Within months, Indonesia will join the ASEAN Free Trade Area (AFTA). In 2015, ready or not, we will face with tougher competition. Some indications can already be seen in the increase of the foreign workforce, especially those from South East Asia, and the increase in the number of foreign owned firms.
This issue was discussed in Talking with The Expert – Business Management Session, at BINUS Business School (BBS) on August 14. The topic was: “Advantage as Your Weapon to Enter AFTA 2015: The End of Made in Indonesia?” Dr. Gerald Ariff B.Eng (Hons), M.Sc from BBS was the main speaker.
“Many large firms in Indonesia are owned by foreigners, and profits go to them. Also, Indonesian distribution is among the most expensive in the world. In that case, what if foreign countries want to invest here? We will be left far behind, compared to other ASEAN countries,” said Gerald. He emphasized that Indonesian companies will face a tighter level of competition, and need to prepare for the upcoming challenges in order to remain profitable.
“In order to survive a tighter level of competition, Indonesia needs to have a sustainable competitive advantage. Without it, this country will struggle to compete with other countries in South East Asia and other regions.”
Indonesia needs to provide low costs for industries, incorporate differentiating features, focus on a narrow market niche and develop expertise and resources. If Indonesia can maintain a sustainable competitive advantage in these areas, then the coming challenges will be much easier to overcome. (RAW)
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