The German company KHS GmbH is a supplier of filling and packaging systems based in Dortmund, Germany. The company offers filling lines for glass and PET bottles, kegs, and cans for the beverage, food, and non-food industries. KHS is a wholly owned by Salzgitter Klöckner-Werke GmbH, Germany.
While the product is selling well the high production costs in Germany mean that the profit margin is small and the firm’s shareholders have requested that management should investigate ways in which the production costs can be reduced.
Management have been investigating moving production to other countries with lower labour costs. Their initial country scan has identified Indonesia as showing promise as possibilities. However, as the products are dedicated to the German market and as the local business partner expects on-time delivery, significantly increased transportation costs have to be taken into account.
1. Summarise briefly, Indonesian economy using available resources. You can use Tables and Charts. Use proper figure and table capture. Discuss the Charts and Tables.
2. Discuss the advantages and disadvantages of establishing a production operation in Indonesia In particular what risks would the company (KHS) face
3. Discuss the importance of Cultural differences between Indonesia and Germany and what is the risk for the company due to cultural differences.
This assignment is worth 20% of the assessment marks for this subject. Assignment has to have less than 2000 words.
Your report needs to be clearly written, well structured and well presented. You should acknowledge all sources used and provide references where appropriate. References must be presented in approved standard form (e.g. Harvard) and the reference list presented alphabetically by author. Please note that the software program Turnitin may be used in assessing your assignment.
Assignment has to have short analysis of both German market (related to company business) and advantages of moving part of the bushiness to the Indonesia.
For example Assignment can be organised as:
TABLE OF CONTENT
INTRODUCTION 2-3 sentences (what it is about)
COMPANY OVERVIEW (5-6 sentences about company, and why they want to go offshore)
ECONOMY (status of economy )
ECONOMY FORECAST (some forecast
INFRASTRUCTURE (existing infrastructure that will be used)
TRADE POLICY (some rules applied in Indonesia)
Cultural differences and Risks (Economical and Political)
Advantages of Moving the Production Plant to Indonesia
Disadvantages of Moving the Production Plant to Indonesia
Bar Charts, Graphs, Tables (Be sure that you write proper capture below Figures, and at the top of tables) are useful way to present information.