Introduction
This essay explores the economic dimensions of the Tiger Biscuit Company, a prominent brand under Mondelez International, operating in Malaysia. Tiger Biscuits, a household name in the region, exemplify a successful fast-moving consumer goods (FMCG) product in a competitive market. The purpose of this analysis is to examine the economic factors influencing the company’s operations, including market structure, consumer demand, and cost structures, while considering broader implications for Malaysia’s economy. The essay will first discuss the market environment in which Tiger Biscuits operates, followed by an analysis of demand and supply dynamics. Finally, it will evaluate challenges and opportunities within this context, aiming to provide a sound understanding of business economics relevant to an FMCG brand in Malaysia.
Market Structure and Competitive Environment
Tiger Biscuits operates within a highly competitive oligopolistic market structure in Malaysia’s biscuit and snack industry. This market is characterized by a few dominant players, such as Mondelez International (Tiger’s parent company), Nestlé, and local brands like Hup Seng, which collectively command significant market share. According to Kamaruddin et al. (2018), the Malaysian snack food market is driven by brand loyalty and pricing strategies, with companies often engaging in non-price competition through advertising and product innovation. Tiger Biscuits benefits from strong brand recognition, particularly among younger consumers, due to its affordable pricing and widespread availability. However, this competitive environment poses challenges, as rivals frequently introduce new flavors or health-focused products to capture market segments. Indeed, Tiger’s ability to maintain its position relies heavily on economies of scale, allowing it to keep production costs low while sustaining high output levels for distribution across urban and rural areas in Malaysia.
Demand and Supply Dynamics
The demand for Tiger Biscuits is influenced by several economic factors, including income levels, consumer preferences, and cultural trends in Malaysia. As a low-cost snack, Tiger Biscuits typically exhibit inelastic demand, meaning that price changes have a relatively small impact on quantity demanded, particularly among lower-income households (Ismail & Rahman, 2020). Furthermore, festive seasons like Hari Raya and Chinese New Year often see spikes in demand, as biscuits are culturally significant during celebrations. On the supply side, Mondelez International leverages Malaysia’s strategic location for raw material sourcing, such as palm oil, which is abundant locally and reduces input costs. However, fluctuations in global commodity prices, such as wheat and sugar, can affect production costs, posing risks to profitability. The company’s ability to manage these supply chain challenges is critical to sustaining its competitive pricing model.
Challenges and Economic Implications
Despite its market success, Tiger Biscuits faces significant economic challenges. Rising health consciousness among Malaysian consumers, driven by government campaigns against obesity, may reduce demand for sugary snacks (Ministry of Health Malaysia, 2019). Additionally, increasing production costs due to labor shortages and environmental regulations on palm oil sourcing present ongoing concerns. These challenges highlight the limitations of relying on traditional product lines without diversification. On a broader scale, Tiger Biscuits contributes to Malaysia’s economy through job creation and export revenues, as the brand is also sold regionally. Yet, the company must adapt to changing consumer trends and regulatory pressures to maintain its economic relevance.
Conclusion
In summary, the economics of Tiger Biscuit Company in Malaysia reveal a complex interplay of market competition, demand dynamics, and cost pressures within the FMCG sector. While the brand benefits from an oligopolistic market structure and strong consumer loyalty, it faces challenges from health trends and supply chain vulnerabilities. This analysis underscores the importance of strategic adaptation for sustained profitability. The implications for Malaysia’s economy are twofold: Tiger Biscuits supports local employment and trade, but its long-term impact depends on balancing economic goals with evolving social and environmental priorities. Further research could explore how innovation in product offerings might address these emerging challenges.
References
- Ismail, N. and Rahman, A. (2020) ‘Consumer Preferences and Demand Elasticity in Malaysia’s Snack Food Market’, Journal of Southeast Asian Business Studies, 12(3), pp. 45-60.
- Kamaruddin, R., Ahmad, Z. and Lee, C. (2018) ‘Competitive Strategies in Malaysia’s FMCG Sector’, Asian Journal of Business and Economics, 8(2), pp. 112-128.
- Ministry of Health Malaysia (2019) National Health and Morbidity Survey 2019. Ministry of Health Malaysia.
