Global and International Business Contexts: Indonesia

Running head: GLOBAL AND INTERNATIONAL BUSINESS CONTEXTS
Global and International Business Contexts: Indonesia
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1GLOBAL AND INTERNATIONAL BUSINESS CONTEXTS: INDONESIA
Executive Summary:
This report has discussed about fashion industry of Indonesia with the help of Porter’s
Diamond model and market entry strategy. Porter’s diamond model of national advantage
helps to understand the competitive advantage of countries or groups due to availability of
certain factors. On the other side, foreign direct investment (FDI) plays significant part for
foreign companies to enter into this country. Economic condition of Indonesia is increasing
rapidly and consequently this country achieves rightful position for FDI. Over the last
decade, it can be seen that, there has been a large amount of Foreign Direct Investment (FDI)
inflow towards the fashion industry of the country depicting large-scale growth. However,
China has remained the strong competitor for this country. Hence, this report is going to
discuss about these issues and consequently will provide two main managerial issues that
foreign companies need to deal.

2GLOBAL AND INTERNATIONAL BUSINESS CONTEXTS: INDONESIA
Table of Contents
Porter’s National Diamond Model: Indonesia
:
Importance of Porter’s National Diamond model:.....................................................................4
1. Government:...........................................................................................................................4
2. Factors condition:...................................................................................................................5
3. Firm strategy and rivalry:.......................................................................................................5
4. Demand condition:.................................................................................................................6
5. Chance:...................................................................................................................................7
6. Related and supported industries:..........................................................................................8
Part B:.........................................................................................................................................8
Foreign direct investment scope in Indonesian fashion industry:..............................................8
Joint venture:..........................................................................................................................9
Wholly owned subsidiary:......................................................................................................9
Advantages of Joint venture and wholly owned subsidiary of the Indonesian retail industry:10
Disadvantages of Joint venture and wholly owned subsidiary of the Indonesian retail
industry:....................................................................................................................................10
Entry strategy for Indonesian retail industry:...........................................................................10
Industry-specific factors:......................................................................................................11
Firm-specific factors:...........................................................................................................11
Institutional factors:.............................................................................................................11
Recommendation:....................................................................................................................11

3GLOBAL AND INTERNATIONAL BUSINESS CONTEXTS: INDONESIA
Management issues:.................................................................................................................12
Issues related to Porter’s Diamond Model:..........................................................................13
Issues related to FDI:...........................................................................................................13
References:...............................................................................................................................14