The political arena in Indonesia has its specifics. While Danone mostly operates in the countries with stable political and legal systems, a constitutional democracy such as Indonesia is a politically attractive developing market. After being subject to dictatorship until 1998, Indonesia became a democratic state with the New Order Regime. Islam, which is the major religion in this country, affects political decisions immensely. Politically, it is a secular state, even though social decisions are subject to religious concern.
Among the major possible political challenges are attacks, terrorism or even civil war, because poor states are found to be at more political risk. However, the state very actively strives to provide safe political environment for businesses. The government promised to grant licenses to companies for drinking water concessions. However, national economy is greatly affected by the decision of the government to cancel licensing for private water concessions. If any of large public players collapsed, mass unemployment and financial crisis would be the outcome. The process began with the cancellation of Act 7 from 2004 on Water Resources and proceeded with an annulment of Law 11 from 1974, which means that entering drinking water industry is much easier for private entities now. As a result, international investments flooded the sector. Lastly, political and economic situation surrounding oil prices may create challenges or new opportunities for the transportation of AQUA Danone.
Technological
The answer to the technological dilemma lies in a shift towards different technology. Water filters would allow people to drink the water from the tap and recycle it. AQUA Danone with its fierce marketing campaigns can make use of this invention and offer installation and servicing of water filter at homes and offices. As a developing country, Indonesia is still struggling technologically, and bottled or filtered water is still absent in many rural areas. Unfortunately, many technological developments in Indonesia are slow in pace due to floods and earthquakes.
A recent project of German Federal Ministry of Education and Research and Indonesia has managed to develop an underground hydropower pilot plant in a karst area of Java. This invention will make it possible for companies such as AQUA Danone to extract water from underground without upsetting the already damaged water resources. Another technological improvement that will benefit AQUA Danone in East Indonesia is the development of new transportation systems led by the government. This initiative may allow to bring factories and drinking water to the currently unreachable parts on Indonesia.
ring factories and dirnking water to the unreachable parts on Indonesia.new transportation systems led by the be a solution. Bibliography
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