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CHAPTER V CONCLUSION AND RECOMMENDATIONS

5.1. Conclusion Choosing Republic of Korea for BKPM foreign investment promotion at year 2007 is a good step marketing communication strategy in the short-term by doing below the line promotion, since after that it gave a significant increased number of projects and its values in year 2008. Based on the results on data analysis, the author tried to conclude that with the marketing communication in the form of investment promotion especially Indonesias Investment Integrated Promotion (IIP) 2007 that held at Seoul, Republic of Korea, was not a wrong strategy. Because after analyzing from the supply and demand analysis of Republic of Korea and Indonesia, they were have mutual relationship Investment focus that attracted almost any sector, including the primary sectors that consist of food crop and plantation, animal husbandry, forestry, fishery and mining; as well as the secondary sectors that cover various SBC (Small Business Cooperation) and small or medium enterprises (such as food processing, textile, wood processing, pulp and printing, chemicals and pharmaceuticals, rubber and plastic, non-metal minerals, metalwork, machinery and electronics (Samsung, LG), motorized vehicle (Hyundai) and other transport, etc). In order to which country of an foreign investment promotion strategy is working and which is falling short on expectations, it is important to monitor which country sector that have big opportunity to be targeted. This practice allows adjusting its approach to achieving the objectives of its investment promotion strategy.

5.2. Recommendation It is not simply a marketing exercise. Its strategic use can surmount many of the constraints on the institutional and regulatory fronts. The formulation of an investment promotion strategy is a new era at BKPM. A unit once seen as waste, investment promotion at BKPM should now act as the advance guard 45

of its efforts to attract more investment to propel economic growth, partnering with foreign investors under its newly adopted strategic framework. The characteristics of the target countries, amongst other things, must be studied as well as the consequences of eliminating factories in the country of origin to see whether lower labors costs would really outbalance the advantages of local production. In endeavor to establish global investment, BKPM sometimes forget the importance of the firms specific characteristics and localizations, which may be real sources of competitive advantage. Designing programs may require complex organizational and management skills and system integration, precisely the things that are difficult to transfer to another country. For instance, like our neighbor in Vietnam they already using tax holiday which more than five years free of tax for foreign investors, its become one of tools or strategy that can attract new investors to join in instead to the country that doesnt have it. Agricultural country like Indonesia, BKPM less discusses social impacts for farmers on agricultural land tenure by the owners of capital. Although the agricultural sector increased by 4.8% in 2008, we can confirm that with the proposed land tenure incentives for owners of capital from the board then, sooner or later farmers will be out of business. It may be that they would sell their own farmland to the owners of capital who have mastered the land more widely and for long periods. Furthermore, these farmers will switch to a mere profession farm laborers for the owners of capital in the agricultural sector. The objective of supply side analysis is to understand destination competition among different countries open for investment. Successfully attracting investment depends on investor preferences, enabling conditions and decisionDmaking processes. Investors rely on a limited pool of information before decided to establish a presence in a specific location. Identification of these decisive factors and the quality of information that investors received guided host governments to positioning themselves to seize a larger share of overall investment flows. Just in case, In endeavor to establish global investment, BKPM sometimes forget the importance of the firms specific characteristics and localizations, which may be real sources of competitive advantage. Actually Effective demand side analysis is dynamic, evaluating competitive sectors as well as sectors with high development potential. Dynamic demand side analysis would

not only look at textiles and apparel as a traditional area of competition but also would examine whether Indonesia can expect to reclaim this competitiveness in the medium term. In short, the purpose of demand side analysis is to show which sectors would be most attractive to investors and most beneficial for the country if investments were made in them. In this case, Designing programs may require complex organizational and management skills and system integration, precisely the things that are difficult to transfer to another country. From internal environment analysis this event (promotion strategy) is also build understanding and confidence about attractive Indonesian investment potentials, to create a positive image about investment climate in Indonesia in international circle, and to recover a strong view and perception in the eyes of foreign investors that Indonesia is ready to become an investment destination by disseminating information about Indonesian investment policies and potentials.