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Feasibility Analysis for Exporting Lingerie into Indonesia
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Examines socio-economic & political profiles of Indonesia, assessing the problems of exporting American-made lingerie into the nation & the potential for high profits.... More...
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Paper Abstract:
Examines socio-economic & political profiles of Indonesia, assessing the problems of exporting American-made lingerie into the nation & the potential for high profits.

Paper Introduction:
Feasibility Analysis for Exporting Lingerie into Indonesia Introduction Based on the contemporary socio-economic and political profiles of Indonesia, there are many problems inherent in exporting American-made lingerie garments into that country. However, based on the economic outlooks proposed by any respected authorities, there are potentially large profits to be made. This analysis discusses these problems and potentialities in four major sections: Section 1, The Economic Variables; Section 2, The Economic Forecast; Section 3, the Market Demand; and Section 4, Economic Risk. Section 1, The Economic Variables Indonesia's population of some 198 million is spread across

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The final variable which is important is the fact that the Indonesianeconomy has a unique structure, wherein the ruling family, the Suhartos,own a great many of the nationalized industries, and exert an extremelypowerful control. Lindblad, J.T. & Mao, P. FOCUS.Indonesian Commercial Newsletter. According to the Indonesian government "It has not yet beenpossible to eliminate the source of these upheavals. (1995, August). The world's best-kept secret.Forbes., v156 n2, p 112. (1997, February 1). This analysis discusses these problems andpotentialities in four major sections: Section 1, The Economic Variables;Section 2, The Economic Forecast; Section 3, the Market Demand; and Section4, Economic Risk. They are more optimistic and predictthat Indonesia's economy will grow at a rate of around 8% this year. When deregulation was launched and promoted in the198 's the target was to increase exports so that they would become thelocomotive of economic development. (1997, August). Tanzer, A. Section 4, The International Risks Most experts agree that it is possible that the socio- politicalupheavals that occurred in Indonesia at the end of 1996 will continue forseveral years. v29 n8, p 14. Dr. Dorodjatun Kuntjoro-Jakti, dean of the faculty of Economics at theUniversity of Indonesia, Jakarta, describes the international risks thus:"Indonesia's economy is especially sensitive to movements in the prices ofexports and imports because of the 'open capital-account' system used tomanage the balance of payments" (Lindblad, 1997). Indonesian economic news and reports. A major economic variable which must be taken into consideration forthis feasibility analysis is the fact that the $78 per capita figurethough statistically accurate is quite misleading, since approximately 75percent of the attributed population of Indonesia consists of a widevariety of ethnic tribes. With youth comes energyand ambition. The Government estimates that Indonesia'seconomic 1997 growth will be 7.1% which is lower than in 1996, but stillquite high. Its major trading partners are the United States,Australia, Japan, Taiwan, and Singapore. , p 13. InstitutionalInvestor. (1995, July 17). Average population age is another critical variable to consider.Three out of every four Indonesian citizens are under the age of 4 , a factwhich prompts another government information source to say "Indonesia isvery much a nation for the future of the world. Section 2, The Economic Forecast Indonesia, in line with other ASEAN countries has registered quite ahigh level of economic growth. Section 1, The Economic Variables Indonesia's population of some 198 million is spread across 13,7 islands in the Pacific Ocean, with several main cities, most notably theCapitol Jakarta, Medan and Bali. TheIndonesian Embassy Journal. And Indonesia has plenty of both." Over the last 25 yearsthe Indonesian economy has diversified and matured, growing at an averagerate of 6.9 per cent annually. Pasow, S. Journal of Development Studies. Edition No. The 1995 Gross National Product in U.S.dollars was $153,27 million and the nation has a per capita income of$78 . (1997, February 17). As Tanzer andMao point out: This is not to say that Indonesia's growth is trouble-free. 213, p2. A 1995 articlein Forbes (Tanzer and Mao) pointed out "Indonesia today is spawning newwealth at an astounding rate. Its foreign debt, close to that of Brazil and Mexico, just passed the $1 billion mark; the debt-service ratio is a worrying 32% of export earnings. This strategy has succeeded. 5 years of achievement. With half its population under the age of 24, Indonesia gets 2.5 million new job-seekers every year and can barely provide jobs even with the current rate of growth. The opinion mostwidely-held in the community is that the upheavals and unrest have beencaused by cumulative community dissatisfaction with the unbalanced state ofpolitics and the economy which is perceived as advantageous to only certaingroups" (Indonesia's economic climate, 1997, 4). However,in the past 3 years Indonesia's economic growth rate has not only beenstimulated by the high rate of growth of exports, but also by increaseddomestic demand as a result of increased per capita income. Feasibility Analysis for Exporting Lingerie into IndonesiaIntroduction Based on the contemporary socio-economic and political profiles ofIndonesia, there are many problems inherent in exporting American-madelingerie garments into that country. References Indonesia's economic climate in 1997/98. However, based on the economicoutlooks proposed by any respected authorities, there are potentially largeprofits to be made. Long known as the Spice Islands, and a Dutchcolony until WWII, this fabled island chain is fast becoming an economicpowerhouse." Section 3, The Market Demand For purposes of this feasibility analysis, only the markets of Medanand Jakarta will be considered, since both of these cities have strongmetropolitan attitudes and a widely diverse cultural and ethnic mix.Although Indonesia, like other ASEAN nations has a strong interest in allproducts and services that have a Western or American flavor and touch,there are several other influences bearing on the potential market demand.The major one of these influences is the fact that in both Jakarta andMedan, there is a large Muslim population (some 25 percent) which does notbelieve in discussing, or considering personal items like lingerie. The cause for concern is the opinion that those who have received thebenefits of economic progress are only those of a certain ethnic group,the majority of whom also happen to be adherents of one specific religion. Total 1995 imports were $16,359.6 million and total exports were$4 .1 billion. It is also commonly believed that those who are advantaged are those fromcertain political groups and those who are close to the power center.These opinions may not necessarily be true, but it cannot be denied thatthere is economic inequality which gives great cause for concern and whichcould affect the popularity of certain kinds of imports. Onereason for this prediction is the fact that there was a dramatic increasein export-oriented projects approved by the Government in 1994 and 1995 andthese projects should be commencing production this year. v33, p877. That makes it open forimports on a grand basis. The Indonesian economy since 1966:Southeast Asia's emerging giant. Investment from both domestic and foreignsources is at unprecedented levels spurred on by the government'scommitment to deregulation and privatization. In the short term, also, the government has announced tighter monetarypolicies to help reduce the rate of inflation and interest levels, butcould create problems for the business sector which requires additionalcapital for expansion. When those people (who would not be potentialcustomers of a lingerie line anyway are factored out, the revised percapita income is much higher. For a variety of reasons some observers consider thisgovernment estimate conservative.

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