This report has written this report to make recommendations to the senior management
team of the Australian fashion shoe company, Zu, on the feasibility of Indonesia as a
possible location for global operations. The report investigates the legal, political,
economic, socio-cultural and technological environments of Indonesia and therefore
explains why Indonesia is a suitable for the company, Zu, to operate.
Political environment
As Indonesia is becoming a democratic society, people are encouraged to become more
independent and provide for themselves. This means that more people are becoming
involved in the work force and relying on their own income, which is beneficially for a
retail outlet such as Zu.
Indonesian being a more democratic culture means its political system is also beginning far
more stable than what it has been is the passed. If there is a stable political environment,
then there is a lot less disputes between politicians, meaning that the people of Indonesia
are more relaxed and more liked to spend money as it takes a lot of the uncertainty out of
every day life.
Legal environment
When franchising a fashion retail outlet, such as Zu, in Indonesia, there are a number of
strict laws to be abided by, and therefore it is important to get the correct legal and
administrative advice concerning the franchise agreement, the operations manual, terms
and conditions of trading, appropriate disclaimers for any prospectus produced, property
issues and employment matters.
It is also necessary that the franchisor has a clear understanding of the Indonesian
language, as the franchise agreement includes specific matters and has to be executed in
