INTERNATIONAL BUSINESS -

week 2

By group 2:
Gadis Salsabila
Hout Seavpenh
Intania Aisha Melati
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PT. INDUSTRI JAMU DAN

FARMASI SIDO MUNCUL, Tbk
also known as
PT. SIDO MUNCUL
Industry Sector : Consumer Goods Industry
Industry Sub Sector : Pharmaceuticals

Sido Muncul, known as “a dream come true” in English, is a herbal company

that has its quarter-based in Indonesia, which corporate for herbal
supplement, healthy foods, drinks, and herbal raw materials.
 PT. SIDO MUNCUL BRIEF TIMELINE
3

The beginning of the Company’s

traditional herbal medicine
industry was started as a home Starting to sell their products in
industry which was assisted by other countries
three employees.

1940 2000

1951 2013

As the second Dutch colonial war Sido Muncul finally go public

broke in 1949, the pair fled to and officially become a public
Semarang and established the company; their stock code in
herbal supplement business capital market: SIDO
there named Sido Muncul,
which means "a dream come
true"
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Tolak Angin herbal is the first product

that the company formulated among the
other products, and it is the beginning of
the Herbal Supplement production since
then.
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Countries that Sido Muncul has exported to, as per 2015:

Africa United States Australia Europe

Nigeria Suriname Sidney Russia

Mauritius United States Melbourne England

Algeria Other Australia Germany

Togo Netherland

Ghana

Jordan

Other Africa
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Countries that Sido Muncul has exported to, as per 2015:

East Asia South East Asia South Asia South West Asia

Hongkong Malaysia Jeddah Qatar

Currently, Sido Muncul
has expanded its
Taiwan Brunei Dubai
market in more than
28 countries
South Korea Singapore Afganistan

Mongolia Thailand
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REASONS WHY THE

COMPANY CHOOSE TO GO
GLOBAL
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Factors to consider before running a business

globally
Before taking a step to run business globally, there are some aspects that company should
consider:
● Political – is the political regulations as well as the political stability of that foreign
countries support the business?
● Technology – will the technology be able to help removing the distance barrier for both
customer and managers assigned to the foreign country?
● Market – can the products meet the desire of the local market?
● Cost – is the financial expense is predictable, and be able to get revenue more than
expense?
● Competition – will the product be able to compete with similar products that already
existing in the foreign country?

Source: International Business: The Challenge of Global Competition by

Ball, et. all

factor drivers that makes company going global
INTERNAL
The company's
commitment to enter the
market arena global
The company's efforts to
improve the company's
image and reputation as
global players
The company's desire to
gain greater profits
The company's efforts in
obtaining the cheaper
production factors
Source: Rusli, K. G., & Andadari, R.K. Internasionalisasi Perusahaan Jamu.
9
EXTERNAL
Social Conditions
▫ The company's actions in overcoming
the decline in sales due to the similar conditions between the
influence of changes in demographic
variables in the country trading countries such as
▫ Enterprise efforts avoiding the culture, social preference,
market, etc.
economic recession in the domestic
market
▫ Utilizing the ease of export regulation
provided by the government to
encourage exports Expand The Market
the company aims to expand
▫ Enterprise efforts extend the product
life cycle of companies that have
entered the saturated phase in the its market in the foreign
market domestic countries to increase its
revenue and its reputations
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Motives for Entering Foreign

Markets
1. Desire to increase profits and
sales
2. The desire to protect these profits
and sales from being eroded by
competitors

Source: International Business: The Challenge of Global Competition by

Ball, et. all
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Increase profit and sales

▫ Enter new markets & new market creation
▫ Faster-growing market
▫ Improved communications
▫ Obtain greater profits
▫ Greater revenue
▫ Lower cost of good sold
▫ Higher overseas profits as an investment motive

Source: International Business: The Challenge of Global Competition by

Ball, et. all
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Protect markets, profits, and sales

▫ Protect market by following customers overseas
▫ Attack in competitor’s home market
▫ Using foreign production to lower cost
▫ Protect foreign market
▫ Lack of foreign exchange
▫ Local production by competitors
▫ Downstream markets
▫ Protectionism
▫ Guarantee supply of raw materials
▫ Acquire technology and management know-how
▫ Geographic diversification
▫ Satisfy management’s desire for expansion
Source: International Business: The Challenge of Global Competition by
Ball, et. all
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These are what Sido Muncul has considered…

● Political – Sido Muncul uses indirect exporting by partnering with foreign distributor in
the other countries
● Technology – the export marketing division needs to communicate with the foreign
distributor
● Market – they adapts the product with the local’s preferences, like adapting the language
into Thailand for example
● Cost – with the help of distributors, the company do not have to put extra expenses for
entering the market, doing market research, and promoting to the locals
● Competition – it has competitive advantage for being a herbal product with steady
ammount of loyal niche market
 PT. SIDO MUNCUL’s Motives for entering 14

foreign market
Enter new market & new Obtain greater profits Greater revenue
market creation Greater profit may be Company will get greater
In order to increase their obtained by either increasing revenue by simultaneously
selling, PT SIDO MUNCUL total revenue or decreasing of introducing products in
need to find new market. cost of goods solds. Based on foreign market and the export
The biggest advantage of financial report of PT SIDO market share of the national
entering new market is MUNCUL in 2016, their profits herbal industry reaches 15-
having a whole set of new increase in positive way and 20% (per 2016). PT SIDO
consumers. still increasing by the time MUNCUL still trying to
increase their export market
share in order to get greater
revenue
 PT. SIDO MUNCUL’s Motives for entering
foreign market
ASEAN Economic Community
one of impact of ASEAN Economic
Community is it helps company to sell
their product more easy in other country
15
PT. SIDOMUNCUL trying to improve
the company's image and reputation
as global players
Most of sidomuncul’s products is herbal
and not all of country has similiar product
as like that. SIDOMUNCUL’s products is
unique and it can help their company to
improve company image and get special
identity as international indonesia
medicine company
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THANK
YOU!
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sources:
▫ Ball, et. all. International Business: The Challenge of Global Competition. 2012. USA: McGraw-Hill
Education
▫ PT. Sido Muncul Financial Reports 2015 by PT. SIDO MUNCUL
▫ PT. Sido Muncul Financial Reports 2016 by PT. SIDO MUNCUL
▫ Rusli, K. G., & Andadari, R.K. Internasionalisasi Perusahaan Jamu.