Toni Cook

12/01/15
MKTG

Case 6 Country study

Sees Candies is a long established maker of candies sold in shops in the western US and several
Asian countries who is seeking growth by expanding its Asian operations http://www.sees.com/ .
They have chosen to explore establishing operations in Indonesia.
1. Briefly describe the relevant economic, demographic, social, and other trends in Indonesia.
One of the major issues in growing to Indonesia is the infrastructure. Indonesias
infrastructure and service networks are under-developed and are not maintained which continues
to raise cost.

Indonesias bureaucracy still remains very difficult for businesses to navigate

through. (http://www.export.gov/indonesia/doingbusinessinindonesia/index.asp ) Indonesia

ranked 107th on Transparency Index scale, citing major issues with conflicting laws, corruption,
and no formal dispute settlement system. (http://www.export.gov/indonesia/doingbusinessin
indonesia/index.asp) There is a high amount of competing firms in Southeast Asia for about any
comparable product. Indonesia is the fourth largest country in the world with a fast growing
economy. Indonesias populations disposable income continues to grow year by year.
(http://www.export.gov/indonesia/doingbusinessinindonesia/index.asp) Even though Indonesia
has a growing economy (estimated at 15% for 2015) close to half of the countrys population
lives at the poverty line. (http://www.unicef.org/indonesia/overview.html) Indonesia is made up
of several different sub groups of cultures spreading along the countrys 17,500 islands. Most
Indonesians have social media accounts. Indonesia has one of the highest social media usage
rates of any country of the world. (http://www.unicef.org/indonesia/overview.html) It would also
be important to consider the different taste preferences of consumers in Indonesia and adapt the
product being sold to those preferences.

Toni Cook
12/01/15
MKTG

2. Discuss the difficulties a company like Sees Candies might experience in expanding to
Indonesia. Describe brand building in particular.
Candies might face issues with government red tape. There are several processes in the United
States have been sped up that could take a longer time in Indonesia, to meeting product
regulations, opening a bank account, and managing conflict laws. Another difficulty would be
managing communications from the management of the business in one language to the bottom
employees in another language. Many things can get lost in translation along the way.( http://
www.businessinsider.com/the-five-biggest-practical-challenges-for-foreign-smes-in-the-chinesemarket-2010-12) Another difficulty would be the agency cost. A different culture may need a
different management style or different procedures regarding incentives and defined roles.
(http://www.businessinsider.com/the-five-biggest-practical-challenges-for-foreign-smes-in-thechinese-market-2010-12) Another difficulty will be branding. It will be very important to stay
consistent to the overall brand. It will also be equally important to adapt the branding/product to
the new environment. It could be difficult to stay true to the overall brand while adapting a sales
approach and a whole product to a new market. Candies will need to allow for flexibility and try
to conform to local needs to help sell their product. (http://www.businessnewsdaily.com/8211expand-business-internationally.html)
3. a) Point out the pros and cons for each of three options for Sees: opening its own shops to
make and sell candy as it has in other Asian countries; making the candy themselves then selling
through existing candy retailers in Indonesia; or signing a licensing agreement with a candy
maker in Indonesia who would make the candy using Sees recipes and brand name then sell it
however the licensee desired.
The pros for Sees Candies to open and sell its candy like it has in other Asian countries would
be that it would have better handle on quality assurance. The negative would be that it unless

Toni Cook
12/01/15
MKTG
Sees Candies had a core competency in making candy it would be more expensive to make then
letting some other company make it for them. The pro for making the candy themselves then
selling through existing candy retailers in Indonesia would be that Candies would shrink their
agency cost, by having other businesses sell their candy, and not have to worry about the
distribution channels. The negative would be that Candies has built a strong brand and some their
marketing and brand power would go to waste. Candies brand would then be tied to the
reputation of the candy retailers selling the candy. Lastly the option of signing a licensing
agreement with a candy maker in Indonesia who would make the candy using Sees recipes and
brand name then sell it however the licensee desired; the pro would be that Candies would
benefit a little bit from the profit of franchise and have taken on little business risk to do that.
The negative is that Candies could not assure the quality of the candy or at what price point it is
sold. The manufacture could change the recipe, or do multiple things that could hurt Candies
because the rule of law in Indonesia is very weak.

b) Which would you recommend and why?

I would take the second option, of making the candy and letting a candy retailer sell the product
in their stores. I chose this option because it lets Candies have their product in the Indonesia
market with shrinking Candies agency cost and not having to worry about distribution channels.