Assessing Business Viability for a Production Joint Venture in the Indonesian Medical Device Industry

Research Aims: This study examines the viability of a joint venture between Daenamic Health Inc., a South Korean medical device manufacturer, and PT. Kenari Jaya Perkasa, an Indonesian medical device importer, to establish a local production facility for high-end medical devices in Indonesia. Design/methodology/approach: The research follows a structured approach involving the analysis of business model compatibility, external market dynamics, and the financial and operational viability of the joint venture. Employing qualitative analysis from discussions, VRIO Framework, and quantitative analysis from Analytic Hierarchy Process (AHP), the study evaluates market conditions and strategic fit between the partners. Research Findings: Findings indicate that Daenamic Health Inc. and PT. Kenari possess complementary strengths, forming a synergistic partnership poised to become a leading local brand for high end medical technology, as well as enabling access to more export market. Motivated by the need to reduce Indonesia's dependency on import, especially highlighted during the COVID-19 pandemic, this venture aligns with government policies to enhance local manufacturing and healthcare infrastructure. However, challenges such as navigating regulatory landscapes, managing a layered cost structure, and training local human capital must be addressed. Theoretical Contribution/Originality: Preliminary assessment for the joint venture’s establishment helps the partners to comprehensively assess their internal situation both as individual business and as future partners, prior to capitalizing the opportunity that comes with Indonesia’s vision towards healthcare self-sufficiency. As a result, partners’ synergistic strengths and aligned individual business needs positions the venture for competitive pricing and expansion in Southeast Asia and beyond. Keywords: Medical Devices; Joint Venture; Local Manufacturing; Market Dynamics; Strategic Fit