Adidas - Market Entry in Indonesia

With a population of 258,316,051, Indonesia has a colourful city, culture and people. Indonesia’s capital is Jakarta and it holds the majority of Indonesia’s population. The main languages in Indonesia are Bahasa Indonesia, English in addition to Dutch as well as the local dialects. Their currency is IDR (Indonesian Rupiah). The topics covered in this report include tourism, defence and education.

Indonesia is a rich country with its resources. Not only oil and gas, but Indonesia also had been a producer of mining and agricultural products such as rubber, tin, tea, coffee, spices and timber. In 2002, timber is one of the key export for “non-migas” (non oil and gas) commodities to provide foreign trades.

In Figure 2 it is evident that Indonesia’s cost of living, as reflected by the CPI, has been significantly deteriorating over the last 8 years. Although research argues that CPI may not be an effective indicator of the cost of living for a developing country such as Indonesia (East Asia, 2015). In contrast measuring the percentage of a household budget that goes to food is could be a good indicator. Since 2000, the percentage of household budget spent on food has declined, meaning higher expenditure on discretionary goods and services. This indicates that Indonesia’s urban regions are getting richer faster than the impression expressed with the CPI (East Asia, 2015). This is also reflected in figure 1, as the significant increase of mobile phone subscriptions is a good proxy of increased living standards as a mobile phone is a discretionary living cost. This is a result of the Indonesian growth rate earning a higher level of surplus income to spend on more luxury items.

Indonesia is now the 15th largest economy on the planet with a global output of just under 1.5% but is expected to rise in the coming years. Manufacturing is the largest single component of Indonesia’s economy with its main exports including crude petroleum and natural gas as well as rubber, coffee, cocoa and palm oil while Australia mostly benefits from exporting mineral fuels, gems, precious metals and meat. Indonesia received $187.3 billion USD from exports in 2012 ranking it 27th in profit from global exports but Australia placed 22nd and profited a total of $257.9 billion USD from its exports leaving Indonesia in the dust. Although Indonesia has showed significant growth recently their quality of life is still worse than Australia’s due to a lower Gross Domestic Product or GDP. GDP is the total value of goods produced and services provided within a country in the duration of a year and determines the strength of a countries currency.

According to AAFC (Agriculture and Agri-Food Canada, 2010) due to its extensive natural resources and geographical location, in the way of several of the world’s most important trading routes, Indonesia represents the Southeast Asia’s largest economy. On a global perspective, Indonesia is the fourth most populated country and has the largest Muslim population, besides being the world’s largest archipelago, with around 17,000 islands. The country’s GDP (Gross Domestic Product) is also showing considerable and stable growth throughout the years and unemployment rates dropped considerably (AAFC, 2011).

Indonesia had a GDP of 868.3 billion international dollars (GDP of Indonesia, 2016) and a GDP per capita of 3,475.25 international dollars in 2013 (GDP per capita, Indonesia, 2016). The GDP is primarily used to indicate an economies performance, it is measured by Y = C + I + E + G, where Y = GDP, C = Consumer Spending, I = Investment made by industry, E = Excess of Exports over Imports, G = Government Spending (Birch T, 2016). The GDP per capita is calculated by the GDP of a country, divided by the population of a country. The GDP and GDP per capita are very vital indicators of an economies progress. A rise in GDP shows that there an increase of value in an economy or there is a higher income or rise in expenditure which implies that there is a rise in the standard of living of the citizens and due to rise in income there will be a higher spending on various goods and services like healthcare, education, etc. Therefore as Australia’s GDP is higher than Indonesia’s there is an indication of higher living

International business has been a part of society for centuries. With the introduction of modern technological advances, countries have moved from participating in business ventures primarily by land or boat and advanced to virtual environments and acquiring passports that enable flights all over the world. This impact has challenged businesses to improve their cultural relations as they venture into unknown markets that are on the opposite end of their cultural spectrum and perspective. The world is a vast melting pot of all walks of life. The business world is no different and requires even sharper skills, especially when entering environments that may be tense or chaotic. This paper examines the country of Italy and how its culture impacts business domestically and internationally. It discusses the various strengths and weaknesses of its economic environment and the potential gains or losses a foreign investor may consider when deciding whether or not enter the Italian market.

2006, p. 18). Thus the Indonesian population reached the conditions which sustain on the other development supporting factors.

Given this, the main target of this essay is to analyse the main approaches to understanding national culture and the way that this culture can manifest and make the difference in the entry of companies in new markets.

Economic system is a system of beliefs (concerning work, property and wealth), activities (extractions, production and distribution), organizations(business firms, labour unions), and relationships(ownership, management) that provide the goods and services consumed by the members of a society.(Cullen 2011, p.81) The economic system is unique in that Indonesia has a market-based economy in which the government plays a significant role. There are 141 state-owned enterprises, and the government administers prices on several basic goods, including fuel, rice, and electricity. Growth rebounded in 2010 to 6.1% and is forecast to have reached 6.2%-6.5% in 2011. Poverty and unemployment have also declined despite the global financial crisis, with the poverty rate falling to 12,5% (March 2011) from 13.3% a year earlier and the unemployment rate falling to 6.6% (February 2011) from 6.8% a year earlier. In December 2011, Fitch Ratings upgraded Indonesia’s sovereign debt rating to investment grade. . There are many potential infrastructure projects in multiple sectors including hydroelectric and solar power, palm oil, new roads including toll motorways, mining, expansion of broadband internet, and

Indonesia is the sixteenth largest economy, the largest economy in the South-east Asian economic region with the world's fourth largest population (263 million in 2017). It is an emerging economy that has increased its international integration, trade liberalisation and diverted from policies of import substitution towards export-led development. Indonesia is a member of the Group of 20 (G20) major economies and has been an active founding member of the World Trade Organisation (WTO). The impact of globalisation has benefited Indonesia as quality of life indicators and economic developments have improved but it also presents the challenge of improving regulations, building more competitive industries, increasing investment into education and infrastructure to remain competitive. Consequently, Indonesia has introduced numerous strategies to promote economic growth and development.

Indonesia complained of their lack of autonomy In regions such as Maluku or other areas of Eastern Indonesia, “a low capacity for generating local revenue restricted the ability to adapt projects and development to local conditions” (Bertrand, 198).). The scanty amounts of funds were unable to support the poor and other problems. Bertrand states, “Faced with the New Order regime introduced mild reforms that were designed to address some technical issues while avoiding political decentralization” (Bertrand, 198). In 1995 the Minister of Home Affairs selected 26 districts were used to evaluate the measures designed to increase autonomy. They noticed an increase in Indonesia budget, but they still failed to support the poor, which resulted in

The word “Indonesia” has two Greek words and meaning in it. “Indos” means Indian and Nesos mean “Islands”. According to the Embassy of Indonesia, the whole country is made up of 17,508 islands. However, like the islands scattered everywhere, Indonesia seems to have a “messy” government. The government of Indonesia has started after decolonization from the Dutch, which is called the “Unitary State of the Republic of Indonesia” starting from 1945. The structure of the Indonesian government seems very similar to the one of U.S. It has an executive, judicial, and and legislative branch. Just like the US government, Indonesia has political representation, bureaucratic organization, judicial system, and law enforcement. However, following the reforms of the government, the Indonesian government is not stable and is apprehensive in taking the government forward.

Since 1965, the president of Indonesia continued to provide continuity and stability. However, in order to define an effective and complex growth plan, a company wishing to be successful needed the president’s support to succeed in the plan.

Adidas Group, as one of the world’s retail leaders in sportswear, has as primary target the sports participants, including high performance athletes, as well as non-athletes who are inspired by those at the highest level of their sport, and those that really love sports as part of their lives.