Project on indonesia.. umer wasay haseeb

Given By Sir Shahid Nawaz
Course International
Business
Presented By Umer Gulzar 636
Wasay Shahid 516
Haseeb 509
Project on Indonesia
1 Made by Umer, Wasay, Haseeb

National Flag of Indonesia

Map of Indonesia

Independence
 On August 17, 1945, Sukarno and Mohammad
Hatta proclaimed the independent Republic of
Indonesia with Sukarno as president and Hatta
as vice president.

The Introduction of Indonesia
 Indonesia, officially the Republic of Indonesia, is a
country in Southeast Asia.
 The nation's capital city is Jakarta.
 Indonesia is comprising approximately 17,508 islands.
 It has 33 provinces with over 260 million people, and
is the world's fourth most populous country.
 Indonesia is a republic, with an elected president.
 The country shares land borders with Papua New
Guinea, East Timor, and Malaysia.

Currency
Indonesian Rupiah (IDR)

Population
 The current population of Indonesia is 262,206,233 as
of Monday, January 1, 2018, based on
www.livepopulation.com estimates.
 Indonesia population is equivalent to 3.51% of
the total world population.
 The total land area is 1,812,108 Km2 (699,658 sq.
miles)
 54.7 % of the population is urban (144,200,189
people in 2017)
 The median age in Indonesia is 28.6 years.

The Political Economy of
Indonesia
1. Political System
• Democracy
• Republic
• Constitutional republic
• Unitary state
• Presidential system

The Political Economy of
Indonesia
2. Legal System:
• Law of Indonesia is based on a civil law system,
intermixed with customary law and the Roman Dutch
law.
• Before the Dutch colonization in the sixteenth century,
kingdoms ruled the independently with their own
custom laws, known as adat.
3. Economic System:
• Indonesia has a mixed economy in which both the
private sector and government play significant roles.
• The country is the largest economy in Southeast Asia.
• According to World Trade Organization data, Indonesia
was the 27th biggest exporting country in the world.

Indonesia Culture
A. National Culture
1. Religion:
The constitution declares Islam the state
religion while allowing freedom of religion for
non-Muslims.

11
2. Language:
More than 700 living languages are spoken in Indonesia.
• Official language:
Indonesian (locally known as Bahasa Indonesia)
• Local languages of Indonesia
 Javanese, Sundanese and Minangkabau
 Recognized languages: English
3. Ethnic groups
 Austronesian
 Melanesians
 Javanese
 Sundanese
 Batak
 Madurese
Made by Umer, Wasay, Haseeb

12
4. Education (Literacy Rate):
5. Sports
• Badminton
• Football
• Boxing
• Basketball
All literacy rate 95.38%
Male Literacy Rate 97.17%
Female literacy rate 93.59%
Gender Difference 4.7 %

Ethical Issues in Indonesia Firms
13
 The fundamental weaknesses in the public service in
Indonesia is a matter of ethics and morality, ethics is
often seen as a less important element in the public
service.
 In fact, in the literature on public service and public
administration, ethics is one of the elements that
determine the satisfaction of the community being
served as well as organizational success in
implementing the public service itself.
 In public service, the act that violates moral or ethical
is difficult to trace and questioned because of the
habits of our society forbid the "open secret" or
threaten those who complain.
 we also face more severe challenges ahead for the
assessment of a standard of public service’s ethic is

Gross Domestic Product (GDP):

 Indonesia's main export markets are Japan (17.28%),Singapore
(11.29%), the United States (10.81%), and China (7.62%).
 The major suppliers of imports to Indonesia are Singapore
(24.96%), China (12.52%), and Japan (8.92%). In 2005, Indonesia
ran a trade surplus with export revenues of US$83.64 billion and
import expenditure of US$62.02 billion.
 The country has Exported Goods: extensive natural resources,
including crude oil, natural gas, tin, copper, and gold, electrical
appliances, plywood, rubber, and textiles.
 Indonesia's major imports include: machinery and equipment,
chemicals, fuels, and foodstuffs.
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International Trade

Indonesia Trade Policy
16
There are a variety of regulations and standards one
should know when planning to do business in
Indonesia.
 Indonesia Trade Policy includes the following:
 Trade Barriers:
 In accordance with the WTO Agreement on Agriculture, Indonesia
agreed to eliminate non-tariff barriers on
agricultural products, and replace them with tariffs but many
barriers still remain.
 In the agricultural sector, 1,341 tariff lines at 40 percent, including
the most sensitive and heavily protected sectors.
 The tariff was increased to five percent in 2013, but this was dropped
within a few months following supply shortages and increased
prices. Soybean import tariffs remain at zero.

17
 Import Tariffs:
 Indonesia continues to enforce a ban on imports of poultry parts,
which has been in place. U.S. industry estimates the value of lost
exports at $10 million or more per year.
 Indonesian Ministry of Agriculture regulation states that poultry
exports are only permitted from countries where halal slaughter is
implanted in all slaughter facilities, not just export- oriented facilities.
 The United States continues to work with Indonesia to ensure that the
approval process is conducted in a fair, indiscriminate and transparent
manner.

Prohibited and Restricted Imports
18
 Goods
 Narcotics.
 Explosives, including fireworks.
 Arms and ammunitions.
 Defined books and printed materials, audio and visual recording
media.
 Certain species of flora and fauna.
 Some goods are exempt from import duty, including:
 Goods for representatives of foreign countries and international
bodies and their officials who work in Indonesia.
 Goods for research and scientific purposes.
 Machinery for the establishment of industry.

19
 Labels for pharmaceutical must show:
 Writing on label should be in Bahasa Indonesia
 Country of origin
 Nature of composition
 Quantity and registration number (KL registration number with
the Ministry of Health)
 Name and address of manufacturer or importer
 Direction of use/dosage
 Ingredients composition
 Energy value per serving
 Alcohol content (if any)
 Side effect and warning (if any).

Foreign Direct Investment
20
 FDI of Indonesia June 2017

Inwards FDI

Regional Economic Integration
24
Indonesia is a member of the following Regional Economic
Integrations.
a. Association of Southeast Asian Nations (ASEAN)
o Formation Date 8 August 1967
o Members
 Indonesia
 Malaysia
 Philippines
 Singapore
 Thailand
 Brunei
 Vietnam
 Laos
 Myanmar
 Cambodia

25
Objective of ASEAN:
 To accelerate the economic growth, social progress and
cultural development in the region through joint
endeavors in the spirit of equality and partnership in
order to strengthen the foundation for a prosperous and
peaceful community of Southeast Asian nations.
 To promote regional peace and stability through abiding
respect for justice and the rule of law in the relationship
among countries in the region and adherence to the
principles of the United Nations Charter.
 In 1995, the ASEAN Heads of State and Government re-
affirmed that “Cooperative peace and shared prosperity
shall be the fundamental goals of ASEAN.”

b. The East Asia Summit (EAS):
26
o Formation Date 14
December 2005.
o Members
 Indonesia
 Brunei
 Cambodia
 Malaysia
 Laos
 Burma
 Philippines
 Singapore
 Thailand
o Members
 Vietnam
 Australia
 China
 India
 Japan
 New Zealand
 Russia
 United States of America
 The Republic of Korea

27
c. The Organization of Islamic Cooperation
(OIC):
o Formation Date September, 25 1969
o Members

d. Asia-Pacific Economic Cooperation (APEC):
28
 Formation Date
November 1989
 Members
 United States
 Australia
 Brunei
 Darussalam
 Canada
 Chile
 China
 Hong Kong
 Indonesia
 Thailand
 Vietnam.
 Members
 Japan
 Mexico
 New Zealand
 Papua New Guinea
 Peru
 The Philippines
 Russia
 Singapore
 Republic of Korea
 Chinese
 Taipei

29
e. The Non-Aligned Movement
 Formation Date 1961
 Members 120 countries
Objective of the Non-Aligned Movement (NAM):
• The purpose of NAM is to create an
international (group of countries) who do not want to
be officially aligned (friends) with or against any
major power bloc (group of countries).

f. The Centre on Integrated Rural Development
for Asia and the Pacific (CIRDAP)
30
 Formation Date 1979
 Members
 Afghanistan
 Bangladesh (Host
State),
 Fiji
 India
 Indonesia
 Iran
 Vietnam.
 Members
 Lao PDR
 Malaysia
 Myanmar
 Nepal
 Pakistan
 Philippine
 Sri Lanka
 Thailand

31
 CIRDAP Objective
 To assist national action and promote regional co-
operation relating to Integrated Rural Development
(IRD), in the region
 To act as a servicing institution for its member states
 To encourage joint collective activities to benefit the
member countries both individually and collectively
 To poverty alleviation through people’s participation in
the development process.

32
g. The Asia Cooperation Dialogue (ACD)
• Formation Date June 2002
• Members 34 countries
 Objective of ACD
 To promote interdependence among Asian countries in
all areas of cooperation by identifying Asia's common
strengths and opportunities which will help reduce
poverty and improve the quality of life for Asian
people whilst developing a knowledge-based society
within Asia and enhancing community and people
empowerment;
 To expand the trade and financial market within Asia
and increase the bargaining power of Asian countries
in lieu of competition and, in turn, enhance Asia's
economic competitiveness in the global market;

33
h. Association of Southeast Asian Nations Plus Three
(ASEAN+3)
 Formation Date December 1997
 Members
 Brunei Darussalam,
 Cambodia
 Indonesia
 Lao People's Democratic Republic
 Malaysia
 Myanmar
 The Philippines,
 Singapore
 Thailand
 Vietnam

34
 Objective of ASEAN+3
 To promote and facilitate collaboration and
cooperation among members of ASEAN Plus Three
FETN for the advancement of the epidemiology
training capacity in the region.
 To advocate and support the development and
enhancement of national capacity in field
epidemiology training among ASEAN Member States
and Plus Three Countries

Foreign Exchange Rate
35
According to Jan 2,2018
• PKR and IDR
• IDR and USD

Our Business in Indonesia
36
 Name Noble Furnishers
 Nature of Business Manufacturing
 Sub-sector: Furniture Manufacturing
 The Reasons for Investing in Indonesia:
 Indonesia has almost 260 million inhabitants, which
represents an enormous market.
 Additionally, the country has abundant natural resources
(timber, fish, oil, natural gas, metals) and enormous
biodiversity.
 Internal demand is growing due to the development of the
middle class.

The main factors that motivated us for
selecting Indonesia are:
37
 Biggest economy in Southeast Asia.
 Continuous GDP growth
 Urbanization – people are moving to cities
 Yearly population increase of ~3 million people
 Decreasing amount of corruption and
bureaucracy
 Foreigners can now have land in Indonesia.
 Better infrastructures.
 Competitive costs.
 Best resources.
 Lowest labor and other input costs.Made by Umer, Wasay, Haseeb

Brand Elements
38
 Name
“Noble Furnishers”
 Brand Logo:

39
 Slogan: “Being The Best Amongst
Others”
 Segment: Furniture Users
 URL
www.facebook.com/Noble-Furnishers-
177224332871880
 Target Marketing:-
 Lower Class
 Middle Class
 Upper Class

40
 Point of parity:-
 Material
 Furniture Manufacturers
 Distribution Channel
 Point of differences:-
 Price
 Quality

Advertisement:-

International Business
Strategy
43
 Selected Strategy: “Localization Strategy.”
 The localization strategy focuses on increasing
profitability by customizing the firm’s goods or services
so that they provide a good match to tastes and
preferences in different national markets
 The localization strategy makes sense when:
 There are substantial differences across nations with
regard to consumer tastes and preferences
 Where cost pressures are not too intense
 Fewer staff
 More tools

44
 The names of some of our prominent competitors are:
Company Activity
Wozniak Manufacturer of furniture
Livaza Sale indoor furniture
BeliFurniture office equipment, and office
supplies
Fabelio dining area, and bedrooms

Organizational Architecture
45
1. Structure:
a. Vertical Differentiation:
 We will choose “centralization” because
 Our Decision making power would be in our hands.
 Our staff capacity will be on small scale.
 We have designed only one main center for making all
types of policies.

46
b. Horizontal Differentiation:

47
2. Culture
Action and
Behavior
of leader
What
leader pay
attention to
What gets
reward and
what get
punished
Allocation
of attention
and
resources.
Team Work

48
3. Process
a. Process of Application for leave
Employ
ee
Senior
Executi
ve
Manage
r
MD
Head
Office

49
b. Manufacturing process:
Client
Order
Design
and Art
work
Proofin
g and
client
approv
al
Manufa
cturing
Hand
work
and
finishin
g
Packag
ing and
wareho
use
Final
shippin
g to
client

Entry Strategy:
50
Wholly Owned Subsidiaries.
In a wholly owned subsidiary, the firm owns 100
percent of the stock Firms can establish a wholly
owned subsidiary in a foreign market:
Setting up a new operation in the host country
Acquiring an established firm in the host country
Wholly owned subsidiaries are attractive because:
They reduce the risk of losing control over core
competencies
They give a firm the tight control over operations in
different countries that is necessary for engaging in
global strategic coordination
They may be required in order to realize location
and experience curve economies
Drawbacks..High cost and risk

51
 Scale of entry:
 Small-scale entry has the advantage of allowing a firm to
learn about a foreign market while simultaneously
limiting the firm’s exposure to that market.

Production And Outsourcing:
52
 We have selected the “Make-Decision” Because
 Vertical integration (making component parts in-
house) can:
 Lower costs - if a firm is more efficient at that
production activity than any other enterprise, it
may pay the firm to continue manufacturing a
product or component part in-house
 Facilitate investments in highly specialized
assets - internal production makes sense when
substantial investments in specialized assets
(assets whose value is contingent upon a
particular relationship persisting) are required to
manufacture a component.Made by Umer, Wasay, Haseeb

Production And Outsourcing:
53
 Protect proprietary technology - a firm might
prefer to make component parts that contain
proprietary technology in-house in order to
maintain control over the technology
 Facilitate the scheduling of adjacent
processes - the weakest argument for vertical
integration is that the resulting production cost
savings make planning, coordination, and
scheduling of adjacent processes easier

Departments Of Business:
54
 Human Resources Management
Operative Functions
 Recruitment:
1. Employees selection process will be on the basis of..
2. Experience, Knowledge, Communication skills, IT
Skills, Good education level, Know how about
organization’s objectives, strategies etc.
Training and Development:
1. Training process..
2. Communicate daily.
3. Let employees teach themselves and give guidance
along the way.
4. All types of Multi-Media.

55
 Professional Development:
 Through
oConsultation.
oCoaching.
olesson study.
o mentoring.
otechnical assistance.
 Compensation and Benefits:
 Some of the benefits given by us.
o Per working hours.
o Performance basis.
o Affordability of business.
o Profit sharing basis.

56
Managerial Functions
• Planning Process.
 Focus on priorities and what is due now
 Mark completed tasks complete
 Assign someone to every task
 Discuss pending or last tasks
• Organizing:
Employees are grouped into positions or activities they
will be performing.
Allocate different functions to different persons.
Delegate authority as per the tasks and responsibilities
that are assigned.Made by Umer, Wasay, Haseeb

Managerial Functions
57
• Directing through:
 proper planning of career of employees,
various motivational methods
and having friendly relations with the manpower.
• Controlling through:
 Bureaucratic System ( Through rules and regulations)
Out put/Performance Controls.

58
Finance/Accounts:
 Financial Decision( Equity and Debt)…
 Business finance would be from 2 main sources.
Equity 40%
 Debt 60%
 Major Sources of getting loan…
 Bank Mundari
 Bank Rakyat Indonesia
 Bank Central Asia
 Bank Negara Indonesia

59
 Accounts Information:
Main Accounts of business would be.
• Income Statement, Balance Sheet, Cash in flow And
Cash out flow.
Preparation Time:
• On the Annual Basis ( 31 December)

References
61
 http://www.globalsmes.org/news/index.php?func=detail&detailid=1089&catalog=38&lan=en
 http://www.worldometers.info/world-population/indonesia-population/
 https://www.google.com.pk/?gws_rd=cr,ssl&ei=k4RvWMSILdbtwAL9uZHwAQ#q=gdp%20of%20in
donesia
 http://www.indonesia-investments.com/finance/macroeconomic-indicators/gross-domestic-product-
of-indonesia/item253?
 http://countrymeters.info/en/Indonesia
 https://en.wikipedia.org/wiki/Languages_of_Indonesia
 http://countrystudies.us/indonesia/35.htm
 https://en.wikipedia.org/wiki/List_of_countries_by_literacy_rate
 https://geert-hofstede.com/indonesia.html
 https://www.researchgate.net/publication/267780237_Ethics_Issues_on_Land_Services_Reformati
on_in_Indonesia
 https://www.export.gov/article?id=Indonesia-Prohibited-Restricted-Imports
 https://www.lowyinstitute.org/publications/trade-protectionism-indonesia-bad-times-and-bad-policy
 https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Indonesia/Doing-
business/Tariffs-and-regulations
 http://dfat.gov.au/international-relations/regional-architecture/eas/Pages/east-asia-summit-
eas.aspx
 http://www.apec.org/About-Us/About-APEC/Member-Economies.aspx
 https://en.wikipedia.org/wiki/Non-Aligned_Movement
 http://www.apec.org/About-Us/About-APEC/Member-Economies.aspx

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