Essay on Swot Analysis Of Indonesia 's Furniture Industry

Essay on Swot Analysis Of Indonesia 's Furniture Industry

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5. SWOT Analysis of Indonesia’s Furniture Industry
This section describes the strengths, weaknesses, opportunities and threats (SWOT) analysis of Indonesia’s furniture industry to identify the competitiveness of Indonesian furniture product and the condition of Indonesian furniture industry to meet EU market access requirements.
Based on study that was conducted by Lord, Oktaviani and Ruehe (2010), the strengths, weaknesses, opportunities and threats of Indonesia’s furniture industry are as follows:
1. Strengths
Natural resources abundant is one of the most competitive advantage which is own by Indonesia’s furniture industry. Supply of raw materials such as wood, bamboo and rattan are available and very easy to get. Moreover, labour cost for this industry is also low, good workmanship especially in carpentry and manual carving become another great advantages for this industry. Furthermore, this industry also has a furniture association (ASMINDO) which has large network to import destination countries.

2. Weaknesses
Indonesia’s furniture industry needs relatively long time in delivering its product to international buyer. This could be caused by many factors such as, inefficient bureaucracy and lack of infrastructure in transportation. Another factor is the producers tend to have different standard, especially in producing parts of furniture, this could hindrance the ability to interchange parts between producer and caused inefficiency in productivity. Furthermore, there is lack of Voluntary Partnership Agreement (VPAs) between Indonesia and EU especially for the implementation of Forest Law Enforcement Government and Trade (FLEGT) and government laboratory such as BPMBEI which conduct testing for furniture product is not yet int...

... middle of paper ...

...ade of solid wood.
The challenges that Indonesia’s furniture industry has to face mostly concentrated in supply side constraints. Exchange rate and cost of production have a significant impact on Indonesian furniture export because it will affect export price of this product. However, non-price factors such as design, quality, and delivery reliability that must be more considered by the Indonesia’s furniture industry because these factors have consistently decrease Indonesia’s export to the European Union market.
In increasing Indonesia’ furniture export to the EU required a solid cooperation between Indonesia’s economic operator such as government, industries and association. They have to work together to increase the capabilities of the furniture industries especially in strengthen the quality, design and market access of the furniture products to the EU market.

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