Rodamas Group

The Rodamas group is faced with many challenges as Indonesia is still an emerging market and hence a risky place for investments. MNCs have to critically analyse the scenario before entering the market, however, the Indonesian government encourages FDI and has reduced trade barriers. In addition, the government has allowed 100% ownership by a foreign firm. This on one hand is beneficial for foreign companies, but poses huge threats to local distributors like Rodamas whose one primary sources of business is partnerships with multinationals. Rodamas group has a knowhow of the local environment thus it can enter into manufacturing business on its own, but the growth in service firms is causing a shift in focus of businesses. Consultants, lobbyists and advisers are hired to provide services to the multinationals which threaten traditional equity partners like Rodamas. Another shift in focus is in the natural resources, one in which Rodamas group lacks expertise. The tax system is Indonesia is also not favourable for conducting certain businesses (e.g. Real Estate). Corruption, bribery and other regulatory issues are causing the companies to incur high costs for operations.

If Rodamas engages in internationalization, then it has to revitalize its strategies in order to make itself competent enough to operate internationally. The company currently lacks international expertise.

Another challenge which Rodamas faces is in a huge number of competitors. The company is engaged in unrelated diversification, accompanied by a variety of competitors as well. This