TNA: a Malaysian prayer-outfit brand opens in Jakarta
How a small apparel brand moved from online exports to a wholly owned greenfield store in a psychically close market.
- Sector
- Apparel (women’s prayer outfits); textiles and retail
- Source
- Week 7 tutorial Case Study 2 (SAGE Business Cases, Liu 2019)
The case in brief
TNA Sdn. Bhd. is a fictional (disguised) Malaysian private limited company. Its founder, Madam Q, began by modifying uncomfortable prayer outfits for relatives and friends, and built a well-known brand around an innovative, stretchable face design and quality materials. The firm has R&D, production, marketing and sales, and after-sales divisions, and runs a sewing academy for women, especially single mothers.
Indonesian demand came first: customers travelled to Malaysia or bought online, and online sales kept rising. About 80% of each outfit was already produced in Indonesia. In July 2015, helped by Indonesia’s push for foreign direct investment, TNA opened a boutique in Jakarta as a greenfield investment, registered as a limited liability company with 100% ownership.
In Jakarta TNA faced many local and foreign rivals, customers who preferred colourful, patterned outfits, counterfeit products, difficult IP registration and slow, poorly coordinated regulation. After more than two years it had built its brand and become profitable in Indonesia, which the case attributes to promotion, after-sales service, solid relationships with producers and customers, and patience with local policies.
Key facts
- Home market
- Malaysia
- Target market
- Indonesia (Jakarta)
- Product
- Women’s prayer outfits with four face designs (Original, Classic, Harmony, Exclusive), plus robes, traditional clothes and accessories
- Production
- About 80% of each outfit made in Indonesia; complex head parts and face designs made in Malaysia
- Prior involvement
- Exports to Indonesian customers through online sales
- Entry
- July 2015: Jakarta outlet
- Entry mode
- Greenfield investment; limited liability company with 100% ownership, after an investment licence from Indonesia’s Investment Coordinating Board (BKPM)
- Positioning
- Luxury brand; “sell the value, not the price”
- Organisation
- Fictional/disguised; medium-sized (per SAGE case data)
Analysis through module theory
Uppsala model
TNA followed an evolutionary path: exporting through online sales first, learning from customer feedback, then committing to a store. Indonesia is geographically close and shares Muslim/Malay culture with Malaysia, so psychic distance was low.
OLI paradigm
Ownership: the innovative face design, quality materials and brand. Location: lower production costs, a leading textile industry, a weaker rupiah, Jakarta’s large and affluent Muslim customer base, and government encouragement of FDI. Internalisation: TNA kept the complex head parts and face designs in Malaysia and owned its store rather than licensing its brand.
Entry modes (wholly owned subsidiary)
The slides’ benefits were realised — control of the brand, product design and after-sales service. Their predicted drawbacks also appeared: legal and regulatory challenges (licences, permits, IP) and a need for local expertise (colour preferences). TNA also used an agent to serve customers outside Jakarta — a partner alongside full ownership.
PESTEL
Political: openness to FDI but weak coordination between ministries. Economic: a weaker rupiah and intense competition. Social: shared Muslim culture, gift buying all year round, a preference for colour and pattern. Technological: social media and online sales. Legal: weak IP protection, complicated registration, slow licences and permits. The case does not discuss environmental factors.
Network theory
Relationships with integrated Indonesian producers, with customers and with an agent underpinned TNA’s success — the case itself credits “solid relationships with its producers and customers”.
Discussion questions
- 1.What triggered TNA to go international rather than just continuing to export its products to Indonesia?
- 2.What challenges did TNA need to address when establishing a store in Indonesia?
- 3.What changes happened in TNA’s value chain that enhanced value creation?
- 4.What is the rationale behind the entry mode(s) that TNA selected to expand into the Indonesian market?
- 5.How can the experiences of TNA be applied to other entrepreneurial ventures?
Takeaways
- Low-commitment modes such as online exporting can build the market knowledge that justifies a larger commitment later.
- Choosing a psychically close market reduces the cultural risk of a wholly owned subsidiary, but local adaptation was still needed.
- Full ownership gives control, not immunity: weak IP enforcement and slow regulation affected TNA regardless of its entry mode.
- Relationships with producers, customers and agents mattered as much as the mode itself.