MOBNAS? Achadiat A. Suhadi Solo, 10 Desember 2011

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Damon Boone
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1 MOBNAS? Achadiat A. Suhadi Solo, 10 Desember 2011

INDONESIA : MARKET OF OPPORTUNITY Indonesia, a very potential market with total population of 228.

2 INDONESIA : MARKET OF OPPORTUNITY Indonesia, a very potential market with total population of millions people in % 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)

3 GROWTH

4 CAR SALES 1,000,

5 MARKET SHARE

6 DOMINATION OF JAPANESE BRANDS

7 TRANSPORT EQUIPMENT & MACHINERIES IMPORT VALUE

8 77% OF THE PARTS IS SUPPLIED BY LOCAL SUPPLIER

9 GOVERNMENT POLICY LOW PRICED CAR (Rp. 60,000,000/unit) -Encourage indigene new entrant to invest - Especially in part manufacturing business

10 PORTER S FIVE FORCESS ON AUTOMOTIVE INDUSTRY SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of supliers and firms in industry Presence of substitute inputs Threat of forward integration relative to threat of backward integration by firms in industry Cost relative to total purchases in industry 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 Fixed(or Expected storage) retaliation costs/value added Intermittent overcapacity Industry growththe DEGREE OF RIVALRY Product differences Concentration and balance Brand identity Fixed (or storage) costs/value added Intermittent overcapacity Switching Industry costs growth -> Product differences Informational Brand identity complexity Diversity Switching of competitors costs -> Informational complexity Corporate Diversity stakes of competitors Corporate stakes Exit barriers 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 THE THREAT OF SUBSTITUTES Relative price performance of substitutes Switching costs Buyer propensity to substitute

11 ENTRY BARRIER Absolute cost advantages Proprietary learning curve X Industry Attractiveness High Access to necessary inputs Proprietary low-cost product design Government policy Economies of scale Capital requirements Proprietary product differences X X X X Force Internal rivalry Entry Substitutes/C omplements Threat to profits High Low to Medium Medium to High Brand identity Switching costs Access to distribution Expected retaliation Supplier power Buyer power Medium Medium

12 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

13 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

14 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

15 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

16 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 technopreneursupport with long term commitment.

17 Typical Ramp Up Steps

18 Typical Initial Cost Necessary Items 1. Product Development 2. Market Proofing 3. Production Tooling 4. Production Facility 5. Marketing & After Sales 6. Raw material, WIP & Finish unit stock TOTAL: Amount Rp. 2,000,000, ,000, ,- 30,000,000,000,- 5,000,000,000,- 10,000,000, ,000,000, ,000,000,000

Systems and Strategy. By Shamira Dias. Introduction

Systems and Strategy. By Shamira Dias. Introduction Systems and Strategy By Shamira Dias Introduction Begins with system planning activity that determines which projects are started according to the needs of the enterprise Enables business plan to be translated