,000 and RM 2,000 and 15.8% were having within a range of RM 5,000 and
RM 10,000. Just only 4.9% were having income higher than RM 10,000 (Malaysia economy 2010,
n.d.).
From this information the majority groups of people are between 1,000 to 2,000 and 5,000
to 10,000. These numbers show that they quite have high average monthly income. The unit of
USD convert to RM is 1 USD equal to 3 RM (1 US Dollar = 3.05782 Malaysian Ringgit). If they
have 3,000 RM monthly incomes, it will be around 1,000 USD. It could be too less in U.S. but this
amount of money could spend for the whole month and also have savings too in Asia.

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Economic Risk
Currently Malaysia is undergoing monetary expansion policies to assist increase domestic
income and spending. The economic recession all around the world now, especially in the US
made Malaysia’s electronics exports reduced; this is also the primary revenue sources. They
continue with its pegged exchange rate, holding at 3.80 RM/US dollars. This strategy helps
maintain the interest rates stable and keeping the inflation rate low (Raj, Colon, Kostembaum,
Cordova, n.d., page 3, para. 3).
Malaysia is like the other countries all around the world, the economic is uncertain. They
protect the country’s economy not to fall down in to the recession again by launch two stimulus
packages cost 67 billion MYR. This is huge amount of money to make the economic stable.
2.3 What make the country attractive for this project?
Economic attractiveness
On the economy views, there are the scores indicate Malaysia economic health. Malaysia
scores 63.4 in our business environment ratings, which was better than the previous score of 61.5
in 2009. The business is stable in Malaysia from 2009 to 2010 which is better in the overview of the
country. This has helped place Malaysia greater than average 29th position out of 167 ranked
markets. On the other hand, due to lower scores in the infrastructure made Malaysia still inferior to
the neighbor countries, including Singapore and Hong Kong (Malaysia Business Forecast Report
Q4 2010, n.d.).
Market environment attractiveness
The size of the market is quite big in Malaysia, as we can see from the number of the
students. Five million students is the target market of our school in the future. Currently, most of the
students in Asia have high competition in education because good companies or institutions require
higher and higher degrees. If new graduates would like to find a good job, they must come with at
least Master degree to differentiate from the other people.

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Malaysian language or Bahasa is the medium of instruction in most of the schools in the
country. However, English is still widely used in education but some of courses such as science and
mathematics will be taught in Bahasa. The government tries to make sure that English will still be
used in most of the schools, they added more hours to teach in English subject. Rate of knowing
English in the country tend to be high according to the government reinforced English Grammar
course in the syllabus to strengthen students’ capability in the way of spoken and written English. In
most of the universities in Malaysia students are required to take an additional exam called
Malaysian University English Test (MUET) and submit the points along with other documents. It
shows that their education system is very good comparing with some of their neighbor countries
that the rate of speaking English is relatively low (Malaysia market introduction, 2009).
The huge competitors that we should focus on are private universities because they are
more flexible in their admission prerequisites. For example, the score that students submit for the
admission are lower than the requirement of some standard universities. They may not need the
English score to attend the university. This is choices that Malaysian students can choose for their
degrees and this cause many universities to compete each other in the intense level. Some of them
reduce the requirement to attract more students that could not pass the other universities’
requirements. This is normal strategy for education business that want high number of students in
the first time with low requirements, after they have much more budget and the reputation of
universities are well known; they will add more requirement in to the admission to upgrade the
standard of their universities. Most private universities and colleges corporate with overseas
universities to offer TNE (Trans-national Education) programs that mean students can get the
overseas Bachelor’s degree in their own country. This is the same situation that we consider to do
in Malaysia but we need to differentiate our university that is come from United States and rare in
Malaysia education.
There is some studies area which very popular in Malaysia because of the market needs.
Popular study areas include science, accounting and business, law, engineering, pharmacy,
medicine. SNHU MBA Program is in business area that popular in the country so, the range of time
that market will accept our business should be very quick.
Government policies attractiveness
Malaysian government had launched many policies to stimulate the education of the country
in long-term plan. The purpose of these plans is to run the country with education and also compete
with the other countries in terms of rate of education. Despite all of the factors around the world that

19

affect to the country, education is still high in Malaysia’s agenda. The 9 th Malaysia plan in 2006 to
2010, twenty one percent of the total budgets are assigned for the education. This is only the first
part of the stimulus plan from the government. The second stimulus plan will be after the first plan
finish. In this plan, the government will give financial support to students for encourage more
Malaysians to study in Master and Doctor Programs. The National Education and National Higher
Education Strategic Plan would like to push Malaysia towards its objective to becoming a local and
international centre of education excellence (Malaysia market introduction, 2009). This is the
exactly meets the objective of SNHU to find the suitable place to expand their business. This
country is very open for the education in every aspect. The trend of getting international degrees is
highly popular in the present; our school will satisfy great demand of students in the country that
don’t want to travel abroad.
On the other hand, the trend of Malaysian students that want to study abroad is growing.
From the 12,430 Malaysian students studying in the United Kingdom in 2007 – 2008, 35 percent
(4,735 students) were enrolled in postgraduate programs. We can compare with 31.2 percent in
2006 – 2007 that have 3,775 students. For the number of the students it has been huge number
increase for 16 percent. The undergraduate program that Malaysian students are taking remained
the same number. So, 4.7 percent of Malaysian students that studying in The United Kingdom was
increase compared to the 11,875 in 2006 – 2007 (Malaysia market introduction, 2009).
2.4 Overall Risk Assessment
From the political views, risk in Malaysia is relatively low. According to Dynamic Political
Risk Index 2010, Malaysia is the Green Zone that means low risk. We could compare the risk levels
with another country in South East Asia such as Thailand and Indonesia; they are all in high risk
level. From this information Malaysia is the best country in South East Asia for the investment.
Economic environment in Malaysia is going in the right direction with the electronics export
focused and they are one of the tigers in Asian. The global economic risk that happens recently is
the only factor that affect directly to the country. The demand was very low at that time and they
cannot export the goods. On the other hand, they keeping produce the goods to protect their labor
not to affect by the economic. This recession was only in a short period of time so; the impact was
not so hard to drag the economic and GDP down in huge number.
The overall picture of Malaysia right now is very good for the investment from many factors
that support our project. The opportunities are open in Malaysia and education business is highly
success in this country.

20

21

III. Industry and Competitive Structure:
3.1

Competing Firms
There are 13 private and public Malaysian MBA programs. In order of popularity they are; the

University Malaya, University Technology Malaysia, International Islamic University of Malaysia,
University Putra Malaysia, University Kebangsaan Malaysia, Multimedia University, UCSI University
Malaysia, University Tun Abdul Razak (UNITAR), University Sains Malaysia, SEG International Bhd,
University Utara Malaysia, European University Malaysia, and University Tenaga Nasional (UNITEN).
The University of Malay was the first established MBA program. Course fees for MBA programs
awarded from Malaysian schools are around $6,000-$8,570 for private universities and $4,290-$5,715
for public universities. These are reasonable rates for MBA programs and the cost of living in Malaysia
for these students is reasonable as well. The local Malaysian universities and colleges are doing okay
but are not considered on par with other international MBA programs. Around 50,000 Malaysians study
abroad each year to earn these sought after international degrees. The Malaysian government’s new
initiative is to bring in more branch campuses to offer MBA programs in Malaysia. The government is
trying to attract and retain knowledge in Malaysia, a big part of their human capital agenda. Individual
cities and states of Malaysia are inviting schools to come and open branch campuses in partnership
with the Malaysian government. The goal of these new branch universities is to grow and retain the
intellectual capital that is already in Malaysia and to also attract students looking to attend post
graduate studies in South-East Asia. There are already two branch universities that are offering MBA
programs in Malaysia, they are Curtin and Nottingham. These two schools would be SNHU's only
competitors being international branch campus' offering MBA programs in Malaysia.
Curtain University of Technology is a school based out of Australia, they offer an MBA program
at a very low cost. They are located on the east island of Malaysia called Borneo. In 1999, Curtin was
invited by the Sarawak State Government to establish a university in the city of Miri on the northwest
coast of the island. This type of invitation is what we are looking to do with the Putrajaya government.
Their campus was the first foreign university campus to be set up on the island of Boreno. The
program that Curtin offers in Malaysia is the exact same one that they offer in Perth, Australia. Miri is
the second largest city in Sarawak, their population is around 300,000. Miri is the first oil producer in
Malaysia. Our campus will be located on the other island of Malaysia to the west making Curtain's low
fees and more rural location take out some of our competition with them but they are still offering the
basic good that we are offering, an very inexpensive MBA from an international university.
Nottingham University is the other MBA branch competitor. Nottingham is a prestigious

22

university based out of the UK. They established their branch in Malaysia in 2000. Ranked in the
Economist as top 100 MBA programs world wide, they also boast top 10 in the UK. The Nottingham
branch campus is located in Kuala Lumpur, Malaysia. Kuala Lumpur is Malaysia’s legal capital and
home to many local MBA programs. Their tuition is around $13,140 per course compared with SNHU's
$1,773 and Curtin's $873 per course. This price differentiation and level of degree awarded put them in
a different bracket than SNHU.
With the latest downturn in the economy and the emergence of new global powerhouses such
as the BRICs, companies are starting to produce more affordable goods and services that appeal to
the masses; goods and services that get-the-job-done with less frills of the past. You can see this type
of reform in the new wave of healthcare (walk-in clinics), products (focusing less of making money off
luxury items, instead producing a good that get the job done that everyone can afford), and education
(the growing popularity of community colleges and affordable private programs such as SNHU). SNHU
believes that affordable International MBA degree program will be just what a lot of people in SouthEast Asia and more importantly China are looking for. Malaysia and Singapore already offer the best
education in Southeast Asia. Malaysia is located right in the heart of South-East Asia and is also
positioned between the growing and every apparent forces of India and China. SNHU's desired
location is in Putrajaya, Malaysia's administrative capital and home to recent and on going government
development. Putrajaya is trying to grow human capital for the city of Putrajaya as well as the country
as a whole. This goal co-insides with the 9 th Malaysian Plan which was a plan from 2006-2010 that was
put forth to advance Malaysia toward becoming a more developed, just and united nation. One of the
ways Putrajaya is trying to grow human capital is by increasing the number of well established
international MBA programs (branches) which will increase the number of Malaysians and International
student that will study their MBA degrees in Malaysia and potentially stay in Malaysia after graduation
retaining human capital as a step towards their goal of becoming a knowledge-based economy. The
Putrajaya government is willing to help with the funding of such development. The funding that they are
offering will help open branch universities in Putrajaya as well as help fund the finances of local
Malaysians that attend those schools.
There are MBA program competitors in nearby countries. In the Philippines they have the Asian
Institute of Management and University of Philippines. In Singapore they have INSEAD, NANYANY,
and the National University of Singapore. In Thailand they have the Asian Institute of Technology
School of Management and Chulalongkorn.

23

3.2

Regulatory Environment
Private educational institutions are required to register with the Ministry of Education. PHEls

(Private Higher Education Institutions) that are approved by the Minister of Higher Education are
closely watched by the Malaysia Qualifications Agency. To gain full accreditation schools needs
approval from the Ministry of Higher Education and the Malaysia Qualification Agency (they fall under
the greater branch of the Ministry of Higher Education). The Malaysian Qualification Agency is a
National accreditation board that was established in 2007 under the new education legislation – The
Malaysian Qualifications Act (MQA). Malaysia Qualification Agency replaced LAN's role of being the
National Quality Assurance agency for private education institutions. They are a statutory body that
was put in place to help establish academic standards and accreditation or courses as well as to
uphold the highest of global academic standards. There are 8 levels of higher education qualifications,
a masters degree fall under 7 of the 8 qualifications. Doctoral programs need to uphold all 8 of the
qualifications. The initial process of approval is called Provisional Accreditation and the formal
recognition is the actual Accreditation.
Education is the primary responsibility of the federal government but each state has an
Education Department to coordinate educational matters in its own territory. Education in Malaysia is
overseen by two government ministries, the Ministry of Education and the Ministry of Higher Education.
They both enforce international standards in higher quality education through authorities and education
legislation. The main legislation governing the education in Malaysia is the Education Act of 1996.
Other important pieces of legislation that have impacted and governed the education system are The
Universities and University Colleges (Amendment) Act 1996 and The Malaysian Qualifications Agency
Act 2007.
The Ministry of Higher Education was established in March 2004. They are responsible for
quality assurance of higher education for public and private sectors. They are comprised of 3
departments and 4 agencies. The departments that its comprised of include: the Higher Education
Department, the Polytechnic Management Department and the Community College Management
Department. The agencies include: MQA, PTPTN, Yayasan TAR and Public Institutions of Higher
Education (IPTA). The Ministry of higher education is located right in Putrajaya.

The Malaysian

Qualification Agency monitors and oversees the quality assurance practices and accreditation of
national higher education. It's a credible and internationally recognized quality assurance body of
higher education. They chart new boundaries in higher education quality assurance. It takes around 2

24

years for a higher education establishment to gain full approval from the Ministry of Higher Education
and the Malaysian Qualifications Agency.
The Malaysian Qualifications Act of 2007 was established to promote dynamic growth of higher
education and the mobility of the Malaysian Qualifications. The act is there to give confidence to the
parents, students and employers about the standards of the Malaysian Qualifications and the quality of
their delivery.
Under the Malaysian Qualification Act the Malaysian Qualification Agency was created. The
agency was a merger of the National Accreditation Board (LAN) and the Quality Assurance Division.
The Agency monitors and oversees the quality assurance practices and accreditation of national
higher education. The Malaysian Qualifications Agency is a credible and internationally recognized
quality assurance body of higher education. The agency charts new boundaries in higher education
quality assurance. It takes around two years for a higher education establishment to gain full approval
from them. The main goal of the the Agency is to implement the Malaysian Qualifications Framework
(MQF).
MQF is Malaysia’s qualifications and their quality in relation to their education system. The framework
creates and classifies qualifications based on a set of criteria that's approved nationally and bench
marked against international best practices. Criteria is accepted and used for all qualifications awarded
by recognized higher education providers. MQF integrates with and links all national qualifications. The
Malaysian Qualifications Framework also provides ways to help students transfer credits and gain
credits for “life long learning.”
The establishment of the Malaysian Qualifications Agency and the implementation of the
Malaysian Qualifications Framework will benefit national higher education and the development of
human capital which is the main goal of Malaysia and more specifically Putrajaya.
Perbadanan Putrajaya are the Federal Territories Ministry of Malaysia. They approval as well as the
Ministry of Higher Education are both required. They were established under the Act 536 Perbadanan
Putrajaya in 1995. The purpose of this ministry is to manage and administer the Federal Territory of
Putrajaya. Perbadanan Putrajaya is also entrusted with the functions of a local authority and local
planning authority by various orders and notifications under the Local Government Act, namely: the
Federal Territory of Putrajaya (Modification of Local Government Act 1976) Order 2002, the Federal
Territory of Putrajaya (Modification of Street, Drainage and Building Act 1974) Order 2002 and the
Federal Territory of Putrajaya (Modification of Town and Country Planning Act 1976) Order 2010.
Please refer to Appendix 3.1 for a process flow chart for approvals from the Ministry of Higher

25

Education and the Federal Territories Ministry.

3.3

Local Financing Potential
Our goal for local financing and overall support is to team up with the Putrajaya Government in

opening up a branch of SNHU that will be solely offering the SNHU MBA program. The Putrajaya
government is already encouraging the development of international branch universities. The
government is trying to develop human capital in Putrajaya and in Malaysia. At first we will be renting
space in Putrajaya to open our MBA program and as that program grows will be be in close contact
with Putrajaya holdings. Putrajaya holdings was incorporated in 1995 and they are the Master
developer of Malaysia's administrative capital of Putrajaya. They are the largest urban development
project in Malaysia. They develop commercial and residential properties in Putrajaya. The
shareholders of Putrajaya Holdings are: Petroliam Nasional Berhad (PETRONAS) 64.4%, Khazanah
Nasional Berhad 15.6% and Kumpulan Wang Amanah Negara (the national trust find) has 20%. As
master developer, Putrajaya Holdings works with the city’s local authority, Perbadanan Putrajaya, to
implement the master plan that envisages Putrajaya as a Garden City & an Intelligent City.
3.4

Overall Attractiveness of MBA Industry in Malaysia
Many foreign students may choose to pursue their post graduate education in Malaysia

because of the world recession. The costs of tuition and living are very affordable in Malaysia. The
Ministry of higher education is expecting about 75,000+ foreign students to take up undergraduate and
postgraduate programs. They were at 72,000 in 2008 that was a 40% increase from 2007. The
Malaysian government's goal is to have over 100,000 students studying there, that was there goal for
2010, no numbers are out yet as to if they made it but we know they are close. The Ministry of Higher
Education is pushing to make Malaysia a hub for higher education excellence in the region. Most of the
students have been from China, followed by Indonesia and the Middle East. Higher education doesn’t
fluctuate like other industries in the recession. The suffering economies is a great time to go back to
school and gain the knowledge needed to take a competitive stand in the future markets. Local
enrollment at private institutions in Malaysia went up 53,000 from 2007 to 2008 totaling at 420,000
people.
Malaysia and specifically Putrajaya are looking for private international universities to open up

26

higher education branches in Malaysia especially with a focus in Business and Research and
Development. They are trying to increase their human capital to pursue their goal of becoming a
knowledge based community. They are looking to attract local Malaysians as well as international
students. As of now only a small portion of the Malaysian working class have post graduate degrees.
There are currently around 32 private universities in Malaysia which leaves room for growth. The
Malaysian government does not want to open up any more public universities they would like to
expand the private sector and more specifically the branch sector so that students will graduate with a
degree from a well know international university. Malaysia is becoming a knowledge based economy.
Malaysia is trying to develop world-class quality education and meet the demands and requirements of
the new millennium. Malaysia is also trying to confirm English as a second language and opening
these branch universities and programs will help. The Malaysian government has initiated major
educational reforms by formulating new legislation on education. Malaysia is becoming a dynamic and
exciting regional center for education excellence. Malaysia is a safe and politically stable country.
Branch Universities of foreign universities enable students to acquire prestigious university
qualifications in a country that has lower living expenses and competitive course fees. The average
living expenses of a student in Malaysia rage from $3,000-$5,000 a year depending on the program.
Another advantage of studying at an International University in Malaysia is that students can go stay at
the host university for a semester or two and pay the same tuition fees. Malaysia's multiracial
environment with a large diverse international student population is also a great bonus to studying
there. Malaysian laws allow students to work to earn extra income. The government offers existing
financial aid to public, private and branch institutions. National Higher Education Fund Corporation
disperses loans and scholarships on top of that. There is additional financial support from GLCs
(Government Linked Companies). The literacy rate in Malaysia is 92%. The development of human
capital is one of Malaysia and Putrajaya's main goals right now and the local universities are not pulling
in enough of what they need. The focus now is on the branch universities. Malaysia has also started
opening up their own branch universities in other countries to start creating their own international
presence.

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28

IV.

Strategy:

Being a third largest economy in Southeast Asia with high GDP per capita and many
economic policies attracting foreign investments, especially in education, Malaysia really has a
lot of national advantages such as highly competitive market, tax incentives, high demand…
for SNHU open a new branch to offer a MBA program there. Before giving the strategy and
recommendation, restating national competitive advantages of Malaysia is necessary to give
the brief background information in order to gain the strengths and opportunities to the project.
During the late 20th century, Malaysia developed economy rapidly and had a high per capital income
of $7, 450 (2008) and relatively higher purchasing power in Asia. Moreover, Malaysia is swiftly moving
from being an emerging contender to become a major player in the region despite the fierce
competitions from the likes of Singapore and Thailand. Malaysia offers an excellent infrastructure,
adequate space, good facilities, and a population of over 28 millions using English as a second
language in communication and in teaching. Furthermore, Malaysia has a peaceful and stable
environment, religious and ethnic tolerance; consequently, it has a good relationship with other
Southeast Asian nations as well as in over the world. Additionally, Malaysia has a consistently
improving standard of living, modern cities and a beautiful and inviting hinterland.
In private higher education industry, Malaysian market is really highly competitive with 48 private
universities and university colleges (including five international universities (see)).
Please refer to Appendix 4.1 for Private Universities with Separate Foreign Branch Campuses
in Malaysia
Along with sophisticated and demanding customers, those universities have to renovate
teaching way, restructuring programs, and invest facilities to gain their competitive abilities. As a result
of this, Malaysian education is gradually becoming world-class education with quality international
program recognized worldwide.
In this project, Putrajaya is chosen as the location for launching the SNHU branch to offer MBA
program. Putrajya is a new administrative capital of Malaysia and the Malaysian government wishes to
see a lot of establishments of international universities here. Moreover, according to website
http://kiat.net/putra/index.html

Putrajaya is situated in Multimedia Corridor that is set up by

government to boost infrastructure development; the city is well-placed to provide the best support for
the university on its new branch.
SNHU branch will be the first American branch offering the MBA program in this city and will
benefit the location to gain competitive advantages.
This strategy and recommendation will comprise two parts: market entry and strategic planning.

29

In market entry, the rapid growth of private higher education institutions in Malaysia is the obvious
evidence to see that Malaysian market is large and successful for higher education. Especially, it is
very reasonable that a Malaysian higher educational market is very niche for quality international
university with its own campus. Moreover, a shared campus is a logical way for some universities offer
few courses.
Moreover, entering a joint venture with local partners is a basis for entry market. Relationship
building is a key factor because they have a better understanding about local business practices and
they also already had a good contact with industry and regulatory authorities. However, because we
have had already a SNHU campus in Malaysia, we just need to build a good relationship with local
universities in Putrajaya through the suggestions of Malaysian SNHU campus and get the support from
them to address a set of complex regulations like where we should take a house on a lease, how to
start business and make a loan in local bank.
There has no funding provided from government for Private higher education institutions in
Putrajaya, Malaysia, there have some tax incentives as well as scholarship from government. In order
to finance for the project, we can receive funding from SNHU home-campus through SNHU Malaysian
campus. Moreover, we can make a loan from local bank such as: The Islamic Development Bank.
According to “Doing business in Malaysia” of U.S Department of Trade noted that: “The Islamic
Development Bank finances a few projects in Malaysia, mainly in the areas of healthcare and
university expansion” (p.77).
Malaysia is ranked at 21 out of 183 economics about ease of doing business in 2011. And
Malaysian Government is intensifying their attempts to make paperwork of administrative procedures
more comfortable and advantageous introducing more online services. Malaysia’s introduction of
online stamping reduced the time and cost to transfer property. According to the World Bank, the cost
of business start-up procedures (% of GNI per capita) in Malaysia was reported at 14.70 in 2008 and in
2009 were 11.90. The cost of doing business in Malaysia is decreasing year by year; it reflects the
Malaysian Government’s effort to facilitate foreign investors to do business. Moreover, it will take 9
procedures to get the appropriate license and nearly 2 years (585 days), and need 2.3 years to close
the business. That’s why; environmental scanning for business and event forecasts have to take at
least for 2 or 3 years to cope with contingencies arise.
Please refer to Appendix 4.2 for Summary of Indicators-Malaysia

30

Therefore we have three strategies: competitive pricing strategy, competitive quality strategy,
and differentiation strategy in reputation and in funding course fee for local and international students.
Competitive pricing strategy
In this strategy, determining who the top competitors are is very important to the strategy. There
have two international universities offering MBA program in Malaysia: Curtin University from Australia
and University of Nottingham (UN) from Britain. However, Curtin University is located in the East coast
where is far from the East peninsular of Malaysia. Consequently, we determined that Curtin University
is not a top competitor of SNHU branch. We just focus to the University of Nottingham. The cost of
MBA program of UN is around 18,000 USD (2011) (Currency exchange rate: 1 USD= 3.05 RM). The
SNHU suggested the cost of MBA program of 23,800 USD.

Please refer Appendix 4.3 for International Universities Course Fee Comparison
There are many factors to contribute the cost of programs such as: exchange rate, tax and
regulations, official building lease cost, cost of competitor’s programs, staff and faculty’s salary, and so
forth. That’s why; in short-term, we will offer the program with the suitable costs that lower than other
foreign universities because we have:


Tax incentives for PHEI in Putrayaja



Tax exemption for professors



Tax incentives for real estate company due to providing lands for education (10 years)

Please refer to Appendix 4.4 for Tax Incentives- Putrajaya
Moreover, we will change the tuition fee annually in accordance with current exchange rate and
competitor’s price.
In long-term, after the period of tax incentives, we will adjust the tuition fee to expectation and
probably increase the cost based on the pervasion of SNHU’s reputation through Malaysian higher
education market and Southeast Asian market. Additionally, effective promotions should be applied
frequently such as: tuition fee including books or simulation program for practicing.

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Competitive quality strategy
Quality of MBA program is a crucial factor that contributes to the success of SNHU branch from
now to future in Malaysia. Before launching this program, we have to provide reliable information to
government, public and students in proactive manner, particularly with respect to the institution’s legal
status, award-granting authority, quality mechanism and some relevant facts as suggested by codes of
good practice.
In the short-term, we have to keep the quality of MBA program in Malaysian branch as excellent as it
in home-campus by moving some professors from home-campus to Malaysia to training local
professors or teaching important courses. We have an important advantage: don’t need GMAT for
requirement qualification in comparison with UN. That will attract many students from Asia because
GMAT is hard earned qualification for them. Thus, we have to keep the quality of MBA program by
giving more assignments or projects to keep students studying and researching through studying
processing.
We have to build a culture of ongoing quality feedback, improvement, and review by creating
the robust quality assurance processes at institutional level, which is heavily depend on faculty
expertise and incorporate with the views of students. Additionally, we need to cooperate with
association and relevant government or non-government bodies to develop quality assurance
principles and practices then apply them to MBA program activities.
In the long-term, we should develop networking and cooperation with local educational institutions to
offer diverse solutions or products in some contingent events. Moreover, we can cooperate with local
universities in appropriate time to strengthen local higher education capacity to gain the reputation of
SNHU MBA programs.
Other strategies
There are three more strategies to gain the competitive advantages of SNHU branch in
Malaysia: Reputation strategy, tuition fee-reduction for SNHU Malaysian campus choosing studying
MBA in Malaysia, Marketing strategy.
In reputation strategy, taking advantage of American successful companies in the world, many people
perceive that America is the best place to study business, especially MBA program. The increasing
number of students from the Post-American world is an obvious truth. Unfortunately, after the
September 11 event, immigration authority has put tough restriction on students, including financial

32

constraint, English proficiency, and limitations on the period of stay and these are stringently applied.
That’s why; so many people want to study American MBA program will not have chance if they cannot
obtain the visa pass. So, opening MBA program in Malaysia will give opportunities to them.
Additionally, the successfulness of

many American companies (the U.S have currently been the

largest foreign investors in Malaysia) in Malaysia make Malaysian want to study business in completely
different angle and want to upgrade or equipped their selves with American business knowledge or
technical skills to prepare for better days ahead: working in American companies.
In tuition fee reduction, we will decrease the tuition fee for students in SNHU Malaysian campus
choosing study MBA program in Malaysia instead of in the U.S. Moreover, there have also a
scholarship from Malaysian Government for local citizen and government staffs if they study in
international universities in Putrajaya.
In marketing strategy, we can use the previous marketing strategy of SNHU Malaysian campus.
Moreover, we can use more advertisements in Malaysian television channels and in Newspaper.

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V. Plan of Visit:
As we know after our previous research, Malaysia has a potential market to develop a new
educational program. In this particular case as SNHU consultant we have established a visit program
to obtain the require procedure and information to run a successfully program in Malaysia Now a day
the world’s economic situation is not the best to start a new business as we have seen in the past days
the political risk cause in Middle East has raised the standard of living around the world and also have
greater repercussion in some countries than in other. So by the visit plan we are trying to find out all
the information and requirements that we need to open a new school and reduce significantly the cost
and the risk for our future investment.
We have develop a visit plan to Malaysia in order to build new connection and relationship, between
SNHU and new business partners, as in this case would be the government of Putrajaya. The right and
strong connection would help us to ensure an attentive audience for our future relations and business
plans . Another reason for a our visit its to build a solid structure for SNHU in the Asian market, as
some of the main point to treat in this visit are marketing, staffing, programming, designing strong
relation, program approval , infrastructure.
Foreign companies are pleased with Malaysia's long-term proposition and not just a quick join
for a short period. One of the key attractions here is this intangible partnership relationship that the
government develops, not a confrontation between the government and private sector, that why from
the part of SNHU we have send letter of introduction to Education Department of Malaysia and also US
embassy in this country.
We also want to meet the needs and the cultural impact before investing in the country, that
why we have got together with US embassy and the office of Cultural Affairs to develop the education
plan that will meet the standards of the Malaysian Education Department.
Our Visit will be for 4 days in Malaysia we also have established in order to reduce cost and
expenses to not travel with the whole team just four of our members with the greatest experience will
travel to the country, the rest will give support by using the latest technology in order to be in present
time at the moment.( William Gillete Dean of Business School, Norma Petit, SNHU charged on
developing International Programs and two staff members).

34

Plan of the visit


Meeting US embassy



Meeting with the Ministry of Education of Malaysia



Meeting the Government of Putrajaya department of state



Marketing Company in Putrajaya



Realtor



Insurance company

Metting US embassy

The Embassy comprises several sections under the Department of State. In addition, several
other U.S. government agencies have offices in Malaysia, in this case we have ask the US embassy to
review our program. The Cultural Affairs Office of the Public Affairs Section of the U.S. Embassy works
closely with a wide range of Malaysian public and private organizations to encourage broader
understanding of the United States and its relationship with Malaysia through a variety of cultural and
educational program.
We have arranged a meeting with US Ambassador in Malaysia Paul Jones how has a previous
experience in developing new business in the region not also business but also developing educational
programs in between these two nations.
Please refer to Appendix 5.1. for the US Ambassador in Malaysia
The location of the US embassy is in Kuala Lumpur which is the capital of the hosting country
and the city where our team is starting their visit. The main reason for visiting the embassy is to
present our MBA program and the strategy that we are going to follow for the next couple of years, also
we are asking for their support in the Government relations for our program.
We are not just meeting with the ambassador but also with the Cultural Affairs Office.

35

Here is Contact information:
Cultural Affairs Office
American Embassy
376 Jalan Tun Razak
50400 Kuala Lumpur
Tel: +60-3-2168-5000
Fax: +60-3-2168-5158
E-mail: [email protected]
Hours of Operations: Monday – Friday, 8.00am-4:30pm, excluding official holidays
Key topics in our agenda with US embassy:


Present SNHU and our MBA program to office of Cultural Affairs of the Embassy



Meet Ambassador Paul Jones



Obtain the best tips in negotiation in Malaysia.



Search for US government support for future negotiations in the country.
After our first day at Malaysia we have to move to Putrajaya the government city which is 25 km

south of Kuala Lumpur, in this case we have decide to rent a car in order to travel to the city of
Putrajaya and we have a schedule a visit to the Ministry of Education offices in Putrajaya , where we
are planning to attend also with the companion of the cultural affairs representative from the Embassy
of the US. The Ministry of Education has several divisions which are shown in the follow diagram and
the people we are also attending to meet for the review of our program.
Please refer to Appendix 5.2

for the Deputy Director General of Education (Policy

Development and Education Sector)
The Educational Planning and Research Division, is the one in charge of initiate educational
planning and research toward satisfying the nations goals, in other word they plan and manage
activities that would develop the education system in their country.
Please refer to Appendix 5.3 for Ministry of Higher Education Organization Chart

36

The key points of our Agenda during the Ministry of Education visit are:


Presentation about SNHU



Build a strong international cooperation between the countries involved.



Plan education policies that will develop the education and also develop the information

application system in education.


Analyzing the best education policies and development of our MBA program that includes

external and regional cooperation.


Create the best techniques in research and evaluation in solving issues arising in relation to

implementing future education policies and programs


Promote international exchange programs



Promote the incursion of international students in Malaysia



Provide the necessary tools and information for officials from the Ministry of Education that they

might require. ( computer labs, library, classrooms etc)


Analyze the best alternatives in the selection of teachers, based on the type of school, program

and school level.


Work in conjunction with the Ministry of Education to develop improvements to the education

system of Malaysia.


Registration for our MBA program

After a 3 hours meeting with the Ministry of Education we have schedule a Lunch in the Midori
Restaurant which is host by the Marriot hotel in Putrajaya.
Most of the Administrative office are now relocated to Putrajaya City , so our next schedule meeting is
with Putrajaya Holding Co. this company is in charge of promoting government approved projects
especially International Universities. So for this meeting we want to talk about specific point for our

37

agenda and also obtain the best information to develop a strong base for our future project are.
We want to establish the MBA program as a branch company from SNHU , so in order to this
we want to obtain the approval from the Ministry of Education and the Government of Putrajaya to start
the development of our project. We need to bring with us the following document for our acceptance:


Certification of Incorporation by the US Department of Education



Certified Copies of the School Status



List of Directors and Shareholders



An a Memorandum of power where authorizes one or more persons to take decision abroad,

they also have to be resident in Malaysia.
It is noteworthy that most of these papers will be sent prior to our arrival so we can save time
during our visit.
The Malaysian government gives huge opportunities for international investments in their
territory ,our main point its to create and develop an MBA program by SNHU that works together with
the government of the City , there are two companies involve in the decision of the City . the first one is
Putrajaya Holding Co, which is the major developer of administrative city of Putrajaya the work hand to
hand with the city’s local authority Perbadanan Putrajaya agency together they look forward to find
new developers that lead them to the right tracks to build a world class city. Putrajaya Holding
Company is committed to deliver quality, cost cost effective and innovative products in a timely manner
for their citizens.
Please refer to Appendix 5.4 and 5.5 for Putrajaya Holding Company Organization Charts
Perbadanan Putrajaya, works as administer of Putrajaya City mainly as the local authority , they
are the responsible to implement , plan and develop the right polices and urban design for the City. The
agency also promotes new relation with shareholder in order to develop investment in construction and
building high performance and efficient customer organizations in order to provide world-class public
amenities and facilities to obtain high degree of good governance and integrity in the new Capital.
In our program one of the reason to build a strong relation is focus on the idea that, we want to
host government employees who are interested in obtaining the MBA programs , but also develop a
partnership with the government by providing more course to train their employees, such as Computer

38

labs, Languages classes , facilities to use the SNHU online library in turn we are looking to obtain
some benefits that we make much more easier the opening of our program mainly in the part of the
building and tax reduction for our school.
Key Points in our agenda during the Malaysian government visit are:


Present our program and let them know more about SNHU



Building a partnership with the government to train their staff



Be able to establish our school inside the free zone



Personal and Immigration procedures (work permits)



Create an multiracial environment in our school



Government Grants for students



Find ways to promote our MBA program inside Putrajaya



Build a strong relation between Putrajaya and NH
After a meeting of 3 hours hosted at the offices of Putrajaya Holding Co. we would like to invite

our guest and staff member to dinner.
Marketing company
As part of our visit we also have schedule a meeting with the staff of Locanto,which is one of
the biggest marketing companies in the city , we want to develop a marketing plan toward our market
niche, that we have preselected mainly to be the Southeast Asian Market and mainly the people in
Malaysia, and here our key points for our meeting.


Benefits of using a massive marketing campaign



Types of advertisement ( publishing, editing, Online,)



Do a market research for MBA program



Cost of developing a Marketing campaign

Realtor

39

Before visiting Malaysia we were in contact with one of the most known realtor in the City of
Putrajaya , Putrajayahome, we have schedule a meeting in order to visit few building that will help to
satisfied our need for ruining the MBA program. This our best option, Commercial Building - 4C11,
Persiaran Perdana, Precinct 4, Putrajaya Retail Units / Office Space For Lease in case to stay with this
option we are just thinking on rent one floor, not the whole building. Net usable floor area 40,386 Ft.
http://www.i-putra.com.my/putrajayahomes/4C11_officespace.cfm
Please refer to Appendix 5.6 for Commercial Building Photo
Insurance
We are meeting with Allianz a local insurance company as is one of the statements required by
federal laws in Malaysia in order to obtain the most information and requirements for future
negotiations
Key points:


Building Insurance



Students and staff Insurance

Total Cost of the Visit to Malaysia
Please to Appendix 5.7 for the Cost and Expenses Table

40

VI. Conclusion
The education system in Malaysia is designed in multi-cultural unity of its citizens. Included in
their long term strategies and in accordance to their 2020 Vision, Malaysian government aspires to
build resilient nation, maintaining sustainable economic growth and promoting just society construction.
In order to become globally competitive economic force there is continuously need for human capital
development creating sustainable and desirable education hub in South-East Asia. The political
situation in Malaysia is now stable. They are still having conflicts between some groups of people in
the country but not enough to be a disturbance to our program. The economic overview is quite good;
Malaysia is the third largest economy in South East Asia. The best factor of economic environment is
Purchasing Power Parity (PPP) that they ranked 29 th in the world. The economic risk recently is global
economic recession that causes Malaysia export reduced. This country is attractive for education
investment because of the support from the government that encourages students to further their
education. The relationship between the US and Malaysia is stable which give will help our progress
on working with their government and educational bodies. Higher education is globalizing, opening an
MBA branch in Malaysia would give us a great competitive advantage. Malaysia is a growing country
that is looking to become a more knowledge based economy and a center of educational excellence.
There are no direct competitors in our area of Malaysia and we would be at the center of everything in
Southeast Asia and more specifically Putrajaya offering an affordable MBA degree from an
international university. The current MBA program of SNHU will be the first in Putrajaya from American
business schools, giving us a step ahead of our competitors. In this new age where businesses are
being more practical about the goods and service that they are offering and the prices they are offering
them at we will be offering a quality program for an affordable price that will appeal to the masses in
South-East Asia that would like to stay close to home but still earn and international MBA.

41

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46

47

VIII.

Appendix

1. Dzenana Hanjalic-Zimic
Appendix 1.1 - Map of Malaysia

Source: CIA maps, 2007c. https://www.cia.gov/library/publications/the-world-factbook/maps/maptemplate_my.html

48

Appendix 1.2 - M alaysia Overall Performance Ranking

Source: International Institute for Management Development, the World Competitiveness Scoreboard 2010, IMD World Competiveness
Online https://www.worldcompetitiveness.com/OnLine/App/Index.htm

49

2. Kitnara Tongkhan
Appendix 2.1 - Dynamic Political Risk Index 2010

Source: http://www.ipoliticalrisk.com/2009_12_01_archive.html

50

51

3. Eliza King
Appendix 3.1 - Process Flow Chart for Approvals from the Ministry of Higher Education and the
Federal Territories Ministry.

SNHU
ESTABLISHMENT
OF MBA PROGRAM

MINISTRY OF HIGHER
EDUCATION MALAYSIA

Inspection

PERBADANAN
PUTRAJAYA
(Federal Territories
Ministry of Malaysia)

APPROVAL

Enforcement

52

4. Luan Nguyen
Appendix 4.1 - Private Universities with Separate Foreign Branch Campuses in Malaysia

53

Name

Acronym

Location

Curtin University of Technology

Curtin (1999)

Miri

Swinburne University of Technology

Swinburne (2009)

Kuching

Monash University

Monash (1998)

Subang Jaya

University of Nottingham

UNiM (2000)

Semanyih

University of Newcastle Medical School

Sunway University Coll./Lancaster University

Appendix 4.2 - Summary of Indicators-Malaysia
Starting a Business

Procedures (number) 9

Time (days) 17

54


Cost (% of income per capita) 17.5

Paid-in Min. Capital (% of income per capita) 0.0
Dealing with Construction Permits

Procedures (number) 25

Time (days) 261

Cost (% of income per capita) 7.9
Registering Property

Procedures (number) 5

Time (days) 56

Cost (% of property value) 2.5
Getting Credit

Strength of legal rights index (0-10) 10

Depth of credit information index (0-6) 6

Public registry coverage (% of adults) 62.0

Private bureau coverage (% of adults) 100.0
Protecting Investors

Extent of disclosure index (0-10) 10

Extent of director liability index (0-10) 9

Ease of shareholder suits index (0-10) 7

Strength of investor protection index (0-10) 8.7
Paying Taxes

Payments (number per year) 12

Time (hours per year) 145

Profit tax (%) 16.7

Labor tax and contributions (%) 15.6

Other taxes (%) 1.4

Total tax rate (% profit) 33.7
Trading Across Borders

Documents to export (number) 7

Time to export (days) 18

Cost to export (US$ per container) 450

Documents to import (number) 7

Time to import (days) 14

Cost to import (US$ per container) 4503
Source: Doing business in Malaysia (2011)

Appendix 4.3 - International Univeristies Course Fee Comparison
55

Providers

Qualifications

Structure of
program

Curtin
University (in
East coast)

MBA, awarded
by Curtin
University of
Technology

11 units per
course

University of
Nottingham

MBA
(General)awarde
d by the
University of
Nottingham

180 credits=18
units per course

SNHU, school
of business

MBA, awarded
by Southern New
Hampshire
University

At least 14 units
per course

Duration

Course fee

1 year/ FT

RM 2,655/unit (2011)

2 years/PT

($871*11=9581)

1 year/FT

RM55,000/course(2011
)

2-4 years/PT

($18,050)

1-1.5 years/FT

Suggested cost:

2 years/PT

($23,800)

Source: Malaysian research group

56

Appendix 4.4 - Tax Incentives- Putrajaya

Eligibility
PHEIs that provide technical or vocational courses
and also science courses in selected fields.
Non-residents franchisors providing franchised
education programs approved by the
Ministry of Higher Education

Incentive for lecturers providing accreditation
of Franchised Education Programs

Scholarship:
A company incurring expenditure in the
provision of scholarship to a student for a
diploma or degree course or equivalent of a
diploma or degree program undertaken at
a recognized higher educational institution in
Malaysia
PHEIs that have incurred expenses for the
development and compliance of new courses
Any person who owns buildings used for

Tax incentives
Investment Tax Allowance of 100% for 10
years
offset against 70% of statutory income for
each
year of assessment
Tax exemption on royalty income paid by
educational institutions to non-residents
franchisor
Fees or honorarium received from MQA by
lecturers/experts who provide services in
the
validation, moderation or accreditation
process
to ensure franchised education programs
are the same quality as those of franchisor
institutions, are exempted from income tax
Single deduction is given for the expenses
incurred. Provided that student:
i. full time education
ii. has no means of his own; and
iii. total monthly income of
parents/guardian
not exceed RM5,000
Expenses incurred for the development
and compliance of new courses qualify for
single
deduction amortized for 3 years
Expenses incurred in constructing or

Agency
Malaysian Industrial Development Authority
(MIDA)
www.mida.gov.my
Inland Revenue Board of Malaysia
www.hasil.gov.my

Inland Revenue Board of Malaysia
www.hasil.gov.my

Inland Revenue Board of Malaysia
www.hasil.gov.my

Inland Revenue Board of Malaysia
www.hasil.gov.my
Inland Revenue Board of Malaysia

57

industrial, technical or vocational training
approved by the Minister of Finance
Any company who owns buildings used for a
school or an educational institution approved
by the Minister of Higher Education

purchasing
the building are eligible for industrial
Building
Allowance of 10% for 10 years

www.hasil.gov.my

58

1.

Alonso Cedeno

Appendix 5.1

- Paul Jones US ambassador in Malaysia

Appendix 5.2 - Deputy Director General of Education (Policy Development and Education Sector) Dr.
Khair bin Mohamad Yusof

59

Appendix 5.3 - Ministry Of Higher Education Organization Chart

60

Appendix 5.4 - Putrayaja Holding Company Organization Chart

61

Appendix 5.5 - Putrayaja Holding Company Organization Chart
Persons we are planning to meet

62

Appendix 5.6 - Commercial Building Photo

63

Appendix 5.7 - Cost and Expenses Table

64

Company

Airplane tckts

Hotel in KL

Car Rental

Hotel in PJ

Daily Exp

Lunch by SNHU

TOTAL COST

In Cost

Full Cost

1443

5772

125

375

120

480

125

750

50/day

900

700

$ 8977.00

65