Proceedings of 7th Asia-Pacific Business Research Conference

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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
IMPLICATION OF PRODUCT PORTFOLIO IN STRATEGIC
APPROACH FOR SMALL BUSINESS
Welisha Firdausi Drieno* and Mia Tantri Diah Indriani**
The strategic decision-making in small firm is a very considered process to
determine the direction of orientation of the company by looking at its all
aspects. Strategic decision, this time, be as the management responsibility
for the short term objective and also for the long term objectives. The
purpose of this study is to describe the application of the product portfolio
as management tool in the small business. The strategic portfolio could
initiate and guide strategic reasoning of management problem. The data
collection was obtained from one of the small apparel business in
Indonesia with its four big brands there are Saswco, Brutal, Weshaki and
Rockweld. The analysis of this paper is the management mapping of the
brands situation and its implication of the position of each brand. The result
suggests that the company need to invest on Rockweld brand while the
rest brand need to be more managed.
1. Introduction
The product portfolio in strategic approach gives an overall picture on the current
business condition; therefore it provides the future strategic decision for the business
and how to achieve a set of the company’s goals. The product portfolio is
management tool to make the strategic choices about what are the factors (product,
technology, or marketing) that will be invested in the business and also product
portfolio deals to balance the allocation of available resources to projects that will be
selected for business development. The managers of small firms lack methods for
analyzing systematically and explicitly their strategic situation and the potential for
the future development of the firm and also for the competition. This study is an
initial attempt to investigate implication the product portfolio for small firm in strategic
approach.
2. Literature Review
Portfolio management is about making strategic choices – which markets, products,
and technology our business will invest in. The choices itself makes today
management determine what the business look like 5 years out (estimated). It is
about resource allocation – how will we spent our scarce engineering, R&D, and
marketing resources. Finally, it deals with the critical issue of balancing resources
available with the numbers of projects.1
1
*Welisha Firdausi Drieno, School of Business and Management, Bandung Institute of Technology,
Indonesia Email: [email protected]
** Mia Diah Tantri Indriani, School of Business and Management, Bandung Institute of Technology,
Indonesia,Email: [email protected]
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
There are many of product portfolio methods. One of the methods is using the
strategic approaches. Strategic Approaches shows that the portfolio of project is
largely driven by the strategy of business. The business strategy decides the spit of
resources across different categories – for example, by types of project, markets, or
product lines – to create strategic buckets. And strategic consideration dominate the
decision to do (or not do) certain R&D and new product project.
GE/Mc Kinsey Product Portfolio Model
Figure 2. 1 GE/Mc Kinsey Product Portfolio Model
The GE matrix generalizes the axes as ‘Market Attractiveness’ and ‘Business Unit
Strength’ whereas the BCG , matrix uses the market growth rate as a proxy for
industry attractiveness and relative market share as a proxy of the strength of
business unit. The difference is that the GE/Mc Kinsey matrix has nine cells diagram
while BCG matrix has four cells diagram.
Market Attractiveness and business unit strength are calculated by first identifying
criteria for each, determining the value of each parameter in the criteria, and
multiplying that value by weighting a factor. The market attractiveness is determined
by




Market Growth Rate (Sales
Growth Rate)
Market size
Demand variability
Industry profitability Growth



Industry rivalry
Global opportunity
Macro environmental
(PEST)
Factors
Some factors that can be used to determine business unit strength include:
 Market share
 Brand equity (Net Promoter
Score)
 Growth in market share
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0


Distribution channel accessed
Production capacity

Profit
margins
competitors
relative
to
The result is a quantitative measure of industry attractiveness and the business
unit’s relative performance in that industry.
Net Promoter Score
The Net Promoter Score (NPS) is a simple and powerful tool to measure client
satisfaction with one single question, an indication of the growth potential of the
company or product. The most successful companies using Net Promoter build out a
complete operational model with NPS as its centerpiece. Real breakthroughs in
performance are achieved only when companies move from a research model to an
operational model embedded in their company culture.
Strategic Implication of Product Portfolio Matrix
Resource allocation recommendation can be made to grow, hold, or harvest a
strategic business based on the its position on the matrix as follows
Figure 2. 2Product Portfolio Strategic Implications



Grow strong business in attractive industry, average business unit’s attractive
industry, and strong business units in average industry.
Hold/Earnings average business in average industry, strong business unit is
weak industry and weak business in attractive industry.
Harvest weak business units in unattractive industry, average business unit in
unattractive industry, and weak business units in average industry.
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Figure 2. 3 Product Portfolio Implication of The Strategy
While the GE business screen represents an improvement over simpler BCG
growth-share matrix, it still presents a somewhat limited view by not considered
interaction among the business units and by neglecting to address the core
competencies leading to value creation. Rather than serving as the primary tool for
resources allocation, portfolio matrices are better suited to displaying a quick
synopsis of the strategic business units
3. The Methodology and Model
Descriptive Research
The descriptive research attempts to describe, explain and interpret conditions of the
present i.e. “what is’. The purpose of a descriptive research is to examine a
phenomenon that is occurring at a specific place(s) and time. A descriptive research
is concerned with conditions, practices, structures, differences or relationships that
exist, opinions held processes that are going on or trends that are evident. This
research is the one of the method of the qualitative research. The company object of
this research is one of the small apparel businesses in Indonesia that is CV Saswco
Perdana. CV. Saswco Perdana is one of the entrepreneurship companies that
established since 1993 in Bandung, Indonesia. The company produces the product
that is focused for low to mid economic as the target market for the business. CV
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Saswco Perdana has four big brands that give impact to the company; there are
Saswco, Brutal, Weshaki, and Rockweld. Those brands will be as the point of the
product portfolio analysis that can give strategic association of the company
management.
Data Collection
The data were collected from interview, observation and also from the company
business data. The interview object is the customer of the company that already
purchased the product in the store for each brand of the company. The objective is
to know the perspective of the brand in consumer mind. The observation data is the
framework of current condition in the company. The company business data include
the financial performance and business unit quantitative data that help the author to
measure the company.
Data Analysis
The product portfolio analysis for this research is used the GE/Mc Kinsey Model in
strategic approach. The purpose is to map the condition of CV Saswco Perdana’s
brand in current market conditions. The result of this analysis will be the strategic
implication for the company strategy formulation. In GE/Mc Kinsey Model of product
portfolio, there are two main axes which will be the necessary reference to make the
strategic implication. The axes are the market attractiveness and the business
strength units. In this research, the author picks two variables of each axis as the
materials to make the product portfolio analysis. Those variables will be as decider
factor to be plotted in the matrix and it resulted from the calculation of the final
scores. Below is shown the framework of construction of product portfolio for this
research.
Determine
The Product
Portfolio
Model
Perform a Review
of The Straregic
Implication of The
Product Portfolio
Determine
The Factor
of The
Variable of
the Axes
Sum All Up
and Intepret
to The
Matrix
Find The
Data
Resource to
Support The
Variable
Multiply The
Weight and
Variable
Score
Assign The Weight
of Each Variable
based on The
Company 's
Necessity
Calculate
The Variable
to Make
Score
Figure 3. 1 Product Portfolio Analysis Making Process
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Market Attractiveness
The market attractiveness factors that are used are the sales growth rate and
profitability growth. These factors determine the attractiveness of market and to
understand its evolving opportunity and threats as they relate to the strength and
weaknesses of the firm. This is caused by the data availability of the company that
can be easier to be proceeded and those variables are represented the market
attractiveness in general. Those factors represented the favorability of the brands in
the market condition from 2011 until 2013.
1. Sales Growth Rate Methodology
To find the sales growth rate score, the author collect the resource directly from
the company document. The data resource was collected from the company’s
financial statement from 2011 to 2013.
 Formula
To make the final score, we have to know the formula to calculate the variable
and make the average of the variable calculation of the sales growth rate. The
average value will be as the input for the scoring method.
- Sales Growth Rate Formula
There are many ways to calculate the sales growth rate of the brand and most of
the calculation uses the annual sales as the input of the formula. Below is shown
the calculation of the sales growth rate:
Sales Growth Rate =
- Average Rate
After know the result of the sales growth rate calculation, we calculate the
average of sales growth rate from 2011 until 2013. Below is shown the
calculation of the average of sales growth rate:
Average Rate =
(
)
(
)
- Scoring Method
To make the score we make the table of scale that integrated with the range of
the result of the average sales growth rate. The score range is from 1 to 5.
 Calculation
The following table is the sales revenue data of CV Saswco Perdana’s brands
from 2011 to 2013.
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Brand
Saswco
Weshaki
Brutal
Rockweld
Sales Revenue
2011
Rp4,465,203,000
Rp893,040,600
Rp2,083,761,400
Rp481,626,926
Sales Revenue
2012
Rp5,369,520,000
Rp1,073,904,000
Rp2,505,776,000
Rp633,719,640
Sales Revenue
2013
Rp4,926,784,200
Rp985,356,840
Rp2,299,165,960
Rp792,149,550
Table 3. 1 CV Saswco Perdana’s Brands Sales Revenue
After know the sales revenue data, we can calculate the sales growth rate by using
the previous formula. Below is shown the result calculation of the sales growth rate
of CV Saswco Perdana’s brands.
Brand
Saswco
Weshaki
Brutal
Rockweld
Sales Growth
Rate 20112012
0.2
0.21
0.02
0.32
Sales Growth
Rate 20122013
(0.08)
(0.08)
(0.08)
0.25
Sales Growth
Rate Average
0.06
0.065
0.06
0.285
Table 3. 2 Calculation Result of Sales Growth Rate
After know the result of the sales growth rate average, we can make the score range
of the sales growth rate average. The following table is the sales growth rate range
scores.
Average Sales Growth
Rate Range Scale
0.01-0.06
0.07-0.12
0.12-0.18
0.19-0.24
0.25-0.30
Score
1
2
3
4
5
Table 3. 3 Average Sales Growth Rate Range Scale Score
2. Profitability Growth Methodology
To find the profitability growth score, the author collect the resource directly from
the company document. The data resource was collected from the company’s
financial statement from 2011 to 2013

Formula
To make the final score, we have to know the formula to calculate the variable
and make the average of the variable calculation of profitability growth. The
average value will be as the input for the scoring method.
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
-
Profitability Growth Formula
The calculation of profitability growth has the same calculation with the sales
growth rate. Below is shown the calculation of the profitability growth:
Profitability Growth =
-
Average Profitability Growth
The average profitability growth calculation has the same method with the sales
growth rate. Below is hsown the formula of the average of average profitability
growth:
Average Rate =
-
(
)
(
)
Scoring Method
To make the score we make the table of scale that integrated with the range of
the result of the average sales growth rate. The score range is from1 to 5

Calculation
The following table is the profitability data of CV Saswco Perdana’s brands from
2011 to 2013
Brand
Saswco
Profitability 2011
Rp,952,023,316.4
Weshaki
Rp390,404,663.2
8
Rp910,944,214.3
2
Rp(152,348,000)
Brutal
Rockweld
Profitability 2012 Profitability 2013
Rp1,760,316,518 Rp1,265,438,563
.2
Rp352,063,304
Rp253,087,712.6
4
Rp821,481,042
Rp2,299,165,960
Rp(109,569,320)
Rp(76,840,000)
Table 3. 4 CV Saswco Perdana’s Brands Profitability
After know the sales revenue data, we can calculate the sales growth rate by
using the previous formula. Below is shown the result calculation of the sales
growth rate of CV Saswco Perdana’s brands.
Brand
Saswco
Weshaki
Brutal
Rockweld
Profitability 20112012
(0.98)
(0.1)
(0.99)
(1.72)
Profitability 20122013
(0.28)
(0.3)
(0.28)
(1.7)
Profitability
Average
(0.63)
(0.2)
(0.635)
1.71
Table 3. 5 Calculation Result of Profitability Growth
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
After know the result of the sales growth rate average, we can make the score
range of the sales growth rate average. The following table is the sales growth
rate range scores.
Average Profitability
Range Scale
(1)-(0.2)
(0.1)-0.6
0.7-1.4
1.5-2.2
2.3-3.0
Score
1
2
3
4
5
Table 3. 6 Average Sales Growth Rate Range Scale Score
Business Strength Unit
The business strength factors that are used are the brand equity that focuses in
calculating customer loyalty by using the net promoter score and the distribution
channel. These factors determine the competitiveness of the business units the
market to understand its evolving opportunity and threats as they relate to the strength
and weaknesses of the firm. This is caused by the data availability of the company
that can be easier to be proceeded and those variables are represented the business
strength unit in general. Those factors represented the favorability of the brands in the
market condition from 2011 until 2013.
1. Net Promoter Score
To know the net promoter score, at the beginning of the research, the author
conducted the interview of the customer that actually bought the product for each
brand. The sample size is 50 respondents of each brand by asking a single
question of the willingness of the customer to promote the product p their
colleagues. From the prior question, the respondents answer from the range
number scale from 1 to 10. The answer of the question could be categorized onto
three group people, there are:
o
o
o

Promoters = respondents giving a 9 or 10 score
Passives = respondents giving a 7 or 8 score
Detractors = respondents giving a 0 to 6 score
Formula
After know the answer from the respondents, the author classified the response
into the group of people. Then the percentage of the group of people was made
to make the calculation easier.
-
Net Promoter Score Formula
As the basis of the score making, below is shown the formula of the net promoter
score
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
-
Scoring Method
To make the score we make the table of scale that integrated with the range of
the result of the average sales growth rate. The score range is from 1 to 5

Calculation
The following table is the result of net promoter score of CV Saswco Perdana’s
brands.
Brand
Saswco
Weshaki
Brutal
Rockweld
NPS
6,37
3,65
5,12
5,26
Table 3. 7 Calculation Result of Net Promoter Score
After know the result of the net promoter score for each brand, we can make the
score range of the net promoter score. The following table is the sales growth
rate range scores.
NPS Range Scale
1-2
3-4
5-6
7-8
9-10
Score
1
2
3
4
5
Table 3. 8 Net Promoter Score Range Scale Score
2. Distribution Channel Access
To know the measurement of the distribution channel access, at the beginning of
the research, the author conducts the interview to gather the information about
the distribution system for each brand. Then, the author collected the data
resource of the number of the store for ach brand from the company documents.
After that, the author categorized the type of store and also the role of store and
makes the weight scoring for each role. Below is shown the store category and
its supply chain process
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
a. Private store/flagship
The private store is the distribution channel that owned by the company itself.
The selling system is controlled by the marketing of the company and it gives
the fastest response of the product service to the customers.
b. Collaboration flagship
The collaboration flagship is the distribution channel that is not owned by the
company. The distribution channel is owned by the client that commonly only
sell the CV Saswco Perdana’s product. The price that been offered is almost
the same with the private store.
c. Made by Order (general product and custom product)
The made by order system is exclusively based on special order demand.
The product can be as the general product of the company or it can be
custom product. The selling activities are directly handled by the company
(not the flagship). The term and conditions is applied for this distribution
system.

Formula
In this analysis, the author valuing the distribution channel based on the function
of the channel to make the score weight. For distribution channel/store which
have a function as distribution point (has two roles as wholesaler and Retailer)
the value for each distribution channel is two, then for wholesaler, retailer, and
made by order function has the value one for each.
-
Distribution Channel Access Weight Formula
After know the value of each distribution channel access, we can calculate the
total distribution weight for each type of the store. Below is shown the calculation
of the total weight of distribution channel access:
For Private Store and Collaboration Store
Total Weight = (2xnumber of distribution point) + (1xnumber of wholesaler) +
(1xnumber of retail)
For the Made by Order System
Total Weight = (1xnumber of made by order)
-
Average Distribution Weight
After know the total weight of the distribution channel, we can calculate the
average of distribution weight. Below is shown the calculation of the average
distribution channel access weight:
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0

Calculation
The following table is the calculation of the total weight of each distribution
channel and its average:
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Brand
Saswco
Score
Weshaki
Score
Brutal
Score
Rockweld
Score
Private Store
Distribution
Point
Wholesale
(Wholesale
and Retail)
4
0
8
0
1
0
2
0
0
0
0
0
2
0
4
0
Retai
l
6
6
2
2
0
0
0
0
Total
Weight
14
4
0
4
Collaboration Store
Distribution
Point
Wholesal Retai
(Wholesale
e
l
and Retail)
2
0
5
4
0
5
0
1
3
0
1
3
1
0
3
2
0
3
0
2
3
0
2
3
Total
Weight
9
4
5
5
Made by
Order
1
1
1
1
0
0
1
1
Average
Distribution
Weight
8
3
1.67
3.3
Table 3. 9The Calculation of Distribution Channel Weight
After know the result of the average distribution weight for each brand, we can make the score range of the
distribution channel access. The following table is the sales growth rate range scores.
Average Distribution Weight Range
Scale
1-2
3-4
5-6
7-8
9-10
Score
1
2
3
4
5
Table 3.10The average Distribution Weight Range Scale
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
4. The Findings
The product portfolio is the tools to know the position of the brands of CV.
Saswco Perdana consider the market attractiveness and the capabilities of the
business units’ itself. We can decide and continue the next analysis after plotting
the factors of the market attractiveness and business strength into the nine cells
matrix.
Market Attractiveness
The market attractiveness which is becomes the factor for this analysis is sales
growth rate and profitability growth for each brand of CV Saswco Perdana. The
following is the result of the analysis of market attractiveness factors.
A. Sales Growth Rate
After know the range scale of the score for the sales growth rate, we can
summarize the score of CV Saswco Perdana’s brands. Below is shown the
table of the score of CV Saswco Perdana’s brands.
Brand
Saswco
Weshaki
Brutal
Rockweld
Score
1
2
1
5
Figure 4. 1Sales Growth Rate Score
From the table above, we can know that Rockweld has the highest score of
the sales growth for the last three years compared with the other brands.
Therefore, Rockweld has the opportunity to keep the position to be more
attractive.
B. Profitability Growth
After know the range scale of the score for the profitability growth, we can
summarize the score of CV Saswco Perdana’s brands. Below is shown the
table of the score of CV Saswco Perdana’s brands.
Brand
Saswco
Weshaki
Brutal
Rockweld
Score
1
1
1
5
Figure 4. 2Profitability Growth Score
From the table above, we can know that Rockweld has the highest score of
the profitability growth for the last three years compared with the other
brands. Therefore, Rockweld has the opportunity to keep the position to be
more attractive.
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Business Strength Unit
The business strength unit which is becomes the factor for this analysis is net
promoter score and distribution channels access for each brand of CV Saswco
Perdana. The following is the result of the analysis of market attractiveness
factors
1. Net Promoter Scores
After know the range scale of the score for the net promoter score, we can
conclude the score of CV Saswco Perdana’s brands. Below is shown the
table of the score of CV Saswco Perdana’s brands.
Brand
Saswco
Weshaki
Brutal
Rockweld
Score
3
2
3
3
Figure 4. 3 Net Promoter Scores’ Score
From the table above, we can know that Weshaki has the highest score of the
sales growth for the last three years compared with the other brands.
Therefore, Weshaki has to concern about maintaining the business unit
strength.
2. Distribution Channel Access
After know the range scale of the score for the distribution channel access,
we can conclude the score of CV Saswco Perdana’s brands. Below is shown
the table of the score of CV Saswco Perdana’s brands.
Brand
Saswco
Weshaki
Brutal
Rockweld
Score
4
2
1
2
Figure 4. 4Distribution Channel Access Scores
From the table above, we can know that Saswco has the highest score of
the distribution channel access for the last three years compared with the
other brands. Therefore, Saswco has the opportunity to keep the position
to maintain the strength
Plotting the Product Portfolio
After know the score for the elements of market attractiveness and business
strength unit, we calculate the total attractiveness and strength for each brand.
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Then, the result of the attractiveness and strength will be plotted in the nine cell
matrix.
Saswco
Market Attractiveness
Factor
Market Growth Rate
Profitability
Weshaki
Market Growth Rate
Profitability
0.6
0.4
Brutal
Market Growth Rate
Profitability
0.6
0.4
Market Growth Rate
Rockweld Profitability
0.6
0.4
Brand
Weight
0.6
0.4
Saswco
Business Strength
Factor
Net Promoter Score
Distribution
Weshaki
Net Promoter Score
Distribution
0.6
0.4
Brutal
Net Promoter Score
Distribution
0.6
0.4
Net Promoter Score
Rockweld Distribution
0.6
0.4
Brand
Weight
0.6
0.4
Score
1
1
Total
2
1
Total
1
1
Total
5
5
Total
The
Attractiveness
0.6
0.4
1
1.2
0.4
1.6
0.6
0.4
1
3
2
5
Score
The Strength
3
1.8
4
1.6
Total 3.4
2
1.2
2
0.8
Total 2
3
1.8
1
0.4
Total 2.2
3
1.8
2
0.4
Total 2.2
After know the final total score of each element of the market attractiveness and
the business strength unit, we plot the point of the brand to the nine cell matrix.
The information of the market attractiveness as the Y-axis and the business unit
strength as the X-axis.
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Market
Saswco
Brutal
Weshaki
Rockweld
From the product portfolio matrix, we can conclude the condition of CV. Saswco
Perdana’s brand position:

Saswco
The plot of product portfolio of Saswco (almost 60% part of the pie chart) is tend
to has low market attractiveness with high business strength. The position shows
that Saswco have to protect the position and re focus the business strategy. It
means that CV Saswco Perdana should to:
a. Manage the current earnings to be more efficient and productive which will
resulting an improvement performance of financial condition for further
development
b. Concentrate on attractive segments to be focused on the niche market and to
make the business settle and keep continue for longer time
c. Defend the brand’s strength and it will be better if there is an innovation
during maintain the brand itself.

Weshaki
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
The plot of product portfolio for Weshaki (almost 60% part of pie chart) is tend to
has low market attractiveness with medium business strength. The position
shows that Weshaki is have to manage their self to keep gain earnings. It means
that CV Saswco Perdana should to:
a. Protect position in most profitable segment for Weshaki product that hopefully
could be the concentration of the market
b. Upgrade product line for Weshaki product to make the customer more
attractive to purchase the product
c. Minimize investment in Weshaki product to balance out the waste expense
with the expected earning

Brutal
The plot of product portfolio for Brutal has low market attractiveness with medium
business strength. The position shows that Brutal is have to manage their self to
keep gain earnings. It means that CV Saswco Perdana should to:
a. Protect position in most profitable segment for Weshaki product that hopefully
could be the concentration of the market
b. Upgrade product line for Brutal product to make the customer more attractive
to purchase the product
c. Minimize investment in Brutal product to balance out the waste expense with
the expected earning

Rockweld
The plot of product portfolio of Rockweld has high market attractiveness with low
business strength. The position shows that Rockweld is have to invest to build for
further development. It means that CV Saswco Perdana should to:
a. Challenge for leadership that will make Rockweld be a leader for its market
segments and keep developing the brand
b. Build selectively on strength that can increase the attractiveness of Rockweld
in its market segments
c. Reinforce vulnerable areas that can makes declining for Rockweld
attractiveness in its market
5. Summary and Conclusions
The product portfolio in strategic approach application is the efficient tools for
management in small business to see the position of the state of the products and
also to see the direction of the strategic decision to be taken. In this study, the object
company suggested to grow or invest on Rockweld brand while the other brand
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
commonly tend to be more managed to increase the company development.
Rockweld decision point is to challenge for leadership, build selectively on strength,
and reinforce vulnerable areas. Saswco decision point is to manage current
earnings, concentrate on attractive market and defend the brand strength while for
the rest brand, they suggested protecting position in most profitable segment,
upgrading product line and minimizing investment.
End Notes
References
Bamberger, I 1982, Portfolio Analysis for the Small Firm, Long Range Planning, Vol
15, No, 6, pp.49-57.
Linneman, RE and Thomas, MJ 1982 A Commonsense Approach to Portfolio
Planning, Long Range Planning, Vol 15, No. 2, pp.77-92.
Cooper, RG and Edgett, SJ 1999, New Product Portfolio Management: Practices
and Performance, J Prod Innov Manag, Vol. 16, pp. 333-351.
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