The capability of Thai bags manufacturers and retailers is high but the domestic market is limited. Thai bags companies should consider expanding the business oversea.
Concerning the Indonesian bags industry, there are many business opportunities available. The external environment of Indonesia is supportive for the international business expansion, as the barriers for business are minimized by government’s regulations. In addition, the emerging of middle class people creates more opportunity in bags market. People tend to purchase bags that deliver higher quality and last longer and exchange them with higher price. After considering the external and internal factors of the firms, the business plan is to be established.
The business strategies that Thai bags brands should implement in order to penetrate Indonesian bags industry are market development strategy and product differentiation strategy. In the early stage of market expansion, direct export is an appropriate entry mode and one of the suitable Incoterms is CFR (Cost and Freight). Thai bags brands can select the appropriate products to penetrate Indonesian market from the existed products in domestic market. In order to avoid the difficulties in Indonesian market, the products will be export to Indonesian import distributor. The distributor will handle the custom process, product distribution, and suggested marketing plan. Thai bags brands should also consider implementing the human resources plan to facilitate the export process and 5-years financial plan to speculate the return on investment.
This business plan will be beneficial for Thai bags manufacturers and retailers to be successful in Indonesian bags market penetration.