Market Entry Opportunity for Arnott's Australia in Indonesia and the UK

Running head: INTERNATIONAL BUSINESS
International Business
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1INTERNATIONAL BUSINESS
Executive Summary
This paper explains the market entry opportunity of Arnott’s Australia in the UK and in
Indonesia. Arnott’s Australia is famous for selling biscuits and bakery based products.
Therefore, the external business environment along with geopolitical forces of both
Indonesia and the UK has been explained focusing on political, economic, socio-cultural
and technological factors. Market entry is a planned strategy to target new market along
with distributing the products in the new market. Therefore, this paper also provides
emphasis on the trade and business policies of both the countries which can be risks or
opportunity for the business. In addition, in the following section, risk, political danger
and opportunity of the business have been explained for both the countries. It has been
noted that after the Brexit, the political and economic conditions of the UK has not been
favourable for marketing new foreign brand. Therefore, Arnott's Australia can consider
Indonesia as the selected market as it has a huge internal market, abundant natural
resources, it allows 100% FDI and Indonesia provides high domestic demand in the
bakery based products.

2INTERNATIONAL BUSINESS
Table of Contents
1. Introduction of Arnott’s Australia..................................................................................3
2. Identification of the two countries selected for market entry........................................3
2.1 The current macro-environmental and geopolitical forces impacting on countries. 3
2.2 Development of trade and business policy of Indonesia and the UK......................6
2.3 An assessment of the potential dangers, risks and opportunities in the current or
short-term policies of Indonesia and the UK.................................................................7
3. Conclusion and recommendation of which one is most suited for market entry...........8
Reference List................................................................................................................10

3INTERNATIONAL BUSINESS
1. Introduction of Arnott’s Australia
In 1865, Arnott's Australia started its journey as a small bakery in Newcastle,
NSW. It mainly supplied pies, bread, biscuits to the people and the crews of the ships.
Therefore, millions of Australians grew up with Arnott's over the past 150 years and
most of the well-known products of Arnott's are Tim Tam, Shapes, SAO, Vita-Wheat,
Iced, Salada and Tiny Teddy. Arnott's is now one of the largest food companies in Asia
Pacific Region and Arnott's is subsidiary of Campbell Soup. At present, more than 2,400
Australians are employed across all territories and states. Arnott’s also employs people
from New Zealand, Japan, Malaysia and Singapore. Arnott’s spends more than AU$
250 million on products and services from Australia suppliers and farmers
(Arnotts.com.au 2018). Each year 85,000 tonnes of grains and flour are supplied from
areas of Australia and Arnott’s takes 18,500 tonnes of sugar from North Queensland.
Revenue of Arnott’s Australia reached AU$ 1.09 billion in 2015 (Arnotts.com.au 2018).
2. Identification of the two countries selected for market entry
Indonesia is the southwest Asian country and it is well known for the travel and
tourism business. In addition, the UK is a European country where Arnott's Biscuits can
start its marketing.
2.1 The current macro-environmental and geopolitical forces impacting on
countries
Macro-environmental factors of Indonesia
Indonesia is the third largest democracy in the world and it has the largest
economy in Southeast Asia. Indonesia has the stable political condition at present,
however, the average Political Stability Index of Indonesia is -1.14 point that is low and
it represents that political stability is not up to the mark. Indonesia is the member of
ASEAN in the G20 and it follows the Presidential system. In Indonesia, it has a
comprehensive push for decentralisation of much power transferred in the regions
(Tambunan 2017). Laws of business and the country are passed by Parliament or it can
be done by the Presidential Decree. In addition, Indonesia has current GDP of US$