BUSINESS STRATEGY FOR SUSTAINABLE SHIPPING BUSINESS: CASE STUDY OF PT BORNEO SHIPPING LINE IN THE INDONESIAN BULK SHIPPING INDUSTRY

• Main Author: Ebenhezer M.L, Christian
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/62868
• Institution: Institut Teknologi Bandung

PT Borneo Shipping Line is a company established initially as a sea transportation service provider dedicated to serving the fuel needs of Adaro's heavy equipment. However, in 2016, PT Adaro established a sub-holding and began to switch its market share to the respected firm. Following the market's shifting, PT Borneo Shipping Line is now facing stagnancy as the revenue volume for the last 5 years almost remained constant. From the root cause analysis, there is an indication that the cause that became the drawbacks of their business growth was due to asset insufficiency, as proven by the fact that their on-time delivery performance was always achieved at 100% of the targeted KPI despite the fact that there were gaps between the planned and actual vessel availability. This assumption is strengthened by the data that the corporations have rented additional vessels to third-party vendors in order for them to meet the demand required by their clients during the first half of the 2021 period. Following the obstacles encountered by PT Borneo Shipping Line, this research was conducted to provide the ideal, suitable, and do-able strategies that can be implemented by the company to not only maintain sustainability, but also achieve growth considering the limitations that the company currently encounters. The research was conducted using a qualitative method and concerned both external and internal aspects. As regards the external factors, they were classified as macro and micro-environmental situations. The PESTEL framework was utilized to determine macro-environmental conditions, while five Porter’s Forces were used to define micro-environmental circumstances. Apart from that, the company's profile and business model, current resources, financial performance, as well as market share were incorporated in the internal assessment alongside SWOT analysis to identify the company’s strengths and weaknesses. Additionally, interviews with some key people, such as the Deputy Director, who have major contributions to the company, were also carried out as a part of data collection as well as data validation. Finally, the TOWS matrix was applied for the strategy formulation. Referring to the TOWS matrix, the suggested actions can be split into two categories: short-term and long-term strategies. The short-term strategies for the company's development are as follows: (1) vendor management enhancement, which needs to be done to mitigate the capacity deficiency; (2) upselling and cross-selling to existing customers by recording the unserved demand in order to have better visibility of the type of asset required; (3) nickel industry players' as well as State-Owned Enterprise (SOE)’s client acquisitions following the external events related to some mega projects initiated by the government and the industry players; and (4) seafarers' employment from outsourcing corporations to cope with government regulation related to ship crew contract agreement. Meanwhile, the long-term strategies that can be implemented are as follows: (5) ship building construction on land owned by the corporation to cope with the recently legalised jetty regulation issued by the government, (6) sell at least two vessels which have the least value-added point and acquire new tankers with bigger capacity to increase the company's competitiveness in the market.