Challenges of Reliable Market Information in Indonesia Expansion

This report analyzes the barriers faced by businesses when researching reliable market information for global expansion, particularly in emerging markets like Indonesia. The executive summary highlights the challenges related to the availability of valid secondary information, poor infrastructure, a...Read More

Running head: CHALLENGES OF RELIABLE INFORMATION
CHALLENGES OF RELIABLE INFORMATION
Name of the Student
Name of the University
Author Note

1CHALLENGES OF RELIABLE INFORMATION
Executive Summary
The given report throws light on the barriers that an economy can face with respect to
researching reliable market information for various global expansion opportunities. Emerging
markets like Indonesia possess vast potential with respect to the business operations and they are
on the target list of many companies. However, the availability of reliable market information in
these economies is quite restricted and the companies looking out for expansion avenues are
often unable to do so because of various barriers. The report has analyzed the pitfalls for the
market research process in a country like Indonesia and has outlined suggestions to overcome the
barriers for the same.

2CHALLENGES OF RELIABLE INFORMATION
Table of Contents
Introduction......................................................................................................................................3
Pitfalls..............................................................................................................................................3
Availability of valid secondary information................................................................................3
Poor infrastructure.......................................................................................................................5
Research cost variations..............................................................................................................6
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

3CHALLENGES OF RELIABLE INFORMATION
Introduction
In the modern era of globalization, expansion and acquisition has become an important
aspect of any organization. This is because, the completion in the business environment is
extremely intense and the company needs to see to it that it is able to abide by the competition
for its survival. This is the reason why various companies, often look out for opportunities to
invest in the emerging markets (Van den Nieuwboer, Van de Burgwal & Claassen, 2016). The
chosen emerging market for the report is Indonesia. Emerging markets have a huge potential to
become the future economies and this makes them even more attractive to various international
firms. However, expansion requires relevant reliable market information to access the feasibility
for the expansion and for this reason various companies carry out research into the given
countries (West, Ford & Ibrahim, 2015). The given report will be analyzing three pitfalls which
exist while researching reliable market information in the emerging economies like that of
Indonesia.
Pitfalls
Availability of valid secondary information
Very often when a business wants to invest into an emerging country, they need to have
access to the past business data available in the country. This provides them with an exposure to
the past trend analysis and the performance of the country with reference to a particular industry
(Sarstedt & Mooi, 2014). The companies before entering a market, often like to conduct various
strategic management tools and analysis like the PESTLE Analysis, SWOT Analysis, and BCG
Matrix Analysis and related in order to figure out the feasibility of the expansion and the

4CHALLENGES OF RELIABLE INFORMATION
profitability that can be expected out of them (Hadiz & Robison, 2013). In an emerging country
like Indonesia, there exists various opportunities for growth. The reason behind this is that the
income level of the people has been increasing at a consistent rate and the economy has been
flourishing. However, there exists lack of relevant data available on various subjects like the:
 Growth of attractive industries in the past
 Accurate rise in the Income level and Population growth
 Detailed Taxation breakdown and analysis
These decision making criteria’s count for the most relevant aspects of an international
business. Hence, if a company planning to invest in Indonesia has no accurate access to the
information, they will not be able to make sound decisions (McGivern, 2013). This may lead to
incorrect decisions being made on the side of the company and create huge losses for them.
Secondly, in certain local libraries there exist certain information available; however, this
information is often inaccessible (Hair Jr & Lukas, 2014). They are not easily available on the
online open library platforms, which cause difficulties in utilizing them.
Therefore, as stated earlier if there is lack of information in these arenas, a business will
not be able to conduct a strategic analysis and might not enter the country from the failure of fear
which then might pose a threat on the Indonesian economy as well.
These following suggestions have been proposed to overcome this barrier:
 Hiring local teams- As the information available in the local countries are restricted and
inaccessible; this makes it difficult to find them on the online open libraries. For this
reason, the company interested in investing in Indonesia, might hire local researchers and

5CHALLENGES OF RELIABLE INFORMATION
scholars to carry out a study. These researchers and scholars can be hired because they
have an acute knowledge and information about the local economic and feasibility
conditions (McQuarrie, 2015).
 Visiting the country – In order to verify the information that will be presented by the
local team of researchers and scholars, a separate department can be formed by the
company, who would then visit the country for a period of 2-4 weeks and verify this
collected information.
If they above given methods are applied then, the company would find it easier to overcome
the risk.
Poor infrastructure
Although Indonesia and other emerging and developing countries are often considered to
be the most attractive markets to explore and to invest in, the investors often forget that these
countries are still on their initial phase towards economic development and that it is necessary
for the firms investing to understand that the infrastructure is yet not well developed
(Webpages.uidaho.edu., 2018).
The infrastructure forms the basis for any organizational research perspective. For the
research to be conducted about the given country and to figure out any relevant factors that have
a huge impact on the performance of the business, the access to communication facilities such as
internet, tele communications, computers, fax and postal services. On top of that the availability
of adequate electricity is one of the major requisites of carrying out effective research in the
given country.

6CHALLENGES OF RELIABLE INFORMATION
For the given barriers, obtaining the reliable market information about the given markets
becomes increasingly difficult. This is because the country lacks relevant resources required for
an effective market research. Details about the factories that need to be developed and the area
where the business will be operating can also be analyzed (Armstrong et al., 2015). However as
many areas if Indonesia another EDME countries do not even have access to proper
infrastructure or electricity, obtaining relevant market information can become increasingly
difficult for the business organization.
For instance, if a business has to develop information about the property rates in
Indonesia, then it will not be able to do so due to lack of information on the internet available
due to restricted infrastructure. Therefore, infrastructure is believed to be one of the most
relevant criteria’s in a business market research. To improve in this dimension, the business
organization can do the following:
It can get into a contractual relationship with a local research and development team
present in various universities in these countries. The students often need to make a thesis report
before they can get their degrees and for this reason they can be collaborated with and they will
help the firm in developing a structured process with the help of which they can overcome the
barrier. These scholars can be provided with adequate information and facilities from the firm`s
side which will help them in their research.
Research cost variations
Market research information in the emerging and developing countries often becomes a
costly affair for the firm. This means that when the company aims to obtain relevant reliable
market information with respect to consumer market and most used products or related

7CHALLENGES OF RELIABLE INFORMATION
information then, they have to invest huge costs (West & Bogers, 2014). This is because; the
government of these countries often restricts the users to obtain access to this secret information.
The government often demands high sums of money to have an access. Hence, it often becomes
increasingly difficult for a firm, to obtain relevant data in this aspect or to break through the
bureaucratic government hierarchy to obtain this information.
Furthermore, there exists issues such as corruption and agent problems in the given
countries which would then lead further cost escalation on the firm`s side.
As these countries have huge urban and rural disparity, the rural areas situated near the
cities are accessible easily, however those located far away from the urban areas will be difficult
to access. Huge logistics costs will be involved in the given process which would then lead to
problems for the firm. The firms generally looking out for international expansions have a well
defined budget, and they need to function just on a basis of the given budget. These distances
between the different parts of the country and lack of a systematic transportation medium may
cause problems for the company and be an expensive affair (Burns, Bush & Sinha, 2014).
Therefore, due to the high costs of research and the related obstacles involved various companies
give away the idea of conducting marketing research with respect to the given countries.
The ways in which these causes can be overcome has been provided below:
1. Researching upon the previous work conducted- Very often certain scholars research
upon information as to the related reliable market information that the company needs
access to, therefore, instead of conducting the expensive marketing analysis available, the
company can engage in the secondary analysis of this kind of information which would

8CHALLENGES OF RELIABLE INFORMATION
go a long way to help the firm to overcome all its barriers related to costs and to see to it
that the market information is also obtained.
2. Taking reference from similar countries to that of Indonesia- If relevant information
related to Indonesia is not available for the market opportunities, then the firm can
conduct a research on the companies whose economy is similar to that of the Indonesian
economy and take calculated risks thereby assuming that, the various components of their
economy shall match with that of Indonesia (Malhotra, Birks & Wills, 2013).
3. Hiring specialists- The Company may also hire specialists who would help them in
conducting the research in exchange for internship opportunities in the firm or for some
related fees.
Conclusion
Therefore, from the given analysis it can be stated that although the emerging and
developing economies like Indonesia have a huge amount of potential to become the future
advanced economies, however, the multinational companies cannot adequately conduct a market
research before entering the country due to various barriers and obstacles related to availability
of information. Certain pitfalls that the companies face refer to lack of reliable market
information due to High cost variations, Lack of proper infrastructure and availability and
accessibility to secondary information. The report has discussed various pitfalls and how the
unavailability of the information to the firms might divert them from entering the market.
Furthermore, the suggested ways to mitigate the pitfalls have also been provided.

9CHALLENGES OF RELIABLE INFORMATION
References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Burns, A. C., Bush, R. F., & Sinha, N. (2014). Marketing research (Vol. 7). Boston, MA, USA:
Pearson.
Hadiz, V. R., & Robison, R. (2013). The political economy of oligarchy and the reorganization
of power in Indonesia. Indonesia, 96(1), 35-57.
Hair Jr, J. F., & Lukas, B. (2014). Marketing research (Vol. 2). McGraw-Hill Education
Australia.
Malhotra, N. K., Birks, D. F., & Wills, P. (2013). Essentials of marketing research. Pearson.
McGivern, Y. (2013). The practice of market research: an introduction. Pearson Higher Ed.
McQuarrie, E. F. (2015). The market research toolbox: a concise guide for beginners. Sage
Publications.
Sarstedt, M., & Mooi, E. (2014). A concise guide to market research. The Process, Data, and.
Van den Nieuwboer, M., Van de Burgwal, L. H. M., & Claassen, E. (2016). A quantitative key-
opinion-leader analysis of innovation barriers in probiotic research and development:
valorisation and improving the tech transfer cycle. PharmaNutrition, 4(1), 9-18.

10CHALLENGES OF RELIABLE INFORMATION
Webpages.uidaho.edu. (2018). Obstacles to Information Access and Use in Developing
Countries, Akobundu Dike Ugah. Retrieved 24 March 2018, from
http://www.webpages.uidaho.edu/~mbolin/ugah3.htm
West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive
advantage. Oxford University Press, USA.
West, J., & Bogers, M. (2014). Leveraging external sources of innovation: a review of research
on open innovation. Journal of Product Innovation Management, 31(4), 814-831.