| Course | GB525 Global Business Environment |
|---|---|
| Unit | Unit 2 |
| Paper type | Country brief |
| Length | About 940 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | MBA |
| Updated | October 2026 |
Free sample paper for GB525 Unit 2
Contract Factory or Own Plant in Central Java: A Unit 2 Country Brief Held to Four Conditions
[Student Name]
Purdue University Global
GB525: Global Business Environment
Unit 2 Country Brief
[Instructor Name]
[Date]
The furniture maker, its volumes and the cost figures are composite and illustrative; the Indonesian and US rules described and the sources cited are real.
To: Vice President of Operations, Pamlico Outdoor Living
From: International Business Analyst
Subject: Indonesia sourcing: contract factory or own plant
Summary
I recommend contract manufacturing in Central Java for the first two years, with an option to open our own plant in an industrial estate once annual volume passes about 18,000 pieces. Land rules and the minimum investment for a foreign-owned company make an own plant a large, fixed commitment, and labor costs favor neither option much. The deciding condition is timber legality: certified contract factories already hold the verified supply chains that US import law requires us to rely on, and building our own would take more than a year.
Condition 1: Land
Foreign-owned companies in Indonesia cannot hold freehold land. A foreign-invested company can hold a right-to-build title or, more commonly for a manufacturer, lease a plot or a ready-built factory inside an industrial estate. Several estates near Semarang offer ready-built units with power, water and customs services.
For Pamlico, an own plant would be a long lease, likely ten years or more, for a building we would fit out ourselves. The lease itself is manageable, about $9 a square meter a month for a ready-built unit in the composite quotes we received, but it is a fixed cost that runs whether hotel orders arrive or not.
What it means for the choice: land rules do not block an own plant, but they turn it into a long fixed commitment, which favors waiting until volume is proven.
Condition 2: Labor
Indonesia sets minimum wages each year by province and by regency or city, and Central Java's are among the lowest on Java. In our composite figures, an experienced furniture worker near Semarang earns about $260 a month including allowances, against about $340 in the industrial areas outside Jakarta. Turnover in furniture factories runs high after the annual holiday, when some workers do not return.
Both options face the same labor market. A contract factory carries the hiring, training and severance obligations; an own plant would carry them directly. Indonesian employment law sets severance by length of service, which makes reducing a workforce costly once it is built.
What it means for the choice: labor cost does not separate the options, but an own plant would add severance exposure if hotel demand fell.
Condition 3: Timber Legality
This is the condition that decided the brief. Indonesia runs a national timber legality assurance system that verifies the origin of timber through the supply chain, and teak from certified sources carries documents that trace it to legal harvest. On the US side, the Lacey Act makes it unlawful to import plant products, including wood, taken in violation of the laws of the country of harvest, and requires an import declaration naming the species and country of harvest (16 U.S.C. § 3372, 2024). An importer who fails to exercise due care can face forfeiture of the goods and penalties even without knowing the timber was illegal.
Under US import law the timber's legality becomes Pamlico's problem whichever factory cuts it, so the question is who can prove the chain of custody today.
Established contract factories in Central Java already hold legality certification and audited supplier chains for plantation teak. An own plant would need to qualify its own suppliers, pass verification and build records, which local consultants estimate at twelve to eighteen months.
What it means for the choice: contract manufacturing lets Pamlico ship with verified documents from the first order. An own plant would delay the first legal shipment by more than a year.
Condition 4: Investment Licensing
Indonesia now issues business licenses through an online, risk-based system, and most manufacturing is open to full foreign ownership under the current investment list. A foreign-owned company must, however, commit a minimum investment of more than IDR 10 billion, roughly $620,000 at current rates, excluding land and buildings, for each line of business at each location.
For Pamlico, the minimum is affordable but significant: about 40 percent of our planned first-year purchases from Indonesia. It would be tied up in equipment and working capital before the plant produced anything.
What it means for the choice: licensing is straightforward, but the minimum investment adds to the fixed commitment an own plant requires.
Conditions Left Out
Currency, political stability and tariffs matter to Indonesia as a whole but not to this choice, because they affect both options equally. Ghemawat (2001) argues that the distance that matters is specific to the industry and the decision, and this brief keeps only the conditions that distinguish the two options.
The Recommendation and Its Trigger
Sign with two certified contract factories near Jepara and Semarang, so that neither holds all our volume. Require each to share its timber legality documents for every shipment and accept an annual audit by a third party we choose. Review the own-plant option when annual volume passes about 18,000 pieces, at which point the fixed lease and minimum investment would be spread over enough units to compete with the contract price, and when we have two years of audited supply chain records to build on. Khanna et al. (2005) recommend that firms entering emerging markets first use local partners who already fill institutional gaps, and in this case the gap is verified timber supply.
References
Ghemawat, P. (2001). Distance still matters: The hard reality of global expansion. Harvard Business Review, 79(8), 137-147.
Khanna, T., Palepu, K. G., & Sinha, J. (2005). Strategies that fit emerging markets. Harvard Business Review, 83(6), 63-76.
16 U.S.C. § 3372 (2024). https://www.law.cornell.edu/uscode/text/16/3372
The Purdue Global GB525 Unit 2 instructions
GB525 Unit 2 asks you to prepare a country brief that supports a specific business decision. Address it to an executive, putting your recommendation and the condition behind it in a short opening summary. Choose the few conditions that actually change the decision, give each its own section, and end each section with a line on what the condition means for the choice. Explain briefly why other conditions are left out. Close with the recommendation and the trigger that would change it. Expect about four pages, citing reliable sources in APA 7.
How the GB 525 Unit 2 example is put together
The summary recommends contract manufacturing for two years and names timber legality as the deciding condition. The land section explains leases inside industrial estates for foreign-owned firms. The labor section compares composite wages near Semarang and outside Jakarta and notes severance exposure. The timber section explains Indonesia's legality assurance system and the US Lacey Act's import declaration and due care rules, and the highlighted sentence places the risk on the importer. The licensing section covers risk-based licensing and the minimum investment for foreign-owned firms. A short section explains why currency and tariffs are left out, citing Ghemawat, and the recommendation cites Khanna and colleagues on local partners.
GB525 Unit 2 rubric: what earns full points
GB525 rubric points for this brief go to conditions chosen for the decision and a recommendation tied to the one that decides it. A summary that gives the answer first earns early credit. Each section should end with what the condition means for the choice. Accurate rules, such as foreign land tenure and US timber import law, show research care. Naming the deciding condition carries significant weight. Explaining what was left out shows judgment. A trigger for revisiting the decision completes it. Ghemawat on distance, Khanna and colleagues on emerging markets and the Lacey Act supply the brief's APA 7 references. A trigger stated as a measurable figure, such as an annual volume, gives the executive a clear point at which to revisit the choice.
Common GB525 Unit 2 mistakes, and how to avoid them
Many GB525 Unit 2 briefs cover every heading in a country profile and never say which condition decides the choice. Others give cost comparisons without the legal conditions that bind both options. A frequent gap is the importer's liability: under US law the legality of imported wood is the buyer's concern, whoever made the product. Some writers end without saying what would change the answer. Choose the conditions that bind, tie each to the choice, name the deciding one, explain what you left out and set a trigger. Closing each section with a single sentence on the choice, as this sample does, keeps the brief from drifting into a country profile. A short paragraph on conditions left out, with the reason each was dropped, shows the selection was deliberate.
Get a GB525 Unit 2 example written to your instructions
A brief is only as focused as the decision behind it, so say which choice the firm faces, alongside the country your Unit 2 prompt sets, its instructions and rubric. One custom brief limited to the conditions deciding that choice is written within 24-48h, free as a first sample, with rates and duties dated to the week of writing. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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- GB525 Unit 1: Discussion Board Post
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- GB525 Unit 4: Currency Exposure Memo
- GB525 Unit 5: Political Risk Assessment
- GB525 Unit 6: Seminar Reflection
- GB525 Unit 7: Case Analysis
- GB525 Unit 8: Regulatory Comparison
- GB525 Unit 9: Location Recommendation
- GB525 Unit 10: Executive Summary
- GB520 Unit 2: Employment Law Analysis Memo
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- GB513 Unit 2: Data Summary Analysis
GB525 Unit 2 questions, answered
How many conditions should a country brief cover?
As many as change the decision, which is often three to five. A brief covering every standard heading reads as a profile, and graders in GB525 tend to mark profiles down. Choosing is part of the analysis, so a sentence explaining why other conditions were left out usually earns more than covering them at equal length.
Should the brief use a PESTEL framework?
Only as a checklist behind the scenes, unless the prompt requires it on the page. A PESTEL scan helps you find candidate conditions; the brief then keeps the ones that bind and organizes around them. If your rubric names the framework, use its headings but let the length under each reflect how much that heading matters to the firm.
Should the brief include a recommendation?
Usually, since a brief exists to serve a decision. Put the recommendation in the summary, tie it to the condition that drives it, and say what would reverse it. If your prompt asks only for a profile of conditions, end instead on the condition that most constrains the firm, which keeps the brief pointed at a choice rather than drifting into description.
Where can I find a free GB525 Unit 2 sample paper?
This page carries a full GB525 Unit 2 country brief on Indonesia for a furniture maker choosing between a contract factory and its own plant, with four conditions, a recommendation and APA 7 references.
Why does timber legality decide the brief?
US law makes it unlawful to import wood taken in violation of the harvest country's laws, and an importer without due care risks forfeiture and penalties. Certified contract factories already hold verified supply chains, while an own plant would need more than a year to build them.