Aeon's Strategic Planning and Competitive Analysis in Indonesia

This report analyzes Aeon's international market entry strategy, focusing on its expansion into Indonesia. It examines the necessity of critical evaluation in international strategic planning, exploring various strategic models like organic and SWOT analysis. The report delves into VRIO analysis, assessing Aeon's strengths and weaknesses, and defines key approaches and principles such as vision, mission, and PESTLE analysis. It also covers strategy development, including direct exporting and investment, strategy implementation, and monitoring. The report critically examines the benefits of strategic planning, including standardisation, risk mitigation, and efficient resource allocation. It provides recommendations for Aeon's international expansion, emphasizing the importance of competitive analysis and market research. The report provides valuable insights into the challenges and opportunities of entering a new international market, offering a comprehensive overview of the strategic planning process.

ENTERING A NEW
INTERNATIONAL MARKET

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Background to company..............................................................................................................3
Expansion of firms products to Indonesia...................................................................................3
Background of product and services............................................................................................3
Target consumer for market.........................................................................................................4
PART 1............................................................................................................................................4
Define how its necessary to conduct critical evaluation of international strategic planning
approach.......................................................................................................................................4
Types of strategic model..............................................................................................................4
Define approaches and principles that must be critically examined............................................6
Conduct critical examination of potential benefits of strategic planning....................................8
Critically evaluate Potential benefits in comparison with alternative planning approach...........9
Recommendations........................................................................................................................9
PART B............................................................................................................................................9
Critically examine how and why to develop strategically plan to undertake competitive
analysis.........................................................................................................................................9
Introduction......................................................................................................................................9
Define strategic planning principles..........................................................................................10
Description on key approach and principles identified..............................................................10
Critical examination of potential benefits strategically planning market research in
international market...................................................................................................................11
Efficiency of product and organisation resource.......................................................................11
Critical examine potential benefits with help of alternative planning approaches....................12
Recommendations......................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
International marketing is defined as an application of principles of marketing that aids to
satisfy the varied needs and wants to different people that resides across national boarders
(Grøgaard, Rygh and Benito, 2019). Therefore, this is based on extension of firm local marketing
strategies with special attention paid to targeting, marketing identification and decision
internationally. Additionally, international marketing defined as an activities that aids to boost
the brand reputation in the overseas market.
The present report is based on the business activities of Aeon, Malaysia, this is
supermarket brand that provides finest selection of fresh commodities and top quality local or
imported commodities. This is largest supermarket chain within Malaysia.
Furthermore, study has covered the evaluation on how and why they must employ a
strategic planning approach to their international marketing strategies within international
market. Also, study has covered how and why firm strategically plan and undertake competitive
analysis within international market.
MAIN BODY
Background to company
Aeon is retail hypermarket and retailer chain in Malaysia and this is headquartered within
Mihama-Ku, chiba and chiba perfecture etc. This is retail network that is comprising almost 300
consolidated subsidiarieds and 26 equity method affilated firm that is ranging from wide range of
convenience stores.
Expansion of firms products to Indonesia
The firm is taking continual steps towards to expand product to Indonesia as current
market in Malaysia is already saturated. Within Malaysia, competition within the entities are
continually enhancing and due to this market of Quoted firm got saturated. In order to cope up
with competition, the entity needs to look over to expand their services in any other foreign
market ( Kamau, 2019).
Background of product and services
Aeon is supermarket chain of Malaysia that engaged in supermarket services of product
as Apparel and footwear speciality, convenience store, discount department store, hypermarket
and super-centre chain etc. This is firm that is also engaged in financial services a firm that
supports lifestyles by assisting customers to maximise business opportunities.

Target consumer for market
Aeon target customers are those who get middle income with young children. This entity
is still targets other segments who are more interested in the quality. Therefore, it is firm that
targets people who wants something reasonable in relation to price and quality as well.
PART 1
Define how its necessary to conduct critical evaluation of international strategic planning
approach.
Strategic planning models.
Strategic planning is defined as an organisation process that aids to define plan of action,
direct and make decision in terms to allocate the resources that aids to pursue one suitable
strategy. As per the view of Li, Hernandez and Gwon, (2019) stated that strategic planning is
defined as components that aids to control the mechanism that guides the execution of the
strategy.
Types of strategic model
Strategic planning defined as to effectively positioning business within the market. In
this, it must be sure to select and alter models that is widely based on issues that must be
addressed in terms to reach particular goals in market.
Organic Strategic planning model-
This is defined as planning model that is in contrast to other planning model and this
follows linear and methodical approaches. Organic planning can be used as technique that allows
participants to develop their ideas before sharing them to the larger group. This is model that
allows stakeholders to plays the more active role within the meetings.
SWOT analysis-
The one of major purpose of SWOT aids to identify the plan of actions that firm can
utilise to know about the strength, weaknesses, opportunities and threats. Henceforth, this is
defined as-:
Strength
 Product innovation- This is defined as an entity that has successful track record of
undertaking steps that aids to develop products and bring innovation.

 Highly skilled workforce- Aeon takes efforts to put huge investment in training and
development of its employees that results to develop high skilled workforce. It also
allows to motivates individuals to accomplish more (Qi, Chan and Li, 2020).
 This is firm that is engaged in providing strong base of reliable supplier of raw material
and this also enables smooth efficiency within enterprise.
Weakness
 In order to expand the scale of operation, this entity needs to make huge investment in
technical advancement.
 The financial planning management not done properly and efficiently. Additionally, this
highly impacts the working industry in huge context.
Opportunities
 Market development leads to weakening of competitive advancement and this enables
chosen firm to enhance its competitiveness that compare to other competitors (Thomas
and Maine, 2019).
 Over the past few year, this firm also start to render their services on online platform.
This investment led to open new channels for Aeon.
Threats
 The continue growing strength of local distributor also reflects threat in some market as
competition is higher margin to local distributors.
 Unfavourable policies of legal authorities can affect the working conditions of business.
VRIO analysis of strategic model-
Valuable
 Aeon analysis shows that employee workforce is highly trained and this leads to enhance
the productivity of entity.
 As per vrio of Aeon, the firm local food commodities are valuable resource as they are
highly differentiated.
Rare
 The local food product of chosen firm are not found to be rare and this is easily provided
in market other competitors.
 Employees of Aeon are highly trained and this is found to be rare as compare to others
rivalries.

Imitable
The local food products of quoted entity is not costly. So, competitors can acquire competitive
advancement in long run.
The employees of Aeon are not costly so other firm can also invest to improve the skills and
capabilities of staff.
Organisation
 The distribution network of Aeon is found to be very attractive as this uses network to
reach to customer by ensuring that product are avail on sites.
 Financial services or firm are organised as they invest resource in right place.
Define approaches and principles that must be critically examined.
The approaches to the key principles are defined as following contexted manner as-:
Vision-
To provide the innovative, objectives and creative solutions that highly put considers
over the understanding the needs of customers.
Mission-
To offer the highest quality consulting services that supports the customer to accomplish
the optimal success. To work towards analysing the needs to customers through safeguarding and
enhancing it.
Environment analysis
PESTLE analysis-
This is analysis that defined as great tool in terms to operating challenges within market.
Therefore, it is defined in below contexted manner as are-:
 Political- The retailing company operates at the worldwide level and these factors highly
influence performance of Aeon. It is inclusive of tax rates, legislation and stability of firm
operational working etc. Therefore, chosen entity plays vital role creation of job
opportunities that turn to enhance the demand for commodities that diversified workforce
(Walsh, 2019). Henceforth, varied number of political barriers impacts the working of
enterprise highly.
 Economic factor- This is inclusive of components as changes in policies, taxation
policies etc. that highly impacts the accessibility of finance. Due to decline in the
disposable income levels and household incomes of the working enterprise chosen entity

has shifted their consideration towards advertising its value brands rather than more
luxurious items.
 Social factor- The culture, trends and preferences affects the way of doings of enterprise.
Aeon needs to take the initiatives to provide information of commodities at online
platform. This can share the offering of services to customers and also a never ending
process.
 Technology factor- The technical advancement has huge impact on the working of the
enterprise. Retail industry is continually growing due to advancement of internet. This
also streamlines the services in order to reach audience at the worldwide level.
 Environmental factors- The increased pressure on firm to address environmental issues
and to adopt the ways of operational working benefits the society. Aeon is looking
forward to minimize the waste produced within stores by enhancing the social conscience
in customers.
 Legislative factors- Government policies and legislation directly affects the performance
of Tesco. Additionally, legal factors become tricker once the firm starts to expand its
commodities at online level. Thus, legislation of different country can have affect on
international marketing strategy.
Strategy development-
To undertake development within the plan of action is crucial in order to enter into
international market for all business organisation that is operating within international market.
Thus, current business environment is very competitive to enter into international market to
generate profits. In order to develop the strategy, the will focus on followings as are-:
Direct exporting- To enter into market of Indonesia, Aeon can select direct exporting strategy in
order to send commodities in one country to sell it to another. This is low risk marketing strategy
that businesses finds more attractive. Additionally, Aeon takes initiative to export their business
product and services with help of this as this offers a degree of control over risk, cost and
resources commitment.
Direct investment- It is strategy that aids to firm to compete aggressively within the
international markets. This is method that requires the huge level of investment and also needs
complete understanding of business conditions and customs in foreign country. This is strategy
with help of which firm can established its operation in foreign country.

Strategy implementation-
This is process that turns the plans of action in terms to accomplish the strategic
objectives and goals of the enterprise. Thus, following things needs to conduct to successful
implementation of strategy as are-
Organisation development- In order to conduct the strategy effective, the firm needs to provide
the training opportunities to employees who has the capabilities to carry out required activities
that contribute to full fill the business strategy.
Financial resources- Aeon must take initiative to make the assumption about the needs of funds
required for implementing the plan of action to enter into international market of Indonesia.
With help of undertaking this, the firm can able to take entry in international market of
Indonesia. Thus, Aeon can take initiative to enter into foreign market with help of plan focussing
over two strategies as Direct investment and Direct exporting.
Strategy monitoring-
The strategy evaluation defined as to undertake analysis to find out the gap between
existing and current planned approach. In order to measures the effectiveness, Aeon must use
Key performance indicators to analyse the success of strategy in foreign market as Indonesia.
Conduct critical examination of potential benefits of strategic planning.
Strategic planning is the art of formulation business plan of actions and to implement
them in terms to evaluate the affect that is based on organisational objectives. This also guides
the management discussion and decision making in order to determine resource and budget
requirements to accomplish set objectives. As per the view of stated that effective strategic
planning aids to bring standardisation in product and services of the enterprise. Thus, this is
defined as blue print to reach the organisational desired goals to assist future goals of enterprise
and also speed up the process of strategy implementation. By formulating strategies to enter into
internal business market, the entity can also able to minimise the risk of execution and can
undertake the process of strategy effectively.
Critically evaluate Potential benefits in comparison with alternative planning approach.
Basis Resource based overview Bottom up
Type of company For the retail enterprise, the
resource based overview is
more effective as this aids to
This aids to build up the
smallest pieces of sensory
information and also give rise

analyse the working condition
of the enterprise.
to complexities.
Organisation culture With help of it, organisation
can accomplish the superior
effectivenesses.
This is rigid in nature.
Requirement of speed It aids to conduct the whole
analysis speedy.
It is time taking approach.
Recommendations
These as are-
 In order to expand business operational in international market as Indonesia, Aeon must
take initiatives to have proper management of resources so that whole things can be
carried out effectively.
 Allocation of funds must be conducted by the chosen enterprise as this assist to undertake
implementation of the investment strategy that aids to balance the risk of versus reward.
 Aeon should put their major consideration over the quality perspective of the
commodities to undertake the business services and to expand their working in the
overseas market.
PART B
Critically examine how and why to develop strategically plan to undertake competitive analysis.
Introduction
` Competitive analysis is termed out as way to identify the competitors and also helps to
understand the strength and weakness of the competitors (How to Conduct and Prepare a
Competitive Analysis, 2018). This is defined as the dynamic external system and this also aids to
better targetting the customers. Henceforth, competitive advancement defined as an advantage
that can be gained over competitors by offering greater value to customers.
Define strategic planning principles.
Market share and trends in local foreign competition-:
 In Indonesia nation there are certain trends that has emerged. Now, people are becoming
more health conscious. It has resulted in changing their needs. Also, foreign companies

are entering into Indonesia to provide organic food. So, it has led to rise in market share.
Furthermore, there is increase in foreign competition.
 The rivalries of chosen firm will be as PT Hero supermarket, Tesco, Aldi etc.
 Division between local and foreign competition-:
Local competition Foreign competition
Unilever. ...
HM Sampoerna. ...
Astra International.
Tesco, Aldi, Giant
 The ownership structure of chosen enterprise will be as Sole proprietorship.
 There is high potential for company to occupy the uncovered space by tapping into
market. At present, there are only few companies which offer organic food. However,
there are not variety of products that is offered. Thus, the competition is low. Besides
that, in Indonesia market contain vast opportunity for organisation to gain market share.
 It has been stated buyer behaviour in Indonesia is shifting towards organic food. As
people are more concerned towards their health, they want nutritious food. At present,
there is slow shift in consumer behaviour. They are preferring companies that offer
organic food as competition is low.
 In Indonesia competition in retail sector is high but in terms of organic food there is less
competition. So, foreign companies are entering into it. There market requirement of
Indonesia is joint venture and FDI. It will allow organisation to enter in nation.
Description on key approach and principles identified.
Ansoff growth matrix-
With the help of this model, the Aeon can analyse company working that is mainly based
on two aspects as market and product.

 Market penetration- In order to gain competitive advancement, this entity put their core
focus over to enhance sales of existing product into the existing market. Aeon has good
reputation in terms to product and services.
 Product development- This aids business to develop new product to sell product and
services within the existing market. Henceforth, Aeon sells a new commodities and they
offer conditional offer at the discounted price.
 Market development- Aeon uses this strategy at time to sell existing commodities
within new markets. This can be done with help of using geographical markets.
 Diversification- This is quite risky and difficult approach. As it requires to sell new
products and services to the new customers. Henceforth, this requires to make more
investment in research and development process.
Critical examination of potential benefits strategically planning market research in international
market.
Relevancy of market- Strategic planning must be conduct in order to find out the significant of
international market of Indonesia (Kamau, 2019). This is one of the effective process that aids to
conduct the plan of action that will allow to cater the needs of customers in new market with help
of bringing up innovation within commodities.
Determination of product market fit- Strategic planning will aids to analyse the needs of
current market. In the Indonesia, there are number of customers who are health conscious so that
Aeon needs to develop the strategies that can cater the needs of individuals in Indonesia. Hence,
chosen firm will come with attributes that will be made up of organic ingredients. This will be
best market fit in the market of Indonesia.
Efficiency of product and organisation resource
Organic product aids to cater the needs of customers within Indonesia. This product can
helps to enhance the efficiency of product within market (Grøgaard, Rygh and Benito, 2019).
Thus, larger number of customers can be attracted with this product innovation and this can aids
to gain the competitive advancement within new market. In addition to this, organisation
resources will be as man, labour and capital etc. who can assist to carry out the organisational
process effectively and efficiently.

Critical examine potential benefits with help of alternative planning approaches.
The strategic planning formalise the objectives, business activities and direction of the
organisation in effective and efficient manner.
 Quicker dominance- With the use of Ansoff growth matrix the entity can able undertake
the strategies in better and effective manner ( Li, Hernandez and Gwon, 2019). This
selected approach aids to analyse the external working within the market so that things
can be done effectively and efficiently.
 Brand acceptance- By undertaking strategic analyse with selected model, the firm can
able to accept the brand in new market of Indonesia as this will come up with lot of
modifications.
Recommendations
These as are-:
1. Aeon should consider market development approach with use specific plan of action so
that the better initiatives can be taken to carry out the things effectively.
2. Quoted enterprise should offer organic product to cater the needs of customers of
Indonesia as this will aids to enhance the competitive advancement by providing effective
services to customers.
CONCLUSION
From the above summarised report it can be stated that market entry strategy termed out
as the distribution and deliver of techniques that aids to cater the needs of new target market. The
present report has based on business activities of Aeon. Furthermore, report has covered the
activities as strategic planning approach by use of framework as resource based view and organic
model. Also, competitive analysis has been conducted with use of Ansoff growth matrix so that
better strategic planning can be developed in international market.

REFERENCES
Books and journals
Grøgaard, B., Rygh, A. and Benito, G.R., 2019. Bringing corporate governance into
internalization theory: State ownership and foreign entry strategies. Journal of
International Business Studies. 50(8). pp.1310-1337.
Kamau, J.M., 2019. The Relationship between market entry strategies and financial performance:
a case of international companies in Kenya (Doctoral dissertation, Strathmore University).
Li, Y., Hernandez, E. and Gwon, S., 2019. When do ethnic communities affect foreign location
choice? Dual entry strategies of Korean banks in China. Academy of Management Journal.
62(1). pp.172-195.
Qi, X., Chan, J.H., Hu, J. and Li, Y., 2020. Motivations for selecting cross-border e-commerce as
a foreign market entry mode. Industrial Marketing Management.
Thomas, V.J. and Maine, E., 2019. Market entry strategies for electric vehicle start-ups in the
automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production. 235.
pp.653-663.
Walsh, J.L., 2019. Success Characteristics of Market Entry in Cuban Tourism. The Cuba-US
Bilateral Relationship: New Pathways and Policy Choices, p.155.
Online
How to Conduct and Prepare a Competitive Analysis. 2018.[Online]. Available through:
<https://edwardlowe.org/how-to-conduct-and-prepare-a-competitive-analysis/>
Grøgaard, Rygh and Benito, 2019 Kamau, 2019 Li, Hernandez and Gwon, 2019 Qi, Chan and Li,
2020 Thomas and Maine, 2019 Walsh, 2019 How to Conduct and Prepare a Competitive
Analysis, 2018
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