200590 International Business Project

SCC3 2020

Project Reflection Report

Client Name- Australia Asia Executive Centre (AAEC)

Nominated Product/Service- Global Branding Services , Practical Business

Solutions ,Cross-Cultural Immersion Programs

Nominated Market-Indonesia

First name Surname (student id.), WSU email address

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 1. Introduction

There are various stages included in the process of entering the international market
for business purposes. These stages include processes such as analysing the market to setting
up the business and reviewing the performance. The international market entry feasibility
report focused on Australia Asia Executive Centre’s plans to enter the Indonesian markets.
The aim of this report is to reflect on the feasibility report, and for this purpose, this reflection
will review the market entry modes considered by AAEC based on the previous market entry
experiences. Furthermore, this reflection will analyse the feasibility report based on multiple
stages, including starting the Project, middle of the Project, and completion and delivery. The
cultural diversity followed within the company will be investigated, and the sustainability
aspects will be compared with the UN Sustainability Development Goals. Moreover, the risk
factors for AAEC to enter the Indonesian market will be analysed. Lastly, the probability of
the extension and the key insights will be laid down.

2. Stages of the international/global market entry feasibility study

2.1 The start of the Project:

The international market entry report of AAEC started with an analysis of the
Indonesian market. The market profile highlighted the country size, regions, capita income
and other major information needed to form a proposal. The report laid down the previous
market entry experience of AAEC, which was extremely necessary to highlight as it provided
critical information as what mistakes needed not to be repeated. Analysing past business
experiences helps identify the key issues that can help form a better entry strategy (Luo &
Zhang 2016). Furthermore, the report followed a structure by firstly laying down its services
and products and then moving towards the marketing analysis. The marketing analysis
mentioned the target market segments and why AAEC will target B2B consumers.

2.2 The middle of The Project

The project conducted the targeted consumer analysis for Indonesian market. This
went in the right direction as the key process of analysing a nominated market is to look at
the broader market and then segregate based on the product and service offerings (Kern &
Rogge 2018). The global market entry report of AAEC gave details about the broad market
size and then proceeded towards the initial market segmentation by laying down the impact

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of a pandemic on the industry’s key trends. Additionally, the initial targeting and positioning
strategy that will be followed by the company is mentioned. Even the process of expanding
its reach and looking for collaborations is pointed out, and all these methods are justifiable
for AAEC. The competitor analysis mentioned two key forces which need to be tackled by
AAEC through its marketing strategies.

2.3 The end of the Project

The end of the project laid down the time table to implement the whole process
discussed regarding the market entry of AAEC in Indonesia. The Project mentioned the
timelines; however, there are certain loopholes in the timelining process as the Indonesian
market analysis cannot be done in a mere one month. The analysis of such a big market needs
more than one month as only then a suitable market entry strategy can be formed without any
major loopholes.

3. Culture and Diversity

The feasibility report highlighted it correctly that it is important for AAEC to develop
its own culture, making it easier to streamline the global business within it. According to
Vaccaro et al. (2012), management and team structures are important in an organisation as it
helps in arranging and integrating the resources to ensure the completion of key goals. The
report laid it down correctly that it is important to have an organised structure; however, how
the company is willing to achieve that goal is not clear. The report is guided in the right
direction as AAEC is looking forward to giving defined roles and responsibilities to its
employees so that their work becomes clear, which is very important while entering in the
international market. In this aspect, AAEC is moving in the right direction to overcome the
hurdles in the international expansion, employees and management structure plays a key role
(Kanten et al. 2015).

Furthermore, AAEC offers three different service variants to its customers which is a little
tricky at the starting point of expansion. It is extremely important to gain local access and
build a network to understand the customers’ needs and the target market (Ang et al. 2015).
AAEC is rushing itself to offer its customers as much as possible, which can backfire
eventually if any uncertain situation arises in the future. Coaching the business executives
about the cross-cultural differences in Australia and Indonesia is a good move as it will help

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in working smoothly in a foreign environment. However, it would have been more
appropriate for AAEC to ensure that its executive learns completely about Indonesian culture
before offering them three variants of services. Launching one service at a time would have
been a better move as it could have reduced the amount of risk in the Indonesian market with
different customer demands and needs.

4. Sustainability
Sustainability is extremely important for a business to remain in the public eyes by
holding a positive image. Apart from the business image, a business needs to behave
sustainably to give back to society in any means possible. Decent work and economic growth
are on 8th number on UN Sustainability Development Goals. Although AAEC is working
towards its responsibility to help local communities, it is also important for the company to
promote economic growth by providing employment opportunities to the local people and a
decent working environment (Costanza et al. 2016). The feasibility report mentioned that
AAEC needs to take up philanthropic tasks, and those tasks should include improving its
public image by engaging with local communities. In that aspect, the company is moving in
the right direction to gain public empathy.

To gain strength in the Indonesian market, AAEC must focus on labour practices, as
mentioned in UN Goal number 10. AAEC needs to reduce any gender inequality within its
premises. However, a little focus has been made about it in the feasibility report. Gender
quality is a key goal which needs to be served by AAEC to gain strength in the Indonesian
market. Gender equality is a burning issue and fulfilling its duties to hire employees based on
capabilities instead of gender, AAEC will easily portray an excellent image in the public eye
(Pedersen 2018). This also comes under the human right issues as not giving jobs to the
people based on their gender is an exploitation of human rights (Lu et al. 2015). However,
AAEC has mentioned that it is working towards equality and ensuring the employees’ well-
being by providing the necessary aid. This aid includes regular communication and justifiable
management practices to provide them with a safe environment to work. Thus, it is quite
clear that the company’s goal to expand in the Indonesian market has not compromised with
its sustainable responsibilities towards society and its shareholders.

5. Key Risk and Uncertainty Factors

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 There are various uncertainty factors witnessed by a firm while entering in the
international markets. AAEC has planned to enter a completely different market in Indonesia
after it failed in the Chinese market. The global market entry report of AAEC highlighted
four key types of risks for the company in the Indonesian market: financial risk, expropriate
risk, capital risk, and political risk. The report mentioned that the company needs to pay a
corporate tax in Indonesia and VAT and other currency fluctuations. These are the basic risks
faced by a company while entering in a new country as financial stability is very important
(Kiss et al. 2013). It seems that AAEC is quite clear in its financial approach. Despite being a
democratic country, the report justifiably mentioned that property seizure risk is high. AAEC
is aware of the higher tax rate and has mentioned it in the report yet, and there is no
justification as the company is planning to mitigate this risk factor (Ji & Dimitratos 2013).

Although Indonesia is a stable country based on its political history, there are various trade
agreements mentioned in the global entry report of AAEC. This indicates that the company is
moving in the right direction by understanding the risks faced by it during its entry in the
Asian country (Mullner 2016). However, the risk analysis’s practicality is questioned as there
are cultural and social risks that affect a company badly in the international market, which
aren’t mentioned in the report. Therefore, it questions the overall practicality of the risk
analysis as culture, and social factors determine a business’s failure or success to a large
extent. Moreover, the ways to overcome the issues related to trade relations risk and
expropriate risks are not mentioned clearly, which puts the entry process of AAEC in
jeopardy.

6. Beyond the Feasibility Study

There are various uncertain factors which extend the completion date of a project. If
the international market entry project of AAEC were extended, then it would have been a
chance to analyse the Indonesian market more specifically. The Australian market is very
different from Indonesia as both have different cultures, power distance rating and social
norms. Therefore, the Project’s extension would have been a good chance to focus on the
distribution channels, analysis of the Indonesian market and re-analysing the market entry
strategy. The company has already failed in its attempt to enter the Chinese market due to a
bad selection of entry strategy, which was not aligned with the customers of China.
Therefore, re-analysing the ways through which the market entry can be made along with the

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culture of the country would have been a beneficial step to reconsider or refine the channels
of distribution for a better approach.

7. Lessons for Next Time

The analysis of the international market entry report of AAEC highlighted that there
are few things which could be changed in future: -

 The report mentioned the previous market entry experience of AAEC and how it
backfired due to misalignment between the needs of the target audience and the
offerings of the company. However, the current report does not learn much from it as
it laid down the market analysis before conducting a cultural investigation. Next time,
a cultural investigation will be conducted before selecting the services and products to
offer in the market. The analysis will help in understanding the core weaknesses and
needs of the customers, and thus, it will become clearer as to what to offer the target
audience.
 To analyse the market of a country, it is important to understand all the aspects which
can affect the entry and growth of the country in the long term. Therefore, instead of
focusing only on the political risks, the report will conduct a PESTEL analysis that
will make it easier to understand all the aspects that will help in strategic thinking as
future threats could be identified through it (Grunig, & Morschett 2017). It will also
help AAEC to focus on those business opportunities which will help it to grow
exponentially.

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 References

Ang, S.H, Benischke, M.H and Doh, J.P 2015, ‘The interactions of institutions on foreign
market entry mode’. Strategic Management Journal, vol. 36, no. 10, pp.1536-1553.

Costanza, R, Daly, L, Fioramonti, L, Giovannini, E, Kubiszewski, I, Mortensen, L.F, Pickett,

K.E, Ragnarsdottir, K.V, De Vogli, R and Wilkinson, R 2016, ‘Modelling and measuring
sustainable wellbeing in connection with the UN Sustainable Development
Goals’. Ecological Economics, vol. 130, no. 1, pp.350-355.

Grünig, R and Morschett, D 2017, ‘Developing international strategies’. Springer Berlin

Heidelberg.

Ji, J and Dimitratos, P 2013, ‘An empirical investigation into international entry mode
decision-making effectiveness’. International Business Review, vol. 22. No. 6, pp.994-1007.

Kanten, P, Kanten, S and Gurlek, M 2015, ‘The effects of organisational structures and
learning organisation on job embeddedness and individual adaptive performance’. Procedia
Economics and Finance, vol. 23, pp.1358-1366.

Kern, F. and Rogge, K.S 2018, ‘Harnessing theories of the policy process for analysing the
politics of sustainability transitions: A critical survey’. Environmental innovation and
societal transitions, vol. 27, pp.102-117.

Kiss, A.N, Williams, D.W and Houghton, S.M 2013, ‘Risk bias and the link between
motivation and new venture post-entry international growth’. International Business
Review, vol. 22, no. 6, pp.1068-1078.

Lu, Y, Nakicenovic, N, Visbeck, M and Stevance, A.S 2015, ‘Policy: Five priorities for the
UN sustainable development goals’. Nature News, vol. 520, no. 7548, p.432.

Luo, Y and Zhang, H 2016, ‘Emerging market MNEs: Qualitative review and theoretical
directions’. Journal of International Management, vol. 22, no. 4, pp.333-350.

Müllner, J 2016, ‘From uncertainty to risk—A risk management framework for market
entry’. Journal of World Business, vol. 51, no. 5, pp.800-814.

Pedersen, C.S 2018, ‘The UN sustainable development goals (SDGs) are a great gift to
business!’. Procedia Cirp, vo. 69, pp.21-24.

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Vaccaro, I.G, Jansen, J.J, Van Den Bosch, F.A and Volberda, H.W 2012, ‘Management
innovation and leadership: The moderating role of organisational size’. Journal of
management studies, vol. 49, no. 1, pp.28-51.

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Appendix
Analysis and Key Issues
Stages of the international/global market entry feasibility study (including experiences
challenges):

While expanding the market roots into the international region, the company may encounter
some of the major barriers depending upon the size of the market, local conditions and entry
mode challenges. However, based on certain issues, the company may create effective
strategies to minimise the impact of the market entry barrier in the internal business process
and maximise business productivity. While analysing the major issues in the process of
international market entry, these following issues are highlighted:

Issues related to Import and Export Controls

It has been observed that while participating in the international business process, there are
multiple important and export restrictions which mainly refer to tariffs and non-tariff barriers
which is imposed by the importing nation. However, it has also been analysed that import
restrictions are mainly adopted in order to maintain the exchange rate of the nation’s currency
rate. Furthermore, in the process of international business, the issues related to lack of
knowledge on the exchange rate, import restrictions may create major barriers. Thus,
choosing the different market for trade choices and developing alternative goods and
strategies are very important.

Issues related to Customs Tariffs and Taxes

In the process of market explanation in the international regions, a business may encounter
the issues related to tariffs and taxes. There are different types of taxes and duties which are
being imposed on the consumer for importing goods and for intrastate transactions which
may affect the profit ratio. However, companies can focus on developing value-added
activities in the target market. Besides, they can also focus on after-sales services which do
not fall under the category of customer tariffs and will be able to create unique value in the
market. Besides, to avoid the issue of tariffs and taxes, the company may also create a
partnership with the target market, which will help in producing goods and facilities.

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Issues related to Government Subsidies

The issue of government subsidies is very common while expanding the business into the
global market. Besides, it has also been analysed that subsidies also create major issues
related to product shortages as the when subsidy has been applied on any particular product,
the price goes down, and the consumptions rate increases. However, to avoid this issue, the
company may create value-added activities which will attract global purchasers. Besides, the
firm can also focus on adapting the products and services based on foreign market condition
and justify the enhanced prices and generate more revenues in the business.

Issues related to Customer Preferences

There are multiple factors such as price, quantity, income, gender, age and other
sociodemographic factors which affects consumer behaviour and affects business growth.
While expanding the business roots into the international market, identifying the customer
preferences based on their cultural and behavioural segments is very challenging. Thus,
identification of the target market based on existing products is very important to maintain
the growth.

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