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Reasons for investing in Indonesia

Discuss about the Business Plan of Repco Automaker.

Repco is an outstanding automaker dealing in spare parts. Given the current market situation in Australia is competitive and the company needs to expand into new markets, especially the emerging markets as demonstrated by Pride (2015). With nearly every household in Indonesia possessing motorcycle or car, the demand for quality auto parts is indisputably high. Repco is a company that operates in Australia and New Zealand where it operates over 400 stores. Commisceo Global Consultancy Ltd (2017) reports indicate that the brand stands for expertise, quality, and knowledge because of its dedication and passion to anything automotive. Repco offers a huge range of automotive parts ranging to about 175,000 parts (Repco n.d). It will continue to benefit from its preferred supplier relationship. The company’s objective is to enter the Indonesian automotive market and improve its market share.

Indonesia is a leading investment destination for many international companies. With over 254 million people, the demand for consumer products is indisputable (Department of Foreign Affairs and Trade n.d). Regarding the economy and GDP, Indonesia is 16th in economy and 8th in consumer purchasing power (ASIALINK n.d). It is the leading economy in the Southeast Asia. The country’s nominal GDP stands at 1 trillion AUD and anticipated to increase (Emerhub n.d). Since many households own automotive, Repco can offer them a quality brand that will make their automotive distinct. Indonesia is endowed with natural resources and skilled workforce that guarantees the investors a good future (Fensom 2017). Since Indonesia is the 13th largest trading partner, REPCO would find it easy to establish its operations (Euromonitor International 2017). The political stability experienced in Indonesia is also an advantage to investors. In fact, it abolished various tariffs to accommodate the free trading policies (Department of Foreign Affairs and Trade n.d1). Unlike other countries, Indonesia offers low production costs because of the availability of resources and skilled labor.

Repco offers product range thus addresses its dedication and passion to automotive (Riley 2016). The Repco is a leading store where motoring enthusiasts can never underestimate (Repco n.d). The company provides a range of products including seat covers, spare parts, car care, in-car entertainment, picnic rugs, lubricants, oils, and traveling and touring accessories among other products (Repco Corporate n.d). The company will continue to order any category of spare parts the client needs. Repco is a proven expertise, outstanding value, and honest advice. The products are sustainable and environmental friendly (Riley 2016). The Repco brand is a unique brand offering quality spare parts thus justify the unique value proposition. It will offer an all-inclusive payment policy (Wikimedia Foundation, Inc. 2017).

Products

Repco understands the competitive pressure in the Indonesian market. To this effect, it intends to use different promotional strategies and campaigns to attract new customers and beat its competitors (Becker 2016). It will offer car warranties to encourage buyback. The firm will also extend its warranties to customers to serve their needs (Eddymurthy & Smith 2013; IBP 2016). Similarly, the firm anticipates introducing an auto club membership where the cardholders will benefit from a 10 percent discount on applies. The customers will be able to save the ten percent upon producing the card. Apart from the club membership card, the company will be offering customers gift cards which it intends to deliver on customer order through standard post.

Repco understands the significance of the clean and green production process. This will continue using this process to reduce environmental pollution (Plumer 2017). Recycling the auto parts is difficult (Becker 2016). As part of its sustainability policy, the company will use different approaches to recycle the spare parts. For instance, SAPA (2017) identifies the recycling of the auto parts for same use like refurbishing the engine. The suspensions, doors, and body will be reused upon processing. The iron rods will be used to make new items through the biopolis project. It will also use

Repco intends to use partnership or joint venture to enter the Indonesia auto parts market (Ador 2016; KPMG 2017). The joint venture strategy will help the company to avoid unnecessary costs and benefit from the partner’s network. To this effect, the organization will have to identify the best local partner that understands the terrain and culture (Wikimedia Foundation, Inc. 2017). To add value to its marketing, the company will use online platforms to reach large customer base. 

Repco’s vision is to become the leading provider and supplier of automotive spare parts for nearly all the car models. It intends to achieve the vision by offering quality automotive. It will become the best provider of quality spare parts thus improve its revenues and sales. It will invest in research and development to improve products through innovation (Magni, Poh & Razdan 2015). Pepco will further rely on the government laws to protect its product by employing its intellectual property strategy.

Penetrating the already saturated market is difficult. However, REPCO needs to use different strategies to outwit competitors in the market. The company will penetrate the market by restructuring it. For instance, this will involve the use of persuasive and aggressive promotional campaigns. The needs to sell its product at an affordable rate will attract customers. The company will also focus on the existing customers so that it can increase usage. It will involve manufacturing quality products that are attractive to customers. For example, REPCO will introduce loyalty schemes, add value to its products, and alter the products to encourage usage.

Promotions and marketing strategies

Conclusion                                

Pepco has the opportunity to improve its market share and revenues by investing in Indonesia. Indonesia offers significant opportunities for the company to succeed. For instance, the company will benefit from low cost of production, increasing middle-class group, and conducive environment for doing business. The growing population increased the rate of urbanization and remains the largest economy in the region benefit the company. Therefore, by investing in Indonesia, the company will improve its profits. Since setting business in a new country is never easy, PEPCO would benefit by using joint venture to maximize the available opportunities. This will reduce the costs and optimize the distribution channels and customers of the host company.

Ador, NJG 2016, December 22, How foreigners can set up a joint venture in Indonesia. Indonesia Expat. [online] available at https://indonesiaexpat.biz/business-property/understanding-basics-setting-joint-business-venture-indonesia/ [Accessed 25 September 2017].

ASIALINK, n.d. Doing business in Indonesia. [Online] Available at: https://www.livescience.com/28823-chinese-culture.html [Accessed 25 September 2017].

Becker, J. 2016, March 20. How leading automotive parts suppliers recycle to preserve the environment. [online] available at https://www.driving-news.com/how-leading-automotive-parts-suppliers-recycle-to-preserve-the-environment/ (Accessed 26 September 2017).

Commisceo Global Consultancy Ltd, 2017. Indonesia guide. [Online]  Available at: https://www.commisceo-global.com/country-guides/indonesia-guide [Accessed 24 September 2017].

Department of Foreign Affairs and Trade, n.d. Indonesia country brief. [Online]  Available at: https://dfat.gov.au/geo/indonesia/Pages/indonesia-country-brief.aspx
[Accessed 24 September 2017].

Department of Foreign Affairs and Trade, n.d1. Australia-India Comprehensive Economic Cooperation Agreement. [Online]  Available at: https://dfat.gov.au/trade/agreements/aifta/Pages/australia-india-comprehensive-economic-cooperation-agreement.aspx [Accessed 25 September 2017].

Eddymurthy, I. & Smith, D., 2013, Mar/Apr, “Infrastructure: The need for more and sooner.” Journal. https://www.ssek.com/download/document/BritCham_-_Up_Date_-_MarchApril_2013_78.pdf [Accessed 24 September 2017].

Emerhub, n.d. 10 reasons why to invest in Indonesia. [Online]  Available at: https://emerhub.com/indonesia/10-reasons-invest-indonesia/ [Accessed 25 September 2017].

Euromonitor International, 2017, Indonesia. [Online] available at https://www.euromonitor.com/indonesia [Accessed 25 September].

Fensom, A., 2017, February 27, “Free trade push: Australia, Indonesia eye deal.” The Diplomat. [online] available at https://thediplomat.com/2017/02/free-trade-push-australia-indonesia-eye-deal/ [Accessed 25 September 2017].

IBP, I. N. C., 2016, Indonesia clothing and textile industry handbook volume 1 strategic information and contacts. S.l.: Lulu Com.

KPMG, 2017 August, Joint venture advisory practice. Issue 6. [Online] Available at https://home.kpmg.com/content/dam/kpmg/id/pdf/2016/11/id-jvap-issue6-august2016-Indonesia-edit.pdf [Accessed 25 September 2017].

Magni, M., Poh, F., & Razdan, R ., 2015, September, Best practices in customer and channel management: Winning in Indonesia’s consumer-goods market. McKinsey & Company, Nielsen.

Plumer, B., 2017, May 31, “Q. & A.: The Paris Climate Accord,” The New York Times. [online] available at https://www.nytimes.com/2017/05/31/climate/qa-the-paris-climate-accord.html?mcubz=0 [Accessed 25 September 2017].

Pride, W. M., Ferrell, O. C., Lukas, B. A., Niininen, O., & Schembri, S., 2015, Marketing principles. Cengage Learning, South Melbourne.

Repco Corporate, n.d. about us. [Online]  Available at: https://www.repco.com.au/CA2571B70016E7AE/page/About+Us?OpenDocument&1=06-About+Us~&2=~&3=~
[Accessed 24 September 2017].

Repco n.d, About us. [online] available at https://www.repco.com.au/CA2571B70016E7AE/page/About+Us?OpenDocument&1=06-About+Us~&2=~&3=~ (Accessed 28 September 2017).

Riley, J., 2016. 5 reasons to do business in Indonesia. [Online]  Available at: https://www.linkedin.com/pulse/five-reasons-do-business-indonesia-jemima-riley [Accessed 24 September 2017].

SAPA, 2017, July 24, How the auto parts production industry is saving the environment. [online] available at https://sapagroup.net/en/how-the-auto-parts-production-industry-is-saving-the-environment/ (Accessed 27 September 2017).

Wikimedia Foundation, Inc., 2017. Repco. [Online]  Available at: https://en.wikipedia.org/wiki/Repco [Accessed 25 September 2017].

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My Assignment Help (2018) Business Plan Of Repco Automaker: Investing In Indonesia [Online]. Available from: https://myassignmenthelp.com/free-samples/business-plan-of-repco-automaker
[Accessed 27 February 2024].

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