The paper “ The German Company KHS GmbH’ s Plan to Relocate Its Business to Indonesia” is a perfect example of a case study on business. One of the main goals that every company or business in the world would like to attain is a lower cost of production and maximum utilization of the available economic resource in order to have a high-profit margin. Most organizations throughout the world use metric profitability as a measure of success (Cleverley & Song, 2011). The strategic plan of a business organization should aim at achieving a competitive advantage, that is, the net margin of the company should exceed the industry’ s average.
In the face of global competition, business organizations like KHS GmbH should come up with effective strategies in order to remain competitive and maximize the wealth of the shareholders. Therefore, KHS GmbH should adopt either one of the following two strategies, namely: reduce business expenses or increase sales volume. The German company KHS GmbH that supplies filling and packaging systems intend to look for a better environment or business opportunity to invest in.
This descriptive report analyses the economic level of the Indonesian, advantages, and disadvantages of investing in the country, risks that are involved and any cultural difference significance between the two countries. Indonesian economy summaryCurrently, Indonesia is the 18th largest economy worldwide, and it has been undergoing an outstanding economic growth. In the late 1990s, the Asian Financial Crisis portrayed a disastrous impact upon the country; but thereafter, there was an incidence of a booming economy where the macroeconomic indicators of the Indonesian commenced to pull back to its track around 2000s.
Since then, the financial system that was infested with a lack of transparency and supervision was overpowered by adopting a system of better fiscal policies in conjunction with the standards of economic internationally. This fostered global market integration and liberalization of the economy. Table 1.0 Indonesia Annual GDP growth rate. The table above indicates that the GDP of the country has been declining over the years since 2011. These are due to the increase in inflation for instance in taxes. In the year 2013and 2014, the annual inflation was twice more as compared to the inflation experienced in the previous years. The budget of 2016 indicates an immense increase in expenditure in public and private health, thus, forcing the Indonesian government to make a plan to mandate a threshold of 5 percent of GDP spending on the health sector as compared to the revised 3.7% in the former budget (Worldbank. org, 2016).
The Indonesian economy has advanced in the last quarter of the year 2015 such that in, December alone, it recorded a growth rate of 5.04 percent. This has been a comparable expansion increase from 4.74 percent as reported in the former quarter and its GDP has hit the market consensus with a growth of 4.80 percent.
In regards to government expenditure and investment, there has been an offset slowdown and decline in exports and private consumption. In the last year 2015, the Growth Domestic Product grew to 4.79 percent by the end of the year, and this was slightly above the expectation in the expansion of 4.75 percent. The economy contracted by 1.83 percent because of a revision of 3.36 % growth at the end of the third quarter.
The Gross Domestic output Annual growth percentage was averaged to 5.36 from the year 2000 until 2015 having reached a higher percent of 7.16 in 2004 in the last quarter (Tradingeconomics. com, 2016).