MOBNAS?
Achadiat A. Suhadi
Solo, 10 Desember 2011
INDONESIA : MARKET OF OPPORTUNITY
•Indonesia, a
very potential market with total
population of 228.5 millions people in 2008
•58% of the population live in Java, although
Java is only 7% of total land area in Indonesia.
•Average GNP per capita is USD 3,000 per yr
•The main driver for Indonesian economy is
domestic consumption.
•Growth at 6% for the last couple of years
•Car Ownership : 121 people per car (2008)
GROWTH
1,000,000
CAR SALES
900
800
2010
2011
2012
MARKET SHARE
DOMINATION OF JAPANESE BRANDS
TRANSPORT EQUIPMENT & MACHINERIES
IMPORT VALUE
77% OF THE PARTS IS SUPPLIED BY LOCAL
SUPPLIER
GOVERNMENT POLICY
“LOW PRICED CAR (Rp. 60,000,000/unit)”
- Encourage indigene new entrant to invest
- Especially in part manufacturing business
PORTER”S
FIVE FORCESS
ON
AUTOMOTIVE
INDUSTRY •Fixed (or storage) costs/value added
THE THREAT OF ENTRY
(Entry Barriers)
•Absolute cost advantages
•Proprietary learning curve
•Access to necessary inputs
•Proprietary low-cost product design
•Government policy
•Economies of scale
•Capital requirements
•Proprietary product differences
•Brand identity
•Switching costs
•Access to distribution
•Expected retaliation
•Intermittent overcapacity
•Industry growthTHE DEGREE OF RIVALRY
SUPPLIER POWER
•Product differences
•Supplier concentration
•Concentration and balance
•Importance of volume to supplier
•Fixed (or storage) costs/value added
•Brand identity
•Differentiation of inputs
•Intermittent overcapacity
•Switching
costs
->
•Impact of inputs on cost or differentiation
•Industry
growth
•Switching costs of supliers and firms in industry
•Product differences
•Informational
complexity
•Presence of substitute inputs
•Brand identity
•Threat of forward integration relative to•Diversity
threat
•Switching
costs ->
of competitors
of backward integration by firms in industry
•Informational complexity
•Cost relative to total purchases in industry
•Diversity
of competitors
•Corporate
stakes
•Corporate stakes
•Exit barriers
THE THREAT OF
SUBSTITUTES
•Relative price performance of
substitutes
•Switching costs
•Buyer propensity to substitute
BUYER POWER
•Bargaining
leverage
•Buyer concentration
vs. firm concentration
•Buyer volume
•Buyer information
•Buyer switching costs
relative to firm
switching costs
•Pull-through
•Substitute products
•Ability to backward
integrate
•Price sensitivity
•Price/total
purchases
•Impact on quality/
performance
•Product differences
•Brand identity
•Buyer profits
•Decision makers’
• incentives
ENTRY BARRIER
Absolute cost advantages
Proprietary learning curve
X
Access to necessary inputs
X
Proprietary low-cost product
design
X
Government policy
X
Economies of scale
X
Capital requirements
Proprietary product
differences
Brand identity
Switching costs
Access to distribution
Expected retaliation
Industry
Attractiveness
Force
Internal rivalry
Entry
Substitutes/C
omplements
Supplier
power
Buyer power
High
Threat to
profits
High
Low to
Medium
Medium
to High
Medium
Medium
STRATEGY TO ENTRY
MARKET SITUATION
SOCIAL
Lower buying power, need for motorcycle substitution,
Social empowerment for economics recovery
Reinforce confidence for local added value
TECHNOLOGY
Shorter life time, lower production volume, multi variant
Appropriate technology for low volume production,
Extended enterprise by managing team work across
supply chain of logistics & production
Flexible manufacturing, multi resources-multi facilities
Concurrent Engineering to speed up time to market
STRATEGY TO ENTRY
MARKET SITUATION
ECONOMICS
Foreign exchange saving, import substitution
Ride on rebound wave of economics recovery
Increase domestic turn over and spin off effect
ENVIRONMENT
Increase recycle-able material
Environment friendly of product and production facility
POLITICS
Stimulate power of middle level community
Nationalism dignity
STRATEGY TO ENTRY
INITIAL SWOT UTILIZATION
STRENGTH
-Emotional nationality sentiment driving force
-New concept in business, technology & investment
-Best utilization of access & relation of relationship with
academician, industry & government
WEAKNESS
-New comer: image, market, supply & distribution
network
-Production facility
-Financial strength
STRATEGY TO ENTRY
OPPORTUNITY
-Low priced car program with opportunity market
-Brand new investment (focus & accuracy)
develop extended company chain network.
-Government policy on industrial and economics growth
THREATS
-Slump down of global economics
-Global automotive industry excessive capacity
-New player & new product in the same segment
TECHNICALLY……………………………….
Ready to enter the industry with assumptions:
1. Make use proximity to market.
2. Pull , not Push process.
3. Priority on profit cashflow turnover
4. Smart, Accurate and Necessity investment
5. Proper technical step for competitive and
sustainable profitability.
6. QCDSMT based supply and distribution chain
development
7. Strong technopreneur support with long term
commitment.
Typical Ramp Up Steps
Typical Initial Cost Necessary
Items
1.
2.
3.
4.
5.
6.
Product Development
Market Proofing
Production Tooling
Production Facility
Marketing & After Sales
Raw material, WIP & Finish
unit stock
TOTAL:
Amount
Rp. 2,000,000,000.1,000,000.000,30,000,000,000,5,000,000,000,10,000,000,000.152,000,000,000.________________
200,000,000,000