Hendrik Setiawan, a young entrepreneur in fresh fruit juice, was preparing for his presentation. He's going to meet potential clients in the next few days. He got various alternatives to promote Mama Roz, a new brand of fresh fruit juice, which displayed some signs of success. Mama Roz was considered as the most saleable fresh fruit juice product in top class supermarkets.

However, he's wondering whether it was appropriate to call his marketing strategy as the blue ocean strategy? His potential client would understand this new concept. And so, he had to be able to present strong evidence that his marketing strategy was indeed blue ocean strategy.

In front of him lies the ethnographic report from Reny Virniati and Nia Kurnianingsih, graduate students of MM Strategic Marketing, Binus Business School. From this report, Hendrik should summarize the evidence from the field, as a resourceful feedback for his marketing strategy.

WIKA started the business from electrical and pipe-installation for houses and buildings, they realized that WIKA would not become a big-corporate if only relied on electrical-business. Now, WIKA’s projects are various from high-rise building, fly-over, toll-road, railway until solar water heater (SWH) and LPG tank. Also WIKA becomes a producer of automotive-component. This was different with other State – Owned Company which usually avoid diversifying from its core-business. The latest diversification was entering the Engineering Procurement Construction (EPC) – business where they believed this would be a future business for WIKA, after preliminary study in 2002, the management decided to enter this high-technology business.

The company plans to acquire toll-road operators as well as engineering consultancy company WIKA claims it has built approximately 30.0% of government-owned 10,000-MW power plant projects. The company plans to acquire a 70.0% stake of PT Catur Insan Pertiwi (CIP), a mechanical engineering and engineering consultancy company specializing in power plants. Going forward, WIKA also plans to acquire toll-road operators and mining contractors, apart from its plan to enter international market. It looks very busy of diversification. What strategies will be implemented to reach the goals? What opportunities and challenges will be experienced by WIKA after diversifying its business? How best could WIKA execute its diversification strategy?

Rahmat Ismail sat in his seat on flight from Honolulu to Jakarta. His mind was racing and filled with the images of various scenes of his meetings and encounters in the past few months. As senior management of Bukaka Teknik Utama (Bukaka), the contractor awarded the contract to provide and install the passenger boarding bridges for Terminal II project at Cengkareng International Airport, Jakarta, he was very uneasy about the latest predicament concerning Bukaka’s technical partner, Jetway Systems (Jetway). Jetway provided engineering design and consultation for building forty-four passenger boarding bridges for new Terminal II at Cengkareng airport. In a recent meeting, Jetway’s and Bukaka’s management sat down to renegotiate fees and division of work between the two companies for the project. The meeting went sour, Jetway management decided to pull-out from the project, leaving Bukaka with no design and a looming deadline.

Having no partner, design, nor the experience of building passenger boarding bridges, Rahmat Ismail knew that there was no way Bukaka could meet project deliverables. Pressured by time, Rahmat Ismail realized that he had several options; including acquiring a new strategic partner or acquired the technology. The latter option of course was more rewarding for company, but more difficult and riskier due to the fact that Bukaka did not have engineering experience in building passenger boarding bridges. In his seat, Rahmat Ismail weighed his options, the credibility and future of Bukaka as an engineering company depended on his decision.

On 16 December 2002, the Government of the Republic of Indonesia ("Government") declared Singapore Technologies Telemedia Pte., Ltd. ("STT") the winning bidder for the divestment of 41.9% shares of the Government in PT Indonesian Satellite Corporation Tbk. ("Indosat").  STT utilized its subsidiary Indonesian Corporation Limited ("ICL") to purchase the shares.  This divestment decision attracted various reactions from the public as well as various institutions within the government.

This divestment process had been long considered by State Minister for the State Owned Enterprise ("Meneg BUMN") a position which was then held by Mr. Laksamana Sukardi, the Minister of Finance ("MoF"), Mr. Boediono, the Indonesian Banking Restructuring Agency ("IBRA") and the Capital Market Supervisory Board ("Bapepam").  To support the divestment process, the Government engaged PT Danareksa Sekuritas and Credit Suisse First Boston ("CSFB") as coordinators for the sale of the shares, particularly as the financial advisor.

One of the reasons the Government decided to dispose of its shares in Indosat was to increase the level of competitiveness of Indosat in the telecommunication sector in Indonesia.  Another reason was Indosat’s failure to achieve optimum results despite previous efforts to enhance its performance.  However, the main reason was that the MoF had planned to utilize the funds generated by the privatization of State Owned Enterprises (including proceeds from Indosat divestment process) to buy back Recapitulation Bonds from a number of banks.

It was 1996, when Mr. Budiardjo Tek, the President Director of PT Sierad Produce Tbk (“Sierad Produce / Sierad / The Company”) proudly presented the Company’s achievement, “I am pleased to report that 1996, our first year as a publicly held company, proved to be a highly successful one, with outstanding financial performance recorded across the board. Net revenues for the year amounted to Rp. 454.4 billion (or equal to USD 192.3 million), income from operations totaled Rp. 44.0 billion (or equal to USD 18.6 million), and net income was Rp. 27.1 billion (or equal to USD 11.5 million). With expansion projects now coming on-stream, our poultry feed operation is growing tremendously. Expansion of our feedmill, for example, will result in a tripling of capacity and will allow us to achieve significant economies of scale.”

Not too soon after the situation changed. The Asian monetary crisis beginning in 1997 was sudden and unforeseen. It had been catastrophic for many businesses. All poultry operators – without exception and including the Company – embarked on expansion before the economic crisis in order to take advantage of the excellent prospects of the industry.  These expansions were funded in part by new equity issues in the capital markets and in part, through cheap and readily available financing offered by offshore financial institutions. However, due to the profound and lingering effect of the crisis, the consumer purchasing power deteriorated. Rupiah depreciated from its normal rate of Rp. 2.500,- to Rp. 4,500 at year end 1997, soaring to Rp. 17,000 in January 1998 and levelling off at Rp. 10,000 – Rp. 12,000 with much volatility towards end of 1998. At the same time, the poultry industry’s cost of production went up several folds. “More than 80% of feed’s raw materials were imported and therefore, the industry is heavily import-dependent”, said Albert Sitorus, member of Sierad’s management team. Large poultry operators like the Company found themselves with new production facilities, large foreign currency debts, a Rupiah-based revenue stream and worse, over a 50% decline in consumer poultry consumption during the worst period. It was inevitable that the Company would go into default.  It was only a matter of time. The Company was unable to pay the USD 313 million debt, which actually was only less than 2 times of its annual revenue before the crisis.

This case study illustrates how PT Aneka Tambang Tbk (Antam) manages their cash flows. Antam’s cash was held in over 15 local and foreign banks where mainly was placed in time-deposit and the rest was in the form of cash account. This company used their revenue to pay administrative cost, investment and financing activities such as construction cost, repayment of bonds and dividend. However, the high-cost labour and the increasing of wages have adversely influenced the condition of their cash-flow management. At the same time payment to suppliers has also gradually increasing. As a result, Antam’s liquidity decreased although the debt-ratio has shown some improvement and profitability seems to be flat with a tendency to decline.

It was January 2006, when Bambang Asmarabudi turned off his remote control on television set in his room in Pulo Gadung office after seeing 30-second TVC (TV Campaign) of new cub, Yamaha Jupiter developed by Yamaha’s headquarter in Japan. He was fond of this motorcycle. The technology was awesome, it had fantastic design, it comprised shooting technique, good setting; it was flawless design and high product quality.

As Managing Director of Promotions and Motorsports, Bambang was involved in the company for 15 years. He started his career in motorcycle manufacturer. Actually, there was nothing wrong with commercial overall content. But he was not sure that the ad would be received by company target market, regarding taste and education level difference in Japan and Indonesia. He knew exactly what kind of people in Indonesia. And it did not match with TV advertising.

He watched thousand times of the commercial advertising of Yamaha Jupiter. He saw the sales report was plummeted during the first quarter. He was weighing the idea about having another type of advertising. The advertising that was easier to understand, better shaped, and reach the grass root community. So that they did not need to think, did not need to analyze, but the advertising still headed the new technology and design of the cub.

He then picked up his cell phone, rang the Vice President, Dyonisius Beti, asked for a time to discuss the matters that bothered him.

One Sunday in 2005, while with her family in one of Jakarta’s popular shopping malls, Mrs. Martha Tilaar, the Chairman of PT. Sari Ayu Indonesia, accidentally overheard two women debating the pros and cons of receiving Botox injections[1]. The passing conversation brought back previous thoughts on how to harness Indonesia’s natural resources, and fashion these resources into products which would be as effective as foreign brands but with the advantage of using natural (and thus safer) ingredients.

In her years of working in the world of cosmetics, Mrs Tilaar had so far gained much from innovative improvement – whether these came from her Brand Department together with R&D Department, or from Mrs. Tilaar herself. She always managed to differentiate her products from those of other companies without discarding their most important ingredients. Nonetheless, the differentiation ensured that the marketed products were safe to both user and environment. For example, the latest product series, Biokos Botu-Like, was created to leverage the brand as high-end anti-ageing treatment, which was expected to compete with similar, foreign-manufactured products marketed by well-known international cosmetics brands.

Nevertheless, Mrs Tilaar wondered whether this continuously-explored innovation process was able to grasp what the market needed and wanted. Would it prove to be profitable to the company in the end? What breakthrough idea could be drawn up to gain more market expansion? There was a plethora of ideas – but how could one pick the most appropriate one to develop? Lastly, how sustainable would the products be?

Botox is a type of beauty treatment conducted by experienced, qualified and board certified doctor in order to reduce facial wrinkles.

It was a bright and fine Monday afternoon in September 2004; outside was a view of a typical busy work day in Jakarta.  Ina Suwandi, head of the Electronic Banking Subdivision of PT Bank Central Asia Tbk. (BCA), was sitting in her well-lit yet conservative office looking at the 2004 2nd semester performance report of Tunai BCA. Tunai BCA is a banking product which lets BCA customers withdraw cash from cashiers at participating retail stores as the customers pay for their purchases using the BCA ATM card, “Paspor BCA” (Exhibit 1 shows a Paspor BCA card). She recalled the phone call earlier that morning from Stephen Liestyo, Head of Consumer Banking.; Stephen wanted an explanation from her team about the performance of Tunai BCA. The frequency of BCA customers using their ‘Paspor BCA’ ATM cards as debit cards for purchases in retail outlets (Debit BCA) from January – September 2004 was 28,150,130, in stark contrast to the usage frequency of Tunai BCA which was only 1,182,673.  Since both Tunai BCA and Debit BCA banking products were based on the Paspor BCA ATM card, Debit BCA users were a potential market for Tunai BCA.  It was very clear in Ina’s mind how Stephen presented the firm’s vision: “Someday, somehow, Tunai BCA will be booming. People will shift away from using Automated Teller Machines (ATMs) to get their cash from the merchants (retailers) while shopping instead.  Look at Australia; withdrawing cash at the merchants is more popular than at ATMs.  We have to spread the idea, grow it and someday, somehow, we will harvest it.  We have to be the ‘First in Mind’, otherwise we cannot be Number 1 in the market”.  After Stephen finished his sentence, Ina realized that Tunai BCA’s success fully rested on her team’s shoulders. She needed to make Tunai BCA as successful as the other banking products offered by the bank. She had to decide what her subdivision should do to make the program successful. Reflecting back on the company’s history, Ina was aware that BCA had proved itself successful in creating a perception of a bank which offered convenience to its consumers. Tunai BCA was created to further enhance the bank’s offerings in providing convenience to BCA cardholders, merchants, and to the bank itself.

In the airline industry, quality, cost, delivery, and flexibility were often mentioned as the key success factors that should be acquired by every company. Up to 2007 the competition within the airline industry became very severe. Therefore, it was crucial that every company should choose the right strategy to fit with the market condition.

Garuda as one of full services airline companies saw that the industry situation had been changed compared to the previous years. Competitive pressure made the Garuda’s management revise their strategy that had been executed for years. The effectiveness of the strategy execution had emerged as the main issue.

On the other hand, Lion Air as a new entrant in the industry saw that the crisis occurred in Indonesia gave them a new opportunity to grab the price sensitive segment. Lion Air’s management at the same time considered to improve their strategy to increase their market share.