Name: Raymond Yonathan Hutapea

NIM: 29320106
Assignment Title: Global Strategy and Organizational Class Assignment

1. Background
PT Indofood CBP Sukses Makmur Tbk (“ICBP” or the “Company”) is one of the
established and leading players in the consumer branded products sector. This
company is engaged in diverse business categories, including noodles, dairy,
snack foods, food seasonings, nutrition and special foods, and beverages. ICBP
also operates a packaging business, producing both flexible and corrugated
packaging to support our main businesses.
To expand its market abroad, PT Indofood tries to open their market in Saudi
Arabia because the company sees opportunity on increasing sales volume in
that country. They also planned to buy a factory to reduce supply chain cost
from Indonesia. One of the most promising factory is developed by Pinehill
because this factory use a tasty colorful packaging and using premium
elements of Indomie ‘s tasty noodle to create Indomie in Saudi Arabia.

2. Vertical Integration
Vertical integration is when a company owns or controls its suppliers,
distributors, or retail locations to control its value or supply chain. Vertical
integration benefits companies by allowing them to control the processes,
reduce costs and improve efficiencies. In this situation, Indofood tries to
control the Pinehill Factory as Indomie supply chain by prioritizing its core
competencies, economic of scale, economies of scope, and transactional cost.

3. Diversification
Diversification is a corporate strategy to enter into a new products or product
lines, new services or new markets, involving substantially different skills,
technology and knowledge. For Indofood, their diversification strategy would
be in product-market diversification strategy because they need diversify their
product amongst competitor and by playing their business abroad, it means
that they also have geographic stragtegy.
4. Geographic Diversification and Market Expansion
Indofood has geographic diversification by opening a new market in Saudi
Arabia by the aid of Pinehill factory. It also successfully expand their market by
selling Indomie in Saudi Arabia.