Market Entry Strategy for Repco in Indonesia

This assignment analyzes Repco's potential market entry strategy into the Indonesian automotive parts industry. It examines market size, growth opportunities, competitive landscape, regulations, and consumer preferences. The analysis considers factors like infrastructure, economic conditions, and cultural nuances to develop a comprehensive market entry plan for Repco in Indonesia.

Surname REPCO Business Plan
REPCO Business Plan
Student’s name
Course
University
Date
Page 1 of 9

Surname REPCO Business Plan
Executive Summary
Repco is a leading auto parts maker in Australia. The company anticipates expanding into
Indonesia using joint venture marketing strategy. The company targets the car owners in
Australia who have incessantly demanded quality spare parts. Because of the quality and
favorable pricing strategy, the Australians would derive satisfaction from the new offers.
Although competition is evident in the Indonesia auto part industry, Repco intends to use
different marketing schemes to attract and retain consumers. For instance, it will offer
expanded warranties to replace and repair their cars. By extending the warrantees to the
dealership, it will be possible to encourage repeat customers. With the good business
environment and affordable cost of production, Repco will maximize profits. In fact, the
country’s high population and available resources would add value to its business goal of
becoming the leading supplier of quality spare parts.
Page 2 of 9

Surname REPCO Business Plan
Introduction
Repco is an outstanding automaker dealing in spare parts. Given the current market
situation in Australia is competitive and the company needs to expand into new markets,
especially the emerging markets as demonstrated by Pride (2015). With nearly every
household in Indonesia possessing motorcycle or car, the demand for quality auto parts is
indisputably high. Repco is a company that operates in Australia and New Zealand where it
operates over 400 stores. Commisceo Global Consultancy Ltd (2017) reports indicate that the
brand stands for expertise, quality, and knowledge because of its dedication and passion to
anything automotive. Repco offers a huge range of automotive parts ranging to about 175,000
parts (Repco n.d). It will continue to benefit from its preferred supplier relationship. The
company’s objective is to enter the Indonesian automotive market and improve its market
share.
Reasons for investing in Indonesia
Indonesia is a leading investment destination for many international companies. With
over 254 million people, the demand for consumer products is indisputable (Department of
Foreign Affairs and Trade n.d). Regarding the economy and GDP, Indonesia is 16th in
economy and 8th in consumer purchasing power (ASIALINK n.d). It is the leading economy
in the Southeast Asia. The country’s nominal GDP stands at 1 trillion AUD and anticipated to
increase (Emerhub n.d). Since many households own automotive, Repco can offer them a
quality brand that will make their automotive distinct. Indonesia is endowed with natural
resources and skilled workforce that guarantees the investors a good future (Fensom 2017).
Since Indonesia is the 13th largest trading partner, REPCO would find it easy to establish its
operations (Euromonitor International 2017). The political stability experienced in Indonesia
is also an advantage to investors. In fact, it abolished various tariffs to accommodate the free
trading policies (Department of Foreign Affairs and Trade n.d1). Unlike other countries,
Page 3 of 9

Surname REPCO Business Plan
Indonesia offers low production costs because of the availability of resources and skilled
labor.
Products
Repco offers product range thus addresses its dedication and passion to automotive
(Riley 2016). The Repco is a leading store where motoring enthusiasts can never
underestimate (Repco n.d). The company provides a range of products including seat covers,
spare parts, car care, in-car entertainment, picnic rugs, lubricants, oils, and traveling and
touring accessories among other products (Repco Corporate n.d). The company will continue
to order any category of spare parts the client needs. Repco is a proven expertise, outstanding
value, and honest advice. The products are sustainable and environmental friendly (Riley
2016). The Repco brand is a unique brand offering quality spare parts thus justify the unique
value proposition. It will offer an all-inclusive payment policy (Wikimedia Foundation, Inc.
2017).
Promotions and marketing strategies
Repco understands the competitive pressure in the Indonesian market. To this effect,
it intends to use different promotional strategies and campaigns to attract new customers and
beat its competitors (Becker 2016). It will offer car warranties to encourage buyback. The
firm will also extend its warranties to customers to serve their needs (Eddymurthy & Smith
2013; IBP 2016). Similarly, the firm anticipates introducing an auto club membership where
the cardholders will benefit from a 10 percent discount on applies. The customers will be able
to save the ten percent upon producing the card. Apart from the club membership card, the
company will be offering customers gift cards which it intends to deliver on customer order
through standard post.
Environmental Sustainability Policy
Page 4 of 9

Surname REPCO Business Plan
Repco understands the significance of the clean and green production process. This
will continue using this process to reduce environmental pollution (Plumer 2017). Recycling
the auto parts is difficult (Becker 2016). As part of its sustainability policy, the company will
use different approaches to recycle the spare parts. For instance, SAPA (2017) identifies the
recycling of the auto parts for same use like refurbishing the engine. The suspensions, doors,
and body will be reused upon processing. The iron rods will be used to make new items
through the biopolis project. It will also use
Marketing strategy
Repco intends to use partnership or joint venture to enter the Indonesia auto parts
market (Ador 2016; KPMG 2017). The joint venture strategy will help the company to avoid
unnecessary costs and benefit from the partner’s network. To this effect, the organization will
have to identify the best local partner that understands the terrain and culture (Wikimedia
Foundation, Inc. 2017). To add value to its marketing, the company will use online platforms
to reach large customer base.
The Future
Repco’s vision is to become the leading provider and supplier of automotive spare
parts for nearly all the car models. It intends to achieve the vision by offering quality
automotive. It will become the best provider of quality spare parts thus improve its revenues
and sales. It will invest in research and development to improve products through innovation
(Magni, Poh & Razdan 2015). Pepco will further rely on the government laws to protect its
product by employing its intellectual property strategy.
Market penetration
Penetrating the already saturated market is difficult. However, REPCO needs to use
different strategies to outwit competitors in the market. The company will penetrate the
market by restructuring it. For instance, this will involve the use of persuasive and aggressive
Page 5 of 9

Surname REPCO Business Plan
promotional campaigns. The needs to sell its product at an affordable rate will attract
customers. The company will also focus on the existing customers so that it can increase
usage. It will involve manufacturing quality products that are attractive to customers. For
example, REPCO will introduce loyalty schemes, add value to its products, and alter the
products to encourage usage.
Conclusion
Pepco has the opportunity to improve its market share and revenues by investing in
Indonesia. Indonesia offers significant opportunities for the company to succeed. For
instance, the company will benefit from low cost of production, increasing middle-class
group, and conducive environment for doing business. The growing population increased the
rate of urbanization and remains the largest economy in the region benefit the company.
Therefore, by investing in Indonesia, the company will improve its profits. Since setting
business in a new country is never easy, PEPCO would benefit by using joint venture to
maximize the available opportunities. This will reduce the costs and optimize the distribution
channels and customers of the host company.
Page 6 of 9
Increase
usage
Loyalty
scheme Add value Technolo
gy change

Surname REPCO Business Plan
Bibliography
Ador, NJG 2016, December 22, How foreigners can set up a joint venture in Indonesia.
Indonesia Expat. [online] available at
http://indonesiaexpat.biz/business-property/understanding-basics-setting-joint-business-
venture-indonesia/ [Accessed 25 September 2017].
ASIALINK, n.d. Doing business in Indonesia. [Online]
Available at: https://www.livescience.com/28823-chinese-culture.html
[Accessed 25 September 2017].
Becker, J. 2016, March 20. How leading automotive parts suppliers recycle to preserve the
environment. [online] available at http://www.driving-news.com/how-leading-automotive-
parts-suppliers-recycle-to-preserve-the-environment/ (Accessed 26 September 2017).
Commisceo Global Consultancy Ltd, 2017. Indonesia guide. [Online]
Available at: http://www.commisceo-global.com/country-guides/indonesia-guide
[Accessed 24 September 2017].
Department of Foreign Affairs and Trade, n.d. Indonesia country brief. [Online]
Available at: http://dfat.gov.au/geo/indonesia/Pages/indonesia-country-brief.aspx
[Accessed 24 September 2017].
Department of Foreign Affairs and Trade, n.d1. Australia-India Comprehensive Economic
Cooperation Agreement. [Online]
Available at: http://dfat.gov.au/trade/agreements/aifta/Pages/australia-india-comprehensive-
economic-cooperation-agreement.aspx
[Accessed 25 September 2017].
Eddymurthy, I. & Smith, D., 2013, Mar/Apr, “Infrastructure: The need for more and sooner.”
Journal. http://www.ssek.com/download/document/BritCham_-_Up_Date_-
_MarchApril_2013_78.pdf [Accessed 24 September 2017].
Page 7 of 9

Surname REPCO Business Plan
Emerhub, n.d. 10 reasons why to invest in Indonesia. [Online]
Available at: https://emerhub.com/indonesia/10-reasons-invest-indonesia/
[Accessed 25 September 2017].
Euromonitor International, 2017, Indonesia. [Online] available at
http://www.euromonitor.com/indonesia [Accessed 25 September].
Fensom, A., 2017, February 27, “Free trade push: Australia, Indonesia eye deal.” The
Diplomat. [online] available at http://thediplomat.com/2017/02/free-trade-push-australia-
indonesia-eye-deal/ [Accessed 25 September 2017].
IBP, I. N. C., 2016, Indonesia clothing and textile industry handbook volume 1 strategic
information and contacts. S.l.: Lulu Com.
KPMG, 2017 August, Joint venture advisory practice. Issue 6. [Online] Available at
https://home.kpmg.com/content/dam/kpmg/id/pdf/2016/11/id-jvap-issue6-august2016-
Indonesia-edit.pdf [Accessed 25 September 2017].
Magni, M., Poh, F., & Razdan, R ., 2015, September, Best practices in customer and channel
management: Winning in Indonesia’s consumer-goods market. McKinsey & Company,
Nielsen.
Plumer, B., 2017, May 31, “Q. & A.: The Paris Climate Accord,” The New York Times.
[online] available at https://www.nytimes.com/2017/05/31/climate/qa-the-paris-climate-
accord.html?mcubz=0 [Accessed 25 September 2017].
Pride, W. M., Ferrell, O. C., Lukas, B. A., Niininen, O., & Schembri, S., 2015, Marketing
principles. Cengage Learning, South Melbourne.
Repco Corporate, n.d. about us. [Online]
Available at: http://www.repco.com.au/CA2571B70016E7AE/page/About+Us?
OpenDocument&1=06-About+Us~&2=~&3=~
[Accessed 24 September 2017].
Page 8 of 9

Surname REPCO Business Plan
Repco n.d, About us. [online] available at
http://www.repco.com.au/CA2571B70016E7AE/page/About+Us?OpenDocument&1=06-
About+Us~&2=~&3=~ (Accessed 28 September 2017).
Riley, J., 2016. 5 reasons to do business in Indonesia. [Online]
Available at: https://www.linkedin.com/pulse/five-reasons-do-business-indonesia-jemima-
riley
[Accessed 24 September 2017].
SAPA, 2017, July 24, How the auto parts production industry is saving the environment.
[online] available at https://sapagroup.net/en/how-the-auto-parts-production-industry-is-
saving-the-environment/ (Accessed 27 September 2017).
Wikimedia Foundation, Inc., 2017. Repco. [Online]
Available at: https://en.wikipedia.org/wiki/Repco
[Accessed 25 September 2017].
Page 9 of 9