STRENGTHENING SMALL MEDIUM ENTREPRISES (SMES) TOWARDS ASEAN ECONOMIC COMMUNITY (CASE STUDY OF CERAMICS SMES CLUSTERS IN KIARACONDONG, BANDUNG)

• Main Author: Rian Ardiyansah, Bayu
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/72389
• Institution: Institut Teknologi Bandung

Many literature studies have been showed evidence in Small and Medium Enterprises (SMEs) roles to the economic growth within the country in despite of the fact that they also face some internal and external problems for their business growth. Nowadays SMEs in Indonesia have to deal with the ASEAN Economic Community (AEC) implementation which has been started since the end of 2015. This mutual agreement between countries within ASEAN region which mainly purposed in establishing single market and production within the region. Therefore, this could bring opportunities and challenges for the companies, including SMEs. This study addressed this issue by researching this topic focused into case study of SMEs ceramic cluster which located in Kiaracondong, Bandung. Purposively, this used aimed to strengthen SMEs toward the AEC implementation. To achieve that aim, this study used qualitative analysis by conducting interview into four SMEs informants in that cluster. Additionally, this study also interviewed two related government institutions which are Department of Cooperative, SMEs, Industrial, and Trade Bandung and Center for Ceramics in order to support and give other perspectives within this topic. Based on the summary of literature review, this study also developed a conceptual framework to get the results as described in the research objectives. Initially, this study analyzed the internal firm condition through three components. First is firm performance in the domestic market which found some significant factors affecting. These factors are family-centered management, passive marketing effort, labor-intensive traditional production, lack of skilled workers, and limitation financing ability. Second is awareness and readiness toward AEC which found that mostly the SMEs is late to adapt their strategy caused by lack of socialization from the government and lack of preparation from the companies. It also found that mainly the companies used pricing strategy to be more competitive in the market while maintaining their products quality. Third is internationalization drivers and barriers. This study found that mainly the presence of foreign buyers and intermediaries is the main driver, while lack of working capital and lack of capacity are considered as main barriers. Then, this study also investigated government roles in supporting SMEs toward the AEC. Each institution have their own roles which mainly supported in the development trainings, trade fairs, and assistance in technology research and development. This found that mainly the communication between government and SMEs should be built proactively in order to make good synergy. After analyzing and evaluating internal firm condition and government roles, this study also conducted strategy formulation analysis. This used identified and summarized factors in the previous analysis as the main inputs for the strategy. This study conducted PEST, SWOT, and TOWS analysis. Based on PEST analysis, this study found external significant factors which are increased competition within the AEC implementation, decreasing economic growth in recent five years, high confident of consumers in Indonesia, and increasing the use of internet in consumers along with the production process shifting trend. Then, by SWOT analysis this study mapped internal and factors through category of strength, weakness, opportunity, and threat. The result then used for TOWS analysis to formulate strategy by matching the internal and external factors. As the results, this study recommended SMEs to focus on actively utilizing internet as direct promotional tools and changing their production process from full manual technique into adapting molding technique. This strategies used to be competitive in the current market. Meanwhile, for the government, this study recommended to focus on facilitating SMEs in developing their management skill and knowledge through intensive trainings evenly. This is due to the findings that mainly lack of management skill and knowledge is the main problem of SMEs growth.