STRATEGIC MANAGEMENT

Asprillya Balqist
Reza Fahlevi Rahman
Dwinanda Rizal
Arfan Nur Akbar
Kevin Patria

COMPANY PROFILE
PT. Indofood CBP Sukses Makmur Tbk., better known as Indofood, is
a major Indonesian company involved in the food industry The company's
headquarters are in Jakarta
Indofood was founded in 1968 as Panganjaya Intikusuma till 1993, before
changing to its current name in 1994. It is one of the companies owned by the
family of Sudono Salim under the Salim Group.

Brief History
1990
Incorporated as PT Panganjaya Intikusuma. Established 51:49
joint venture (JV) with Seven-Up Netherlands B.V., an affiliate
of PepsiCo Inc. to enter into snack foods industry (The JV has
been transferred into ICBP in 2010 as part of the restructuring of
CBP Group)

1994
Changed its name to PT Indofood Sukses Makmur. IPO of 763
million shares at Rp1,000 par value per share, listing on the IDX.
1995
Acquired Bogasari flour mill
1997
Acquired 80% equity stake in a group of companies involved
implantations, agribusiness and distribution.

2006
Acquired 55.0% equity in shipping company Pacsari Pte. Ltd.
(Pacsari).
Acquired additional plantation companies in West Kalimantan.
2011
On June 9, 2011, SIMP, a direct and indirect subsidiary of the
Company, conducted an IPO and listed its shares on the IDX.

2012
ICBP established two JV companies with Asahi Group Holdings
Southeast Asia Pte. Ltd. (Asahi) to enter into the non-alcoholic
beverage market in Indonesia.
2014
ICBP and Asahi, through its JV subsidiaries, acquired assets
related to the packaged water business including the brand of
Club.

Employee
To be sustainable, Indofood recognizes that its rapid progress depends
largely on the support of its human resources. Its workforce of some 80
thousand employees is an invaluable asset to support the Companys
current performance and growth. However, to maintain and improve its
performance in the future, Indofood needs a highly competent and qualified
workforce that is oriented towards the Companys future needs. Company
performance is dependent upon workforce quality, as a sound business
strategy is difficult to execute without the support of competent human
resources. Therefore, the Company is committed to continue building its
human resources and organization to address both current and future
challenges.

Products - Noodles
The Noodles Division produces and markets a range of bag noodles,
cup noodles, egg noodles and instant vermicelli, and represents one
of the worlds largest instant noodle producers with an annual
capacity of more than 16 billion packs. Its diverse brand portfolio
includes Indomie, Supermi, Sarimi, Sakura, Pop Mie, Pop Bihun and
Mi Telur Cap 3 Ayam, catering to all market segments. These brands
are renowned for their quality and high level of acceptance by
consumers, and have won numerous awards for excellence and
brand status.

Products - Dairy
The Dairy Division is operated by Indolakto, a 68.57% indirect
subsidiary of ICBP and one of the leading producers of dairy products
in Indonesia. It produces a variety of dairy products including
sweetened condensed milk (SCM), ultra-high temperature (UHT)
milk, sterilized bottled milk, pasteurized liquid milk, powdered milk,
butter and ice cream. Its flagship brand Indomilk has enjoyed strong
market presence for more than 40 years and is one of Indonesias bestknown brands. Other brands include Cap Enaak, Tiga Sapi, Indomilk
Champ and Calci Skim for milk products, Orchid Butter for butter,
and Indoeskrim for ice cream.

Products Snack Foods

The Snack Foods Division comprises two business units, snack foods
and biscuits. The snack foods unit is a JV company with PepsiCo that
produces modern and traditional snacks including potato, cassava
and soybean chips, curly and prawn crackers, and extruded snacks
marketed under brand names such as Chitato, Lays, Qtela, Cheetos
and JetZ, all of which enjoy strong market presence. The biscuits
unit is solely operated by ICBP and produces a range of biscuit
brands targeted at two different market segments: Trenz for youths,
and Wonderland for families.

Vision and Mission

Year

Vision

Mission

2009

To Become a Total Food Solutions

Company

To continuously improve our

people, our process and our
technology
To produce high quality,
innovative, and affordable products
which are preferred by customers
To ensure availability of our
products to customers domestically
and internationally
To contribute to the improvement
of the quality of life of Indonesians
with emphasis on nutrition
To continuously improve
stakeholders value

Vision and Mission

Year

Vision

Mission

2013

A Total Food Solutions

Company

To provide sustainable
solutions for food needs
To continuously improve our
people, processes and
technologies
To contribute to the welfare
of the society and
environment in a sustainable
manner
To continuously improve
stakeholders value

Vision

Graphic

Directional

Focused

Flexible

Feasible

Desirable

Easy To
Communicate

A Total
Food
Solutions
Company

YES

YES

YES

YES

NO

YES

YES

Mission

Criteria

To provide sustainable solutions for food needs

To continuously improve our people, processes
and technologies
To contribute to the welfare of the society and
environment in a sustainable manner
To continuously improve stakeholders value

Employee
Customers
Products
Market
Technology
Survival growth profit
Philosophy
Self concept
Public image

Rivalry Among Competitors

Current

Future

Number of quality balance

competitor

Product features

Capacity increase

Diversity of competitors

Overall

14

13

Barriers to Entry
Current

Future

Economic of scale

Product differentiation

Brand identification

Switching Cost

Access to distribution channels

Capital Requirement

Access to technology

Government protection

Experience effect

Overall

37

36

Barriers to Exit
Current

Future

Asets specialization

Cost to exit

Government and social restriction

Overall

11

11

Availability of Substitutes
Current

Future

Availability of close substitutes

Users switching cost

Substitute producers
profitability & aggresiveness

Substitutes price/ value

Overall

15

15

Power of Buyers
Current

Future

Number important buyers

Buyers switching cost

Buyers threat of backward

integration

Industry threat of forward

integration

Contribution to quality or service of

buyers product

Buyers profitability

Overall

21

22

Power of Supplier
Current Future
Number of important suppliers

Availability of substitutes for supplier product

Differentiation or switching cost of suppliers product

Suppliers of contribution to quality or service of the industry product

Important of the industry to suppliers profit

Overall

18

18

Overall Assessment
Current

future

Barriers to entry

Barriers to exit

Rivalry among competitors

Power of buyers

Power of suppliers

Availability of substitutes

Overall Industry Assessment

Overall industry
assesment

Current

Future

External Factor Analysis

weight ranges : 0.0 (not important) to 1.0 (very
important)
rating : between 1 and 4 the firms current strategies respond to
the factor, where :
4 = the response is superior,
3 = the response is above average,
2 = the response is average, and
1 = the response is poor.
Weight Score : weight x rating

Key external factor

Weight

Rating

Weight score

0.2

0.6

0.1

0.4

0.07

0.14

0.05

0.15

OPPORTUNITIES
Domestic and global market is still wide open to be exploited,
either as a new area of expansion and the birth rate is quite
high. Instant noodle market in Nigeria has 38 million
customers. It also Indomie exported to more than 50 countries.

Rising demand, due to the decline in purchasing power caused

by the rise in food prices but the national minimum wage only
increase by 10%.

The pattern of consumption of instant foods are high, which is

estimated to have a lifestyle community that is approximately
50% of the total population.

Slow technological change in the noodle industry

THREATS

Weight

Rating

Weight Score

The existence of such a substitution for instant food and instant

0.05

0.1

Competitors who have a quality product with aggressive advertising

0.2

0.6

The possibility of the anti MSG and other harmful substances as

0.1

0.4

0.13

0.39

0.1

0.3

porridge instant rice

well as the threat of anti-monopoly law (Article 52 paragraph 2 of

the Antimonopoly Law)
High dependence with suppliers of raw materials wheat in Australia,
where wheat prices are likely to rise, resulting in lower profit margin
of 3.7% in 2006 to 2.1% in 2007. The price of wheat rose due to bad
weather and the level of world wheat supplies low.

Low credit availability in the market due to the global financial crisis
to fund overseas expansion, namely Nigeria and Saudi Arabia

TOTAL

3.08

EFE MATRIX PT INDOFOOD

The total weight score of Indofood is 3.08 which means Indofood is
responding in outstanding way to existing opportunities and threats
in industry. The firm strategies effectively take an advantage of
existing opportunities and minimize the external threats.

CPM
Indomie

Mie sedap

Critical Success Factor

Weight

Rating

Score

Rating

Score

Advertising

0.05

0.1

0.15

Product Quality

0.2

0.8

0.6

Product Innovation

0.1

0.4

0.2

Price competitive

0.15

0.45

0.45

Customer loyalty

0.15

0.6

0.45

Global expansion

0.2

0.4

Sales distribution

0.05

0.15

0.1

Availability of raw
material

0.1

0.3

0.3

TOTAL

3.8

2.65

INTERNAL EVALUATION MATRIX

Key internal
factors

Weight

Rating

Weight score

Product variance

0.3

1.2

Market share 70%

0.3

1.2

Wide distribution
channel

0.2

0.8

MSG

0.2

0.6

TOTAL

STRENGTH

WEAKNESSES
3.8

The Internal Factors Evaluation Matrix of PT. Indofood is 3.8 which

means Indofood respond is outstanding to the strength and
weaknesses.

SWOT ANALYSIS

STRENGTH
Product variance
Market share 70%
Wide distribution channel
Brand image
Have a reliable staff, supported by innovations that continue
to rely on the team's performance
Has penetrated overseas markets
Target markets reached all circle
Aggressive in advertising
Production has penetrated as far abroad
Has a separate group that handles the distribution of its
products
Many stock points strategically located in the region
Have internal R & D division that does not require an
external R & D

OPPORTUNITIES
Domestic and global market is still wide open to be
exploited, either as a new area of expansion and the birth
rate is quite high. Instant noodle market in Nigeria has 38
million customers. It also Indomie exported to more than 50
countries.
Rising demand, due to the decline in purchasing power
caused by the rise in food prices but the national minimum
wage only increase by 10%.
The pattern of consumption of instant foods are high, which
is estimated to have a lifestyle community that is
approximately 50% of the total population
Slow technological change in the noodle industry

WEAKNESSES
MSG
Has a huge marketing cost

THREATS
The existence of such a substitution for instant food and instant
porridge instant rice
Competitors who have a quality product with aggressive advertising
The possibility of the anti MSG and other harmful substances as well
as the threat of anti-monopoly law (Article 52 paragraph 2 of the
Antimonopoly Law)
High dependence with suppliers of raw materials wheat in Australia,
where wheat prices are likely to rise, resulting in lower profit margin
of 3.7% in 2006 to 2.1% in 2007. The price of wheat rose due to bad
weather and the level of world wheat supplies low.
Low credit availability in the market due to the global financial crisis
to fund overseas expansion, namely Nigeria and Saudi Arabia

SWOT

Business Model Of Indofood

Key Partner

Key Activities Value

Proposition
Bogasari
Production
AgriBusines Marketing
Dairy
Producing
s
product
Distributio
Food
Own
n
seasoning
Key
China
Snack food
Resources
Edible oil
Minzhong
Food
and fats
Flour
corporation Distributio Flour
Pasta
limited
n
Packaging
Packaging
AgriBusines
s

Cost Structure

Costumer
Relationship
Advertisem
ent to
Costumer
Call Center
Channels

Large Scale
Distribution

Manual
Distribution
Center

Revenue stream

Costumer
Segment
Retail
Market
Traditional
Market
Convenient
Store

Key BUSINESS
Partner
Key Activities
Value
WINGS
MODEL
Group
Proposition

Djarum
(Pulau
Gadung
Trade
Center)
PT
Adyabuana
Persada
(Hercules
Ceramic
Siam
Cement
Thailand
(Gipsum)

Production
Marketing
Producing
Own

Key Resources

Flour
Distribution
Packaging
AgriBusiness

Costumer
Relationship
Advertiseme
nt to
Costumer
Call Center
Cust service

Wings
Household
Wings Care
(Wings
Surya & Lion Channels
Wings)
Wings Food Large Scale
(Alam Segar)
Distribution

Manual
Distribution
Center

Costumer
Segment

Retail
Market
Traditional
Market
Convenient
Store

Competitive Advantage
Internal

External

Range almost all market segment.

Affordable price.
A lot of variant flavor

Language Label
Expand market to global world
Make healthy noodle.

Porter Generic Strategies

Indofood Value Chain Analysis

Value Chain

Primary Activities

Inbound Logistic
Operation
Outbound Logistic
Marketing & Sales
Services

Inbound Logistic
Indofood

Wings Food

This activity is regarding how Indofood

provide good quality products supported with
good ingredients that most are come from
their own subsidiary.

Understanding the purchase and chose to

evaluate suppliers, maintain relationships
with suppliers so as to improve the
smoothness and efficiency of the company

Operation
Indofood

Wingsfood

- The operations of the Indofood Group

span six separate divisions namely
Noodles, Dairy, Snack Foods, Food
Seasonings, Nutrition & Special Foods and
Beverages.
- Customization on each product of
Indofood based on customers demand
To be responsible in maintaining the
production process to achieve production
targets while concentrating on the quality
of goods, equipment, maintenance, and
efficiency of use of raw materials.

Outbound Logistic
Indofood

Wingsfood

Spreading the product into retail market.

Exporting the product into more than 60
countries.

Spreading the product into retail market

Exporting the product into several
countries, especially Saudi Arabia.

Marketing & Sales

Indofood

It basically targets the people till the age of

55, including working people, families,
teenagers, children, and traveller.
There are lot of variants of each product.
Indofood has spread their product into a
large number of customer.
Good ads on TV

Wingsfood

Product marketing. Identifying target

markets and potential competitors.
Identifying customer needs, developing
integrated product strategies for each
brand and creating brand identity.
Working in collaboration with the sales
and R&D departments, as well as other
departments.

Services
Indofood

Indofood

Indofood provides call center for customer

care of each product.

Provides customer care by call center

Firm Infrastructure
INDOFOOD

There are 18 production

facilities in Indonesia, 1
malaysia, 8 China, 1 Brasil, 1
Philipine.

WINGSFOOD

Procurement
INDOFOOD

It basically deals with how to

get the required resources
It has to maintain the quality
Their strategy to take some
ingredients from their own
subsidiary and get some
imported helps them maintain
the quality as well as low prices.

WINGSFOOD

Technology Development
Indofood

Implementing ERP
Must have a good

Wingsfood

Must have a good mastery of IT. Capable of

organizing hardware, software and
network infrastructure and of dealing with
any problems that arise in the field. Must
have a solid knowledge of programming
and systems analysis, and be capable of
providing solutions to problems. Capable
of developing and maintaining cuttingedge communications and information
systems. Able to work with other
departments.

Human Resources
Indofood

With a total workforce of approximately 62

thousand, Indofood believe that employees
are one of the most important group of
stakeholders and an important element in
the success continues. The Company
believes that every employee has the
capacity to excel and contribute to the
success of not only the company, but the
nation itself.

Wingsfood

Committed to the development of human

resources and the organization so as to
improve business efficiency and
productivity and continuously increase
value both for the Company and
employees. Must have an in-depth
understanding and mastery of human
resources, recruitment and training
strategies, as well as compensation and
benefits.

Long term objective

Long term objective PT Indofood
Provide the best quality product with affordable price
Keep customer and distributor loyalty

STRATEGY of PT INDOFOOD

DEFINITION AND CONCEPT OF STRATEGIES

Strategy is derived from the ancient Greek language 'Stratos which is a term in the military field
that refers to the action in general. Strategic management is the process of crafting decisions,
activities, or a set of managerial plans to achieve corporate objectives within a specified period.
Process of managerial plans :
1. Environmental scanning
2. Strategic formulation
3. Strategic implementation
4. Evaluation and control
The purpose of company to make management strategic :
5. Stakeholder value
6. Customer value
7. Competitive advantage

Strategic in PT Indofood
1.

2.

3.
4.
5.

Product development strategy : increase sales by improving present products or services or creating new one. For example :
Indomie in 2004 introduce Sarimi and Supermi to compete with the competitor (Mie sedap), in 2006 introduce Indomie goreng
kriuk with 3 diva as the endoser, in 2007 Sarimi Soto Koya with Luna Maya as the endorser, in 2008 Supermi Gobang, Gokar, and
Goso with event launching Supermi Go Makan mie serentak dengan peserta terbanyak (more than 30k person based on MURI)
Market development strategy : Introducing present products or services into new geographic area. In 2007, the consumption
of instant noodle in indonesia reached 11 million packs, one of the channel distribution of Indofood is Warung Indomie. The
effective way is teach the owner of warung to make an Indomie, support their warung with banner, and monitoring the availability
of the Indomie product.
Forward Integration : gaining ownership or increase control of distributors or retailers. Indofood has own distributor to
distribute Indomie which is Indomarco to every region in Indonesia.
Backward Integration : seeking ownership or increase control of firm supplier. Indofood cooperate with PT Bogasari to
provide wheat flour.
Market Penetration : seeks to increase market share for present products or services in present markets through greater
marketing efforts. In Indomie advertising with Gita Gutawa as the endorse, Indomie emphasize their segmentation to teenager
and family, Indomie also has a several event such as Jingle Dare for high school, Mama mia, and also the activity of ibu ibu PKK.

Vertical Integration
FORWARD INTEGRATION
Gaining ownership or increase control of distributors or retailers. The six guidelines indicate when forward
integration may be an effective strategic :
1.
When a company present distributors are expensive, unreliable, incapable with the company needs.
2. When the availability of quality distributors is so limited as to offer a competitive advantage
3. When an organization competes in an industry that is growing and is expected to continue to grow markedly; this
is a factor because forward integration reduces an organizations ability to diversify if its basic industry falters
4. When an organization has both the capital and human resources needed to manage the new business of
distributing its own products
5. When the advantages of stable production are particularly high; this is a consideration because an organization
can increase the predictability of the demand for its output through forward integration.
6. When present distributors or retailers have high profit margins; this situation suggests that a company profitably
could distribute its own products and price them more competitively by integrating forward

BACKWARD INTEGRATION
Seeking ownership or increase control of firm supplier.
Seven guidelines for when backward integration may be an especially effective
strategy are:
When an organizations present suppliers are especially expensive, or unreliable,
or incapable of meeting the firms needs for parts, components, assemblies, or raw
materials.
When the number of suppliers is small and the number of competitors is large.
When an organization competes in an industry that is growing rapidly; this is a factor
because integrative-type strategies (forward, backward, and horizontal) reduce an
organizations ability to diversify in a declining industry.
When an organization has both capital and human resources to manage the new
business of supplying its own raw materials.
When the advantages of stable prices are particularly important; this is a factor
because an organization can stabilize the cost of its raw materials and the associated
price of its product(s) through backward integration.
When present supplies have high profit margins, which suggests that the business of supplying products or
services in the given industry is a worthwhile venture.
When an organization needs to quickly acquire a needed resource.

Intensive strategies
MARKET PENETRATION
Seeks to increase market share for present products or services in
present markets through greater marketing efforts. These five guidelines
indicate when market penetration may be an especially effective strategy :
When current markets are not saturated with a particular product or service.
When the usage rate of present customers could be increased significantly
When the market shares of major competitors have been declining while total
industry sales have been increasing.
When the correlation between dollar sales and dollar marketing expenditures
historically has been high.
When increased economies of scale provide major competitive advantages

MARKET DEVELOPMENT
Involves introducing present products or services into new
geographic areas. These six guidelines indicate when market
development may be an especially effective strategy:
When new channels of distribution are available that are reliable,
inexpensive, and of good quality.
When an organization is very successful at what it does.
When new untapped or unsaturated markets exist.
When an organization has the needed capital and human resources
to manage expanded operations.
When an organization has excess production capacity.
When an organizations basic industry is rapidly becoming global in
scope.

PRODUCT DEVELOPMENT
Seeks increased sales by improving or modifying present products
or services. These five guidelines indicate when product development may
be an especially effective strategy to pursue:
When an organization has successful products that are in the maturity stage
of the product life cycle; the idea here is to attract satisfied customers to try
new (improved) products as a result of their positive experience with the
organizations present products or services.
When an organization competes in an industry that is characterized by
rapid technological developments.
When major competitors offer better-quality products at comparable prices.
When an organization competes in a high-growth industry.
When an organization has especially strong research and development
capabilities.

Diversification StrategiesDiversification is a corporate strategy to enter into a new market or industry which the business is not
currently in, whilst also creating a new product for that new market

Related
It is when a business adds or expands its existing
product lines or markets. Example: a phone company
adds or expands its wireless products and services by
purchasing another wireless company is engaging in
related diversification.
Advantage:
- understand the business and know what the industry
opportunities and threats are
- number of related acquisitions fail to provide the
benefits or returns originally predicted.

Unrelated
It is when a business adds new, or unrelated,
product lines or markets. For example, the same
phone company might decide to go into the
television business or into the radio business. This
is unrelated diversification: there is no direct fit
with the existing business.
Why would a company want to engage in unrelated
diversification? Because there may be cost
efficiencies

Advantages and Motivation to use diversification strategy:

Most companies favor related diversification strategies in order to capitalize on synergies as
follows:
Transferring competitively valuable expertise, technological know-how, or other capabilities from one
business to another.
Combining the related activities of separate businesses into a single operation to achieve lower costs.
Exploiting common use of a well-known brand name.
Cross-business collaboration to create competitively valuable resource strengths and capabilities.

Motivation to use diversification strategy:

1. Financial
Advantage: A company can gain financial advantages from diversifying its strategies. If company enters into
joint ventures or acquires other companies it can increase its profits, cash flow and borrowing power.
Disadvantage: However, some companies miscalculate the profitability of a venture versus the expense of
getting into it.
2. Market Share
Advantages: By introducing new products, exploring new regions or targeting new groups of customers, a
company can expand your customer base.
Disadvantage: Each of these moves exposes the company to more competition, potential changes in customer
preferences and seeing your products or services become obsolete due to new technology. These threats can
rear their heads while the company is increasing expenditures on marketing and delivering your products.

Motivation to use diversification strategy:

3. Growth
Advantage: with measuring growth in terms of the number of employees, profits or sales, a diversified
strategy can help you get there. For example, a company could move into industries that it is not currently
involved in, form subsidiaries that act much like independent businesses and introduce global marketing as
part of its diversified strategy.
Disadvantage: The risk of this strategy is not being able to manage all of these activities simultaneously. This
can lead to inefficiencies that cut your profits. For example, if a company have several subsidiaries
independently ordering supplies, it may be duplicating orders and thus spending money it could've used on
marketing. The company has to make sure that each strategy pays for itself.

Motivation to use diversification

strategy:
4. Risk Protection
Advantages: To protect company from the risk of failure. If product "A" fails, new products "B" and "C" may do
well and make up for the loss. Similarly, successful regional marketing may uncover lucrative opportunities
that make up for a sluggish sales region.
Disadvantages: This risk protection comes at a cost. It means you will most likely spend money on strategies
that don't pay off. Even though other strategies make up for the wasted money, a company might do better with
a less diversified strategy that focuses on its most effective efforts.

DEFENSIVE STRATEGY
Retrenchment : Regrouping through cost and asset reduction to
reverse declining sales and profit
Divestiture : selling a division or part of an organization
Liquidation : selling all of a companys assets, in parts for their
tangible worth.

Porters Five Generic Strategies

Target Scope

Advantage

Advantage

(Low Cost)

Product Uniqueness

Broad (Industry wide)

Cost Leadership

Differentiation

Narrow (Market wide)

Focus Strategy (Low Cos)

Focus strategy differentiation

Cost Leadership
Aiming to become Lowest Cost Producer
The firm can compete on the price with every other industries and
earn higher unit profits.
Cost reduction provides the focus of the organization strategy.
Target a broad market.
Competitive advantage is achieved by driving down costs.
A successful cost leadership strategy requires that the firm is the
cost leader and is unchallenged in this position.
Especially beneficial: where customers are price sensitive

Differentiation
A differentiation strategy calls for the development of a product or
service that offers unique attributes that are valued by customers.
Customers perceive the product to be different and better than
that of rivals.
The value added by the uniqueness of the product may allow the
firm to charge a premium price for it.
Differentiation can be based on product image or durability, aftersales, quality, additional features.
It requires flair, research capability and strong marketing.

Focus Strategy
The focus strategy concentrates on a narrow segment and within that segment
attempts to achieve either a cost advantage or differentiation.
The premise is that the needs of the group can be better serviced by focusing
entirely on it.
A firm using a focus strategy often enjoys a high degree of customer loyalty,
and this entrenched loyalty discourages other firms from competing directly.
Because of their narrow market focus, firms pursuing a focus strategy have
lower volumes and therefore less bargaining power with their suppliers.
However, firms pursuing a differentiation-focused strategy may be able to pass
higher costs on to customers since close substitute products do not exist

Focus Strategy (Differentiation)

This dimension is not a separate strategy for big companies due to small
market conditions. Big companies which chose applying differentiation
strategies may also choose to apply in conjunction with focus strategies
(either cost or differentiation). On the other hand this is definitely
appropriate strategies for small companies especially for those wanting
to avoid competition with big ones.

GENERIC STRATEGY PT INDOFOOD

Cost Leadership
Differentiation
PT Indofood has a several strategy to push the Indomie has several flavor based on taste of
production and distribution cost.
Indonesia such as Indomie goreng rendang,
PT Indofood cooperate with PT Bogasari in
indomie goreng cabe ijo, Indomie rasa soto
order to produce wheat which is one of the
koya, Indomie Goreng Rasa Rendang Pedas
ingredient to make noodles (Indomie).
Medan Indomie Rasa Coto Makassar Indomie
PT Indofood has their own distribution
Rasa Empal Gentong Indomie Rasa Kari
channel to distribute Indomie, called
Ayam Medan Indomie Rasa Mi Cakalang
Indomarco
Indomie Rasa Mi Celor Indomie Rasa Mi
Kocok Bandung Indomie Rasa Sop Buntut
Indomie Rasa Soto Banjar Indomie Rasa Soto
Banjar Limau Kulit Indomie Rasa Soto
Betawi Indomie Rasa Soto Medan with
affordable price.

Strategy Evaluation
Asprillya Balqist
Kevin Patria
Arfan Nur Akbar
Reza Fahlevi
Dwinanda Rizal

Strategic evaluation allows an organization to capitalize on internal strengths

as the company develop, to exploit external opportunities as they emerge, to
recognize and defend against threats, and to mitigate internal weaknesses
before become detrimental
3 Basic Activities :
Examining the underlying bases of a firms strategy
Comparing expected results with actual results
Taking corrective actions to ensure that performance conforms to plans

Three guidelines help determine if

organizational problems are due to
inconsistencies in strategy :
1. if managerial problem continue despite
changes in personnel and if they tend to
be issued-based rather than people-based,
then strategies may be inconsistent.
2. If success for one organizational
department means, or is interpreted to
mean, failure for another department,
then strategies mau be inconsistent.
3. If Policy problems and issues continue to
be brought to the top for resolution, then
strategies may be inconsistent

Richard Rumelts Criteria for Evaluating

Strategy

Consistency
A strategy should not
present inconsistent goals
and policies

Richard Rumelts Criteria for Evaluating

Strategy

A strategy must represent an adaptive response to the

external environment and to be critical changes
occurring within it.
Examine whether an organization has demonstrated in
the past that it possesses the abilities, competencies,
skills, and talents needed to carry out a given strategy.
Competitive advantage normally are the result of
superiority in one of three area : resources, skills and
position.

Consonance
The need for strategists to examine sets of
trends, as well as individual trends, in
evaluating strategies.
Feasibility
A strategy must neither overtax available
resources nor create unsolvable sub problems
Adavantage
A strategy must provide for the creation
and/or maintenance of a competitive
advantage in a selected criteria of activity
(resources, skills, position)

Strategy Evaluation PT INDOFOOD

1. In 2004 Indomie made a mistake on the strategy to compete with Mie Sedaap by
following competitors by creating a brand which is Supermi Sedaaap and Noodle wing.
Unfortunately, the strategy can not stem the Mie Sedaap. Knowing this, Indomie
improve its strategy by not carrying out attacks on opponents brand, but to strengthen
its own brand, such as innovation, improve retailer loyalty, and provide bonuses
purchase.
2. In 2007, knowing that the huge production costs caused by external factors, namely the
increase in wheat prices, the cost of transportation and electricity costs, resulting in
lower profit margins, then Indomie make savings by using low-cost fuel and efficient
machines.
3. Evaluation and corrections made Indomie based on achieving strategic objectives
(loyalty, product quality, and innovation) and financial objectives (market share and
profit margin).

IE Matrix

The

The total score weight

of EFE

Kuat

Tinnggi

Sedang

Lemah

total score weight of IFE

Rata-rata

Lemah

II

III

IV

VI

VII

VIII

IX

Space Matrix
Product

Awareness

Exploration

Commitment

Provide up-to-date
information on the activities
of companies in their CSR
program

Contact us" and "leave

comment" aims to convey
suggestions from customers.

Provide useful information to

the customers such as CSR
programs and information on
the activities to be
implemented or already
implemented.

The same name between web

site address with the
company name.
The display designed
attractive and easy to use.
The information presented on
the company's CSR program
is very clear and complete

Communication

Distribution

Provide information to the

customers through web site
or social networking.

The ease in accessing

information on PT Indofood
Sukses Makmur Tbk in the
form of address and company
profiles

Provides easy navigation

used website for customers
Indofood.
There is a detailed
explanation about the
information the company's
CSR program activities in the
website.
Customer service artifacts in
the "Contact Us".
Customers may comment on
the menu leave a comment

Dissolution

SWOT MATRIX
IFAS / EFI
EFAS / EFE

Strength (S)

Weakness (W)

Indofood has many

distribution channel across
nation
Most of the noodles market
share is owned by Indofood
Has many flavors of noodles,
adjusting with Indonesian
traditional taste
Affordable price for all
market segments
Strong image with its slogan
Good marketing strategy
Good advertising and
promotion strategy

Bad for health if consumed

continuously
Too many brands released

SWOT MATRIX
Opportunities (O)
Is a strong position in the market
Increased condition of purchasing
power
Utilizing e-Business in company
activities
Has opportunity to cooperate with
other similar company

SO
Increase customer loyalty by
expanding the reach of
Indofood CSR program
activities in the various areas
where the firm produces.
Providing information via
the Internet by optimizing epublication as a publication
medium enterprise activity.

WO
Using information
technology to develop epublication system to help
business activities, as well as
increase customer loyalty
and public image.
Making activities / social
program by working with
companies that have similar
products and take advantage
of adequate manpower.

SWOT MATRIX
Threats (T)
The global financial crisis which affecting commodity
prices

Tight market competition

Healthy life-style issues

Threats (T)
The global financial crisis which affecting commodity prices

Tight market competition

Healthy life-style issues

ST
Provide information about the company's
CSR program through online publication
system to enhance the corporate image and
win the competition in the industry.
Maintain customer loyalty by improving
service for customers.
ST
Provide information about the company's CSR
program through online publication system to
enhance the corporate image and win the
competition in the industry.
Maintain customer loyalty by improving service for
customers.

Quantitative Strategic Planning Matrix (QSPM)

Strategy Alternative
Key Factor

Weight

Product Development

Market Development

AS

TAS

AS

TAS

Opportunity
Wide Open Market

0.2

0.6

0.8

0.05

0.1

0.1

0.1

0.4

0.3

Consumption pattern

0.15

0.45

0.45

Slow technology
change

0.05

0.1

0.1

Low Labor Wage

Increasing demand

Threat
New substitution
of noodle

0.1

0.4

0.3

Aggressive
advertising from
competitor

0.2

0.6

0.6

Increasing price
of wheat in the
world

0.05

0.1

0.1

MSG and
monopoly
regulation

0.05

0.15

0.1

The possibility of
a difficult
funding

0.05

0.2

0.2

Strengths
Product
Variance

0.2

0.8

0.6

0.15

0.45

0.45

Wide
distribution

0.2

0.8

0.6

Financial
support

0.2

0.8

0.6

Big Market share

Weaknesses
Not
adaptable
with
competitor
MSG towe
Total
attractivenes
s score

0.05

0.2

0.15

0.1

0.2

0.2

6.35

5.65

Based on the total attractiveness score, strategy development product > strategy development market, than Indofood
should implement strategy development product.

BCG Matrix

DEVELOP EFE & IFE MATRIX

EFE Matrix Opportunities

NO

Critical Success Factors

Wight

Rating

Total
Score

Opportunities
1

Sound investment Climate

0.07

0.21

Deregulation of government
restrictions on wheat flour
import

0.10

0.4

Increase income per capita

0.07

0.21

Increase society aggregate

consumption

0.07

0.28

High public response to the

product

0.1

0.4

Instant paced lifestyle

0.7

0.28

Overseas expansion

0.7

0.28

EFE Matrix Threat

No

Critical success factor

weight Ratng

Total Score

Fluctuation Risk Commodity

Price of raw materials

0.09

0.27

Reputanional risk issues related

to food safety

0.05

0.2

Increase in minimum wage

0.06

0.18

Competitors quantity

0.07

0.21

Sabotage experts

0.08

0.24

Negative effect of hazardous

substances HSE using

0.05

0.2

Strategic Issues of enviromental

0.05

0.2

3.56

IFE Matrix Strength

No

Critical success factor

weight Ratng

Total Score

Good financial performance

0.07

0.21

Company value increasing

0.07

0.28

Wide market share

0.08

0.32

Good brand equity

0.1

0.4

Extensive distribution network

and quickly

0.07

0.28

Integrated supply chain and

superior

0.09

0.36

Research and Development

0.07

0.28

IFE Matrix Weaknesses

No

Critical success factor

weight Ratng

Total Score

Require large Capital

0.08

0.24

High operational cost

0.07

0.21

High leverage ratio

0.06

0.18

Lack of internal control

0.05

0.1

Too many brands

0.05

0.1

Product are easily imitated (mass

Product)

0.09

0.27

Certain product contain

ingredients that harmful to HSE

0.05

0.1

3.33

DISTRIBUTION CHANNEL
Indofood has their own distribution channel called Grup Distribusi
Indofood.
One of the product, Indomie also has own distribution channel,
called Indomarco to distribute the noodles for the store around
Indonesia.
In 2007 Indomie got 97% for The Most Powerful Distribution
Performance by Qasa Consulting compare with the Mie Sedaap only
got 73%.

MARKETING STRATEGY

SEGMENTATION
Indofood has 3 kinds of product of noodles :
1. Sarimi : Sarimi has a cheaper price than the other product of
Indofood noodles, so their segmented the market for the low class
2. Supermie : Supermie has average price, so their segmented the
product for the middle class
3. Indomie : Compared with the other product, indomie has a little
expensive price, but also has a lot innovation for the indomie
product, so their segmented the product for middle up class until
high class

Research & Development

The Groups R&D activities are centered on five key areas:
Plant breeding: The development of top quality seed and planting materials through traditional
and advanced breeding methods, a diverse germ-plasm base and biotechnology, supported by field
trials that test progenies across a range of planting environments.
Soils: Detailed soil survey maps that support site-specific, agronomic block management.
Agronomy: Precision soil management and crop cultivation techniques that provide our estates
with optimal recommendations on crop management and planting densities, providing insight for
yield forecasts and block-by-block fertilizer and herbicide usage.
Crop protection: The development of integrated pest management and biological pest control
systems to minimize crop losses and to monitor, prevent and eradicate pests and diseases.
Data capture, management and analysis: GPS surveys and remote sensing technology enable
detailed 2D and 3D topographic maps, while Geographic Information System (GIS) tools provide
analysis and troubleshooting to ensure optimum plantation management. An integrated, real-time
software system provides visibility of data across subsidiaries, refineries and plantations.

CSR
Sustainable Plantations
Through its Agribusiness Group the Company is actively engaged in the sustainable production
of palm oil, and launched its Sustainability Report for the year 2012. The Agribusiness Group has
made a commitment to achieving the Roundtable on Sustainable Palm Oil (RSPO) and
Indonesian Sustainable Palm Oil (ISPO) certifications for all of its estates and palm oil mills by
2019. As of 2013, the Agribusiness Group has been awarded with ISPO certification for one palm
oil mill and three plantation estates in North Sumatra. The Agribusiness Group succeeded in
increasing its certified CPO production to close to 248 thousand tons, or some 28% of total CPO
production during 2013. On top of sustainable production, the Agribusiness Group also engages
in other initiatives including a zero burning policy to reduce carbon footprint, the maintenance of
conservation areas based on RSPO principles and criteria, policies to reduce the use of paraquatbased pesticides, and waste reduction through agriculture and palm oil mill waste recycling, such
as using liquid waste and empty fruit bunches as an energy source and as fertilizer.

Packaging Waste Bank

In compliance with Law No. 18 Year 2008 regarding Solid Waste Management, and
Government Regulation No. 81 Year 2012 regarding the Responsibilities of Producers in
Household Solid Waste and Household-like Solid Waste Management, which require
industries to implement these regulations within the next ten years, the Company formed
a coalition with five other consumer goods firms to manage a Packaging Waste Bank
pilot project in Pejaten, Pasar Minggu, South Jakarta. In 2013, the coalition focused
intensively on conducting reviews, discussions and dialogs with various parties including
academics, the Government, various communities and environmental observers, to seek
an effective waste management model and communications program. Currently, initial
steps are being taken to form an association for sustainable packaging, with Indofood as
one of its founders. This has received positive feedback from the Government and other
community organizations.

Business Ethics
WHISTLE BLOWING
The Group has put in place a whistle blowing policy and procedure ("Policy"). This
Policy provides employees with clearly defined processes through which they may raise
their concerns in good faith and in strict confidence, with respect to suspected fraud,
corruption, dishonest practices or other malpractices that do not comply with the
Group's standard operating procedures, to the Head of IAD, the Exco or the AC & RMC.
The Policy aims to encourage the reporting of discrepancies and suspicious behaviors
with the confidence that employees making such reports will be treated fairly and, to the
extent possible, protected from reprisal.
The AC & RMC reviewed and approved the Policy and was satisfied that independent
investigation would be conducted for all whistleblowing reports and the appropriate
follow-up actions would be taken to resolve the issues.

International Expansion
Currently Indofood already fulfilled their objectives and already
done exporting the products to many countries especially for
Indomie as the main product which already exported and gain the
market share in other countries especially middle east countries.
And the other products except Indomie is only licensing from
another company for instance Lays and Pepsi. So we can conclude
that right now and for a few years, we dont need to add more
countries as our market since except Asia, noodles are not that
preferred by the market.