STRATEGIC ANALYSIS OF ORGANIC AND IN-ORGANIC BUSINESS EXECUTION TO REACH STRATEGIC OBJECTIVE: CASE STUDY TELKOM GROUP

• Main Author: Rizananda, Hilman
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/45291
• Institution: Institut Teknologi Bandung

The competition in Information and Communication Industry in Indonesia is very tight, because of that, there are many Companies that cannot maintain their position and then other bigger companies consolidate them. How the company can maintain their business is shown by the performance of their company. The performance itself includes the ability of the company to develop the creativity and Innovation. The Telkom Group determines the Target for 2015 that states IDR 100 Trillion and IDR 300 Trillion Market Cap. In order to achieve that, Telkom use Organic Business (business as usual) and In-Organic Business (A&A). In the next five year (2020), Telkom is aspiring to become Top 10 market cap telco in Asia Pacific. It can be assumed that the Strategic Objective in 2020 is IDR 650 Trillion in Market Cap. In order to achieve the target in 2015, Telkom do projection for each year. From year 2010-2014, the deviation of revenue, EBITDA and net income projection from the realization is not above 13,1%. Also for the revenue in 2015, it projected about IDR 101.7 Trillion, which reach the target value. In that revenue, the contribution of Telkomsel is still dominant about 60%. The Market Cap of Telkom Group is reaching IDR 300 Trillion in some occasions. In the 2020, the projection of Organic Business is valuated using Discounted cash flow methods with terminal value. The Value of Organic business in 2020 is about IDR 540.1 Trillion or 83% of total objective value. The gap between the Strategic Objective in 2020 with the Organic business value is about IDR 110 Trillion which is 17% of total objective value. This gap will be closed by the contribution of In-Organic business. Strategy to reach In-Organic target is to do A&A of Telco, DiCo or other related business in lucrative location in domestics or international. Telkom Group or other Telco that wants to use this Strategy can use this research. Also for the further research, it can be included more market cap influencer to see more reliable result.