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Market Entry Strategies

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In the name of Allah the Most Gracious and the Most Merciful. Alhamdulillah, all praises to Allah for the strengths and His blessing completing this group project for this subject IBM530/535 (International Business)
Firstly, we would like to express our deepest thanks to our dedicated lecturer, Miss Riza Emifazura Bt Jaafar who had guided us a lot during this semesters session March-July 2013. Her invaluable help of guidelines support and suggestion in order to finish up our project.
Not forgotten deepest thanks and appreciation to staff from Adabi Consumer Industries Sdn Bhd, Madam Azatul Izan Bt Mohamed Nordin as a product manager for giving us details information about Adabi’s product in local market and international market. We also thanks to all of group member that have been contributed by supporting this work and give fully cooperation, commitment and help during this project progress till it is fully completed
Last but not least, thanks to our parents, family and friend for their constructive suggestion, idea and full of support for the report completion from the beginning till the end.
Thank you.


i. General Information
The country that our company chooses is Indonesia. The name Indonesia has its roots in two Greek words: "Indos" meaning Indian and "Nesos" which means islands. It is an appropriate description of the archipelago as there are estimated to be a total of 17,508 islands, of which only about 6,000 are inhabited, stretching for 5,150 km between the Australian and Asian continental mainland’s and dividing the Pacific and Indian Oceans at the Equator.
Five main islands and 30 smaller archipelagoes are home to the majority of the population. The main islands are Sumatra (473,606, Kalimantan (1539,400, Sulawesi (189,216, Irian Jaya (421,981, and last but not least Java (132,187, home to 70 percent of the country’s population. Indonesia shares Irian Jaya with Papua New Guinea and two thirds of the island of Kalimantan with Malaysia and Borneo.
The climate of Indonesia is tropical, with two monsoon seasons, a wet season from November to March and a dry season from June to October. The weather is more moderate between monsoons. Many parts of the country have only slight differences in precipitation during the wet and dry seasons.
The Indonesian currency unit is called the Rupiah. Notes are issued in the values of Rp500, Rp 5,000 and Rp10,000. Coins of Rp5, Rp10, Rp25, Rp50 and Rp100. When changing large amounts, banks usually give Rp10,000 notes, but changing these in the provinces may prove troublesome. If you are heading for the Outer Islands, take Rp1,000 and Rp5,000 notes instead. Always keep your exchange receipts so that you can exchange your rupiah for foreign currencies upon leaving the country. The U.S. dollar is the most readily accepted currency.

Government office hours are variable, but are generally 8am to 4pm Monday to Friday (with a break for Friday prayers from 11.30am to 1.30pm), and 8am to noon on Saturday. Go in the morning if you want to get anything done. Private business offices have staggered hours: 8am to 4pm or 9am to 5pm Monday to Friday, with a lunch break in the middle of the day. Many offices are also open until noon on Saturday. Banks are usually open from 8am to 4pm Monday to Friday, although they can close as early as 2.30pm. In some places banks open on Saturday until around 11am. Banks in many areas also close during Friday afternoon prayers. The foreign-exchange hours may be more limited and some banks close their foreign-exchange counter at 1pm.

ii. Cultural And Social Analysis

a. Language / languages spoken and written.

The official language is Bahasa Indonesia, which is similar to Malay. More than half the population speaks some Bahasa Indonesia or Malay. However, about 300 other languages are also spoken in the country. Of these, Javanese is the most common, with more than 70 million speakers. Some older people still speak Dutch, the official language until 1942. English is taught as the main international language after regional languages and Bahasa Indonesia.
The Indonesian language is written using a Latin alphabet. For the most part, spelling is phonetically precise, so that words are spelled as they sound. The standard Indonesian has undergone a number of spelling change since independence. Spelling reforms of 1972 were undertaken with Malaysia, in an attempt to facilitate communication between Malaysia and Indonesia. Some examples of such changes are the replacement of “oe” with “u” and of “dj” with “j.” Although these spelling changes rid the Indonesian language of some of its Dutch influence, evidence of Dutch influence still can be found today, especially in proper names.

b. Religion(s) and religious influences in life and business.

Religion plays an important role in Indonesian business. The religious influence on political, cultural and economic life is immense and not to be taken lightly. While a religion is required by law, which religion is left to the individual. Hinduism, Christianity, and Buddhism all have substantial followings in Indonesia, but for the vast majority of Indonesians, religion is synonymous with Islam. As the nation with the world's largest Moslem population,
Indonesian Moslems have been able to forge a national variation of the religion emphasizing the concept of rukun or societal and interpersonal harmony atthe familial, community, and societal level. While rukun is universally recognized as a principle of Islam, Indonesians have blended it with East Asian concepts of harmony, conflict avoidance, and surface tranquillity to give it a greater emphasis than practiced anywhere else in the Moslem world.

c. Customs/ traditions/ manners/ habits: foods, drinks, clothing, personal hygiene, myths and superstitions.

i. Foods

As in the rest of Asia, Indonesian food is heavily based on rice, supplemented by vegetables, a little bit of fish and once in a while, meat and eggs. Indonesian cuisine is known for its combination of contrasting flavors and textures, its influences having originated in all corners of the world. Each culinary art of foreign origin can be distinguished in Indonesian cooking, yet each is blended creatively with the islands’ own cooking secrets. Each province or area has its own cuisine, which varies in the method of cooking and the ingredients used.

The Javanese cuisine is probably the most palatable to the general taste and usually consists of vegetables, soybeans, beef and chicken. The Sumatrans generally eat more beef compared to other regions. West Sumatra is known for its Pandang specialty restaurants found nationwide. Aside from their hot and spicy food, these restaurants are known for their unique style of service. Further to the east, seafood is featured in the daily diet, either grilled or made into curries. In Bali, Irian Jaya and the highlands of North Sumatra and North Sulawesi, pork dishes are specialties. As the population of Indonesia is predominantly Muslim, pork is usually not served except in Chinese restaurants, non-Moslem regions and places serving international cuisine.

The most popular dishes in Indonesia are gado-gado, bakso, salad with peanut sauce, nasi goreng, fried rice, bakmi goreng, fried noodles and sate.

ii. Drinks
There are a number of drinks unique to Indonesia influenced by the climate and the local plants. A few of the most popular ones which is Teh Manis (sweet tea) is a common household drink served hot. Popular variations include Jasmine tea and green tea (made from camellia sinensis). While usually prepared hot, an ice-cold variation is also popular. A refreshing bottled jasmine tea called Teh botol is sold alongside traditional soft drinks.
Kopi (Coffee) like Tehmanis, Indonesian households often serve Kopi Tubruk which is a hot sugary coffee. Another variation called Kopi Susu is served hot with condensed milk and is the Indonesian version of Café au lait. Fruit juices are very popular and are often treated as desserts. Ingredients such as oranges, guava, mango, jackfruit, papaya, logan, avocado, coconut, seaweed, red kidney beans and melon are combined with condensed milk, chocolate syrup and/or ice to create treats
Other hot drinks include bajigur and bandrek which combine coconut with spices, sekoteng and wedangjahe which are ginger-based drinks and wedangronde which contains sweet potato balls. Wine and other alcoholic beverages are not very popular in Indonesia as it is predominantly a Muslim country. However, in certain areas tuak (a palm wine), ciu (Chinese wine), brembali (rice wine) and various local brands of beer can be found.

iii. Clothing

In the larger cities like Jakarta, people prefer to dress in western style. There are different styles of clothing for men and women. All Indonesians tend to wear light clothes because of the hot and humid climate.

• Men

The male would wear shirt (long or short sleeves) with collar and trousers. Some offices require more formal dress that men should wear tie and blazer or jacket. Another choice for office outfit is batik shirt. But this is considered more when you are going to meet public officials or going to attend a wedding ceremony. However, uses more of their own traditional fabrics, called ‘ songket’.

• Women

As most Indonesians are Muslim, women are preferred to dress conservatively. Women are work in offices may wear business suits made of light material. They may also wear skirts with blouses. Skirts are expected to reach at least to the knees and blouses or shirts should cover their upper arms. Even though it has large Muslim population, women in Indonesia are not required to wear Muslim veils or scarves. Some women do choose to wear these items as a sign of their own beliefs.

iv. Personal hygiene

Personal hygiene is a concept that is commonly used in medical and public health practices. It is also widely practised at the individual level and at home. It involves maintaining the cleanliness of our body and clothes. In this regard, personal hygiene is defined as a condition promoting sanitary practices to the self. Everybody has their own habits and standards that they have been taught or that they have learned fromothers. Generally, the practice of personal hygiene is employed to prevent or minimise the incidence and spread of communicable diseases.
In Indonesia, we can see the market for personal hygiene in Indonesia increased at a compound annual growth rate of 2.9% between 2004 and 2009. The soap category led the personal hygiene market in Indonesia. It means that Indonesia very particular about their personal hygiene. The leading player in the Indonesian personal hygiene market is Unilever.

v. Myths and superstitions.

Many myths and superstitious beliefs in Indonesia make people avoid do certain kind of actions. Like other counties, Indonesia has a variety of superstitions and one of the particular belief which appears in several superstitions or taboos of Indonesia, which is animism. For a long time people believed that there were spirits everywhere and that these spirits could change things or make things happen in our world. The spirits live in places like rocks, trees, rivers and mountains and they can be good and evil. Quite often they are tricky and it can be hard work to keep them happy.

d. High or low-context culture: ranking on Hofstede’s Cultural Dimensions.

For ranking on Hofstede’s Cultural Dimensions, we can get a good overview of the deep drivers of Indonesia culture relative to other world cultures through the exploration of the lens 5-D Model of Indonesia culture. In fact of that, 5-D Model consists of power distance, individualism, masculinity or femininity, uncertainty avoidance and long-term orientation.

i. Power distance
For the first 5-D Model of cultural dimensions is power distance. Power distance is the extent to which the less powerful members of organizations within a country accept that power is distributed unequally. It deals with the fact that all individuals in societies are not equal. It expresses the culture’s attitude towards these inequalities amongst us. In other words, it mean that every individual have to accept the different level of power among them. For example subordinates are expected to obey instruction from their superiors.

Under this dimension, Indonesia has Power Distance (PDI) as its highest ranking Hofstede Dimension at 78 score. This is because of a characterises the Indonesian style such as being dependent on hierarchy, unequal rights between power holders and non-power holders, superiors in-accessible, leaders are directive, management controls and delegates.
Apart of that, high power distance also means that Indonesian co-workers would expect to be clearly directed by the boss or manager. It is the classic Guru-Student kind of dynamic that applies to Indonesia. Besides that, power is centralized and managers count on the obedience of their team members.
It means that employees have to follow the instructions from leader such as what they have to do and when. Thus, control is expected and managers are respected for their position. For communication among them, it is indirect and negative feedback hidden.

Individualism / Collectivism Individualism is the degree of interdependence a society maintains among its members. This dimension was related whether people’s self-image is defined in terms of “I” or “We”. It looks at the relationship between individuals and others in their society. In individualism, people are supposed to look after themselves and their family only. In collectivism, people belong to in groups that take care of them in exchange for loyalty.

Under this dimension, Indonesia score lower individualism with 14 score which mean that score on this dimension indicates the Indonesian society is collectivist as compared to Individualist In other words, there is a high preference for a strongly defined social framework in which individuals are expected to conform to the ideals of the society and the in groups to which they belong. The aspect of the family in the role of relationship in collectivistic culture is important.

For example, in Indonesia, if one wishes to marry, it is important to meet a woman’s family because the family is so important to her. If a man wants to be taken seriously by a woman, he has to visit the latter's family and introduce himself formally to the parents of the girl.

Another example of collectivist culture of Indonesia is in the equation between child and parent. It means that Indonesian children are committed to their parents, as are the parents committed to them since from small until their growing lives. In order to repay for their parents, they desire is to make their parents life easier such as take care of parents and give them support in their old age. There is an Asian saying that is accepted in Indonesia, "You can get another wife or husband but not another mother or father". It means that Indonesia children are really loves their parents. Other than that, Indonesian families are not sending elders such as grandparents to any institution but they are keeping and care their elders at home.

ii. Masculinity and Femininity
In this dimensions, it is the extent to which society embraces masculine compare with feminine values. The issue arise under this dimension is what motivates people wanting to be the best (masculine) or liking what you do (feminine). Masculine is high score while feminine is low score in this dimensions.

Apart of that, masculine consider as high score because it indicates that the society will be driven by competition, achievement and success. Success is defined by the winner which a value system that starts in school and continues throughout organizational behaviour. For feminine values, it classify as lowscore because the dominant values in society are caring for others and quality of life. Besides that, it also one where quality of life is the sign of success and standing out from the crowd is not admirable,

Indonesia is a lower of masculine society with score 46 under this dimensions. Indonesia also less Masculine than some other Asian countries like Japan, China and India. The status and visible symbols of success are important.

Other than that, the position that a person holds is also more important to them because of an Indonesian concept called “gengsi”. In other words, it can be translate as “outward appearances”. It is important that the “gengsi” be strongly maintained thereby projecting a different outward appearance aimed at impressing and creating the aura of status. For feminine country, people working in order to live, value equality, solidarity and quality in their working lives and managers strive for consensus.

In fact of that, conflicts are resolved by compromise and negotiation while incentive such as free time and flexibility are favoured. The decision making and supportive one can be achieve through involvement by an effective manager. iii. Uncertainty avoidance

Uncertainty avoidance is the extents to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these. Thus, it is the way that a society deals with the fact that the future can never be known. A question arises should the society try control to control the future or let it happens? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways

In Indonesia, uncertainty avoidance is second highest Hofstede’s Cultural dimensions with a score 48 compare to other dimensions. In other word, there is a strong preference in Indonesia toward the Javanese culture of separation of internal self from external self. The relationship harmony and maintaining work place is very important. For example, when a person is upset, it is habitual for the Indonesian to keep smiling, be polite and not to show negative emotion or anger externally in no matter how angry they are inside in work place.
Conflict resolution also another aspect of this dimension. Direct communication as a way of conflict resolution is often seen to be a threatening situation and one that the Indonesian is uncomfortable in. By using third intermediary which has many benefits, it is a successful method of conflict resolution. It permits the exchange of views without loss of face since one of the main manifestations of Indonesia’s uncertainty avoidance is to maintain the appearance of harmony in the workplace.
The one very key phrase in Indonesia that describes how this works is “Asal Bapak Senang” (Keep the Boss Happy). Under this phrase, when keeping the boss happy, it means you will be rewarded and if you are rewarded, you have no status uncertainty as you will keep being a valuable member of a company.

e. Business customs – protocol, greetings, keeping time, space, gift giving, hospitality, negotiations, etc.

i. Protocol
 Dining etiquette
Dining etiquette is generally relaxed but depends on the setting and context. The more formal the occasion, the more formal the behaviour.Below are some basic dining etiquette tips:
 Wait to be shown to your place - as a guest you will have a specific position.
 Food is often taken from a shared dish in the middle. You will be served the food and it would not be considered rude if you helped yourself after that.
 If food is served buffet style then the guest is generally asked to help themselves first. It is considered polite that the guest insist others go before him/her but this would never happen.
 In formal situations, men are served before women.
 Wait to be invited to eat before you start.
 A fork and spoon are often the only utensils at the place setting. Depending on the situation some people may use their hands.
 Eat or pass food with your right hand only.

 Business meeting etiquette
Do arrive on time to meetings, but as a general rule, do not expect your Indonesian counterparts to do so. For Indonesians, time management is not a priority and little effort is put into planning ahead. Initial meetings may be more about getting-to-know-you rather than business.

Do not be surprised if business is not even discussed. It is common for Indonesians to enter the meeting room according to rank. Although you do not have to do this, doing so would give a good impression.

Indonesians do not make hasty decisions because they might be viewed as not having given the matter sufficient consideration. Be prepared to exercise patience. If negotiating, avoid pressure tactics as they are likely to backfire. Don’t be afraid to recap what you have discussed in your meeting. It may be necessary to explain yourself in a different way. Indonesians will never indicate if they do not understand something so it is wise to summarise in order avoid any misunderstandings.

 Business cards
Business cards are normally exchanged after the initial handshake and greeting. Business cards should display your titles. This help to enhance your image and credibility. Although not required, having one side of your card printed in Bahasa shows respect. If you know if you are working with Chinese Indonesians, it is polite to have the reverse side printed in Chinese. If you are working with ethnic Indonesians it is necessary to have the reverse side translated into Bahasa Indonesian.

ii. Greetings
Greetings can be rather formal as they are meant to show respect. For men, they will shake hands. A good friend may greet each other with a handshake which is the most common greeting accompanied with the word "Selamat" which means peace. Many Indonesians may give a slight bow or place their hands on their heart after shaking your hand. If you are being introduced to several people, always start with the eldest or most senior person first. If greeting an older family member such as father and grandfather one might kiss their forehead to show respect. For foreigners it is best to start with the handshake.

Titles are important in Indonesia as they signify status. If you know of any titles ensure you use them in conjunction with the name. Some Indonesians only have one name, although it is becoming more common for people to have a first name and a surname, especially in the middle class. Many Indonesians, especially those from Java, may have had an extremely long name, which was shortened into a sort of nickname for everyday conversation. There are several ethnic groups in Indonesia. Most have adopted Indonesian names over the years, while some retain the naming conventions of their ethnicity.

iii. Keeping time
Time in Indonesia is approached in a very relaxed and flexible manner. Indonesians do not rush through business negotiations and often do not take the time to plan everything in great detail. Punctuality is not always observed, as Indonesians do not like to feel hurried and do not have the western sense of urgency. The Indonesian attitude towards time is reflected in that, to them, time is not money. They may show less interest in profit or material success but rather building relationships.

iv. Space
Indonesians tend to prefer standing at least arms lengths from one another. When conversing with friends and close acquaintances this distance is a bit shorter. Amongst friends and close acquaintances of the same sex, there is a decent amount touching during conversation. There is almost no touching between men and women while conversing. Kissing and hugging in public is to be avoided at all costs.
Indonesians tend to stand close to each other, especially in public places. So when you are queuing and can feel the person behind you breathing on to your neck, it is not meant to be rude. Women tend to hold hands with each other but this is not a romantic gesture. It’s advisable to avoid touching between opposite sexes (like hand on shoulders) unless they initiate first.

v. Gift giving
The issue of gift-giving in Indonesia is somewhat contentious as the country has, for years, had a reputation for large scale corruption reaching from the highest levels of government down to petty bureaucrats and department managers within corporations. Whilst it is true that such corruption exists, it is also true that the giving of small gifts to help develop and maintain business relationships is also an indigenous Indonesian custom. Gifts are not usually exchanged during first meetings but can be offered at subsequent events. To avoid any hint of corruption, give small, corporate gifts.

Gifts should always be wrapped and will rarely be opened in front of the giver. Avoid giving any form of alcoholic gift to any Muslim colleagues or clients. If offered a gift, accept reluctantly and with humility.

vi. Hospitality
Hospitality and guest care are the features of the Customs and Traditions in Indonesia. According to Macmillan Dictionary, hospitality is friendly and generous behaviourtowards visitors or guests and intended to make them feel welcome.

Indonesians are known for their hospitality. Do not reject their hospitality, as it will be viewed as a personal rejection.When a guest is invited to a local household on formal or friendly purpose the former is treated to a cup of coffee.

You should never refuse food or drink, but never finish either completely. Compliments about the food are appreciated. It is a special honourto be invited to an Indonesian's home.

vii. Negotiations
Although a small minority in this pluralistic country, many Indonesian businesspeople are Chinese and may have strong family connections back to China. As a country, Indonesia consists of countless islands that are quite heterogeneous in history and culture. The information given in this section applies to all of them to some degree, but may not always be comprehensive. Always keep in mind that this is essentially an Islamic country. Showing any disrespect for the religion could have disastrous consequences.

Businesspeople and officials in Indonesia usually have only limited exposure to other cultures except for neighbouring countries. When negotiating business here, realize that people may expect things to be done ‘their way,’ and let them set the pace initially until you have had a chance to determine how your interactions are most effective.

Indonesia’s culture is strongly group-oriented. Asserting individual preferences may be seen as less important than having a sense of belonging to a group, conforming to its norms, and maintaining harmony among its members. Building lasting and trusting personal relationships is therefore critically important to most Indonesians, who expect to establish strong bonds prior to closing any deals. People in this country usually do business only with those they know and like.

Establishing productive business cooperation requires a long-term perspective and commitment. Consequently, proceed with serious business discussions only after your counterparts have become comfortable with you.

Relationships are based on familiarity, respect, and personal trust, which can take a long time to establish. Business relationships in this country exist between people, not necessarily between companies. Even when you have won your local business partners’ friendship and trust, they will not necessarily trust others from your company. That makes it very important to keep company interfaces unchanged. Changing a key contact may require the relationship building process to start over.

In Indonesia’s culture, ‘saving face’ is very essential. Every person’s reputation and social standing rests on this concept. Causing embarrassment to another person may cause a loss of face for all parties involved and can be disastrous for business negotiations. Reputation and social standing strongly depend on a person’s ability to control emotions and remain friendly at all times. If you have to bring up an unpleasant topic with an Indonesian, never do so in public and always convey your message in ways that maintain the other’s self-respect. The importance of diplomatic restraint and tact cannot be overestimated. Keep your cool and never show openly that you are upset.

Indonesians are usually very friendly and polite. Since they prefer to do business with others who treat them with deference and genuinely like them, it is important to demonstrate similar behaviours yourself. These factors do not affect anybody’s determination to reach business goals, though, and your counterparts will patiently and persistently pursue their objectives. It is in your best interest to do the same.

In Indonesian business culture, the respect a person enjoys depends primarily on his or her status, rank, and age. Showing status is important since people will take you more seriously. Carefully select your hotel and transportation. Use the services of others, such as a porter, to avoid being viewed as a low-ranking intermediary. Admired personal traits include patience, good listening skills, experience, and wealth.


a. Population: Actual count (latest), growth rates, number of households, working population, age distribution.

According to the 2010 national census, the population of Indonesia is 237.6 million with high population growth at 1.9%. The annual population growth rate is 1.04%. In 1961 the first post-colonial census gave a total population of 97 million. Despite a fairly effective family planning program that has been in place since the 1960s, population is expected to grow to around 265 million by 2020 and 306 million by 2050.Indonesia is the world's most populous Muslim-majority nation, with almost 86.1% of Indonesians declared Muslim according to the 2000 census. 8.7% of the population is Christian, 3% are Hindu and 1.8% is Buddhist or other. Most Indonesian Hindus are Balinese and most Buddhists in modern-day Indonesia are ethnic Chinese.

The nationality in Indonesia is Indonesian. The largest ethnic group is the Javanese, who comprise 42% of the population and are politically and culturally dominant. The Sundanese contribute 15.0% of the population and Madurese contribute 3.3% of the population which also are the largest non-Javanese groups. Meanwhile, Minangkabau gave a population of 2.7%, Betawi and Bugis gave a population of 2.4%, Banten gave a population of 2.0%, Banjar comprise 1.7% of the population and 29.9% of the population represent other or unspecified ethnic group. Chinese Indonesians are an influential ethnic minority comprising 3 - 4% of the population. Much of the country's privately owned commerce and wealth is Chinese-Indonesian-controlled which has contributed to considerable resentment and even anti-Chinese violence.

It is assume that the life expectancy for male is 68.53 years old and female is 73.69 years old. The 2011 estimated age distribution of the total population in Indonesia is from the range of 0-14 years is27.3% (male 34,165,213 and female 32,978,841), 15-64 years is 66.5% (male 82,104,636 and female 81,263,055), 65 years and over is 6.1% (male 6,654,695 and female 8,446,603). The Indonesia 2011 percentage of households over 33 provinces is 13.00% where 14.16% subject to household in urban area and 11.86% subject to household in rural area.

The 2012 estimated labour force in Indonesia is about119.5 million where unemployment rate in Indonesia decreased to 5.92 per cent in the first quarter of 2013 from 6.14 per cent in the third quarter of 2012 and the labour force participation rate is 67.88 per cent. The labour force by occupation is divided into three which are 14.3% of agriculture, 46.9% of industry and 38.8% of services. The main industries in Indonesia are petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food as well as tourism.While, the non-labour force is about 55.87 million, where the 14.08 million is subject to schooling, the 33.63 million is subject to housekeeping and the 8.16 million is subject to others.

Indonesia's estimated Gross Domestic Product (Nominal) as of 2012 was $894.9 billion and Gross Domestic Product growth is 6.23%. Its GDP (Gross Domestic Product) per capita is $4,943 and the GDP composition by sector is divided into three which are 38.3% of agriculture, 12.8% of industry and 48.9% of services.

b. Inflation rates

Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well-known measures of inflation are the CPI (Consumer Price Index) which measures consumer prices and the GDP deflator, which measures inflation in the whole of the domestic economy.The inflation rate in Indonesia was recorded at 5.57 percent in April of 2013. Inflation rate in Indonesia is reported by theIndonesia's central statistical body. Historically, from 1997 until 2013, Indonesia inflation rate averaged 11.82 percent reaching an all-time high of 82.40 percent in September of 1998 and a record low of -1.17 percent in March of 2000. In Indonesia, the consumer price index is based on a survey conducted in 66 cities. The indicator consists of 774 commodities classified into 7 major groups. Housing, water, electricity, gas and fuel constitute 25.5 per cent of total weight, food stuff constitutes 19.5 per cent and transportation, communication and financial services constitute 19 per cent. Food and beverage, cigarette and tobacco accounts for 16.5 per cent of total weight, education, recreation and sports accounts for 8 per cent, clothing for 7 per cent and medical care for the remaining 4.5 percent.

c. International trades statistics :

I. Exports

Exports in Indonesia decreased to 15003.40 USD million in March of 2013 from 15015.60 USD million in February of 2013. Exports in Indonesia are reported by the Indonesia's central statistical body. Historically, from 1960 until 2013, Indonesia exports averaged 3379.43 USD million reaching an all-time high of 18647.83 USD million in August of 2011 and a record low of 30 USD million in January of 1961. In Indonesia, exports have been an engine of growth in recent years. Major exports are oil and gas accounted for 20 per cent, mineral fuels and oils accounted for 14 per cent, fats, oils and waxes accounted for 11 per cent and electrical equipment and machinery accounted for 9 per cent. Other exports include rubber and rubber articles contribute to 5.5 per cent, clothes and footwear contribute to 6 per cent and wood and paper contribute to 5 per cent. Major export partners are China amounted to 14 per cent, Japan amounted to 12 per cent, the United States amounted to 9.5 per cent and India amounted to 8 per cent. Others include Singapore, Malaysia and South Korea. II. Imports

Imports in Indonesia decreased to 14698.50 USD million in March of 2013 from 15313.30 USD million in February of 2013. Imports in Indonesia are reported by the Indonesia's central statistical body. Historically, from 1959 until 2013 Indonesia imports averaged 2534.22 USD million reaching an all-time high of 17207.93 USD million in October of 2012 and a record low of 21 USD million in September of 1959. Indonesia imports mainly oil and gas amounted to 22 per cent of total imports, machinery amounted to 15 per cent, electrical equipment amounted to 10 per cent, iron and steel amounted to 5 per cent and vehicles amounted to 5 per cent. Main import partners are China contributes to 19 per cent, Japan contributes to 15 per cent, the United States contributes to 7.5 per cent and Singapore contributes to 7 per cent. Others include Thailand, South Korea and Malaysia.

III. Balance of Trade

Indonesia recorded a trade surplus of 304.90 USD million in March of 2013. Balance of Trade in Indonesia is reported by the Indonesia's central statistical body. Historically, from 1960 until 2013, Indonesia balance of trade averaged 798.80 USD million reaching an all-time high of 4641.92 USD million in December of 2006 and a record low of -1540 USD million in October of 2012 since the 1970’s Indonesia has been recording trade surplus due to exports growth. However, in 2012 the country posted trade deficit as exports fell due to a slowdown in the global economy and surge in imports. Indonesia major exports are oil and gas, electrical equipment, machinery and oils. The country imports mainly oil, electrical equipment, iron and steel. Main trading partners are China accounted for 14 percent of total exports and 19 per cent of total imports, Japan accounted for 12 percent of exports and 15 percent of imports and the United States accounted for 9.5 percent of exports and 7.5 per cent of imports. Others include Singapore, Malaysia and South Korea.

IV. Exchange Rates

The USDIDR spot exchange rate appreciated 85.0000 or 0.87 percent during the last 30 days. Historically, from 1991 until 2013, the USDIDR averaged 7747.7600 reaching an all-time high of 16650.0000 in June of 1998 and a record low of 1977.0000 in November of 1991. The USDIDR spot exchange rate specifies how much one currency, the USD, is currently worth in terms of the other, the IDR. While the USDIDR spot exchange rate is quoted and exchanged in the same day, the USDIDR forward rate is quoted today but for delivery and payment on a specific future date.

d. Trade restriction

i. Tariffs

A tariff is either a tax on imports or exports or a list of prices for such things as rail service, bus routes and electrical usage.In parallel with Indonesia's policies to create a more open economy and trading system and to increase the efficiency and competitiveness of Indonesian products, tariffs will constantly be reviewed and gradually reduced, partly by adjusting their classification.Indonesia 2011 tariffs on animal, vegetable and fish products cover 51% of product category averages, 23.69835% of animal and fish products, 4.3144% of fats, oils and waxes, 19.1561% of skins and furs and 45.0239% of vegetables, fruits and nuts. Furthermore, Indonesia 2011 tariffs on foods, beverages and tobacco cover 28.0693% of food products,20.9308% of beverages, 19.5741% of tobacco products and 2.5155% of other food industry products. Meanwhile, Indonesia tariffs on base metals, minerals, stones and glass cover 67.41518% of base metals, 5.599% of glass, 11.597% of mineral products, 21.2546% of stone products and 13.1926% of wood. Moreover, Indonesia tariffs on natural and man-made textiles and wood pulp cover 26.7123% of animal and plant textiles, 18.4403% of synthetic textiles, 8.942001% of pulp of wood and 89.2713% of processed textile products. The Indonesia tariffs on chemicals, plastics, transportation, machinery and arms cover 55.94324% of chemicals, 16.2855% of plastics, 19.734651% of transportation, 11.0253% of machinery and 6% of weapons and the Indonesia tariffs on instruments, manufactured articles, jewellery and art cover 19.9823% of instruments, 4.28571% of art, 6.1321% of precious metals and stones and 80.5632% of manufactured items.

ii. Import Prohibitions and Licensing

Any goods coming from overseas into the Indonesian customs territory are treated as “import” and are generally subject to import duty. Importation of goods into Indonesia is subject to customs verification such as verification of documentation and physical inspection of goods.Importation of goods into Indonesia must be declared to the Customs Authority using an Import Declaration Form (PIB). To beable to fulfil customs obligations, the importer must register with the DGCE to obtain a CustomsIdentification Number (NIK).Import duty and import taxes payable should be settled first before the goods are released from the customs area which is harbour and airport. The government bans the import of narcotics and drugs, pornographic materials, printed material in Chinese languages, Bahasa Indonesia and other Indonesian dialects. Video tapes and laser discs are subject to review by the censor board.The GOI continues to reduce the number of items subject to import restrictions and special licensing requirements. Goods such as alcoholic beverages, hand tools, artificial sweeteners, engines and pumps, tractors, rice, lube oil, and explosives continue to regulate.

iii. Custom Duties

Customs duty is a kind of indirect tax which is realized on goods of international trade. In economic sense, it is also a kind of consumption tax. In 2011, Indonesia had an average customs duty of 6%, which is 5% less than the average for all tariffs and customs. No customs for mailed goods below or equal to US$50 in Indonesia. Customs policy may be different in Batam free trade zone. The Indonesian Government has stipulated the free zones which include the islands of Batam, Bintan and Karimunas well as the nearby small islands that have

fulfilled the criteria to be designated as free trade and/or free port zones.A company that operates in a free zone is not required to registerfor VAT (non-PKP status).


a. Political ideology and role of politics.

Politics of Indonesia takes place in a framework of a presidential representative democratic republic, whereby the President of Indonesia is both head of state and head of government and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the two People's Representative Councils. The judiciary is independent of the executive and the legislature. The 1945 constitution provided for a limited separation of executive, legislative and judicial power. The governmental system has been described as "presidential with parliamentary characteristics." Following the Indonesian riots of May 1998 and the resignation of President Suharto, several political reforms were set in motion via amendments to the Constitution of Indonesia, which resulted in changes to all branches of government.

Role of Politics

During the colonial period the radical groups among Muslim women were particularly active.In the colonial period a number of Islamic organizations were primarily concerned with getting rid of foreign rule. What made them radical at that time was the fact that they rejected the existing colonial system. From Sarekat Islam onwards, there were organizations that took their guiding principles from both nationalism and Islam. This combination seemed to offer them considerable flexibility as far as gender was concerned, so women could play a prominent role in such organizations. It was really continuing the tradition of the Aceh War against the Dutch, when some women became leaders in the name of national independence and defence of Islam.The best-known women leaders in radical Islamic organizations in the colonial period were in the Sumatran organization Permi (Persatuan Muslimin Indonesia). After male leaders of Permi were arrested, women took their place in the 1930s. The Dutch colonial Attorney-General noted in 1933 that women leaders like Rasuna Said and Rasimah Ismail sometimes "put the men to shame" with their fiery speeches. "At many meetings the women are even in the majority and often express themselves more sharply and passionately than the other sex," he said.

Within Sarekat Islam and its successors like the Partai Sarekat Islam Indonesia, women were also active during the colonial period, although they did not achieve such prominence as in Permi. Tjokroaminoto's wife started a women's wing of Sarekat Islam and was noted for her public speeches. In the period leading up to the communist revolts of 1926-1927 in Indonesia, the distinction between Islam and communism was not as clearly made as afterwards and there were organizations that combined the two with nationalism in an explosive manner. It was a combination that accommodated women in public roles. PSII also had its women's wing and permitted women to speak at its public meetings. 'Permitted' is stress because at this time the moderate Islamic organizations like Muhammadiyah did not allow women to speak before mixed audiences. At such meetings they used to segregate the audience and erect a curtain (tabir) to conceal the women from male eyes. Even in PSII, however, women often felt restricted by what the male leaders wanted and struggled to advance their own agendas.

By the end of the colonial period women in radical Islamic organizations had helped to legitimize women's public role in politics. The main resistance had been in the overtly non-political, moderate organizations like Muhammadiyah, which preferred women to stay in the background. But by the 1930s almost all Indonesian organizations had been drawn into the nationalist fold, where opinion was turning in favour of a greater public role for women. Nationalists recognized that women had to participate in modernizing the country in preparation for independence. By the time of the Japanese Occupation, for instance, the nationalist movement, including its Islamic elements, had accepted the notion of women’s right to vote.

Elections in Indonesia have taken place since 1955. At a national level, Indonesian people elect a head of state, the president and a legislature. The president is elected for a five-year term, as are the 550 member People's Representative Council (DewanPerwakilan Rakyat, DPR) and the 128 seat Regional Representative Council (DewanPerwakilan Daerah). The Council is elected by proportional representation from multi-candidate constituencies. Under Indonesia's multi-party system, no one party has yet been able to secure an outright victory; parties have needed to work together in coalition governments. The voting age in Indonesia is 17 but anyone who has an ID card (Indonesian: KartuTandaPenduduk (KTP)) can vote. People under 17 who are married can get a KTP.

b. Relationship with other countries

Indonesia and Malaysia enjoy friendly relations. The populations of both countries have cordial relations and trade between the two countries has greatly increased over the years. Indonesia has an embassy in Kuala Lumpur and consulate generals in Johor Bahru, George Town, Kota Kinabalu and Kuching. Malaysia has an embassy in Jakarta and a consulate general in Medan and Pekan Baru. Both nations are founding members of ASEAN and APEC. Both nations are also members of the Non-aligned Movement. Relations between the two nations deteriorated under President Sukarno, however relations were restored under President Suharto.

Currently, both nations are in a territorial dispute over the oil rich islands of Ambalat. Previously, they were over territorial disputes over the islands of Sipadan and Ligitan, which were won by Malaysia. The Indonesian migrant workers (Tenaga Kerja Indonesia) have become the important issue between both countries. The problems concernabout migrant workers such as illegal immigration, crime, human trafficking, abuse, poor treatment and extortion upon migrant workers. Since 2009 Indonesia has temporarily stop sending domestic workers to Malaysia until both countries agree on ways to protect them. Indonesia will resume sending migrant workers to Malaysia in May 2011 as both countries will sign a memorandum of understanding (MoU) about worker protection by the end of April 2011.

The relationship between ancient Indonesia and Cambodia dated back from the kingdom of Chenla and JavanSailendra also Srivijaya, it was mentioned that king Jayavarman II had resided for some times in Java during the reign of Sailendrasand in 802 declare sovereignty of Cambodia from Java and proclaimed himself as universal monarch thus started the Angkor period. During Sukarno reign in the 1960s, the president of Indonesia has visited Cambodia and vice versa Prince Norodom Sihanouk also visited Indonesia. In 1992 Indonesia is among countries that provides troops for United Nations Transitional Authority in Cambodia. Indonesia also supported Cambodia membership to ASEAN in 1999. Indonesia also among the countries that provide aid to Angkor restoration projects especially the three main gates of Angkor Royal Palace archaeological site near Phimeanakas site. Indonesia is also appointed as observer in Cambodian–Thai border dispute.

Both Indonesia and Myanmar are promoting the two countries trade volume. The trade volume is estimated to reach up to $1 billion in 2016. Indonesia has offered to purchase 300,000 tons of rice from Myanmar, with prospects of buying more in the future.Indonesia supports Myanmar's democratization process.

Indonesia and the Philippines are both archipelagic country and same ethnic population that belongs to Austronesian. Indonesia and the Philippines established there bilateral and diplomatic on 1949. The Indonesian Government has opened its Consular office in Manila but it was not until the mid-1950s that an Embassy was established headed by an Ambassador.A treaty of friendship was signed on 1951. This Treaty constituted the basic relationship of both countries, covering several aspects such as maintenance of peace and friendship, settlement of disputes by diplomatic and peaceful means, traffic arrangements for citizens of both countries and activities to promote cooperation in the area of trade and cultural, which include the political, social-economic and security matters of both countries.Both countries are members of the East ASEAN Growth Triangle together with Brunei Darussalam and Malaysia in the BIMP-EAGA.

In August 2005, Singapore and Indonesia signed a Memorandum of understanding to expand aviation rights between the two countries. On 3 October 2005, Prime Minister Lee Hsien Loong met Indonesian President Susilo Bambang Yudhoyono in Bali, just two days after the Bali bombings. They agreed to strengthen the fight against terrorism and also discussed cooperation in the fields of economy, trade and investment.Relations with Indonesia are generally good, though current outstanding issues include the bans on the export of sand, and granite; both of which Singapore's construction industry is reliant on.

Indonesia is Thailand's third most important trade partner within ASEAN, with bilateral trade worth $8.7 billion in 2007. Trade between the two countries is set to grow over the years.

Formal relations started in 1955 for the consulate general level. Soedibjo Wirjowerdojo (former chargé d'affaires of Indonesian Embassy in Peking, China from year of 1953 - 1955) was appointed to be The First Indonesian Consul General to Vietnam and located in Hanoi.Vietnam and Indonesia are both members of ASEAN, the Association of Southeast Asian Nations.President Megawati Sukarnoputri of Indonesia visited Vietnam in June 2003. At this time the two countries signed a "Declaration on the Framework of Friendly and Comprehensive Cooperation Entering the 21st Century".In May, 2005 President Susilo Bambang Yudhoyono of Indonesia visited Vietnam.In the December of the same year festivities were organized in the respective capital cities to celebrate the 50th anniversary of the establishment of diplomatic ties.

Republic of Indonesia established diplomatic relations with Brunei Darussalam on 1 January 1984. Brunei Darussalam was recognised by Jakarta on independence in 1984. Although do not shared direct land borders, Indonesia and Brunei shared the island of Borneo. Overall relations between the two countries were progressing well and that both sides continued to enjoy strong ties in a wide spectrum of cooperation’s including trade and investment, tourism, agriculture, marine and fisheries, health, defence, transnational crimes, education, youth, culture and people-to-people contacts.

c. Legislations, regulations or special rules affecting marketing of your product.

Duty Rates
Duty rates in Indonesia vary from 0% to 40%, with the average duty rate at 10.89%. Some products can be imported free of duty such as books, laptops and other electronic products.

Sales Tax
VAT is levied on imports at a standard rate of 10% or at a reduced rate between 0% and 5% calculated on the sum of the CIF value and duty. However, sales tax can vary and be applicable based on units of measure.

Minimum Thresholds
Imports with a FOB valueof up to USD 50 are exempt of duty. However, they are still subject to VAT and excise and STLG if applicable.

Other taxes and custom fees
Excise is applicable to alcohol and tobacco products at a rate of 275% on the sum of the CIF value and duty. Excise can also be applied per units of measure.STLG (Sales Tax on Luxury Goods) is applied to certain products at rates between 10% and 75% of the sum of the CIF value and duty.

d. Tariffs, quotas and other restriction on imports and exports.

i. Import Restrictions

You may bring a maximum of 200 cigarettes, 50 cigars or 100 grams of tobacco and a reasonable amount of perfume per adult. One litre of alcoholic beverage may be brought in per person 18 years of age or over. Personal goods up to a value of USD 250 per passenger or USD 1,000 per family may be brought into the country.(Video) cameras, portable radio cassette recorder, binoculars and sport equipment may be imported by tourists provided also exported upon departure. Passengers not entering on a tourist visa have to pay duties for photo and film cameras unless this equipment is registered in their passport by the Indonesian Customs on former occasion. Importation of electronic equipment is not permitted at all. Film pre-recorders, video tapes, video laser disc, records and computer software must be screened by censor board.Chinese medicines and printings, narcotics, firearms and ammunition, pornography, fresh fruit, cordless telephone are not permitted except for those holding licence.Prohibited are any commercial or merchandised goods as part of baggage. Infringements will be charged IDR 25,000 per piece. The use of cardboard boxes as baggage must be dissuaded.Residents of Indonesia are recommended to register valuable belongings with customs prior to departure from Indonesia.Dogs or cats require import permit issued by the Directorate General of Livestock Service together with good health and rabies vaccination certificate issued by an authorized Government Veterinarian in the country of origin.Any person bringing cash into or taking cash out of the country in the amount of Rp.100,000,000.00 (one hundred million rupiah) or more or other currency in equivalent amount, must declare same to Customs.Indonesian law forbids visitors from bringing weapons, illegal drugs or pornography into the country. Penalties can be severe and include death for weapons or drugs. Visitors must surrender a signed customs declaration in order to clear customs inspection upon arrival. The export of certain products such as tortoise shell, crocodile skin and ivory is prohibited. Permits are generally required to export live animals.

ii. Export Restrictions

Export restrictions and controls are applied by the government to a number of food commodities in an effort to ensure adequate domestic availability and stable prices of such products, particularly with the economy in such poor shape. Products that is eligible subject to:

o Poultry and poultry products other than poultry parts. o Boneless beef. o Pork and pork products.

Halal certification is not required for pork and pork products. However, general labelling requirements including production and expiration dates. Meanwhile, products that are ineligible subject to beef offal and bone-in beef, beef offal and bone-in beef with a Bill of Lading date on or before April 24, 2012 will be allowed entry into Indonesia.

e. Information on subsidies provided.

The government of Indonesia, like many countries around the world, has used subsidies for decades to promote a range of social and economic objectives. The government provides fisheries subsidies.Fishery subsidies greatly impact the sustainability of fishery resources. Indonesia spends US$ 621,377 and 39.43% of landed value on fisheries subsidies. Based on this, there are three categories of subsidies that can be identified which are beneficial (good) subsidies, harmful (bad) subsidies and ambiguous (ugly) subsidies.

‘Good subsidies’ are programs that lead to investment in natural capital assets to a social optimum, which is defined here as the maximum allocation of natural resources to society as a whole. Good subsidies enhance the growth of fish stocks through conservation and the monitoring of catch rates through control and surveillance measures to achieve a biological optimal use. For good subsidies, Indonesia spends about US$ 102,646 and 6.51% of landed value.

‘Bad subsidies’ are defined as subsidy programs that lead to disinvestments in natural capital assets once the fishing capacity develops to a point where resource exploitation exceeds the Maximum Economic Yield (MEY).Bad subsidies include all forms of capital inputs and infrastructure investments from public sources that reduce cost or enhance revenue. For bad subsidies, Indonesia spends about US$ 397,077 and 25.20% of landed value.

‘Ugly subsidies’ are defined as programs that have the potential to lead to either investment or disinvestment in the fishery resource. These subsidy programs can lead to positive impacts such as resource enhancement programs or to negative impacts such as resource overexploitation. For ugly subsidies, Indonesia spends about US$ 621,377 and 39.43% of landed value.

Other than that is Indonesia fuel subsidies. Fuel subsidy scheme in Indonesia, at least in the last eight years, is no longer sustainable. First, since 2004 Indonesia was no longer a net oil-exporting country. Thus, an increase in international crude price (ICP) would create oil trade deficit. The goal pursues fuel subsidy reform in order to minimize the distortions and budgetary pressures. President Susilo Bambang Yudhoyonohas made increasing gasoline and diesel prices conditional on parliament approving a compensation package for the poor to be included in the 2013 revised budget. However, Indonesia’s new Finance Minister, Chatib Basri aim to cutting fuel subsidies and building more infrastructures. Reducing subsidies will strengthen the rupiah, Asia’s worst performer in the past 12 months excluding the yen.

The impact on the rupiah will be positive because adjusting the fuel price will reduce the consumption of gasoline and will see an improvement on the current-account side. This is also good for investor confidence because people will start to look at Indonesia in a better shape.Subsidies for fuels and electricity receive huge amounts of public support in Indonesia. In fact, the government spends more on subsidies to fuelthan it does on capital expenditure for public services.Thesesubsidies also have majorimpactsonsocialequity,economicgrowthandenvironmentalpreservation. Fuel prices in Indonesia are among the lowest in the world. Those countries that do have cheaper fuel tend to be net oil exporting countries. Among the member countries of the Association of Southeast Asian nations (Asian), Indonesia has the cheapest subsidized fuel.

f. Intellectual Property Rights
Intellectual property (IP) is a legal concept which refers to creations of the mind for which exclusive rights are recognized. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets such as musical, literary and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights, trade dress and in some jurisdictions trade secrets.

i. Trademarks

A trademark is a sign in the form of a picture, name, word, letters, figures, composition of colours or a combination of these elements, used in trade to distinguish the goods and services of one trader from those of another. It is especially important to register your trade mark in Indonesia because trade mark piracy is a serious problem. Trade mark piracy exists where a third party (not the legitimate owner of the mark) registers the mark first in Indonesia, thereby preventing the legitimate owner from registering it. This is very common in the case of well-known marks. The remedy is to apply to the Court to cancel the unauthorized registration. Trademarks are registered with the Trade Mark Office (TMO). A mark maybe registered by a person, several persons jointly, or a company. Marks are registered in relation to particular goods or services. The International Classification of Goods and Services sets out the 45 classes of goods and services in relation to which marks can be registered. You will need to specify the particular goods or services in relation to which you wish to register. More classes means broader protection, but higher cost.Once registered, a trade mark is protected in Indonesia for 10 years from the date of filing. The registration can be renewed for subsequent periods of 10 years. Applications for renewal can be filed up to 12 months before expiry of the then current registration period, but not thereafter.

ii. Patents A patent is a right granted to an inventor in respect of their invention. It can be obtained for a new or improved machine or process, article of manufacture, or chemical composition.Two types of patent are recognised in Indonesia which is standard patents (for products and processes) and simple patents (for products only).

There are two ways of obtaining registration. You can apply for a patent directly by filing an application at the Patent Office. Alternatively, you can file an application under the Patent Cooperation Treaty (PCT) at WIPO in Switzerland and designate Indonesia as a country in which protection is sought. The PCT is a system which allows the applicant to file one application and designates other member countries. This is a cost effective system where protection is being sought in many countries.

For all applications, applicants need to specify, in a series of claims, the scope of the protection sought and to explain, by means of technical descriptions and drawings, how to work the invention. A standard patent is granted for 20 years from the filing date. A simple patent lasts for 10 years from the filing date. Yearly payments must be made after grant to keep the patent alive.If a patented invention has not been used three years from the date of grant, any party may file a request for a compulsory license with the Patents Office. A royalty will be payable to the patent owner. If process patents are not worked in Indonesia, the patent owner may be precluded from objecting to the unauthorized importation of goods manifested by the process covered by the patent.

iii. Industrial Designs

An industrial design protects the shape or configuration of three dimensional industrial or handicraft articles, or patterns applied to their surface. Examples of articles that may qualify for design protection range from household appliances, such as blenders or shavers, jewellery, watches and perfume bottles, to components of industrial machinery. A batik or ikat design may also be capable of protection.Industrial designs may be registered with the Industrial Designs Office. Unless otherwise agreed, it is the designer who created the industrial design who is entitled to registration. Industrial designs are registered in relation to particular goods. It is necessary to specify the goods, following the Locarno Classification.Once registered, an industrial design is protected in Indonesia for a period of 10 years from the date of filing the application. The registration cannot be renewed.Any industrial design can be registered except an industrial design that is not new (either in Indonesia or overseas) at the time of filing. (Novelty is not destroyed if the design is displayed in international exhibitions or used in experiments for education, research and development purposes up to six months before filing) or it is contrary to prevailing laws and regulations, public order, religion or morality.

iv. Copyright

Copyright is the right to prevent others from copying a particular form of expression. It does not protect the underlying facts, ideas or concepts.Works in the field of science, arts and literatureare capable of being protected by copyright. Copyright arises automatically at the time a work is created in material form. It is not necessary to register your copyright at the Indonesian Copyright Office to have protection, and registration is not validation of the content of the registered work.

However, many people in Indonesia choose to register copyright or leave dated samples of the copyright work with someone independent. Indonesia is a party to the Berne Convention on the Protection of Literary and Artistic Works, so works of foreign nationals will be automatically protected in Indonesia if the author is a national of a country that is also party to the Berne Convention, or the work was first published in a country that is a party to the Berne Convention. This covers most industrialised countries.It usually takes about 12 months for the registration certificate to be issued.

Once the application has been filed and all formalities complied with, the Copyright Office registers the copyright and issues a certificate of registration.Generally, copyright lasts for the life of the author and 50 years after their death. In relation to computer programs, cinematographic and photographic works, databases and adaptations, copyright lasts for 50 years from the date of first publication. Performing rights and recording rights last for 50 years from date of performance or production and broadcasting rights for 20 years from date of first broadcast.

i. Introduction

First and foremost, in order to fulfil the requirement of this project, our group has decided to choose a firm which is Adabi Consumer Industries Sdn. Bhd. The type of this company is a small-medium sized company. This company was established since March 1984 with the first batch of Adabi’s products from a small factory in Batu Caves Light Industries Area. In year 1986, ADABI moved from Batu Caves to Taman Kepong Light Industrial Area which is a bigger factory because Adabi has a steady market growth over the year. In the year of 1990 and 1992, it also makes additional plans for a new place at Taman Ehsan Light Industrial Area. After that, in November 1996, the company shifted to its own factory and office premises located in Rawang Integrated Industrial Park, Selangor. 1.1 Signboard of Adabi Consumer IndustriesSdn.Bhd

The main strategy of Adabi is meets the demand from consumer and market needs. Besides that, the founder and owner of this company is Dato' Syed Manshor Syed Mahmood. He started this business by using his own money without seeking or makes any loans from any institution. From the beginning of this company, Adabi has initial staff strength of 25 workers. All of workers are full time workers and Muslims.

The segregation of duties among the workers consists of manufacturing part, delivering the products, a person on marketing part, a person manage on administration, and an accountant. It is important to have a segregation of duties in order to produce good quality food products for Malaysians and the people all around the world and get the customers’ satisfaction. The workers were able to carry the company to its current status which is"Become a leading manufacturer of food based products in Malaysia and the other regions ".

Apart from that, in year 1984, this company gets annual sales of RM2 million. Furthermore, Adabi operates from 8.30 a.m. until 5 p.m. on weekdays. In Saturday, it opens from 8.30a.m until 1.00p.m while Sunday is a off-day for them but only for production. Their operations will open if there is a request from the manufacturing department. Malaysia has a lot of festivals and this company will give holidays to the workers according to the Muslim’s festival. An example would be that during Hari Raya, the workers will get their holidays but for Deepavali, the workers will not get the day off but will be replacing during the Hari Raya holidays.
The main activity of Adabi is manufacturing food products. Adabi provides consumers with products of the highest quality and standards. Furthermore, the products are guaranteed to be100% halal, hygienic, good taste, wholesome and healthy. The first product of Adabi is curry categories. After the rapid growth of Adabi, the product mall of Adabi consists of four main categories which are powdered spice mix, processed paste, soya sauce and flour mix under 33 types of products. Currently, Adabi has 2 additional categories which are beverages and canned food.The company not only produces those foods but they also produce recipe book.
The main reason why the company produces a recipe book is because of the demand from customer and one of the specialties from Adabi. Besides that, Adabi products also can be used in variety of foods. For example, soup spices can be put in rice briyani or spice chicken to make the food more delicious. The customer can get Adabi’s recipes only from their website which is Adabi is dealing with Karangkraf which located in Shah Alam in order to make the recipe book held in market but it is still under process for Karangkraf to print out the books and make it available to the market. Furthermore, Adabi also make their own product from the initial stage which is raw material until the final stage which is the finished good. It includes the process, logistics and packaging of the products to distribute in Malaysia and all over the world.

The product that we choose from this company is the flour mix. There are 10 types of flour mix but we only choose fried banana coating flour. Fried banana coating flour is one of the famous demands from the customers. As we know, banana is nice to eat when it is fried with flour. It can prevent the banana from getting too oily and flaccid. Usually, for 100gram of flour, it can be use for 5 -6 bananas. Furthermore, the best time to eat fried banana is when it is still hot and before dusk which is usually before Maghrib with friends and family. The estimation for the expiration is 1 year .The banana coating flour is produced by using modern machineries.

The type of international entry that our group chooses is exporting. Exporting is the selling of goods and services produced in one country to another country. It is an important move for a firm if it wants to expand over the country. The company tries to expand the sales life of existing products by finding new markets to sell through exporting instead of licensing, investment or others. For example, our company exports products such as fried banana coating flour, fried chicken coating flour and paste fried rice at Indonesia.

The rationale we choose exporting for our market entry is because our company already makes research, studies and survey in order to get feedback from Indonesian. For example, we give them sample distribution or food tasting session by random consumers at supermarkett. Although we get a demand from them, we have to make phases of tasting until it has consensus approval by the management team of the country before we can hit the market. The result of this approach, our company now is the best seller in the market, so it will be easier for our company to export to Indonesia.

Besides that, our image has a good quality food product and 100% halal. This is because the main religion in Indonesia is Islam, so Indonesians are convinced that our products are genuinely halal. Other than that, we can get a products awareness. It means that everyone around the world will know about our company instead just in local country.

Nonetheless, there are some difficulties arise when our company use the exports strategy. The first one is rate of price. There are fluctuation price of raw material. For example, when producing a fried banana coating flour, there will be a fluctuation price for flour. Next is labor cost. Nowadays, it is hard to find a local worker because some of local worker are not interested to work at factory, so our company have to take a foreigner worker. It will incur a high cost.

As our company consists of Bumiputera, one of opportunities that our company have are in terms of Bumiputera quota and halal certification. It means that we have more quotas to sell our products in Malaysia. The halal certification also is very important for the distribution of our products. In fact, Adabi products were the first to receive Halal certification from the Islamic Affairs Division of the Prime Minister’s Department. Thus, Indonesians can trust Adabi in terms of the products quality and genuine or not .Furthermore, government agencies also support and give subsidies to the brand Adabi .Besides that, early month of April 2013, our company had joined a program from MIHAS (Malaysia International Halal Showcase).This is to expand the products abroad.

The competition encountered is in term of price and quality. Other than that, we have to come up with good strategies to sell our products because there are many competitors in local market and Indonesia. For example, Tepung Goring Pisang Lyzza and Tepung Goring Pisang Nona while in Indonesia, there are Tepung Bumbu Mamasuka, Tepung Bumbu Sasa and others. ii. Situation analysis

The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. SWOT is an acronym for strengths, weaknesses, opportunities and threats. SWOT can be divided into internal and external origin. Internal origin consists of strengths and weekness while external consists od opportunities and threats.

a) Strengths - Strengths are the qualities that enable us to accomplish the organization’s mission.. Strengths can be either tangible or intangible.

b) Weaknesses - Weaknesses are the qualities that prevent us from accomplishing our mission and achieving our full potential. These weaknesses deteriorate influences on the organizational success and growth.

c) Opportunities - Opportunities are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable.

d) Threats - Threats arise when conditions in external environment jeopardize the reliability and profitability of the organization’s business. They compound the vulnerability when they relate to the weaknesses. Threats are uncontrollable.

 Strengths
The strenghts of our company is brand. Based on the logo of our company, it represented by the traditional Royal malay palace of malacca in sixteenth century with tagline, ‘BERSIH DAN ASLI’. In other words, it is hygienic in process, very original and halal so it can convince the consumers. Besides that, committed of employee. Our company provide 10 characteristics how to be excellent an employee which are discipline,easy to interact, quality of work, positive thinking, help each other in one group and more. When our employee have the following characteristics, the product will be produced in timely manner and of good quality.

 Weaknesses
Forweaknesses, our company face problems with the consumers that are loyal to the local products. It means that some of Indonesian prefers to buy their local product. This is because certain Indonesian tends to stick with their local product and does not want to try another brand. They also want to support their local product. Furthermore, our product might not suit with their taste bud, so the chances of them to buy our products are may very low.

 Opportunities
The business has been established for 28 years, so Adabi are well known and accepted abroad .Hence, it is easier for our company to get any tender and expand our product in Indonesia. In addition, the currency difference between our countries with Indonesia. The currency of Indonesia is lower than our country. In fact, we can get more profit when doing business in Indonesia. Besides that, we can improve our performance in certain outlet in Jakarta, Indonesia.

 Threats
One of the threats is that our outlet can only be held in certain places. We have a limited outlet throughout Indonesia. This is because certain Indonesian such as people in rural area tends to stick with their local product and does not want to try another brand.Other than that, the culture is also one of our threats. The main reasons are they prefer to eat heavy food such as seafood, poultry, and eggs. On the other hand, our threats incur high cost to pay an agent for them to promote our product and the cost incurred for the first time is around RM2000.

iii. Target market and positioning

A target market is a specific group of consumers at which a company aims its products and services. Any business must focus their marketing strategies towards a certain group of customers. A target market can be separated from the market as a whole by geography, demographics and psychographics.

It is important to our company to have a strategic place in order to get attraction from consumers. Thus ,our company provide a product especially those in the Indonesian cosmopolitan areas of Medan and Jakarta. The products are available in certain outlet such as in Tesco supermarket.In indonesia , our product is called as ‘Tepung Bumbu Goreng Pisang’.Our product which is fried banana coating flour is suitable for everyone. That includes all level of age, gender either male orfemale , all level of income can afford to buy our products. This is because we sell our product at a reasonable price. Besides that, the first potential consumers are hawkers. They need ingredients especially fried banana coating flouring in order to make their sales. It is easier for themto use our products because our products are the best in quality and taste. The second one is family especially housewives will buy our products.They too would probably need fried banana coating flour in order to fry a banana for the family.On the other hand, the factors that cause Indonesian will buy our fried banana coating flour because it is crunchy and tasty.

Product positioning refers to consumers' perceptions of a product's attributes, uses, quality, and advantages and disadvantages relative to competing brands. In order to make position our product in market, we conduct marketing research studies to analyze consumer preferences,when product improvements need and to construct product position maps that plot their products positions in relation to those of competitors offerings.

The way we position our product is through research, studies and survey. By doing survey, it will determine the different reactions of distinct and measurable groupings of consumers that will buy our products. For example, we provide a sample and food tasting in certain supermarket. It is to ensure our company know the feedback from consumers.On the other hand, our packaging is easy to bring,in medium size, colorful which will attract the customer and follow the requirement from management team of Indonesia. Other than that, the benefits of our products are that they are delicious, reasonable price and importantly, good quality. Furthermore, we also make a promotions and discounts in order to capture attention from consumers.

iv. Marketing mix

a. Product Decision
The most famous product in Indonesia is Fried Banana Coating Flour. The ingredients in this flour are rice flour and spices. The nutrition contains 315.95 Kcal of energy, 6.43 gm. of protein, and 71.52 gm. of carbohydrates of which sugar, 0.45 gm. of fat, 0.36 gm. fiber, and 19.92 gm.

This product have special features which is this flour are added with secret ingredient from Adabi which we call it ‘pre-mix’. This ‘pre-mix’ is secret recipe of Adabi. This secret ingredient will make our flour crunchier. So, Indonesian should buy our product as our product is more crunches than others. Other than that, we also had modified the taste of this flour which satisfied the Indonesian taste bud. We also modify the packaging colour only for product that we export to Indonesia. The language of instruction using the product also we used Bahasa Indonesia. So, it will easier to the Indonesian to use this product. With all these specialties that we have, it can be the reasons why people should buy our product.

People in Indonesia, are loyal to their local product even though the quality is not excellent than our product. So, it is difficult to us in order to make our product acceptable in that country. However, urban area like Jakarta and Medan, people in area are more opened and can accept foreign product.

Our sales expectation is:

1 carton = 40 packet. 40 packets distributed to one retailer in a month and we have 200 retailers.
A DAY 10/7 days x 200 = 286
A WEEK 40/4 weeks = 10 x 200 = 2000
A MONTH 40 x 200 = 8000
A YEAR 8000 x 12 = 96000

b. Pricing Decision

Our pricing objective is to make sure all customers can buy our product with affordable price because in Indonesia they had already has the flour to make a banana fried. In addition, we need to increase our profit to cover all the cost incurred. In other hand, we need to consider our target customers and their location because the Indonesia people who from rural areas does not so interested with product from outside and also the competitor price to compete with our competitors and make our product stable. So, our strategy is to make sure that the price is to be at par, lower or consumer price. We also use the ‘Minimum Order Quantity’ or MOQ that we set the price same like Malaysia but the size of packaging a little bit smaller.

Our product price is already locked in price means that the cost of flour is bear by Malaysian company. If the price of flour is cheaper than we can enjoy the benefit but if the price of flour is increasing we will bear the burden.
The price of one package of banana fried flour is RM2.30 and it is harder for us to reduce the price but we change it to other solution. We also mark up our price 10% to 20% and consider as all in cost which include all together the cost of container and shipping.

We give special price during festivals such as Eid by give extra value added. We also give special offer that known as ‘National Trade offer’ that who buy one carton will receive extra one package of flour. This is to attract buyers to buy our flour in a big quantity and do not burdening the buyers.

In placing the price, we consider other factors as well. Environment does influence our pricing decision. Our target market is everyone regardless of their level of income. Thus, we priced our flour as affordable as possible to make sure it is attainable but at the same time, still give us the profit out of it. The price is after we go through all of our expenses compulsory to pay such as any trade barriers like taxes.

On the other hand, we will be sold based on the “Cost-based Pricing” method where a standard mark-up is added to the cost of a product. There are about 200 and more outlet in Indonesia. The environmental influences on our price decision are based on the place. This is because, the mentality of citizen in urban area such as Jakarta and Medan are more modern and can accept our product. But, the citizen in rural areas such as Surabaya is not interested with outsider product. So, in order to attract them we still maintain the price same like in urban areas but we give extra quantity of flour to rural areas place.

COGS of our product for 1 carton (40 packages) are:

Direct material RM 1.10x 40 package RM44.00
Labor (2 labor x RM 15/Day) RM30.00
Overhead (5% x RM44.00) RM 2.20 RM 76.20

Mark-up 20% RM 76.20X 120% RM91.44

Therefore, the currency of Indonesia money is 3160.7 Rupiah equal to RM1.00 Malaysia. So RM91.44 per Carton is 289,014.4 Rupiah and one package is 7269.61 Rupiah.
Our revenue expectation is:
Time Expected to produce 1 Carton for 200 outlets(Carton) Price/carton Total Revenue
A day 286 RM91.44 RM26,152
A week 2000 RM91.44 RM182,880
A month 8,000 RM91.44 RM731,520
A year 96,000 RM91.44 RM8,778,240

c. Channels of distribution decisions.

The channel of distribution is very important as it is a medium to make goods or services available to users. Other than that, distribution channel also is the channel to meet customer’s or buyer’s need. Our distribution objective is to be available to all consumers thus our product can be well-known to people in Indonesia.

We are using agency and retailer as channel of distribution. Agent includes manufacturer’s representatives and brokers. They also sell to resellers. Our agent in Indonesia is PT Multi Alam Prima Rasa Company. At the beginning, we faced problem in penetrate into market, it time consuming to make our product well-known to people in Indonesia as Indonesian people are not aware and support the foreign product. Thus, we have limited state that we can penetrate.

Our product can be accepted in urban area such as Jakarta and Medan, whereas rural area such as Surabaya our product cannot penetrate in that area as the people in that area cannot accept foreign product. At the urban area, people there are more opened towards foreign product. This make difficult to make our product well-known to Indonesian people. Our marketing consultant, En.Zahari Bin Omar is from Malaysia and had transferred to Indonesia to consult with us about people in Indonesia taste and also the response from the consumer and the requirement that they want in order to satisfy consumer preferred. We are not having many problems in communication as PT Multi Alam Prima Rasa Company is used English language.

We also used retailer as our distribution channel. Retailer directly sells the product to the customer. We have about 200 retailers in Indonesia such as Tesco Indonesia. By using retailer, it is easy to consumer to get our product .Other than that, we participate in exhibition provide by Malaysia External Trade Development Corporation (MATRADE). MATRADE promote our product to Indonesia with some fees charge.

d. Promotion decision
Our target audience is everyone from little kid up to baby boomers. Our promotion objectives are to give the information about our product to local customers in Indonesia and other countries. Other than that, from the advertising and promotion, this will increase demand and stable our sales. Lastly, to attract customers by using different ways of the advertising compared to our competitor. We use short term strategies and long term promotion strategies. There are so many types of promotions that we use such are advertisements in television which use the TVRI(region) channel, flyers, social networks, and use the supermarket (Tesco Indonesia) and we also make sales promotions at any events.

For long term strategies, we make sales promotion at any events such as give a free token to SMK Cyberjaya and the student can redeem the coupon with food made using product Adabi powder. Other than that, we also make a Corporate Social Responsibility by help the orphaned and single mothers. For short term strategies, we give a sample to agent distribute it to the Indonesia people. We also give a promotion of National Trade Offer which buys one carton and you will receive one package free. The extra value also added especially during the Eid festivals. The main reason in choosing these types of promotions is these mediums easy to see and listen to. This is because they made advertising in Indonesia language and the cost of the advertising is bear by Company Adabi in Malaysia.

Nowadays, information technology (IT) is popular among us. Everyone will use it for any business. For example is Facebook and twitter. We have our own Facebook account where at that page, customers all over the world can know our business and get to know our product and also being provided the recipe book that has variety used of the Adabi product. This will make our customers to get information about us easier.

We also have twitter account to update our product progress all the time. We will communicate with our buyers and future buyers all around the world using this modern method. We will make sure they will not find it hard to get information about our company and product.

Besides, one of the strongest promotion strategies is by good reviews and testimonials from customers. This is because, people will believe more when it is proven by other people. We also change the packaging more attractive by use the Indonesia language and change the name. The size also being adjusted this is requirement from Government Indonesia.

We also use it in order to advertise our products. We also use it in order to advertise our products. We use internet because we can attract majority customer from this media since majority of people around the world are the users of Facebook and twitter.

v. Conclusion and recommendation

a) Why have chosen the specific strategy?

The specific strategy that we had chosen is exporting our product to Indonesia. Exporting allow us to expands our product instead in local. We also make a research and survey in Indonesia to make sure that our products are accepted and suits with the consumer needs. For example, our company gives a sample distribution and food tasting by random to Indonesian consumers in supermarket. Furthermore, exporting will ensure the increasing in economics of scale. The big population of Muslim in Indonesia would lead to higher food consumption. Besides that, exporting can lower our cost because we did not need to build our own factory in Indonesia and not incurred any manufacturing cost. So, we can save our money to cover the others cost.

b) What are the chances of success for your product in the targeted country?

The chances of success for our product in the targeted country are encouraging by putting the consumer taste at first place. We always put our consumers as our priority and always keep abreast of their taste. As we know that majority population of religion in Indonesia is Islam, so our products are 100% halal, good in taste, high good quality and hygiene. For example, Indonesia imports Tepung Goreng Pisang. In fact, our fried banana coating flour known as “Tepung Bumbu” among the fan at that country. Furthermore, P.T. Multi Alam Prima Rasa as importer was set up in order to facilitate the export of Adabi products into Indonesia. Medan has been picked as the entry point as Adabi products are no strangers to the locals who knew about Adabi from Malaysia TV transmission. Demand for the products is also encouraging and to-date preparation is being made for the products to be distributed to the other parts of Indonesia. Furthermore, the company has received the MS890:1984 certification from Sirim and the Super Brand status from the Malaysian Super brands Council and Reader's Digest.

The demand for new and convenient packaged food products will rise because consumers find themselves subject to time constraints in view of their busy lifestyles. Based on this, it is not difficult to us to introduce our product to them. We are sure that our product will be success in there.

vi. Reference list

• "Indonesian." - Language Information & Resources. Retrieved on May 21,2013 from • "Indonesia Country Information." Asian Food Recipes. Retrieved on May 31,2013 from • "A Truly Asian Experience, The Place Is Indonesia with 13.000 Islands for Your Holiday." A Truly Asian Experience, The Place Is Indonesia with 13.000 Islands for Your Holiday. Retrieved on May 31, 2013 from

• "Indonesia General Information." Indonesia General Information. Retrieved on May 31, 2013 from

• "Indonesia - Jakarta - Bali." Indonesia - Jakarta - Bali. Retrieved on May 28, 2013 from

• "Indonesia." Work in. retrieved on May 23, 2013 from

• "Religion in Indonesia." Friends of Indonesia. Retrieved on June 1, 2013 from • "Drinks in Indonesia." AngloINFO Indonesia. Everything for Expats Living in or Moving to Indonesia. Retrieved on May 31, 2013 from

• "Animism and Myths." In Indonesia, HSIE Year 6, NSW. Retrieved on May 31, 2013 from • Doing Business in Indonesia | Indonesian Social and Business Culture. Retrieved on June 1, 2013 from • "Reference for Business." Indonesia, Doing Business in. Retrieved on June 1, 2013 from • “Indonesia - Language, Culture, Customs And Business Etiquette”. Retrieved on May 26, 2013 from

• "In This Section: Business Culture in Indonesia." Business Meetings in Indonesia and Manage Successful Meetings with Indonesian Business. Retrieved on June 1, 2013 from • “A Community Built Guide To Cross-Cultural Etiquette & Understanding”. Retrieved on June 2, 2013 from • "THE HOFSTEDE CENTRE." Indonesia. Retrieved on May 28, 2013 from

• Adabi gears up to enter mass market. Retrieved on May 29, 2013 from • Adabi terus pelbagaikan produk penuhi permintaan. Retrieved on May 29, 2013 from • A household name going global. Retrieved on May 29, 2013 from • Target market. Retrieved on May 29 ,2013 from • Product positioning in Five Easy Steps. Retrieved on May 29, 2013 from • Only the best Adabi. Retrieved on May 31, 2013 from • Home page Adabi. Retrieved on May 31, 2013 from • Spice route 5 recipe. Retrieved on May 31, 2013 from • Demographic of Indonesia. Retrieved on May 1, 2013 from • Elections in Indonesia. Retrieved on May 17, 2013 from • Politics of Indonesia. Retrieved on May 19, 2013 from • Foreign relations of Indonesia. Retrieved on May 28, 2013 from • Economy of Indonesia. Retrieved on May 25, 2013 from • Indonesia : Trade Regulations & Standards. Retrieved from • Indonesia Customs Guide 2012. Retrieved from • Indonesia Inflation Rate. Retrieved on April, 2013 from • Indonesian Rupiah. Retrieved on May, 2013 from • Indonesia Balance of Trade. Retrieved on March, 2013 from • Indonesia Exports. Retrieved on March, 2013 from • Indonesia Imports. Retrieved on March, 2013 from • Percentage of Household by Province, Area Type and Area of Occupancy per capita. Retrieved from¬ab=20 • Import Duty & Taxes When Importing into Indonesia. Retrieved from • Khan et al. (2006) and Sumaila et al. (2006). Fisheries Subsidies in Indonesia. Retrieved from • Rouse (2011). Intellectual Property in Indonesia. Retrieved from • YudithHo& Sharon Chen (2013, May 22). Indonesia’s Basri Sees Subsidies, Infrastructure Key. Retrieved from • The Jakarta (2003, July, 24). Indonesian Muslim Women’s Role in Political. Retrieved from • "Personal Hygiene in Indonesia to 2014." Data monitor Research Store. Retrieved on May 28 from • "Indonesia - Cultural Etiquette - E Diplomat." Indonesia - Cultural Etiquette - E Diplomat. Retrieved on June 4, 2013 from vii. Appendices

 Maps of Indonesia  Currency of Indonesia

 Traditional customs of Indonesia

 Religion of Indonesia

 Product Adabi in Indonesia


Address: Adabi Consumer Industries SdnBhd
Lot 136, Rawang Integrated Industrial Park,
48000 Rawang, Selangor DarulEhsan, Malaysia.

 Founder and owner of Adabi

 Warehouse of Adabi

 Product mall of Adabi

 During interview with Adabi

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If You Were the Ceo of a Multi-National Corporation Considering a Market-Entry Mode Strategy, What Questions Would You First Want to Have Answered? Be Sure to Explain Why.

...If I were the CEO of a multi-national corporation to consider a market entry mode strategy, there would mostly be the most important question that would come up into my mind is which market entry mode strategy will give my company higher profitability and larger market share. There are lot of market entry mode strategies like direct exporting, indirect exporting, licensing, franchising, wholly owned companies, joint venture, strategic alliance etc. however, before choosing the market mode strategy, I would definitely consider the market’s existing conditions that will back me to boost up my company’s bottom line. The first question that would come up is what is the condition of the economic factors of the country that my company has to deal with? It is very clear that for every market entry strategy mode, I need to consider the existing economic issues of the country to confirm my company’s profitability and future, like its inflation rate, interest rates, income levels, currency strength, balance of trade, tax, tariff & Excise Duty, and government controls over these issues. If there is any high inflation rate or the inflation rate is unstable like Zimbabwe, no market entry mode is going to work to ensure my profitability. If there is a high market interest rate that will hamper my future business prospect, I will not consider this country to enhance my business....

Words: 538 - Pages: 3