Analysis of Indonesia as a Market for BritishIndia

Added on - 27 Mar 2020

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ContentsExecutive Summary........................................................................................................................11)Firm Analysis for British India...............................................................................................22)Market Analysis......................................................................................................................23)Country Analysis of Indonesia as a Market for British India Products...................................43.1 Political Factors....................................................................................................................43.2 Economic Factors.................................................................................................................43.3 Social Factors.......................................................................................................................53.4 Technological Factors...........................................................................................................53.5Environmental Factors....................................................................................................53.6 Legal Factors........................................................................................................................6Demand Forecasting.......................................................................................................................6Pricing Forecasting..........................................................................................................................8Bibliography.................................................................................................................................10Executive SummaryBritishIndia Company, is a Malaysian brand that plans to foray as a fashion brand in thegrowing economy of Indonesia. This report highlights the analysis of Indonesia as amarket for BritishIndia. The country has seen rapid economic growth in the last fewdecades and now has a growing middle class which is largely comprised of a youngpopulation. Additionally, Indonesia is an easily access and is a party to ASEAN FreeTrade Agreement. The report also presents the expansion plan for British India inIndonesia.
1)Firm Analysis for British IndiaBritishIndia, a Malaysia famous local lifestyle and fashion brand was establishedin 1994 by Pat Liew. Currently, BritishIndia has over 40 outlets across Malaysia,Singapore, Thailand and Philippines. There are 8 core collection of BritishIndia, namely:classic, new classic, pure, adventurer, travel and yoga, women and classic. BritishIndia iswell known in its luxury, comfort and superior quality of product. Besides, BritishIndiaalso expand from clothing to home furnishing mainly in Colonial and EasternisedWestern designs in order to gain different experience for their customers (BritishIndia2012).The style of British India is conform with the Indonesian’s clothing style and Jarkata ableto provide a market which admit new brand in short time. Every year, Jarkata will heldJarkata Fashion Week for introduce new brand to the market since 2008(Jarkata FashionWeek 2017). Furthermore, the spending power of Jakarta is high and the number ofmiddle income group is rising in Jarkata(Europe International 2012). This provide anopportunity for BritishIndia to target Jarkata market and get success. Last but not least,Malaysia is one of the Indonesia import partner, we are the fifth largest partner ofIndonesia. Indonesia policy are friendly to Malaysia investor(Alliance Expert 2016).2)Market AnalysisIndonesia has seen rapid economic growth in the past few years. Currently, Indonesia isthe 16thlargest economy in the world and is predicted to grow rapidly in the next decade.[ CITATION Dep16 \l 1033 ]The demographics of the country suggest that Consumer Spending is on the rise, thanksto economic growth which in turn, has created opportunities for fashion brand like BritishIndia.
The middle class is growing. The demand for consumer and retail goods isespecially, expected to grow.[ CITATION Dep16 \l 1033 ]Domestic consumption is increasing. The youth form a big part of the population,who would be likely to open to new fashion.[ CITATION Dep16 \l 1033 ]As a coastal city, Jakarta presents a unique opportunity due to easy access by sea whichcompounded and great consumer demand due to being a large metropolitan area. The cityof Jakarta has a population of over 9 million residents which makes it one of the biggesturban agglomerations in the world. It is also a city that is becoming increasinglycosmopolitan. Research indicates that the number of international travellers who travel toJakarta for business purposes is on an upward trend. Intuitively, international travellerswho travel for business purposes may have high discretionary spending budgets. Asurvey indicated that these travellers spend 13.4 % of their budget on shopping. Thisindicates that there is scope in terms of consumer spending for brands that match localdressing sensibilities with international standards.[ CITATION The174 \l 1033 ]Additionally, the province of Bali is an international leisure travel hub.[ CITATIONMin161 \l 1033 ]Bali , as a province is a popular destination for international conferencesand retreats. Thus, there is an opportunity in the form of demand from leisure who maynot only have high spending power but also, international, modern tastes.The Indonesian market is not only gaining significance for Malaysian exporters but also,for brands worldwide.[ CITATION Dep16 \l 1033 ]. This implies increased competition fromall over the world.British India, being a Malaysian brand, may appeal more to thedressing sense of the Indonesian population, as compared to other International brands,such as brands from countries such as UK.[ CITATION Dep16 \l 1033 ][ CITATION Min16 \l1033 ]
3)Country Analysis of Indonesia as a Market for British India ProductsFor this analysis, the PESTEL Model has been used to analyse Indonesia’s potential forthe products of British India company. The following is the PESTEL Analysis3.1 Political FactorsIndonesia and Malaysia are looking to improve Co- operation and this implies, betteropportunities for British India. Additionally, there is a generally, an increase inpolitical stability in the country.[ CITATION Dep16 \l 1033 ]The countries of Malaysia and Indonesia have tried to build a better tradeenvironment under the ASEAN Free Trade Agreement which allows traders to tradewith great tax and custom duty benefits, better standardisation in export/ importprocesses and transit procedures for goods and other support . British India aims tocapitalise on the better trade environment. Hence, the decision to export to Indonesiamakes sense.[ CITATION Min17 \l 1033 ]However, complicated bureaucracy, red tape and the uncertain nature of politicalreforms are some of the political risks that must be considered.[ CITATION Dep16 \l1033 ]3.2 Economic FactorsThe five provinces of Sumatra, Bali, Java , Kalimantan and Nusa Tengarra are the keyeconomic centresand have a major share in the total output of the country.As a country,Indonesia presents a growth market for the next decade since the population has beengrowing rapidly in the last few decades.[ CITATION Dep16 \l 1033 ]Indonesia does not have great infrastructure such as well developed ports, high speed railand road networks, public warehousing, electricity etc. Poor infrastructure in the countryleads to high costs of logistics. This may result in high mark up costs for British Indiaproducts. . However, there are plenty of infrastructure projects in pipeline in the country,that connect Jakarta to major economic hubs in the country, which may help reduce costsof transporting goods as well as the speed of transporting goods.[ CITATION Dep16 \l 1033 ]Apart from costs of transporting goods, speed of transit of goods is an important
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