ELP 2014-15: Expression of Interest

Team Information
No.

Student Name

PG ID

Mobile No.
+91 97 0121
5544
+91 95 4056
5700
+91 70 3264
6185

Class Section

1 Arijit Biswas

61510096

61510538

61510525

4 Nitish Barbaria

61510824

+91 8106458811

61510266

+91 96 7681
3011

D
D

Projects being applied for:ELP No.

Title of the Project

ELP 069

Develop entry strategy into Indonesia for two of the subsidiaries of

Pennar Industries

agree to take up this project, as a part of this team, if the team is selected.

E-mail ids of the team members:-

1. Arijit_Biswas2015@isb.edu
2. @isb.edu
3. @isb.edu
4. Nitish_Barbaria2015@isb.edu
5. @isb.edu

PROBLEM/SUB PROBLEM AS THE TEAM HAS UNDERSTOOD

With an imminent plan to grow beyond India in the South-East Asian countries, Indonesia is a target
for future expansion for Pennar Industries subsidiaries, namely PEBS Pennar and Pennar Enviro
Ltd(PEL). The primary objective of the project is to analyze the Indonesian market and business
scenario and prepare a detailed market entry strategy and implementation road maps for both the
companies.
The South-East Asia is increasingly becoming the hotspot for Infrastructure development. Indonesia is
becoming increasingly relevant in the Asia-Pacific region with Australia keen on engaging with the
country, in lieu of its traditional partnerships with the British Isles. Indonesia being a country with
hundreds of islands, faces major infrastructural challenges with connectivity both in terms of access
and in terms of infrastructural services like electricity (they still have a fragmented grid than a unified
grid etc.) as an issue.
What is the approach you will take to address this issue?
We plan to have a three-phase approach to deal with the issue at hand, and have detailed the same over

the subsequent sections.

Market Understanding
The first phase of the project will entail assessment of the current status of the market, which we
propose to undertake using the following frameworks:
Market Attractiveness: We will evaluate whether the country presents any substantial
opportunity for the firms subsidiaries by looking at the respective market sizes, projected
growth rates, and profitability for the relevant industry segments for Pennar.
Porters 5 Forces Analysis: This framework will further help us determine the attractiveness of
the market in terms of level of competition among the various stakeholders, i.e. direct
competitors, buyers, suppliers, new entrants and product substitutes.
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 Competitor Assessment: We will then study potential direct competitors of PILs subsidiaries in
greater detail in terms of their capabilities, growth histories, market position, etc.
PESTEL Analysis: This framework will help us assess the various macro-environmental factors
dominating the country that the company needs to take into consideration before it decides to
enter the market.
Regulatory Framework: This part of the project will delve in greater detail regarding the
regulations governing the target industries.
Business Case Development
A positive assessment in the first phase will be followed by the development of a business case for the
groups entry in the market.
SWOT Analysis: This study will explore the companys unique strengths that can be leveraged
and potential weaknesses that can be minimized for a success in the new market. It will also
probe into any potential opportunities or threats that the company is likely to face.
Potential Customer Assessment: We will identify the customers that can be initially targeted by
the firm to gain a footing in the market.
Partner / Contractor Feasibility: This assessment will identify the possibility of partnerships
that can add value to the companys offerings so as to differentiate it from the incumbents or
provide it a competitive advantage.
Risk Assessment: We will evaluate the inherent risks associated with entry into new markets
and also any potential risks that may be associated with operating in that geography.
Implementation Plan
We will subsequently create a roadmap for the company assessing and detailing the following factors.
Investment Requisites and Return Estimations: We will also explore the various avenues for
funding the required investments.
Execution Timeline: We will estimate the implementation timeline for the company, from initial
entry to establishment of economic activities.

Project Approach
The group will engage rational-analytic methods in combination with participatory engagement of the
internal as well as external resources. The overall development of ideas will follow the ancient Greek
model of Aristotle- Theoria, Poiesis and Praxis.
Model

Outcomes

Activities

Theoria

Development of a robust situational

analysis

Desk research, Synthesis and Analysis of

Information, Verification

Poiesis

Development of Models and approaches for

entering, winning and consolidating market

Building models and theoretical hypothesis on

the market conditions, competitive environment,
politico-legal systems and entry methods

Praxis

Testing hypothesis and models through

engagement with the context. Development
of solutions and suggestions.

Site visit, engagement with stakeholders and

testing theoretical models and knowledge with
contextual realities.

Regulatory factors need to be considered for assessing the viability of setting up

construction and water based industries in Indonesia. The focus will be on the tax
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regime, government investment outlook, rules and regulations concerning

investment and industrial development, relevant labour laws, contracting
principles and practices, litigation, mediation and arbitration. The study will also
concentrate on the ease of doing business (World Bank method), import and
export regulations, risk factors, regulations around environmental protection and
native populations, safety and security.