Maximazing Revenue and Competitive Advantage of Small And Medium-Sized Enterprises in Binjai, Indonesia: A Community Service Study

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1 Maximazing Revenue and Competitive Advantage of Small And Medium-Sized Enterprises in Binjai, Indonesia: A Community Service Study Muhammad Bukhori Dalimunthe 1, Fitri Yani Panggabean 2 1. Department of Economic Education, Universitas Negeri Medan, Indonesia 2. Department of Accounting, Universitas Pembangunan Pancabudi, Indonesia daliori86@gmail.com Abstract Small and medium-sized enterprises (SMEs) should be adapt to the fluctuative business environment that actually increasing competitive advantage competition as well as sales competition, so that SMEs must have the uniqueness of the product to have a competitive advantage to be sustainable in the market. The aim of this service is to encourage SMEs, as partner of Community Service Institution, Universitas Negeri Medan (LPM-Unimed) to maximizing the productivity and revenue with creating competitive advantage to lead the market. We have doing training and mentoring the community of SME in West Binjai, North Sumatera, on topics eficiency of production and design of packaging. This activity done at January to July, 2016 in Suka Maju village, West Binjai districs, where 33 km from LPM-Unimed. LPM-Unimed have at least 15 enterpreneurs as partner over there, while they have potential banana chips as iconic product from Binjai city. The outcome and achievement of this community service activity is devided on two part. First, enhancing skills of SMEs to make (a) diversified product with sweet, salty, and spicy flavour, (b) design of packaging to be eye-catching, and (c) we encourage SMEs to legalizing their business to Departement of Health of Binjai and registering the Halal Certificate to Majelis Ulama Indonesia-North Sumatera. Second, we attempt to enhancing the revenue through market expansion with consignment methods on supermarkets and campuses in the city of Binjai and Medan. Keywords: Small and medium-sized enterprises (SMEs), Competitive Advantage, Community Service. I. Introduction Companies that want to increase revenue and competitive advantage can implement strategies that harness the power of internal and external opportunities to avoid external threats and internal weaknesses (Porter, 1985; Barney, 1991; Chen et al, 2009). Information from the company's internal and external can be used by managers to facing business competition. For small businesses the information can be used to diversify the products, packaging design, and legality of the product. Smaller firms in the Suka Maju village, Binjai western districts where a community service partners only produce banana chips by means of a simple and insipidity. For partners who produce banana chips can perform competitive advantage through the diversification of banana chips with various flavors, such as sweet, salty, and spicy flavour. Diversified product of banana chips required creativity, innovation, and promotion. Thus, diversified banana chips can make products competitive so that it can meet the tastes and needs of consumers, expand markets, add value, and increased revenue. 165

2 Business potential banana chips produced by one of the partners named Mr. Rino Hartono capable of producing an average daily 5 banana bunches are processed into 120 packets of crisps banana with 2 sizes of 20 packs of size 2.5 ounces with the selling price of 10,000 IDR per pack and 100 packs of 1.5 ounces with a selling price of 5,000 IDR per pack. Banana chips produced only insipidity and sold on the stores around the house. The production capacity can still be improved because there is still a huge potential market to sell banana chips, so there are opportunities to increase sales by diversifying products various flavors of banana chips. So much potential business partners in the Suka Maju village, needed an effort to empower partners to be able to compete in the market and developed into an economic independently. II. Teoritical Framework Competitive Advantage Facing the competition of business the smaller firms will make every effort to survive and excel from its competitors. Smaller firms commit all their resources in order to create a competitive advantage to get the trust of consumers. Companies can invest internally and externally in creating a competitive advantage. Investments in the external determinant-relationship learning, and the internal determinantabsorptive capacity, is more important for companies to enhance their innovation performances and competitive advantages (Chen et al, 2009). Competitive advantage appears accidental to their business operations around the company (Jennings and Beaver, 1997; O Donnel et al, 2002). Smaller firms generally operate in the same area, so the competition accidentally happens between smaller firms. Market share is not widespread to make smaller firms should be able to plan marketing strategies out of the area. Their products were revamped to be able to compete outside the area. The owner-managers design their products to be unique and a must have product legality is something that must be considered in order to enter a new market. Community Service Institution Universitas Negeri Medan Small and medium enterprises (SMEs) to facing competition in the market have to prepare the product in order to be accepted in the market. Currently, many products marketed by SMEs has not been acceptable to the market legally. The owner-managers are still oriented to production, their knowledge is still weak in product marketing. Many products are only sold to stores which are located around the area of the house. The products sold are good but not feasible of packaging and legal aspects. Smaller firms have a huge potential to be developed so as to increase revenue. The universities a strategic role in the development of the nation through Tridharma college. Community Service Institution Universitas Negeri Medan (LPM- Unimed) encourage SMEs with grants service Science and Technology for Community (IbM). Coaching is done to SMEs banana chips in the Suka Maju village form of activities to improve competitive advantage. The schedule for implementation of activities can be seen in the figure 1. Figure 1. Methods of Implementation Activities Community Service Justification Problems Method Approach supported Plan Activity supported Diversified Products Packaging Design outcome outcome Various Flavors Attractive packaging Procedure Activity Participation Partners 166

3 III. Research Methods This research was undertaken to increase productivity and revenue through competitive advantage. Competitive advantage is created through training of SMEs owner-managers referred to as a partners. From the results of the training was conducted observation of the activity and behavior of partners to apply the material obtained in running the business. This behavior is demonstrated by the awareness of SME owner-managers to increase product capacity and revenue by diversified products, packaging design, and legality of the products. This research was conducted from January to July 2016 with the number of samples are 15 entrepreneurs banana chips contained in Suka Maju village. This research analyzes the social and economic changes of SMEs ownermanagers that used qualitative research methods. Bungin (2007) said that some form of observations that can be used in qualitative research, that is participatory observation, observation is not structured, and unstructured observation group. Methods of data collection using participatory observation, where researchers observe and record the activity of respondents directly. Positioning a qualitative researcher to be one of the keys to success to get the data that is authentic. IV. Result and Discussion Observations Phase I In phase I, conducted training of diversified products to partners on 12 April The material provided to partners through training in production make banana chips with various flavors. The training was conducted by a lecturer from the Universitas Negeri Medan directly provide tutorial starts from preparing raw materials to complete the process of making banana chips with taste salty, spicy, and sweet. From the results of observations made at the event, partners indicated very enthusiastic training with questions and comments provided by the participants during the training of production. After training on diversified products, it was observed the first phase of the production partners in the effort to make banana chips wide sense. Phase I observations made to 15 partners starting April 13 until May 15, Results of Phase I observations indicate that there are eight partners were diversified products with a variety of flavors and has sold these products to stores which are located around the house partners. Partners were diversified products gain more profits than selling products insipidity. Variations flavors of banana chips create new markets, where consumers try different flavors of banana chips. Observations Phase II In phase II, performed community service activities such as training product packaging design. This activity was conducted on May 18, 2016 which aims to increase the value of the product. Materials provided by the lecturer of the University of Medan as create an image that displays an icon of the village Suka Maju products, designing packaging design animated backgrounds, and display examples of good product packaging. This training only provides information and knowledge to partners about the importance of product packaging appearance. After the training package design, it is observed the second phase to the production of business partners. The results of the second phase observations indicate that there are five partners who have made the design of the packaging in its products. Partners make packaging design assisted by students from Universitas Negeri Medan to create a design in accordance with the idea of a partner. The 167

4 products have been packaged to be sold disupermarket interesting. After the program ended acquired three partners where the product has been marketed and cafeteria disupermarket in universities located in the city of Binjai and Medan. While the two other partners in the process of handling the legality of operations and products. Discussion A smaller firms that survive in the competitive business should have the advantage of other competitors. Competitive advantage that will be created through community service conducted by a lecturer from the Universitas Negeri Medan form of training diversified product and packaging design. Participation in the training partners very well indicated on the willingness of partners to provide training, materials, and frequently asked questions during training. A total of three partners' products have been sold in the supermarket and cafeteria in the universities in the city of Binjai and Medan. The product has a variety of taste salty, spicy, and sweet and has had an attractive packaging design and product legality of Binjai City Health Department and the Halal Certificate from Majelis Ulama Indonesia. However, not all partners implementing the training materials provided by the lecturer. Partners can not accept changes to the face of competition and market expansion. Partners still believe that the experiment can still compete in the market. This is one factor that causes many SMEs that can not develop optimally because there is no awareness to expand its business in the future. Table 1. Matrix Achievement Community Service Training Diversified Packaging Behavior Products Design receive 8 5 reject 7 10 The results of this research still has determinate, especially the use of the method of observation that have not been explained in detail the activity of partners in implementing community service. In the future, researchers can further complement the limitations of this research using data in the form of primary data and secondary data. V. Conclusion The purpose of this research is to improve the productivity and revenue through competitive advantage. The research was conducted for the 15 partners from January to July The research was conducted through observation in community service activities. The partner's behavior in accepting changes to create a competitive advantage is a key factor for the product to compete in the marketplace. There are eight partners who receive training product diversification and five partners who receive training on packaging design. Of all partners, acquired three partners who have diversified products, packaging design, and the legality of the business and the products that can compete in the banana chips market share of new ones as supermarket and cafeteria in the universities. References (1) Barney, J Firm Resources And Sustained Competitive Advantage. Journal of Management, 17(1), (2) Bungin, Burhan H.M Penelitian Kualitatif : Komunikasi, Ekonomi, Kebijakan Publik, dan Ilmu sosial. Jakarta : Kencana Prenama Media Group. 168

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