PROPOSED BUSINESS STRATEGY FOR SBU CENTRAL MAINTENANCE OF PT. KRAKATAU PERBENGKELAN DAN PERAWATAN TO IMPROVE COMPETITIVE ADVANTAGE

• Main Author: Akhmad Imaduddin, Dani
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/83989
• Institution: Institut Teknologi Bandung

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