STRATEGIC ANALYSIS OF BUSINESS SITUATION CHANGES AND PROPOSED SOLUTION FOR IMPORTED CATTLE FEEDLOTTING COMPANY OF PT AGRIRIA INDONESIA

• Main Author: Rickson Saragih, Firman
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/38742
• Institution: Institut Teknologi Bandung

Beef is one of the most popular source of protein in Indonesia beside poultry. The growth of population, accompanied with the growing middle class number and growth in purchasing power in Indonesian market fueled the demand for proteins, especially in this project, beef. The growing demand for beef can not be fully fulfilled from domestic source, causing the need to import, both in the form of frozen meat and live cattle. In the domain of live cattle import, the main business operations is focused in acquiring young cattle from import (mainly from Australia), feedlot the cattle into sufficient weight and age deemed ready to slaughter, and then sell the cattle to slaughterhouses. In this way, the final products of the feedlotters are not fresh meat, but live cattle ready to be slaughtered. In this business model, the main focus is traditionally in fattening the cattle as efficiently as possible, to get the most optimum weight. In this final project, the author attempts to analyze the outlook of cattle/beef industry in Indonesia, specifically from the production side, which is the feedlotting operations, nurturing young cattle to be ready to be slaughtered. The conducted analysis will attempt to assess this industry, related to government policy, demand rate, and market availability for the product. Beside that, the study is also trying to formulate strategic recommendation for a company in this industry based on the analysed outlook. In order to answer these questions, the author firstly makes the business situation analysis using external and internal analysis. Secondly, the research methodology is the combination of interviews with the related business owners in the industry and literature and publications research. Thirdly, the strategy formulation is derived from the Diamond Strategy and TOWS Matrix. Lastly, the strategy formulation that consists of a new business model canvas. The young cattle for feedlotting companies come from two sources, local and imported. Most of large scale feedlotter nowadays sourced the cattle from import. The import source is tightly regulated by government quota and then distributed among the member of the association, Gapuspindo, making it hard for new entrants to enter the business. Based on the literary and policy study so far, the trend seems to be reduced in terms of import as the government tries to champion local source. On the other hand, the market for beef in Indonesia is still wide open, with high population growth, large population, and majority Muslim population, causing beef and poultry to be the primadona source of protein among the population. Interviews with other owners of similar business, albeit from different cattle source from the main case study, shows that the current situation of local source of cattle for feedlotters seem relatively stable and can be a solution in optimizing the company facility to buttress the effect of change in quota distribution. Other additional solution, shown from the competitor analysis and the practice done by at least one of the interviewees is in utilising the by-product of the feedlotter activity through partnership with plantations and biogass.