Global Business-Operational Concerns Essay

Submitted By savetheseagulls
Words: 1434
Pages: 6

Indonesia is arguably the most populous Muslim-dominated democracy in the world and Southeast Asia’s largest economy. The administration has fought corruption and attempted to promote much-needed foreign direct investment. Despite this, the poor rule of law persists as a main hurdle to attracting resources. Indonesia is a member of the G-20 and a propelling force among the Association of Southeast Asian countries and consequently plays an increasing role in global economic policy deliberations. The increasingly diversified and contemporary economy has improved considerably from the recent financial crisis and recession (, 2013). Indonesia has embarked on a broad-range of transformations to tackle diverse structural challenges and enhance competitiveness. Latest reform programs have emphasized improvement of regulatory competence, improvement of regional competitiveness, and forming a more robust private sector through upgrading and modernization of the financial sector (, 2013). Despite considerable progress, the country’s development potential remains weak and hindered by incompetent investment and legal regimes. For example, political meddling in the private sector economy dampens vibrant economic growth, and persistent corruption, aggravated by a fragile judicial system, increases business risk. In the first half of year 2012, the administration reintroduced trade and investment hurdles that comprise restrictions on banks and ownership.
Engaging in local sales efforts
The Indonesia market is full of rivalry from companies in the neighboring nations such as Japan Singapore, China, and Malaysia. This implies that local intelligence and knowledge is critical to fend of or match the intense competition and this favor a local or regional composition of the sales team. The county and the region in general have different and unique culture that is necessary for the sales people to understand since they will be interacting with different distribution outlets and local consumers (, 2013). Even though it may be feasible in a number of cases to supply directly to the administration or state-owned entities, local partnerships of agents, domestic offices or distribution agents are regularly important to success of sales projects and development. The social networks and infrastructure are key elements in the Indonesian society. People tend to buy from outlets or distribution chains owned and managed by friends, relatives or acquaintances. Using of foreign citizens to manage distribution will not auger well with the large majority and may keep away potential buyers. The social network, values and norms embrace the support of one another. The local distribution equally has the experience and intelligent of the market and can make entry for the energy drink. Research study by the export office shows that small and medium scale U.S. companies venturing in the Indonesian market enhance their chances of performance by engaging strong local distributors (, 2013). The U.S. Commercial Service Jakarta helps U.S. companies identify and qualify potential Indonesian representatives (, 2013). The infrastructure is generally fairly well developed at a rating of 4.2 on a 1-7 scale. Specific areas such as roads, railway, port and energy are at an average score meaning that the direct engagement in direct selling efforts may prove a big challenge. The Indonesian marketing professional and marketing aspects are well developed. The country is rated at about 70 percent in marketing development by the global competitive index 2013. This means that the local sales and marketing team is equal to the task and can manage the distribution, sales and marketing effectively.
Undertaking local manufacturing operations
Although Indonesia publicly embraces foreign direct investment, numerous investors, both local and foreign, face unpredictability in the investment regulations and inconsistent enforcement.