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Syndicate 5
Bibhushan Raj Joshi (29118701)
Hawa Firdausi K (29118145)
Jonathan Febrian (29118124)
Rodamas Profile
• Rodamas (means “golden wheel”) is an
Indonesian manufacture company that
is active in several line businesses.
• Started in 1959 by Tan Siong Kie, a
Chinese Indonesian, in Jakarta, under
the name Ho Hoa Trading Company
Limited. Currently led by Tan Siong Kie’s
son, Mucki Tan.
• Rodamas was established as a response
of Indonesia’s rising industrial
development after its proclaimed
independence, which focused on import
trade and developed partnership with
foreign manufacturers to produce basic
products, starting from roof material
and gourmet powder.
• Rodamas has now diversified its
product, consist of:
2
Business Problem
• Due to changing environment, Rodamas started to
think of moving away from its traditional business
model.
• Challenges;
Capabilities
• Rodamas does not own any proprietary competencies
Rising competitors
• Rodamas has given up some market share to other
competitor (eq. Unilever)
Saturated market
• Rodamas line businesses have natural limits of growth
Diversification strategy
• What strategy should Rodamas pursue to secure its
place?
3
Alternative Strategies
4
Justification for Diversifying
5
Real estate business
6
1. Entering the property sector
Industry Attractiveness Test – Porter’s 5 Forces Analysis
7
Cost of Entry Test: Real Estate Business
Better-off Test
Available resources that needed to enter the industry
Tangible Intangible
Financial resource ✔ Human resource
Organizational resource Innovation resource
Physical resources ✔ Reputation resource
Technological resource
8
Real estate business (Not Recommended)
PROS CONS
● Favorable land site available with the company in ● Lack of strong brand name
Jakarta ● Government regulations.
● Rapid expansion & potential demand in Jakarta ● Unfavorable tax regime
expected ● Volatile industry
● Existing connections with the local government ● High competition. Rodamas would be a small player.
officials ● Getting further land sites would be a problem.
● High investment
9
Entering Property Sector
External
Economy 0,05 2 0,1 Related and depend from buying power of customer
Political/Legal/Governmental 0,05 1 0,05 Need to understand about legalization and tax rate
Social/Cultural/Demographic/Environm
ental 0,1 2 0,2 According how many population in target area
Technological 0,1 2 0,2 The strategy is an average response in technological factor
Competitive 0,1 3 0,3 Many strong existing competitor who had experienced
Internal
Management 0,05 1 0,05 The strategy is a poor response to internal management
Marketing 0,2 1 0,2 Low brand recognition
Finance/Accounting 0,05 2 0,1 The strategy is an average response to financial factor
Production/Operations 0,05 2 0,1 The strategy is an average response to operational factor
Research and Development 0,05 1 0,05 The strategy is a poor response to R&D factor
Computer Information Systems 0,2 2 0,4 The strategy is an average response to IT system
Total 1,00 1,7
10
labor-intensive manufacturing
11
Move into labor-intensive manufacturing
PROS CONS
● In-house capability for end to end value chain ● Non-competition clause in certain businesses
Management ● High existing competition
● Success of many local firms ● No starting base
● Understanding of local market & Expertise in distribution ● Low market entry barrier
● Breadth of experience across a variety of product
categories
Strength Opportunities
Weakness Threat
External
Economy 0,05 2 0,1 Salary and labor are highly depent on current economy
Political/Legal/Governmental 0,05 1 0,05 Bundling promotion response is less effective on political situation
Social/Cultural/Demographic/Environm
ental 0,1 3 0,3 Allows the workders to get jobs and build trust in the organization
Technological 0,1 2 0,2 The strategy is an average response in technological factor
Competitive 0,1 3 0,3 Bundling promotion gives an advantage in competitiveness
Internal
Management 0,05 1 0,05 The strategy is a poor response to internal management
Marketing 0,2 1 0,2 Low brand recognition
Finance/Accounting 0,05 2 0,1 The strategy is an average response to financial factor
Production/Operations 0,05 4 0,2 The strategy is an average response to operational factor
Research and Development 0,05 1 0,05 The strategy is a poor response to R&D factor
Computer Information Systems 0,2 2 0,4 The strategy is an average response to IT system
Total 1,00 1.95
13
Internationalization via foreign direct
investment
14
Industry Attractiveness Test –
3. Internationalization via foreign direct investment
PROS CONS
Internationalization
Key Factors Weight Notes
External
By joining promotion for online shop/game, it will create positive demand in
Economy 0,05 3 0,15 economic scope
Political/Legal/Governmental 0,05 3 0,15 Bundling promotion response is less effective on political situation
Social/Cultural/Demographic/Environm
ental 0,1 3 0,3 International name provides a good reputaionand trust in the society
Technological 0,1 3 0,3 The strategy is an good response in technological factor
Competitive 0,1 3 0,3 Internationalization can help to gain competitive advantage
Internal
Management 0,05 3 0.15 The strategy is a good response to internal management
Marketing 0,2 4 0,8 Internationalization helps to build name and reputation
Finance/Accounting 0,05 2 0,1 The strategy is an average response to financial factor
Production/Operations 0,05 3 0,15 The strategy is an average response to operational factor
Research and Development 0,05 4 0,2 The strategy is agoodr response to R&D factor
Computer Information Systems 0,2 3 0,6 The strategy is an average response to IT system
Total 1,00 3.2
16
Internationalization (Recommended)
● This strategy provides a global reach and gives the organization large room to explore
● Allows limited financial risk
● Provides huge potential in the future
17
Focus on distribution business
18
Industry Attractiveness Test –
4. Focus on distribution business
PROS CONS
Since their main customers are from Indonesia, their previous knowledge will be
helpful
Rodamas has been active in the manufacturing and distribution of a long time, so
definitely, their distribution and sales activities will be useful
Rodamas is somewhat relevant with the competitors in their own areas of business
Intended Market: X-Axis cont.
intended market
Their customer might be totally different than their existing customer and lie
in different market segment.
Roda mas has a capable management system for the distribution of Go-Jek is a
stable and widely used app being used in Indonesia with new updates and
development in the technology.
Successful in providing customer with good UI and UX application with the latest
technology.
Concern about Safety of driver and user. Considers the crime rate of the country
Gojek services and facilities can be similar with of existing companies in other
countries.
Product/Technology: Y-Axis cont.
Product/Technology
Rodamas is well versed with the knowledge and science behind the distribution.
The product and services are similar to the one the company is using in their
current business
Rodamas, current quality standards use for their products will be somehow useful
for the distribution as well
Internationalization
Key Factors Weight Notes
External
By joining promotion for online shop/game, it will create positive demand in
Economy 0,05 3 0,15 economic scope
Political/Legal/Governmental 0,05 1 0,05 Bundling promotion response is less effective on political situation
Social/Cultural/Demographic/Environm
ental 0,1 3 0,3 Provides a certain social advantage
Technological 0,1 3 0,3 The strategy is an good response in technological factor
Competitive 0,1 3 0,3 Helps to gain competitive edge among competitors
Internal
Management 0,05 3 0.15 The strategy is a good response to internal management
Marketing 0,2 2 0,4 Rodamas doesnt have a reputable name in the industry
Finance/Accounting 0,05 2 0,1 The strategy is an average response to financial factor
Production/Operations 0,05 3 0,15 The strategy is an average response to operational factor
Research and Development 0,05 2 0,1 The strategy is agood response to R&D factor
Computer Information Systems 0,2 3 0,6 The strategy is an average response to IT system
Total 1,00 2.6
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Acquisition
27
Industry Attractiveness Test
5. Buy existing manufacturing business/ Aquisition
PROS CONS
· Access to developed technology · Finding the right business at the right price is a
or existing licenses challenge.
· Availability of Finances · New capabilities may be required which could take time
· Advantage of additional/acquired · Clashes in corporate culture/philosophy
channels
· Cost effective & limited
· setup time
IE Matrix for Acquisition
Aquitision
Key Factors Weight Notes
External
Economy 0,05 3 0,15 Can play a vital role for steady growth
Political/Legal/Governmental 0,05 3 0,15 Thoroughly executted acquition leads to better political advantage
Social/Cultural/Demographic/Environm
ental 0,1 3 0,3 Can establish social reputation with proper execution
Technological 0,1 2 0,2 The strategy is an average response in technological factor
Competitive 0,1 3 0,3 Bundling promotion gives an advantage in competitiveness
Internal
Management 0,05 3 0,15 The strategy is a good response to internal management
Marketing 0,2 4 0,8 Can provide media coverage and better marketing if done properly
Finance/Accounting 0,05 2 0,1 The strategy is an average response to financial factor
Production/Operations 0,05 2 0,1 The strategy is an average response to operational factor
Research and Development 0,05 4 0,2 The strategy is a poor response to R&D factor
Computer Information Systems 0,2 3 0,6 The strategy is an average response to IT system
Total 1,00 3.05
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Overall SWOT Analysis
Strength Weakness
• Experienced, more than 5 decades in Indonesia. Has • Risk averse and conservative makes the slower
an in-depth knowledge of local market, consumer, growth
and regulation. • Lack of qualified people in management and sales
• Distribution service • No proprietary competencies
• Asahimas is the largest glass producer in southeast • Lack of R&D
Asia
• Tan’s reputable profile on negotiation
• Conservative management style makes steady (but
slow) growth without any financial problem
Opportunity Threat
• New hired managers offer dynamic change in future • 100% foreign investment makes companies less
strategy dependent on local partner
• Rapidly growing population in Indonesia • Standardized products pushes Rodamas to be
• Trustworthy local partner still sought-after centralized, unable to use own knowledge
• Office building is located in rapidly growing area in • Basic product market is crowded with competitors
Jakarta
31
Comparison of Alternative Strategies
Strategies Cost of Entry QSPM Score Recommendation
Entering the property sector Development and renovation cost 1.7 High Risk - Do not Enter this sector
Legal cost related to development
Advertisement cost
Move into labor-intensive Inventory cost 1.95 Medium Risk with high investment
Employee cost - Do not enter
Internationalization International import export tax 3.2 Medium Risk and High opportunity-
Enter
Focus on distribution business Transportation and shipment cost 2.6 Medium Risk with average
Inventory and Quality control cost opportunity- Do not enter this
Sector
Buy existing manufacturing Acquisition cost 3.05 Medium Risk and high opportunity-
business Legal fees Enter
(Acquisition) Employee training and
development cost
32
Recommendation
Phone
Website
THANK YOU