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TNT Ltds Logistics Services in Asia A The Strategy Case Solution

Solution Id Length Case Author Case Publisher
2594 532 Words (3 Pages) Carin Isabel Knoop Harvard Business School : 397017
This solution includes: A Word File A Word File

The Indonesian market did not have substantial competition at that time although significant investment was required in facilities and equipment since there was nominal consumption of higher margin wester products. In addition, the deregulations by the government have also attracted foreign investment to make this sector more sophisticated.

Following questions are answered in this case study solution

  1. How attractive was Indonesia as a market at this stage? In particular, how significant would be the impact of deregulation? What were the risks and opportunities, and what type of challenges would TNT encounter once there?

  2. If TNT were to consider Indonesia as a priority, would a JV make sense? Or should TNT wait until deregulation enable it to take a 100% stake?

  3. If a partner was desirable, was PT Tigaraksa the best option? If PT Tigaraksa was the best partner, what kind of deal should be struck? How willing would PT Tigaraksa be to let TNT run its logistics operations, given that some of the original clients of the logistics JV would JV would be existing PT Tigaraksa clients?

  4. If TNT Logistic Asia decided to enter Indonesia at this stage, how should it review the strategy and timing set for China and Thailand? Could it afford to break off discussions and risk its reputation in these two countries as well as put on hold a fairly eager customer base in Thailand?

  5. If TNT decided to enter all three markets simultaneously, would TNT Logistics Asia have the resources needed to transform opportunities into success? Should it stick to its very disciplined schedule?

Case Analysis for TNT Ltds Logistics Services in Asia A The Strategy Case Solution

The deregulation has allowed TNT to look at the Indonesian market with more focus which could have a market potential of A$650 million. The risks include lack of professionalism in the transport industry, as driver abandon load mid-trip for more profitable business. However, the opportunities still exist since there is lack of competition in a market that is receiving a considerable foreign direct investment from MNCs growing at 20% rate. Lastly, infrastructure challenges also exist where the road infrastructure is not ideal.

2. If TNT were to consider Indonesia as a priority, would a JV make sense? Or should TNT wait until deregulation enable it to take a 100% stake?

A JV would be a good option to enter the Indonesian market since TNT, allowing TNT to access the local market expertise of PT Tigaraksa. By doing so, TNT would also be able to exercise majority control since PT Tigaraksa is willing to provide that while using its own brand name.

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