Macro economy situation

The Macroenvironment described as PESTEL can be divided into several aspects, which represented
the companies surrounding environment. Depending on the current market situation and personal
factors of the company these aspects are: Demographic, Economic, Natural, Technological, Political
and Cultural.

For Toyota Textile Machinery Indonesia the Economic, the Technological and the Political situation
showing the biggest impact on the company and will be further analysed.

The economic situation in Indonesia is steadily improving with an annual GDP growth of 5% over the
last three years, while Inflation is shown to be around 3%. The growth of GDP is reflected by more
buying power of consumers and a growing industry. Forecasts show that the GDP in Indonesia will
continue to increase, which keeps the buying power of costumer high and might increase numbers of
sales.

On the technological side Toyota Textile Machinery Indonesia is supported by Toyota Industries
Corporation (TICO), located in Japan. As Toyota Textile Machinery Indonesia acts as a retailer of TICO
in Indonesia and offering services around their products, it is given the newest and advanced textile
machineries developed be the Research&Developement Center in Japan. With the aim not just to
improve short-term business but also achieve sustainable growth the R&D Center is developing high
quality machines which belong to the most advanced in the world, while improving existing
machines.

The biggest influence on Toyota Textile Machinery Indonesia has the government in Indonesia and
their plans for re-modernization of domestic textile companies, the target market for Toyota Textile
Machinery Indonesia. While most of Indonesias textile machineries are older than ten or even older
than 15 years, the governments plan is to support companies by buying newer textile machineries to
compete with Chinas and Indias textile market. Therefore the government offers 10%
reimbursement to textile companies when the effort new textile machineries. This plan is further
intensified by exemption of PPN explanation for heavy machinery imports, which shall improve
the relation to Chinese textile machinery corporations. While the governments plan has a major
influence on the textile industry in total, it is not aimed at textile machinery production in Indonesia
but at textile industries and textile machinery industries from other nations.

Industry situation

Toyota Textile Machinery Indonesia is the only domestic branch selling textile machineries and is
located in Jl. Kopo no. 618A Blok 88AA Bandung, West Java and acts as a retailer for the head office of
TICO Textile Machinery located in Japan.

The products sold by Toyota Textile Machinery Indonesia are produced in Japan. Two industry
locations which are part of TICO, Toyota Tsusyo and Toyota Marubeni supply Toyota Textile Machinery
Indonesia with their final products. Spare parts and single units of the complete machineries are
provided by a local company named Anugerah Texindotama . Since Toyota Textile Machinery
Indonesia act as a retailer for TICO textile Machinery it has no further marketing intermediaries to
promote, distribute or sell their products.
Since Toyota Textile Machinery Indonesia is the only branch in Indonesia, their competitors origin is
mostly other Asian countries such as China, Japan, South Korea and Taiwan, as well as European
countries such as Germany, Switzerland and Italy. The major competitor is Picanol from China, which
offers lower prices caused by the economic situation in China, followed by Tsudakoma from Japan,
Lakshmi from India and Schaforth from Germany.

The public opinion about Toyota and their related companies and industries is high and valued as a
well-known, trustfully and high quality producing company. This also reflects the opinion about
Toyota Textile Machinery Indonesia. The interest of buying products from Toyota Textile Machinery
Indonesia is raised by their high quality standards and the durability of their machines, which is
related to a value-based pricing strategy.

Customer segments and behavior

Based on the Surat Izin Usaha Perdagangan (SIUP) and data provided by Toyota Textile Machinery
Indonesia the segmentation is sorted by location and capital of possible customer companies.

In total 56 companies on Java are using textile machinery and are potential customers of Toyota
Textile Machinery Indonesia. The size of the company is separated in small, medium and large size
companies by definition of SIUP. Small companies have capital below 200 million rupiah. Medium size
companies have capital between 200 and 500 million rupiah and large companies own a capital
above 500 million rupiah.

Since Toyota Textile Machinery Indonesia is only operating on Java, the geographical segmentation is
limited to this island. The majority of companies with 71% are located in West Java, followed by 12%
in the capital Jakarta. 5% of the companies are located in Central Java and another 5% in East Java.
The missing 7% are located in the part region of Banten.

Since Toyota Textile Machinery Indonesia represents high quality products it targets large and
medium size textile companies which can afford buying high quality products and rely more on
quality than on lower investment costs. Even if 71% of potential customers are located in West Java
(90% with Banten and Jakarta) Toyota Textile Machinery Indonesia aims also on companies located on
other parts of Java. Describing the consumer behavior: consumers of Toyota Textile Machinery
Indonesia are motivated by high quality and durable products, they are aware of the high quality
standards and the constantly developing technology. Not only Toyota Textile Machinery but also the
brand Toyota itself stands for high quality which is known by the customer. Consumers are bind to
Toyota Textile Machinery Indonesia by long term relationships and partnerships, which creates loyal
customers.

On the other hand, being aware of the high quality and technology development more and more
customers desiring cheaper products to compete on the market against their competitors. Decreasing
customer satisfaction in service department and the compared high price, resulting in decreasing
brand awareness and a change of consumer behavior to similar but less expensive products.

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG
https://www.toyota-industries.com/investors/items/p42-43_1.pdf
http://www.ice.gov.it/paesi/asia/indonesia/upload/169/TEXTILE%20REPORT%202010.pdf
http://perusahaan.web.id/definisi/kelas-siup