International Management

Chelsea Furniture Company

Business Expansion Plan

Presented by

Table of Contents:

Executive Summary (Introduction)----------------------------------------------Page 3

I. Company description

a. Operation /History------------------------------------------------------------Page4

b. Reasons of expansion of our business-------------------------------------Page 5-6

c. Our Future Business Expansion ------------------------------------------Page 6-7

II. .Entry Strategy/ Business Environment--------------------------------------Page7-13

a. Entry strategy

b. Chelsea Modified Value Chain

c. Business environment ---Politics

---Other factors

III. Cultural Dimensions

a. Cultural profile------------------------------------------------------------Page 13

b. Indonesian management style ------------------------------------------Page 14

c. Communication problem and solution---------------------------------Page 15

d. Local reception-- -------------------------------------------------------- Page 17

VI. Concerns of our operations in Indonesia:----------------------------------Page18-19

a. Local Community Concerns

VII. Organizational Chart:--------------------------------------------------------Page 20

a. International Division Structure

VIII. .Control Issues:-------------------------------------------------------------- Page22-26

a. External Control Issues

b. Internal Control Issues

Conclusion--------------------------------------------------------------------------Page 27

Reference----------------------------------------------------------------------------Page 28

Executive Summary:

Chelsea is a furnishing company. We started in the 1940s by the entrepreneur Ingvar Kamprad with his 3 fundamental principles are "Low price" "high quality", and "Good for earth" and this is our mission statement. Our fist store is in San Francisco in 1943 and we had expanded our business in west coast area, Los Angeles and San Diego. We also had made factory in 1948 in the suburbs of Los Angels. In 1960's we made inroads in to East Cost area which was New York, and Boston. At present, we have 13 stores, 3 factories, and we have 7100 employees in United State of America. Now, we believe that it is time to go international market for the following reasons: Indonesia is central in Asia and Oceania place so, this branch will be able a footing branch to develop Asian Oceania markets, including China, Japan, India, and Australia. Next, Indonesia has extensive natural resources such as copper, gold, iron and wood. Finally, we can take advantage of cheaper cost of labor and land. However, to succeed in an Indonesian market, we must not only master the political and economical business environment but also we need to understand Indonesia culture, their management style and local concerns. In addition, we must have better internal and external control more than ever so that our management functions to make sure those corporations are working towards our objectives. Indonesia is currently undergoing a radical transition towards becoming a more modern and efficient economy. We believe that if we have a proper understanding of cultural, social and legal-regulatory environments, business and investment in most parts of Indonesia is relatively safe and profitable.

1. Company Information: Operation and History

Chelsea is a furnishing company. We started in the 1940s by the entrepreneur Ingvar Kamprad, who still has control. His 3 fundamental principles are "Low price" "high quality", and "Good for earth" and this is our mission statement.

Fist store is opened in San Francisco in 1943 and we had expanded our business in west coast area, Los Angeles and San Diego. We also had made factory in 1948 in the suburbs of Los Angels. In 1960's we made inroads in to East Cost area which was New York, and Boston. At present, we operate 13 stores, 3 factories, and we have 7100 employees in United State of America as shown below.

Picture 1

*Picture 1 explains location of our 13 stores and 3 factories. West cost area has 4 stores and 1 factory. East cost area has 5 sores and 1 factory. South area has 4 stores and 1 factory.

Red Point is Store

Blue Point is Factory

Our company made a great expansion by establishing a number of new stores within the states every year during the last decade. At this time, we decide to go international. This is because, we reduce price of productions and also make new market.

Reason for Why We to Go International(Indonesia):

At present, U.S. furniture market has been already in mature state, so it is difficult to increase profit in here by doing the same thing as competitor does. Beside that, oil price will have become more expansive form now on. Accordingly, our product cost also must be raised and our management will be expected to be pressure by manufacturing cost. As a these facts, we challenge to go international market, and we decide to go to the Indonesia because of 3 reasons.

First of all, Indonesia located central in Asia, Oceania area. This country located in the Asian Archipelago, the world's largest archipelago, between Indochina and Australia, between the Indian and Pacific Oceans. Indonesia's 18,108 islands, of which about 7,000 are inhabited, are