Summary:

Damar International, an Indonesian firm importing handcrafts was established in Burke, Virginia
to capitalize on Soemantoro’s international experience and contacts. Currently, Dewi
Soemantoro is the president of the company and Ronald is the vice president. With strong
commitment from Dewi’s family members, Damar International imports clothing, high-quality
brassware, batik accessories, wood carvings, and furnishings from Indonesia to the U.S. The
financing for the company has been limited due to borrowing from friends, family, and relatives
in Indonesia. Thus, its current annual sales revenues are between $20,000 and $30,000.
Unfortunately the company has yet to reach the break-even point. However, the sales and
revenue have expanded more rapidly than predicted in the business plan.

To keep costs low and strengthen the company, Damar International is pursuing a niche
strategy. In the sales of handcrafted artifacts to boutiques, Damar has found no competitors. In
addition, once a week, Dewi checks with her family and relatives to adapt traditional products to
American tastes, and to report new orders and check the progress of previous ones. The firm’s
greatest strength allows it to fill a vacant market “niche” with extremely limited capital and labor
resources; it’s clearly the result of many connections from her family and relatives. Thus, allows
Damar International to supply unique products without the use of a middleman. As Damar
International grows its primary concerns lay in potential shipping delays, exchange rate
fluctuations, and resources for expansion.

Question 1: Evaluate the alternative expansion strategies for damar

international in the united states?

Three alternatives:

 Do nothing.
 Look for additional investors that won’t take a large stake in the company.
 Work on business to business strategies in order to receive funds quicker.
Alternative #1

Importing to the U.S market is a challenge for any company. Damar has taken up this
challenge and has been importing to the United States for several years. Currently, Damar has
several advantages in their business strategy. For example, Damar International is pursuing a
niche strategy and there are no present competitors. In addition, Damar is constantly adapting
traditional products to meet their intended target market and their niche allows them to supply
unique products without the use of a middleman. Also, Damar's financing structure has its
advantages, whereas they can operate without letters of credit which saves a hassle when dealing
with paperwork.

Even though Damar International has done well in the US market so far, the company is
currently dealing with red tape involved in the importation of products due to regulations. In
addition, they may face financial problems due to only having family and friends investing in the
company. Despite these weaknesses, its sales and revenue have expanded more rapidly than
predicted in their original business plan and the partners are satisfied with the current results of
the company. While Damar has the option for further expansion due to business contacts, the
amount of resources on hand may pose a problem. However, they have continually sustained
themselves through investments with family and friends. Thus, doing nothing could be the best
course of action.

Alternative #2

Currently, Damar is worried about sustained expansion of their business due to lack of resources.
Traditionally, there are many opportunities for a business to receive financing. Damar
International is a small company, having revenues between $20,000 and $30,000. Thus, they will
be eligible for venture opportunities that various organizations offer, one being the Small
Business Association. As Damar International is a minority owned business, they have a higher
chance of attracting a venture capital investment. Traditional bank loans are another option,
which wouldn’t require Damar to give up control of their company. In addition, angels are a last
option which can not only provide a decent investment but offer additional advice.
 In addition to English Soemantoro speaks French, German, and Italian, which can
contribute to the companies search to locate additional angels in other various countries. This
also makes expansion, and seeking further investment easier by eliminating language barriers. In
addition, Dewi has experienced varieties of culture, which may make expansion into other
markets an easier task. By taking advantage of her abilities, the company can secure additional
funds, thus being able to take on attractive opportunities that present themselves.

One of the most important lessons Damar International has learned is how participating
in a variety of shows is particularly helpful in attaining personal contacts. While unlikely, it’s
also an opportunity for meeting a potential investor that may offer financial advice and
investment in Damar. One of their greatest mistakes was not attending a trade show in New
York. In this regard, Damar may have missed out on a great investment opportunity. Thus, it’s
our worldly connections that eventually lead to new competitive opportunities.

Alternative #3

Historically, Damar’s strategy is to import clothing, high-quality brassware, batik

accessories, wood carvings, and furnishings from Indonesia to the U.S. In addition, Damar has a
small California firm marking some of their imports on the west coast. While focusing on their
small niche, the revenue of the company has been better than expected. However, through a
contact established by a friend in France, Soemantoro is planning to additionally import
handmade Fresh and silk blouses. By quickly taking action Soemantoro may be able to secure
possible grounds to negotiate the amount a buyer deposits. Traditionally, the amount required is
only ten percent with ninety percent due thirty days from shipment. Damar International being
recognized as a company that maintains multiple country imports may increase trust among their
current business partners. Thus, a negotiation may be possible to the amount they deposit in
order to decrease working capital. Thus, the company will have additional money for further
expansion.

Commercial risk and political risk is a barrier for any international companies importing
to different countries. To reduce the risk and build trust, Damar International can give an option
to family, friends to manufacturer products in America. In doing so, this will boost relations with
their current business partners even further and reduce costs. Damar already has a plant in the
U.S. the aspects of this plant are unknown. However, they can possibly create a section to
manufacture Indonesian products. In this regard, they can negotiate and reduce their political and
commercial risk, thus, reducing overall costs making way for more revenue for future expansion.

Question: 2 Discuss the Damar’s expansion alternatives in Indonesia

and France and their implication for the U.S market?

The Damar of today provides a wide range of effective services and supports. We help those
with severe autism learn to talk. Youth with severe behavioral challenges improve to the point of
returning to a traditional school setting. An adult diagnosed with intellectual disabilities exceeds
the expectations of all who know them. Many say that a visit to Damar Services' campus in
southwest Indianapolis feels more like a college tour than a visit to a residential facility. At
Damar, people are filled with hope — the hope of achieving their greatest potential. But it wasn't
always so. When Damar Services was founded in 1967, many people with developmental
disabilities or severe behavioral challenges experienced life in state mental institutions.

Few had any hope of achieving some independent living or reaching their potential. It was
during this period that Beverly and Theodore Farkas, parents of David and Martha Farkas, two
children with developmental disabilities, faced a huge dilemma. They could not care for their
children in a home setting. Alternatives beyond a state institution or out-of-state residential care
were not available. These courageous parents knew that an alternative should be in place.
Together with likeminded professionals and social workers, they founded that alternative.

 The first alternative to sustained expansion of its Indonesian handicraft business

because the firm does not currently have the resources to organize large scale
cottage industry in Indonesia.
 The second way to plan import from the France handmade French porcelain
and the silk blouses.