SYNDICATE 10

Dian Maya Sari - 29118063

Elizabeth Elvienna - 29118060
Gema Rendrahadi - 29118194
I Made Devantara - 29118149

KUDO CASE

1. Is it the solution for supporting the development of Kudo by joining Grab? Are there any
other alternatives?
In our opinion, it’s a great development opportunity for Kudo by joining Grab. This
happens because:
● Opportunities To Grow
In this case, it’s said that “Kudo was not satisfied yet with the condition. The founders
thought that Kudo still need to be developed”. By joining Grab, Kudo will be supported
by Grab in terms of funding and facilities (approximately US$ 100 million). Kudo
operation also become integrated with Grab (Grab Pay). In terms of efficiency and
effectiveness, this collaboration may help Kudo to improve their activities and
performances. Moreover, Kudo will have larger access to other regions such as Southeast
Asia (Malaysia, Singapore, etc) so there are more opportunities for company expansion
and growth.
● Shared Vision
Kudo operated a network of more than 400,000 authorized agents across 500 Indonesian
towns and cities, linking consumers with online merchants and service providers. Kudo
has a vision that is “creating e-commerce payment solutions for people who do not have
access to it”. In the other hand, Grab vision is “Forward Together” which is being a
platform that brings people together to make life better for all. Grab President Ming Maa
told TechCrunch in an interview earlier this month:
“These are real problems that I think deserve a solution in way that hasn’t been seen in
markets today. 80-90 percent of the Indonesian market hasn’t really had access to mobile
payments, modern banking, or modern credit, which we think it’s so important to develop
Indonesia’s digital economy,”
 With the in line vision of both parties to provide better access for people especially the
underserved, it’s easier for them to collaborate and reach the company goals.
● Easier Access For The Underserved
Combining Kudo’s innovative Online to Offline e-commerce solution and extensive
agent network with GrabPay and Grab’s massive and active customer base will advance
the mission of providing millions of people across Indonesia with increased access to
convenient cashless payments and new income opportunities, while also unlocking
compelling new ways to boost online spending that can increase both company
profitability.

In our opinion, given by the need of Kudo to be developed larger that requires huge funding,
the other alternative that may works for Kudo besides joining Grab is through venture capital
(Investor (venture capitalist) invest their funds (venture capital) in the business. Then the
return or profit that flows to the venture capitalist depends on the performance of the
business.) But in order to achieve this, Kudo has to own a capable team with potential to
grow the business in the long term and to carry it to high levels of success so the investors
will feel confident in funding the business. Moreover, the company’s businesses must have a
strong value proposition in the form of a proven demand for great products and services with
a competitive edge that is long lasting.
2. What is the most appropriate form of financing for Kudo?
From the current situation, the form of financing that may be appropriate for Kudo is:

Form of Financing Definition Details

Merger and Mergers and acquisition When two businesses (Grab and
Acquisition (M&A) represent the growth or Kudo) are combined into one,
expansion of a business. the value of the resulting
company is equivalent to the
A merger refers to an total value of the two pre-
arrangement where two existing companies. The
companies come together to combination of two companies
form one company with the aim promises more value than each
of expanding their business company operating alone.
operations. So, the merger and acquisition
may create additional value,
An acquisition is arrangement which is called “synergy value”.
where one company acquires
another company with the aim When Grab and Kudo
of integrating the new company integrates, they can achieve
into their business model. synergy value by
complementing each other
business. In this case for
example, Grab will get access to
around 400.000 agents and in
the other hand Kudo will get
support in funding and facilities.
This will give mutual benefit to
the overall performance of both
and increase company
competitiveness.
3. If you have to join Grab, how to ensure this financing process runs smoothly?
● In line Vision and Mission
All parties need to understand the vision of the acquiring companies (Grab). This means,
all employees have to understand why an acquisition is necessary and it’s in their best
interest. It’s very important to ensure that the employees are in line with the company
vision and mission so they will understand what the company goals are. Transitioning
(Kudo joining Grab) is not easy because some people opposed changes, so it takes the
senior management’s leadership to get everybody on the same page to prevent culture
clash and successfully implement the acquisition.
● Sense of Belonging
Sense of belonging have to be built between Kudo and Grab through ‘kinship situation’
to the employees. With this, the employees will have the sense of responsibility and feel
engage to serve the company with their best efforts.
● Creating Synergies
Create value added activities that mutually beneficial for both parties. For example:
Through the integration between Kudo and Grab, people can apply become a Grab driver
through Kudo application(Exhibit 1).
● Transparency
Kudo and Grab integration should be based on trust and openness regarding their
activities and performances. For example, Kudo share the comprehensive annual
financial report to provide financial information that helps Grab as a partner to review the
business performance and examine the health of business so they can make decisions
regarding the allocation of capital or resources.
4. How to convince Kudo employees in organizational development referring OD
framework?
● Organizational Development is an organization-wide effort to improve organization’s
effectiveness and efficiency to enable the organization to achieve its strategic goals. It’s
also a systemic learning and development strategy intended to change the basic of beliefs,
attitudes and relevance of values, and structure of the current organization to better
absorb disruptive technologies, shrinking or exploding market opportunities and ensuing
challenges.

Resource: Western Washington University, 2015.

Based on above OD Framework, we can try to convince Kudo employees through three
stages:
1. WHY

Organizational development (OD) need a commitment, support and involvement from all
parts of organizations. At first, the company should do an assessment about the current
company condition also the changes and problems they’re facing then explain to the
employees why they need to developed the organization. In Kudo, the leaders should
explain about the changing condition after they’re joining Grab and the necessity to adapt
to the new condition. The workplace situations might be changing because Kudo is
expanding from 300 employees to 6000 employees. This will cause some challenges to
face such as resistance from employees, changes in work patterns, demands for
innovation, and changes in organizational structure to financial structures.

2. WHAT
What actions that the company need to take in order to adapt the changes and achieve the
OD goals?
Firstly, Kudo should build situational awareness to their employees that their workplace
behavior is changing. They should re-evaluate the organization’s core values, norms, and
desirable behaviors in the company (organizational clarity). Reinforcing organizational
clarity is one of the most effective ways to build trust, effective communication, conflict
resolution approach, and commitment of all the employees.

Secondly, Kudo can measure the condition of company through Organizational Health
Index (OHI) as one of the development tools. There are nine elements of OHI: leadership,
direction, innovation, environment and values, external orientation, accountability,
coordination and control, motivation, and capability. From this, Kudo will be able to
assess what aspect that need to be improved in order to increase the company
performances and achieve the OD goals.

3. HOW
How to ensure that the development process runs smoothly?
Kudo should review about their key success factors, organizational alignment and the
change management (implement strategies for controlling change and helping people to
adapt to change) by monitoring the actions, give feedbacks and do evaluation and
corrective actions to ensure that the transition goes smoothly. Moreover, Kudo also needs
to provide coaching, facilitating and mediating for employees in order to guide them
during the development process to make sure all the employees understand and also
ready for the changes.
 Through OD, Kudo will be able to develop organizational processes that not only get
work done effectively, but also ensure the empowerment, development and commitment
of all members of the organization. The ultimate outcome is improved operational
efficiency and organizational effectiveness.

5. What is the example of Kudo development in term of Fintech that can be duplicated by
other SMEs in Indonesia?
● The Online-to-Offline (O2O) business model.
As an online-to-offline platform, Kudo offer the way that digitizes retail transactions that
enables people who have limited access to banks and do not master technology to shop or
make payments online.
● Application on smartphone
This application that can facilitate the transactions between seller and consumer become
easier. People can easily top-up their balance and then use them to make payments or
shop the products (digital products, physical products and financial services) that they
need through the Kudo application.
This kind of breakthrough can be duplicated by SME’s in order to make their transactions
with consumer more effective and efficient using the technology platform.
References:
https://www.profitableventure.com/funding-mergers-acquisitions/
https://hrdevelopmentinfo.com/organizational-development-definition-uses-and-techniques/
https://wp.wwu.edu/professional/2015/10/27/organizational-development-content-framework/
https://techcrunch.com/2017/02/13/grab-kudo/
https://www.techinasia.com/grab-kudo-confirm-deal-boost-digital-payments
https://www.marketing-interactive.com/grab-acquires-indonesian-e-commerce-platform-kudo/
https://www.forbes.com/sites/bill-rader/2017/05/30/7-ideas-to-make-your-merger-or-acquisition-
a-success/#6d2bc0303720
https://www.grab.com/id/en/press/business/grab-kukuhkan-keunggulan-di-bidang-pembayaran-
non-tunai-lewat-kesepakatan-untuk-mengakuisisi-kudo-platform-e-commerce-online-untuk-
offline-o2o-terkemuka-di-indonesia/
Exhibit 1. Synergy Value between Kudo and Grab