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BUSINESS STRATEGY AND COMPANY ANALYSIS

OF INDONESIA DATA BUSINESS UNIT

GROUP FIELD PROJECT

Prepared by:

Batara Krishna Hariandja, B.Sc (15232042)

Benyamin Pardamean Tambunan, S.T (15232035)

Erik Jeremia Maruli Siagian, S.T (15232037)

Mega Ayu Mustika Pradani, S.T, B.Eng (15232039)

Advised by:

Prof. Ir. H. M. Roy Sembel, MBA, Ph.D, CSA

IPMI INTERNATIONAL BUSINESS SCHOOL

2017

Group Field Project Report

Business Strategy and Company Analysis of Indonesia Data Business Unit

By Batara, Benyamin, Erik, Mega

Page i




Page ii




Page iii

Table of Contents

CERTIFICATE OF APPROVAL ............................................ Error! Bookmark not defined.

NON-PLAGIARISM DECLARATION FORM ..................... Error! Bookmark not defined.

Table of Contents ..................................................................................................................... iii

List of Figures ........................................................................................................................... vi

List of Tables ........................................................................................................................... vii

ACKNOWLEDGMENT........................................................................................................ viii

EXECUTIVE SUMMARY ...................................................................................................... ix

CHAPTER 1 INTRODUCTION ............................................................................................... 1

1.1 Background ............................................................................................................................. 1

1.1.1 Industry Background ....................................................................................................... 2

1.1.2 DaaS as a Service Concept .............................................................................................. 4

1.1.3 Company Background ..................................................................................................... 4

1.1.4 MARS Indonesia Vision and Missions ........................................................................... 6

1.1.5 Market Landscape ......................................................................................................... 10

1.1.6 Problem Background..................................................................................................... 13

1.2 Purpose .................................................................................................................................. 14

1.3 Method of Study ................................................................................................................... 14

1.4 Chapter of Content Brief ....................................................................................................... 15

CHAPTER 2 LITERATURE REVIEW .................................................................................. 16

2.1 Theory of Firm ...................................................................................................................... 16

2.1.1 Organizational forms..................................................................................................... 17

2.1.2 Transactions costs ......................................................................................................... 18

2.2 Porter Five Forces Theory..................................................................................................... 19

2.3 Strategy Formulation ............................................................................................................ 21

2.4 Marketing Strategy for Offline Business .............................................................................. 22

2.4.1 Market Segmentation ........................................................................................................... 23

2.4.2 Market Targeting.................................................................................................................. 23

2.4.3 Market Differentiation and Positioning ............................................................................... 24

2.4.4 Developing an Integrated Marketing Mix ............................................................................ 24

2.5 Marketing Strategy for Online Business ............................................................................... 25

2.5.1 E-Loyalty ...................................................................................................................... 26

2.5.2 E-Satisfaction ................................................................................................................ 26

2.5.3 E-Trust .......................................................................................................................... 26




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2.6 VRIO Theory ........................................................................................................................ 27

2.6.1 VRIO Framework ......................................................................................................... 28

2.5.2 Applying VRIO Framework ................................................................................................ 30

2.7 SWOT Analysis Theory ........................................................................................................ 31

2.8 PESTLE Theory .................................................................................................................... 32

2.9 Business Canvas Model Theory ............................................................................................ 34

2.10 Competitive Advantages Theory .......................................................................................... 38

2.10.1 Generic sources of competitive advantage .................................................................... 39

2.9.2 Ownership based source of advantage ................................................................................. 40

CHAPTER 3 RESEARCH METHODOLOGY ...................................................................... 42

3.1 Methodology ......................................................................................................................... 42

3.1.1 Research Design ............................................................................................................ 42

3.1.2 ResearchWorkflow........................................................................................................ 43

3.2 Data Collection ..................................................................................................................... 44

3.2.1 Primary data .................................................................................................................. 44

3.2.2 Secondary Data ............................................................................................................. 45

3.3 Data Analysis ........................................................................................................................ 45

3.3.1 Product and Service Analysis ....................................................................................... 46

3.3.2 Company Analysis ........................................................................................................ 46

3.3.3 External Analysis .......................................................................................................... 46

3.3.4 Internal Analysis ........................................................................................................... 46

3.3.5 SWOT Analysis ............................................................................................................ 46

3.3.6 Strategic Formulation .................................................................................................... 46

3.4 Conclusion and Recommendation ....................................................................................... 47

CHAPTER 4 DATA ANALYSIS ........................................................................................... 48

4.1 Product and Service Analysis ............................................................................................... 48

4.1.1 Market Segment ............................................................................................................ 48

4.1.2 Market Target ................................................................................................................ 48

4.1.3 Market Differentiation and Positioning ........................................................................ 49

4.1.4 Marketing Mix/Tools (7Ps) ........................................................................................... 49

4.2 Company Analysis ................................................................................................................ 51

4.2.1 MARS Indonesia Business units ................................................................................... 51

4.2.2 Indonesia Data Business Process .................................................................................. 53

4.2.3 External Analysis .......................................................................................................... 54

4.2.4 Internal Analysis ........................................................................................................... 66




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4.3 SWOT Analysis .................................................................................................................... 71

4.4 Strategic formulation ............................................................................................................ 75

4.4.1 Financial Analysis ......................................................................................................... 75

4.4.2 Forecast Revenue .......................................................................................................... 78

CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS ............................................ 83

5.1 Conclusions ........................................................................................................................... 83

5.2 Recommendation .................................................................................................................. 89

5.3 Reflection .............................................................................................................................. 90

APPENDIX .............................................................................................................................. 92

REFERENCES ...................................................................................................................... 102




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List of Figures

Figure 1-1 MARS Indonesia Board of Director Structure ......................................................... 5

Figure 1-2 MARS’ Business Units (Source: MARS INDONESIA Company Profile) ............. 6

Figure 1-3 Customized Research Product Example (Source: www.indonesiadata.com) .......... 7

Figure 1-4 Business Report Product (Source: www.marsindonesia.com) ................................. 7

Figure 1-5 Bank MARSMAP Product (Source: Company Profile of MARS Indonesia, 2017) 8

Figure 1-6 Revenue of MARS Indonesia 2013-2016 (Source: MARS Annual Report) ......... 10

Figure 1-7 Indonesia Big Data Market Size (Source: IDC 2014) ............................................ 13

Figure 1-8 Indonesia Big Data Market Growth (Source: IDC 2014) ...................................... 13

Figure 2-1 Theory of Firm (Source: Miller, 1958) .................................................................. 16

Figure 2-2 Porter Five Forces Model (Source: Mason Meyer, 2013) ...................................... 20

Figure 2-3 Managing Marketing Strategies and Marketing Mix ............................................. 23

Figure 2-4 The Generic Value Chain Develop by Porter (Source: Barney, 2008) .................. 28

Figure 2-5 SWOT Templates (Source: Chuck,2013) .............................................................. 31

Figure 2-6 PESTLE Theory (Source: Jim, 2014) .................................................................... 33

Figure 2-7 Business Canvas Model (Source: Osterwald, 2008) .............................................. 35

Figure 3-1 Research Design ..................................................................................................... 43

Figure 3-2 Research Workflow ................................................................................................ 44

Figure 4-1 Percentage of Sales based on business sector in 2015-2016 (Source: MARS

Annual Report) ....................................................................................................... 49

Figure 4-3 Indonesia Data Business Process (Source: PT. MARS Indonesia, 2017) .............. 53

Figure 4-4 Porter Value Chain Analysis of Indonesia Data .................................................... 68




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List of Tables

Table 1-1 Worldwide Big Data Revenue (Source: IDC, 2014) ................................................. 1

Table 1-2 MARS Indonesia Financial Performance 2013-2016.............................................. 10

Table 2-1 The VRIO Framework (Source: Barney, 2008) ...................................................... 30

Table 2-2 The VRIO Framework (Source: Barney, 2008) ...................................................... 31

Table 2-3 Generic Source of competitive advantage (Source: Hao ma, 1999) ....................... 40

Table 4-1 Market Research Competitor Analysis .................................................................... 57

Table 4-2 PESTLE Analysis for Indonesia .............................................................................. 62

Table 4-3 Five Porter’s Matrix for Indonesia Data .................................................................. 66

Table 4-4 VRIO Analysis for Indonesia Data.......................................................................... 70

Table 4-5 SWOT Framework for Indonesia Data Business Unit ............................................ 74

Table 4-6 SWOT Matrix for Indonesia Data ........................................................................... 74

Table 4-7 PT. MARS Indonesia Financial Performance ......................................................... 76

Table 4-8 PT.MARS Indonesia Operating Expense (Source: MARS Annual Report) ........... 76

Table 4-9 Indonesia Data Income Statement 2016 .................................................................. 77

Table 4-10 Assumption of Indonesia Data Forecast ................................................................ 78

Table 4-11 Indonesia Data Operating Income Projection (Non-Integrated& Optimist) ......... 80

Table 4-12 Indonesia Data Operating Income Projection (Non-Integrated &Moderate) ........ 81

Table 4-13 Indonesia Data Operating Income Projection (Non-Integrated & Pessimists) ...... 82

Table A-1 MARS Indonesia Balance Sheet 2013 and 2014 .................................................... 92

Table A-2 MARS Indonesia Income Statement 2013 and 2014 .............................................. 94

Table A-3 MARS Indonesia Balance Sheet 2015 (Source: MARS Annual Report, 2015) .... 95

Table A-4 MARS Indonesia Income Statement 2015 ............................................................. 97

Table A-5 MARS Indonesia Balance Sheet 2016 (Source: MARS Annual Report, 2016) ..... 98

Table A-6 MARS Indonesia Income Statement 2016 ........................................................... 100

Table A-7 Indonesia Data Income Statement 2016 ............................................................... 101




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ACKNOWLEDGMENT

First and foremost, we offer our sincerest gratitude to God, for His showers of

blessings to accomplish this thesis. We could never have accomplished this without the

faith we have in the Almighty.Also, big thanks to our families for all of the

encouragement, motivation, and support during our GFP.

The Authors would like to express my special appreciation and thanks to our advisor,

Prof. Ir. H. M. Roy Sembel, MBA, Ph.D. CSA, for guiding us and giving his precious

time and also great ideas that enabled us to complete this thesis.

Another special thanks toMr.AstoSubroto and Mr. Pascal Sembel, Mr.Satria,

Mr.Wandy. Their inspiration and great efforts to explain things clearly during completion

of this thesis and giving their time to giving some information from their company were

remarkably appreciated.

Last but not least, to all lectures, library assistances and staff members of IPMI

International Business School for the helpful and offered invaluable assistance, support

and guidance, and to all our friends and colleagues, who assisted, advised, and supported

us.

Jakarta, September 2017

GFP Team

(Batara, Benyamin, Erik, Mega)




Page ix

EXECUTIVE SUMMARY

BUSINESS STRATEGY AND COMPANY ANALYSIS OF

INDONESIA DATA BUSINESS UNIT

MARS Indonesia is aiming to be the largest Data Provider and Marketplace in

Indonesia, so to adapt with this market demand; MARS Indonesia must have configured

new business strategies to increase their Market shares in Indonesia. One of the business

strategies is to leverage a growing business unit called ―Indonesia Data.‖ Indonesia Data

is the DaaS business unit that provide online and offline data research.

To effectively capitalize quickly captured as the ―big chunk‖ of the research market

industry, MARS Indonesia needs to quickly respond to the following questions:

1. What is the strategy of MARS Indonesia to generate Indonesia Data business unit

to fulfill forecast market share in following years?

2. Should MARS Indonesia set the Indonesia Data business unit under a new

company by creating a separated structure or should maintain Indonesia Data is

as a business unit to get maximum profit in next following years?

3. Third, how will be business model of Indonesia Data in the future after MARS

Indonesia already decides the decision plan?

To analysis the problem identifications above, the authors conducted through

quantitative analysis. From the data analysisthe authors will find the best conclusion and

recommendation for the implications in the company. 7p theory, VRIO Analysis,

PESTLE, Porter 5 Forces, SWOT analysis, the Theory of Firm, Competitive advantage

and Business Model Canvas, will be used as the author’s analysis to find the best

solutions for the problem that occurs.

As the result, Indonesia Data business unit need to improve their product, promotion,

competitive advantage, and key suppliers to grow its market capitalization in research

market industry. In another hand, Indonesia DataMustEstablish/investment on new

organization (separate from PT MARS) by external funding since they lack of investment

from internal.

Keyword: 7P theory, VRIO Analysis, PESTLE, Porter 5 Forces, SWOT analysis, the

Theory of Firm, Competitive advantage and Business Model Canvas.




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CHAPTER 1

INTRODUCTION

1.1 Background

The Group Field Project (GFP) is the final project of IPMI Master of Business

Administration (MBA) Program. This program is used to apply effective research and

business knowledge whereby students will gather, analyze and make decisions in

response of a real problem from a real company using business tools and theory that

they have previously learned. Students are expected to increase their business

proficiency and be able to consult the company to solve the problem. Nowadays, big

data business analytic is growing. Many modern companies rely on big data to make

strategic decisions. More data are being produced and known in the popular literature

as ―big data‖ is becoming more pervasive, and it is potential for policy making and

strategic decisions for modern companies. We can see from figure 1-1, in previous 5

yearsbig data revenue is increasing significantly.

Table 1-1Worldwide Big Data Revenue (Source: IDC, 2014)

From the forecast of IDC, it stated that the worldwide revenues for big data and

business analytics will grow from $130.1 billion in 2016 to more than $203 billion in

2020, at a compound annual growth rate (CAGR) of 11.7%.

MARS Indonesia is a leading local market research companies which provides Data

research as a business. MARS Indonesia is in need of applicable strategies, for their

https://www.idc.com/getdoc.jsp?containerId=prUS41826116

https://www.idc.com/getdoc.jsp?containerId=prUS41826116




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business transformation, as they embark to be the largest Data Provider and

Marketplace in Indonesia. One of the target plans of MARS Indonesia is to leverage the

position of their ―Data as a Service‖ business unit in Indonesian market. By increasing

the market position, MARS Indonesia is expected to be significantly growing. It is also

expected to be the largest big data and analytic company in Indonesia.

1.1.1 Industry Background

Data as a Service (DaaS) is basically a stream of data in which subscribers can access

on demand. On that note, DaaS companies entirely focus on collecting data and

compiling it into relevant streams, allowing subscribers to easily access the data, with a

relatively low cost. Most of every modern-day companies have embraced data as a

decision-making tool. However, a few companies are lack of human capital and other

resources to fully leverage the accuracy of the data they collect. By using DaaS

services, modern business essentially can eliminate the need for in-house commitment

to data and allows businesses to perform with greater agility because they can

seamlessly and effortlessly get the exact data they need.

DaaS is a useful tool for modern businesses and industries. Modern companies have use

and quickly show the importance of data as a strategic business decision-making. DaaS

companies offer a means to streamline data more effectively and higher

accuracy.Modern companies also need to deal their data problem but are lacking the

sources due the wide range of Big Data analytic which are classified in three areas

below:

1. Company specialized in infrastructure

2. Company specialized in analytics

3. Company that combine both.

There are big names market research companies in Indonesia, for industry mapping the

authors will classification into three segments. First, the classification worldwide

companies are divided into three categories:

Global or multinational companies: AC Nielsen, TNS, Polling center, Roy Morgan,

All Data International

Asian companies with presence across Asia: Kadence International, Spire Research

and Consulting, FSPL, Solidance and Insight Asia, MARKPLUS insight, CIMIGO,

Purple Analytic, Sigma Research

https://www.predicthq.com/blog/what-is-data-as-a-service-or-daas/



http://converge.xyz/big-opportunity-big-data-service/




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Local Indonesian companies like RAD Research, MRI (Market Research

Indonesia), MARS Indonesia, Pixel, Qasa Strategic Consulting, Frontier, Field

Survey Indonesia and Inmarcs, KAD Indonesia, KINAS Consulting Indonesia,

Cybertrend Intrabuana, Kompas Data

Second, The Classification in the market sectors are divided into five major categories:

Foods and Nutrition: CIMIGO, RAD Research, KINAS Consulting Indonesia,

Kadence International, MARS Indonesia, FSPL, AC Nielsen, MARKPLUS.

Financial Services: CIMIGO, RAD Research, KINAS Consulting Indonesia, MARS

Indonesia, AC Nielsen, MARKPLUS Insight. Roy Morgan, MRI. QASA, Sigma

Research.

Telecommunication: CIMIGO, RAD Research, MARS Indonesia

Pharmaceutical: RAD Research MARS Indonesia, AC Nielsen, MARKPLUS

Insight, MRI

Public Sectors/Government: Field Survey Indonesia, Inmarcs, Polling center,

Kompas Data

Third, the classification in the research services are divided into three categories:

Analytical Services: CIMIGO, RAD Research, KINAS Consulting Indonesia,

Kadence International, MARS Indonesia, FSPL, AC Nielsen, MARKPLUS. AC

Nielsen, Sigma Research

Consultancy: KINAS Consulting Indonesia, Kadence International, FSPL, AC

Nielsen, MARKPLUS, Roy Morgan, Solidance and Insight Asia, Qasa Strategic

Consulting

Data Collection/Field Services: AC Nielsen, Polling center, Roy Morgan, Kadence

International, Spire Research and Consulting, FSPL, Solidance and Insight Asia,

MARKPLUS insight,RAD Research, MRI (Market Research Indonesia), MARS

Indonesia, Pixel, Qasa Strategic Consulting, Frontier, Field Survey Indonesia and

Inmarcs, KAD Indonesia, KINAS Consulting Indonesia.

Data as a service (DaaS) companies have a big responsibility to convince modern

companies to utilize their analytical data. This is surely not an easy work to do.

DaaSCompanies must influence the executives to pay attention on their big data

strategy for increasing the company’s revenue.




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1.1.2 DaaS as a Service Concept

Data as a service (DaaS) is a cloud strategy that is used to facilitate companies with

access to critical businesses data in a well-timed, protected and affordable manner. Data

as a Service (DaaS) depends on the principle that is very specific, causing only useful

data that is given to users on their discretion, regardless of any organizational or

geographical separation between consumers and providers.

DaaS provide data stream that subscribers can access on demand, and then subscribers

also can access the streams at any time they need it.Data-as-a-service provides some

solution andbenefit, such as:

Agility: customers can easily access the data and do not need to know the actual

data.

Affordability: DaaS can be tailored to costumers need in an easy to use

presentation layer. The providers can build the data foundations and outsource the

presentation layerwhich helps to build highly affordable user interfaces which

allows more feasible presentation layer change requests.

Data Quality: Data access is controlled through data service with single update

point to ensure the data quality.

DaaS pricing model, divided in two main categories:

Volume Based Model: charged based on the amount of data used or for each

call/access

Data Type Based Model: charged based on the data type/attributes.

1.1.3 Company Background

MARS Indonesia is a market research company that provides all kinds and wide range

of research services. The company was established in 1992 by Dr. AstoSubroto, a

Marketing PhD Graduate from the University of Indonesia with emphasis on Statistics

and International Management. Dr. Asto once states, ―Research is not only a collection

of data that processed and produce information, but it is a scientific process which aims

to address problem‖. MARS Indonesia offers client (personal and corporate) a full

service marketing research: problem definition, research objectives, research design,

data collection, data processing, analysis, all the way to the solution for about twenty

five years now.




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MARS Indonesiahas more than 100 employees and networks in more than 133 cities in

Indonesia. With total 800 field staffs and capacity until 2500 trained field staff, MARS

has resources to conduct research in all over Indonesia

Figure 1-1MARS Indonesia Board of Director Structure (Source: PT MARS Indonesia, 2017)

In its research operation,MARS Indonesia requires very intensive and knowledgeable

procedures, combined withtheir extensive experiences in Indonesian markets, resulting

in comparable results with International standard of marketing research services.

MARS Indonesia is also equipped with thelatestfacilities such as: Mobile interview,

Integrated Research Application System, Online Survey, Data Processing & Advanced

Analysis Tools, FGD Room, CATI and CAPI Equipment.

MARS Indonesia currently provides a wide range of research services, the companies

have 6 business units: MARS Customized Research, INDONESIA DATA, OPINI

KONSUMEN, SYLLABUS, MARS Institute, MARS Data Science. By utilizing these

business units, MARS Indonesia could deliver the most-comprehensive research and

provide a solid input for decision makers.




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Figure 1-2MARS’ Business Units (Source: MARS INDONESIA Company Profile)

1.1.4 MARS Indonesia Vision and Missions

The Mission is to provide ―research based solutions‖ with scientific methods and

produces accurate and reliable data, information, and knowledge. In the current

development, offline research is inadequate and relatively slow. Faster information

acquisition needs to support decision making, and at the same time, the information

flows in online world which drastically changes the game. Aware by this business need,

MARS transforms from offline research provider to be integrated research company

which isa mixture betweenBig Data and Data Science.

With extensiveknowledge and experiences in the field of research combined with a

variety ofwith clients from many different industries, MARS Indonesia

iscontinuouslystrivingto find the key of success to get the best competitive advantages.

Innovation plus strong research will result in a successful product in the market and be

able to win the competition.

1.1.4.1 Business Operation

As a result of its extensive experiences, in many industry sectors, MARS Indonesiahasa

competitive product portfolio, including long-term relationships with customers. It is

based on a strong commitment to research and development, as well as industry-wide

standards which addresses both customers’ and business demand. MARS Indonesia has

standardized research methodologies in order to bequickertoget the topic of research.




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During the planning sessions, MARS Indonesia will give input to the clients regarding

the content of the studies.

The Standard Products are:

1. Customized Research

Customized Research service offers a wide variety of market research service that

customized based on client's specific needs. Each marketing research project is

treated uniquely.

Figure 1-3Customized Research Product Example(Source: www.indonesiadata.com)

2. Business Reports

Business Reports are the result of researches which are conducted and funded by

MARS Indonesia. This reportsis made available to everyone who wishes to

purchase it.

Figure 1-4Business Report Product(Source: www.marsindonesia.com)

3. Online data provider

Mars GIS Map-based data dashboard

http://www.indonesiadata.com/

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MARS GIS is a marketing GIS-based information system Bank MARSMAP.

This product can be used to analyze: Market potential map by area, the pattern of

the spread of ATMs and branches compared to competitors, knowing the area that

have not been covered by branches and ATMs, knowing which areas that has

potential to become a new branch.

Figure 1-5Bank MARSMAP Product (Source: Company Profile of MARS Indonesia, 2017)

To collect research data (qualitative and quantitative research, industrial research, desk

research) that have been requested by client, there are several business activities that

conducted in MARS Indonesia. First step is Data Collection. In this step MARS has

resources to conduct research all over Indonesia. With current total trained interviewer

about 800 people,MARSIndonesiahas data collection permanent offices in: Jakarta,

Surabaya, Bandung, Semarang, Medan, and Makassar. It also has network with trained

interviewers in: all cities in Java, Bali, Sumatra, Makassar, Balikpapan, and

Banjarmasin.

Second step is Data Quality. In this step PT. MARS strictly control the data collection

process. Every interviewer has been trained sufficiently before he/she is get the license

to do the interview.

Third step is Data Processing. In data processing step, PT. MARS uses a variety of

highly reliable software to process large size of resource data such as Quantum, QPS,

SPSS, stat-pac gold and others. The human resources for this activity have been

mastering the statistical analysis using advanced analysis tools such as Structural

Equation Models, Neural networks, and others.




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MARS Indonesia has been working with big brand from many business sectors, such

as:

Automotive Industry: AHM (Astra Honda Motor), Toyota Astra Motor, General

Motors, Honda Prospect Motor, Hino Astra Motor

Insurance Company: Askes, IFF, Jasindo, Astra, Jiwasraya, Jamsostek

Banking Industry: BCA, BNI, BRI, CIMB-Niaga, BTN, Bank of Indonesia, Bank

Mega, HSBC, Panin Bank, Mandiri

FMCG: Danone, Mead Johnson, Bogasari, Kao, P&G, Nutricia, Indofood, Mayora,

Bentoel Group, Wismilak

Telecommunication: XL Axiata, Indosat Mega Media (IM2), Telkomsel, Telkom

Indonesia, Lintasarta

Pharmacy: SOHO Industry Pharmacy, Phapros, DexaMedica, Pfizer,

BintangToedjoe

Media: Kompas, Media Indonesia, Pikiran Rakyat, Suara Merdeka, SWA, SCTV,

RCTI, Indovision, Gramedia

Retail: Charabot ASEAN, Matahari, Lippo Supermall, Hero, Shell, Super Indo

Electronic: LG Indonesia, Samsung

Others: UNICEF, European Union, JICA, IIGF, Semen gresik, Holcim

1.1.4.2 Financial Performance Review

As it stated inMARS Indonesia Financial Performance, the biggest increasing revenue

is in 2015. The revenue growth isover than 45%.The profit is growing from minus IDR

1.9 Billion) become plus IDR 93 Million. The revenue was decreasing in 2016 about

10% but profit become more stronger 51% due to perfomance on operating cost.




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Table 1-2MARS Indonesia Financial Performance 2013-2016 (Source: MARS Annual Report)

Figure 1-6Revenue of MARS Indonesia 2013-2016(Source: MARS Annual Report)

1.1.5 Market Landscape

Based on the new Worldwide Big Data and Analytics from International Data

Corporation (IDC), worldwide revenues for big data and business analytics will grow

from nearly $122 billion in 2015 to more than $187 billion in 2019, an increase of

more than 50% over the five-year forecast period.

In 2019, almost half of the revenues will come from purchases of Reporting, and

Analysis Tools and Data Warehouse Management Tools. From a geographic

2013 2014 2015 2016

Revenue 14,088,819,307.00IDR 12,090,277,908.00IDR 17,605,962,251.00IDR 15,870,273,435.00IDR

Gross Profit 8,799,942,124.00IDR 7,394,500,754.00IDR 11,640,941,817.00IDR 8,752,120,598.00IDR

Operating expense (9,892,648,462.00)IDR (8,720,707,150.00)IDR (9,568,423,757.00)IDR (7,367,190,212.00)IDR

Operating income (1,092,706,338.00)IDR (1,326,206,396.00)IDR 2,072,518,060.00IDR 1,384,930,386.00IDR

Net Income (2,159,796,274.00)IDR (1,939,850,463.00)IDR 93,396,149.00IDR 142,032,105.00IDR

Year

14,088,819,307.00

12,090,277,908.00

17,605,962,251.00

15,870,273,435.00

-2,159,796,274.00 -1,939,850,463.00 93,396,149.00 142,032,105.00

2013 2014 2015 2016

Revenue of MARS Indonesia

Revenue Net Income

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perspective, more than half of all big data and business analytics revenues will come

from the United States. By 2019, IDC forecasts that the U.S. market for big data and

business analytics solutions will reach more than $98 billion. The second largest

geographic region will be Western Europe, followed by Asia/Pacific (excluding Japan)

and Latin America. (https://www.idc.com/getdoc.)

Howabout Indonesia? From Figure.1.6 below, big data market in Indonesia is growing.

Annual Global growth forecast more than 20%.AccordingMrs. Lalitha Soundararajan

Former Business Director of TNS,thesize or marketing research industry in Indonesia

for 2016 was approximately USD 130 million.Moreover, approximately 70% of the

markets are controlled by the following companies with the following market share

composition:

1. Nielsen: 35% (USD 455 million)

2. Kantar Group (World Panel, TNS, Mildred Brown): 25% (USD 325 million)

3. IPSOS: 10% (USD 13 million)

For more details please kindly see Figure - 1.6a (L. Soundararajan, personal

communication, October 23, 2017). The remaining 30% percentage will be shared

by other market research companies such as Kadence, Deka, Markplus, Mars

Indonesia, Sigma and others. Based on the 2016 revenue which is about 15 billion

rupiahs Indonesia Data contributed about 1.22% of the market share (based on 1

USD = IDR 10,000 conversion rate).

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Figure 1-6A: 2016 Indonesia Market Research Landscape (Source: TNS)

The Indonesia market size forecasting in this year 2017 will be 140 Million USD

(CAGR will 39.5%) and modern companies are spending big expense on big data.IDC

says that worldwide revenues for big data and business analytics will grow from $130.1

billion in 2016 to more than $203 billion in 2020, at a compound annual growth rate

(CAGR) of 11.7%.Over five years, the big data market is expected grow at about a 50

percent clip, said IDC. However, by the end of 2017, revenue growth from information-

based products will be doubled too stated IDC.




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Figure 1-7Indonesia Big Data Market Size(Source: IDC 2014)

Indonesia Big Data market growth will be driven mainly by the demand of the big data

enabled infrastructure, services and software for storage. In services category, demand

will be higher for consulting and implementing services. Service business will get

13.75 Million USD in 2017. It is big opportunities for local Big Data Analytics

companies to fulfill the market cap.

1.1.6 Problem Background

As one of the local players in Indonesia, PT MARS Indonesia is fully aware of the

market research industry (not including Government and Political Research) which runs

about almost of 20% of Indonesia Market Research Revenue in 2016.MARS Indonesia

Figure 1-8Indonesia Big Data Market Growth (Source: IDC 2014)




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is aiming to be the largest Data Provider and Marketplace in Indonesia, so to adapt with

this market demand, MARS Indonesia must have configured new business strategies to

increase their Market Positioning in Indonesia. One of the Business strategies is to

leverage a growing business unit called ―Indonesia Data.‖ Indonesia Data is the DaaS

business unit that provide online and offline data research. At the moment, Indonesia

Data contribute about more or less 20% of the total revenue of MARS Indonesia and

forecasting will be growing in following years.

To effectively capitalize quickly captured as the ―big chunk‖ of the research market

industry, MARS Indonesia needs to quickly respond to the following questions:

1. What is the strategy of MARS Indonesia to generate Indonesia Data business unit

to fulfil forecast market share in following years?

2. Should MARS Indonesia set the Indonesia Data business unit under a new

company by creating a separated structure or should maintain Indonesia Data as

a business unit to get maximum profit in next following years?

3. Third, how will be the business model for Indonesia Data in the future after MARS


1.2 Purpose

The purpose of this research is to give the best recommendation for MARS Indonesia to

enlarge DaaS Business Unit (Indonesia Data) by using valuation theory.

1.3 Method of Study

Data Collection: This is relevant to the problems, scope of work and objective of the

study. This activity covers internal MARS Indonesia, external respective industry as

well as interviewing with some experts on this industry. The methods of collection are

through primary & secondary data such as request company’s data from MARS

Indonesia, library research, interviews, and focus sessions.

Data Analysis: Gathering, selecting, structuring and interpreting and analyzing the

relevant data. This study conducted through quantitative analysis in big data marketing

issues. From the data,the authors will find the best recommendation for the implications

in the company. 7p theory, VRIO Analysis, PESTLE, Porter 5 Forces, SWOT analysis,

the Theory of Firm, CompetitiveAdvantage andBusiness Model Canvas, will be used as

the author’s analysis to find the best solutions for the problem that occurs.




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1.4 Chapter of Content Brief

This research paper will be divided into 5 chapters, whereas each chapter will be

consisting of several sub-chapters that are will be complement the chapter. Below are

the following outlines of this research paper:

CHAPTER 1: Introduction

In this chapter, the author will explain mostly about the background of the writing on

this paper which are; GFP background including the purpose and methodology,

Industry background, Company background, and Problem background.

CHAPTER 2: Literature Review

In this chapter, the author will explain some information regarding the topic that has

been chosen in different sources, from online literature to books and journals. The

author will expose some facts and previous research in order to find the right

methodology to solve the problem. Literature review will also be used to strengthen the

idea of the author.

CHAPTER 3: Methodology

In this chapter, the author will choose which methods are the best to solve the

problems. The author will also explain how to do the method and how to make the

method done efficiently. Methodology is important to make limitation on the

research;thus, it will only be focused on the main goal.

CHAPTER 4: Analysis and Discussion

In this chapter, the author will explain about the analysis based on the methodologies

that has been done. The analysis will be both quantitative and qualitative. From the

analysis, the author and then discuss the best options to solve the problem.

CHAPTER 5: Conclusion and Recommendation

In this chapter, the author will finally give the conclusion and recommendation for the

company to solve the problem. The author hopes the recommendation that will be given

will be apply and it also give positive effect for the company.




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CHAPTER 2

LITERATURE REVIEW

2.1 Theory of Firm

Hart and Bengt in 2002 stated that the theory of firm is an economics’ theory that

explains about the nature, behavior of a firm in order to maximize the profit. Theory of

firms is ananswer to the questions behind the existence of firms as well as the

fundamentals description of the corporate governance. The firm is run to meet the

relevant conditions with the respect of inputs and outputs, that is use to maximizing

profits, or more accurately, presenting value. In economics, profit maximization is the

short term or long-term process which a firm determines the price and output level that

returns the greatest profit.

Many economists are using the classic economics tools to point out instancesonbusiness

activities that are carried out with the firm’s structure and the process of developing

policy implications in the corporate governance. Therefore, the theory of firm is the

starting point for corporate governance studies said Hart and Bengt in 2002.

In a free market environment, the definition on the economic benefits of organization

within the structure of a firm compared with the relationship on a market. Firms are

characterized by the scope of their activities. The economy of the firms has been

applied in each group or units. For instance, there is a possibility that the unit manager

Figure 2-1Theory of Firm (Source: Miller, 1958)




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will also be the boss or the owner, based on what the given fact that units can be bought

or sold, which allow the manager to be the owner of the units.

Ownership of a unit determines the right to make the decisions in that particular unit.

The decisions can be transferred only by the ownership. It is acentral feature of this

theory from Hart and Bengt in 2002 and it will distinguish from the standard property

rights model in which decisions are ex ante (before the event), non-contractible but ex

post (after the event) contractible. The Author might focus on decisions that have

potential external effects; whether positive or negative, yet are impossible toagree upon

contractually.

2.1.1 Organizational forms

There are two leading organizational forms based on Hart and Bengt in 2002 which are

shown below:

(1) Non-integration:Manager A is the head of unit A, and manager B is the head of

unit B. The units are sole proprietorships. Manager A maximizes unit A and

manager B maximizes unit B.

(2) Integration: A professional manager from the external is the head of both units and

managers AandB are subordinates. The professional manager maximizes unit A +

B.

To simplify the matters, based on the assumption of each unit generates two kinds of

benefit: monetary profit and private benefits (form of job satisfaction for those working

in the unit), the author assumed that:

- The manager is the only employee and because of that, the private benefits refer to

his job satisfaction.

- The head of a unit can divert all profit from his particular unit and make it his own.

To illustrate Hart and Bengt in 2002 gives the simplest examples setting with two units

A and B which resemblesfor profits and private benefits (measured in money) accruing

to each by (vA, wA) and (vB, wB). Then if the units are non-integrated; manager A is

the head of unit A, and manager B the head of unit B. Manager A will maximize vA +

wA since he was responsible to the profit from unit A and cares about his own private

benefits; and manager B will maximize vB + wB for same reasons.

In contrast, if unit A and B are integrated. If manager A is the overall head, manager A

will maximize vA + vB + wA, knowing he/she was responsible for both growth

whether the profit from both units, and cares about his own private benefit but not




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manager B's. Similarly, if manager B is the overall head, he will maximize vA + vB +

wB. Finally, if a (professional) outsider is become the boss, he will maximize vA + vB,

since he/she was responsible to all the profit and does not care about private benefits.

In thepreviouslydescribed model we can identify that there is no role for outsourcing,

for we know that all decisions are always made inside the units and our primary

concern is whether they are made by one or two people from the management. Truth be

told, the outsourcing of a decision or activity is often become the feasible alternative for

a company. For example, let us take a look at two units in the output market that

required a specialized input. Each unit can stay separated and produce the input in-

house; or the units can merge horizontally and collectively provide the input in-house;

or the units can continue to be separated and purchase the input from an independent

supplier.

As great as it sounds, in reality, the outsourcing of a decision or activity is often an

alternative for an organization. For example, consider two units that operate in the same

or similar output markets that need a specialized input. The input might come in the

form of goods or it could appear in the form of service like advertising or marketing.

Regardless of the two input options, each unit can stay separated and provide the

service in-house; or the two units can merge horizontally and collectively provide the

service in-house; or the units can remain separate and procure the service from an

independent supplier. In this particular section, we will tweak a model so much so that

it will allow us to analyze the exchange between these choices. Among other things the

model will throw light on the idea that firms merge horizontally to exploit "synergies",

the synergies will stem from the ability to reduce costs by sharing scarce input capacity

stated Hart and Bengt in 2002.

2.1.2 Transactions costs

The Transaction Cost Approach is a common tool used in reference to the Theory of the

Firm. The approach was firstintroduced by Ronald Coase, a British author and

Economist. Transaction cost is defined as the cost of that providing some good or

service through the market. The cost associated with the exchange of goods or services

and incurred in overcoming market imperfections. Transaction costs include to

communication charges, legal fees, informational cost of finding the price, quality, and

durability, and also include transportation costs.




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Ronald Coase, in his classic 1937 paper stated that ―The Nature of the Firm,‖ was the

first to introduce the idea of transaction costs for the learning purpose of firm and

market organization. Coase, uncovered a theory of firm and market organization. In his

observation Coase discovered that the decision to use one model in the place of another

must not be taken as given but should be derived. Coase also advised some economists

that they needed to bridge what seems to form a gap in economic theory between the

assumption resources that are allocated by the price mechanism with the assumption

that are allocation is dependent on the entrepreneur coordinator. When the transaction

costs are zero, then the parties of transactions will causelessly bargain to an efficient

result. The zero transaction costs would reveal the need to make provision for positive

transaction costs. Transaction costs need to be embedded in a conceptual framework

from which predictions can be derived and empirically tested.

2.2 Porter Five Forces Theory

The Five Forces Analysis model was made known in the Harvard Business Review in

1979 by Michael Porter. This theory is useful toanalyze the competitive structure of a

business by looking at five forces of competition that affect and shape profit potential.

The competitive environment of a business has a significant influence on the

performance within the industry. Porter’s five forces define whether a business is

attractive or unattractive from the lenses of a company that compete in the market. Due

to its nature, this theory isbeneficial both in understanding the strength of an

organization’s current competitive position, and the strength of a position that an

organization may look to tap into.

Moreover, five forces analysis also helps companies to comprehend the factors

affecting profitability in a particular market, and is able to inform decisions regarding

to: whether to enter a specific market; whether to increase capacity in a specific market;

and developing competitive strategies. The Five forces framework is advantageous in

strategic planning and is useful toaid a company in determining whether or not to enter

an industry or market by evaluating the potential for profitability.

In the economic feel, the model proposes a classic perfect market. The closerthe

industry is regulated, the less meaningful insights the model can deliver. The model is

best applied to analyze in a simple market structures. A comprehensive description and

analysis of all five forcesoftenbecomesquite challenging in complex industries with

multiple interrelations, product groups, by-products and segments. A slightly narrow




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focus on particular segments of such industries, however, bears the risk of missing

important elements stated Michael Porter in 1979.

Although it has extensive advantages, Porter’s Five Forces Model may have some

major limitations in today's market setting. The challenge lies on the fact that the theory

is not able to take into account new business models and the dynamics of markets. The

value of Porters model is more that it enables managers to think about the current

situation of their industry in a structured, user-friendly way as a starting point for

further analysis.

Further analysis discovers that an attractive business is about the balance of supply and

demand. When demand is greater than supplies, then businesses should find it easy to

make a profit; however,if the supply is greater than demand, then the business needs a

competitive advantage to survive the competition process. The roots of the Five Forces

analysis model hinges on the industrial economics alone and represent many of the key

assumptions in the model of perfect competition. These assumptions keep the supply

and demand within a market in equilibrium and block firms who compete from earning

big profits or making big losses.

The five forces that Michael Porter identified are:

(1) The threat of new entrants

This force is point out on how easy or difficult it is for competitors to join the

marketplace. The easier it is for a competitor to join the marketplace, the

greater the risk of a business's market share. However, the entry of new firms

can be blocked by incumbents; patents, economies of scale, absolute cost

advantages, access to inputs, economies of scale and well-recognized brands,

and capital requirements or government policies.

Figure 2-2Porter Five Forces Model (Source: Mason Meyer, 2013)




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(2) The bargaining power of customers

This force point out at the power of the consumer to affect pricing and quality.

The customers have the authority to ask for lower price or higher product

quality from industry producers when their bargaining power is strong. Buying

power is low when consumers purchase products in small numbers and the

seller's product are very different from any of its competitors. If a business has

just a few powerful buyers, they are often able to dictate terms.

(3) The bargaining power of suppliers

This force point out the extent of power that business suppliers have,and how

much control it has exercised the potential to increase its prices, which in turn

would drive downbusiness's profitability. Fact of the matter is that is driven by

the: number of suppliers of each essential input; uniqueness of their product or

service; relative size and strength of the supplier; and cost of switching from

one supplier to another. Businesses are in a better position when there are a

multitude of suppliers.

(4) The threat of substitutes

This force examines on how consumers feel when they switch from a

business's product or service to that of a competitor. Where close substitute

products appear in a market, it increases the likelihood of customers switching

to alternatives options. This force is jeopardizing buyers when they can easily

find alternative products with intriguing prices or better quality and when

buyers can switch from one product or service to another with little cost.

(5) The rivalry among existing firms.

This force studies how intense the competition currently is in the marketplace.

The main driver is the number and capability of competitors in the market. In

competitive industry, firms have to compete aggressively for a market share,

which results in low profits. Rivalry competition is high when there are just a

few businesses equally selling a product or service, when the industry is

growing and when consumers can easily switch to a competitor's offering for

little cost.

2.3 Strategy Formulation

Strategy formulation is the process of an organization when choosing the most

appropriate action to achieve its goals. This process is necessary to an organization’s




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success, due to the fact that it provides a framework for the actions that will lead to the

anticipated results. Strategic formulation is an ongoing process to develop and revise

future-oriented strategies that allow a company to obtain its objectives, considering its

capabilities, constraints, and the environment in which it operates stated Ulwick in

1999. A strategic plan also equip a company to evaluate its resources, allocate budgets,

and determine the most effective plan for maximizing ROI (return on investment).

Three Aspect of Strategy Formulation based on Ulwick in 1999 :

Corporate strategy describes as set a company’s corporate actions with the goal to

achieve company objectives while maintaining a competitive advantage.

Business strategy describes as the firm's working plan for achieving its vision, and

optimizing financial performance with its business model. Strategies succeed

when they lead to business growth, a strong competitive position, and strong

financial performance.

Functional strategy describes as shorter-horizon strategies that deals with each

functional area and how each unit will carry out its functional activities to be

effective and maximize resource productivity.

2.4 Marketing Strategy for Offline Business

Basically, company cannot profitably serve all consumers in a given market. There are

too much different type of consumers with too many different kinds of needs. Because

of that reason company must decides which customers it will serve (segmentation and

targeting) and how (differentiation and positioning). Company must identify the total

market and then divides it into smaller segments, selects the best segments, and focuses

for serving andsatisfying the customers in chosen segments.

Guided by marketing strategy based on McCarthy in 1940, the company creating an

integrated marketing mix madeupby factor control which are: product, price, place, and

promotion (the 4 Ps) and other Ps: people, process, physical evidence. Creating the best

marketing strategy and mix, the company must engage in marketing analysis,

planning,implementation, and control.

In Figure 2-3 there are major activities which involved in managing a customer-driven

marketing strategy and the marketing mix. From that figure, consumers are in the

center. The goal of this activity is to create value for customers and build profitable

customer relationships.




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Figure 2-3Managing Marketing Strategies and Marketing Mix

(Source: Kotler and Armstrong, 2014)

2.4.1 Market Segmentation

Consumers or market can be segmentedandserved in many ways based on geographic,

psychographic, demographic and behavioralfactors. Market segmentation is process of

dividing a market into groups of buyers who have differentneeds, characteristics, or

behaviors, and who might require separate products or marketingprograms. Every

market has segments, but not all ways of segmenting a market are equally useful.

2.4.2Market Targeting

The next step after a company has determined its market segments, the company must

be creating target of each market segment, this activity called market targeting. Market

targeting is also evaluating each market segment’s attractiveness and selecting one or

more segments to enter.

A company must target the segments in which it can profitably generate for greatest

customer value and sustain for long period. Companies that have limited resources

might decide to serve only one or a few special segments or called market niches.

Alternatively, a company might choose to serve several related segments perhaps those

with different kinds of customers but with the same basic wants.

In the beginning, most companies enter a new market by serving a single segment, they

will be adding more segments, if the serving of single segment running successfully.




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For example, Nike started with innovative running shoes for runners, after successful

Nike now makes and sells a broad range of sports product in every sports, and designs

different products to meet the special needs of each segment it serves.

2.4.3Market Differentiation and Positioning

The next step, after a company has decided which market segments to enter and

deciding market targeting, it must determine how to differentiate its market offering for

each targeted segment and what positions it wants to occupy in those segments. If a

product is perceived to be same like other competitor companies on the market,

consumers would have no reason to buy your product. This step is called market

differentiation.

Market positioning is company arranging a product in clear, distinctive, and desirable

place relative to compete theirproducts in the minds of target consumers.

Companyplanspositions that distinguish their products from competing brands and give

the company the best advantage in their target markets.Firstly, company must identify a

possible customervalue differences that provide competitive advantages on which to

buildthe position for the brand of its product. A company can offer by charging lower

prices than competitors or offering more benefits to justify higherprices. Thus, effective

positioning begins with differentiation, actually differentiating the company’s market

offering so that it gives consumers more value. Once the company has chosen a desired

position, itmust take strong steps to deliver and communicate that position to

targetconsumers.

2.4.4 Developing an Integrated Marketing Mix

The integrated marketing mix is combination tactical of marketing tools to get the

response of company’s objective in its target market. The marketing mix consists of

everything the firm cando to influence the demand for its product.

A founder McCarthy's 4Ps mix theory has stated that different marketing mixes have

been put forward for different marketing contexts. From the survey in UK and

European marketing academics result, stated that there is a high percentage of

dissatisfaction with 4Ps and also 7Ps framework is already achieved a high degree of

acceptance as a generic marketing mix. Overall, it provides a fairly strong support that

Booms and Bitner's 7Ps framework should replace McCarthy's 4Ps framework.

According to Booms and Bitner (1981), marketing management is the focus of the

marketing mix. Marketing isa conceptual framework which helps the principal

decisions that company is configuring their offerings to cater to customers’ needs. This




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theory is beneficialto develop both long term strategies and short term tactical programs

(Palmer, 2004). Booms and Bitner (1981) defined 7Ps of the marketing mix as follows:

Product- means the goods and services combination the company offers to the

targetmarket. Basically, it involves introducing new products or improving the

existing products.

Price - is the amount of money customers must pay to obtain the product. Pricing

must be competitive and must entail profit. The pricing strategy can comprise

discounts, offers, and the like.

Place - It refers to the place where the customers can buy the product and how the

product reaches out to that place. This is done through different channels, like

internet, wholesalers and retailers.

Promotion - It includes the various ways of communicating to the customers of

what the company has to offer. It is about communicating about the benefits of

using a particular product or service rather than just talking about its features.

People -This refers to the customers, employees, management and everybody else

involved in it. It is essential for everyone to realize that the reputation of the brand

that you are involved with is in the people's hands.

Process - It refers to the methods and process of providing a service and is hence

essential to have a thorough knowledge on whether the services are helpful to the

customers, if they are provided in time, if the customers are informed in hand

about the services and many such things.

Physical (evidence) - It refers to the experience of using a product or service.

The marketing mix determine the company statistical tool kit for establishing strong

positioning in target markets in short term and long term period. An effective marketing

program is blending the marketing mix elements into an integrated marketing program

which are designed to achieve the company’s marketing objectives by engaging

consumers and delivering value to them.

2.5 Marketing Strategy for Online Business

Many online companies rely on trust as the determinant of relationship development to

retain new and potential e-consumers in the competitive digital world. Lack of trust was

the utmost issue that inhibited in e-purchase. Lack of trust willaffectunsuccessful e-

commerce. Statistically, the survey study conducted by National Electronics and




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Computer Centre (2006) found that 63 percent of e-consumers did not involve in e-

purchasing because of trust lacking issue on website. Lack of trust omitted many

negative impacts,such as e-shoppers refused to buyand less confident in involving e-

commerce. Moreover, e-consumers were unwilling to give their credit card number and

personal information data to the retailers. Hence, it is important to gain consumer trust

in consumer’s information privacy in the digital channel. With trust, consumers would

be more likely to involve in the e-transaction.

2.5.1 E-Loyalty

E-Loyalty is defined as ―consumer’s favorable attitude towards an online business,

resulting inrepeat purchasing behavior. It acknowledges a customer’s commitment to

particular website. Based on the above definitions,e-loyalty is described as the

perceived loyalty of an e-consumer towards a website and their intention to visit the

same website to repeat purchase. Loyal customers exhibit intentions and commit

to repurchasing the same products with the same company.

2.5.2 E-Satisfaction

Creating e-satisfaction requires customers to feel comfortable shopping on websites,

and maintain positive attitude and response. This state is achieved when website

attributes and the services delivered exceed customer expectations. Based on

customers’ perception value, needs, and wants will linked to high levels of re-

purchase or revisits to the same website. Higher involvement of purchasing results in

higher level of re-patronage intention. With high involvement, e-customers intended

to spend more money to purchase, time and efforts to achieve satisfaction. Revisit is

defined as the decision to repurchase the same products and visit the same stores

regularly.

2.5.3 E-Trust

For ecommerce to flourish, e-retailers must understand and gain the trust of their

online consumers. Companies need a deeper understanding of how trust works in the

online context in order to make this medium a successful element in marketing. If the

website does not lead the online customer to believe its trustworthiness, no purchase

decision will result.




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2.6 VRIO Theory

VRIO is way to integrated two existing theoretical frameworks, which are: the

positioning perspective view and resource based view based on Barney and Hesterly,

2008. It is primary tool to get internal capabilities analysis of the company. It stands of

four questions about resource of capability to determine company competitive potential,

which are:

1. The Question of Value: Do company resources exploit an environmental

opportunity or neutralize an environmental threat?

2. The Question of Rarity: Iscurrentlyresources controlled by a small number of

competing company?

3. The Question of Imitability: Do company without a resource face a cost

disadvantage in developing it?

4. The Question of Organization: Are company’s policies and standardize organized

to support the exploitation of its valuable, rare, and costly to imitate resources?

What is Resources? Resources in the RBV (Resource-based view) are defined as the

tangible and intangible assets that a company controlling that, it can use to implement

company’s strategies. Examples of resources are: Products, teamwork among

managers, reputation, factories.

What is Capabilities? Capabilities are a subset of the company’s resources that tangible

and intangible that enables a company to take full advantage of the other resources it

controls. Capabilities alone do not enable a company to implement its strategies, but it

can enable a firm to use others resources to implement such strategies. Example of

capabilities: Marketing skills, cooperation of manufacturing to produce the product.

Resources and capabilities can be classified into four categories:

Financial resources include the cash from entrepreneurs, bondholders, equity,

retained earnings, profit, investment, etc.

Physical resources include a company’s factory and equipment, geographic

location, raw materials

Human resources include in training, intelligence, relationships and insight of

individual managers and workers

Organizational resources are an attribute of groups of company, include a

company’s formal reporting structure, planning organization, coordination

systems, culture and reputation.




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2.6.1 VRIO Framework

Based on RBV, it is possible to generate a set of tools for analyzing all the different

resources and capabilities of the company and potential of each of these to develop

competitive advantage of the company. From this analysis, it will be possible to

identify internal strength and weakness of the company. There are four questions to

build the framework based on Barney and Hesterly, 2008, which are:

1. The question of value.

The Question of value is: Do company resources exploit an environmental

opportunity or neutralize an environmental threat? If a company answers is ―yes‖

then its resources and capabilities are valuable and consider to the strength. But if

a company answers is ―no‖ then its resources and capabilities are weaknesses.

Company can identify potential valuable resources and capabilities by study the

company’s value chain. A company’s value chain is the set of company’s business

activities in which defining to develop, produce, and market its products or

services.

Figure 2-4The Generic Value Chain Develop by Porter(Source:Barney, 2008)

From Figure 2-4 value chain divided in two main categories:

- Primary activities and support activitiesthis activity includes inbound and

outbound logistic, production, sales marketing, and dealer services.

- Support activities, this activity include infrastructure (Planning,

information services, legal, finance), research and development, and

human resource management




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Primary activities are linking to manufacture and distribution of product, support

activities are assist to accomplishing primary activities. A company can develop

strengths or weakness in any one or in any combination of activities listing on

figure 2-4 (Porter’s Value chain).

2. The question of Rarity.

The question of Rarity: Is a currently resources controlled by a small number of

competing company or how many competing companies are already have

particular resources. Consider for example is competition in sports channels, like

ESPN, Star sports, etc.

Of course, not all company’s resources have valuable and rare, but company must

increase its probability of survival to gain competitive parity. How rare a valuable

resources or capability must be generating a competitive advantage by company in

situation to situation?By determines the key strategies of companies to get

competition advantage of its resources and capabilities.

3. The question of Imitability.

The question of imitability: Do company without a resource face a cost

disadvantage in developing it, compared to other company that already have it?

Valuable and rare resources and capabilities however, can be the key for sustained

competitive advantage only if the company that does not have them faces a cost

disadvantage in developing them. These kinds of resources and capabilities are

imperfectly imitable. Company that have and exploit costly to imitate, rare and

valuable are sustain competitive advantage for long period, this company is

innovative company.

Imitation forms in one of two ways: Direct duplication or substitution. Imitating

company can attempt to directly duplicate the resources that other company have

to gain competitive advantage, but if the cost for this duplicate activity is too high,

then the original company that have resources and capabilities may obtain a

sustainable competitive advantage company. Imitating company also can attempt

to substitute other resources. If imitating firms do not have a cost disadvantage for

substitute the resources then the competitive advantage of the original company

will be temporary.There are for reason why the resources and capabilities are




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hardly to imitate or creating cost disadvantage: Unique historical conditions,

Causal ambiguity, Social complexity, Patents.

4. The question of Organization.

The question of organization: Are company’s policies and standardize organized

to support the exploitation of its valuable, rare, and costly to imitate resources?

Management control systems divided in two mechanisms to ensure that managers

are consistent with company’s strategies, which are:

- Formal Management controls, this activity include in a company’s

budgeting and reporting that people in higher level in organization chart

are controlling people lower down level

- Informal Management controls, this activity include in a company’s

culture of employees control each other’s behavior.

2.5.2 Applying VRIO Framework

From figure 2.5 the VRIO framework can being identify of which competitive

implications level is companies have.

Table 2-1The VRIO Framework(Source: Barney, 2008)

Table 2-1 the relationship between VRIO framework and organizational strength and

weaknesses.




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Table 2-2The VRIO Framework(Source: Barney, 2008)

2.7 SWOT Analysis Theory

SWOT Analysis by Humprey in 1960 is a business tools or technique that the

organization can perform for the product, markets and services when the organization

deciding on the best way to achieve current target and future. The analysis process used

to evaluate a firm’s strengths, weaknesses and opportunities, and threats in the present

market.SWOT Matrix (Figure 2-5)

Figure 2-5SWOT Templates (Source: Chuck,2013)

The completion of SWOT analysis should help the organization to create strategic

planning of organization and help to decide which market segment with the best

opportunities to success and profitable growth.

Strength: Internal Factors which favorable to achieve organization’s objective.

Strength is something that has a positive implication. It can be adding value, or the

competitive advantage of the organization.

The sorts of questions that can be ask to ascertain the strength are:

- What does the organization do well?




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- What qualities or value are our customers choosing our product or services?

- What resources does an organization have at their disposal?

- What do other organization (it can be: the competitor) see as our strength?

- What areas are seen as being expert at?

- What advantages that over the competition?

Weakness: Internal Factors which unfavorable to achieve organization’s objective

A Weakness is a characteristic of the product or servicethat detract from the value

or disadvantage when compared with the competitors.

The sort of questions that can be ask to identify the weakness are:

- What does the organization do badly?

- What can be improved?

- How does the performance compare with the competitors?

- What should we avoid?

- How about self-imposed any constraints?

- How the organization compare with others?

- How did the organization respond to the feedback?

Opportunities: External Factors which favorable to achieve organization’s

objective. An opportunity can occur for a variety of reasons and may result from

changes within the market, technology, lifestyle, etc. Opportunities for growth can

occur from a countermeasure of a problem of current product or services.

Threats: External Factors whichisunfavorable to achieve organization’s objective.

These are referred to as threats and are made up of external factors that are beyond

the organization control. The greater ability of an organization to identify potential

threats the more proactive organization that will be able to plan for quick respond.

2.8 PESTLE Theory

All Organizations are in need to identify all external factors within their environment

that could impact of their business activities. A popular tool is the PESTLE analysis.

Based on the analysis of FME team in 2013, is the process of identifying should include

a variety of different disciplines across the organization so the external factors can be

built up. These factors can be fully researched and analyzed. As Organizations are

becoming global, the PESTLE technique must be analyzed to consider about the

impact. The source of these external factors can come from macroeconomic factors

thatorganizationhas no control over, including political, interest rate, currency) and




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microeconomic factors. PESTLE group the external factors into six factors (Figure 2-

6):

1. Political

Political results from the processes and actions of government bodies that can

influence the decisions and behavior of firms such as political policy and fiscal

stability, and taxation policies.

2. Economic

These factors are resemblance of economic from helicopterviews which include

factors that can impact directly to firms’ ability to earn profits such as interest

rates, inflation and deflation, raw material price, currency rate, growth rate, and

employment rate.

3. Sociocultural

These factors has a lot to do with society’s cultures and norm and identify

emerging trends such as demographics, education levels, religion, cultural

changes, lifestyle and etc.

4. Technological

These factors include the rate of technological innovation and development that

could affect a market or industry in the near future.Thesefactors may include but

not limited to changes in digital or mobile technology, automation, research and

development.

5. Ecological

Figure 2-6PESTLE Theory(Source: Jim, 2014)




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These factors relate to the influence of the surrounding environment and the

impact of ecological aspects. With the rise in importance of CSR (Corporate

Sustainability Responsibility), this element is becoming more important. Factors

include climate, recycling procedures, carbon footprint, waste disposal and

sustainability.

6. Legal

Legal factors cover the official outcomes of political processes as in laws,

mandates, regulations, and court decisions which can have a direct impact on a

firm’s ability to earn profits.

2.9 Business Canvas Model Theory

Based on Osterwalder and Pigneur in 2009 a Business Model describes as the

foundation of how an organization or companies creates, delivers, and captures value.

The Business model is like a blueprint of strategy to be implemented through

organizational structures processes, and systems. Ultimately, business model is about

creating value for companies, customer, and society. It is about replacing outdated

models. We can see that Apple created an innovative new business model that

transformed the company into the dominant force in online music with its iPod digital

media player and iTunes.com online store. Skype brought us dirt-cheap global calling

rates and free Skype-to-Skype calls with an innovative business model built on so-

called peer-to-peer technology. It is now the world’s largest carrier of international

voice traffic.

Construction a Business Model

The ―Business Model Canvas‖ delivers a framework for focused brainstorming and

staff inspiration. The Business Model Canvas provides a flexible template for capturing

the nine essential parts of a business model. The ―canvas‖ is usually a large piece of

paper with sections.

That are 9 elements or building blocks, that forming the Business Canvas Model, and

they are: Key Partners, Key Activities, Value Proposition, Customer Relationships,

Customer Segments, Channels, Key Resources, Revenue Stream, and Cost Structure.

These nine building blocks cover an organization’s ―customers, offer, infrastructure and

financial viability.




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Figure 2-7Business Canvas Model(Source: Osterwald, 2008)

Key Partnerships

The Key Partnerships Building Block determines the network of suppliers and

partners that create the business model work.

Organization partnerships are becoming a base of many business models.

Organization creates alliances to optimize their business models, reduce risk, or

acquire resources. Consider supplier links, joint ventures and ―strategic alliances.‖

Tactical partnerships with rivals, or ―coopetition,‖ can lessen risk or provide savings.

Organization also can reduce costs or gain access to vital resources by outsourcing or

subcontracting. We can distinguish between four different types of partnerships:

• Strategic alliances between non-competitors

• Coopetition: strategic partnerships between competitors

• Joint ventures to develop new businesses

• Buyer-supplier relationships to assure reliable supplies

Key Activities

The Key Activities Building Block determines the most important things a company

must do to make its business model work. Key Activities differ depending on business

model type. For software maker Microsoft, Key Activities include software

development. For PC manufacturer Dell, Key Activities include supply chain




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management. For consultancy McKinsey, Key Activities include problem

solving.Like Key Resources, they are required to create and over a Value Proposition,

reach markets, maintain Customer Relationships, and earn revenues.

Key Activities can be categorized as follows:

Production

Problem Solving

Platform/network

Value Proposition

The Value Propositions Building Block determines the compliance of products and

services that create value.

The reason of why customers turn to one company over another is Value Proposition.

It can solve problem from customer or satisfies a customer need. Each Value

Proposition consists of a selected bundle of products and/or services that caters to the

requirements of a specific Customer Segment. Some Value Propositions may be

innovative and represent a new or disruptive offer. Others may be similar to existing

market offers, but with added features and attributes. Create value by inventing

something new, improving your product’s performance and offering to specific needs.

Values may be quantitative (e.g. price, speed of service) or qualitative (e.g. design,

customer experience).

Customer Relationships

The Customer Relationships Building Block determine the types of relationships a

company establishes with specific Customer Segments

Any organization should clarify the type of relationship it wants to establish with each

Customer Segment. Relationships can range from personal to automate. Customer

relationships may be driven by the below motivations:

• Customer acquisition

• Customer retention

• Boosting sales (upselling)

Customer Segments

The Customer Segments Building Block defines the segmentation or different groups

of people or organizations an enterprise aims to serve and reach.

In order to better satisfy customers, a company may group them into distinct segments

with common needs, common behaviors, or other attributes. A business model may




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define one or several large or small Customer Segments. ―Mass‖ markets and ―niche‖

markets require starkly different approaches, while ―segmented‖ customer bases share

similarities, but their needs vary slightly. An organization must make a conscious

decision about which segments to serve and which segments to ignore. When the

decision is made, a business model can be carefully understanding of specific

customer needs.

Customer groups represent separate segments if:

Their needs require and justify a distinct offer

They are reached through different Distribution Channels

They require different types of relationships

They have substantially different profit abilities

They are willing to pay for different aspects of the offer

Channels

The Channels Building Block determines how a company can communicates with its

Customer Segments to deliver a Value Proposition.

Communication, distribution, and sales Channels comprise a company's interface with

customers. Channels are customer touch points that play an important role in the

customer experience.

Channels serve several functions, including:

• Raising awareness among customers about a company’s products and services

• Helping customers evaluate a company’s Value Proposition

• Allowing customers to purchase specific products and services

• Delivering a Value Proposition to customers

• Providing post-purchase customer support

Key Resources

The Key Resources Building Block determines the most important assets required to

make a business model work.

Key resources allow an enterprise to create and offer a Value Proposition, maintain

relationships with Customer Segments, reach markets, and earn revenues. Different

Key Resources are needed depending on the type of business model. These most

important assets can take several forms: physical, financial, intellectual or human,

depending on what a company does. They range from executive talent and intellectual




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property rights to physical plant and credit lines; key resources may be owned or

leased.

Revenue Stream

The Revenue Streams Building Block represents the cash of the company from each

Customer Segment (costs must be subtracted from revenues to create earnings)

These are the ―arteries‖ of a business model; income flows through them from

discrete sales or from ongoing payments such as rentals, licenses or subscriptions.

Each Revenue Stream may have different pricing mechanisms, such as fixed list

prices, bargaining, auctioning, market dependent, volume dependent, or yield

management. For what value is each Customer Segment are willing to pay?

Successfully answering that question allows the firm to generate one or more Revenue

Streams from each Customer Segment.

Two different types of Revenue Streams:

• Transaction revenues resulting from one-time customer payments

• Recurring revenues resulting from ongoing payments to either deliver a Value

Proposition to customers or provide post-purchase customer support.

Cost Structure

The Cost Structure describes all costs used to operate a business model

Creating and delivering value, maintaining Customer Relationships, and generating

revenue all incur costs. Such costs can be calculated relatively easily after defining

Key Resources, Key Activities, and Key Partnerships. Cost structure model example

is ―cost-driven‖ or ―value-driven‖ business, offering low-priced services like discount

airline tickets or creating exceptional value like a top hotel. Outlays represent ―fixed

and variable‖ expenses; bigger companies can pursue economies of scale and―scope‖

from large-scale production and distribution.

2.10 Competitive Advantages Theory

Conceptually competitive advantage by Michael Porter states about giving an overview

of competitive advantage for companies, for selecting and implementing a common

strategy to improve and maintain the competitiveness of companies. The strategy can

be based on cost leadership, differentiation, and a combination of these two factors

form the basis of generic Porter's competitive strategy, namely: focus (based cost or

differentiation). In the approach described by Porter, there are two factors that are taken

into account in creating the right competitive strategy:




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The first is based on the competitive advantage of the organization. According to

Porter's competitive advantage will only be obtained through one of two sources:

either of excellence creates a low cost (cost leadership), or of the ability of the

organization to be different (differentiation) compared to its competitors.

The second factor in this approach is the scope of product-market (competitive

scope) in which organizations compete with each other in a market that is both

broad and narrow.

The company's strategy is a strategy developed in a business so that the company will

face competition by changing the distinctive competence into competitive advantage.

The company's strategy embodies three general orientations (which is often called the

grand strategies): growth, stability, and reduction. Besides, there is also a competitive

strategy is a business strategy (Competitive Strategy), which compete with its

competitors to gain competitive advantage.

Competitive advantage can be determined as the differential in any firm attribute that

allows one firm to better serve the customers than others and hence create better

customer value and achieve superior performance. Such attributes, for instance, could

be a superior location, example: Wal-Mart's often monopolized location in rural areas

in the USA; domination of shelf-space in retail, Coca-Cola's or Pepsi's dominance in

supermarkets; exclusive or favorable access to supply, Toyota's just-in-time

manufacturing and inventory system.

However, that competitive advantage and superior performance are two different

particular. A particular competitive advantage over rivals in one aspect of competition

may help the firm better serve the customer in that particular aspect. To achieve

superior performance, especially persistent superior performance, a firm often needs

multiple competitive advantages.

2.10.1 Generic sources of competitive advantage

As advantage is comes from the differences of any firm attributes, can be: it ownership,

access, or knowledge based, that allows one company to better provide customer value

than others can, any factor that contributes to the enlargement of such a differential

could serve as a source of company advantage (see Figure 2.10).




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Table 2-3Generic Source of competitive advantage (Source: Hao ma, 1999)

To gain advantage, a company could focus on raising the playing level of itself, or

proactively constrain or belittle rivals. The former approach exploits the above three

sources of advantages by positively enhancing a focal firm's ability to create value

better than others can.

2.9.2 Ownership based source of advantage

Ownership-based source of advantage means any assets or factors under a company's

possession from which a company could gain an upper hand to its competitor in better

serving customers. That is, by possessing certain characteristics or by being in a certain

status, a firm enjoys advantage over others. The ownership-based source of advantage

lies within the firm. This source includes, among others, strong market power, for the

example: Microsoft's power in the computer-related business arising from its large

installed base in PC operating system; unique resource endowments, Caterpillar's

extensive world-wide dealer and maintenance system; exceptional managerial talents,

3M culture that facilitates innovation, and admirable corporate reputation. There are 2

categories of ownership based source of advantage:

Acquire valuable assets

Acquire valuable asset is defined as an instance when the company is active for

acquiring and accumulating valuable resources and gaining market positions in a

systematic way contributes to a company’s gaining of ownership based on

competitive advantage.




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Brand is one of the most valuable assets a firm can own. It is usually the stock

variables that determine a firm's advantage in any moment: what positions company

have, how the strength are the company’s name or brand, and reputation.

Constrain rival’s options

It means a company could gain advantage by sabotage or constrain rivals' options in

acquiring valuable assets or positions.




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CHAPTER 3

RESEARCH METHODOLOGY

3.1 Methodology

Qualitative inquiry is using different philosophical assumptions; strategies of inquiry;

and methods of data collection, analysis and interpretation (Creswell 2009,173). A

qualitative approach emphasizes the qualities of entities, processes and meanings that

are not experimentally examined or measured in terms of quantity, amount, intensity or

frequency (Denzin and Lincoln 2008).

In the case of MARS Indonesia, the author uses qualitative method to analyze all

information regarding the identified problem. The information get from activities to

review some list of characteristics common of several qualitative methods. Though the

list below is not exhaustive (Creswell 2009,175-6/0), it offers a sense of well-known

qualitative research methods.

Research is often conducted in the field, allowing direct interaction with the

people being studied in their context.

Researchers collect data themselves by examining documents, observing behavior

or interviewing participants.

Multiple sources of data are preferred over a single source; this requires the

researcher to review all data, make sense of it and organize it into categories and

themes from the bottom up (inductive analysis).

The focus is on learning the meaning participants hold rather than the meaning

brought in by the researcher.

The research is often an emergent, shifting process in response to the field.

The qualitative researcher interprets what is seen, heard and understood. This

must be seen in light of the researcher’s background, history, context and prior

understanding.

The researcher tries to develop a complex picture of the problem or issue by

reporting multiple perspectives and identifying multiple factors involved.

3.1.1 Research Design

According to Christensen, Johnson, and Turner (2011), the research design is the

conceptual structure within which research is conducted; it constitutes the blueprint for

the collection, measurement and analysis of data. As such the design includes an outline




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of what the researcher will do from writing the hypothesis and its operational

implications to the final analysis of data. The figure 3.1 below will describe on how this

research design will be conducted.

Figure 3-1Research Design

3.1.2 ResearchWorkflow

This research is conducted to propose the best recommendation for Indonesia Data,

DaaS business unit of MARS Indonesia. The authors need to identify the best business

strategy to leverage Indonesia Data in market research competition industry, by identify

problem of business proces and using some important company information. The

information will include some insight from the industry itself, the holding company

background, and performance analysis of the business unit. Source of study come from

literature, field observation, the company data and reports, and interview with the

management.

This research was conducted from July 2017 until September 2017. To create some

solution or recomendation, The Authors need to create workflow research to easily and

bounderies performance of the research. The figure 3.2 below will describe on how this

research workflow will be conducted.




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Figure 3-2Research Workflow

3.2 Data Collection

The author uses data collection methodology which is obtained from interviews and

also from analyzing the company’s data. Media source and literature review will also

be used in order to get more complete data.

There are two main sources of data that are used in this study; primary and secondary

data sources. The studies will implement both primary and secondary data in answering

research questions. Both data sources contribute to the objectives and helped generate

conclusion and recommendations.

3.2.1 Primary data

The primary data is collected through discussion and interview with MARS

management. This will be done by unstructured interview. Unstructured interviews do

not follow a system of pre-determined questions and standardized techniques of

recording information. In a non-structured interview, the interviewer is allowed much

Start

Observation

Preliminary

DataOK

No

Yes

1

ProblemIdentification

2

TheoriticalFramework

Research Question & Hypothesis

DataCollection

Analysis (Deduction)

SWOTAnalysis

Company Analysis(PESTLE, Porter 5

Forces, VRIO Theory

Product & ServiceAnalysis (7P Theory)

3

Recommendation(Business Canvas

Model Theory)

OK

Yes

No

Company Decision

StrategicFormulation

(Theory of firm)

4

Yes

No




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greater freedom to ask, in case of need, supplementary questions or at times he may

omit certain questions if the situation so requires. He may even change the sequence of

questions. He has relatively greater freedom while recording the responses to include

some aspectsand exclude other (Kothari, 2004).

3.2.2 Secondary Data

The secondary data may be referred to as data that are already available, for example

data which have already been collected and analyzed by someone else. Secondary data

for this study was acquired from variety of online journals, books, company financial

report, group field project by past students of the institutions, and other such sources.

The secondary data may be unsuitable or may be inadequate in the context of the

problem which the researcher wants to study. By way of caution, the researcher, before

using secondary data, must see that they possess following characteristics (Kothari,

2004):

Reliability of data

The reliability can be tested by finding out such things about the said data:

(a) Who collected the data? (b) What were the sources of data? (c) Were they

collected by using proper methods (d) When were they collected.

Suitability of data.

The data that are suitable for one enquiry may not necessarily be found suitable in

another enquiry. Hence, if the available data are found to be unsuitable, they should

not be used by the researcher.

Adequacy of data.

If the level of accuracy achieved in data is found inadequate for the purpose

of the present enquiry, they will be considered as inadequate and should not be used

by the researcher. The data will also be considered inadequate, if they are related to

an area which may be either narrower or wider than the area of the present enquiry.

From all this we can say that it is very risky to use the already available data. The

already available data should be used by the researcher only when he finds them

reliable, suitable and adequate.

3.3 Data Analysis

Three stages will be used for this analysis; pre-field study, field study, and analysis &

recommendation. Pre-field study is a planning of the analysis. In this stage, the author

will determine the purpose of the group analysis and what method will be conducted to




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measure and collect data for the analysis. In field study, the group will produce research

outline and determines all sources of data and information. In analysis &

recommendation stage, the author will try to make the best solution for the company’s

problem based on the data that has been given. The recommendation of this study is

made through several activities:

3.3.1 Product and Service Analysis

In the first step will begin by analyze Indonesia Data product and service features, who

the targeted market is (segmentation, targeting, positioning), and also analyze of its

value driver by using 7P theory.

3.3.2 Company Analysis

In the second step, the analysis will begin by understanding each Business unitof

MARS Indonesiaand also Indonesia Data Business Process as MARS Indonesia

business unit. After that the authors continue with External Analysis & Internal

Analysis.

3.3.3 External Analysis

The author will analyze the external factorthat faced by Indonesia Data using PESTLE,

and Porter’sfive forces theory, we also analyze some competitor competitive advantage.

3.3.4 Internal Analysis

Next the authors will analyze Indonesia Data resources, capabilities, and core

competencies to understand its strengths and weaknesses. In this step the authors will

used VRIO Framework to analyze the resource, capability/ competency.

3.3.5 SWOT Analysis

Next the author will analyze the company strength and weakness to face opportunities

and threat using SWOT analysis framework. The method of this analysis is through

research and data gathering from the company. Internal strengths (S) and weaknesses

(W) concern resources, capabilities, and competencies. Whether they are strengths or

weaknesses can be determined by applying the VRIO framework. External

opportunities (O) and threats (T)are in the firm’s general environment and can be

captured from PESTLE and Porter’s five forces analyses.

3.3.6 Strategic Formulation

In the final step, the authors will gather all data from previous analysis and used it as

input for the Theory of Firm Scope. The authors will analyze which strategic will be




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efficiently whether if the Indonesia Data business units remain non-integrated or if they

integrated from MARS Indonesia.

3.4 Conclusion and Recommendation

After the authors analyze the data and information, This phase will be used for giving

MARS Indonesia, what is the best conclusion and recomendation for Indonesia Data

Business Unit in the short term, mid term and long term period, Competitive advantage

theory will be use in this phase. The authors also create Business model of Indonesia

Data for conclusion of the problem identification.




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CHAPTER 4

DATA ANALYSIS

4.1 Product and Service Analysis

One of the Business strategies of MARS Indonesia is to leverage a growing business

unit called ―Indonesia Data‖ and also Indonesia Data contribute about more or less 20%

of the total revenue of MARS Indonesia and forecasting will be growing in following

years. Due to that reason the authors are analysis Indonesia Data Business unit.

4.1.1 Market Segment

Indonesia data (DaaS) market is segmented on the basis of its business sector in major

industries in Indonesia:

IT and Telecommunication

Healthcare

Financial

Retail and Consumer Goods

Manufacturing

Travel and hospitality

Plantation and forestry

Media and entertainment

Government

4.1.2 Market Target

Indonesia Data have provide two target market, which are: Business Player (corporate)

and Academic (University student). For Business palyer, almost all business sectors

statistical data such as IT and Telecommunication, Healthcare, Financial, Retail and

Consumer Goods, Plantation and forestry etc. In 2015, their revenue mostly came from

sales of ―Brand and Consumer Profile‖ report, and ―Financial Research‖ report.

―Brand and Consumer Profile‖ report is a report on general consumer behavior in

several business sectors such as Pharmaceutical, Bank and Insurance, Transportation,

Consumer Electronics, Food and Drink, Cosmetics, Toiletries, and Building Materials.

From Figure 4-1, most of Indonesia Data revenue comes from Banking, Food and

Beverage, and Pharmaceutical Company.Moreover, Indonesia Data differentiatesits

value products by also targetting individual/academic and offering Specific single data

with a low price.




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4.1.3 Market Differentiation and Positioning

Indonesia Data positioning is data provider and data market place business and the

differentiation is Indonesia Data distinguishes itself as a leader among Indonesian

market research companies through its ―Data as a Service‖ (DaaS) product, which is

creating trend and not responding to request of customers, as commonly practiced by

other market research companies.

4.1.4 Marketing Mix/Tools (7Ps)

Products: currently IndonesiaData offers its products in 2 forms which is Data &

Analysis in a comprehensive report and specific single data.. From Figure 4-1,

most of Indonesia Data revenue comes from Banking, Food and Beverage, and

Pharmaceutical Company (Total 52,3% in 2016). Many of the data offered in

www.indonesiadata.comare not up to date till current/last year.

Price: for Data and Analysis in a comprehensive report the price is up to

Rp.25.000.000 meanwhile for Specific Single Data the price is up to Rp.55.000.

ForData and Analysis in a comprehensive report, currently the competitor (PT.

Sigma Research) offering lower price.

Figure 4-1Percentage of Sales based on business sector in 2015-2016

(Source: MARS Annual Report)

http://www.indonesiadata.com/




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Place:Indonesia Data offer its products on internet through

www.indonesiadata.com. Indonesia Data also should consider making mobile app

for easy acces by existing costumers or potential costumers.

Promotion:Indonesia Data using Personal Selling and Direct Digital Marketing

for its promotion. For Personal Selling, Indonesia Data sales force engaging

costumer by sales presentation and building costumer relationship. For Direct

Digital Marketing it used website and social media (instagram) to promote its

products and build costumer relationship.

People:Indonesia Data structure organization still under MARS Indonesia,

majority employee’s jobdescription is still overlap with other business unit.

Process:Currently there are three marketing staffs and one marketing manager.

The Marketing Staff currently not focus on creating sales, but rather focus on make

sales. This Marketing staff also used by another business unit and not focus only to

Indonesia Data.

Physical (evidence):Indonesia Data used attractive and user-friendly website to

attract costumers, but currently the web is not fully supported mobile access. Some

content still missing if accesed via mobilephone.

Conclusion: From the analysis above we conclude:

Indonesia Data targeting too many market segments. It will be better if

Indonesia Data focus on Banking, Food and Beverage, and Pharmaceutical

Industry with more complete data and analysis on those sectors because:

- Those sectors contribute more than 52,6%revenue.

- To be more efficient it is better to focused on the stated segments (food

and beverages, banking, and pharmaceutical).

- In March 2014, Business Monitor International released the forecasts for

Indonesia’s Food and Beverage sector growth CAGR for 2014-2018 (9,3% for

soft drinks, 7.6% for Food, and 10.7% for grocery (bkpm.go.id).

- The outlook in 2017 is predicted to be positive due to higher loan growth,

recovery of commodity prices and better economy in Indonesia, Bank of

Indonesia Projected Banking Industry growth in 2017 to be 12% (Ernst and

Young).




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- Indonesia’s pharmaceutical market will witness higher growth of

branded, Frost and Sullivan projected pharmaceutical CAGR growth

in 2013-2019 is 12,9%.

Provide deeper analysis on specific business sector such as providing answer

to specific industry question, for example:

- What are the current and future trends in the industry?

- What are the unmet consumer needs?

- Where are the opportunities?

- What are competitors doing, why are they succeeding?

- How are consumers behaving, thinking and changing?

- What choices for products packaging?

- What threats are there to the industry?

The products not up to date compare to competitors. For corporate

costumers, this obsolete data will hamper the decision making/business

strategy process. Indonesia Data should update their research at least every 6

month.

It will be better if corporate costumers charge based on Data-Type in yearly

membership basis, for example banking, pharmaceutical, food and beverage,

cosmetics etc.

For corporate market, Indonesia Data should use market-penetration pricing

by set a low initial membership price to penetrate the market quickly and

deeply to attract a large number of buyers quickly and win a large market

share.

To promote its products, Indonesia Data can give free access to university or

campus library computer to access Indonesia Data content, for example data

for previous 2 years/below, because:

- University students in Indonesia is around 4.8 million which is about

18.4% of 19-24-year-old ages (potential costumer).

4.2 Company Analysis

4.2.1 MARS Indonesia Business units

MARS Indonesia is a market research company that established in Indonesia. The

company must identify all external factors within their environment that could impact

of their business activities. As an organization that focuses on growth and becoming a




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global business, MARS Indonesia must exercise the ability to control/influence (such as

political, interest rate, currency) and macroeconomic factors. MARS Indonesia mission

is to provide research-based solutions with scientific methodology which produces

accurate and reliable data, information, and knowledge. . To fulfill the mission, MARS

Indonesia established 6 Business units, which are:

MARS – Customized Research

Offers a comprehensive method ―Marketing Research Analysis and Consumer Insight‖

is providing a valuable knowledge for client's market. MARS also execute the research

project using accurate and reliable data through efficiently and effectively execution.

MARS also fill the gap of Company’s needs of Marketing & Consumer Exploration.

INDONESIA DATA – Data Provider & Market Place

Help companies to provide business and consumer data bank, on top of tailor-made

offline and online research. There are three types of data business that Indonesia Data

offers, and they are:

1. Data and Analysis in a comprehensive business report.

2. The First and The Largest Biggest Online Data Store at www.indonesiadata.com

3. Data in a Geographical Information System.

OPINI KONSUMEN – Online Mobile Research

Is a collection of data gathered by an integrated mobile app that Help companies to

track, research and make decision in response of its customers’ response. There are four

medium through which consumers can give their responses and they are:

1. Public Portal

2. Survey Developer System

3. Panel Management System

4. Client Survey Dashboard

SYLLABUS – Data Collection & Processing Services

Covers different types of methodology such as FGD; IDI; random face to face home

placement; Centralized Location (CLT); mystery shopper (MS); CATI and mixed

methodology.

MARS Institute – Training on Research, Data Science and Strategy

Provide training and education in the areas of Research, Data Provider and Data

Science. Some of the training include but limited to: Research & Big Data & Data

Science

MARS Data Science – Data Science Company




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MARS Data Science provides analysis of Data such as:

1. Customer Segmentation analysis (based on transaction behavior)

2. Churn and Loyalty Analysis

3. Transaction Profiling

4. Catchment Area Analysis

MARS Indonesia is aiming to be the largest Data Provider and Marketplace in

Indonesia, so to adapt with this market demand. One of the Business strategies is to

leverage a growing business unit which is Business Information Center business unit.

MARS-BIC have called ―Indonesia Data‖. Indonesia Data is DaaS business unit that

provide online and offline data research. At the moment, Indonesia Data contribute

about more or less 30% of the total revenue of MARS Indonesia and forecasting will be

growing in following years.

4.2.2 Indonesia Data Business Process

The business process of MARS-BIC (Indonesia Data) consists of many processes as

shown below figure:

First step is Data Collection. In this step MARS-BIC has resources to conduct research

all over Indonesia. Starting with monitoring issue process which process is to identify

Figure 4-2Indonesia Data Business Process(Source: PT. MARS Indonesia, 2017)




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what is the trend issue in Indonesia that have good opportunity to being a good data

research. This activity is taking 4 days. Due to costly field survey fees, MARS-BIC will

collect at least 20 ideas first before conducting field reviews and surveys. After get an

issue, theme and idea is created, the idea and formulation processes are done by MARS

– BIC Unit.

The next step is the Idea Implementation process, which can be collaborated with PT.

MARS subsidiary, ―Syllabus‖ (specializing in fieldwork), the process major activity is

about discussion the idea, business model, methodology research, questioner design.

This process takes 15 days.

After finish design questioners and research instruments, MARS-BIC conduct kick off

meeting and negotiating with Syllabusfor the survey and fieldworks price. After the

agreed for the design and price, MARS-BIC generates Purchase Order to Syllabus, and

the fieldwork started. All activitiestake fifteen days.

Second step is Data Quality. In this step fieldwork on going processingandMARS-

BICare conducting quality control for all data collection. The duration needed for this

activity is 28 days.

Third step is Data Processing. In data processing step, Syllabus send backthe research

survey result in form of tabulation data to MARS-BIC and MARS-BIC conduct

processing data uses a variety of highly reliable software to process large size of

resource data such as Quantum, QPS, SPSS, stat-pac gold and others. After processing

the data, MARS-BIC will analyze the data. This activity is taking 22 days

The final step is checking, editing and printing, designing cover of book. Prior to

sending to the customers (Marketing step) which are business partner or personal by

using online or offline (Book). MARS-BIC takes the time to conduct editing for

website and layout, also for the book, designing cover and printing. This might take

about 30 days. Total days for creating research is ± 4 month, but this 1 research can

creating 6-10 books.

4.2.3 External Analysis

The author will analyze the external factorthat faced by Indonesia Data business

unitusing PESTLE, and Porter’sfive forces theory, the author also analyze some

competitor competitive advantage.

Competitor Analysis




Page 55

There are some companies in Indonesia that also deliver data as a service. Below are

some of them with analysis of each company.

1. PT. All Data International

PT. All Data International is a system integrator company that helps the company

to get the key to improving accuracy of business diagnostics and effectiveness of

business strategies in the areas such as marketing, customer service, finance,

accounting, and service

Competitive advantage:

PT. All Data International has mobile application that helps customers to

manage their business need.

It has joining partner with MAPR Platform which is powered by the industry’s

fastest, most reliable, secure, and open data infrastructure from the US.

This company provides Data Infrastructure, Data Preparation, Data

Integration, Data Platform, Data Visualization and Data Analytic.

2. PT. CybertrendIntrabuana

PT. CybertrendIntrabuana is a business company that delivers data analysis, data

warehouse, business intelligence, big data analytics, software and application

development.


This company provides various business analytics training to support

customer’s data warehouse, business and big data analytics project

implementation.

3. PT. Survey Prima SolusiStatindo (Purple Analytics)

Purple Analytics Indonesia is an integral part of Purple Analytics Asia with offices

in Bangkok, Jakarta and Kuala Lumpur that help companies to calculate their risk

management to establish marketing management (CRM) for them.


This company mastering in CRM analytical.

This company also sells IBM SPSS software as one of their business unit. IBM

SPSS is statistical analysis software that delivers the core capabilities you need

to take the analytical process from start to finish.




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4. Kompas Data danStatistic

Kompas is one of the most famous newspapers in Indonesia. Since it is a

Newspaper Company, it has to provide many data every day. So that is why

Kompas has its own data statistic. However, so far Kompas use its statistic data

only for their newspaper needs, they never use it as one of their business unit as

data analytic.


Brand was famous in Indonesia

Have media to marketing his analytical data research

5. PT. Sigma Research Indonesia

PT. Sigma Research Indonesia is a company engaged in marketing research. It sells

research that can help the customer’s company prepare a business plan, set sales

quotas, measures and investment budgets and make decisions on product launches.


Sigma have several international partner that make this company produces

better and very accurate data. These partners are Aramiz Company

(Escondido, CA), Adup Media LLC (Walnut Creek, CA), Green Shield

(Charlotte, NC), and Primo Software (Manitowoc, WI).

This company also offers consulting for the customer to do the business

strategy, this service called WP.




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Table 4-1Market Research Competitor Analysis

Conclusion: From theCompetitor Analysis above, Indonesia data can identify what is

competitive advantage of each competitor. As overall competitive advantage of other

competitor companies are:

- Having mobile application

- Joining partner with international and spealized market research companies

- Specialize in two or three market research industries

4.2.3.1 PESTLE Analysis

In this step, PESTLE framework will be used to identify and monitor externals factors

in Indonesia that are related to the Market Research industry. PESTLE groups the

external factors of the firm’s general environment into the following 6 segments:

Political, Economic, Sociocultural, and Technological, Environment and Law. The

analyses are based on Indonesia’s macro environment condition in 2017.




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1. Political Factor

Indonesia is one of the largest countries in South-east Asia. Indonesia consists of

over 13,000 islands, with Jakarta as its capital city. Indonesia declared its

independence on 17th

August 1945. Joko Widodo is the current President and

Muhammad Yusuf Kalla is the Vice-President of Indonesia. Bahasa Indonesia is the

official language of Indonesia. The highest percentage of religious affiliations in

Indonesia is Muslim which covers about 88% of Indonesians population. Economic

wise, there are about 21% of Indonesian population who live below poverty line,

based on data from BPS (BadanPusatStatistik) 2016.

Political Stability:

The Country’s Election is being contested every five years for President and

Vice President posts by direct vote of the citizens. The last time it was held

was in July 2014. Mr. Joko Widodo has been elected as president and

Muhammad Yusuf Kallaisthe Vice-President. Similarly, Ministerial Cabinet

are also appointed by the president, so for next 5 years there are more chances

of stability of the government. The activities and policies of Indonesian

governments have greatlyinfluencedthe environment of all industry including

market research industries in general section.

Labor Laws:

To protect the labor rights, Indonesian government has made Labor laws

which on Article 28D (2)states that company should have 7-hour workdays

and 40-hour workweeks, with one 30-minute rest period for each 4 hours of

work, and also one day of rest by weekly is mandatory in Indonesia. Labor

force by occupation:Agriculture: 42.1%, Industry: 18.6%, Services: 39.3%.

Business and tax system:

Indonesia government has imposed Tax systems that have various rules and

categories. Income rate of tax is 10% for personal income, and Income Tax on

interest from Indonesian banks is fixed 15% for Companies.

2. Economic Factor

Indonesia is considered as a developing country. Economic outlook in Indonesia

experience positive trend due to a supportive global economy and strong domestic




Page 59

fundamentals caused by the government policies and treasure of national resources,

leading to the rapid increase rise of their GDP growth has for the past few years.

GDP:

Indonesia’s real GDP growth is projected to increase from 5.0 percent in 2016

to 5.2 percent this year 2017 and will further strengthen to 5.3 percent in 2018.

Stronger economic growth and higher commodity prices are considered to be

key drivers. 14.4% of GDP earning from agriculture, 37.5%from service

sector and the major part 48.1% comes from industry sector (The World Bank,

2016).

Indonesia has a GDP per capita of $3,540 ($4,900 at PPP) in last quarter 2016

with 258 million people (World Bank), Indonesia’s economy comprises nearly

half of ASEAN economic output.

Exchange rate:

Indonesian rupiah (IDR) per US dollar – 13.278 (sept 2017) compare to13.473

(2016). The rupiah has benefited from Jokowi's reform drive and the tax

amnesty programmed, but it remains exposed to external market sentiment.

The government expects the rupiah to remain relatively stable in 2017.

Inflation:

World Bank projected Indonesia inflation rate will jump from 3.5% in 2016, to

4.3% in 2017. The trigger is caused by the adjustment of electricity tariff and

motor vehicle tax. Nevertheless, inflation is projected to fall back in 2018, due

to a loss of price rising effects. The fiscal deficit is also projected to increase

due to increased public infrastructure investment. Higher public spending, in

part due to new efforts to increase public infrastructure investment, is expected

to be partially offset by revenue growth, which in turn will result stronger

GDP growth and dividends from administrative and taxation policy reforms.

3. Sociocultural Factor

Population:

Indonesia has a large population; it is on the 5th

position all over the world with

total over than 258 million populations which is growing at 1.13% by yearly.

Indonesia total life expectancy rate is 70.76 years in which for male its 68.26

years andfor female its 73.38 years, and for living area: 52% of total




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population lives in urban areas which are increasing at3.2% every year. (BPS

Indonesia 2016)

Age factor:

Indonesia’s demographics as a key component of its future growth potential.

Over 50% of the population is below the age of 30. Indonesia is considered as

nation of young people. The total median age is 27.6years in which for male it

is 27.1 years and for female its 28.1 year (BPS Indonesia 2016)

Education:

Indonesia has good literacy rate then it has bright future. 90.4% of its

populations are have a minimum education (high school) in which male are

94% and female are 86.8%.3.6% of Indonesia GDP is spent on education.

Religion:

Indonesia is a multicultural and religion country, majority it is a nation of

Moslem with 86.1%, Protestant 5.7%, Roman Catholic 3%, and Hindu 1.8%.

Socio environment:

Indonesia has a healthy environment for the future development of democracy

for open debate and discussion as well as bringing into question accepted

cultural norms. This freedom provides easy access to all market research data.

4. Technology Factor

Indonesia is one of the world's largest internet users, reaching 93.4 million people

and smartphone users (smartphone) reached 71 million people. With such huge

potential, Indonesia government is targeting to create 1,000 technopreneurs with a

business valuation of USD 10 billion and e-commerce value reaching USD 130

billion by 2020.

Most of the e-commerce players in Indonesia use data centers in other countries

because they are more affordable. The cost of local data centers in Indonesia is two

times more than the ones abroad.

5. Ecological Factor

Geographical location:

Indonesia has a geographic environment that one of the most complexes and

varied in the world. Indonesia has total 1,904,569 square kilometers of area

from which the land makes up 1,811,569 sq km and water makes up 93,000




Page 61

square kilometers. Indonesia is located between the Indian Ocean and the

Pacific Ocean. The nation encompasses some 13,667 islands.

Time zone:

Indonesia’s time zone is UTC+7 mean 7 hours ahead of GMT and 16

hoursahead of U.S. Pacific Standard Time.

Natural or environmental disaster:

Due to its geographic location, several times Indonesia has faced many natural

disasters such as an earthquake on December 26, 2004; with a magnitude 9.0

on Richter scale. This earthquake has led to a tremendous powerful tsunami in

the Indian Ocean and which cause the death of 155,000 people.

6. Law Factor

Company Law:

Company has been ruled by The Indonesian Company Law of 1995. That law

has been recognized as the most important framework for the current

legislation on corporate governance in Indonesia. Every company must

register their Memorandum of Act under this Company Law. (Incorporation

of company Law in Indonesia)

Indonesia government also has rules to Utilization and Administration of

Market research industry that have been amended in Presidential Decree

Number 11/2008.




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Table 4-2PESTLE Analysis for Indonesia

Conclusion: From The PESTLE Analysis above, Indonesia Data Business unit can

identify external factor for increasing market research industry in Indonesia. There is

some advantage and disadvantage in term of legal policy, economic factor, social,

geographic and technological factor.

As overall doing business Indonesia has good opportunity due to several macro

environment factors, which are:

- Population is high about over 258 millions in 2016, with socio cultural is most of

young people and one of largest internet user in the worldwide, it is big

opportunity for online industry. Healthy democracy environment will impact to

market research companies to give detail and opened data research.

- Indonesia has international labor law, GDP are growth with stabilize forecast

exchange rate. It will make stabilization for company health and organization

L EPolitical :

- Activities and

policies have

greatly influenced

the environment of

all industry

- Labor laws which

on Article 28D (To

protect the labor

rights)

- Imposed Tax

systems that have

various rules and

categories

P E S TSociocultural :

- Has over than 258

million populations

in Oct 2016

- Over 50% of the

population is below

the age of 30

-Has good literacy

rate 90.4% of its

populations are

have a minimum

education (high

school)

- Healthy

environment for

open debate and

discussion

(Democracy)

Technology :

- One of the world's

largest internet

users, reaching 93.4

million people and

smartphone users

reached 71 million

people.

- Indonesia

government is

targeting to create

1,000

technopreneurs

Ecological :

- Geographic

environment that

one of the most

complexes and

varied in the world

-Indonesia’s time

zone is UTC+7 mean

- Several times has

faced many natural

disasters

Law :

- Company has

been ruled by The

Indonesian

Company Law of

1995

-Every company

must register their

Memorandum of

Act under this

Company Law

- Rules for Market

research industry

utilization has

amended in

Presidential Decree

Number 11/2008

Economic :

- Real GDP growth

is projected

increasing to 5.3

percent in 2018

- GDP per capita in

last Quarter 2016 is

$3,540 ($4,900 at

PPP) with 258

million people in

2016

-Exchange rate

rupiah (IDR) per US

dollar 13.278 (sept

2017), stable from

2016

- Inflation rate will

jump from 3.5% in

2016, to 4.3% in

2017




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- It is like open market for market research industry to provide data analysis, due to

every political changing it will impact to all environments of industries.

4.2.3.2 Porter Five Forces Analysis

In this step the author is using Five Forces Analysis to analyze Indonesia Data business

are attractive or unattractive from the lenses of company that compete in the market and

also analyze the competitive structure of Indonesia Data business unit.

7. Threat of New Entry

Analysis: Moderate

There are quite a lot of companies that have strong partnership with multinational

companies. In fact, this could be one of the difficulties for new company and

having partner from abroad will also increase the fund of the company and ease

things up as far as investment is concerned.Research Companies also have several

high technologies that need high fixed cost and high quality for employees.

On the contrary, In Indonesian there are several multinational companies which

drive Indonesia Data to engage in some serious competitions in the research

market.Possible to International Company will come to Indonesia to doing business

in Indonesia. Indonesia Data is required to deliver more innovation and rigorous

marketing approach to make its product to be well-favored by the customers.

However, Indonesia Data is one of the companies who excessively focus into data

analysis product. Another positive point lies in the fat that and MARS Indonesia as

holding company has good reputation in local market research companieswhich

can drives the indonesia customer to easily select research type and pay for the data

they needed. So, it means Indonesia data still has competitive advantage for new

entry companies in the Indonesian market.

8. Power of suppliers

Analysis: Moderate

Suppliers are critical point in any data analysis companies, because it’s the one

who do the surveys. Indonesia Data using Syllabus for conducting surveys and

fieldworks. Syllabus takes very important role on research and collecting data in

the field. They also canmake the decision which data should be taking or which

theme is taken on the project.Eventough Syllabus is business unit of MARS

Indonesia, that MARS Indonesia can take benefit from this organizatio, but if a

company only depends on one supplier it will not make the company have high




Page 64

bargaining power because the power of supplier become very strong and could

monopoly. Indonesia Data Business unit also have high cost for research (material

cost for suplier) its about ≤ 300 MIDR that makes power of suppliers is high.

It is better for Indonesia Data to integrate its survey into at least two suppliers or

more so the result will be more objective and create high bargaining power for

company and competitive price.

9. Power of buyers

Analysis: Low

Indonesia market for market research industry is on growing path, we can see in

the figure 1.6 and figure 1.7. All modern companies in Indonesia are using big data

analysis to create strategic plan to mid term and long term objectives. This

opportunity will be benefit for Indonesia Data business unit. Since data research

are detail and specific, it will impacting the powers of buyersbecause they aregoing

to face high switching cost. And also only several DAAS companies in Indonesia.

That is why the power of buyer is low.

Positive strategy fromIndonesia data is, the companies creating their price of the

product are very reasonable and affordable for any kind of customer segments. The

companies also create good quality data product

However, the only thing that makes Indonesia Data market salecan be threated is

because the lead time for creating research is very high. Indonesia Data actually

produce a very useful data customer but if takes too long to posesss some data

research, it will be advantage for other competitor companies to take the market or

customers, and also for student market segment, student still tend to use library

books, newspaper, or Wikipedia to gain data analysis for their research or thesis.

10. Threat of substitutes

Analysis: low

The possible substitutes are free research data that provided by government such as

data from www.data.go.idand from Kompas data but these kinds of data is not

created to help costumer’s business. Those are just some real-time statistic data to

complement news that has to be report and not detailing for research data or too

general. Research data from market research industry include Indonesia Data is still

can’t substitute due to company provides good quality data very specific for

customize customers.

11. Rivalry among existing competitors

http://www.data.go.id/




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Analysis: Moderate

As it stated on the point above there are also some companies that produce exactly

the same like Indonesia Data and also has online market, like PT. Sigma Research

Indonesia for example. It also has websites that serve online selling just like what

Indonesia Data has. Moreover, this company also partnering with some abroad data

analytic companies in the US. So PT. Sigma Research can be one of a strong

competitor for Indonesia Data, and this kind of companies will be more and more

in the matter of time because nowadays this kind of business are have good

opportunities in the future.

But Indonesia Data is one of the leaders of this DAAS business in Indonesia so it

still has many opportunities in the market. If Indonesia Data can maintain its

costumers or clients it could be one of the ways to prevent the decreasing market

because of the competitors. It is also critical to do some seminars or marketing

booth in schools or universities to make its product to be well known, and

innovation is critical to improve the costumer’s satisfaction. Some competitors

doing training to make its product more familiar for the costumer, so it will be a

good idea to Indonesia Data to also do some training or seminars to introduce its

product.




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Table 4-3Five Porter’s Matrix for Indonesia Data

Conclusion:Indonesia Data has good opportunities in the Indonesia’s marketdue to

Market research industry in Indonesia is in growing path for following years, power of

buyer is low and subtitute threat is low. It is potential business for Leverage Indonesia

Data business unit in Indonesia’s market. But it must considered that rivalvry among

competition is moderate to high due to competitors will doexactly provide the same

product and power of supplier is high due to only one key suppliers in MARS Indonesia

which is Syllabus. Indonesia Data must possess some activity improvement like to make

the product are well known in the market, always innovate the product and services,

and provide other key partnership or supplier.

4.2.4 Internal Analysis

In this step the authors will analyze Indonesia Data resources, capabilities, and core

competencies to understand its strengths and weaknesses. In this step, the authors will

used VRIO Framework to analyze the resource, capability/ competency.

(+) Lack of subtitute product, only free data research that

provided by government but not usefull for coorporate

companies

Rivalry among Existing

CompetitorsModerate

(-) Eventough only several companies provide DAAS research

data (for example: PT Sigma Research), in the future there

are going to be much more companies doing this business

Threat of New Entry Low

(+) Product (Data Research) is specific not common

(+) Only several companies for DAAS business in Indonesia

(+) High Switching cost

Threat of Subtitute Low

Threat of New Entry Moderate

(+) Strong partnership with multinational companies

(-) High technology

(-) High fixed costs

(-) Specific and high quality for data researcher

(+) Several multinational companies will doing business in

Indonesia

Power of Suppliers Moderate

(-) Only one key suppliers (Syllabus)

(+) Syllabus is one of MARS Indonesia business unit




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4.2.4.1 Value ChainAnalysis

This analysis will identify potential valuable resources and capabilities that have in

Indonesia data by study the company’s value chain. A company’s value chain is the set

of company’s business activities in which defining to develop, produce, and market its

products or services.

Primary Activities:

Inbound Logistic

Starting with creating topic or theme of the reaserch, Create planning the research

like schedulling by Indonesia Data.

Production

Operation &managingresearch like control research activity by the key partners

which is Syllabus.

Indonesia data conduct data quality research activity and processing data after get

data collection from syllabus uses a variety of highly reliable software to process

large size of resource data, after processing the data MARS-BIC will analyze the

data

Outbound Logistic

The final step is checking, editing and printing, designing cover of book and store

it in MARS Indonesia (Offline) and website (e-Commerce/Online).

Through Indonesia Data not only provides tailor made research services, but also

develops business & consumer data bank that can be utilized by client. Indonesia

data offer data business in 3 forms: Data & Analysis in a comprehensive report,

Specific single data (online – www.indonesiadata.com), and Data in a

Geographical Information System.

Marketing

Marketing Sales activities : strategic relationships with custumer, find new

customer, presentation the product and service.




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Supporting Activities:

Techonological Development

Data processing using highly reliable software such as Quantum, QPS, SPSS, stat-

pac gold, and adopt International standard of marketing research to conduct, and

provides comprehensive research services.

HRM

Consistenly provide sufficient training to employee.

The human resources have been mastering the statistical analysis of using advance

analysis tools such as Structural Equation Models, Neural networks.

Procurement

Provide document related project research (administration), funding and purchase

raw material

Figure 4-3Porter Value Chain Analysis of Indonesia Data

Conclusion:Indonesia Data has a valuable Resource and Capabilities to support

Primary activities, which are: inbound and outbound logistic, production and

marketing and sales. For secondary activities indonesia data have technology, HRM




Page 69

and Procurement resources. It is important to compete in market research industries,

but to the resources are competitive or not the authors will analysis by VRIO analysis.

4.2.4.2 VRIOAnalysis

This step will analysis potential valuable resources and capabilities that have in

Indonesia data utilize result from by analysis the company’s value chain. This vrio

analysis will analysis the resources and capabiities are competitive or not and this

resources and capabities are become strength or weakness of Indonesia Data Business

unit.

Indonesia Data As a Brand

Indonesia Data still young in this market research industries, compare to other

competitors. Brand and experience still on growing path in Indonesia Customer.

Supply Chain Management

It has been argued that Indonesia Data has achieved such efficiency in its supply

chain that the company operates as a corporate. This is due to MARS Indonesia as

a holding company has develop this supply chain efficiently and effectively

Human Resource Management

Indonesia data have good quality for Human resources but Indonesia Data have

several problem with High Performance Production due to lack specialize

resources, because the human resources are common for other business units.

International Standard Research

With the facilities like: Mobile interview, Integrated Research Application

System, Online Survey, Data Processing and Advanced Analysis Tools, FGD

Room, CATI and CAPI Equipment, Indonesia Data can fulfill the standard

International research.

E-Commerce

To engage with Indonesian internet users, Indonesia data provides digital media

space by online platforms like Instagram and Facebook and the website by using

several marketing techniques which are e-mail direct marketing, display

advertising, e–books.




Page 70

Table 4-4VRIO Analysis for Indonesia Data

Conclusion:From Table 4.4, the author stated that there are several improvement to

conducting in Indonesia Data:

- Brand still weakness, integrated marketing promotion must be conducting to

increase brand image & innovation marketing program must being

implementation, such as collaborative environment marketing such as,

membership program for corporate business, Influencer marketing such as

cooperation with some university for free access to get communities

- For High Performance production, Indonesia Data must add specialize

human resources not common resources and improving research standard

time to increase performance.

E- Commerce, if look to the pestle analysis current era is technopreneur and digital

marketing era. Many youth people is using internet. There are several digital marketing

technique must being implementing :SEO & SEM (Search Engine optimization &

Marketing) optimizing the website to get more visitor like add image, video search and

academic search or involves the promotion of websites by increasing their visibility

in search engine results pages (SERPs) primarily through paid advertising and provide

digital media such as mobile phone (SMS and MMS).

Resource/

Capability

Does it

have Value?Is it Rare?

Is it

Inimitable?

Is the company

Organized to

exploit the resources

Competitive

Implications

Strength or

Weakness

The Brand/Experience No No No NoCompetitive

DisadvantageWeakness

Supply Chain

Management Yes No No Yes

Temp Competitive

Advantage

Strength &

Distinctive

HR Management Yes No No YesTemp Competitive

Advantage

Strength &

DistinctiveInternational Standard

ResearchYes No No Yes

Temp Competitive

Advantage

Strength &

Distinctive

E-Commerce Yes No No Yes Temp Competitive

Advantage

Strength &

DistinctiveHigh Performance

ProductionNo No No No

Competitive

DisadvantageWeakness

https://en.wikipedia.org/wiki/Websites

https://en.wikipedia.org/wiki/Search_engine_results_page




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4.3 SWOT Analysis

The next crucial step is to evaluate Indonesia Data’s strengths, weaknesses,

opportunities, and threats (SWOT), as the meanto sustain and grow in the highly-

competitive Indonesian market. In order to function precisely, SWOT Analysis must be

viewed as a business toolthat conducts Internal Evaluation (Strength and Weakness) in

anticipation of external factors (Opportunities and Threat).

SWOT Framework

12. Strength

Provide Good Product Quality:

Indonesia data provides good accuracy for data analysis, Moreover, the

country alsoprovidesrelevant insights and reliable data on various research

approaches.Not only a collection of data that is then processed produce

information, but provide a scientific process which aims to address problem.

Digital Media Space:

In the attempt to engage with Indonesian internet users, Indonesia data

provides digital media space and is at the forefront of understanding consumer

behavior by online platforms like Instagram and Facebook also website.

Innovation Data Analysis:

IndonesiaData is different than other market research company, create data

research analysis is starting base on idea from their self, not base on order of

client. Data research analysis starting with monitoring issue process which

process is to identify what is the trend issue in Indonesia that have good

opportunity to being a good data research.

International Standard Research:

Indonesia Data adopt International standard of marketing research to conduct,

and provides comprehensive research services. With the facilities like: Mobile

interview, Integrated Research Application System, Online Survey, Data

Processing and Advanced Analysis Tools, FGD Room, CATI and CAPI

Equipment, Indonesia Data can fulfill the research project activities.

High Employee Education:

The human resources have been mastering the statistical analysis using

advance analysis tools such as Structural Equation Models, Neural networks,

and others.




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Completed range of market research services:

Indonesia data support any client from all type of business to make a decision

and developing their business with all data analysis that complete range of

market research services both qualitative and quantitative research.

13. Weakness

Subsidiary dependence:

Indonesia Data structure organization still under MARS Indonesia, majority

employees are still work in other business unit it makes Indonesia Data are

dependency on MARS Indonesia.

Low Productivity:

To provide data research analysis it takes over than 3 month, it potential to

loose client. Even though data research ideas are from Indonesia Data not base

on client request, but if too long for lead time process it will be an opportunity

for other research company to get the client.

Lack of Experience:

Even though MARS Indonesia is very intensive knowledge and abundant

experiences in Indonesian markets, but Indonesia Data business unit is still

young in this business, starting this business from 2010. Compare to other

competitor that already starting in this business.They still not established as a

reputable research industry in the market yet.

Low Digital Media Utilization:

Even though Indonesia are providing Digital Media to gather Indonesia

Customer, but utilization for this media is still low.

Lack of Source of External Funding

The internal funding of PT MARS is not able to cover the expansion of

Indonesia Data business unit.

14. Opportunities

Highest demands:

The most common complaint from Indonesian clients was that agency

recommendations were not accurate, either caused by a lack of industry

knowledge or their undetailed analysis of potential solutions. One way, then,

for a market research agency to get around this dissolution of trust in

Indonesia is to establish an agency as a specialist authority. Considering the




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weakness found in Indonesia, Indonesia Data as Market Research agencies,

have an opportunity to arise and innovate to provide the most accurate data.

(https://asia-research.net).

Customer loyalty:

Since MARS Indonesia has been working with big brand customer from many

business sectors.This is an opportunity for customer looking for business

relationship with Indonesia Data also.

Domestic Population, GDP scale and economic growth:

Indonesia population is high with socio cultural is most of young people and

one of largest internet user in the worldwide. It is big opportunity for online

industry. GDP are growth with stabilize forecast exchange rate. It will make

stabilization for company health and organization.

15. Threats

Research Data is out of date:

Consider to lead time for creating new research data is too long, and for some

research data still using out of date data. This influencing accurate of data

when clients want to buy the product.

Competitor have similar product:

Indonesia Data hascompetitor companies with the same industry, market

research industry, so possible to have similar data research theme.

Low Price Competition:

To compete with other competitor companies, beside quality and accuracy,

price will be major category for customer or client to buy Indonesia Data

product.

https://asia-research.net/




Page 74

Table 4-5SWOT Framework for Indonesia Data Business Unit

INT

ER

NA

L

STRENGTH

- Provide Good Product Quality

- Digital Media Space

- Innovation Data Analysis

- International standard research

- High Employee Education

- Completed range of market

research services

WEAKNESS

- Subsidiary dependence

- Low Productivity

- Lack of Experience

- Low Digital Media Utilization

- Lack of Source of External

Funding

EX

TE

RN

AL

OPPORTUNITIES

- Highest demand

- Customer loyalty

- Domestic Population, GDP

scale and economic growth

THREATS

- Research Data is out of date

- Competitor have similar product

- Low Price Competition

Table 4-6SWOT Matrix for Indonesia Data




Page 75

Conclusion: From the SWOT Analysis above, Indonesia Data business unit can

evaluate current internal factor for facing external factor.

As overall with the current strength is not enough for facing the threat and fulfill the

opportunities. Indonesia data must be improving strategies which are:

- Provide product that popular in the social media & interesting youth people.

- Improving in Digital Marketing technique, like explain by the author in the VRIO

analysis.

- Establish/investment on new organization (separate from PT MARS) to get high

performance team (reduce lead time in current process) but need external

investment due to lack source of funding

- Provide competitive pricing for product by membership program, discount for key

member

- Innovation Promotion for the brand of Indonesia Data

4.4 Strategic formulation

In this phase the authors will use Theory of firm analysis. Theory of firm is a number of

economics’ theory that explains about the nature, behavior of a firm in pursuit of profit

maximization. To get profit maximization in the long run process, Indonesia Data must

determine input (Revenue) and output (costs) level that returns the greatest profit. From

Previous analysis, to achieve the goal which is leverage Indonesia Data business unit

and get greatest revenue in the long run process, MARS Indonesia must establish

Indonesia data as a company (Non-Integrated). The Author might focus on that

decisions that have potential external effects; whether positive or negative, yet are

impossible to agree upon contractually.

4.4.1 Financial Analysis

In2016 PT. MARS Indonesia Net Profit Margin is very low: 0,6%. This is due to high

Operating Cost Ratio (46,4% in 2016).From Table 4-7, from 2013-2016, more than

70% of operating expense are consumed by employee salary & benefit. This mean that

there are low productivity in human resources compare to revenue generated.

.




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Table 4-7 PT. MARS Indonesia Financial Performance


Table 4-8PT.MARS Indonesia Operating Expense (Source: MARS Annual Report)

Item 2013 2014 2015 2016

Revenue 14.088.819.307 12.090.277.908 17.605.962.251 15.870.273.435

COGS 5.288.877.183 4.695.777.154 5.965.020.433 7.118.152.837

Gross Profit 8.799.942.124 7.394.500.754 11.640.941.817 8.752.120.598

Operating Expense 9.892.648.462 8.720.707.150 9.568.423.757 7.367.190.212

Operating Income -1.092.706.338 -1.326.206.396 2.072.518.060 1.384.930.386

Net Income -2.159.796.274 -1.939.850.463 142.032.105 93.396.149

Gross Profit Margin (GPM) 62,5% 61,2% 66,1% 55,1%

NET Profit Margin (NPM) -15,3% -16,0% 0,8% 0,6%

Operating Expense Ratio (OER) 70,2% 72,1% 54,3% 46,4%

Operating Expense 2013 2014 2015 2016

8.001.093.925 6.696.343.614 8.130.890.646 5.656.003.527

170.876.996 163.093.508 243.442.990 301.264.905

194.756.911 216.454.352 296.120.409 155.655.704

446.693.546 422.530.019 484.773.638 453.209.405

173.500.120 210.393.977 208.126.660 79.375.309

836.245.493 806.305.232 98.989.322 0

9.226.780 133.064.346 39.114.127 687.056.362

60.254.691 72.522.102 66.965.965 34.625.000

9.892.648.462 8.720.707.150 9.568.423.757 7.367.190.212

Office Stationary

Marketing,advertising and promotion

GA Expense

Salary

Total Operating Expense

Tax & Permit

Depreciation

Office Household

Utility

Others




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Table 4-9Indonesia Data Income Statement 2016 (Source: MARS Annual Report, 2016)

In 2016, Indonesia Data only generate revenue Rp.2.305.331.819 or 14,5% from PT.

MARS Indonesia total revenue. Indonesia data Cost of Good Sold are Rp.

2.149.922.600 (93,5% from its revenue). This COGS mainly consist of Service Direct

Cost Rp.1.876.370.590 which are transaction cost to syllabus business unit. From

Error! Reference source not found. most of Indonesia Data Revenue came from sales

of Brand and Consumer Profile products (64%), followed by Financial Products (21%),

Food and Beverages Products (4%), and Pharmaceutical products (2%).

Conclusion:

PT.MARS Indonesia operating expense is to high compare to its revenue. This

operating expense is mainly consisting of employee salary and benefit. This means

that there are low productivity compare to revenue generated..

Indonesia Data revenue only contribute 14,5% from total MARS revenue,

meanwhile Indonesia Data COGS are 30% from total MARS COGS. This means

that Indonesia Data Revenue still too low and need further increase.




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Establish/investment on new organization (separate from PT MARS) must being

conducting, to achieve purpose: to get high performance team (reduce lead time in

current process), reduce MARS employee salary, Increase Indonesia Data Revenue

& can focus on 3 major businesses.

4.4.2 Forecast Revenue

The Authors made revenue projection based on our recommendation to focus on Brand

Survey, Banking, Food and Beverage, and Pharmaceutical. The research will be

conducted once a year and focus on those 3-specific industry and 1 for Brand and

Consumer Profile.

To further increase Indonesia Data Revenue, the marketing cost will also increase

significantly. This additioanl marketing cost will be used to promote Indonesia Data

products to university/campus and also to related industry and for implementing digital

marketing. To forecast Indonesia Data revenue, the authors will use several

assumptions such as:

Table 4-10Assumption of Indonesia Data Forecast

The authors forecast Indonesia Data Revenue with 3 possibilities which are Optimistic,

Moderate, and Pessimists/conservative (32%, 20%, 8% revenue increase annually).

From our forecast, Indonesia Data will start generated profit in the 2nd

yearfor optimist

case, and in the 3rd

year for moderate case. Meanwhile for pessimist case, in 5th

year,

Indonesia Data still generated loss which is not an option for Indonesia Data forecast

profit.

For the Optimistic forecast, the revenue will get9 BIDR in the 5 years, 3.5 times higher

than current 2016 and profit will get 4.3 BIDR in the 5 years. For Moderate forecast,

the revenue will get 5.6 BIDR in the 5 years, 2.5 times higher than current 2016 and

profit will get1.3 BIDR due to salary and fieldwork cost will responsible by Indonesia

Data.

Brand & Consumer Profile research cost IDR 700.000.000

IDR 300.000.000Industry specific research cost

Inflation

Revenue increase (Optimistic)

Revenue increase (Moderate)

Revenue Increase (Pesimist)

5%

32%

20%

8%




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For Moderate case, Indonesia Data will need cash at least cash 1.5 BIDR to cover its

lost on operational expense till 3rd year, meanwhile for Optimist Case, Indonesia Data

will need cash at least 1 BIDR to cover its operational expense till 2nd year.




Page 80

Table 4-11Indonesia Data Operating Income Projection (Non-Integrated& Optimist)

2016 1st year 2nd year 3rd year 4th year 5th year

OPERATING REVENUE

Revenue 2,305,331,819 2,975,114,161 3,927,150,693 5,183,838,914 6,842,667,367 9,032,320,924Sales 2,323,581,819 3,067,128,001 4,048,608,961 5,344,163,829 7,054,296,254 9,311,671,056Discount & Commision 18,250,000 92,013,840 121,458,269 160,324,915 211,628,888 279,350,132

Sales Discount 18,250,000 92,013,840 121,458,269 160,324,915 211,628,888 279,350,132Total Operating Revenue 2,305,331,819 2,975,114,161 3,927,150,693 5,183,838,914 6,842,667,367 9,032,320,924Cost of Goods Sold

Research Cost 222,737,510 233,874,386 245,568,105 257,846,510 270,738,836 284,275,777Multiclient Data Cost 50,814,500 54,000,000 56,700,000 59,535,000 62,511,750 65,637,338Service Direct Cost 999,140,100 1,318,865,040 1,384,808,292 1,454,048,707 1,526,751,142 1,603,088,700

Total Cost of Goods Sold 1,272,692,110 1,606,739,426 1,687,076,397 1,771,430,217 1,860,001,728 1,953,001,814Gross Profit 1,032,639,709 1,368,374,735 2,240,074,295 3,412,408,697 4,982,665,639 7,079,319,110Operating Expenses

Sales & General Administrative Expenses 125,907,256 1,917,574,019 2,084,432,720 2,268,151,956 2,470,596,866 2,693,848,498 Salary 1,400,000 1,014,000,000 1,135,680,000 1,271,961,600 1,424,596,992 1,595,548,631

Project Admin Salary 1,400,000 0 0 0 0 0Employee Salary 0 1,014,000,000 1,135,680,000 1,271,961,600 1,424,596,992 1,595,548,631

Marketing & Promotion 120,185,256 835,574,019 877,352,720 921,220,356 967,281,374 1,015,645,442 Printing 17,306,000 18,171,300 19,079,865 20,033,858 21,035,551 22,087,329 Shipping Cost 94,669,256 99,402,719 104,372,855 109,591,497 115,071,072 120,824,626 Transport 8,210,000 50,000,000 52,500,000 55,125,000 57,881,250 60,775,313 Costumer Relationship 0 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113 Digital Advertising 0 400,000,000 420,000,000 441,000,000 463,050,000 486,202,500 Marketing Comminication 0 250,000,000 262,500,000 275,625,000 289,406,250 303,876,563

Stationary 2,065,000 14,000,000 14,700,000 15,435,000 16,206,750 17,017,088 Stationary 705,000 12,000,000 12,600,000 13,230,000 13,891,500 14,586,075 Printing 1,360,000 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013

Utility (Electricity, Telephone, Internet & Water) 1,797,000 36,000,000 37,800,000 39,690,000 41,674,500 43,758,225 Internet 1,797,000 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013 Electricity 0 24,000,000 25,200,000 26,460,000 27,783,000 29,172,150 Telephone 0 6,000,000 6,300,000 6,615,000 6,945,750 7,293,038 Water 0 4,000,000 4,200,000 4,410,000 4,630,500 4,862,025

Ofice Household 460,000 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113

Gasoline, Parking, Toll and Transport 460,000 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113 Total Operating Expenses 125,907,256 1,917,574,019 2,084,432,720 2,268,151,956 2,470,596,866 2,693,848,498 INCOME FROM OPERATION 906,732,453 -549,199,284 155,641,576 1,144,256,741 2,512,068,773 4,385,470,612

Description




Page 81

Table 4-12Indonesia Data Operating Income Projection (Non-Integrated &Moderate)

2016 1st year 2nd year 3rd year 4th year 5th year

OPERATING REVENUE

Revenue 2,305,331,819 2,704,649,237.32 3,245,579,084.78 3,894,694,901.74 4,673,633,882.08 5,608,360,658.50Sales 2,323,581,819 2,788,298,183 3,345,957,819 4,015,149,383 4,818,179,260 5,781,815,112Discount & Commision 18,250,000 83,648,945.48 100,378,734.58 120,454,481.50 144,545,377.80 173,454,453.36

Sales Discount 18,250,000 83,648,945.48 100,378,734.58 120,454,481.50 144,545,377.80 173,454,453.36Total Operating Revenue 2,305,331,819 2,704,649,237.32 3,245,579,084.78 3,894,694,901.74 4,673,633,882.08 5,608,360,658.50Cost of Goods Sold

Research Cost 222,737,510 233,874,385.50 245,568,104.78 257,846,510.01 270,738,835.51 284,275,777.29Multiclient Data Cost 50,814,500 54,000,000 56700000 59535000 62511750 65637337.5Service Direct Cost 999,140,100 1,162,999,172 1,221,149,131 1,282,206,587 1,346,316,917 1,413,632,762

Total Cost of Goods Sold 1,272,692,110 1,450,873,558 1,523,417,235 1,599,588,097 1,679,567,502 1,763,545,877Gross Profit 1,032,639,709 1,253,775,680 1,722,161,849 2,295,106,805 2,994,066,380 3,844,814,781Operating Expenses

Sales & General Administrative Expenses 125,907,256 1,917,574,019 2,043,872,720 2,178,919,956 2,323,347,842 2,477,835,673 Salary 1,400,000 1,014,000,000 1,095,120,000 1,182,729,600 1,277,347,968 1,379,535,805

Project Admin Salary 1,400,000 0 0 0 0 0Employee Salary 0 1,014,000,000 1,095,120,000 1,182,729,600 1,277,347,968 1,379,535,805

Marketing & Promotion 120,185,256 835,574,019 877,352,720 921,220,356 967,281,374 1,015,645,442 Printing 17,306,000 18,171,300 19,079,865 20,033,858 21,035,551 22,087,329 Shipping Cost 94,669,256 99,402,719 104,372,855 109,591,497 115,071,072 120,824,626 Transport 8,210,000 50,000,000 52,500,000 55,125,000 57,881,250 60,775,313 Costumer Relationship 0 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113 Digital Advertising 0 400,000,000 420,000,000 441,000,000 463,050,000 486,202,500 Marketing Comminication 0 250,000,000 262,500,000 275,625,000 289,406,250 303,876,563

Stationary 2,065,000 14,000,000 14,700,000 15,435,000 16,206,750 17,017,088 Stationary 705,000 12,000,000 12,600,000 13,230,000 13,891,500 14,586,075 Printing 1,360,000 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013

Utility (Electricity, Telephone, Internet & Water) 1,797,000 36,000,000 37,800,000 39,690,000 41,674,500 43,758,225 Internet 1,797,000 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013 Electricity 0 24,000,000 25,200,000 26,460,000 27,783,000 29,172,150 Telephone 0 6,000,000 6,300,000 6,615,000 6,945,750 7,293,038 Water 0 4,000,000 4,200,000 4,410,000 4,630,500 4,862,025

Ofice Household 460,000 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113

Gasoline, Parking, Toll and Transport 460,000 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113

Total Operating Expenses 125,907,256 1,917,574,019 2,043,872,720 2,178,919,956 2,323,347,842 2,477,835,673 INCOME FROM OPERATION 906,732,453 -663,798,339 -321,710,870 116,186,849 670,718,539 1,366,979,109

Description




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Table 4-13Indonesia Data Operating Income Projection (Non-Integrated & Pessimists)

OPERATING REVENUE

Revenue 2,305,331,819 2,434,184,313.58 2,628,919,058.67 2,839,232,583.36 3,066,371,190.03 3,311,680,885.24

Sales 2,323,581,819 2,509,468,364.52 2,710,225,833.68 2,927,043,900.38 3,161,207,412.41 3,414,104,005.40

Discount & Commision 18,250,000 75,284,050.94 81,306,775.01 87,811,317.01 94,836,222.37 102,423,120.16

Sales Discount 18,250,000 75,284,050.94 81,306,775.01 87,811,317.01 94,836,222.37 102,423,120.16

Total Operating Revenue 2,305,331,819 2,434,184,313.58 2,628,919,058.67 2,839,232,583.36 3,066,371,190.03 3,311,680,885.24

Cost of Goods Sold

Research Cost 222,737,510 233,874,385.50 245,568,104.78 257,846,510.01 270,738,835.51 284,275,777.29

Multiclient Data Cost 50,814,500 54,000,000 56,700,000 59,535,000 62,511,750 65,637,338

Service Direct Cost 999,140,100 1,046,699,255 1,099,034,218 1,153,985,928 1,211,685,225 1,272,269,486

Total Cost of Goods Sold 1,272,692,110 1,334,573,640 1,401,302,322 1,471,367,438 1,544,935,810 1,622,182,601

Gross Profit 1,032,639,709 1,099,610,673 1,227,616,736 1,367,865,145 1,521,435,380 1,689,498,284

Operating Expenses

Sales & General Administrative Expenses 125,907,256 1,917,574,019 2,013,452,720 2,114,125,356 2,219,831,624 2,330,823,205

Salary 1,400,000 1,014,000,000 1,064,700,000 1,117,935,000 1,173,831,750 1,232,523,338

Project Admin Salary 1,400,000 0 0 0 0 0

Employee Salary 0 1,014,000,000 1,064,700,000 1,117,935,000 1,173,831,750 1,232,523,338

Marketing & Promotion 120,185,256 835,574,019 877,352,720 921,220,356 967,281,374 1,015,645,442

Printing 17,306,000 18,171,300 19,079,865 20,033,858 21,035,551 22,087,329

Shipping Cost 94,669,256 99,402,719 104,372,855 109,591,497 115,071,072 120,824,626

Transport 8,210,000 50,000,000 52,500,000 55,125,000 57,881,250 60,775,313

Costumer Relationship 0 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113

Digital Advertising 0 400,000,000 420,000,000 441,000,000 463,050,000 486,202,500

Marketing Comminication 0 250,000,000 262,500,000 275,625,000 289,406,250 303,876,563

Stationary 2,065,000 14,000,000 14,700,000 15,435,000 16,206,750 17,017,088

Stationary 705,000 12,000,000 12,600,000 13,230,000 13,891,500 14,586,075

Printing 1,360,000 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013

Utility (Electricity, Telephone, Internet & Water) 1,797,000 36,000,000 37,800,000 39,690,000 41,674,500 43,758,225

Internet 1,797,000 2,000,000 2,100,000 2,205,000 2,315,250 2,431,013

Electricity 0 24,000,000 25,200,000 26,460,000 27,783,000 29,172,150

Telephone 0 6,000,000 6,300,000 6,615,000 6,945,750 7,293,038

Water 0 4,000,000 4,200,000 4,410,000 4,630,500 4,862,025

Ofice Household 460,000 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113

Gasoline, Parking, Toll and Transport 460,000 18,000,000 18,900,000 19,845,000 20,837,250 21,879,113

Total Operating Expenses 125,907,256 1,917,574,019 2,013,452,720 2,114,125,356 2,219,831,624 2,330,823,205

INCOME FROM OPERATION 906,732,453 -817,963,346 -785,835,983 -746,260,211 -698,396,244 -641,324,920




CHAPTER 5

CONCLUSIONS AND RECOMMENDATIONS

5.1 Conclusions

The overriding objective of this study is to provide the best recommendation on how to

leverage Indonesia Data as a business unit ofMARS Indonesia by growing its market

capitalization through the increase in offline and online market research. To effectively

capitalize quickly captured as the ―big chunk‖ of the research market industry, MARS

Indonesia needs to quickly respond to the following questions, by using analysis above

the author is determining the conclusions of this study by answering to the following

questions.

1. What is the strategy of MARS Indonesia to generate Indonesia Data business unit to

fulfill forecast market share in following years?

Answer:

Doing business Indonesia has good opportunity due to several macro environment

factors, which are:

Population is high about over 258 millions in 2016, with socio cultural is most of

young people and one of largest internet user in the worldwide; it is big

opportunity for online industry. Healthy democracy environment will impact

to market research companies to give detail and opened data research.

Indonesia has international labor law, GDP are growth with stabilize forecast

exchange rate. It will make stabilization for company health and organization

It is open market for market research industry to provide data analysis.

To compete with this macro environment opportunity, thereare business strategies that

Indonesia Data must doing to improve current market position:

Indonesia Dataproducthave to focus and specialize on 3 major business:

Banking, Food and Beverage, and Pharmaceutical Industry with more complete

data & analysis on those sectors

Create innovation promotion on sales the product to increase the revenue by

charge Corporate costumers based on Data-Type in yearly membership basis and

set market-penetration pricing by set a low initial membership price to penetrate

the market quickly and deeply—to attract a large number of buyers quickly and

win a large market share.




Page 84

Increase competitive advantage by joining partner with international spealized

market research companies

Indonesia data must add key supplier not only Syllabus to create lower power of

suppliers.

To Improve Resources in competing the market, Indonesia data must conducting:

Integrated marketing promotion must be conducting to increase brand image and

add human resources to increase High performance production.

2. Should MARS Indonesia set the Indonesia Data business unit under a new company

by creating a separated structure or should maintain Indonesia Data is as a

business unit to get maximum profit in next following years?

Answer:

To facing the threat and fulfill the opportunities, Indonesia

DataMustEstablish/investment on new organization (separate from PT MARS) must

being conducting, to achieve purpose: to get high performance team (reduce lead

time in current process), reduce MARS employee salary, Increase Indonesia Data

Revenue & can focus on 3 major businesses. but it is need external investment due

to lack source of funding in MARS Indonesia.

The authors forecast Indonesia Data Revenue will start generated profit in the 3rd

year for optimist case, and in the 5th year for moderate case. For the Optimistic

forecast, the revenue will get 9 BIDR in the 5 years, 3.5 times higher than current

2016 and profit will get 4.3 BIDR in the 5 years. For Moderate forecast, the revenue

will get 5.6 BIDR in the 5 years, 2.5 times higher than current 2016 and profit will

get1.3 BIDR due to salary and fieldwork cost will responsible by Indonesia Data.

For Moderate case, Indonesia Data will need cash at least cash 1.5 BIDR to cover its

lost on operational expense till 3rd year, meanwhile for Optimist Case, Indonesia

Data will need cash at least 1 BIDR to cover its operational expense till 2nd year..

3. Third, how will be business model of Indonesia Data in the future after MARS


Answer:

A Business Model describes as the foundation of how an organization or companies

creates, delivers, and captures value. The Business model is like a blueprint of

strategy to be implemented through organizational structures processes, and systems.

To compare current Indonesia Data as a business unit of MARS Indonesia and future




Page 85

Indonesia Data as a companies, the author determine both business canvas model

below:

Current Indonesia Data Business Model

Figure 5.1Current Indonesia Data Business Canvas Model

1. Key Partners

Current Indonesia Data Key Partner is only Syllabus

2. Key Activities

There are 4 main activities of Indonesia Data: Research (data collection, data

quality, data processing, design the layout and printing the book and store in the

website), Marketing (Documentation & Administration activities by marketing

supports, customer relationships, presentation the product), Finance (Creating




Page 86

operational budget and controlling budget), Project Management (Control

research activity, developing researcher)

3. Key Resources

In regards to Key Resources Indonesia Data relies heavily on Human Capital (well

train researcher and marketing team), International Standard Facilities, Financial

(Owners investment and bank’s loan) and e-commerce.

4. Value Propositions

Beside give the good accurate data research as a value proposition, Indonesia Data

also have value propositions which is always start research project not by request

its start by the idea to identify current trend so the data will give benefit to

company.

5. Customer Relationships

At Indonesia Data’s social media (Instagram), its provide customer review and

ratings in order to get customer feedback and increase the brand.

6. Channels

Social Media: Promotion of intriguing research on social media such as

Facebookand Instagram

Media Placement: Ads on business magazine and newspapers.

Customers and MARS Indonesia: To promote and raise awareness to general

public audience about the existence of Indonesia Data, which cannot be carried

out thoroughly by mere media placement or social media

7. Customer Segments

Business to Consumer (B2C) College and University Students, Industry

Associations, etc.

Business to Business (B2B) Companies (Banking Industry, Food & Beverage,

Pharmaceutical, etc)

8. Cost Structures

Brand Promotion &Marketing Cost

Research cost, includes delivery cost & transport

9. Revenue Streams

When it comes to revenue creation, Indonesia Data is relying on sales of data

broken down into two categories:

Single Sales usually run about IDR 55.000, targeting education sector such

as college and university students as well as industrial association.




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Full Report Sales usually run from IDR 10.000.000 – IDR 25.000.000,

targeting large companies from sectors such as Banking Industry, Food &

Beverage, Pharmaceutical, and many more.

Future Indonesia Data Business Model

In contrast of the previous or current business model of MARS Indonesia, there

are slight modifications and changes in regards of the business canvas model

should MARS Indonesia separate itself from a business unit to become a separate

entity/company as shown on figure 5.2.

Figure 5.2 Indonesia Data Future Business Model (Non-Integrated Business)




Page 88

1. Key Partners

Compared to previously where partnerships are conducted only with Syllabus; our

recommendation is to create stronger or intensify on additional partnerships with

International Research Companies. For improvement in research (fieldwork)

Suppliers there are others research (fieldworker) companies to compete with

Syllabus.

2. Key Activities

There are 4 main activities of Indonesia Data: Research (data collection, data

quality, data processing, design the layout and printing the book and store in the

website), Marketing (Documentation and Administration activities by marketing

supports, customer relationships, presentation the product), Finance (Creating

operational budget and controlling budget), Project Management (Beside control

research activity and developing researcher, Indonesia Data also control

Membership Project)

3. Key Resources

In regards to Key Resources Indonesia Data relies heavily on Human Capital (well

train researcher and marketing team), International Standard Facilities, Financial

(Owners investment and bank’s loan) and e-commerce.

4. Value Propositions

In the future business model Indonesia Data have additional value proposition

which is: Provide Membership Program in yearly basis for corporate companies,

the program is giving some quantity data research that companies can choose and

to always update data research in monthly basis that company request.

5. Customer Relationships

In the previous business model, Indonesia Data’s social media (Instagram) is

providing customer review and ratings to get customer feedback and increase

brand. In the future, Indonesia Data will also giving free access for some research

data in university in Indonesia to increase customer relationships

6. Channels

Social Media: Promotion of intriguing research on social media such as

Facebookand Instagram

University: Brand Promotion will start in the big universities in Indonesia




Page 89

Customers and MARS Indonesia: To promote and raise awareness to general

public audience about the existence of Indonesia Data, which cannot be carried

out thoroughly by mere media placement or social media.

7. Customer Segments

Business to Consumer (B2C) College and University Students, Industry

Associations, etc.

Business to Business (B2B) Indonesia Data is only focus in 3 major business

companies (Banking Industry, Food & Beverage, Pharmaceutical)

8. Cost Structures

Brand Promotion and Marketing Cost, Research cost, includes delivery cost and

transport and Human Resources due to salary will being cost expenses for

Indonesia Data as establishing company.

9. Revenue Streams

Single Sales

Full Report Sales (Membership Program will being added in this revenue

segment).

5.2 Recommendation

The purpose of this study the author will provide the best recommendation on how to

leverage Indonesia Data as a business unit. From the conclusion above there are some

key strategic plans for Indonesia Data on leverage the DaaS business like it is also

important to leverage the market of Indonesia data by doing digital marketing, because

from the analysis most of the user market of Indonesia are mostly also in young age

which is very addicted to social media. Digital marketing are one of key strategic for

Indonesia Data in the future.

The Author is recommended to put all strategic plans for Indonesia data to have

competitive advantage. Competitive advantage can be determined as the differential in

any firm attribute that allows one firm to better serve the customers than others and

hence create better customer value and achieve superior performance.

In these phase the author will create strategy plan (Short, Mid, Long Term) to improve

and maintain the competitiveness of Indonesia data, include the strategy for create

competitive advantage in valuable asset of Indonesia Data such as Brand and Human

Resources (Ownership-based source).




Page 90

Table 5.1 Indonesia Data Short, Mid, Long Term Plan

5.3 Reflection

Looking back to the entire GFP Process our group has learned a lot about the business

operation of PT. Mars Indonesia. We have discovered that the complexity of research

process is very time-consuming and requires great effort; yet, despite all of that, our

partners at PT. Mars Indonesia has generously spare their time and contribute to the

well-being of this Group Final Project; however, there are a few things that we believe

could serve as a reflection for the following Research on Group Final Project, such as:

1. Insufficient of knowledge on Sales and Marketing process

Reflection for the next GFP includes deeper analysis on Sales and Marketing

process

Short Term Plan

(6-12 Months)

Medium Term Plan

(3-5 years)Long Term Plan

(5-10 Years)

Valuable

Asset/Resources

4. Starting to implementing SOE & SOM

3. 25 Companies for Memberships Program

4. SOE & SOM & Other Digital Media (MMS &

SMS are established)

1. Sales achievement 4 times higher (vs FY16)

2. Market Share 15% of DaaS Indonesia Market

1. Net Profit 5 B IDR

2. Starting IPO

1. Running Free Access Program in top 3

university in Indonesia successfully

1. New Investment for 1.5 BIDR Capital

2. Monthly Sales Product achievement ratio

90% (Plan vs Actual)3. Increase Sales 50% vs FY16

5. Reduce Operating costs 5%

Performance

3. Market share 40 % of Data provider & Data

Market Place Industries

1. Running Free Access Program in 10

university in Indonesia successfully

3. Achieve OaO (overall opinion)of DaaS

company -> 10% young people in 10 big cities

1.Top 3 Research Brand in Indonesia

1. Implemantation Training Program for

employee Succesfully 100%

Brand

Human Resources

2. 10 times vs FY16 Followers in Social Media

3. Achieve OaO (overall opinion)of DaaS

company -> 10% young people in Jakarta

1. Achieve High Skill & Best Quality Employee

1. Implemantation International Training

Program for employee Succesfully 100%

2. Top 10 Research Brand in Indonesia

2. New Structure Organization Fulfill

Succesfully (Separate from MARS)

Profitability

1. Have International Standard Performance in

Indonesia & Specialize Data Research

Companies in 3 major industry (Banking, Food

& Beverage, Pharmacy)

3. Specialize in 3 major industries

3. Implemantation for Marketing Training

Program Successfully 100%

1. International Standard Facilities

implemantation

2. Accurate Data Researcher (Reject Ratio 5%)

3. Reduce Lead time 10 % vs FY16

1. Joint venture with International Research

Companies

2. Achieve High Standard (Design Standard

time) of Research Performance

2. All Researcher & Fieldworker have high skill

3. All Marketers have high skill




Page 91

2. Insufficient of Research Process

Reflection for the next GFP includes deeper analysis on Research workflow and

process.

3. Lack of time in one-on-one discussion with the Department Head

Reflection for the next GFP includes with the initial meaningful discussion with

the leaders in each department, to get a comprehensive data.




Page 92

APPENDIX

Table A-1MARS Indonesia Balance Sheet 2013 and 2014





Page 93

Table A-1 – Continued-MARS Indonesia Balance Sheet 2013 and 2014





Page 94

Table A-2MARS Indonesia Income Statement 2013 and 2014





Page 95

Table A-3MARS Indonesia Balance Sheet 2015 (Source: MARS Annual Report, 2015)




Page 96

Table A-3– Continued - MARS Indonesia Balance Sheet 2015

(Source: MARS Annual Report, 2015)




Page 97

Table A-4MARS Indonesia Income Statement 2015

(Source: MARS Indonesia Annual Report)




Page 98

Table A-5MARS Indonesia Balance Sheet 2016 (Source: MARS Annual Report, 2016)




Page 99

Table A-5 – Continued-MARS Indonesia Balance Sheet 2016





Page 100

Table A-6MARS Indonesia Income Statement 2016





Page 101

Table A-7Indonesia Data Income Statement 2016

(Source: PT. MARS Indonesia)




Page 102

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