PROPOSED BUSINESS STRATEGY FOR SBU CENTRAL MAINTENANCE OF PT. KRAKATAU PERBENGKELAN DAN PERAWATAN TO IMPROVE COMPETITIVE ADVANTAGE
The steel industry is vital to national development, including Indonesia. Even major global producers like America, Russia, and Japan now experienced a decline due to China’s steel emergence. PT. Krakatau Steel (Persero) Tbk. (KRAS) has also experienced declining performance since 2012; market...
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Format: | Theses |
Language: | Indonesia |
Online Access: | https://digilib.itb.ac.id/gdl/view/83989 |
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Institution: | Institut Teknologi Bandung |
Language: | Indonesia |
Summary: | The steel industry is vital to national development, including Indonesia. Even major
global producers like America, Russia, and Japan now experienced a decline due to
China’s steel emergence. PT. Krakatau Steel (Persero) Tbk. (KRAS) has also
experienced declining performance since 2012; market capitalization dropped by
68.9% in the last eight years. In 2019, KRAS carried out a spirit of transformation
in harmony with the instructions of the Minister of SOE regarding the formation of
a holding to strengthen competitive advantage. The second year of the KRAS
transformation succeeded in recording profits and carrying out smooth operations
until 2023, there was an incident in the main KRAS factory that experienced a short
circuit that hampered operations. Finally, in September 2023, it was decided to
support the factory, Central Maintenance Facilities, to become a profit center and
penetrate the external market. The primary objective is to identify potential gaps
and areas of improvement between company conditions and current market demand
and formulate strategies for SBU-CM to achieve sustainable competitive
advantage. Then, the factors driving the formation of the Strategic Business Unit
Central Maintenance (SBU-CM) spin-off from KRAS will be identified. Another
objective is to analyze customer preferences in the maintenance industry and
determine positioning strategies. Data were collected qualitatively through
interviews and forum group discussions (FGD) with customers to understand their
perspective, SBU-CM management to understand core business competencies,
maintenance industry, business strategy, and KRAS management to understand the
parenting strategy.
The formation of the SBU-CM spin-off was driven by the main issues in KRAS
internal dynamics: 1) the transformation of the parent company; 2) the incident of
the main KRAS factory that experienced a short circuit. External factors dynamic
driving this spin-off: 1) indications of rapid industrial growth; 2) the strengthening
of the company as a group after experiencing losses for almost a decade. The
proposed strategy for SBU-CM involves leveraging KRAS’s competitive
advantage for centralized service maintenance, initially targeting KRAS
subsidiaries and then entering Joint Venture companies. SBU-CM aims to offer
comprehensive, customized one-stop maintenance solutions with quality at
competitive prices, targeting large industries in steel manufacturing, petrochemical,
flour mills, cement, port, and logistics industries. Researchers recommend
strategical steps to leverage the competitive advantages of SBU-CM and KPdP: 1)
to prepare the grand design for future KPdP; 2) Strengthen core abilities 3)
ii
Leverage unique value proposition; 4) Growth to economic of scale |
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