THE BUSINESS STRATEGY ANALYSIS OF GAS DOMESTIK DIVISION AT PT. PERTAMINA (PERSERO)

• Main Author: RACHMAWAN (NIM : 29106007) ; Pembimbing : Dr. Ir. Mohammad Hamsal. MSE, MQM, MBA , ENDRA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/18402
• Institution: Institut Teknologi Bandung

Gas Domestik is one of the divisions in Pertamina that operates in downstream sector. The operation covers such business activities as sourcing, storing, distributing, and marketing products. It is associated with LPG and gas. Business environment has changed a great deal since the enactment of the Law Number 22/2001 that has the tendency to support liberalism of oil and gas in domestic market. The Law makes the market of oil and gas in Indonesia open to global oil and gas companies that are interested to invest and compete with the incumbent domestic player. This situation has forced Pertamina especially Gas Domestik to be able to survive and retain market share by performing long term strategy that can increase entry barrier and customer loyalty.The scope of business of Gas Domestik shows huge economic value. This is because the characteristic of LPG is unique, clean and more efficient than kerosene and other alternative fuels. Considering these aspects and other potencies, Gas Domestik is considered more strategic to manage and followed by other units’ effective roles will enable PT Pertamina (Persero) or known as Public Liability Company to achieve its vision. This is the basic concept to change Gas Domestik to become Strategic Business Unit (SBU).To find out what kind of strategy that is proper to implement in Gas Domestik whether it is for SBU implementation or as blue print of strategy, there are some investigation to be followed, namely external and internal analysis. For external analysis identification Porter Five Force model is used. This model captures business situation and environment that happen in this few years from some point of view like competitive rivalry within an industry, threat of new entrance, threat of substitute product, bargaining power of supplier, and bargaining power of customer. Whereas, for Internal analysis identification V-RINE model is used. Through this model the core competence that Gas Domestik has can be classified and mapping. Those competences come from resource and capabilities evaluation.After conducting analysis and investigation, the research continued to conduct Gas Domestik strategic setting. In this step there are five criteria that should be fulfilled to develop good and complete strategies. The criteria or known as diamond strategy analysis are arenas, vehicle, differentiators, staging & pacing, and economic logic. Firstly the arenas, Gas Domestik is located in Jakarta, the most populous city in Java island, as head office. Java island is the most potential market compared with that of other islands in Indonesia. Gas Domestik also has five regional offices that are located in big cities like Medan, Jakarta, Semarang, Surabaya, and Makassar. Each office has responsibility for maintaining security of supply, customers and product quality. Secondly the vehicles, Gas Domestik used vertical alliance and internal development to realize the strategy. The latter is used to back up supply chain distribution, and the former as the main supply chain and channel distribution has responsibility for distributing LPG to the end customers. The third point that is also important is how to be different among the competitors. Gas Domestik has product leadership excellence in all over Indonesia. Solely relying on product leadership excellence is not enough to sustain market share and create entry barrier. Gas Domestik, therefore, needs to choose either creating operational excellence or customers’ intimacy. Gas Domestik that has good quality products will be more competitive if the products are combined with service excellence (compared if they are combined with operational excellence that requires more capital to make all infrastructure all over Indonesia more efficient). Gas Domestik can adopt CRM tools to increase customers’ intimacy. The fourth point is staging and pacing, in this point Gas Domestik should focus on distributing and accelerating infrastructure to support government conversion program sequence until 2012. This program can give potential profit from government subsidies. Finally, the economic logic, Gas Domestik should also consider how to generate profit from the implementation of all those aspects. This can be done from government program that provides subsidy for LPG PSO (Public Service Obligation). As for Non PSO products, Gas Domestik can implement market price policy to reduce potential loss from self subsidy.