Case Study Analysis: Questions and Answers on the Indonesian Culture

1. Cultural understanding is an essential element of this situation. Comment on the importance of this aspect of market entry and development, being sure to discuss the key elements of understanding and working effectively in Indonesia.

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Based on the findings by Budi Rustandi and Aditya Wardhani in their study in search for strategies in the marketing and performance in Indonesia, the country has an enormous potential for growth and tapping into this possibility can make a company wishing to invest in this market high. The market strategy requires the setting of objectives, developing, implementing and managing the marketing team in line with the cultural beliefs and way of life with the Indonesian community (Crane, Matten, & Spence, 2013).

According to Kolk (2016), an effective market strategy should be able to specify the people that the company will serve, in what way the company will address and help the people, the place where the business will be located and the process of acquiring the resources to serve a market. With the Indonesian market, the company requires to make use of the local population to be able to provide services to the targeted customer

The Indonesian market is divided into segments or group of consumers where every group has different tastes and likes. This was according to Kotler, Philip, & Keller, (2012) as they studied the Indonesian market. The company needs to identify and determine the profiles of various market segments of the buyers in order to factor in the likes and preferences from each group and factoring which market segments have the greatest potential for easy entry. This way the company can decide to which market segment they wish to target.

The Indonesian market strategy should also incorporate the medium the company wants to use in communicating with the buyers the value of the item and the value of the customer base to the enterprise. Kotler and Armstrong in 2012 developed a set of marketing tools that might be able to help a company break through into a new market. These devices involve the process of value creation so as the product can satisfy a need or want including services events and properties to a market. The tools required are categorized into the product being sold, the price of the product, place of manufacture, how the company promotes the product and the people or the market intended for the good. These set of marketing tools are a distinct blend activities that a company takes to efficiently and persuasively communicate customer value and able to build customer relationships (Felzensztein, Stringer, Benson-Rea, & Freeman, 2014).

The other key element a new company requires is the process or the method by which the company publicizes a product. Over recent years the internet traffic in Indonesia has been soaring due to an increase of mobile internet device. This was observed and reported by StatCounter in 2015. It depicted that more than 70 percent of Indonesian Internet traffic originated from mobile devices. An effective marketing strategy on the targeted market segment would see the company advertise their product on mobile devices. The company would also make use of online payments to make it easier for the targeted buyers to purchase these products. The company could also take advantage of mobile platforms and a modernized delivery system to account for the countrys weak infrastructure (Samaha, Beck, & Palmatier, 2014).

2. Using the Hofstede Framework, analyze the Indonesian culture with reference to concepts covered in the course materials.

Hostefede's framework is composed of six cultural dimensions of cross-cultural communication that designates the effects of peoples culture on the worth of its members. The Indonesian culture was examined by the following;

Power Distance

In this element, Indonesia has a high score of 78 and thus has certain features. There are unequal rights between those who hold power and those who do not, the leaders are directive, and the superiors are also inaccessible. The management is in charge of controlling and delegating matters. Indonesia in this element is also dependent on hierarchy and power is also centralized. Furthermore, managers rely on the obedience of members of their team and workers also wait to be given instructions pertaining on what to do and the time to undertake activities as well. There is also an indirect form of communication, and any kind of negative feedback is not given back to those who are concerned (Ghosh, 2011). This element further means that co-workers of Indonesia have an expectation of being given directions by the manager or even the boss. The unequal disparity also lies between the wealthy and poor. As such, this may make it quite hard for a foreign country to invest in this nation.

Individualism

Indonesia has a score of 14 in this aspect and thus depicts that it is a collectivist society. As such, it people are expected to follow the morals of the society. In the aspect of the trade, this form of culture thus means that for a country to carry out any kind of business, they will have to obtain a clear understanding of all the morals in the respective societies. In this way, they will be in line with the cultural expectations and thus make it quite easy to penetrate this foreign market (Hofstede, 2001). Additionally, foreign direct investments may be less in Indonesia as a result of this cultural expectation from people. Economic integration by Indonesia with other countries in the same geographic region to eliminate or even minimize barriers and thus enhance the flow of products or capital may be adversely affected as a result of this cultural practice.

Masculinity

Indonesia has a score of 46 thus low masculine and thus considered to be feminine. As such, the position of a person is more important. Therefore, managers struggle to obtain an agreement and there is a high value for equivalence, cohesion and even superiority in their work lives (Ghosh, 2011). This may be a depiction of hard work being valued in the Indonesia economy by employers and employees that may be an encouragement for foreign businesses. It is evident that if one invests in this country, they will obtain high returns as a result of people striving to show high-quality performance in their jobs hence overall output will be efficient.

Long Term Orientation

Indonesia has a pragmatic culture as it has a score of 62. This means that people have a strong belief in the truth and that it is reliant to a very great extent on the period, background and condition. Additionally, individuals also portray the capability to adapt to traditions in an easy way and even to conditions that have been altered. Besides, they also have a strong tendency to save and invest and also persist in accomplishing results (Hofstede, 2017). With this form of culture, investments are likely to take place at a lower rate as it may take a substantial amount of time to save a significant amount for investment purposes. In as much as individuals are focused on saving and investing, foreign countries are likely to succeed more when they invest in Indonesia with this form of culture.

3. CSR and business practices are another set of critical issues in this case. Describe four CSR issues and explain how these issues can impact a company's international business activities.

Corporate social responsibilities are approaches taken by companies that contribute to sustainable development by developing economies and also showing their markets that they value their customer base (Crane, Matten, & Spence, 2013).

A group trying to show its efforts in conserving the environment it operates in can be a very public event that eventually benefits the company regarding improved financial performance lowered operating costs and greater productivity and quality. The company achieves this by conserving high - value forests and helping to protect the local wildlife in the country among other acts of corporate social responsibilities (Hermawan, & Mulyawan, 2013).

Philanthropy is a great character for a company to be associated with the aspect. For a company to be recognized internationally as philanthropic, it wants its public image to be seen performing acts that benefit the community as it encourages donations to charitable groups and events, community education and also promoting local employment within the country. The company achieves this by participating in medical aid after incidents like earthquakes and providing relief food to local charities and remote villages (Adam, 2014).

Ethical labor practices need to be adapted by the company. This means that a certain level of professionalism is expected from a company that it respects the culture, its local workforce and the customer base it serves. A company achieves this by being transparent in the way it handles production, distribution, and sales of products into the market. It is also attained by showing the public that the company is fair and ethical to its workforce. The company has to demonstrate that it maintains high ethical codes within its core values that are in line with the countrys culture and the rules and guidelines stipulated by its governing body. The public population that the company serves would like to have information of how the company builds the economy it surrounds and not just of how it generates revenue (Crane, Matten, & Spence, 2013).

Volunteering and doing good deeds - companies do this by Nourishing children in the rural areas, supporting rural orphans, supporting health care needs of the people by visiting clinics and providing medical aids to remote villages, building educational facilities, giving access to clean water. Selfless acts like this being conducted by the stakeholders of a company help the business to create a social name and helps the society believe that the firm cares about the people. For a company that publicly portrays its selflessness in a country, it can be publicized to international standards, and further increases its global revenue generating activities (Chapple, & Moon, 2005).

4. The Client, in order to develop its Market Entry Strategy fully, will be required to make an investment in Indonesia. Explain each of the four means of incorporating risk into market entry strategies if the client wanted to use an Adaptation Strategy.

Companies existing in other countries and wishing to expand into new territories or international markets need to customize their products such that they fit the targeted market's expectations. Products are modified based on existing goods and services from the original market the company mainly operates. Product adoption helps a company fit into individual markets through a systematic understanding of the local necessities and adjusting diverse characteristics of the merchandise to fit the new market standards and guidelines (Johanson & Mattsson, 2015).

One of the risks product adaptions in a new market may face when launching a product in a market may be the target market itself. Noticing the change in moods of the customer base after an entry of a new product into the market is a key factor. The company launching products need to gather feedback from the ground where the product is selling to keep in touch with the needs of the customers. This can be achieved by holding focus groups and also conducting online forums and surveys within the target market country to show the business owners how the product is performing (Lieberman, Lee, & Folta, 2017).

Product information is also a key factor affecting the performance of a product in a new market. The information provided on products significantly advertises the product or lets the product speak of its value to the target market. If a trend for a particular ingre...