PROPOSED BUSINESS STRATEGY FOR THE REVENUE GROWTH OF A FOREIGN INVESTMENT MANUFACTURING COMPANY OPERATING IN INDONESIA

• Main Author: Lelli, Matteo
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/47812
• Institution: Institut Teknologi Bandung

Construction industry related to civil infrastructures development has been experiencing a substantial growth during the past five years of President Joko Widodo’s administration, mainly thanks to the accelerated program to develop strategic infrastructures to support the macro-economic growth and development of Indonesia. Infrastructures development was among the top priorities during the 2014-2019 mandate, and it still is one of the key priorities for President Joko Widodo’s second mandate until 2024. This represents an opportunity for growth for all companies involved in infrastructures business such as construction companies, civil engineering consultants, project management consultants, suppliers, manufacturers, etc. Object of this research is a local company with a foreign investment operating in the field of civil engineering applications and particularly manufacturing various products used for construction of civil infrastructures and environmental engineering (“the Company”). The revenues growth expectations and financial targets for the Company are challenging for the next five years ahead. Therefore, the Company’s management urgently needs to define a business strategy which will give sustainable competitive advantage and will allow the Company to capitalize on the next years of infrastructure push driven by the government in order to meet or exceed expectations in terms of revenue, and profitability. The project is conducted by using a qualitative research method. The information collected are both primary data by means of observation and interviews, and secondary data. Following the business strategy AFI framework, the author combined the external environment analysis and the internal analysis of the Company to come with the formulation of a proposed business strategy as well as an implementation plan. The external scanning is done with the aid of PESTEL model, Porter’s five forces, and competition strategic grouping. While, in the Company internal analysis, the author identified the competencies of the Company and utilized the VRIO framework to conclude whether the current competencies and capabilities possessed by the Company can lead to a sustainable competitive advantage and above-average returns. The current value chain of the Company is also analyzed. As business issue solution, the author described the key elements of the proposed business strategy using as reference the four Porter’s generic strategies, Ansoff growth matrix, and TOWS strategic alternatives model. The whole business strategy is visualized and summarized using the Hambrick and Fredrickson Diamond Strategy model. Lastly, a brief implementation roadmap is proposed to the Company along with a timeline of each strategic activity. For the Company to successfully accomplish the revenue growth goal, specific and detailed strategies at functional levels (marketing, finance, operations, etc.) should be also formulated. The formulation of functional strategies could be an extension of this work to be carried out by the Company.