PROPOSED BUSINESS STRATEGY FOR ITB’S CONSULTANT COMPANY TO IMPROVE FINANCIAL PERFORMANCE THROUGH ACQUISITION STRATEGY

• Main Author: Fitriani, Novi
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/51865
• Institution: Institut Teknologi Bandung

Institut Teknologi Bandung (ITB) is a university with the best reputation in Indonesia which has 12 companies engaged in consulting services (construction and non-construction) controlled by the Badan Pengelola Usaha Dana Lingkungan (BPUDL ITB). The proportion of ownership in this business varies from 20% to 99.99%. This business has several companies that are inefficient and unhealthy because operating costs are greater than revenue. In addition, in 2019, this consulting company experienced a decrease in revenue by 7.11% while the cost of goods sold increased by 7.45%. This study aims to select which companies have good and healthy performance, create new and effective business strategies for the best performing companies, and develop sustainable business and new competitive advantages. This research methodology is qualitative using secondary data from annual financial reports of 12 companies (2015-2019), websites, news, and other information media. External analysis in this study uses PEST, Porter's Five Forces, and Benchmark Analysis. While the internal analysis uses Financial Ratio Analysis and Altman-Z Score. The tools used to obtain business solutions and strategies from the ITB consulting firm case are Business Level Formulations, Business Level Strategies, Functional Strategies, and Implementation Strategies. After analyzing and calculating using Financial Ratios and Altman-Z scores from 12 companies, the result shows that there are only 7 companies that have good and healthy performance so that they are included in the "Safe Zone" category with a discriminant zone Z> 2.99. The companies are PT LAPI ITB (Z = 4.03); PT Rekacipta ITB Innovation (4.73); PT Ganesha Jaya Sejahtera (4.29); PT LAPI Ganeshatama Consulting (Z = 4.44); PT Elektro Informatika Utama ITB (4.95); PT LAPI Divusi (Z = 3.61); and PT LAPI Indowater ITB EPC (Z = 7.03). The acquisition strategy was created by combining these companies. After valuing each company, the acquisition calculation is then carried out to determine the synergy value to compare the value when the acquisition was made and when the acquisition was not made. The calculation results show that the company's FCFF accumulation over the next 10 years in 2030, if an acquisition occurs, is IDR 124,131,871,981.11. Meanwhile, if there is no acquisition of Rp. 117,285,044,723.00. So that it is known that there is an added value from the synergy of IDR 6,846,827,258.11. Other strategic recommendations that are applied in this business are to implement Integrated Cost Leadership/Differentiation Strategy with supported by Functional Strategy that consist of Financial, Operation, Marketing, Human Resource Strategy, and Implementation strategy.