Detailed PESTLE Analysis Report: Indonesian Market Expansion

This report offers a comprehensive PESTLE analysis of the Indonesian market, examining the external factors that influence business operations and development. It delves into the social environment, highlighting cultural influences, education, and human resources. The technological landscape is explored, emphasizing advancements, economic impact, and job creation. Legal factors, including new laws, taxes, and business licenses, are discussed in detail. Lastly, the report analyzes environmental factors such as climate effects, investment opportunities, and security, providing a holistic view of the Indonesian business environment. The analysis references several scholarly articles to support the claims made in the report. This detailed PESTLE analysis provides valuable insights for businesses considering expansion into or operation within the Indonesian market.

PESTLE ANALYSIS
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Table of Contents
Social factors...................................................................................................................................3
Technological factors.......................................................................................................................3
Legal factors....................................................................................................................................4
Environmental factors......................................................................................................................5
References........................................................................................................................................6
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Social factors
Expansion of a business in the Indonesian market is usually influenced by the social or cultural
factors of this country. The society of Indonesia is known for its different culture, which has a
huge impact on the business market. The differences in the culture include different policies and
norms of society. For example; the business industry is negatively affected by the prevailing
culture (WidyaYudha, Tjahjono and Kolios, 2018). For the social environment of Indonesia, The
liquor business can be part of this type of cultural effects because alcohol drinking has some
specific rules in society. Education is considered as one of the influential element of society for
Business Development. For developing successful businesses, new institutions and courses are
working in the Indonesian society. The current trading development of this country is counted as
the result of this institutions and courses. Human resource is counted as one of the major parts of
the social environment. Indonesian society has issues number of working population. This
working population is contributing in the future success of this country.
Technological factors
The technological effect in the business sector of Indonesia has totally changed the scenario of
business development. With the advancement of technology, the business sector of this country
is changing. Indonesia is considered as the largest economy of Southeast Asia with 888 billion
dollars GDP. But the main contribution is seen in technology. The service networks and
infrastructure has developed after the customer lead economic development which has impacted
on the investors and exporters (Singh, 2016). The Hi-Tech technology of Indonesia improves the
competitiveness of the industrial market. The main development has identified in the
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technological advancement area including 3D printing, Sensor Technology, Internet of things,
Human-machine interface, artificial intelligence and robot. This technological improvement area
of Indonesia Technology has impacted on the different sectors like chemicals, automobile, food
and beverage, textile and electronics. Depending on this successfulness, the country was able to
develop around 7-9 million jobs in the next 12 years which will ultimate Lee increase the GDP
of the country around 1-2% per year. The technological development has not only part of the
industrial growth but also poster SMEs development of this country. New regulations have
included due to technological development has increased the skills and capabilities of the local
workforce. This development process of the workforce has contributed to the business
development of the entire country (Raczet al. 2018). The technological development is positively
increasing the countries growth and business development factors.
Legal factors
For the development of the digital economy in Indonesia, the Indonesian government has passed
several new laws related to the business industry. From the year of 2014, there are several
patents copyright and trademark laws, which are part of the current business industry. High taxes
are part of the business industry of Indonesia. There are multinational organisations, which are
actively working in the Indonesian business sector and gaining financial profits from this market.
Besides that, new entrepreneurs at establishing business ventures which have to face a large
number of tax issues. Therefore the instability of the business can influence the profit (Hamilton,
Harris and Hillier, 2016). In the country of Indonesia, luxury car selling organizations are
associated with paying high volume of tax than other businesses. The business licence is
considered as one of the major legal environmental factors which affect the business sector. Both
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the local government and national government of Indonesia are equally responsible for
permitting the business licence. Besides that, there are several employment laws, which have
been followed by the organisations for developing employment relationship. For example data
protection, competition law product liability and safety are also part of this legal environment of
Indonesia (Fozeret al. 2017).
Environmental factors
The environmental factor is related to different business atmospheres. Climate effect of the
business includes different situational effect like liquidation, bankruptcy, etc. The economic
condition of Indonesia is growing with big business industries. Therefore, there are multiple
investment options open for new businesses in Indonesia, which is creating a suitable business
environment for entrepreneurs. The business environment also includes the safety and security of
businesses in Indonesian society. The security system of the business includes the building and
land. The security issues can be considered as one of the disadvantageous issue of the business
environment. Environmental safety is counted as a threatening and business endangering (Barik
and Kumar, 2018). Therefore, the entire security of the business in Indonesia is partly the
responsibility of the government. Best quality of infrastructure for foreign organisations needs to
be provided by the government for maintaining their business success. It is directly contributed
to the economic growth of Indonesia.
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References
Barik, B. and Kumar, S., 2018. Macro Environment of Indian Life Insurance Business: A
PESTLE Analysis. Bimaquest, 18(3).
Fozer, D., Sziraky, F.Z., Racz, L., Nagy, T., Tarjani, A.J., Toth, A.J., Haaz, E., Benko, T. and
Mizsey, P., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS process
alternatives. Journal of cleaner production, 147, pp.75-85.
Hamilton, P.J., Harris, C. and Hillier, S., 2016. Characterisation of Geothermal Systems Through
FTIR Mineral Analysis of Drill Cuttings for Exploration, Appraisal and Development.
In Proceedings The 4th Indonesia International Geothermal Convention & Exhibition.
Petroleum Field.Proc. 5th Geol. Conf. & Exhibition, Geol. Soc. Trinidad & Tobago.
Racz, L., Fozer, D., Nagy, T., Toth, A.J., Haaz, E., Tarjani, J.A., Andre, A., Selim, A.,
Valentinyi, N., Mika, L.T. and Deak, C., 2018.Extensive comparison of biodiesel production
alternatives with life cycle, PESTLE and multi-criteria decision analyses. Clean Technologies
and Environmental Policy, 20(9), pp.2013-2024.
Singh, A.K., 2016. Selecting Regional Postponement Centre Using PESTLE–AHP–TOPSIS
Methodology: A Case Study in a Pharmaceutical Company. Global Business Review, 17(5),
pp.1266-1268.
WidyaYudha, S., Tjahjono, B. and Kolios, A., 2018.A PESTLE policy mapping and stakeholder
analysis of Indonesia’s fossil fuel energy industry. Energies, 11(5), p.1272.
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