1. Navigating Through Social and Economic Crisis Vanquish Syndicate

2. A leading Indonesian manufacturer of cosmetics and traditional herbal supplements A local success story and had even been able to expand in surrounding countries

3. Situation Financial Crisis Unpredictable Prospects Immediate Decision, Pricing, Material Cost, Distribution

4. Macro Condition Exchange rate of IDR against USD  IDR 2.383 to IDR 10.000 IDX lost 95% of its value between its height of 1997 and May 1998 Unemployment rate is approaching 40% Foreign direct investment had dried up 50% of all bank loans are non-performing Wage increases did not keep pace with high inflation Significant decline in disposable income 94.1% of Mustika Ratu revenue came from cosmetics products which possessed a monopolistic market structure

5. Micro Condition A need to raise up tp 40% due to the increase of material cost The stock of Mustika Ratu has declined dramatically in tandem with IDX Plans for further expansion of manufacturing facilities had been put on hold Applying the conservative cash management Saving on short-term deposits at foreign-owned bank Threat from foreign cosmetics companies through marketing effort and product competitive price

6. Illustration Normal and Crisis Situation in Domestic Market Decrease demand Increase total cost Increase price Lower maximum profit

7. Illustration Normal and Crisis Situation in International Market Decrease demand; not as much as domestic market Increase total cost Increase price Buying power is higher than domestic market Decrease in maximum profit; not as much as domestic market

8. Conclusion & Recommendation Financial crisis in 1997 had adverseley hit Indonesia’s macroeconomic and firm’s microeconomic Suggestion for domestic market Not to increase the supply quantity Maintain the market or demand with minimum price increase Decrease the cost by reducing advertising cost, focusing on direct sales, CSR and PR programs Continue with the plan of modernizing production facilities to reduce variable cost on long run

9. Conclusion & Recommendation Suggestion for International market Focus the expansion effort in regional market where brand awareness is better Expansion could be done through joint venture with multinational company to reduce cost Maintain the existing counters in Middle East Hold the expansion to other market while keep monitoring other international market

10. THANK YOU