Rodamas Group: Designing Strategies for Changing Realities in Emerging Economies
(11 pages of text)
By 2008, Rodamas Group, owned by the ethnic Chinese Tan family, was one of the top-20 business groups in Indonesia. The company started as a trading firm in 1951 and, over time, became a joint venture partner in manufacturing businesses with a range of mainly Japanese partners. In the 1980s, the company transferred to the second generation leader. The businesses included glass manufacturing (with Asahi), personal care products (with Kao), packaging (with Dai Nippon) and MSG production. The role of Rodamas in these partnerships was to deal with local regulations, hire local personnel and distribute the products in Indonesia. When the then President Suharto was toppled in the Asian Crisis in 1998, Indonesia underwent several drastic changes, including the transition to democracy. Its economy became more open, and foreign firms were allowed to operate in the country without having a local partner. In addition, several global business developments, including the tendency of multinationals to rely on lawyers and consultants rather than local equity partners, threatened the Rodamas business model. In view of this, the current leader, Mucki Tan, is reconsidering the future of his company and weighing strategic options: 1) internationalize with existing partners; 2) develop own businesses that need little technology, such as property; 3) buy existing manufacturing firms; 4) focus on distribution of products for foreign multinationals; 5) focus on a traditional partnership role with a new wave of foreign direct investment (FDI) from developing market multinationals, more specifically, China. Students are asked to analyze the company and its environment, decide on a strategic direction and reflect on the consequences.
Rodamas Group: Designing the Portfolio (9B14M029
) is available as a supplement to this case.
Indonesia, Large, 2008
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