Finding your Blue Ocean in Indonesia – Part 2

1 min read – 

In the previous post we have seen the theory of the Blue Ocean strategy. Let us now look at this concept practically with two examples.
Indonesia is a significant player in the global mining industry and among the world top producers of coal, tin, nickel, bauxite, gold, copper, cobalt, etc. In the process, rocks move and bump onto transfer points that need wear protection to reduce production downtime due to repair.
For some precious metals, one hour of downtime can cost up to 100 thousand USD in lost production. So when you propose a special anti-abrasive material that is more expensive than the usual product but yields an annual saving of several millions of USD, the price discussion is irrelevant.
I know a Scandinavian supplier who got this right and who is selling good volumes with high margins in Indonesia. I know a similar north American supplier who thinks that their products are too high-end and too expensive to fit a market in Asia. They don’t even try entering the Indonesian market.
More than 50 million Indonesians belong to the middle class. About 25-30 million have a purchasing power equivalent to the one in western Europe. These rich consumers buy Starbucks coffees at 4 USD per cup, elegant croissants from French Paul or Eric Kayser at 5 USD per piece.
They don’t compare to local or regional brands like Holland Bakery, BreadTalk or Bakerzin. Expensive foreign brands don’t compete on prices with local competitors. Instead they target and find consumers with money looking for higher quality and social status. They sail on their blue ocean.
Hire us at CINTASIA  as your flagship captain to help you navigate around the Indonesian blue ocean archipelago.