BUSINESS STRATEGY FORMULATION

FOR FISH PROCESSING COMPANY

(STUDY CASE: PT XYZ)

FINAL PROJECT

By:

STENLEY ANDERSEN
29120215

Master of Business Administration Program

School of Business and Management

Institut Teknologi Bandung

2021
This page is intentionally left blank
 BUSINESS STRATEGY FORMULATION
FOR FISH PROCESSING COMPANY
(STUDY CASE: PT XYZ)

STENLEY ANDERSEN
NIM: 29120215
Date of Final Examination (________________)
Date of Graduation Ceremony (________________)
Graduate Program, Institut Teknologi Bandung, 2021
Final Project Advisor: Ira Fachira, Ph.D.

ABSTRACT
Indonesia is an archipelagic country that is rich in natural resources, especially the fisheries sector.
Fisheries sector in Indonesia is one of the most attractive business sectors for entrepreneurs. One of
the fish processing units that will be discussed in this research is PT XYZ.
PT XYZ started its commercial operation in 2018 and is engaged in the industry of processing and
trade of fishery products sold overseas. In 2020, the company's export volume decreased by 10.41%
due to the worldwide pandemic. By seeing the large potential of the fisheries product market in
Indonesia, PT XYZ tries to adapt the B2C business model by utilizing e-commerce as a platform for
selling their products.
Keeping in mind the above, then carried out external and internal analysis. External analysis was
conducted with PEST analysis, Potter Five Forces, and Competitor Analysis, while internal analysis
was conducted with marketing mix, value chain analysis, and VRIN analysis. After obtaining the
results from external and internal analysis, the next step is to conduct a SWOT analysis to identify
strengths, weaknesses, opportunities, and threats that will be faced by the company. Selling quality
products that are safe for consumption at competitive prices are PT XYZ's advantages.
Based on the results of the SWOT analysis, then a strategy formulation is carried out using the TOWS
matrix which is expected to produce an optimal strategy for the company to be able to compete with
competitors in e-commerce.
Keywords: fish processing unit, business strategy, SWOT analysis, e-commerce strategies
 FORMULASI STRATEGI BISNIS
UNTUK PERUSAHAAN PENGOLAHAN IKAN
(STUDI KASUS: PT XYZ)

STENLEY ANDERSEN
NIM: 29120215

Tanggal Kelulusan Sidang (________________)

Tanggal Wisuda (________________)

Program Magister, Institut Teknologi Bandung, 2021

Final Project Advisor: Ira Fachira, Ph.D.

ABSTRAK
Indonesia merupakan salah satu negara kepulauan yang kaya akan sumber daya alam khsususnya
fisheries sector. Fisheries sector di Indonesia merupakan salah satu sektor bisnis yang sangat menarik
bagi para pengusaha. Hal tersebut dibuktikan dnegan jumlah unit pengolahan ikan di Indonesia yang
berjumlah kurang lebih 62.000-unit yang tersebar di seluruh Indonesia. Salah satu unit pengolahan
ikan yang akan dibahas pada penelitian ini adalah PT XYZ.
PT XYZ memulai its commercial operation in 2018 and engaged in the industry of processing and
trade of fishery products yang dijual ke luar negeri. Pada tahun 2020, volume ekspor perusahaan
mengalami penurunan sebesar 10.41% akibat pandemi yang melanda seluruh dunia. Dengan melihat
besarnya potensi pasar fisheries product di Indonesia, PT XYZ mencoba untuk mengadaptasi model
binis B2C dengan memanfaatkan e-commerce sebagai platform penjualan produk mereka.
Dengan mengingat hal tersebut di atas, maka dilakukan ekternal dan internal analysis. Eksternal
analysis conducted with PEST analysis, Poter Five Forces, and Competitor Analysis, sedangkan
internal analysis conducted with marketing mix, value chain analysis, and VRIN analysis. Setelah
diperoleh hasil dari eksternal dan internal analysis, tahap selanjutnya adalah melakukan SWOT
analysis untuk mengidentifkasi strengths, weaknesses, opportunities, and threats yang akan dihadapi
oleh perusahaan. Menjual produk yang berkualitas dan aman di konsumsi dengan harga yang
kompetitif merupakan keunggulan yang dimiliki oleh PT XYZ.
Berdasarkan hasil SWOT analysis, kemudian dilakukan formulasi strategi dengan menggunakan
TOWS matrix yang diharapkan dapat menghasilkan strategy yang optimal bagi perusahaan untuk
dapat bersaing dengan competitor di e-commerce.
Kata kunci: unit pengolahan ikan, strategi bisnis, analisis SWOT, strategi e-commerce.
 VALIDATION PAGE
BUSINESS STRATEGY FORMULATION
FOR FISH PROCESSING COMPANY
(STUDY CASE: PT XYZ)

By:

STENLEY ANDERSEN

NIM.29120215

Master of Business Administration Program

School of Business Management

Institut Teknologi Bandung

Approved,

Bandung, December 2021

Final Project Advisor

_____________________

Ira Fachira, Ph.D.

DECLARATION OF NON PLAGIARISM
 FOREWORD

Praise and gratitude I pray to God Almighty, because of the abundance of His grace and
guidance, the author was able to complete the final project as one of the requirements for
graduation at the Master of Business Administration, Bandung Institute of Technology. I
gained valuable experience knowing business strategy formulation while researching this
thesis. In addition, I gained many new relations both internally and externally with the
company board of directors and other stakeholders when I had discussions with the company
where I was doing research.

I also want to thank Ms. Ira Fachira, Ph. D. as the final project advisor who has guided the
completion of my thesis. In addition, I would also like to thank Prisa Rizky Yulistia as
commissioner of PT XYZ who has allowed me to do research and helped me during the
discussion and preparation of this thesis. These two parties are inseparable in the process of
preparing and completing this thesis so that I can make an optimal contribution to the
company through this thesis.

Dari penelitian yang saya lakukan dalam proses penyusunan thesis ini, saya
telah mendapatkan both soft skills and the implementation of hard skills yang
saya dapatkan melalui kegiatan pembelajaran di kelas. Sehingga, ini merupakan
sebuah kesempatan bagi saya untuk mengembangkan karir saya di bidang
marketing and business strategy in the future. Saya harap pengalaman dan
pengetahuan yang telah saya dapatkan dapat membantu saya dalam dunia kerja
professional.

Bandung, 2021

Stenley Andersen
TABLE OF CONTENT
LIST OF FIGURES
LIST OF TABLES
APPENDIX
 CHAPTER I INTRODUCTION

1.1. Background

As an archipelagic country, Indonesia consists of land and sea areas. According to the
Indonesian Ministry of Maritime Affairs and Fisheries (KKP), the number of islands in
Indonesia both large and small, reaches 17,504 islands. With a very large number of
islands, of course the total area of water areas in Indonesia is very wide. Referring to the
reference figures released by the General Directorate of Marine Spatial Management in
2020, the total area of Indonesian waters is 6,400,000 Km2.

With the total area of these waters, the potential of the fisheries sector in Indonesia is very
large. According to the World Bank, in 2018 Indonesia was the second largest producer of
fishery products in the world with a total production of 22,042,342 tons per year. While
the first producer is China, namely by producing as much as 80,966,368 tons per year.
Ideally, as the number second largest country that produces fishery products in the world,
fisheries sector should make a considerable contribution to Indonesia’s GDP. In fact, the
contribution of Indonesia’s marine and fisheries sector to Indonesia’s GDP in 2020 is only
3.7%. the low contribution is caused by the lack of equitable maritime infrastructure
development throughout Indonesia. In fact, the Ministry of Maritime Affairs and Fisheries
(KKP) noted that this sector has enormous potential which is 1.3 times of Indonesia’s
GDP or 130%, if Indonesia seas are managed optimally (Tempo, 2020).

Globally, the Food and Agriculture Organization (FAO) in 2020 noted that there was an
increase in fish consumption by 122% by 1990 to 2018. In addition, FAO also predicts
that by the 2030 the world’s fish demand will reach 172 million tons. According to the
data obtained from the Ministry of Maritime Affairs and Fisheries (KKP), fish
consumption figures from 2010-2019 continue to increase every year. Given this, the
industry in the fisheries sector is a business that has very exciting prospects. Based on
estimates from the Ministry of Maritime Affairs and Fisheries (KKP), Indonesia’s marine
economic potential is predicted to reach USD1.338 billion per year. However, there is still
a gap between the fishing industry in the western and eastern regions of Indonesia. The
majority of the fishing industry is located in eastern Indonesia, while the fishery market
share is in western Indonesia. So that in the distribution process, a high transportation
costs are unavoidable (iNews,2020).

Currently, according to the statistics data of KKP in 2019 there are 62,866 fish processing
unit in Indonesia. As one of the fish processing companies located in western region of
Indonesia, PT XYZ which is currently focusing on the international market sees the
opportunities that exist in the country. In addition, as a result of Covid-19 pandemic that
has hit the whole world, the World Trade Organization (WTO), as of April 22,2020, 80
countries have reported the implementation of 92 types of export bans or restrictions in
their respective countries, of which 17 countries have also impose export restriction on
food (Hepburn et all, 2020). As a result, the barrier to exporting fishery products during
pandemic will be even higher.

Given the conditions and barriers that exist as a result of the Covid-19 Pandemic, PT XYZ
tries to penetrate the market, especially in the buyers to consumer (B2C) segment. It is
hoped that by selling directly to individual consumer can increase revenue stream for the
company.

1.2. Company Profile

PT XYZ is an integrated seafood producer company that was established on March 26,
2008 and started its commercial operation in 2018. PT XYZ is one of fishery company
that engaged in the industry of processing and trade of fishery products. The company
produces various types of frozen seafood products, such as frozen fish, frozen fillets,
canned crab meat, octopus, squid, and frozen shrimp. Those products were sold to the
international market, such as America, China, and Europe. Through transformation, the
company is moving towards the goal of providing excellent service in the fisheries sector
it focuses on. This step is also an effort to create synergy between business units in order
to “Become the Leading Integrated Fishery Company in The World”. Through the support
and involvement of an experienced management team and staff, PT XYZ established
operational policies that adhere to the principles of quality, effectiveness, efficiency, and
professionalism.
1.2.1. Business Line

PT XYZ focuses on selling packaged seafood. The products that sold by company are as
follows:

● Crab meat products, which are divided into Colossal, Jumbo, Backfin, Claw, Super

Lump, and Special.

● Canned Crab Meat, with meat sizes Colossal, Jumbo, Backfin, Claw, Super Lump,

and Special.

● Plastic Crab Meat, with meat sizes Colossal, Jumbo, Backfin, Claw, Super Lump,

and Special.

● Glass Jar Crab Meat

● Frozen Fish which are divided into Mahi-mahi fillet skinless IQF IVP, Mahi-mahi

fillet skin on CO, Mahi-mahi fillet skinless portion cut, and Mahi-mahi fillet
portion skinless.

● Scarlet Snapper fillet skinless IQF IVP, Scarlet Snapper fillet skin on IQF IVP,

Scarlet Snapper all round.

● Cooked Octopus

● Conger Eel

● Kingfish Whole Around or Steak.

 ● Cephalopods (Squid, Octopus, and etc.): Raw Whole Clean, Boiled Whole Clean,

Fully Clean and Boiled Cut.

Followings are the majority of buyer of PT XYZ from around the world:

● Harbor Seafood (USA)

● North Atlantic, Inc. (USA)

● Altamar Foods (USA)

● Dockside (Europe)

● Nordic Seafood (Europe)

● Nautilus (Europe)

● Alpha Frozen (Europe)

1.2.2. Vision, Mission, and Value

1.2.2.1. Company Vision

The vision of PT XYZ is:

Become a leading company in the integrated fishing industry

1.2.2.2. Company Mission

PT XYZ Seafood divided their mission by the stakeholders:

● Customer: Provide satisfaction for customers through the provision of

products and services that meet and exceed customer expectations.

 ● Employees: Provide opportunities for all employees to develop themselves

in order to improve welfare.

● Shareholders: Giving earning per share or the best dividend.

● Business Partners: Establish mutually beneficial and sustainable

partnerships

1.2.2.3. Company Values

XYZ Seafood has several values that are applied to the company’s operations.

● Continue to growth

● Work smart: work effectively and efficiently

● Integrity: in each activity always prioritize transparency, accountability,

and responsibility.

● High performance: the company has a high-performance principal to meet

customers in quality, quantity, and continuity.

● Homely: comfort at work.

1.2.3. Location

PT XYZ is located at Jl. Raya Cirebon - Tegal KM8.2 Blok Kemis Kulon, Kanci
Kulon Astanajapura, Cirebon 45181, West java Indonesia.

1.2.4. Organization Structure

PT XYZ organization structure can be seen as below:

 Figure 1.1 Organization Structure of PT XYZ
Source: PT XYZ Company Profile, 2021

1.3. Business Issue

The main income of PT XYZ is from export activities carried out by several regular
customers spread both in America and Europe. Since starting its commercialization
activities in 2018 until 2019 the export volume produced by PT XYZ has always
increased from USD 10,277,459.2 to USD 12,910,218.9. Of course, as a fishery company
that continues to grow, PT XYZ is targeting an increase in export volume in 2020.
However, because of the Covid-19 pandemic which has been designated a global
pandemic since March 11, 2020, the export volume targeted by PT XYZ cannot be
achieved and even decreased by 10.41% to USD 11,565,902.1 in 2020.

Export Value of PT XYZ

14,000,000 12,910,219
12,000,000 11,565,902
10,277,459
10,000,000
Export Value (USD)

8,000,000

6,000,000

4,000,000

2,000,000

-
2018 2019 2020
Year

Figure 1.2 Export Value of PT XYZ

Source: PT XYZ, 2020

Of course, the decline in export volume that occurred was a result of concerns about the
global health crisis and prompted governments in each country to improve national
security standards and adopt several new policies. At the beginning of the pandemic, this
policy was initiated by implementing a lock down mechanism such as by closing
businesses, banning travel, implementing physical/social distancing, to closing national
border. Specifically, the government also made changes to the hygiene rules for food
processing as regulated in the Global Food Safety Initiative, Safe Quality Food, and Brand
Reputation Compliance. Existing rules are made to ensure that all parties involved in the
global supply chain, from production, distribution, to consumption, implement social
distancing initiatives and the Covid-19 health protocol (Espetia et all, 2020).

In addition, based on data from the World Trade Organization (WTO), as of April
22,2020, 80 countries have reported the implementation of 92 types of export bans or
restrictions in their respective countries, of which 17 countries have also imposed export
restrictions on food (Hepburn et all, 2020). This condition will ultimately affect the
dynamics of the global economy as it is projected to drop drastically to -3%. In addition,
the high cost of Covid-19 has also prompted more than 85 countries to apply for
emergency funding assistance to the IMF (Refaat, 2020). According to a statement from a
representative from the World Food Security High Level Panel of Experts on Food
Security and Nutrition, currently export-import regulations have an impact on the supply
and demand for food ingredients and the capacity to produce and distribute food (Mintarja
et all, 2020).

Based on the things mentioned above, PT XYZ is trying to enter the domestic market. In
addition to the export-import restrictions that apply in several countries that are regular
customers of the company, the increasing number of Indonesian people's fish consumption
from 2010 - 2019 also gives companies an idea of how exciting the fishery business in
Indonesia is.

Indonesia Fish Consumption

60
54.5
50.69
50 47.34
43.94
41.11
40 38.14
33.89 35.21
kg/percapita

30.48 32.25
30

20

10

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year

Figure 1.3 Indonesia Fish Consumption

Source: Statistics Data of KKP, 2019

As a company that has been running a business to business (B2B) business model for the
past three years, PT XYZ is trying to penetrate the market into the business to consumer
(B2C) business model. The B2C business model that will be applied by PT XYZ is direct
sales to individual consumers or households through e-commerce platforms in Indonesia
as a retailer. The reason for PT XYZ to sell processed seafood products through e-
commerce is very clear, because according to the Director of Information Empowerment,
Directorate General of Information Applications at the Ministry of Communications, and
Informatics, Septriana Tangkary, the growth in the value of electronic commerce (e-
commerce) in Indonesia has reached 78% and is the highest in the world (Kominfo, 2019).
In line with the statement made by Septriana Tangkary, according to We Are Social as of
April 21,2021, 88.1% of internet users in Indonesia used e-commerce to buy certain
product categories in the last few months.

10 Countries with The Highest Percentage of E-commerce

Usage in The World (April,2021)
89
88
87
86
Percentage (%)

85
84
83
82
81
80
sia sh
ne
s nd s ia an
y
an
d re
a l y nd
ne Br
iti pi ila ay l Ko Ita la
do
il l i a a l rm Ire h Po
In Ph Th M Ge ut
So
Country

Figure 1.4 10 Countries with The Highest Percentage of E-commerce Usage in The World
Source: Databoks.katadata.id, 2021

In line with the growth in the value of electronic commerce (e-commerce) in Indonesia,
research results from the Institute for Economic and Community Research, Faculty of
Economics and Business, University of Indonesia (LPEM FEB UI) show that the sales
volume of business actors at Tokopedia soared. Based on the research conducted, seven
out of ten business actors experienced an increase in sales volume with a median of 133%.
In addition, based on internal data from Tokopedia, sellers of health products as well as
food and beverages are categories of goods that experienced a significant growth in
transactions value per category during the pandemic, namely 154.1% and 106.1%.
 Growth in Transaction Value per Category During The
Pandemic

-6.90%
Categories

24.10%
106.10%
154.10%

-50.00% 0.00% 50.00% 100.00% 150.00% 200.00%

Percentage

Fashion Electronic
Food and Beverages Health Products
Figure 1.5 Growth
in Transaction Value per Category During the Pandemic (2020)
Source: Internal Data of Tokopedia

In addition, Bank Indonesia also noted that the nominal transaction through e-commerce
carried out by the Indonesian people from 2017 to 2020 increased by 600% from the
initial 42.2 trillion in 2017 to 266.3 trillion in 2020.

Nominal of E-commerce Transaction

300
266.3
250
205.5
200
IDR Trillion

150
105.6
100

50 42.2

0
2017 2018 2019 2020
Year

Figure 1.6 Nominal of E-commerce transaction in Indonesia

Source: Bank Indonesia, 2021

It is important for PT XYZ to know which e-commerce is the prima donna in Indonesia,
so that the company can then determine the right e-commerce to sell existing products.
According to SimilarWeb, as of February 24, 2021, Tokopedia is an e-commerce that has
the highest traffic share compared to other e-commerce in Indonesia. Tokopedia is
recorded as having 32.04% total traffic share with 129.1 million monthly visits. Second
place is Shopee with 29.78% traffic share with 120 million monthly visits. The third rank
is occupied by Bukalapak with a traffic share of 8.23% with a total of 13.58 million visits.
Lazada is ranked fourth as the most visited e-commerce with a traffic share of 7.11% and
a monthly number of 28.66 million visits. In fifth position is Blibli with 4.22% traffic
share and 16.99% monthly visits. In line with data from SimilarWeb, according to
Statista, Tokopedia also ranks first as e-commerce that has the highest monthly traffic
during the first quarter of 2021.

Top 10 E-commerce sites in Indonesia As of 1st Quarter

2021, by monthly traffic
Zalora 2.86
JD.id 4.06
Ralali 4.48
Orami 5.34
E-commerce

Bhinneka 6.73
Blibli 19.59
Lazada Indonesia 30.52
Bukalapak 34.17
Shopee 127.4
Tokopedia 135.08
0 20 40 60 80 100 120 140 160
Online Traffic in million clicks

Figure 1.7 Top 10 E-commerce Sites in Indonesia as of 1st Quarter 2021, by monthly traffic
Source: Statista, 2021

Based on observations made by the author in several e-commerce sites such as Tokopedia,
Bukalapak, and Shopee, the public's need for fresh fish products, crabs, and cephalopods
(Squid, Octopus, etc.) commerce in the past year received hundreds to thousands of
orders. With this in mind, the steps taken by PT XYZ to sell retail through e-commerce
are the right steps because the market size and demand for seafood in e-commerce is very
large and very high. In addition, deciding to implement a B2C business model by utilizing
e-commerce is one of the new breakthroughs made by the company to maintain company
performance during the pandemic and can add new revenue streamlines for the company
even though it only relies on export activities that have been carried out so far.
 Figure 1.8 Number of Sales of Fisheries Product in E-commerce
Source: Tokopedia, Shopee, and BukaLapak

1.4. Research Question

According to the business issues explained above, there are questions to answer this
research:

1. What is the current issue faced by PT XYZ for selling fisheries product though e-
commerce?

2. What strategies should be proposed for PT XYZ for selling fisheries product
through e-commerce?

1.5. Final Project Objectives

These below are final project objectives:

1. To identify the current business issue faced by PT XYZ.

2. To develop business strategies that can be implemented by PT XYZ for selling

fisheries product through e-commerce.

1.6. Research Scope & Limitation

This final project will be focusing on PT XYZ strategies to sell their fisheries products in
e-commerce in Indonesia. Of course, during the writing of this final project there will be
some limitation. Here are some limitations for this research:
 1. The scope of this research only focuses on frozen fisheries products consumer,
especially in e-commerce.

2. This research using the data from 2018 until 2020, where PT XYZ has just started
their commercial operation.

1.7. Writing Structure

The final project consists of four chapters, which divide as follows:

Chapter 1, Introduction, consists of Background, Company profile, Business Issue,

Research Questions, Research Objectives, Research Scope and Limitation and Thesis
Structure.

Chapter 2, Business Issue Exploration, consists of Conceptual/Theoretical Framework,

Research Methodology, Analysis of Business Situation.

Chapter 3, Business Solution, consists of Business Solution Alternatives, Analysis of

Alternatives.

Chapter 4, Conclusions, and Implementation consist of Conclusion and Implementation

Plan.
 CHAPTER II BUSINESS ISSUE EXPLORATION

2.1. Conceptual Framework

Figure 2.1 Conceptual Framework

Source: Author Analysis, 2021
 Figure 2.1 showed the conceptual framework that is used to complete this final project
so that in the process of writing this final project will be more systematic and
understandable. The final project starts with defining business issue of PT XYZ to sell
fisheries product in e-commerce. Then, in determining the external factor by using
PEST analysis (Political, Economic, Social, and Technology) to understand the market
trends, risk, position, potential & direction of the business, Porter’s five forces
analysis is conducted to analyze and anticipate five external forces that can be a threat,
last, competitor analysis is also conducted to identify key competitors, assessing their
objective, strategies, strengths & weaknesses. In term of internal factors, marketing
mix analysis is conducted to help PT XYZ to understand the element that must be
combined in order to meet their marketing goals and objectives, value chain analysis is
conducted to understand the parts of its operations especially in the value chain
activities that create value and those do not, and VRIN analysis (Valuable, Rare,
Inimitable, and Non-substitutable) to explain and predict firm-level competitive
advantage. And then, to summarize the internal and external analysis that had been
conducted SWOT analysis need to be done. Last to generate the best possible
strategies alternatives, TOWS matrix needs to be made before implementing the best
business strategies to the company.

2.2. Research Methodology

This final project was written using a qualitative methodology that used both primary
and secondary data. Qualitative research, according to Bogdan dan Taylor, is research
that incorporates descriptive data from people in the form of written or spoken words,
as well as observable behavior. The qualitative method employed during this final
project is having discussion with the representative of the company about the problem
they are facing to sell fisheries product in e-commerce.

Primary data, according to Suharsimi Arikunto (2013:172), is information gathered

from first-hand sources, such as interviews, trials, and other methods. Secondary data,
on the other hand, is information gathered from literature, books, papers by reading,
studying, and comprehending it through various mediums (Sugiyono, 202:141).
Primary data for this final project was gathered through discussion with the
representative of the company. Secondary data is gathered from websites, news,
 article, theories, and other online and offline source that is relevant during the
preparation of this final project.

2.3. External Analysis

According to Ramdani (2014), External environmental analysis is a study of external

factors, or situations and conditions that exist outside the organization that can affect
the company’s performance directly or indirectly. The goal of external environmental
analysis is to provide list of possibilities that the organization can take advantage of
and a list of threats that the organization should avoid. Both lists should include
important aspects that influence the organization’s external environment.
Organizational strategies should take use of current possibilities while avoiding
dangers to the organization. External data is gathered to examine concerns relating to
state-owned firms’ economic, social, political, technological, and environmental
issues, as well as other important external data.

External analysis that is conducted in this research consists of PEST Analysis, Porter
Five Forces, and Competitor Analysis.

2.3.1. PEST (Political, Economic, Social, and Technology) Analysis

Political, Economic, Social, and Technological (PEST) analysis is an acronym for

four factors of change: political, economic, social, and technological. PEST
analysis is a popular and effective method for assessing strategic risk. It examines
the changes in the external macro-environment and their impact on a company's
competitive position. The external environment is made up of variables that are
beyond a company's control but must be analyzed in order to adjust corporate
strategy to changing business situations. Firms are part of a larger ecosystem in
which they function. They are subject to a wide range of exogenous circumstances,
any of which can have a significant impact on the firm's competitive position. A
PEST study includes elements that potentially have significant fundamental value
to a company. The study might be carried out for the entire company, its business
units, individual goods, or a new venture or partnership (Galea,2015).
 Political factors. In a PEST analysis, the extent to which policymakers are likely to
intervene in the commercial environment is a critical factor. Factors to consider
include trade, taxation, labor, and environmental laws. Commercial constraints and
political stability are other important elements that might decide whether a
company succeeds or fails. The supranational level is becoming increasingly
important as economic activities become more worldwide.

Economic factors. Economic considerations have the greatest impact on a market's

or industry's profitability and overall appeal. The Gross Domestic Product (GDP)
per capita is the most often used indicator of economic success for a national
economy or a specific industry sector. This is typically quantified in terms of
Purchasing Power Parity (PPP) to allow for fair comparisons between countries.

Social factors. Work habits and attitudes, consumer tastes and preferences, and the
specific type, form, and amount of demand for products and services are all
influenced by social trends. Monitoring social trends allows a company to
reposition its products or services to meet shifting client expectations. Changes in a
population's demographic features can have an impact on many aspects of the
economy.

Technological factors. The rapid pace of technological progress is fueled by

innovation, which is fueled by entrepreneurs who aim to push the limits of what is
currently possible. A technical advance can either put an end to some industries or
open the door to new ones. A company must be watchful in order to prosper in a
fast-paced technological transition. It must keep up with technical advances in the
sector and understand how they will affect the industry's future attractiveness and
profitability.

2.3.1.1. Political Factor

According to the Governor of Bank Indonesia, Perry Warjiyo, Indonesia’s e-

commerce business during the covid-19 pandemic is increasingly promising, this
business is projected to experience growth of 33.2 percent or experience growth
from 253 trillion to 337 trillion this year (Indonesia.go.id, 2021). In line with the
statement made by the Governor of Bank Indonesia, Trade Minister Muhammad
Lutfi, said that the value of e-commerce transaction rose 63.36 percent during the
first half of 2020 on an annual basis with a total transaction value of 186.75
trillion and is predicted to continue throughout the year. In fact, the government
expects total e-commerce transactions will rise 48.4 percent in 2021 to 385
trillion compared to the total value in 2020. Based on the enormous growth and
huge potential, the coordinating minister for Economic Affairs, Erlangga
Hartanto, continues to encourage the potential for e-commerce in Indonesia,
namely by developing better internet infrastructure (Sindonews,2021).

In line with the development of e-commerce in Indonesia, according to the

Minister of Communication and Information, Rudiantara, the government will
continue to encourage the growth of the e-commerce industry considering that
the e-commerce industry is the most effective industry in the absorption of labor
so as to reduce the unemployment rate and community income gap
(Republika.co.id, 2018).

One of the efforts being made by the government to support the rapid
development of e-commerce is by accelerating the fulfillment of internet access
throughout Indonesia which is targeted for completion in 2022. The Ministry of
Communication and Information through the BAKTI Kominfo program will
install base transceiver stations (BTS) at 7,904 village locations located leading,
outermost, and lagging (3T) in Indonesia. In 2021, the Ministry of
Communication and Information will complete the construction of digital BTS
infrastructure in 4,200 villages/kelurahan, and as many as 3,704
villages/kelurahan by 2022. At the same time, cellular operators have also
committed to complete construction in 3,435 villages/kelurahan in commercial
areas. In addition, backbone networks such as fiber optic networks have been
built up to 342,000 km on land and sea. This includes the Palapa Ring built by
the Ministry of Communication and Information (Media Indonesia, 2021).

The Minister of Communication and Information, Johny G Plate, also

emphasized that by 2022, villages in the 3T area will be served with 4G signal
coverage. These villages will then become the backbone of Indonesia's digital
development going forward (Media Indonesia, 2021). The acceleration of internet
infrastructure development in Indonesia, which was originally targeted to be
completed in 2032, was accelerated to 2022, with the support of President Joko
Widodo and based on strong political decisions. In addition, the ministry also
relies on blended financing to accelerate development (Katadata, 2020).

As a country where 88.1% of internet users use e-commerce services whose

transaction value continues to increase every year, of course there will be
concerns about the responsibility of e-commerce companies to consumers. Of
course, the government has set several regulations related to this, such as Law
No.7 of 2014 on Trade and Law No. 8 of 1999 on Consumer Protection which is
a reference for every business actor in conducting trade transactions, both in
conventional trade and trade through online or e-commerce. In addition to
regulations related to trade and the protection of consumer rights, in 2019 the
government issued Government Regulation No.80 of 2019 on Trading Through
Electronic Systems.

In Law No.8 of 1999 on Consumer Protection, the rights and obligations of

consumers and business actors have been clearly and unequivocally regulated.
For the rights and obligations of consumers regulated in Article 4 and % of the
Consumer Protection Law, while for the rights and obligations of business actors
stipulated in Articles 6 and & 7 of the Consumer Protection Law (Pariadi, 2018)

In the context of e-commerce transactions, aspects of consumer protection law

that are directly related to consumers are those concerning aspects of prohibited
acts for business actors and the responsibilities of business actors. Aspects of
prohibited acts for business actors in the Consumer Protection Law are regulated
in Articles 8 to 17. This aspect can be applied if it can be proven that goods
and /or services traded through e-commerce violate these terms. Furthermore,
advertisements that mislead consumers and those who deceive, as if the goods
and / or services offered have good conditions but in fact do not, are prohibited
(Nasution, 2001).

E-commerce or merchant businesses also have responsibilities that must be

fulfilled if consumers find goods and / or services purchased not in accordance
with the agreement. Merchant responsibilities are also contained in the Consumer
Protection Act and are stipulated in Articles 19 to 28. This aspect applies when
business actors commit acts that cause harm to consumers. The losses in question
can be in the form of damage, pollution of goods and / or services traded by
business actors. This aspect of responsibility applies not only to business actors
in producing goods and / or services, but also to advertising businesses and
importers of goods or providers of foreign service actors (Pariadi, 2018).

In Law No.7 of 2014 on Trade, regulations related to e-commerce are regulated

in articles 65 and 66. The enactment of e-commerce rules contained in the Trade
Law applies to the international scale, meaning that all electronic transactions
conducted by domestic and foreign businesses that make Indonesia a market must
comply with the e-commerce rules contained in the Trade Law and its
implementation regulations (Nasution, 2001).

In article 65 of the Trade Law requires e-commerce businesses to provide

complete and correct data and /or information so that it will be easier to trace its
legality. This is very good in terms of consumer protection, but the
implementation of this provision will be difficult to realize if the implementation
rules are not immediately published by the government, because e-commerce
itself is very complex and occurs across countries. (Pariadi, 2018).

With the value of electronic transactions reaching 266.3 trillion, the government
certainly sees that e-commerce or start-ups that use internet marketing or
electronic media as a potential country. Stimulus began to be carried out by the
Directorate General of Taxes to get the amount of taxes, ranging from
government to government or government to business (marketplace) cooperation
to the issuance of PMK 48 / PML.03 / 2020 to add criteria in the implementation
of VAT for PMSE (Trade Through Electronic Systems); as well as VAT imposed
on the Utilization of Intangible BKP and/or JKP from outside the Customs area
within the customs area through the PMSE based on Article 2 paragraph 1 PMK
48 / PMK.03 / 2020.

With PMK 48/PMK.03/2020, Indonesia has imposed a tax on trade through

electronic systems as of July 1, 2020. Through the enactment of the regulation,
transactions between domestic service providers / providers with foreign
 services, buyers or recipients of suits, will be directly collected, deposited and
reported by foreign traders / service providers who have been appointed as PMSE
VAT Collectors. PMSE VAT collectors themselves are PMSE actors who have
been determined to make evidence of VAT levies, which can be commercial
invoices, billing, order receipts, or similar documents whose position is equated
with tax invoices. Such collection shall be made at the time of payment by the
buyer of the goods and/or the recipient of the service. In terms of reporting,
according to PMK 48/2020 requires reporting to be carried out by PMSE VAT
collectors on a quarterly basis, for a period of 3 (three) tax periods, at the latest
the end of the following month after the quarterly period ends.

With the support from the government to advance the e-commerce industry, as
well as regulations governing rights and obligations for users or e-commerce
merchants, it certainly provides fresh air for e-commerce companies and
consumers. From the consumer's side, with the regulations that regulate it, it can
provide security because all electronic transactions and online business must be
accountable by merchants. It is hoped that the existence of a clear legal umbrella
related to consumer protection and public awareness of product awareness can
reduce the risk of fraudulent trading practices.

From the merchant's perspective, of course, the existing regulations require them
to provide goods and/or services that match the description or explanation given
when selling goods online. In addition, as a company operating in Indonesia, e-
commerce companies also need to fulfill their obligations to pay taxes in order to
contribute to Indonesia's GDP.

2.3.1.2. Economical Factor

E-commerce is one example of advances in information technology, where all

buying and selling transactions are carried out online without requiring direct
interaction between sellers and buyers which requires payments to be made
directly and in cash. The growth of this digital economy certainly has a positive
or negative impact on global and national economic life which no longer
recognizes the territorial boundaries of a country or a region. The current use of
e-commerce is not only limited to transactions and exchange of goods and/or
 services, but people in big cities also now make e-commerce a part of their
lifestyle (Sanusi, 2010).

As a country where most internet users use e-commerce services, according to

the Minister of Trade Muhammad Lutfi, in 2020 the contribution of the digital
economy will only be 4 percent of GDP. However, he projects that the
contribution of the digital economy will grow eightfold from IDR 632 trillion to
IDR 4,531 trillion in 2030. With this projection, it means that the digital
economy is estimated to contribute 18.97 percent of Indonesia's GDP which is
worth IDR 24,000 trillion in 2030 (Tempo, 2021).

In line with the statement issued by the Minister of Trade, President Joko
Widodo said that the value of Indonesia's digital trade transactions will reach Rp.
253 trillion and will increase to 330.7 trillion in 2021. In addition, he is also
confident that the value of Indonesia's digital economy can be the best. largest in
Southeast Asia by 2030 (KataData, 2021). The consumptive behavior of tens of
millions of middle-class people in Indonesia is the reason why e-commerce in
Indonesia will continue to grow (Lukito, 2017).

During the COVID-19 pandemic, e-commerce platforms have an important role

in supporting the business sector, both large companies and micro, small and
medium enterprises (MSMEs) in undergoing digital transformation and
accelerating the formation of a capable digital economic ecosystem structure in
Indonesia. Expert Staff of the Minister for Digital Transformation, Creativity and
Human Resources, Coordinating Ministry for Economic Affairs, Mira Tayyiba
ST MSEE emphasized that digital transformation plays an important role in the
recovery of the national economy to achieve a strong economic foundation and
sustainable development (Berita Satu 2021).

2.3.1.3. Social Factor

The growth of the e-commerce industry in Indonesia is certainly caused by

several factors. The things that underlie this significant development include
population growth that continues to increase. The Central Statistics Agency of
Indonesia noted that the rate of population growth in Indonesia for 10 years from
2010 to 2020 reached an average of 1.25% per year. In line with the increasing
rate of population growth, the population in Indonesia from 2018-2020 also
continues to increase from 264,161.6 million to 269,603.4 million. Of course, the
population continues to increase from 2018-2020 in line with the nominal
transactions in e-commerce which continue to increase. Bank Indonesia projects
that the value of e-commerce transactions in Indonesia will reach 395 trillion in
2021 (CNN, 2021).

According to the Group Head of the Payment System Policy Department of Bank
Indonesia, Fitria Irmi Triswati, the high projected value of e-commerce
transactions carried out by Bank Indonesia is based on changes in people's
transaction patterns towards digital as a result of limited physical activity during
the Covid-19 pandemic. This figure has increased by 48.4% compared to the
achievement of e-commerce transactions in 2020, which amounted to 253 trillion
(CNN, 2021).

In addition, with the COVID-19 pandemic changing people's shopping habits,

which previously used to shop more often directly at stores, switched to e-
commerce. According to Riko Abdurahman, President Director of Visa
Indonesia, the current pandemic continues to accelerate the shift towards trade
that prioritizes digital, reinforced by the surge in first-time online shoppers and
contactless shopping. Based on studies conducted by Visa, it shows that many
consumers have experienced the benefits of e-commerce in managing their daily
transactions, including paying for electricity, water, landlines, cell phones,
internet, and other subscription bills (Bisnis.com, 2021).

Of course, changes in shopping habits using e-commerce are based on several

factors. According to the results of research conducted by the Association of
Indonesian Internet Service Providers (APJII) released in 2020 to 7000
respondents using the questionnaire interview method, the main reason
consumers shop for their needs online is that the prices offered are much cheaper
than buying them directly at the store. Another reason is the convenience of
shopping offered, which can be done anywhere, quickly, and practically, as well
as the many discounts and promos offered (Databoks, 2020).
 Various Reasons Consumers Choose Online Shoping
16.00% 15.20%
14.00% 13.20%
12.00% 10.30%
10.00% 8.30%
8.00% 7.10%
6.00%
4.00%
2.00% 0.10%
0.00%
l os s ic
ice he
re ca m
r Pr w a cti rom Ite dem
pe y Pr P re n
ea An re nd pa 9
pa
h n o a m 1
C do M nt Co -
uc
h
be nd cou to o vid
n a i s c
M
Ca er sy e
st ofD Ea f th
F a ts o
Lo e
a us
c
Be

Figure 2.2 Various Reasons Consumer Choose Online Shopping

Source: Databoks, 2021

In addition to changes in people's spending patterns, during the COVID-19

pandemic, the average consumption of fish in the world has also increased.
According to the Chairperson of the Indonesian Traditional Fishermen
Association (KNTI), M Riza Damanik, amid the current situation there is good
news, namely that fish consumption in the world is growing at an average of
3.1% per year, far above the growth of the human population in the world. earth
which is only 1.6%. In fact, this increase is much higher than the consumption of
other animal proteins such as meat, milk, and others which is only 2.1%
(Liputan6. 2020).

Based on the results of records from the Badan Pusat Statistik (BPS), in
September 2021, Indonesia was still experiencing deflation of 0.04 percent.
Deflation that occurred in September was still lower than the previous month at
0.03 percent. The low rate of the Consumer Price Index (CPI) is caused by the
decline in people's mobility which has an impact on purchasing power which also
decreases (Suara.com, 2021). Although people's purchasing power has decreased,
on the other hand, transactions through online platforms have experienced a very
significant spike. According to the Governor of Bank Indonesia (BI), Perry
Wijayanto, the growth of transactions through e-commerce is predicted to reach
48.4 percent (Bisnis.com, 2021).
2.3.1.4. Technological Factor

Technological factors certainly play an important role in the development of the

e-commerce industry in Indonesia. According to statista.com, Indonesia's internet
penetration rate is predicted to continue to increase from 2017 which was only
54.13% until 2026 which will reach 82.53%. With the internet penetration rate,
which is predicted to continue to increase, it means that the percentage of
Indonesian people who use the internet will increase.

Internet Penetration Rate in Indonesia From 2017 to 2020

with Forecast Until 2026
90.00%
79.57% 81.17% 82.53%
80.00% 72.87% 75.47% 77.69%
69.80%
70.00% 63.95% 66.19%
60.00% 54.13%
Share of Population

50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Year
 Figure 2.3 Internet Penetration Rate in Indonesia from 2017 to 2020 with Forecast Until 2026
Source: Statisa.com, 2021

In line with the internet penetration rate, which is predicted to continue to

increase until 2026, Statista also predicts that internet users in Indonesia from
2017 which was at 132.7 million people will increase to 239.03 million people in
2026. With the increase in internet users in Indonesia, according to Director
General of Post and Information Technology at the Ministry of Communication
and Information, Ahmad M Ramly, with existing digital developments, can
improve people's decent lives, namely by utilizing the internet network to find
and open new jobs which will ultimately increase productivity.

Number of Internet Users in Indonesia From 2017-2020

with Forecast Until 2026
300
Number of Users in millions

239.03
250
218.95 226.37 233.03
190.92 201.37 210.67
200 171.17 179.14
143.26
150 132.7

100

50

0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Year

Figure 2.4 Number of Internet users in Indonesia from 2017-2020 with Forecast Until 2026
Source: Statista

Along with the penetration rate, and the number of internet users in Indonesia,
Statista also predicts that the smartphone penetration rate in Indonesia from
2017-2026 will continue to increase. In 2017 the smartphone penetration rate in
Indonesia was only 44.44% and it is predicted that in 2026 it will reach 82.45%.
 Smartphone Penetration Rate in Indonesia from
2017-2020 with Forecasts Until 2026

Share of Population with a Smartphone

90.00% 81.09% 82.45%
80.00% 75.40% 77.61% 79.49%
72.07%
70.00% 67.15%
61.30%
60.00% 56.24%
50.00% 44.44%
40.00%
30.00%
20.00%
10.00%
0.00%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Year

Figure 2.5 Smartphone Penetration Rate in Indonesia from 2017-2020 with Forecasts Until 2026
Source: Statista, 2021

In 2020, according to the Global Mobile Market Report, Indonesia occupies the
4th position as the country with the highest smartphone penetration rate in the
world behind China, India and the United States with 160.23 million smartphone
users and a penetration rate of 58.6%. This high smartphone penetration rate
provides a breath of fresh air to the e-commerce industry because it will make
more and more Indonesians own and use smartphones for transactions.

Top Countries by Smartphone Users

1000 918.45
900
Smartphone Users in Million

800
700
600
500 439.42
400
300 270
200 160.23
109.34 99.93 80
100
0
China India United Indonesia Brazil Russia Japan
States
Country
 Figure 2.7 Top Countries by Smartphone Users
Source: Global Mobile Market Report, 2020

In line with the smartphone penetration rate, according to statistics, the number of
smartphone users in Indonesia from 2017 to 2026 will continue to increase. With
the number of smartphone users in 2017 as many as 117.61 million people and is
predicted to reach 238.79 million people in 2026. During the pandemic period that
has been going on since 2020, research firm International Data Corporation (IDC)
noted that the number of smartphone shipments in Indonesia in the second half
both of 2020 experienced 19 percent YoY growth. This growth is driven by the
increase in the use value of smartphones which are not only used as basic
communication tools but are also used to support various user needs while at
home, such as work-from-home, home-based-learning, and entertainment
streaming services or to communicate online. virtual with relatives or family (IDC
2021).

Number of Smartphone Users in Indonesia from

2017-2020 with Forecasts until 2026
300
Smartphone Users in Milion

250 232.79 238.79

210.45 218.73 226.14
199.18
200 183.68
165.9
150.54
150
117.61
100

50

0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Year

Figure 2.7 Number of Smartphone Users in Indonesia from 2017-2020 (Forecasts Until 2026)
Source: Statista, 2021

Based on the PEST analysis that has been carried out, economic factors are a
matter of particular concern for PT XYZ. As previously mentioned, during this
pandemic era, Indonesian people's purchasing power continued to decline. The
decline in purchasing power was caused by social restrictions that were
continuously implemented by the government to suppress the spread of COVID-
 19. Based on data obtained from the Indonesian Central Statistics Agency, as of
February 2021, there were 19.1 million people of working age affected by
COVID-19. Of the total number, 15.72 million people experienced a reduction in
working hours, 1.62 million people in the labor force became unemployed during
the day-to-day period. A total of 1.11 million people is temporarily out of work
due to the corona pandemic, and there are 650,000 residents who are not in the
orkforce who have stopped working because of the corona since February 2020.

The same thing regarding the reduction in working hours was also conveyed by
the Minister of National Development Planning/National Development Planning
Agency (PPN/Bappenas), Suharso Monoarfa, based on calculations carried out
by Bappenas and confirmed by BPS, that there were 24 million workers who lost
working hours and at least half of his working time (suara.com, 2021). According
to Suharso, the loss of people's purchasing power due to lost income directly
reached Rp. 360 trillion. The reason is the decrease in working hours in the
industrial and tourism sectors with utilization of only 50 percent. Meanwhile, the
rest is indirectly lost community income from Micro, Small and Medium
Enterprises (MSMEs) because they lost the market (suara.com, 2021).

With the things mentioned above, it further strengthens and makes it clear that
economic factors really have to be a concern for PT XYZ to market the fisheries
products they offer through e-commerce.

2.3.2. Porter Five Forces Analysis

The character and strength of the competitive forces operating in an industry are
never the same from one industry to another. The most powerful and widely used
tool for diagnosing the principal competitive pressures in a market is the five forces
frameworks. This framework holds that competitive pressures on companies within
an industry come from five sources. These include competition from rival sellers,
competition from potential new entrants to the industry, competition from
producers of substitutes products, suppliers bargaining power, and customer
bargaining power (Thompson et all, 2018). Porter’s five forces framework is based
on the perception that an organizational strategy should encounter the opportunities
and threats in the organizations external setting (Porter, 1979).
 Figure 2.2 The Five Forces Model
source: Thomson et all, 2018

2.3.2.1. Threats of New Entrants

As a company that just started its commercialization activities in 2018, PT

XYZ can be categorized as a young company in the fishing industry in
Indonesia. However, even though it has only been commercializing for three
years, PT XYZ already has various certifications that show PT XYZ's
dedication to producing quality and safe products for consumption. The
certifications that have been obtained by PT XYZ are Hazard Analysis and
Critical Control Point (HACCP) Certification, Food and Drugs Administration
(FDA) Certification, Brand Reputation Compliance (BRC) or now is known as
Brand Reputation Compliance Global Standards (BRCGS), and Europe Quality
Certified.

For the last three years, PT XYZ has focused on marketing fisheries products
that focus on business-to-business sales to the United States and Europe. When
PT XYZ decides to sell directly to customers through e-commerce, it is
important for PT XYZ to know the threats of new entrants. If viewed from the
side of the costs required by a company to start selling in e-commerce, of
course the existing threats of new entrants are very low because it does not cost
anything to start selling in e-commerce.
However, if we explore more in terms of threats of new entrants, then there are
several factors that can cause the barrier to entry for the fishing industry in
Indonesia to be high. These factors are as follows:

1. The capital required to build a fish processing factory is quite large.

According to the advisor to the Central Board of the Indonesian
Pindang Fish Entrepreneurs Association (Apikando), Suharjito, the
capital needed to build a small-scale fish processing factory requires
an initial capital of Rp 500 million to Rp 1 billion. Meanwhile, to
build a large-scale fish processing company that is modern and has
high standards, an initial capital of IDR 2 billion to 20 billion is
needed (Kontan, 2015).

2. Loyalty and strong network effects. As we know, the loyalty of

buyers plays an important role in all buying and selling activities.
Even though as a company that is just about to enter e-commerce, PT
XYZ can take advantage of the strong networking owned
domestically owned by the board of directors or all employees
working at PT XYZ. So, with the existing strong networking, it is
hoped that it will increase awareness and ultimately increase the
loyalty of PT XYZ consumers.

3. Incumbents have significant cost advantages over potential entrants

because they have a proper processing technology that has been
certified and acknowledge by several certification that has been
mentioned before. As for new entrants, preparing a fish processing
unit in accordance with existing standards requires a lot of time and
money. In addition, PT XYZ also has a significant experience-based
cost advantage or learning curves effects. This means that with PT
XYZ's existing experience it will be easier to find out what fisheries
product needs are needed by the market and of course the products
sold by PT XYZ have international standards, for new entrants this
will take a lot of time and money.
 4. Government and Trade Policies are restrictive. As a company that has
started its commercial activities in 2018, this clearly provides benefits
to PT XYZ because it already has a valid business license and is
allowed to operate in the territory of Indonesia. New entrants actually
do not have significant difficulties if they want to open a processing
industry in Indonesia, because the Ministry of Maritime Affairs and
Fisheries has facilitated the process of opening a business in the
marine and fisheries sector through the One Single Submission (OSS)
system for issuing Processing Business Permits (SIUP). However, as
mentioned earlier that the initial investment required to build a fish
processing plant is not cheap. In addition, PT XYZ's HACCP, FDA,
and BRC certifications show that the fisheries products produced are
products that meet world standards and quality. Of course, it will be
difficult for new entrants to meet the certification standards that have
been owned by PT XYZ to produce fisheries products that have the
same quality.

Based on the things mentioned above, it can be concluded that the

barriers to entry into the fish processing industry in Indonesia are high. By
having high barriers, threats of new entrants are low threats for PT XYZ.

2.3.2.2. Bargaining Power of Suppliers

The next thing that must be considered by PT XYZ is the bargaining power of
suppliers. Bargaining powers of suppliers relates to the pressure that suppliers
can put on companies by raising their prices, lowering their quality, or reducing
the availability of their product.

In the case of PT XYZ, specifically talking about suppliers of raw materials

needed by the company to produce fisheries products, the bargaining power
owned by suppliers is in the high category. As a company that focuses on
processing seafood products in Indonesia, it is true that the availability of raw
materials in nature is very abundant.
 Although there are indeed several types of fish that can only be harvested at
certain times, the existence of aquacultures methods that can be easily found in
Indonesia results in the availability of the fish sufficient so that there will be no
significant difficulties related to product supply.

However, PT XYZ still has a very high dependence on their suppliers to obtain
the raw materials they need. This is due to PT XYZ which still does not have a
fleet of fishing and aquaculture vessels. During its operation process, the
company relies heavily on fisherman and aquaculture cooperatives that have
established cooperation with the company. If existing suppliers have difficulty
meeting the demands of the company, it will automatically affect the
company's production.

2.3.2.3. Bargaining Power of Buyers

It is not only the bargaining power of suppliers that must be considered by PT

XYZ, but the bargaining power of buyers is also a crucial thing that must be
considered. Bargaining power of buyer here means the pressure that
customer/consumer can put on business to get them to provide higher quality
products, better customer service, and/or lower price.

In this case, PT XYZ's bargaining power of buyers, especially in e-commerce,

is in the high category. This is based on several things, such as buyers can
easily find similar products in e-commerce with low switching costs. Of
course, when in the process of searching for similar products, buyers have
certain criteria to buy fisheries products, such as whether the processing
process is safe and clean for consumption, and the packaging used when
shipping. In addition, buyers can buy the same product at the same time from
different sellers to compare prices, cleanliness, and quality. So that in the end
they have a strong bargaining power to get the product they want at a low price
and the best quality.

Buyer demand also plays a very important role in the commodity industry,
because the demand from buyers determines the price and availability of goods
on the market. Such a situation has ultimately made the fisheries product
 industry highly dependent on demand from buyers. However, in the case of
buyer demand, this is not a threat to the company because according to the
Minister of Maritime Affairs and Fisheries, Sakti Wahyu Trenggono, the
national fish consumption rate in 2020 will increase by 3.47 percent to 56.39
kg/capita and is targeted at 2024 consumption figures. national fish will be 60.5
kg/capita (Detik, 2021).

2.3.2.4. Threats of Substitutes

The next factor that cannot go unnoticed by PT XYZ is threats of substitutes,

this relates to similar goods available in the market and can be easily obtained
by consumers with low switching costs so that consumers do not buy products
offered by the company or industry.

Seafood is an example of a commodity product in Indonesia, so there are other

similar products that contain protein that can replace seafood products (Yusuf
et all, 2018). There are many substitutes for seafood products available in
Indonesia, both animal and vegetable protein. As for other animal protein
products that can be consumed as a substitute for seafood products, namely
chicken, pork, and duck. As for vegetable protein products that can replace
seafood, namely products derived from processed soybeans such as tofu and
tempeh.

In general, the food consumption pattern of the Indonesian population is still

dominated by food sources of carbohydrates and then vegetable protein foods.
The participation rate of household consumption in 2019 shows that
households that consume more vegetable protein than households that consume
animal protein foods (BPS, 2019).

According to the Central Statistics Agency, in 2019, it was shown that tofu and
tempeh as a source of vegetable protein had a higher consumption participation
rate than food sources of animal protein such as meat or fish. The participation
rate of tempeh consumption is 75 percent and 73.9 percent per year, while
chicken meat is only 49.71 percent and tuna/tuna is only 21.46 percent.
 Figure 2.3 shows that over the last three years, the monthly per capita
consumption pattern for fresh fish and shrimp, beef, native chicken, tofu and
tempeh has increased. Starting from 2017-2019, the highest increase occurred
in the consumption of fresh fish and shrimp with an increase of 0.070 kg,
chicken/village meat increased by 0.026 kg, tofu increased by 0.050 kg, and
tempeh increased by 0.028 kg. the only consumption figure that shows a
decrease is only beef consumption, which is a decrease of 0.192 kg, as a result
of higher prices and always increasing prices every year.

Monthly Average Consumption per Capita of Fresh Fish

and Shrimp, Beef, Boiler/Local Chicken Meat, Tofu, and
Tempeh
1.600
1.400
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Fish and Fresh Beef Broiler/ Local Tofu Tempeh
Shrimp Chicken Meat

2015 2016 2017 2018 2019

 Figure 2.3 Monthly Average Consumption per Capita of Fresh Fish and Shrimp, Beef,
Boiler/Local Chicken Meat, Tofu, and Tempeh
Source: Badan Pusat Statistik Indonesia, 2019

Furthermore, if we look at the proportion of protein consumption per capita per

day according to commodity groups in Indonesia, grains are the food group
with the most protein consumed by the public as of March 2020. The
proportion of protein consumption in this food group is 30.91%. In the second
position followed by the ready-to-eat food and beverage group with a
proportion of protein consumption of 25.72%. Meanwhile, the proportion of
protein consumption from fish, shrimp, squid, or shellfish is 13.6%. For details
regarding the proportion of protein consumption per capita, see figure 2.4.
 Consumption Proportion of Protein per Capita a Day by
Food Commodity Group (March 2020)
35 30.91
30 25.72
25
20
15 13.6
10 8.39 6.54
3.74 1.76
5 1.29 0.83 0.71 0.59 0.31
0
s t es s ts r t
ns rin
k sh ut ea bl nt nt
s
ui ce
s be nu
rai D l lfi N M a i e i e F r pi T u co
G d he ge
t ed re
d S Co
an /S gr
d p Ve In Ing nd
o im od k la
e
Fo hr Fo rin Oi
S r D
ad sh
/
he
y-M Fi Ot
ad
Re

Figure 2.4 Consumption Proportion of Protein per Capita a Day by Food Commodity Group
Source: Badan Pusat Statistik Indonesia, 2020

Based on the aforementioned matters relating to threats of substitutes, it can be

concluded that these threats are in the high category. This is due to the
existence of similar products that contain protein in the market and can be
easily obtained by the public with low switching costs.

2.3.2.5. Industry Rivalry

The last thing that PT XYZ should pay attention to is industry rivalry. The
competition for consumer patronage among competing suppliers of a product
or service is generally the greatest of the five competitive forces. A variety of
factors determines the level of competition among competing vendors in a
given business (Thompson et all, 2018).

When talking about fisheries products in Indonesia, the products offered in the
market are fishery commodity products. This means that the products available
on the market or those offered by the industry have the same product
variations, so it can be said that the fisheries product competition in Indonesia
is at a moderate level.

In carrying out and fulfilling their operational activities, companies engaged in

the fisheries industries have high fixed costs and storage costs. Fixed costs and
high storage costs can be seen from the amount of initial investment required
to build a fish processing unit and the number of employees needed in a fish
processing unit which will affect the company's operational costs. In addition,
raw materials that have been purchased from local collectors or fishing also
require special treatment and storage to maintain the quality and freshness of
the existing raw materials.

There are quite a number of competitors in the fisheries industry in Indonesia

and have the same business scale. When PT XYZ decides to make sales
through an e-commerce platform, of course there are many competitors that
will be faced by the company. However, if you look closely, there are only a
few main competitors for each e-commerce platform. For the Tokopedia
platform, the company will have 10 competitors consisting of five direct
competitors and five indirect competitors. There are seven competitors in
BukaLapak, which consist of three direct competitors and four indirect
competitors. As for Shopee, there are seven competitors consisting of four
direct competitors and three indirect competitors.

However, the competitors in the top three e-commerce in Indonesia are not a
serious threat to PT XYZ, this is because the products sold are commodity
products whose prices are very competitive between one seller and another. In
addition, the fisheries industry in Indonesia is an oligopoly market type, which
means that every big player still knows each other.
The good thing is the objectives and strategies from rivals are mostly the same
and they do not possess any significant differences as in types of products or
form of promotion. The last thing to consider in industry rivalry is high exit
barriers. As previously mentioned, to build a fish processing unit requires large
funds to build a factory, purchase machines and high research and laboratory
costs in running the business. Existing companies have spent very large funds,
so it will be difficult for companies to exit the industry.

Based on the things above, it can be concluded that industry rivalry is

moderate because the goods sold by the company are commodity products that
have the same similarity as competitors, apart from that, even with the number
of competitors, many companies can still sell their products in the market.

Based on the results of the analysis that has been carried out using porter five
forces, it can be concluded that threats of new entrants are low because large
initial capital is required to enter this industry so that the existing barriers of
entry are very high. Furthermore, the bargaining power of suppliers is high
because the company has a high dependency to the supplier due to the
company didn’t have any fishing fleet or aquaculture. Meanwhile, other threats
such as bargaining power of buyers and threats of substitutes are high because
buyers can easily find similar products in the marketplace with competitive
prices, and there are many other foodstuffs that can replace fisheries products
with relatively lower prices. Last, the threat from the industry rivalry is
moderate because the majority of players in this industry have the same
characteristics and the same promotion method. Also, the fisheries product
market is included in the oligopoly category so that it is only controlled by a
few big players and know each other. The porter's five forces results can be
illustrated as shown in figure 2.5.
 Figure 2.5 Porter Five Forces for E-commerce Penetration
Source: Author Analysis

2.3.3. Competitor Analysis

Competition is one of the most inevitable forces in today’s business world. No

matter what a firm is, big or small, it has competitors in the industry and the
strategies of these competitors affect the process of formulating strategic plans.
Competition is an accepted feature of corporate life for profit-driven organizations.
Analyzing an organization's competitors helps to discover its weaknesses as well as
identify opportunities and threats from the industrial environment. While
formulating an organization’s strategy, managers must consider the strategies of the
organization’s competitors (Adom, Alex Et all, 2016).

According to Zahra dan Chaples (1993) competitive analysis is the process by

which a company attempts to define and understand its industry, identify its
competitors, determine the strengths and weaknesses of its rivals, and anticipate
their moves. Competitive analysis aims to provide an in-depth understanding of the
competitive forces that are to be found in any given organization’s competitive
environment. It will attempt to understand an organization’s industry, its
competitive position with it, the prerequisites for survival and prosperity and the
nature of competition and of the market process (Oxenfeldt and Schwartz, 1981).

Of course, when PT XYZ decides to sell through e-commerce, it is important for

PT XYZ to conduct an analysis of competitors who sell similar goods. Competitor
analysis was carried out in three e-commerce sites with the highest traffic, namely
Tokopedia, Shopee, and BukaLapak. In the analysis conducted through the
Tokopedia platform, there are 10 competitors, while for BukaLapak and Shopee
there are seven competitors. Furthermore, all competitors on the three platforms are
grouped into two types, namely direct competitors, and indirect competitors.

Direct competitors are businesses that are offering identical or similar products or
services as the focal firm. These organizations that customers can easily buy from
instead of from the firm, so these companies represent most intense competition.
 Direct competitors offer the same products and services, and customer often
compares prices, features, and deals from these competitor as they shop.

Indirect competitors are businesses that are offering products and services that are
close substitutes. These competitors are probably targeting the firm’s markets with
a same or similar value proposition but delivering a different product. Indirect
competitors offer the same or similar products or services in a small number of
areas, but their target customers seldom over the firm’s.

2.3.3.1. Direct Competitor in Tokopedia

Based on competitor analysis conducted at Tokopedia, it was found that PT XYZ's

direct competitors consist of five main competitors, namely Segar Laut Supplier,
MDS Seafood Supplier, Sellfish Indonesia, Big Ocean, and 22 Seafood AMT.

The first direct competitor is Segar Laut Supplier and is a competitor that sells the
same products that will be marketed by PT XYZ in e-commerce, namely Whole
Red Snapper, Fillet Red Snapper, Cleaned Squid, Steak King Fish, and Whole King
Fish. Of the five products offered, one of the featured products from Segar Laut
Supplier is the Whole Red Snapper. When viewed in terms of the price offered, PT
XYZ provides a much cheaper price than Fresh Laut Supplier. In terms of shipping,
PT XYZ excels because it serves delivery throughout Indonesia, while Fresh Laut
Supplier only serves same day delivery, especially in cities. Finally, the customer
support provided by PT XYZ is also more than the Fresh Laut Supplier which only
provides customer support through the chat feature in e-commerce. For a more
detailed comparison regarding PT XYZ and Segar Laut Supplier, see table 2.1.

Table 2.1 Comparison of PT XYZ and Segar Laut Supplier

The second direct competitor, namely MDS Seafood Supplier, as a direct
competitor, this store only sells four of five products similar to PT XYZ, namely
Whole Red Snapper, Fillet Red Snapper, Cleaned Squid, and Steak King Fish. In
terms of price, the price difference between PT XYZ and MDS Seafood Supplier is
not significant, in fact the average difference is only Rp. 1000 or even Rp. 500. In
terms of shipping, PT XYZ remains superior because it serves delivery throughout
Indonesia, compared to MDS Seafood Supplier, which only serves delivery in one
city using the same day service, and the out-of-town reach served by MDS Seafood
Supplier is only cities around the Jakarta area, namely Bandung and Greater Jakarta
(Jakarta, Bogor, Depok, Tangerang, and Bekasi). Lastly, regarding customer
support, PT XYZ offers more support than MDS Seafood Supplier because it does
not provide customer support in the form of Call Centers and Emails. For a clearer
comparison between PT XYZ and MDS Seafood Supplier, see figure table 2.2.
 Table 2.2 Comparison of PT XYZ and MDS Seafood Supplier

The third direct competitor is Sellfish Indonesia, a competitor that sells three of all
products that will be marketed by PT XYZ in e-commerce, namely Fillet Red
Snapper, Cleaned Squid, and Steak King Fish. Of the three products offered by
Sellfish Indonesia, two of these products have a lower price than the price offered
by PT XYZ, namely Fillet Red Snapper which is cheaper at Rp. 500, and Steak
King Fish which has a price difference of Rp. 1000. However, the price difference
is not too far away, so it can still be said that the price offered by PT XYZ is still
very competitive to compete in e-commerce, especially with Sellfish Indonesia.
When viewed in terms of the shipping offered, Sell Fish Indonesia only serves
same day delivery specifically within the city and out of town reach that is reached
by Sellfish Indonesia is only cities around Jakarta, namely Bandung and
Jabodetabek (Jakarta, Bogor, Depok, Tangerang and Bekasi). Regarding the
customer support provided, Sellfish Indonesia only provides customer support
through chat features in e-commerce, and Whatsapp compared to PT XYZ which
also has a special call center and email for customer support. For a clearer
comparison between PT XYZ and Sellfish Indonesia, see table 2.3.
 Table 2.3 Comparison of PT XYZ and Sellfish Indonesia

The fourth direct competitor, namely Big Ocean. As a direct competitor, this store
only sells three of the five products that will be marketed by PT XYZ, namely
Whole Red Snapper, Fillet Red Snapper, and Steak King Fish. Of the three
products offered, one of the featured products from Big Ocean is King Fish Steak.
When viewed in terms of the price offered by Big Ocean, the only product that has
a low price compared to that offered by PT XYZ is Steak King Fish, it's no wonder
that Steak King Fish is one of the featured products that is the mainstay of Big
Ocean. In terms of shipping, Big Ocean and PT XYZ both serve the delivery of all
their products throughout Indonesia by cooperating with existing expedition
companies. Finally, Big Ocean only provides customer support in the form of chat
features in e-commerce and WhatsApp, does not provide customer support in the
form of email and call centers. A clearer comparison between Big Ocean and PT
XYZ can be seen in table 2.4.

Table 2.4 Comparison of PT XYZ and Big Ocean

The last Direct Competitor, namely 22 Seafood AMT, as a direct competitor 22
Seafood AMT sells products similar to the products that will be sold by PT XYZ in
e-commerce, namely Whole Red Snapper, Fillet Red Snapper, Cleaned Squid,
Steak King Fish, and Whole Kingfish. Of the five products offered by 22 Seafood
AMT, there are only two products that have a lower price than those offered by PT
XYZ, namely Whole King Fish which has a difference of Rp. 30,000 per kg, and
Steak King Fish which has a price difference of Rp. 1000. When viewed in terms of
shipping offered by 22 Seafood AMT, they only provide same day delivery
specifically within the city and do not accept delivery other than within the city.
Regarding the customer support provided, 22 Seafood AMT only does not provide
a call center as a customer support channel, they have provided customer support in
the form of email, WhatsApp, and chat features in e-commerce. For further
comparison between PT XYZ and 22 Seafood AMT, see table 2.5.

Table 2.5 Comparison of PT XYZ and 22 Seafood AMT

2.3.3.2. Indirect Competitor in Tokopedia

As for indirect competitors from PT XYZ at Tokopedia, namely Sentra Ikan Laut,
Samudra Pasar, Mina Jaya Seafood, Raja Daging, and Yago Frozzen Food.

The first indirect competitor that will be discussed is the Marine Fish Center. As
one of the indirect competitors, Sentra Ikan Laut sells four of the five products that
will be marketed by PT XYZ in e-commerce, namely Whole Red Snapper, Fillet
Red Snapper, Cleaned Squid, and Steak King Fish. Even though they sell four of
the five same products as PT XYZ, these four products are not the featured
products that Sentra Ikan Laut is the mainstay of. The featured products from
Sentra Ikan Laut at Tokopedia are Salmon Fillet, Dory Fillet, Medan Anchovy,
Rendang Beef, and Mackerel.

In terms of price, in general the priced that is offer by Sentra Ikan Laut is a lot more
expensive than what PT XYZ will offer. The price difference is between Rp. 1,800
to Rp. 3,000. However, the biggest difference is the price difference for Cleaned
Squid, PT XYZ offers a price of Rp. 50,000/kg while Sentra Ikan Laut offers a
price of Rp. 100,000/kg for the same product. Thus, it can be said that the price
offered by PT XYZ is much cheaper and this price difference can also be used as a
competitive advantage for PT XYZ to compete with the Sentra Ikan Laut.

In terms of shipping offered by Sentra Ikan Laut, they offer a same-day delivery
system around Jakarta, and only serve out-of-town deliveries for cities around
Jakarta, such as Bogor, Depok, Tangerang, Bekasi, and Bandung. If a comparison
is made, PT XYZ serves shipments throughout Indonesia through collaboration
with well-known expedition services in Indonesia. Sentra Ikan Laut has quite good
customer support because the customer support channels offered to their customers
are in the form of chat features in e-commerce, WhatsApp, and Call Center. In
terms of customer support channels, PT XYZ is superior because it has email as
one of the customers supports channels that Sentra Ikan Laut does not have. For
further comparisons between PT XYZ and Sentra Ikan Laut, see table 2.6.

Table 2.6 Comparison of PT XYZ and Sentra Ikan Laut

The second indirect competitor, namely Samudra Pasar. As an indirect competitor,
Samudra Pasar also sells four of the five products that will be marketed by PT XYZ
in e-commerce. The four products that Samudra Pasar sell in e-commerce are
Whole Red Snapper, Fillet Red Snapper, Steak King Fish, and Whole King Fish.
Even though they sell four of the five same products as PT XYZ, none of these
products are the featured products of Samudra Pasar on Tokopedia. The featured
products from Samudra Pasar are Chicken Egg, Local Chicken, Fresh Oyster,
Mackerel Tuna, and Fresh Pork.

In terms of price, the price offered by Samudra Pasar and PT XYZ is very
competitive. For the Whole King Fish price offered by these two stores, the price is
the same at Rp. 85,000/kg. As for some products, such as Steak King Fish, and
Fillet Red Snapper, PT XYZ offers lower prices. Samudra Pasar only has one
product that is cheaper by RP.500 from PT XYZ, namely Whole Red Snapper, but
with an insignificant price difference does not give Samudra Pasar a competitive
advantage to win the competition with PT XYZ for the Whole Red Snapper
product.
In terms of the delivery offered by Samudra Pasar, they only serve the delivery of
all the products they sell via same-day delivery specifically for within the city.
Compared to PT XYZ which serves delivery throughout Indonesia by collaborating
with all well-known expedition services in Indonesia.

In terms of customer support, Samudra Pasar only has one customer support
channel, namely through chat features in e-commerce. PT XYZ certainly has
advantages compared to the customer support provided, because it has a customer
support channel in the form of chat features in e-commerce, WhatsApp, Call
Center, and Email. For more details regarding the comparison between PT XYZ
and Samudra Pasar, see Table 2.7

Table 2.7 Comparison of PT XYZ and Samudra Pasar

The third indirect competitor, namely Mina Jaya Seafood. As an indirect competitor
from PT XYZ, Mina Jaya Seafood sells four of the five products that will be
marketed by PT XYZ in e-commerce, namely Whole Red Snapper, Fillet Red
Snapper, Steak King Fish, and Whole King Fish. Despite selling the same four
products as PT XYZ, Mina Jaya Seafood's featured products are Vaname Shrimp,
Mackerel, Grouper, Pomfret, and Fresh Squid.

When viewed in terms of the delivery offered, Mina Jaya Seafood only accepts
delivery within the city using the same day delivery service and does not serve
delivery outside the city other than Jakarta. If a comparison is made, PT XYZ
excels because it serves delivery to all cities in Indonesia because it has
collaborated with well-known and trusted expeditions in Indonesia.

In terms of price, all products offered by Mina Jaya Seafood are more expensive
than those offered by PT XYZ. For the price of Whole Red Snapper and Fillet Red
Snapper, the price offered by Mina Jaya Seafood is Rp. 1.800/100 gr and
Rp.6.000/100gr. As for the price of Steak King Fish and Whole King Fish, there is
a fairly large price difference, namely Rp. 6,000/100gr and Rp. 10,000/kg. With
this considerable price difference, it gives PT XYZ a competitive advantage to be
able to compete with Mina Jaya Seafood at Tokopedia.

In terms of customer support, Mina Jaya Seafood only has a customer support
channel in the form of chat features in e-commerce as the only support channel to
communicate with their customers. Meanwhile, if a comparison is made, PT XYZ
also has customer support channels in the form of Whatsapp, Call Center, and
email. For a more complete comparison between PT XYZ and Mina Jaya Seafood,
see table 2.8.
 Table 2.8 Comparison Between PT XYZ and Mina Jaya Seafood

The fourth indirect competitor, namely Raja Daging. As an indirect competitor,

Raja Daging sells three of the five products that will be marketed by PT XYZ in e-
commerce, namely Fillet Red Snapper, Cleaned Squid, and Steak King Fish.
Although it sells the same three products as PT XYZ, Raja Daging's featured
products are US Beef Slice, Fillet Dory, Boneless Buffalo Meat, Ground Beef, and
Australian Beef Slice.

In terms of price, the price offered by Raja Meat is slightly cheaper than the price
offered by PT XYZ. However, the price difference is not too much, for Red
Snapper Fillet it is only Rp. 500/100gr cheaper, for Cleaned Squid it is only Rp.
3,000/kg cheaper, and for Steak King Fish it is only Rp. 500/100gr cheaper. With
this price difference that is not too far away, it can be said that the prices offered by
PT XYZ are still very competitive to compete in Tokopedia.

When viewed from the delivery offered, Raja Daging only provides delivery within
the city using Same Day services specifically for the city of Jakarta. If a
comparison is made, PT XYZ sends all products sold throughout Indonesia by
collaborating with well-known and trusted shipping companies in Indonesia.

In terms of Customer Support, Raja Daging has several Customer Support

Channels, namely chat features in e-commerce, WhatsApp, and Call Center. In
terms of Customer Support, PT XYZ is superior to Raja Daging because it provides
a special customer support email for its customers. A clearer comparison between
PT XYZ and Raja Daging can be seen in table 2.9.

Table 2.9 Comparison Between PT XYZ and Raja Daging

The last indirect competitor at Tokopedia, namely Yago Frozzen Food. As an

indirect competitor, Yago Frozzen Food sells four of five products similar to PT
XYZ, namely Whole Red Snapper, Fillet Red Snapper, Cleaned Squid, and Steak
King Fish. Even though they sell similar products, Yago Frozzen Food's featured
products are Fillet Dory, Ground King Fish, Tuna Fillet, Salmon Head, and
Cleaned Shrimp.

In terms of price, all products offered by Yago Frozzen Food are generally more
expensive than those offered by PT XYZ. For the price of Whole Red Snapper,
there is a price difference of Rp. 1800/100gr, the price of Fillet Red Snapper is not
too far away, only Rp. 300/100gr, while the price of Cleaned Squid is only Rp.
1,000/kg. There is only one product which is cheaper than the price offered by PT
XYZ, namely Steak King Fish, which is Rp. 1.300/100gr. With a price difference
that is not too far off, the prices offered by PT XYZ when compared to Yago
Frozzen Food are very competitive at Tokopedia.

When viewed in terms of the delivery offered, Yago Frozzen Food only serves
delivery within the city using the same day service specifically for the city of
Jakarta. In terms of delivery, PT XYZ is superior to Yago Frozzen Food because it
serves deliveries throughout Indonesia by collaborating with well-known and
trusted expeditions.

In terms of customer support, Yago Frozzen Food only provides customer support
channels in the form of chat features in e-commerce. When compared to PT XYZ,
of course the customer support provided is much more, namely chat features in e-
commerce, WhatsApp, Call Center, and email. A more detailed comparison
between PT XYZ and Yago Frozzen Food can be seen in table 2.10

Table 2.10 Comparison Between PT XYZ and Yago Frozzen Food

2.3.3.3. Direct Competitor in BukaLapak

There are only three direct competitors from PT XYZ for BukaLapak, namely
Wholesale H Doni, Segar Laut Supplier, and Kent Shop. Of the three direct
competitors in BukaLapak, Segar Laut Supplier is the same store as the one at
Tokopedia and sells the same products.

The first direct competitor, namely Grosir H Doni. As a direct competitor of PT

XYZ, Grosir H Doni sells four of the five products that will be marketed by PT
XYZ in BukaLapak, namely Whole Red Snapper, Fillet Red Snapper, Steak King
Fish, and Whole King Fish. Despite being a direct competitor, H Doni's featured
products are Beef, Beef Ribs, Fillet Chicken Breast, Whole Chicken, and Gurame
Fish.

In term of price, the prices offered by Grosir H Doni are generally very competitive
with the prices offered by PT XYZ. For the Whole Red Snapper price, the price
offered is more expensive Rp. 3,000/100 gr, for the price of Fillet Red Snapper, the
price offered is more expensive Rp. 1,000/100gr, and the price for Steak King Fish
is more expensive Rp. 1,000/100gr. However, if a comparison is made between the
prices of Whole King Fish, then PT XYZ offers a cheaper price of Rp. 19,000/kg,
compared to Grosir H Doni. By looking at the existing price differences, PT XYZ
has a good competitive advantage, because customers in e-commerce tend to
compare prices between one store and another.

In terms of delivery services offered, Grosir H Doni only serves deliveries within
the city of Depok by offering same day delivery. If a comparison is made, PT XYZ
is superior because it sends the products they sell throughout Indonesia.

In term of customer support, customer support channel provided by Grosir H Doni,

namely chat features in e-commerce, call center and WhatsApp. Meanwhile, PT
XYZ also provides Email as an additional customer support channel as another
option. So, it can be said that PT XYZ has more customer support channels than
Grosir H Doni. For further comparison between PT XYZ and Grosir H Doni, see
table 2.11.
 Table 2.11 Comparison Between PT XYZ and Grosir H Doni

The second direct competitor, namely Segar Laut Supplier. Segar Laut Supplier is
the same competitor as Tokopedia. As a direct competitor of PT XYZ, Segar Laut
Supplier sells the same products that will be offered by PT XYZ, namely Whole
Red Snapper, Fillet Red Snapper, Cleaned Squid, Steak King Fish, and Whole King
Fish. The featured products from Segar Laut Supplier are Whole King Fish, Ground
Salmon, Slice Gindara, Fillet Salon, and Steak Mackerel Tuna.

In term of price, the prices offered by Segar Laut Supplier are generally much
higher than those offered by PT XYZ. For Whole Red Snapper the price is more
expensive Rp.2,000/100gr, Fillet Red Snapper is more expensive Rp.4,000/100gr,
Cleaned Squid is more expensive Rp.5,000/kg, Steak King Fish is more expensive
Rp.3,000/100gr, and for Whole King Fish more expensive Rp. 10,000/kg. In terms
of price, of course PT XYZ has a better competitive advantage, because as is well
known, customers in e-commerce tend to compare prices between one store and
another. So that PT XYZ will be superior to Fresh Laut Supplier.

In term of Shipping, Segar Laut Supplier only serves delivery within the city using
the same day delivery service specifically for the City of Jakarta and does not serve
orders originating from outside the city. In this case, PT XYZ excels because it
accepts orders from all over Indonesia and has collaborated with well-known and
trusted shipping expeditions in Indonesia.

In terms of customer support, Segar Laut Supplier only relies on chat features in e-
commerce as the only customer support channel. In comparison, PT XYZ also
provides WhatsApp, call center, and email as other customer support channels to
provide support to their customers. For a clearer comparison between PT XYZ and
Fresh Laut Supplier, see table 2.12.

Table 2.12 Comparison Between PT XYZ and Segar Laut Supplier

The last Direct Competitor, namely Kent Shop. As a direct competitor, Kent Shop
only sells three of the same five products, namely Fillet Red Snapper, Cleaned
Squid, and Steak King Fish. Even though they only sell the same three products, all
three products are featured products from Kent Shop. In addition to these three
products, other products that are featured products from Kent Shop are Filet Dory
and Ground King Fish.

In term of price, in general the price offered is much cheaper than that offered by
PT XYZ. The price of Fillet Red Snapper is Rp. 500 cheaper, and the price of
Cleaned Squid offered is the same as that offered by PT XYZ. However, Kent Shop
offers a much cheaper price of IDR 2,900/100gr for Steak King Fish. By looking at
the existing price differences, PT XYZ can be said to offer quite competitive prices
because the difference is not too much, except for Steak King Fish products. As a
new player in e-commerce, PT XYZ has a tight price competition with Kent Shop
because Kent Shop offers lower prices. This lower price gives Kent Shop a
competitive advantage to compete with PT XYZ in BukaLapak, because e-
commerce customers are very price sensitive.

In terms of shipping, Kent Shop only serves delivery within the city using same day
delivery specifically for the city of Jakarta and does not accept orders from outside
the city. In this case, PT XYZ is superior because it accepts orders from all over
Indonesia and has collaborated with well-known and trusted shipping expeditions
in Indonesia.

In terms of customer support, Kent Shop only uses chat features in e-commerce as
the only customer support channel for its customers. In comparison, PT XYZ also
provides WhatsApp, call center, and email as other customer support channels to
provide support to their customers. Further comparison between PT XYZ and Kent
Shop can be seen in table 2.13.
 Table 2.13 Comparison Between PT XYZ and Kent Shop

2.3.3.4. Indirect Competitor in BukaLapak

PT XYZ's indirect competitors in BukaLapak consist of four stores, namely Indo

Fresco, Cari Sayur, Trijaya Abadi Sentosa, and Al Azka Frozen Meat.

The first indirect competitor, namely Indo Fresco. As an indirect competitor, Indo
Fresco sells three of the five products that will be sold by PT XYZ, namely Fillet Red
Snapper, Cleaned Squid, and Steak King Fish. Even though it sells three products
similar to PT XYZ, none of these products is Indo Fresco's featured product at
BukaLapak. The featured products from Indo Fresco are Roasted Seaweed, Salad
Dressing, Miso Paste, Smoke Beef Bacon Slice, and Gochujang.

In term of price, the price offered by Indo Fresco is much more expensive than that
offered by PT XYZ. For the price of Fillet Red Snapper, it is twice as expensive as the
price offered by PT XYZ, with a price difference of Rp. 9,000/100gr. Likewise, the
price of Cleaned Squid offered, Indo Fresco sells at a higher price of Rp. 28.000/kg.
Lastly, the price of Steak King Fish offered is also more expensive Rp.6.500/100gr.
By looking at the existing price differences, it can be concluded that PT XYZ has a
competitive advantage because it is known that customers in e-commerce tend to be
very price sensitive.

In terms of shipping, Indo Fresco only serves delivery within the city by utilizing the
same day service specifically for delivery within the city of Jakarta. In addition, Indo
Fresco also provides an option for its customers to perform self-service by taking it
directly to their offline store. In addition to the alternative delivery options mentioned,
Indo Fresco will not serve or accept orders from its customers. Based on this
information, it can be concluded that in terms of shipping, PT XYZ is superior because
it serves shipments throughout Indonesia because it has collaborated with well-known
and trusted shipping companies in Indonesia.

In terms of customer support, Indo Fresco only has two consumer support channels,
namely by utilizing the chat features in e-commerce and having a call center.
Meanwhile, if a comparison is made with the customer support owned by PT XYZ, in
addition to utilizing the chat features in e-commerce and call centers, PT XYZ also
uses WhatsApp and Email as other customer support channels to reach their
customers. A more detailed comparison between PT XYZ and Indo Fresco can be seen
in table 2.14.

Table 2.14
Comparison
Between PT
XYZ and Indo
Fresco
The second indirect competitor is Cari Sayur. As an indirect competitor, Cari Sayur
sells three of five products like those that will be offered by PT XYZ at
BukaLapak, namely, Whole Red Snapper, Fillet Red Snapper, and Cleaned Squid.
Even though it sells three similar products to PT XYZ, none of these products are
featured products. The featured products from Cari Sayur are Papaya, Carrot,
Broccoli, Tofu, and Orange.

In term of price, the price offered by Cari Sayur is much more expensive than that
offered by PT XYZ. For the Whole Red Snapper price, the price difference is more
than doubled with a price difference of Rp. 9.880/100gr. For the price of Fillet Red
Snapper, the price difference is more than three times with a price difference of Rp.
16,375/100gr. The last product, namely Cleaned Squid, the price difference offered
is more than double with a price difference of Rp.96,250/kg. By looking at this
considerable price difference, PT XYZ is certainly very superior when compared to
Cari Sayur, because the price offered is much cheaper and at a lower price this is
PT XYZ's competitive advantage to compete with Cari Sayur in BukaLapak.

In term of shipping, Cari Sayur only serves delivery of all its products using
Pelapak Couriers. Pelapak Courier is a delivery service provided by BukaLapak for
stores in BukaLapak. The use of Pelapak Couriers means that Cari Sayur only
serves delivery within the city, especially for areas around Tangerang. If a
comparison is made, PT XYZ is superior in terms of shipping because it accepts
shipments throughout Indonesia.

In terms of customer support, PT XYZ and Cari Sayur both have four customer
support channels, namely by utilizing chat features in e-commerce, WhatsApp, Call
Center, and Website. Although it has four customer support channels, PT XYZ
does not provide a website as an option for customers to do online shopping
activities and contact customer services. For a more complete comparison between
PT XYZ and Cari Vegetable, see table 2.15.

Table 2.15 Comparison Between PT XYZ and Cari Sayur

The third indirect competitor is Trijaya Abadi Santosa. As an indirect competitor,

Trijaya Abadi Santosa sells three of the five products that will be offered by PT
XYZ in e-commerce, namely Fillet Red Snapper, Cleaned Squid, and Steak King
Fish. There is only one of the three products offered by Trijaya Abadi Santosa
which is the featured product, namely Steak King Fish. The other featured products
are Crab Stick, Cheese Dumpling, Unagi Kuzami, and Beef Black Angus.
In terms of price, the prices offered by Trijaya Abadi Santosa are generally very
competitive with those offered by PT XYZ. For the price of Fillet Red Snapper, the
price of Fillet Red Snapper offered is more expensive Rp. 1.850/100 gr, Cleaned
Squid is also more expensive Rp. 6.500/kg. The only product that has a cheaper
price is Steak King Fish, which is Rp. 500/100gr cheaper than what is offered by
PT XYZ. By looking at the existing price differences, it can be concluded that PT
XYZ can still compete with Trijaya Abadi Santosa in BukaLapak because the
prices offered by PT XYZ are generally cheaper.

In terms of shipping, Trijaya Abadi Santosa serves delivery within the city using
the same day service specifically for the City of Bandung and provides the option
for its customers to take the purchased goods directly to the offline store owned by
Trijaya Abadi Santosa. If a comparison is made, of course PT XYZ is superior
because it accepts orders and sends existing orders throughout Indonesia because it
has collaborated with well-known and trusted shipping companies.

In terms of customer support, Trijaya Abadi Santosa only relies on chat features in
e-commerce and WhatsApp as customer support channels for their customers.
Meanwhile, when compared, PT XYZ also relies on call centers and emails as
additional customer support channels to serve their customers. Further comparison
between PT XYZ and Trijaya Abadi Santosa can be seen in table 2.16

Table 2.16 Comparison Between PT XYZ and Trijaya Abadi Santosa

The last indirect competitor, namely Al Azka Frozen Meat. As an indirect
competitor, Al Azka Frozen Meat only offers the same two products as PT XYZ,
namely Fillet Red Snapper and Cleaned Squid. Of the two products offered, none is
the featured product of Al Azka Frozen Meat. The featured products from Al Azka
Frozen Meat are Pure Salmon Oil, Chicken Liver, Smoke Salmon, Ground Salmon,
and Salmon Skin.

In term of price, the price offered by Al Azka Frozen Meat is more expensive than
the price of PT XYZ. For products in the form of Fillet Red Snapper, the price
offered is more expensive Rp. 600/100gr, and the price for Cleaned Squid offered is
more expensive Rp. 10,000/kg. Based on the price difference, it can be said that PT
XYZ has a competitive advantage over Al Azka Frozen Meat to compete in
BukaLapak.

In terms of shipping, Al Azka Frozen Meat only serves delivery within the city
using the same day service specifically for the city of Tangerang and does not serve
delivery outside the city. If a comparison is made, PT XYZ excels because it serves
shipments throughout Indonesia, this is because the company has collaborated with
well-known and trusted shipping companies in Indonesia.

In terms of customer support, Al Azka Frozen Meat relies on three customer

support channels, namely with chat features in e-commerce, WhatsApp, and call
center. If a comparison is made, PT XYZ also uses email as a customer support
channel to serve their customers. A clearer comparison between PT XYZ and Al
Azka Frozen meat can be seen in table 2.17.
 Table 2.17 Comparison Between PT XYZ and Al Azka Frozen Meat

2.3.3.5. Direct Competitor in Shopee

The last e-commerce platform analyzed is Shopee, PT XYZ's direct competitor on

this platform consisting of four stores, namely Oishi Seafood, Abiyogafahrizal,
Mina Dwi Sempurna, and Waroeng Ikan.
The first direct competitor, namely Oishi Seafood. As a direct competitor, this store
sells four of the five products similar to PT XYZ, namely Fillet Red Snapper,
Cleaned Squid, Steak King Fish, and Whole King Fish. Even though they sell four
out of five similar products, the featured products from Oishi Seafood are Mackerel
Tuna, Mackerel, Skipjack, Fresh Squid, and Sero Shrimp.

In term of price, the price offered by Oishi Seafood is much more expensive than
PT XYZ. The price for Fillet Red Snapper is Rp.2,600/100gr, Cleaned Squid is
more expensive Rp.93,000/kg, Steak King Fish is more expensive Rp.2,900/100gr,
and Whole King Fish is more expensive Rp.3,000/kg. Based on the existing price
differences, it can be said that PT XYZ has a competitive advantage compared to
Oishi Seafood because consumers in e-commerce are very price sensitive.

In term of shipping, Oishi Seafood only serves delivery within the city using the
same day delivery system specifically for the City of Jakarta and does not serve
delivery outside the city. If a comparison is made, PT XYZ excels because it
accepts shipments throughout Indonesia through well-known and trusted courier
services in Indonesia.

In terms of customer support, Oishi Seafood relies on three customer support

channels, namely chat features in e-commerce, call center and WhatsApp.
Meanwhile, PT XYZ also provides customer support through the email feature to
customers. For a more detailed comparison between PT XYZ and Oishi Seafood,
see table
2.18.

Table 2.18
Comparison
Between PT
XYZ and
Oishi
Seafood
The second direct competitor, namely Abiyogafahrizal. As a direct competitor, this
store sells four of the same five products as PT XYZ, namely Whole Red Snapper,
Fillet Red Snapper, Cleaned Squid, and Steak King Fish. Of the four products sold
by this store, none of them are featured products. The featured products from this
store are Dory Fillet, Tuna Fillet, Octopus Cut Tako, Milkfish, and Baramundi
Fillet.

In term of price, the price offered by this store is much more expensive than that
offered by PT XYZ. The price for Whole Red Snapper is more expensive Rp.
2,800/100gr, Fillet Red Snapper is more expensive Rp. 500, and Cleaned Squid is
more expensive Rp. 1,000/kg. There is only one product that is cheaper, namely
Steak King Fish with a price difference of Rp. 1,200/100gr. With the price
difference, it can be said that the price competition between PT XYZ and
Abiyogafahrizal is very competitive, but in general it can be concluded that PT
XYZ has a competitive advantage in terms of price when compared to this store.

In terms of shipping, Abiyogafahrizal only serves delivery within the city using the
same day service specifically for the City of Jakarta and does not accept orders
from outside the city. It is clear from a shipping perspective that PT XYZ is
superior because it offers shipping throughout Indonesia because it has collaborated
with a well-known and trusted shipping company in Indonesia.

In terms of customer support, this store only relies on the chat features in e-
commerce as the only customer support channel used to interact with their
customers. As for PT XYZ, apart from using the chat feature in e-commerce, it also
uses email, WhatsApp, and the call center as other customer support channels to
interact with their customers. Further comparison between PT XYZ and
Abiyogafahrizal can be seen in table 2.19

Table 2.19 Comparison Between PT XYZ and Abiyogafahrizal

The third direct competitor, namely Mina Dwi Sempurna. As a direct competitor,
this store sells four of the five products that will be offered by PT XYZ at Shopee.
These products are Whole Red Snapper, Fillet Red Snapper, Cleaned Squid, and
Steak King Fish. Even though it sells the same four products as PT XYZ, none of
these products is a feature product of Mina Dwi Sempurna. The featured products
from Mina Dwi Sempurna are Salmon Fillet, Dory Filet, Salmon Scrape, Salmon
Head, and Cleaned Shrimp.

In terms of price, the price offered by Mina Dwi Sempurna is more expensive than
that offered by PT XYZ. The Whole Red Snapper is more expensive Rp.500/100gr,
Fillet Red Snapper is more expensive Rp.2,000/100gr, Cleaned Squid is more
expensive Rp. 4,000/kg, and the price of Steak King Fsih is more expensive Rp.
1,400/100 gr. With reference to the price difference for similar products offered by
Mina Dwi Perfect, it can be said that PT XYZ has a competitive advantage in terms
of price to compete with Mina Dwi Perfect at Shopee.

In terms of price, the price offered by Mina Dwi Sempurna is more expensive than
that offered by PT XYZ. The Whole Red Snapper is more expensive Rp.500/100gr,
Fillet Red Snapper is more expensive Rp.2,000/100gr, Cleaned Squid is more
expensive Rp. 4,000/kg, and the price of Steak King Fsih is more expensive Rp.
1,400/100 gr. With reference to the price difference for similar products offered by
Mina Dwi Perfect, it can be said that PT XYZ has a competitive advantage in terms
of price to compete with Mina Dwi Perfect at Shopee.

In terms of customer support, Mina Dwi Sempurna uses two customer support
channels, namely chat features in e-commerce and WhatsApp. Meanwhile, if a
comparison is made, other customer support channels used by PT XYZ are the call
center and email. With this in mind, it can be said that PT XYZ provides more
customer support for its customers. For further comparison between PT XYZ and
Mina Dwi Sempurna, see table 2.20
 Figure 2.20 Comparison Between PT XYZ and Mina Dwi Sempurna

The last direct competitor for PT XYZ at Shopee is WaroengIkan. As a direct

competitor, this store sells three of the five same products as PT XYZ. The three
products are Whole Red Snapper, Steak King Fish, and Whole King Fish. Of the
three products offered, none of the products are featured products from this store.
Featured products from WaroengIkan are Fresh Catfish, Fresh Vename Shrimp, Ax
Clamp, Green Scallop, and Anchovy.

In term of price, the price offered by WaroengIkan is more expensive than that
offered by PT XYZ. The Whole Red Snapper is more expensive at Rp. 800/100gr,
Steak King Fish is more expensive Rp. 1,200/100gr, and for Whole King Fish is
more expensive Rp.18,000/kg. After knowing the price difference between PT
XYZ and WaroengIkan, it can be concluded that PT XYZ has a competitive
advantage compared to WaorengIkan in price, this is certainly profitable for PT
XYZ because customers in e-commerce are very price sensitive.
In term of shipping, WaroengIkan only serves delivery within the city using the
same day service specifically for the City of Jakarta and does not accept delivery
outside the city. If a comparison is made, PT XYZ is superior, this is because PT
XYZ accepts shipments of all products offered throughout Indonesia because it has
collaborated with well-known and trusted shipping companies in Indonesia.

In terms of customer support, WaroengIkan only uses chat features in e-commerce

as the only customer support channel to communicate with its customers.
Meanwhile, when compared, PT XYZ also uses other customer support channels in
the form of WhatsApp, call center, and email. Thus, it can be concluded that PT
XYZ has more customer support channels to communicate with their customers. A
more complete comparison between PT XYZ and WaroengIkan can be seen in table
2.21

Table 2.21 Comparison Between PT XYZ and WaroengIkan

2.3.3.6. Indirect Competitor in Shopee

PT XYZ's indirect competitors at Shopee consist of three stores, namely Jajan

Daging, Cahaya Meat n Fish, and King Chopper.

The first indirect competitor, namely Jajan Daging. As an indirect competitor, this
store sells three out of five products similar to PT XYZ. These products are Fillet
Red Snapper, Cleaned Squid, and Steak King Fish. Of the three products sold, none
of them are featured products from this store. The featured products from this store
are Boneless Chicken Breast, US Slice Beef, Boneless Chicken Tight, Norwegian
Fresh Salmon, and Local Beef.

In term of price, the price offered by this store is very competitive with that offered
by PT XYZ. For the price of Fillet Red Snapper, the price offered is more
expensive Rp. 160/100gr, Cleaned Squid is more expensive at Rp. 14,200/kg, and
for Steak King Fish is more expensive Rp. 160/100gr. Based on the existing price
difference, in general PT XYZ still has a competitive advantage compared to Raja
Meat because the price offered is still cheaper, especially for the price of Cleaned
Squid which has quite a big difference.

In terms of shipping, Jajan Daging only serves delivery within the city using the
same day service specifically for the City of Jakarta and does not accept delivery
outside the city. In this case, PT XYZ is superior to Jajan Daging because it serves
deliveries throughout Indonesia thanks to the cooperation that has been established
with all the best and most trusted shipping companies in Indonesia.

In terms of customer support, Jajan Daging provides the same customer support
channel as PT XYZ, namely by using chat features in e-commerce, WhatsApp, call
center, and email as a means to communicate with customers. For further
comparison between PT XYZ and Snack meat, see table 2.22.

Table 2.22 Comparison Between PT XYZ and Jajan Daging

The second indirect competitor, namely Cahaya Meat n Fish. As an indirect
competitor, this store sells three of five products similar to those that will be
marketed by PT XYZ, namely Fillet Red Snapper, Cleaned Squid, and Steak King
Fish. Of the three similar products offered, none of them is the featured product of
Cahaya Meat n Fish. The featured products from this store are Slice Beef,
Tenderloin, Beef Trimming, Ground Beef, and Tenderloin Meltique.

In term of price, the price offered by Cahaya Meat n Fish is very competitive with
PT XYZ's price. For the price of Fillet Red Snapper, it is more expensive
Rp.1.000/100gr, Cleaned Squid is more expensive Rp. 3,000/kg, and the price for
Steak King Fish is the same, which is sold at Rp. 8.000/100gr. By looking at the
existing price differences, PT XYZ in general still has a competitive advantage
compared to Cahaya Meat n Fish because customers in e-commerce are very price
sensitive.
In terms of shipping, this store only serves delivery within the city using the same
day service specifically for South Tangerang City and does not accept delivery
outside the city. If a comparison is made with PT XYZ, it can be concluded that PT
XYZ is superior because it accepts shipments throughout Indonesia thanks to
cooperation with well-known and trusted shipping companies in Indonesia.

In terms of customer support, Cahaya Meat n Fish only uses two customer support
channels, namely chat features in e-commerce and a call center to provide
assistance or interact with their customers. If a comparison is made, in addition to
using the two customer support channels previously mentioned, PT XYZ also uses
WhatsApp and email as additional customer support channels. By looking at the
existing comparisons, it can be concluded that PT XYZ has more customer support
channels, making it easier for their customers to communicate with the store. A
more detailed comparison between PT XYZ and Cahaya Meat n Fish can be seen in
table 2.23.

Table 2.23 Comparison Between PT XYZ and Cahaya Meat n Fish

The third indirect competitor for PT XYZ at Shopee, namely King Chopper. As an
indirect competitor, this store sells three of five products similar to those that will
be marketed by PT XYZ, namely Fillet Red Snapper, Cleaned Squid, and Steak
King Fish. Of the three similar products sold, none of them are featured products
from this store. The featured products from this store are Broiler Chicken, Fillet
Chicken Breast, Fillet Dory, Chicken Wing, and Fillet Chicken Tight.

In term of price, the price offered by King Chopper is generally more expensive
than that offered by PT XYZ. For the price of Cleaned Squid, it is more expensive
Rp. 10,000/kg, and the price of Steak King Fish is more expensive Rp.6,000/100gr.
There is only one product which is cheaper than the one offered by PT XYZ,
namely Fillet Red Snapper which is sold at Rp.500/100gr. By looking at the
available price comparisons, in general it can be said that PT XYZ has a
competitive advantage over King Chopper because customers in e-commerce are
very price sensitive, and seafood products are also not the mainstay of this store.

In terms of shipping, this store only accepts deliveries within the city using the
same day service specifically for the City of Bekasi and does not serve deliveries
outside the city. If a comparison is made, PT XYZ is superior because it accepts
shipments throughout Indonesia because the company has collaborated with a
trusted and well-known shipping company in Indonesia.

In terms of customer support, King Chopper uses three customer support channels,
namely chat features in e-commerce, call center, and WhatsApp. If a comparison is
made, in addition to using the three customer support channels, PT XYZ also
provides email as a customer support channel that is not owned by King Chopper.
By looking at the existing comparisons, it can be said that PT XYZ is superior in
terms of providing support to customers, making it easier to communicate with
stores. Further comparison between PT XYZ and King Chopper can be seen in
table 2.24
Table 2.24 Comparison Between PT XYZ and King Chopper
 Based on competitor analysis conducted in three e-commerce sites in Indonesia,
namely Tokopedia, BukaLapak, and Shopee, it is known that there is a competitor
PT XYZ who sells on the three platforms, namely 22 Seafood AMT, Wholesale H
Doni, and Fresh Laut Supplier. Furthermore, of the three competitors that PT XYZ
must watch out for, 22 Seafood AMT is the main competitor that must be given
special attention by the company. This is because the prices offered by 22 Seafood
AMT for several seafood products such as Steak King Fish and Whole King Fish are
offered at lower prices and the Whole Red Snapper price offered is the same as that
offered by PT XYZ. PT XYZ only has two products that are cheaper than 22 Seafood
AMT, namely Fillet Red Snapper and Cleaned Squid. However, the price difference
for the two products is not very significant.

Apart from the price, the number of fisheries products offered by 22 AMT Seafood
also varies, ranging from Fillet Salmon, Salmon Head, to Ground King Fish. In terms
of the quality of the goods sold, 22 Seafood AMT received a rating of 4.9 out of 5.
Apart from relying on the three e-commerce sites (Tokopedia, BukaLapak, and
Shopee), 22 Seafood AMT also sells their products through BliBli and Instagram.

Thus, it can be concluded that 22 Seafood AMT is a competitor that must get more
attention from PT XYZ because it sells a wide variety of fisheries products, sells
across platforms, has the most followers compared to the other two competitors, and
provides quality products.

For more detailed comparison between PT XYZ and other competitors in e-

commerce, it can be seen on the appendix.

2.4. Internal Analysis

Internal analysis of the company is an analysis to formulate and evaluate the strengths
and weaknesses within the company itself, also providing a basis for the identification
and evaluation of the company’s functional relationship with its competitors. Data and
information on internal aspects of the company can be excavated from several
functional companies, consisting of products aspects, marketing, human resources,
 and operations (Ramdani, 2014). Internal resources are also the most important part
for the company to face competition. In an industry, there must be a superior company
and a leader, compared to other companies when the existing company faces the same
external environment (Wandrial, 2011). Considering that it is important for the
companies to have a good internal environment so that it has a competitive advantage
that will give an advantage over competitor companies.

2.4.1. Marketing Mix

Marketing mix can be defined as controllable group of variables that the

organization can use to effect on the buyer’s response to product or service.
Marketing mix has many elements, these elements can be specified according to
the main goal of the organization, the main elements of marketing mix refer to the
4 ‘P’s which are Product, Price, Place and Promotion (Kotler et all, 2018).

Product refers to the goods and services presented by the organization. So, in few
words, the product can be known as a pack of advantages which a marketer
presents to the customer for a price. The product can also take the shape of a
service like a train travel, communication, etc. Thus, the product is the main
element of any marketing mix (Kotler et all, 2018).

Price is the second most significant element in a products or services. It can be

known as the value charged for any product or service. Fixing the product’s price
is a difficult job. The marketers must know that while fixing the price, so many
factors like the need of a product, cost involved, consumer’s ability to pay,
government restrictions, price charged by competitors for comparable products,
etc. can control this process. In fact, pricing is very critical decision zone as it has
its impact on the need for the product and also on the profitability of the
organization (Kotler et all, 2018).

Place. Goods are produced to be sold to customers; they must be made ready to
the customer at a suitable place, where they can handily make deals. So, it is
important that the product is ready at markets in the city. This includes a chain of
persons and organizations like distributors, wholesalers, and retailers who shape
the distribution network of the organization (the channel of distribution). The
organization must choose whether to sell directly to the persons or through the
distributors. It can even plan to sell it directly to customer. The four variables of
marketing mix are interconnected. By increasing the product’s price, the product
demand will be decreased, and lesser distribution points will be desired. Finally,
the overall marketing mix can result in dynamic modelling based on customer
feedback for improving a product and the same can be launched as the upgraded
product, in addition to enhancing the quality of marketing accountability (Kotler et
all, 2018).

Promotion is one of the strongest elements in marketing mix. It is the marketing

manager who decides the level of marketing expenses on promotion. Promotional
actions are mainly meant to complement personal selling, advertising and
publicity. Promotion helps the trader and sales force to show the product to the
customers in an effective manner and encourage them to purchase. Promotion
depends on many mixtures of its components which are used to realize the
organization marketing objectives. Advertising is a strong element of the
promotion mix. The main purpose of the advertising is to make and evolve the
image of product in the market zone. It is one of the significant tools of
competition which saves the dynamism of industry. Promotion mix determines the
positioning of the product in the target market. in should be considered as an
expense and hence added the cost of a product (Kotler et all, 2018).

Here is the marketing mix analysis for PT XYZ.

● Product:

During running its business, for the last three years, PT XYZ has offered several
types of international standard products for the international market, especially
for the American, European, and Chinese markets. The products offered
includes, Crab Meat Products, Canned Crab Meat, Plastic Cup Crab Meat, Glass
Jar Crab Meat, Frozen Fish, and Cephalopods.

Variation of Crab Meat Products that are offer by PT XYZ in their international
market are colossal crab meat, jumbo crab meat, backfin crab meat, crab claw,
super lump crab meat, and special crab meat. The canned, Plastic, and Glass
Crab Meat variation that is offered to the international market consist of colossal
crab meat, jumbo crab meat, super lump meat, backfin meat, claw meat, and
special crab meat.

Variation of frozen fish products that are offer by PT XYZ in their international
market are Mahi-mahi Fillet Skinless, Mahi-mahi Fillet Skin on, Mahi-mahi
Fillet Portion Cut, Scarlet Snapper Fillet Skinless, Scarlet Snapper Fillet Skin
on, Whole Scarlet Snapper, Cooked Octopus, Conger Eel, King Fish Steaks,
Whole King Fish, and Tread fin Bream Whole Round. Last, variation of
Cephalopods products that are offer by PT XYZ in their international market are
Raw Whole Clean Cephalopods (Flower Shape), Boiled Whole Clean (Flower
Shape), Boiled Cut Octopus, and Fully Cleaned Squid.

Of all the products offered by PT XYZ for the international market, when it
decided to sell in e-commerce, PT XYZ decided to sell five products from the
frozen fish and cephalopods categories. These products include Frozen Whole
Red Snapper, Frozen Fillet Red Snapper, Frozen Cleaned Squid, Frozen King
Fish Steak, and Frozen Whole King Fish. The reason is because these five
products are the most sought after and sought after by customers in e-commerce.

Based on the competitor analysis that has been done previously, it is known that
the products that will be offered by PT XYZ in e-commerce are generally
cheaper than the prices offered by competitors in the three e-commerce sites
(Tokopedia, Shopee, BukaLapak). By offering lower prices, it gives PT XYZ a
competitive advantage to compete in e-commerce where consumers tend to be
price sensitive.

In addition to having an advantage in terms of the price offered, PT XYZ can

also consider adding a variant of fisheries products that will be sold in e-
commerce so that it will provide other options for their consumers. Considering
that the fisheries products offered by PT XYZ in the international market are
very diverse and offer internationally certified products.
● Price:

When deciding to penetrate the direct sales market to consumers through e-

commerce, PT XYZ decided to sell the five fisheries products most sought after
and interested by e-commerce customers, namely Whole Red Snapper, Fillet
Red Snapper, Cleaned Squid, King Fish Steak, and Whole King Fish.

The prices for the five products that will be offered by PT XYZ in e-commerce
are as follows:

a. Whole Red Snapper offered at a price Rp.8.000/100gr

b. Fillet Red Snapper offered at a price Rp.8.000/100gr

c. Cleaned Squid offered at a price Rp.50.000/kg

d. Steak King Fish offered at a price Rp.8.000/100gr

e. Whole King Fish offered at a price Rp.85.000/kg

Based on the competitor analysis that has been done previously, in general the
prices of the five products offered by PT XYZ in e-commerce are cheaper when
compared to all competitors from Tokopedia, Shopee, and BukaLapak. Thus, it
can be said that PT XYZ has a competitive advantage compared to all its
competitors in terms of price, although there are several similar products whose
price differences are not too much. With the characteristics of consumer e-
commerce, which is very price sensitive, of course with the price difference
which, although only slightly, still gives PT XYZ an advantage compared to its
competitors.

In addition, after averaging the prices of products offered by PT XYZ at

Tokopedia, it was found that the average Whole Red Snapper price is sold at Rp.
9,175/100gr, Fillet Red Snapper is sold for an average of Rp. 10,230. /100gr,
Cleaned Squid is sold for an average of IDR 59,000/kg, Steak King Fish is sold
for an average of IDR 8,970/100gr, and Whole King Fish is sold for an average
of IDR 82,000/kg. If a comparison is made between the prices offered by PT
XYZ and the average product prices offered by competitors at Tokopedia, it is
found that four of the five products offered are cheaper. The four products are
Whole Red Snapper which is cheaper at Rp. 1.175/100gr. Red Snapper Fillet is
cheaper Rp.2.230/100gr, Cleaned Squid is cheaper Rp.9.000/kg, and Steak King
Fish is cheaper Rp.970/100gr. Meanwhile, only one product from PT XYZ is
more expensive than the average price, namely Whole King Fish, which is more
expensive at Rp 3,000/kg. In addition, there are two types of products sold by all
competitors, the products are Fillet Red Snapper and Steak King Fish.

Furthermore, the average price of similar products offered by PT XYZ in

BukaLapak was also carried out, it was found that the average price of Whole
Red Snapper was sold at Rp. 12,960/100gr, Fillet Red Snapper was sold for an
average of Rp. 8,712.5 /100gr, Cleaned Squid is sold at an average price of
Rp.74,291.66/kg, Steak King Fish is sold at an average price of Rp.9,240/100gr,
and Whole King Fish is sold at an average price of Rp.99,500/kg. If a
comparison is made between the prices offered by PT XYZ and the average
product prices offered by competitors at BukaLapak, it is found that all products
sold are cheaper than those offered by competitors. The price difference for the
Whole Red Snapper product is cheaper Rp. 4,960/100gr, Fillet Red Snapper is
cheaper Rp. 712.5/100gr, Cleaned Squid is cheaper Rp. 24,291.66/kg, Steak
King Fish is cheaper Rp. 1,240/ 100gr, and Whole King Fish is cheaper at Rp.
14,500/kg. In addition, there is only one type of product sold by all competitors
at BukaLapak, namely Fillet Red Snapper.

Finally, a comparison of the average prices of similar products offered by PT

XYZ at Shopee was also carried out, it was found that the Whole Red Snapper
on average was sold at Rp. 9,366.67/100gr, Fillet Red Snapper was sold for an
average of Rp. 8,960/ 100gr, Cleaned Squid is sold at an average price of
Rp.70,866/kg, Steak King Fish is sold at an average price of Rp.9,351/100gr,
and Whole King Fish is sold at an average price of Rp.95,500/kg. If a
comparison is made between the prices offered by PT XYZ and the average
product prices offered by competitors at Shopee, it is found that all products sold
are cheaper than those offered by competitors. The price difference for the
Whole Red Snapper product is Rp. 1,366.67/100gr, Fillet Red Snapper is
 cheaper Rp. 960/100gr, Cleaned Squid is cheaper Rp. 20,866/kg, Steak King
Fish is cheaper Rp. 1,351/ 100gr, and Whole King Fish is cheaper at Rp.
14,500/kg. The price difference for the Whole Red Snapper product is Rp.
4,960/100gr, Fillet Red Snapper is cheaper Rp. 712.5/100gr, Cleaned Squid is
cheaper Rp. 24,291.66/kg, Steak King Fish is cheaper Rp. 1,240/ 100gr, and
Whole King Fish is cheaper at Rp. 10,500/kg. In addition, there is only one type
of product sold by all competitors at Shopee, namely Steak King Fish.

● Place:

PT XYZ currently only sells all the products they produce to the international
market through the company's website and will directly shipped from Indonesia
to their customers. However, by deciding to do direct sales to customers, there
are several e-commerce platforms that will be used by PT XYZ to market their
products, namely Tokopedia, Shopee, and direct sales through WhatsApp.

It is hoped that the marketing of existing products through several e-commerce

and social media can make it easier for customers to find the products they want.
In addition to making, it easier to search, selling in e-commerce also makes it
easier for consumers to compare prices for similar products.

The reasons for choosing only two e-commerce sites, namely Shopee and
Tokopedia, as the two e-commerce channels used to market products from PT
XYZ are Tokopedia and Shopee, which are the two e-commerce websites with
the highest monthly traffic in Indonesia. according to Statista, the monthly traffic
for Tokopedia and Shopee is 135.08 million clicks and 127.4 million clicks,
respectively. Apart from being e-commerce with the highest monthly traffic,
Shopee and Tokopedia are the two e-commerce sites that have the most monthly
active users in Indonesia.

Referring to data released by iPrice, as of August 2021, the Unique Daily

Activers Users (DAU) accessing from android mobile devices in Indonesia for
Shopee is 26.92 million, while the DAU for Tokopedia is 7.882 million. If the
calculation is made for the total active users of mobile apps and websites, it is
found that Shopee has an average number of visits of 961.51 million. This
number was obtained from website visits of 126.99 million and applications of
834.52 million. If calculated with iPrice's assumptions regarding user visits
through websites and applications, Tokopedia managed to achieve 392.13
million visits per month. This number was obtained by adding up 244.34 million
application visitors and 147.79 million website visitors (Kompas, 2021).

In addition, based on the Momentum Works report entitled Momentum Works

Blooming Ecommerce in Indonesia, the gross transaction value or gross
merchandise value (GMV) of Indonesian e-commerce is dominated by Shopee.
The GMV frozen by Shopee in 2020 was US$14.2 billion or 37% of the
Indonesian GMV market share. In second place, it was won by Tokopedia, with
a market share of 35% and a GMV of US$14B.

Of course, by deciding to sell fisheries products through e-commerce, PT XYZ

will encounter several obstacles. Currently, all competitors or sellers who sell
fresh food or frozen food do not serve delivery outside the city. All sellers only
provide delivery options using the same day delivery feature in collaboration
with several online motorcycle taxi platforms in Indonesia. even if they receive
deliveries outside the city, all sellers only accept deliveries to cities around
Jakarta.

In addition to being constrained in terms of product delivery, other obstacles that

will be faced are related to product packaging that cannot last long in transit,
which will result in product damage when received by consumers. Finally, in
some cases that I found, some sellers from e-commerce did not provide fresh
fish to consumers.

Of course, PT XYZ is aware of the obstacles faced by the industry that trades
frozen food or fresh food. During the three years of operation, PT XYZ has done
several things to keep the freshness and quality of the products they sell into the
hands of consumers. One method that is always used by PT XYZ or competitors
to maintain the freshness of the products sold to consumers is to use the instant
courier service which is widely offered by online motorcycle taxi services in
 Indonesia. In addition, another delivery method is to use an inter-city delivery
service that promises same day delivery to several locations.

Apart from shipping partners, PT XYZ also optimizes the product packaging
that they will send to their customers, whether the distance is still within the city
or outside the city or country. The type of packaging that is often used is to use a
vacuum bag or vacuum sealer. By using a vacuum bag for all fisheries products
that will be sent to customers, you can maintain the quality and taste of the
product. In addition, a vacuum bag will also reduce the potential for
contamination from bacteria or other harmful substances from the product.

In addition to using a vacuum bag, if the volume of purchases made by the

customer is in large quantities, PT XYZ also provides packaging in the form of
Styrofoam Boxes which are available in various sizes according to the number
of orders. Inside the Styrofoam box, an ice pack is also provided to maintain the
optimal temperature of the product to be shipped. However, the disadvantage of
packaging using Styrofoam boxes and ice packs is that they are quite expensive.

● Promotion:

It is important for PT XYZ who will do direct sales to customers to carry out
promotional activities. For export activities that the company is currently
running, PT XYZ prior to the covid-19 pandemic carried out promotional
activities by participating in seafood exhibitions held either locally, nationally or
multinationals. Seafood exhibition is currently seen as one of the effective
promotional media because it can attract new customers and can directly
introduce products directly to the new potential buyers. However, after the
pandemic, the company is currently focusing on promotional activities through
websites owned by companies or other online communication media that can
connect directly to the existing customers and relying on word of mouth from
existing buyers.

Furthermore, using the same business model, the company's target customers are
buyers from friendly countries who have established bilateral cooperation with
Indonesia. Some of the countries targeted by the company are the United States,
Vietnam, Canada, and China. Of the four countries, the United States is the
country that exports the most products from PT XYZ, this is due to the number
of seafood consumption per capita which is increasing every year. According to
the National Oceanic and Atmospheric Administration (NOAA), US per capita
seafood consumption in 2019 hit 19.2 pounds per person. This total is an
increase of 0.2 pounds from the 19 pounds consumed in 2018, due to a small
increase in the consumption of canned seafood (Intrafish, 2021).

US per Capita Seafood Consumption

Based on New NOAA Calculations
19.5 19.1 19.2
Per Capita Consumption in lbs

19
19 18.8
18.5 18.3
18 17.7 17.8 17.9

17.5 17.3
17 16.8
16.5
16
15.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year

Figure 2.6 United States Per Capita Seafood Consumption

Source: NOAA

Promotional methods and media, as well as target customers that are currently
being carried out by companies when doing B2B business models can be said to
be running smoothly and well. However, when a company decides to sell
directly to consumers or by using a B2C business model, the company needs to
make some adjustments regarding the methods and promotional media that will
be used to brand and sell products through e-commerce.

For now, the company has not promoted or targeted the customers they want
when selling directly through e-commerce. However, it would be better if the
company considers customers with the following segment. The target segment of
the company is women aged 18-45 years who live throughout Indonesia. The
potential customers can be students, young professionals, and housewives who
fall into the middle-class category. The reason for choosing the middle-class
customer is because according to the World bank (2019), the middle-class
customer is the major driver of economic growth for Indonesia as the group's
consumption has grown at 12% annually since 2022 and now represents close to
half of all household consumption in Indonesia. In addition, this social class has
been growing faster than another group in Indonesia, and also for over the past
20 years, the majority of the poor and vulnerable have climbed out of poverty
and into the aspiring middle class, where there are approximately 115 million
people who belong in this category.

The next thing that is no less important is knowing the target of PT XYZ in e-
commerce to market their fisheries products. The company targets consumers
who like practicality and don't have enough time, consumers who like online
shopping, consumers who have a healthy lifestyle, and consumers who are
seafood lovers.

As a newcomer to the world of e-commerce, of course, the products offered by

PT XYZ will not be directly ogled by consumers or will not appear directly on
the front page of search results in e-commerce because they still do not have
ratings and reviews from customers. The first thing that must be done by PT
XYZ is to optimize word of mouth as the first medium used to promote to
friends and relatives from employees or board of directors from the company.
The word-of-mouth promotion that is carried out must at least be able to direct
potential customers from PT XYZ to buy fisheries products offered by the
company through e-commerce, so that the company has several ratings and
reviews for some of the products they sell through e-commerce.

Apart from relying on word of mouth, there are several promotional activities
that can be done to increase brand awareness, first, it is important for PT XYZ to
promote the products they market through Instagram to increase brand
awareness.

Instagram became the first platform used for promotion because according to
Statista, Indonesia is a country that is in the 3rd position with the most users in
the world, with 93 million users. And, according to Napoleon Cat, a social media
management tool, as of May 2021, the majority or 52.6% of Instagram users in
Indonesia are women.

With these data, the author believes that promoting on Instagram is the right
thing because according to We Are Social, Instagram is in the 3rd position as the
most widely used social media in Indonesia after YouTube and WhatsApp. In
addition, with the majority of users being women, it is even more ideal because
grocery shopping activities are mostly carried out by women.

Meanwhile, when carrying out Instagram promotion activities, PT XYZ needs to

package the advertisement in the form of interesting and unique content. The
content can be in the form of short videos that explain the freshness of the
products offered. Apart from being in the form of short videos, PT XYZ can also
use paid promotions to one or more influencers who have personal branding as a
celebrity chef. Some celebrity chefs who can be considered are William Gozali,
Suhaidi Jaman or Lord Adi (Master Chef Season 8), and Arnold Poernomo.

In the short video advertised, PT XYZ must be able to direct consumers to make
transactions directly to e-commerce. This is something that must be a concern,
because Instagram is only used to build brand awareness to potential customers
from PT XYZ, and they have to make transactions through e-commerce. This e-
commerce transaction will later help to build the reputation, trust, and credibility
of PT XYZ as a new store in e-commerce.

In addition, it is important for PT XYZ to provide a link tree on the store's

Instagram biography. This link tree must contain a direct link to PT XYZ's e-
commerce (Tokopedia, and Shopee), and a direct link to the store's WhatsApp.
So that with this link tree you can see the traffic for each existing link.

Besides using Instagram, PT XYZ can also use TikTok as other social media to
carry out promotional activities. This is of course because TikTok is a social
media that is currently hype. As a digital platform that is currently growing
rapidly, TikTok offers TikTok for Business for businesspeople in Indonesia to
build brands by reaching a wider segmentation and interacting with young
people through unique and immersive content.
 Ads shown on TikTok must be short videos of 5-60 seconds in length, with an
optimal duration of 9-15 seconds per video. The videos made must be
interactive, memorable, and interesting for other users, so that they can get
communication between brands and users organically. Apart from making
videos personally, collaboration with other TikTok creators must also be done to
increase the buzz in the brand.

Last, shopping festivals such as 9.9, 10.10, 11.11, and 12.12 can be another
alternative to promote in e-commerce. Apart from being a way to increase sales,
shopping festivals can also be used as an opportunity for companies to launch
stores or products. Based on the 2021 Indonesia Online Shopping Festival
Trends Report released by The Trade Desk (NASDAQ: TTD), 52% percent of
Indonesians are keen to learn about new rands during online shopping festivals.
Thus, online shopping festivals can be a consideration for companies to start
selling in e-commerce (The Trade Desk, 2021)

In addition, according to internal data from Sirclo.com, based on research

conducted on event 9.9 in 2020, it shows that the shopping event is inflicted
more eagerness compared to last year's. This is significantly portrayed in the
quantity of orders that reached threefold as well as the transaction value that
exceeded twofold than that of 2019. Thus, PT XYZ can also increase its number
of sales by taking advantage of shopping festivals such as 9.9, 10.10. 11.11, or
12.12.

2.4.2. Value Chain Analysis

The concept of value chain analysis was introduced by Porter (1985) to describe
the full range of activities, which are required to bring a product or service from
conception, through the different phases of production, distribution to consumers,
and final disposal after use. As the products moves from one player in the chain to
another, it is assumed to gain value (Hellin and Meijer, 2006). As such, the value
chain can be used as a tool to disaggregate a business into major activities, thereby
allowing the identification of sources of competitive advantage (Brown,1997).

The value chain can be described by use of a diagram as follows:

 Figure 2.7 Company Value Chain
Source: (Thompson et all, 2018)

The primary activities consist of these activities:

1. Supply Chain Management, activities, costs and assets associated

with purchasing fuel, energy, raw materials, parts, and components,
merchandise, and consumable items form vendors; receiving, storing
and disseminating inputs from suppliers; inspection; and inventory
management.

2. Operations, activities costs, and assets associated with converting

inputs into final product form (production, assembly, packaging,
equipment maintenance, facilities, operations, quality assurance,
environmental protection).

3. Distribution, activities, costs, and assets dealing with physically

distributing the product to buyers (finished goods, warehousing, order
processing, order picking and packing, and shipping, delivery vehicle
operations, establishing and maintaining a network of dealers and
distributors).

4. Sales and Marketing, activities costs, and assets related to sales

force efforts, advertising and promotion, market research and
planning, and dealer/distributor support.
 5. Service, activities, costs and assets associated with providing
assistance to buyers, such as installation, spare parts delivery,
maintenance and repair, technical assistance, buyer inquiries, and
complaints.

The support activities consist of these activities:

a. Product R&D, Technology, and Systems Development,

activities, costs, and assets relating to product R&D, process R&D,
process design improvement, equipment design, computer software
development, telecommunications systems, computer-assisted
design and engineering, database capabilities, and development of
computerized support systems.

b. Human Resource Management, activities, costs, and assets

associated with the recruitment, hiring, training, development, and
compensation of all types of personnel; labor relations activities;
and development of knowledge-based skills and more
competencies.

c. General Administration, activities, costs, and assets relating to

general management, accounting and finance, legal and regulatory
affairs, safety and security, management information systems,
forming strategies alliances and collaborating with strategic
partners, and other “overhead” functions.

The value chain is an ideal tool for examining the workings of a company’s
customer value proposition and business model. This value chain system has
implications that extend far beyond the company’s costs. It can affect attributes
like product quality that enhance differentiation and have importance for the
company’s customer value preposition, as well as its profitability. Because
suppliers perform activities and incur costs in creating and delivering the
purchased inputs utilized in a company’s own value-creating activities. The costs,
performance features, and quality of these inputs influence a company’s own costs
and product differentiation capabilities. Anything a company can do to help its
suppliers drive down the costs of their value chain activities or improve the
quality and performance of the items being supplied can enhance its own
competitiveness-a powerful reason for working collaboratively with suppliers in
managing supply chain activities.

Value chain analysis for PT XYZ can be seen in figure 2.31:

Figure 2.8 Value Chain Analysis of PT XYZ

It can be seen at figure 2.31 that the main activity of PT XYZ starts from inbound
logistics, which relates to the receipt and storage of the raw material. Then, the
company will process the raw materials into products and pack them according to
the order that had been made. The packed products will be sent to the buyer,
either by sea or by air service. Last, the company will provide an after-sales
service to the buyer.

a. Primary Activities

● Inbound Logistics

PT XYZ acquires products as raw materials to respond to products offered

to customers in e-commerce and international markets. The raw materials
needed by PT XYZ are raw materials related to production activities,
product packaging, and delivery. Raw materials needed for production
activities are Crab, Mahi-mahi Fish, Scarlet Snapper, Conger Eel, King
Fish, Threadfin Beam, Squid, and Cephalopods (Squid, and Octopus). In
order to obtain these seafood products, PT XYZ relies on several suppliers
consisting of fishermen's cooperatives or companies that specialize in
providing raw material for seafood products.

In addition to raw materials in the form of seafood, PT XYZ also needs to

purchase raw materials for their product packaging in the form of cans,
plastic cups, glass jars, vacuum plastics, and plastic pouches. The suppliers
of raw materials for product packaging consist of two main suppliers.

In addition, to deliver products to customers, PT XYZ also needs to make

purchases in the form of Styrofoam boxes, dry package ice, and card
boxes. The number of suppliers for this packaging consists of two main
suppliers.

Not only that, PT XYZ also needs to buy personal protective equipment for
employees who work on the processing plan. The personal protective
equipment includes masks, latex gloves, alcohol, hand sanitizer, rubber
boots, shower cap, head cap, disinfectant, apron, hand soap. To meet the
need for personal protective equipment, PT XYZ does not depend on only
one supplier but makes purchases based on the cheapest prices on the
market. After all the raw materials needed to carry out production are met,
the next stage is processing the product.

Of course, with the large number of raw materials needed, the company
also needs to carry out initial quality control regarding all raw materials
obtained from suppliers, especially for raw materials related to fisheries
products to be processed. The initial stage of quality control carried out by
the company is that before placing an order for raw materials, the company
provides certain specifications regarding the raw materials needed for
production activities. Furthermore, when the raw material is received, the
procurement division conducts a random sampling of the raw material that
has been received. The company conducts random sampling activities in
this early stage because it has established cooperation based on trust and
 kinship that has existed for a long time, so that suppliers know exactly the
raw materials needed by the company.

● Operations

Once the product needed is available, the next step is to process the
product. These activities include fish cleaning, crab peeling, octopus
cleaning and squid cleaning. In the fish cleaning process, the activities
performed include making fillets on several types of fish, such as Mahi-
Mahi, Scarlet Snapper, and King Fish.

At the same time, at other stations, fish are also sorted according to the
company's size and standard for whole fish. The types of fish sold in the
form of whole fish are Scarlet Snapper, King Fish, Conger Eel, and
Threadfin Bream. At the same time, the crab peeling, squid cleaning and
octopus cleaning processes were also carried out at different stations. After
processing the product, PT XYZ introduces quality control (QC) in the
laboratory to ensure that the quality of the product is below the desired
standards.

In this process quality control, the company conducts random sampling on

all products that have been produced by the company. This random
sampling is intended to conduct random checks on all products that have
been produced, whether the product is free from contamination by harmful
external substances or contamination from bacteria that are detrimental to
the health of the buyer. If the product is declared according to the
company's standards of quality, the next step is to package the product to
the buyer.

At this stage, PT XYZ needs to pay attention to packaging in order to

maintain the quality of products shipped in Indonesia and abroad. The
standard packaging owned by the company for crab meat products consists
of three types, namely can, jar, and plastic cup. Meanwhile, standard
packaging for fish meat products is packaged using sealed plastic. This is
 done to maintain the freshness of the product and keep the product from
being contaminated by bacteria and other harmful substances during the
trip to the customer.

As for product delivery, the company uses Styrofoam filled with dry ice
packs. By using this kind of packaging, products sent to customers can last
for three days in transit. Meanwhile, if the company sends overseas, the
company uses a container that has a freezer to keep the products shipped
fresh and of good quality.

To ensure that all activities carried out during operations run smoothly, the
company's efforts are to use streamlined processes and workflows. With
this method, the operations in the company have been simplified by
eliminating unnecessary work-related tasks to improve the efficiency of
processes. In the streamlining process, the company combines modernized
processing and cleaning techniques for raw material fisheries products and
uses packaging technology that is tailored to the company's needs.

● Outbounds Logistics

When the goods are ready to ship, PT XYZ addresses the customer's
delivery needs from the ship or aircraft licensing, transportation, loading
and shipping process to good and fresh buyers. For now, when carrying out
export activities to overseas customers, the company relies on two logistics
companies to make deliveries overseas. The reason the company chose to
cooperate with the shipping company was the principle of trust and
kinship. Basically, the business run by PT XYZ is a business that is closely
related to kinship and trust with the relationships owned by the owner. The
other criteria set by the company in selecting logistics partners are logistics
companies that can meet criteria such as having containers that have
freezers and having access to export activities to destination countries.

Of course, the company needs to make some adjustments regarding the

logistics partners that will be used to ship fisheries products sold by the
company when it decides to sell via e-commerce. Here are some shipping
companies that can be included in the company's consideration in
determining shipping companies. The shipping companies that can be
collaborated with PT XYZ to deliver their products to customers
throughout Indonesia are Paxel, JNE, J&T, Wahana, SiCepat, Anter Aja,
Gojek and Grab.

For delivery within the city, the company relies on the same day delivery
service offered by Anter Aja, Gojek, and Grab through instant delivery or
same day delivery. As for deliveries outside the city, the company only
accepts product deliveries to cities with a maximum delivery time of three
working days in collaboration with Paxel, JNE, J&T, Wahana, SiCepat,
and Anter Aja. For this long-distance delivery, it would be better to
cooperate with Paxel, because Paxel is the only logistics company that is
committed to keeping the food we send frozen when it is received by the
customer. This is due to the special facilities that Paxel has to handle
shipments in the form of frozen food, namely by picking up and using a
motorbike that has a freezer for delivery within the city. If the product is
shipped out of town, Paxel also provides a freezer and chiller to keep the
product shipped fresh. Finally, in the delivery process which takes more
than one day, Paxel uses a cold truck. In addition, to ensure that the
package sent is safe, Paxel also adds extra security by attaching a special
frozen food sticker.

The steps taken by the company to ensure that all products sent are in
accordance with customer expectations, by ensuring that the product
packaging to be sent is in accordance with the standards applied by the
company, which uses a Styrofoam box, has been filled with ice packs, and
is covered with cardboard. the outermost part. After making sure that the
packaging is in accordance with shipping standards, the company will
contact the logistics partner to pick up the product that has been prepared.
For shipments outside the city, the company always provides insurance for
all products sent, so that if there is damage to the product sent, it can be
 assisted to make an insurance claim for damage to goods or be given a
refund.

However, if the buyer already knows the product to be delivered, it takes

more than three days, and still wants to make the delivery. Then the
company will still send the goods, but the risk must be borne by the buyer,
because previously the company has notified the buyer regarding the
durability of the packaging provided by the company.

● Sales and Marketing

Currently, the production system of a business is make-to-order. PT XYZ

looks for buyers and accepts orders from them. For export activities that
the company is currently running, PT XYZ prior to the covid-19 pandemic
carried out promotional activities by participating in seafood exhibitions
held either locally, nationally or multinationals. Seafood exhibition is
currently seen as one of the effective promotional media because it can
attract new customers and can directly introduce products directly to the
new potential buyers. However, after the pandemic, the company is
currently focusing on promotional activities through websites owned by
companies or other online communication media that can connect directly
to the existing customers and relying on word of mouth from existing
buyers.

Of course, companies need to adapt related to sales and marketing

programs that will be carried out when changing the business model from
B2B to B2C. Companies need to do more innovative and new sales and
marketing methods when deciding to enter e-commerce. This is important
to do to increase brand awareness and brand recognition of their potential
buyers in e-commerce and on social media. The marketing methods that
can be used by the company will focus on marketing through social media
such as Instagram, TikTok, and Facebook.
Instagram was chosen as one of the social media used to increase brand
awareness and brand recognition because Indonesia is one of the countries
in the world that has the most users. In addition, Instagram is also one of
the platforms that can be the key to the company's success to build
branding and increase sales through Instagram marketing. In the Instagram
marketing campaign that will be carried out, it will focus on marketing
through Instagram posts in the early stages, this is important because it is to
build the brand identity of our company on Instagram. In addition, using
Instagram feeds to build brand awareness and identity is important for
companies to create interesting content, because this content will later
become one of the media for storytelling related to companies or products
offered in the marketplace.

After that, the next thing to do is to maximize the Instagram stories feature.
Indeed, this feature only lasts for 24 hours, but with the tendency of users
to be increasingly lazy to read long captions, this feature will also help
companies to build brand identity and increase their brand recognition. In
addition, this feature can also establish interactive communication between
companies and consumers or potential customers through trivia or
questions and answers related to the products offered by the company.

The company will use several e-commerce and social media to maximize
sales of all products that will be offered. The companies will use several
platforms to market their products, namely Instagram, Tokopedia, and
Shopee. Apart from relying on social media, the company also accepts
orders directly via WhatsApp. By using these sales channels, it is hoped
that it can help companies to reach their customers more closely. However,
all the company's sales activities will focus more on two e-commerce,
namely Tokopedia and Shopee.

Another thing that should not escape the company's attention is the
addition of employees who will handle all buying and selling transactions
that occur through the company's e-commerce. So that when the company's
marketing campaign goes well and has a division or employee that
 specifically handles e-commerce, the recording of export and e-commerce
transactions owned by the company will be neater and separate.

● Service

The company ensures that customers are happy and provides appropriate
feedback on the products they ship. If the product shipped is lacking in
specifications, PT XYZ will provide proactive action to be negotiated to
create a mutually beneficial solution.

For example, suppose that when you purchase a certain product, the
company sends the wrong product. Then the company will swiftly offer the
option to make a return or refund in accordance with the refund rules that
apply in e-commerce. In other cases, for example, if at the time of delivery,
the product received by the customer is in a rotten condition due to
negligence by the shipping company, the company will help the customer
to make an insurance claim to the related shipping company.

During the commercial operation which has lasted for three years, the
company very rarely receives complaints regarding the products they send
to customers. This is because the company consistently improves and
maintains the quality of the products produced every year to comply with
international standards owned by the company.

Even if there is damage to the product when it is received by the consumer,

the company will first verify the damage that occurred, whether the
incident occurred due to negligence from the company or from the logistics
side. If based on the results of the investigation, it is found that the error
was caused by the company's negligence when packing or during the
production process, the company offers two options for the customer,
namely to provide a refund or return of goods. However, if the product
damage is caused by the negligence of the logistics company, the company
will help the customer to make an insurance claim based on the work
contract agreed by the company and the logistics company.
b. Support Activities

● General Administration

The finance and administration department are responsible for managing

the financial flow of the business. In Finance and Administration, it
consists of a director of finance and accounting. The task of accounting is
to perform accounting based on transactions or activities that occur within
the enterprise. The financial task is to use the accountant's data to execute
a company's financial planning.

The accounting division of the company has a very good performance, this
is because the financial performance for three years of operation has never
experienced a loss. This is due to the demand for fisheries products both
globally and nationally which continues to increase every year and the
market owned by the company is always increasing every year. In
addition, the company also routinely reports the results of the company's
annual financial statements to the public accounting firm to check the
company's financial health on a regular basis to find out whether the
business being undertaken is currently experiencing a decline in
performance or not.

On the other hand, the administration focuses on submitting and

processing the documents necessary for business. In addition, this
department is required to ensure that the company has the necessary
certificates for its commercial activities. In addition, when making sales
via e-commerce, this administrative division will also take care of the
recap of the delivery receipt, and the customer's delivery address before
being handed over to the shipping company.

● Human Resource Management

Human resource management focuses on the recruitment, training and

development of company employees and factory workers. The Human
 Resources Department also ensures K3, or occupational health and safety,
taking into account the risks of occupational accidents in the
manufacturing process. Human resources also play a role in the
distribution of wages and salaries to employees and workers.

The daily activities carried out by the HR division at the factory are
checking the attendance of all workers working in the factory, then
providing safety briefings regarding the use of PPE and Health protocols
to all company employees. In addition, the company's HR will also check
the performance of all employees in the company every six months to
ensure each division is working well in accordance with the job
description provided by the company. In general, the company's HR
division focuses more on managing the performance of 3,000 daily
workers every day because the company's day-to-day operations rely
heavily on the presence of these workers to sort, clean, and pack products
before sending them to the company's expedition partners.

● Product Research and Development, Technology, and System

Development

R & D takes place when the company receive orders for new
specifications that have never been seen before, and this section also helps
us create new and innovative products based on market trends and
demand. This division also plays an important role in determining what
products will be sold next in addition to the five products that have been
determined by the company as the initial products to be marketed when
launching in e-commerce. Of course, when determining other products to
be marketed, this division must also adjust the demand or trends that are
developing in e-commerce, especially for fisheries products that are being
favored by buyers.

● Procurement
 The procurement department is responsible for helping the business
manage its day-to-day operations. This department is responsible for
purchasing the raw materials or other materials needed during operation.
To obtain raw materials, the purchasing department can contact the
company's partners or assisted fishermen directly.

The daily activities carried out by the procurement division are purchasing
raw materials needed for production activities which include fish,
cephalopods, crabs, and eels. In addition, this division also has weekly
purchasing activities carried out to purchase needs for product packaging
which include Styrofoam boxes, plastic vacuums, dry ice packs, card
boxes, and so on. Meanwhile, for needs such as PPE and office stationery,
purchasing is done monthly.

2.4.3. VRIN (Valuable, Rare, Inimitable, and Non-substitutable) Analysis

Barney (1991) proposes the VRIN framework, which identifies the traits that
resources must possess in order to attain competitive advantage. Valuable, rare,
imperfectly imitable, and non-substitutable resources, according to the VRIN
Framework, have the potential to generate long-term competitive advantage. The
value of resources is determined by their ability to neutralize threats and enable a
company to capitalize on opportunities that arise in a business environment, i.e.,
resources are valuable if they allow a company to design and implement strategies
that increase its efficiency and effectiveness. It is critical to underline that the
value of resources must be assessed in the context of business strategy and the
company's operating environment.

Rareness of a resource suggests that competitors either do not have access to it or

have restricted access to it. Competitive advantage cannot be gained from
valuable resources that are not rare. The resource must be precious and
uncommon in order to gain a competitive edge. This isn't to say that valuable
materials that aren't rare aren't important to a business. These resources secure the
company's survival and allow it to compete on an equal footing in the industry in
which it operates. A corporation will be at a competitive disadvantage if it fails to
exploit valuable resources. If a company's resource isn't valuable, it won't be able
to choose and implement strategies that take advantage of possibilities and
mitigate dangers from the environment. Such resources are regarded as problems.
Strengths are valuable resources that are not rare (Barney and Clark, 2007).

If rivals cannot get a resource in a given market, it is imperfectly imitable.

Existing resources are not substitutable if there is no other resource that might be
used as an appropriate and worthy replacement for them. The importance of
resource value and scarcity is emphasized as crucial prerequisites for obtaining
competitive advantage. However, resources must be imperfect, imitable, and non-
substitutable in order to achieve long-term competitive advantage. In response to
Barney's taxonomy of VRIN circumstances, Foss and Knudsen (2003) argue that
only two conditions are required for obtaining long-term competitive advantage:
uncertainty and immobility.

Following are the results of VRIN analysis conducted at PT XYZ:

● Valuable

As previously mentioned, the main activity carried out by PT XYZ is currently

exporting fisheries products to several countries such as China, Europe, and the
United States. Of course, to carry out export activities to these countries,
several certifications are required that must be owned by foreign companies to
meet standards in accordance with the countries that are the export
destinations. PT XYZ currently has several international certificates which
include HACCP, BRC, FDA, and European Quality Standards certifications.
Of course, having this international certification provides benefits not only for
the company to compete with other competitors, of course it will also provide
benefits for customers. With the HACCP certificate, this shows the company's
commitment to identifying, evaluating, and controlling real hazards to the
safety of food that will be consumed by customers.

BRC certification also shows that the company has implemented a food safety
management system that is recognized in international trade. Companies that
have been certified by the BRC Global Standard are considered to have proven
their competence in the HACCP system in the form of hygiene, food safety and
quality systems. In addition, this also shows the company's commitment to the
safety of products consumed by consumers and all stakeholders.

Similar to other international certifications, FDA and European Quality

Standards are also certifications related to the quality and safety of food that
will be consumed by customers. The FDA is a certification obtained through
the United States Food and Drug Administration which regulates food, dietary
supplements, drugs, biopharmaceutical products, blood transfusions, medical
devices, radiation therapy devices, veterinary products, and cosmetics
marketed in America as safe according to with the promises made by the
manufacturer. In addition, the FDA also regulates food packaging that is
appropriate for consumer safety, as well as safe for environmental safety.
Meanwhile, the European Quality Standard is a standard set by the European
Commission to ensure safety and quality of food and agricultural products.

With all international certifications that have been owned by PT XYZ, of

course this will provide more value for customers who will buy products from
the company. Customers are ensured to get products that have the best quality
assurance and are not contaminated by harmful substances, both in the initial
process of receiving raw materials to the product packaging process and
product delivery to consumers' hands. In addition, the existence of this
international certification also provides a competitive advantage for the
company to compete with other competitors in e-commerce. In addition, the
quality standards and quality assurance owned by this company can also be
used as selling points when doing digital marketing, because consumers will
tend to look at products that have good quality and are sold at relatively
cheaper prices in e-commerce.

As previously mentioned in the previous competitor analysis, companies need

to be aware of 22 Seafood AMT which will become the main competitor in e-
commerce because it has varied sales channels and offers quite competitive
prices for similar products offered by PT. XYZ. In addition, 22 Seafood AMT
is also an import-export company that has one of the four certifications held by
 PT XYZ, namely HACCP. As a competitor who also has HACCP certification,
the sales performance of the seafood products offered is very good and this
shop even gets a rating of 4.9 out of 5 from their customers.

In addition, 22 Seafood AMT also has a halal certification issued by the

Indonesian Ulema Council (MUI) as proof that all the products they produce
and sell are safe for consumption in accordance with Islamic law. However,
because the products sold by PT XYZ in e-commerce are products in the form
of frozen fish and frozen squid, the halal logo does not need to be included
because fish and squid meat is halal meat to be consumed by Muslims in
Indonesia.

In addition, it would be better if the company also considers doing halal

certification issued and legalized by MUI, because with halal certification it
will increase the trust of customers to buy processed seafood products sold by
PT XYZ in e-commerce. In addition, customers in e-commerce also have a
tendency to ignore the certifications held by the company, they are more
sensitive to the price of the products offered. So, with international
certification, companies can also target international hotel and restaurant lines
that are very concerned about the quality of the products they process for their
customers.

With this in mind, it can be concluded that the company's internal resources in
the form of international certifications are very valuable resources to compete
in the e-commerce industry and the fisheries product industry in Indonesia
because all international certifications owned by the company are not easy to
obtain.

● Rare

Currently, according to the statistics data of KKP in 2019 there are 62,866 fish
processing units in Indonesia. Despite having approximately 62,000 fish
processing units throughout Indonesia, not many companies or fish processing
units are internationally certified. Based on data obtained from the Fish
Quarantine, Quality Control and Safety of Fishery Products (BKIPM), the
number of fish processing units registered as exporters to several countries
such as China, Canada, Russia, Vietnam, Korea, European Union, Norway, and
Saudi Arabia are as many as 821 fish processing units that have been
internationally certified. If a comparison is made between companies with
international standards and the number of fish processing units, it is found that
only 1.305% of fish processing units in Indonesia have international standards.

In addition, if viewed from the fisheries product that is produced by the

company and is still not marketed in e-commerce, there are several products
that the company can consider increasing its competitive advantage. These
products are crab products and Mahi-Mahi fish, both products can be
considered to be marketed through e-commerce because most competitors in e-
commerce do not sell these two products. In addition to these two products, the
company can also sell waste products such as snapper heads which have no
demand in the export market, while these products are in great demand by
Indonesian consumers. However, the demand for buyers in e-commerce related
to these two types of products is quite high. For example, the snapper heads
sold by 22 Seafood AMT have been sold 152 times. When viewed again from
other stores, some have even managed to sell 236 times. Another product is
Mahi-mahi. Based on the analysis, there are indeed no competitors who sell it,
but if you look at other stores, there are those that have managed to sell 122
times to 257 times. So having a product that has a good demand but is not sold
by competitors will also provide an advantage for the company.
 Figure 3.1 Demand for Mahi-Mahi, and Red Snapper Head in e-commerce

Finally, delivery services out of town and after sales service provided by the
company are also rare compared to competitors. All competitors faced by
companies in e-commerce only accept shipments using the same-day delivery
service which only serves delivery within the city, and if in the delivery
process the goods received by consumers are not fresh or not according to
competitors, they rarely give refunds.

Based on the things mentioned above, it can be concluded that the company's
internal resources to compete in e-commerce are rare.

● Inimitable

As previously mentioned, the number of fish processing units in Indonesia is

62,866 consisting of large and small-sized fish processing units. Of these, there
are 773 large-scale fish processing units spread throughout Indonesia (KKP
Statistics, 2019). If a comparison is made between small-scale and medium-
large fish processing units, the majority of fish processing units in Indonesia
are small-scale, because only 1.22% of large-scale fish processing units in
Indonesia, one of which is PT XYZ. The main reason for the lack of medium
and large-scale fish processing units in Indonesia is that it is costly to imitate.
According to Suharjito, an adviser to the Central Committee of the Indonesian
Pindang Fish Entrepreneurs Association (Apikando), the capital required to
build a small fishery processing plant is an initial capital of IDR 500 million to
IDR 1 billion is required. On the other hand, establishing a large-scale modern
and high-level fish processing company requires an initial capital of IDR 2 to
IDR 20 billion (Kontan, 2015).
 In addition, if a deeper analysis is carried out regarding the competitors that
will be faced by companies in e-commerce, it is known that none of the
existing competitors is a company that has international standards like those of
PT XYZ. Of course, this provides an advantage for the company because it
sells quality products at competitive prices. However, the rarity owned by PT
XYZ is a temporary competitive advantage, because the current international
certification owned by the company can still be duplicated by other
competitors.

Based on the analysis that has been done, it is known that the internal resources
owned by PT XYZ are currently limited, but only provide a temporary
competitive advantage for the company.

● Non-substitutable

Based on the analysis that has been done above, it is known that all
stakeholders in the company are non-substitutable assets. This is due to all
divisions tasked with providing support activities to the company so that they
have good performance for three years of commercial service. General
administration owned by the company has the skill to prepare all of the
administration works needed by the company to run their business. The Human
Resource Management division has the skill to manage all of the daily workers
who work in all processing plants owned by the company and use a database of
all employees in the company to hire, promote, manage, and improve the
employees. Product Research and Development, Technology, and System
division has the skill to research the current market needs and the improvement
that needs to be done by the company.
2.5. SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis

SWOT analysis is a method of identifying the strengths, weaknesses, opportunities,

and threats that affect a company's or institution's performance (Richard L. Daft,
2010). SWOT analysis, according to the Badan Pusat Statistik (BPS), is an
examination of an organization's internal and external situations that will be utilized to
develop strategies and work plans. This approach of analysis is founded on the
concept of maximizing strengths and opportunities while minimizing weaknesses and
threats. Internal elements such as appraisal of strengths and weaknesses, as well as
external factors such as opportunities and threats, are compared in a SWOT analysis.

The following are the results of the SWOT Analysis for PT XYZ:

2.5.1. Strength

1. PT XYZ has its own supplier to meet the demands of the company in
accordance with the standards and specifications for the international market.

2. PT XYZ has its own laboratory to conduct research related to the development
of new products or to ensure that the products produced are in accordance with
company standards.

3. Has experience in producing fisheries products in accordance with international

standards and quality because they have been certified by FDA, HACCP, and
BR.

4. Have a lot of resources (raw materials) so as to ensure the products sold are
always available.

5. The prices of products offered by PT XYZ in e-commerce are generally cheaper

than those offered by competitors.

6. PT XYZ accept delivery of all products sold throughout Indonesia.

7. If a comparison is made with other competitors who only sell products in the
form of fish, PT XYZ has several potential products such as Canned/Jar Crab
Meat, Octopus, and Conger Eel.
 8. PT XYZ has a processing plant in Banyuwangi, so it is close to one of the
regions of Indonesia that has a variety of marine resources.

2.5.2. Weaknesses

1. As a newcomer to e-commerce, PT XYZ still doesn't have a good name and

store reputation compared to other competitors.

2. The company's current production system to meet the international market is

made-by-order, so PT XYZ does not have inventory in the company.

3. The number of products offered by PT XYZ when compared to competitors is

much less.

2.5.3. Opportunities

1. Globally, the number of world fish consumption continues to increase, so as to

maintain the demand chain for world fishery products and price stability in the
market.

2. The number of fish consumption in Indonesia continues to increase, so that it is

able to maintain the demand in the market.

3. The pandemic has increased people’s awareness of health, and fish is a good
source of protein.

2.5.4. Threats

1. There are many other products on the market that can meet people's protein
needs, such as chicken, beef, and vegetable protein products (Tempe, tofu,
etc.).

2. The price of seafood products is very volatile because of the amount of

available stock which is influenced by natural conditions.
 3. There are many competitors in e-commerce who sell the same products by
offering competitive prices.

4. Some of the company's technologies need to be upgraded to optimize the

production process and delivery of goods and services.

2.6.Root Cause Analysis

Root cause analysis is designed to connect incidents with their causes (causal factors
and root causes) and to connect the causes of the incident to recommendations that
prevent or mitigate the incident(s) being investigated (ABS Consulting, 2008). The
following is a root cause analysis that has been carried out by the author regarding the
problems faced by PT XYZ to market their products through e-commerce.

Based on the company's historical data regarding the export volume carried out from
2018-2020, it was found that the export volume carried out by the company in 2018 to
2019 showed a very good increase, from 10,277,459.2 US$ to 12,910,218.6US$.
Meanwhile, in 2020, it decreased by 10.41% to 11,565,902.1US$. The decline in
export volume that occurred was a result of concerns about the global health crisis and
prompted governments in each country to improve national security standards and
adopt several new policies.

After conducting an analysis related to macro and microenvironment, where the macro
environment consists of PEST (Political, Economic, Social, and Technology) which is
aimed at knowing market trends, risk, position, potential, and direction of business.
Meanwhile, the microenvironment that directly affects the business run by the
company consists of Porter's five forces (threats of new entrants, bargaining power of
buyers, bargaining power of suppliers, threats of substitute products, and industry
rivalry) which are carried out to anticipate five external factors. which can be a direct
threat to the business the company is running today. In general, all macro and micro
analyzes that have been carried out show that the efforts made by PT XYZ to conduct
direct sales in Indonesia through e-commerce using the B2C business model is a
feasible thing to do.
This is because according to statistical data obtained from the KKP, it is known that
the fish consumption rate in Indonesia from 2010 to 2019 continued to increase from
the initial 30.48 kg/percapita to 54.5 kg/percapita. With the increasing national fish
consumption figures, this illustrates that the fisheries product market in Indonesia is
very exciting for companies. By adapting the B2C business model by selling through
e-commerce by PT XYZ, it will provide a new revenue stream for the company during
the COVID-19 pandemic while waiting for restrictions on export activities to
countries that are consumers to return to normal. In the long term as a company that is
internationally certified and offers very competitive product prices, PT XYZ also has
the potential to become one of the market leaders in Indonesia for fisheries products
and cannot rely solely on export activities as the company's only revenue stream due
to this pandemic. it is not known when it will end.

E-commerce was chosen as one of the trading platforms that can be used by
companies because it is based on data obtained from the Director of Information
Empowerment, Directorate General of Information Applications at the Ministry of
Communication, and Informatics, Septriana Tangkary, the growth in the value of
electronic commerce (e-commerce) has reached 78% and is the highest in the world.
In line with the statement made by Septiana Tangakary, according to We Are Social,
88.1% of internet users in Indonesia used e-commerce to buy certain product
categories in the last few months. In addition, Bank Indonesia also noted that the
nominal transaction through e-commerce from 2017 to 2020 increased by 600% from
the initial 42.2 trillion in 2017 to 266.3 trillion in 2020.

However, companies also need to pay attention to several things related to plans to sell
products directly to customers through e-commerce. The first thing that the company
must pay attention to is the price, because the products sold by the company are
commodities, the prices offered by competitors are very competitive with those
offered by the company. In addition, the characteristics of customers in e-commerce
should not go unnoticed by the company because customers tend to have
characteristics that are very sensitive to price. In addition, the large number of similar
products offered in e-commerce and low switching costs give customers high
bargaining power. Although the new entrants are very difficult to enter fisheries
industries due to the high initial investment required, companies also need to be aware
of competitors who have similar certifications as the company and offer the same
products at very competitive prices. So that the things previously mentioned can affect
the buying decision of the customer.

In implementing the B2C business model, companies also need to know that with all
international certifications related to the quality of the products produced by the
company, it does not promise that the products sold will have good sales performance.
Customers in e-commerce tend to pay attention to the prices of products offered by
companies, and the certification that customers pay attention to is halal certification.
With the lack of attention from e-commerce customers with international certifications
owned by PT XYZ, the company can consider the international hotel line as one of the
potential customers because the international hotel and restaurant line has several
standards that must be met regarding the food safety standards they serve to
customers.

Finally, with a B2C business model that focuses on sales using digital marketing,
companies also need to provide special training related to digital marketing campaigns
to marketing and administration staff so that they have sufficient digital marketing
basics to execute digital campaigns, which is something new for the company.

Based on the things above, to overcome the problems faced by PT XYZ in the
marketing and administration, operations, human resources, and finance divisions, it is
necessary to formulate the right business strategy for the company to adapt the B2C
business model that relies on e-commerce as one of the one of the main platforms for
buying and selling activities.
 CHAPTER III BUSINESS SOLUTION

3.1 Business Strategy Formulation

This chapter will explain the business solutions used to solve the problems that have
been discussed in the previous chapter. Strategy formulation is a development of long-
range plans for the effective management of environmental opportunities and threats
in light of corporate strengths and weaknesses (Wheelen, Thomas L and Hunger, J.
David, 2011). It begins with situation analysis: the process of finding a strategic fit
between external opportunities and internal strengths while working around external
threats and internal weaknesses (Wheelen, Thomas L et all, 2015).
In order to obtain the right business solution, the SWOT method is used to identify the
company's internal factors consisting of the company's strengths and weaknesses.
Then the identification of external factors that affect the company's performance
 which consists of threats and opportunities is also carried out. After identifying
internal and external factors that can affect the sustainability of the business run by the
company, these factors are then formulated using TOWS analysis. From the TOWS
analysis that has been carried out, one of the most suitable strategies is chosen to be
implemented to overcome the problems faced by the company, so that in the end it can
improve the company's performance in general.
3.2 External and Internal Analysis Summary
Internal Factor Analysis Summary (IFAS) table is one way to organize the internal
factors into the generally accepted categories of strengths and weaknesses as well as to
analyze how well a particular company’s management is responding to these specific
factors in lights of the perceived importance of these factors to the company. On the
other hand, External Factor Analysis Summary (EFAS) table is one way to organize
the external factors into the generally accepted categories of opportunities and threats,
as well as to analyze how well a particular company’s management (rating) is
responding to these specific factors in light of the perceived importance (weight) of
these factors to the company (Wheelen, Thomas L et all, 2015).
As for how to generate and IFAS and EFAS tables for the company, according to
Wheelen, are as follows:
1. In column number one, list the most important internal factor (strength and
weaknesses for IFAS) or external factors (opportunities and threats for EFAS
facing the company).
2. In column number two (weight), assign a weight to each factor from 1.0 (most
important) to 0.0 (not important) based on that factor’s probable impact on a
particular company’s current strategic position. The higher the weight, the more
important is this factor to the current and future success of the company. All
weights must sum to 1.0 regardless of the number of factors.
3. In column three (rating), assign a rating to each factor from 5.0 (outstanding) to
1.0 (poor) based on that particular company’s specific response to that particular
factor. Each rating is a judgement regarding how well the company is currently
dealing with each specific external or internal factor. In order to provide a rating,
a discussion was held with one of the commissioners from PT XYZ named Prisa
Rizky Yulistia which was held on December 10, 2021, via Zoom Meeting.
4. In column four (weighted score), multiply the weight in column two for each
factor times its rating in column three to obtain that factor’s weighted score.
5. In column five (comments), note why a particular factor was selected and how its
weight and rating were estimated.
6. Finally, add the weighted scores for all the external or internal factors in column 4
to determine the total weighted score that particular company. The total weighted
score indicates how well a particular company is responding to current and
expected factors in its external or internal environment. The score can be used to
compare that firm to other firm in the industry. Check to ensure that the total
weighted score truly reflects the company’s current performance in terms of
profitability and market share. The total weighted score for an average firm in an
industry is always 3.0.

Table 3.1 PT XYZ Penetration to E-commerce EFAS Table

 External Factors (1) Weight (2) Rating (3) Weighted Score (4) Comments (5)
Opportunities
Globally, the number of world fish
consumption continues to increase,
so as to maintain the demand chain
for world fishery products and price Export market demand will continue
stability in the market. 0.1 3 0.3 to be maintained for a long time
The number of fish consumption in
Indonesia continues to increase, so The demand for fisheries products in
that it is able to maintain the demand Indonesia will continue to be
in the market. 0.2 3 0.6 maintained in the long term
The pandemic has increased
In line with the number of fish
people’s awareness of health, and
consumption in Indonesia which
fish is a good source of protein.
0.2 3 0.6 continues to increase every year
Threats
There are many other products on the
market that can meet people's protein
needs, such as chicken, beef, and The prices of some substitute
vegetable protein products (Tempe, products are cheaper than fisheries
tofu, etc.). 0.15 2 0.3 products
The price of seafood products is
very volatile because of the amount Weather plays an important role for
of available stock which is the availability and quality of raw
influenced by natural conditions. 0.1 4 0.4 materials
There are many competitors in e-
commerce who sell the same The product being sold is a
products by offering competitive commodity whose price difference is
prices. 0.15 3 0.45 very thin
Some of the company's technologies
need to be upgraded to optimize the By upgrading technology, can
production process and delivery of improve the efficiency of the
goods and services. 0.1 3 0.3 production process
Total Scores 1 2.95

Source: Author Analysis, 2021

Based on the EFAS table above, it is known that the world fish consumption figure has
increased by 122% from 1998 to 2018, so that it can maintain the supply-demand
fisheries product chain in the world so that it is given a weight of 0.1. The increasing
number of fish consumption in Indonesia has the highest weight among all existing
opportunities, which is 0.2, this is due to PT XYZ which decided to sell in the
domestic market, and this gives an idea of how attractive the fisheries product market
is in Indonesia. Another opportunity that received a weight of 0.2 was related to public
awareness regarding increased health due to the pandemic and considering fish meat
as a source of animal protein that has a high protein content.

Based on the calculations performed using the EFAS table above, it is found that the
total external score factor of PT XYZ penetration to e-commerce is 3.25. Based on this
score, it is found that the penetration that will be carried out by PT XYZ into e-
commerce has a high external or high-risk company condition because the external
factor value owned by the company is more than 3.0.
 Table 3.2 PT XYZ Penetration to E-commerce IFAS Table

Internal Factors (1) Weight (2) Rating (3) Weighted Score (4) Comments (5)
Strength
PT XYZ has its own supplier to meet
the demands of the company in
accordance with the standards and
specifications for the international Make it easier for companies to meet demand
market. 0.15 4 0.6 related to raw material fisheries products
PT XYZ has its own laboratory to
conduct research related to the
development of new products or to
ensure that the products produced are Does not require additional costs or other
in accordance with company parties when you want to do R&D and product
standards. 0.15 4 0.6 quality control
Has experience in producing fisheries
products in accordance with
international standards and quality Shows the seriousness of the company to
because they have been certified by produce quality and safe fisheries products for
FDA, HACCP, and BR. 0.1 4 0.4 consumption

Have a lot of resources (raw With suppliers who have collaborated for a
materials) so as to ensure the products long time, so the company will not have
sold are always available. significant difficulties to meet customer
0.05 3 0.15 demands
The prices of products offered by PT
XYZ in e-commerce are generally This is due to the large number of raw
cheaper than those offered by materials purchased by the company in one
competitors. 0.18 4 0.72 transaction
PT XYZ accept delivery of all Provide a secure packaging that will last for 3
products sold throughout Indonesia. 0.05 3 0.15 days
If comparison is made with other
competitor who only sell products in
the form of fish, PT XYZ has several These three products can be used as additional
potential products such as canned/jar products as a variety of products offered by
crab meat, octopus, and conger eel. 0.05 4 0.2 companies in e-commerce
PT XYZ has a processing plant in
Banyuwangi, so it is close to one of
the regions of Indonesia that has a Can reduce the cost of transporting raw
variety of marine sources. 0.05 2 0.1 material to the processing plan
Weaknesses
As a newcomer to e-commerce, PT
XYZ still doesn't have a good name The new breakthrough made by PT XYZ to
and store reputation compared to sells directly to customer that is caused by the
other competitors. 0.1 4 0.4 pandemic
The company's current production
system to meet the international
market is made-by-order, so PT XYZ
does not have inventory in the The needs of warehouse is postponed sambil
company. 0.08 4 0.32 melihat demand di e-commerce
The number of products offered by PT
At the initial step, company want to play safe
XYZ when compared to competitors
by only providing the most wanted fisheries
is much less.
0.04 3 0.12 products in e-commerce
Total Scores 1 3.76

Source: Author Analysis, 2021

Based on the IFAS table above, it is known that when it decides to sell its products in
e-commerce, PT XYZ has three advantages to compete with competitors in e-
commerce. The most important advantage or strength of PT XYZ is that it offers
fisheries product prices which are much cheaper than competitors in e-commerce by
getting a weight score of 0.18. As previously explained through competitor analysis,
by offering lower prices than competitors will provide a competitive advantage for the
company because customers in e-commerce have a tendency to have very high price
sensitivity.

By having this advantage, it will certainly support the sale of products owned by
companies in e-commerce. The second strength with the highest weight is PT XYZ
has its own supplier to meet the demand of the company in accordance with the
standards and specifications for the international market that gets a weight score of
0.15. By having this advantage, PT XYZ will certainly have no significant difficulty in
finding suppliers of raw materials that can meet the standards and demands set by the
company. Thus, the quality of the raw materials owned by the company will have the
same quality because it comes from suppliers who have established long-term
cooperation with the company.

The last strength that has the same weight is 0.15, namely PT XYZ has its own
laboratory. This is no less important for the company because in order to develop
products and carry out quality control related to the products produced, the company
does not need to spend more money to use the services of third parties or outside
parties which in turn can reduce the company's operational costs.

Strength in the form of experience owned by the company to produce fisheries

products with international standards gets a weight of 0.1. With experience in
producing fisheries products with international standards, it shows the company's
commitment to continue to produce and maintain the quality of the products they
produce for both international and domestic markets. While the two lowest strength
points owned by the company in the form of a large number of resources in the form
of raw materials and receiving product shipments sold throughout Indonesia received
the same weight, namely 0.05. As for the other two strengths that also have the same
weight, namely PT XYZ which has several potential products that can be launched in
the near future on e-commerce in the form of canned/jar crab meat, octopus, and
conger eel, and the location of one of the company's processing plants. located in
Banyuwangi which is one of the regions of Indonesia that has a variety of marine
sources.

As for the biggest weakness owned by PT XYZ based on the IFAS table above by
getting a weight score of 0.1, namely because it just plans to make sales through e-
 commerce, the company does not have a good reputation and reputation. Of course,
not having a reputation and good name in e-commerce can affect the performance of
stores in e-commerce and customer trust to make transactions with stores owned by
companies in e-commerce.

Weakness in the form of the order system used by the company today, namely made-
by order, gets a weight of 0.08, this is because if the company decides to sell their
products in e-commerce, it is important for the company to have a warehouse that can
at least meet the demands of e-customers. -commerce. Meanwhile, the last weakness
in the form of product variants offered by the company is less than competitors in e-
commerce, getting the smallest weight, which is 0.04. This weakness gets the smallest
weight because the product variants sold by companies in e-commerce may increase in
the future.

Based on the IFAS table above, it is known that the total internal strategic score factor
for PT XYZ when penetrating in e-commerce is 3.76. The score indicates that
penetration into e-commerce by PT XYZ has a high internal or high-risk company
condition caused by an IFAS value of more than 3.0.

3.3 TOWS Matrix

After conducting a SWOT analysis in the previous chapter, the next step is to perform
a TOWS analysis. TOWS Analysis, like SWOT analysis, entails identifying an
organization's strengths, weaknesses, opportunities, and threats. The difference
between a SWOT and a TOWS analysis is that a SWOT analysis does not depict the
relationship between the various elements and categories, whereas a TOWS analysis
will attempt to match internal factors to external factors in order to assist a business in
determining appropriate strategic options. It can help a company find advantages,
eliminate threats, overcome weaknesses, and capitalize on strengths. TOWS can help a
business provide significant value and take strategic planning to the next level by
using it. An example of a TOWS matrix is shown below.
The TOWS matrix indicates four conceptually distinct alternative strategies, tactics,
and actions. According to Weihrich (1982), those strategies, tactics, and actions are:

1. The WT (Weakness-Threat) Strategy (mini-mini). In general, the aim of the

WT Strategy is to minimize both weaknesses and threats.

2. The WO (Weakness-Opportunity) Strategy (mini-maxi). The second

strategy attempts to minimize the weaknesses and to maximize tile
opportunities.

3. The ST (Strength-Threat) Strategy (maxi-mini). The strategy is based on

strengths of the organization that can deal with threats in the environment. The
aim is to maximize the former while minimizing the latter.

4. The SO (Strength-Opportunity) Strategy (maxi-maxi). Any company would

like to be in a position where it can maximize both, strengths, and
opportunities.

Below are the results of TOWS matrix that has been conducted for PT XYZ:
 Table 3.3 TOWS Matrix for PT XYZ
(Internal) Strengths (Internal) Weaknesses

PT XYZ has its own supplier to meet the demands of As a newcomer to e-commerce, PT XYZ still
the company in accordance with the standards and doesn't have a good name and store reputation
specifications for the international market.(S01) compared to other competitors. (W01)

PT XYZ has its own laboratory to conduct research The company's current production system to
related to the development of new products or to meet the international market is made-by-order,
ensure that the products produced are in accordance so PT XYZ does not have inventory in the
with company standards. (S02) company. (W02)

Has experience in producing fisheries products in

accordance with international standards and quality
because they have been certified by FDA, HACCP,
and BR. (S03)

Have a lot of resources (raw materials) so as to

ensure the products sold are always available. (S04)

The prices of products offered by PT XYZ in e-

commerce are generally cheaper than those offered by
The number of products offered by PT XYZ
competitors. (S05)
when compared to competitors is much less.
(W03)
PT XYZ accept delivery of all products sold
throughout Indonesia. (S06)

If comparison is made with othe competitor who only

sell products in the form of fish, PT XYZ has several
potential products such as canned/jar crab meat,
octopus, and conger eel. (S07)
PT XYZ has a processing plant in Banyuwangi, so it
is close to one of the regions of Indonesia that has a
variety of marine sources (S08)
(External) Opportunities Strength- Opportunities Weakness-Opportunity

Globally, the number of world fish Provide counseling or training to company suppliers Company need to build warehouses to ensure
consumption continues to increase, so so that they can continue to maintain the quality of raw that stocks of fisheries products are always
as to maintain the demand chain for materials in accordance with company standards so available, given the increasing demand both
world fishery products and price that product quality is guaranteed even though demand internationally and nationally. (W02-O01-O02-
stability in the market.(O01) continues to increase (S01-S03-O01-O02-O03) O03)

The number of fish consumption in Do an exploratory research regarding the e-

Continue to produce a low price fisheries product to
Indonesia continues to increase, so that commerce customer needs so that it can
fullfill the fisheries product demand in e-commerce.
it is able to maintain the demand in the optimize another potential seafood products that
(S05-S07-O02)
market.(O02) the company have. (W03-O02-O03)

Companies need to form new divisions or

Company can try to market their products by
recruit additional staff who will handle digital
emphazing the nutritional content contained in the
marketing campaigns carried out by the
products their provide and can serve delivery
company and transactions made in e-commerce
throughout Indonesia (S02-S06-O03)
(W01-O02-O03)

The pandemic has increased people’s

PT XYZ can also promote other products such as
awareness of health, and fish is a good
canned/jar crab meat, octopus, and conger eel as an As a new comer in e-commerce, in the initial
source of protein. (O03)
alternative to other seafood products that have a high stage, company can create their own unique
protein content, considering that these products have a value preposition by creating a marketing
fairly high demand in e-commerce (S07-O02-O03) campaign that not also truy to sell products, but
also provide the nutrient content of the product
they sell, keeping in mind that public awareness
regarding health has increased during the
Maximizing the potential of raw materials around the pandemic (W01- W03-O03)
Banyuwangi processing plant to meet market demand
(S04-S08-O01-O02)

(External) Threats Strength- Threats Weakness-Threats

There are many other products on the Encourage the R&D division of the company to
Companies need to try to market their products and
market that can meet people's protein do research regarding the innovatives fisheries
educate to their potential buyers about the nutritional
needs, such as chicken, beef, and products that e-commerce customer wants and
difference between seafood and another source of
vegetable protein products (Tempe, sell the products with a competitive price.
protein. (S02-S03-S07-T01)
tofu, etc.). (T01) (W03-T03)

The price of seafood products is very Ensure the availability of the raw materials for the
Build a warehouse to anticipate demand that
volatile because of the amount of company, so that they products are always available
suddenly explodes or problem occur in the
available stock which is influenced by in the market and still offer a relatively cheaper price
company's supply chain (W02-T02)
natural conditions.(T02) compare to the competitors. (S04-S05-T02)

During the marketing campaign, company need to

There are many competitors in e-
highlight their lower price and serve delivery
commerce who sell the same products
throughout Indonesia to gain competitive advantage
by offering competitive prices. (T03) As a new comer, the company need to build a
(S05-S06-T03)
good reputation by providing the best service
and lower price. Given the e-commerce
Some of the company's technologies Maximizing the current company system or
customer is price sensitive and really depend
need to be upgraded to optimize the machineries to maintain their product quality and
on the store reputation. (W01-T03)
production process and delivery of maintain the company reputation as a company that
goods and services. (T04) has an international standard. (S02-S03-T04)
 Source: Author Analysis, 2021

Based on the TOWS matrix that has been done, it is known that with the current
condition of the company, the best strategy that can be taken by the company is to
apply the Weakness-Opportunities strategy. This is due to the current position of the
company which is a newcomer in e-commerce, so the company needs to first correct
the weakness of the current company, namely that it still does not have special staff or
divisions that will handle transactions and digital marketing strategies that will be
carried out by the company. While maximizing existing opportunities related to the
sale of fisheries products in Indonesia.
There are several strategies that can be implemented by the company based on the
TOWS matrix that has been carried out as follows. First, companies need to build
warehouses to ensure that the stock of the products they sell is always available to
meet international and domestic market demands. Second, it is important for
companies to conduct exploratory research to find out what customer wants, to
maximize the potential of seafood products that are not yet sold by companies in e-
commerce. Third, companies need to form new divisions or recruit new employees
who will later handle the company's digital marketing campaigns and transactions
made in e-commerce. Finally, as a newcomer in e-commerce, in the initial stage, the
company can create their own unique preposition by creating a marketing campaign
that does not also try to sell products, but also provide the nutrient content of the
product they sell, keeping in mind that public awareness regarding health has
increased during the pandemic.
3.4 Business Strategy
Business strategy focuses on improving the competitive position of company’s or
business unit’s products or services within the specific industry or market segment that
the company or business unit serves. Business strategy is extremely important because
research shows that business unit effects have double the impact on overall company
performance than do either corporate or industry effects. Business strategy can be
competitive (battling against all competitors for advantage) and/or cooperative
(working with one or more companies to gain advantage against other competitors).
Business strategy asks how the company, or its units should compete or cooperate in
each industry (Wheelen, Thomas et all, 2015).
In the case faced by PT XYZ, the suggested business strategy is a competitive
business strategy. This is because companies need to win battles with other companies
to gain a competitive advantage in e-commerce. A company’s competitive strategy
lays out the specific efforts of the company to position itself in the marketplace, please
customers, ward off competitive threats, and achieve a particular kind of competitive
advantage. The chances are remote that any two companies – even companies in the
same industry – will employ competitive strategies that are exactly alike in every
detail. However, when one strips away the details to get at the real substance, the two
biggest factors that distinguish one competitive strategy from another boil down to
whether a company’s market target is broad or narrow and whether the company is
pursuing a competitive advantage linked to lower cost or differentiation (Thompson,
Arthur A et all, 2021). According to Thompson et all, these two factors five rise to
four distinct competitive strategy options, plus one hybrid option, which are:
1. A broad, low-cost strategy – striving to achieve broad lower overall costs than
rivals on comparable products that attract a broad spectrum of buyers, usually by
underpricing rivals.
2. A broad differentiation strategy – seeking to differentiate the company’s
product offering from rivals with attributes that will appeal to a broad spectrum of
buyers.
3. A focused low-cost strategy – concentrating on the needs and requirements of a
narrow buyer segment (or market niche) and striving to meet these needs at lower
costs than rivals’ (thereby being able to serve niche members at a lower price).
4. A focused differentiation strategy – concentrating on a narrow buyer segment
(or market niche) and offering niche members customized attributes that meet
their tastes and requirements better than rivals’ products.
5. A best-cost strategy – striving to incorporate upscale product attributes at a lower
cost than rivals. Being the “best-cost” producer of an upscale, multifeatured
product allows a company to give customers more value for their money by
underpricing rivals whose products have similar upscale, multifeatured attributes.
This competitive approach is a hybrid strategy that blends elements of the
previous four options in a unique and often effective wats. It may be focused or
broad in its appeal.
 Figure 3.1 The Five Generic Competitive Strategies
Source: Thompson, Arthur Et all, 2021

Based on the generic competitive strategies that have been described previously, the
appropriate strategy to be applied by the company is to apply the best-cost strategy. If
 based on the analysis that has been done in the previous chapter, it is known that the
fisheries products offered by PT XYZ are sold at lower prices when compared to
competitors in e-commerce. Even though it is sold at a relatively cheaper price,
customers get more value from the products they buy, namely the quality and
cleanliness that have been guaranteed by the international certification that has been
owned by the company.

3.5 Functional Strategy

Functional strategy is the approach a functional area takes to achieve corporate and
business unit objectives and strategies by maximizing resource productivity. It is
concerned with developing and nurturing a distinctive competence to provide a
company or business unit with a competitive advantage. Just as competitive strategies
may need to vary from one region of the world to another, functional strategies may
need to vary from region to region (Wheelen, Thomas, et all, 2015).

3.6.1 Marketing Strategy

Marketing strategy deals with pricing, selling, and distributing a product.
Using a market development strategy, a company or business unit can capture
a larger share of an existing market for current products through market
saturation and market penetration or develop new uses and/or markets for
currents products (Wheelen, Thomas, et all, 2015).
The first step that must be done by the company before compiling a marketing
strategy is to determine in advance the target audience and the positioning of
the product to be sold. The target segment of the company is women aged 18-
45 years who live throughout Indonesia. The potential customers can be
students, young professionals, and housewives who fall into the middle-class
category.

The next thing that is no less important is knowing the target of PT XYZ in e-
commerce to market their fisheries products. The company targets consumers
who like practicality and don't have enough time, consumers who like online
shopping, consumers who have a healthy lifestyle, and consumers who are
seafood lovers.
After knowing the target and segmentation that will be addressed by the
company, the next thing to do is determine the right marketing strategy. One of
the advantages of PT XYZ that can be highlighted when conducting a
marketing campaign is internationally certified products which are sold at low
prices. When compared to all competitors on several e-commerce platforms,
PT XYZ is the only store that sells products with international certification but
at lower prices.

It is certain that a company has advantages and disadvantages. As a company

that has international certification regarding the quality of the products
produced, of course this provides a competitive advantage for companies to
brand on social media. However, what companies also need to remember is
that they carry out buying and selling activities in e-commerce where
customers are more concerned with low product prices with the best quality.

Not only that, but it is also important for companies to know the right branding,
marketing, and communication strategies. Currently the company has a sales
and marketing division, but this division focuses on export activities carried out
by PT XYZ. In order for the branding, marketing, and communication strategy
that will be prepared by the company to run well, the company needs to add a
number of employees who will later focus on conducting marketing campaigns
through the company's social media. So that when export activities are normal,
the sales and marketing divisions in e-commerce and export can work
simultaneously.

One of the branding strategies that companies can do is to use social media
such as Instagram, TikTok, and Facebook. Instagram is the social media
chosen for branding for companies because Indonesia is one of the countries
that has the most users in the world and the majority of Instagram users in
Indonesia are women. Of course, in doing branding via Instagram, the digital
content created by the company must be attractive so that it can be recognized
by potential customers to be addressed.

In addition to relying on Instagram, word of mouth can also be one of the first
promotional media that can be optimized by the company, namely by
promoting to friends or relatives of employees or the board of directors of the
company. The word of mouth that is carried out is expected to attract potential
customers to make transactions through e-commerce.

In view of this, here are some alternative solutions that can be considered by
PT XYZ to conduct a digital marketing campaign:

1. Personal Selling

One of the marketing methods that can be used by PT XYZ to

promote and sell the products they sell is by using the personal selling
method. Personal selling is a marketing method that interacts directly
with buyers in the hope of generating sales.As a newcomer to the
world of e-commerce, of course, the products offered by PT XYZ will
not be directly ogled by consumers or will not appear directly on the
front page of search results in e-commerce because they still do not
have ratings and reviews from customers.

The first thing that must be done by PT XYZ is to optimize direct

sales in the form of word of mouth as the first medium used to
promote to friends and relatives from employees or the board of
directors from the company. The word-of-mouth promotion that is
carried out must at least be able to direct potential customers from PT
XYZ to buy fisheries products offered by the company through e-
commerce, so that the company has several ratings and reviews for
some of the products they sell through e-commerce.

According to Nielsen (2012), 92% of people around the world said

they trust recommendation from friends and family (earned media)
above all other forms of advertising. With a high percentage of public
trust with recommendations from friends and relatives, personal
selling by doing word of mouth is the right thing to do at an early
stage.
2. Advertising
The next thing that must be a concern for PT XYZ as a newcomer in
e-commerce is branding and increasing customer brand awareness of
the company. One of the social media that can be used to increase
brand awareness and branding of the company is Instagram, because
according to Statista, Indonesia is a country that is in the 3rd position
with the most users in the world, with 93 million users. And,
according to Napoleon Cat, a social media management tool, as of
May 2021, the majority or 52.6% of Instagram users in Indonesia are
women.

When carrying out Instagram promotion activities, PT XYZ needs to

package the advertisement in the form of interesting and unique
content. The content can be in the form of short videos that explain the
freshness of the products offered. Apart from being in the form of
short videos, PT XYZ can also use paid promotions to one or more
influencers who have personal branding as a celebrity chef. Some
celebrity chefs who can be considered are William Gozali, Suhaidi
Jaman or Lord Adi (Master Chef Season 8), and Arnold Poernomo.

In the short video advertised, PT XYZ must be able to direct

consumers to make transactions directly to e-commerce. This is
something that must be a concern, because Instagram is only used to
build brand awareness to potential customers from PT XYZ, and they
have to make transactions through e-commerce. This e-commerce
transaction will later help to build the reputation, trust, and credibility
of PT XYZ as a new store in e-commerce.

In addition, it is important for PT XYZ to provide a link tree on the

store's Instagram biography. This link tree must contain a direct link to
PT XYZ's e-commerce (Tokopedia, and Shopee), and a direct link to
the store's WhatsApp. So that with this link tree you can see the traffic
for each existing link.

Besides using Instagram, PT XYZ can also use TikTok as other social
media to carry out promotional activities. This is of course because
 TikTok is a social media that is currently hype. As a digital platform
that is currently growing rapidly, TikTok offers TikTok for Business
for businesspeople in Indonesia to build brands by reaching a wider
segmentation and interacting with young people through unique and
immersive content.

Ads shown on TikTok must be short videos of 5-60 seconds in length,

with an optimal duration of 9-15 seconds per video. The videos made
must be interactive, memorable, and interesting for other users, so that
they can get communication between brands and users organically.
Apart from making videos personally, collaboration with other
TikTok creators must also be done to increase the buzz in the brand.

3. Promotion
Shopping festivals such as 9.9, 10.10, 11.11, and 12.12 can be another
alternative to promote in e-commerce. Apart from being a way to
increase sales, shopping festivals can also be used as an opportunity
for companies to launch stores or products. Based on the 2021
Indonesia Online Shopping Festival Trends Report released by The
Trade Desk (NASDAQ: TTD), 52% percent of Indonesians are keen
to learn about new rands during online shopping festivals. Thus,
online shopping festivals can be a consideration for companies to start
selling in e-commerce (The Trade Desk, 2021)
The promotion that can be done by the company in the shopping
festival is by providing discounted vouchers with certain minimum
purchase requirements. Apart from discounted prices, the company
can also provide bundling packages between one fisheries product and
another.
3.6.2 Financial Strategy
Financial strategy examines the financial implications of corporate and
business – level strategic option and identifies the best financial course of
action. It can also provide competitive advantage through a lower cost of funds
and a flexible ability to raise capital to support a business strategy. Financial
 strategy usually attempts to maximize the financial value of a firm (Wheelen,
Thomas, et all, 2015).
During its commercial activities for approximately three years, PT XYZ has no
significant financial problems. However, when adopting the B2C business
model, the financing division owned by the company must allocate special
funds to carry out digital marketing campaigns.
The special funds allocated for digital marketing can be divided into several
posts, such as monthly expenses used for advertising using Instagram ads and
TikTok ads. Furthermore, what is no less important is to allocate a special
budget to do paid promotion in collaboration with KOLs.
Not only a special budget for digital marketing activities, PT XYZ's finance
division also needs to allocate funds for the construction of the warehouse, and
the supporting facilities for the warehouse to be built. Finally, the company's
finance division also needs to allocate additional funds for the salaries of
employees who will be recruited by the company in order take care of all
transaction activities carried out in e-commerce.
By looking at the company's current financial condition, the company still has
sufficient financial resources. However, there are some limitations that the
decision makers should pay attention to. The company is currently only able to
add a maximum of five employees for the marketing and administration
divisions who will specifically handle digital marketing campaigns and all
transaction activities carried out in e-commerce. The total budget for additional
employee salaries allocated by the company is Rp. 15,000,000.
In addition, for the marketing budget alllocated by the company for the first
three months, a maximum of Rp. 35,000,000. Meanwhile, the rejuvenation of
production technology is postponed in advance, considering that the current
technology in the company can still be maximized to meet domestic and
international market demands.
3.6.3 Operations Strategy
Operations strategy determines how and where a product or service is to be
manufactured, the level of vertical integration in the production process, the
deployment of physical resources, and relationship with suppliers. It should
 also deal with the optimum level of technology the firm should uses in its
operations processes (Wheelen, Thomas, et all, 2015).
For the operations division owned by PT XYZ, the company may consider
carrying out special production activities for all fisheries products sold in e-
commerce at the processing plant located in Banyuwangi. This is because
Banyuwangi is one of the regions in Indonesia that has an abundant diversity
of marine resources and with the production of fisheries products in
Banyuwangi, it can meet customer demand, most of which will come from the
island of Java.
In addition, with the additional production capacity at the Banyuwangi
processing plant, the company may also consider adding or updating the
existing production technology in this processing plant. So that even though
the production burden increases, the entire operation chain of the company can
still run well.
3.6.4 Human Resource Management Strategy
HRM strategy, among other things, addresses the issue of whether a company
or business unit should hire a large number of low-skilled employees who
receive low pay, perform repetitive jobs, and will most likely quit after a short
time or hire skilled employees who receive relatively high pay and are cross-
trained to participate in self-managing work teams. As work increases in
complexity, the more suited it is for teams, especially in the case of innovative
product development effort (Wheelen, Thomas, et all, 2015).
As mentioned in the previous chapter, it is important for companies to form
special divisions or add employees who will later handle all digital marketing
activities that will be carried out by the company. So, one of the strategies
devoted to the HRM division is to hire skilled employees specifically to handle
digital marketing campaigns. Meanwhile, additional administrative staff who
help record transactions carried out in e-commerce can hire some low-skilled
employees who at least understand technology.
Hiring skilled employees is the right step for companies because companies
can directly use the skills possessed by new employees to start digital
marketing campaigns as soon as possible without having to wait for some time
to provide digital marketing training to existing marketing staff. In addition,
 these high skilled employees are also expected to slowly transfer knowledge to
other marketing staff over time.
In addition to hiring, the HRM division of PT XYZ can also consider
providing seminars or training related to digital marketing to all existing
marketing staff, so that at least all existing marketing staff have the basics
related to digital marketing.
3.6.5 Research and Development Strategy
R&D strategy deals with product and process innovation and improvement. It
also deals with the appropriate mix of different types of R&D and with the
question of how new technology should be accessed – through internal
development, external acquisition, or strategic alliances. One of the R&D
choices is to be either a technological leader, pioneering an innovation, or
technological follower, imitating the products of competitors (Wheelen,
Thomas, et all, 2015).
As a newcomer to e-commerce, the R&D division plays an important and
crucial role in determining what customers want in e-commerce. So that by
knowing the wants of customers in e-commerce, companies can increase or
decrease the number of products to be marketed to match the demands of
customers.
In addition, this division can also carry out development for fisheries products
sold by the company. One of the developments that can be done is to create
fisheries products that are ready to be cooked or ready to be eaten by
collaborating with other companies. So, with this development can provide a
competitive advantage for the company.
 CHAPTER IV IMPLEMENTATION PLAN

4.1. Conclusion
At the beginning of the study, it was known that PT XYZ experienced a decline in
export volume in 2020 caused by the covid-19 pandemic. The decline in export
volume that occurred was a result of concerns about the global health crisis and
prompted governments in each country to improve national security standards and
adopt several new policies. At the beginning of the pandemic, this policy was initiated
by implementing a lock down mechanism such as by closing businesses, banning
travel, implementing physical/social distancing, to closing national border. For this
reason, PT XYZ, which is engaged in the export of fisheries products, decided to try to
enter the domestic market by selling it through an e-commerce platform.
After knowing the problems faced by the company, then external and internal analysis
was carried out to find out what factors could affect the business run by PT XYZ to
sell its products through e-commerce. External analysis was carried out using the
PEST analysis method, Porter's Five Forces, and competitor analysis. Based on the
external analysis that has been carried out, it is known that all macro and
microenvironments strongly support the condition of PT XYZ to sell their products in
e-commerce. However, several things that companies must pay attention to are related
to consumer behavior in e-commerce which is very price sensitive, and the number of
competitors is quite large, and the price of similar products in e-commerce is very
competitive.
Meanwhile, the internal analysis was carried out using the marketing mix, value chain
analysis, and VRIN analysis methods. Based on the internal and external analysis that
has been carried out, PT XYZ's strengths, weaknesses, opportunities, and threats are
obtained. Having products that are produced in accordance with international quality
standards with cheaper selling prices compared to competitors is a competitive
advantage owned by PT XYZ to compete in e-commerce.
Based on the analysis that has been done in chapter 2 regarding internal and external
factors that affect the business run by PT XYZ, this has answered the questions in
chapter 1 related to business issues faced by the company. As for the next question,
related to the proposed business strategy, it has been answered in chapter three. The
main problem faced by PT XYZ is the lack of brand awareness and recognition
because the company is a newcomer to e-commerce. So that the research carried out
focuses on the business strategy that must be carried out by PT XYZ so that their sales
in e-commerce can run well.
The proposed strategy resulting from this research is divided into five strategies, each
for marketing, operations, HRM, R&D, and financial. The marketing strategy carried
out by PT XYZ is to optimize direct selling by using the word-of-mouth method,
considering that this method is a method that can dominantly influence buying
decisions from potential customers. In addition, in order to do advertising, Instagram
and TikTok were chosen as the two social media used because Instagram is the social
media that has the third most users in Indonesia after YouTube and WhatsApp in
 Indonesia. In addition, most Instagram users in Indonesia are women, so they match
the company's target customers. The reason for using TikTok as one of the media
advertisements is its increasing popularity in the community, so advertising or
collaborating with KOLs on this platform can increase brand awareness, recognition,
and generate sales through e-commerce.
The strategy operations that need to be carried out by the company is to centralize the
production of fisheries products that will be sold in e-commerce at the processing
plant located in Banyuwangi. In addition, the company also needs to rejuvenate the
technology in the processing plant so that the existing operations chain and production
rhythm are not disturbed.
The HRM Division of PT XYZ needs to conduct recruitment related to high skilled
labor who will later take care of the digital marketing campaign that will be carried out
by the company. In addition to high skilled labor, low skilled labor also needs to be
added to take care of the administrative activities of all transactions carried out in the
company's e-commerce. The R&D division needs to do exploratory research related to
what customers need and want in e-commerce and needs to do development related to
the products sold so as to increase the company's competitive advantage. Meanwhile,
from the finance division, this division must add a budgeting post to support the
digital marketing campaign that will be carried out by the company and needs to make
adjustments to the company's monthly expenses related to employee salaries,
considering the company will add several employees.

4.2. Implementation Plan

After proposing the business solution that has been provided in the previous chapter,
the main priority in solving PT XYZ problem is to create action plan, marketing
strategy and time schedule will be carried out in January 2022 to December 2022. The
following is the action plan for PT XYZ:
 Table 4.1 Implementation Plan for PT XYZ

2022
Action Plan

January February March April May June July August September October November December
Sign up for e-
commerce account,
and other social media
account
Open Recruitment for
Digital marketing
Specialist and
Adminstrator Position

Doing a Contractor
Search for Warehouse
Construction

Start of Warehouse
Construction

Digital Marketing
Planning and strategies
formulation

Instagram Ads

TikTok Ads

Paid Promote

Promotion in Shoping
Festival (11.11, 12.12)

Source: Author Analysis, 2021

REFERENCES