Before the year 2003, Indomie domination (Indofood) in instant noodles market was unbeatable. It succeeded with hardly any competitors. Several attempts to take over the market share of instant noodle market was done by competitors and failed. Instead Indofood succeeded to defeat them. Even multinational company like Unilever which had skill to develop brand and wide distribution network tried to enter the instant noodle market to no avail.  Mie&Mie brand (Unilever) was forced to exit market by Indofood. This also included the failure of Tara Nasiku, an instant rice brand launched by Unilever in 1999, with intention to switch consumer buying behavior from instant noodle to instant rice. Although the production budget and development of Tara Nasiku exceeded boundary of new product launching, consumers still preferred Indomie.

Initially, Indofood did not suspect that Mie Sedaap from Wingsfood would succeed in taking over the market share. Although Wings Group was long enough in toiletries industry, supported by solid marketing team and a wide range of distribution network, Indofood still believed that food business needed special expertise. And Indofood, indeed, did not think that Wingsfood had that. Indofood was not seriously counter the aggressive marketing activities done by Mie Sedaap. It could be said without any obstacles Mie Sedaap glided to the market.

Slowly Indofood’s Indomie domination broke down. Its market share fell. Their 90% market share in 1999 declined to only 70% in 2003. The national instant noodle market itself was worth 8 trillion rupiahs, thus Indofood’s sales decline disturbed the plan to increase their sales in the country.

What super strategies did Wingsfood use with its Mie Sedaap to overpower Indomie’s domination in instant noodle market?   What effort and attempt did Indofood take to regain and restore their lost market? How were the consumers’ perceptions after of this noodle war?

In December 2002, Hendrik Tio was ready for strategic meeting with board of directors to discuss the future of P.T. Bhinneka Mentari Dimensi. As Director and founder, Hendrik felt that the company has gone through a lot; Indonesian’s economic crisis in 1998, the dotcom crash, and now, once again, the company faced something that nobody was familiar with: the internet.

During economic crisis in 1997, due to deterioration of market buying power, Bhinneka was forced to diversify its business from IT solutions provider to a computer accessories manufacturer, furniture manufacturer and shrimp business. In June 1999, Hendrik decided that the company should return to its original business of providing IT solutions and insisted that the company start building its reputation as the pioneer of e-commerce by going online.

The dotcom euphoria didn’t last very long, because in 2001, the dotcom crash started. However, some strong companies actually survived the crash in US, such as Amazon.com. The same phenomenon happened in Indonesia. Some online shops such as Bebita.com, Dialmart.com, even Lipposhop.com could not get enough revenue to cover their operational costs; the only reason why they were still in the market was due to their belief that the internet would be the future of business. Bhinneka.com  likewise was not making enough profit. However, it had gained high brand awareness due to its website and the number of visits grew steadily.

As Hendrik walked toward the meeting room, some thoughts came to mind;: should he stop the online retail business before it’s too late, or should he continue it by altering his existing business model? Some facts that happened around the world as well as in Indonesia worried him. What should Bhinneka.com do to maintain its position and grow given the unpredictable nature of cyberworld?

The time was approaching 5.45 p.m. A mother was hurriedly moving towards an elevator   in Jakarta’s golden triangle apartment while checking on her wrist-watch at times.  Reaching the second floor, he sound of small kids could be heard coming from a Daycare with noticeable design on the same floor.  As she approached the Daycare entrance, her face became radiant.  She walked faster in order to see her sweetheart. Inside the Daycare, a cute little girl rushed towards the mother accompanied by a neat uniformed Daycare staff.   She explained to the mother all the activities her daughter has done during the day according to the note written in the agenda.  The mother listened to it with full interest while carrying her three years cute daughter.

Dr. Lukiarti, the Director and the person in charge of the daily activities of the High Reach Learning Care Institution was observing each of the picking up activities of the children under her observation. She also spoke to a few parents on the subjects that needed further explanation regarding the kids’ development. These routine interactions with parents are done to make sure that everything runs smoothly and under control.

After the children’s pick-up operation was completed, Ibu Luki, this was how Dr.Lukiarti was addressed by her colleagues, entered her office and sat down on a chair in the corner of the room.  Her eyes did not show tiredness although she is in her early fifties.  She quickly picked up a folder from the table which contained to pieces of proposals on the business development.  For the past one week her mind had been preoccupied with these proposals. It was not a simple offer and hard to be chosen:  Franchising the Daycare business which had been developed for one year or developing the business organically, collaborating with a few office buildings.  The periodic meeting of the High Reach founders / share holders would be held in an hour’s time.  The discussion on the development of this Daycare business was one of her agendas. She picked up her glasses and started making deeper analysis on the pros and cons of the two offers.

One still could vividly remember when Starbucks first opened its first store at Seattle, United States of America on 1972 and the hype suddenly went breakthrough like a wildfire from the State only into nationwide and upon 1996, Howard Schultz as Starbucks’ owner decided to go international.

It wasn’t long before that when Starbucks opened its first store in Indonesia and the buzz that already went along the words that already whispered in everyone’s ears gone crazy. The cozy ambience and the promise of “delivering the best coffee only for you” from the company to the consumers have been the magic words among Indonesia’s socialite and all in sudden, Starbucks’ coffee stores flocked with people. Now everybody could enjoy their nice cup of Frappuccino™ or Café Americano at the good-looking place with sweet and slow jazzy tunes at every Starbucks coffee store or simply grab the signature cup of Starbucks and bring it everywhere, be it campus, school, office or simply for hangout purpose.

The opportunity for Starbucks at that time when they entered Indonesia market was still big for there were only several small players at Indonesia. Coffee store and café business never been taken seriously and people accepted coffee-drinking activities as side activity which did not have any added value for any other means. Indonesian even didn’t recognize coffee as one of their primary habits. However, the hype started around 1999, not so long after the crisis that hit several regions at Southeast Asia. Indonesia, by any means, considered as a very interesting place for Starbucks to expand. However not so long after the trend started, recently nowadays Starbucks isn’t the only player at Indonesia. Thanks for the hype and buzzwords, more and more competitors barged into the market, be it from foreign players (Gloria Jean’s Coffee, The Coffee Bean and Tea Leaf) or domestic players (Bakoel Koffie, Bengawan Solo Coffee) and all of them even offered similar beverages and “experience” as same as Starbucks. They create same ambience, same coffee and even, same packaging – only in different brand name and label.

This kind of situation forced Starbucks to think hard and long because even though Starbucks already got big name and big time at United States where it is originally came from, the market in Indonesia is totally different. They are playing at different culture, different consumer’s expectations and even different purchasing power and Starbucks realized it clearly that in order to survive in this volatile market of Indonesia they should take the right approach.

On October 2006, Bambang Asmarabudi, General Manager of Marketing and Promotion of Yamaha Motor Kencana Indonesia (YMKI), was irritated as he and his team would face Mid-Year meeting the next day.

The fact that only ten to thirteen percent of these female inhabitants were motorcyclists made very large open market for prospective female consumer. From the supplier side, it seemed manufacturers were aware of the fact, but they were unsure of this female market prospect.

Although the sales unit sales grew from 2003 to 2006, Bambang was irritated by the reality that Yamaha Mio was not bought by women as target market. He wondered if he and his team should make adjustments to the marketing strategy facing this unexpected trend.

“Apa pun makanannya, minumnya Teh Botol Sosro”, (Any food you eat, the beverage is Teh Botol Sosro), it was SOSRO’s tag line appeared in every SOSRO advertising, in television or printed media. Mr. Sosrojoyo’s dream happened now where he wanted everybody to enjoy the delicious smell and taste of Sosro tea. Now everywhere in Indonesia, in every small kiosk from small village to big city we could see the product of Sosro tea.

Of course this success did not happen in one night. It was a long journey since Sosro built the kingdom of tea, facing lots of challenge and obstacles. It was in 2006, when Mr. Sosrojoyo sat in his office, reflecting the long journey the family went through. It seemed to him the nowadays business situation had changed, the coming of new player in bottled beverage made him re-thinking about Sosro’s competitive advantage. He had to reformulate Sosro’s competency in a way so that they could answer the challenge of competitor.

In 1998 Lippo Bank introduced internet banking; that same year Bank Internasional Indonesia launched internet for its customers. Bank Central Asia (BCA) soft launched KlikBCA (Internet Banking BCA) in August 17, 2000 and officially launched it in March 2001.

When introducing internet banking for Consumer Banking in Indonesia, Stephen Liestyo, BCA Senior General Manager knew that he had to choose the right strategy as other local banks that allocated extensive programs to educate customers about using internet banking did not attain substantial immediate results. Several options and solutions were discussed extensively among the steering committee team before launching KlikBCA. One of the options chosen was to use the same ATM screen in the KlikBCA. Replicating the ATM screen and features into KlikBCA was a critical first step. The team also decided to add more features, such as a message feature in KlikBCA in the next step of KlikBCA’s development. Individual customers increased from 29,000 customers during the first launch to 217,653 customers at the end of 2001. Stephen Liestyo asked his team to formulate the strategy that could prepare KlikBCA to go world wide in order to strengthen BCA position as the best transaction bank.

On one bright afternoon on May 31, 2007 at 3:00 pm, a member of Case Writing Team received an SMS sent by Stephen Liestyo, Senior General Manager of Consumer Banking BCA. The content of the SMS was “Sorry, from June 6 – 13, 2007, I will be in Shanghai to receive an award from The Asian Banker”. BCA was named as “The Best Retail Bank in Indonesia in 2006 at Asian Banker Excellence in Retail Financial Awards. Asian Banker assessed over 140 financial institutions in 22 countries throughout Asia Pacific. This SMS reply confirmed the need for further discussion on internet banking.

On one side, Case Writer Team at Binus Case Center should wait for his presence and reschedule the meeting after Liestyo’s return from Shanghai. On the other side, this news encouraged team to develop further Klik BCA case. Stephen Liestyo confirmed that Asian Banker Award named BCA as “The Best Retail Bank” for four consecutive years started in 2003.

According to Eric Berliner in Asian Banker assessment, one of BCA’s strengths was its well developed automatic transaction network. ”BCA utilized a solid infrastructure to support bank operation in order to maintain its position as the transaction bank of choice in Indonesia”.. This solid infrastructure helped BCA generate more profits in 2006 than its competitors. With the best infrastructure, BCA became the most efficient, reliable, innovative and profitable bank in Indonesia.

It is January 19, 2007, Ulf and Bo Andersson is pacing agitatedly about his hotel suite, located in the business district of South Jakarta. He is both excited and a little bit apprehensive about the decision he has soon to make. Bo is currently on a trip to Jakarta in search of a location for a sister office to expand GRIN, the company founded by Bo and his brother, Ulf Andersson. GRIN is a game development company based in Stockholm, Sweden which focuses on making games for the PC (Personal Computer) platform. The company’s latest hit,‘ Tom Clancy’s Ghost Recon: Advanced Warfighter’ (GRAW), published by Ubisoft Entertainment, has won reviews and awards worldwide. Bo, in his quest for a suitable office/studio location outside Sweden, is hoping that the new sister office will strategically support the main office in Stockholm in producing the next generation of games.

Looking out from his hotel suite, immersed in thought, Bo gazes at the huge sports complex across the street. The decision to expand won support from his brother and some people at GRIN, but choosing the location will be critical since it will mean a sizeable investment for the company. Prior to the trip to Indonesia, Bo considered the Baltic States in Eastern Europe, China, and India as potentially favorable locations. A merger with another game development company in the United States or Sweden is also an option for the expansion. Whatever the decision, the expansion is needed to acquire the necessary creative talent in building the next generation of AAA games (triple A: multiple platform games; games developed for multiple platforms, e.g.: PC, Sony PlayStation, Microsoft Xbox).

Within the past few days, in search of market opportunities and talent, Bo has met with game developers, universities, and even found potential office space in the central business district of Jakarta, all with the help of a Swedish acquaintance with years of experience doing business in Indonesia. The office space is located in a tower adjoining a shopping mall.

Bo turns his head and looks at the DVD disk sitting innocently on the coffee table. The disk was sold to him the day before in a software store at the shopping mall in a flimsy plastic sheet with a poorly printed paper-insert depicting the contents of the package. Bo bought the disk for 50 thousand Indonesian Rupiahs, or approximately 5 US Dollars. The paper-insert was printed from a scanned packaging of GRIN’s latest hit, Ghost Recon, and Bo purchased this pirated copy of the game his company developed at a fraction of the cost the publisher of the game sells it for elsewhere (Exhibit 1 shows packaging of pirated software). The store not only carries PC games, but also productivity applications, operating systems, software development tools, and other office/business software; basically any category of software a person would ever need. In that particular shopping mall, there are at least 3 other stores selling pirated software, and other small stands/kiosks selling pirated DVD movies and CDs (Exhibit 2 shows the typical software store). Jakarta seems to be a good location for finding talent; but Bo wonders whether the city is the right location to expand his company and develop the capacity to compete in the future.

Stefanus Mulianto, Director of PT. Hollitech, was proud of the achievement of PT. Hollitech since the day it was founded. He had reasons for that since his company was the only company that successfully developed applications software for the garment/apparel industry in Indonesia. The latest achievement was shown in late 2005 when the company acquired an Indian IT company. Over the past four years Stefanus Mulianto had been responsible for managing the operations of company as well as its human resources. Once an IT department of a textile/garment conglomerate, PT. Hollitech had grown into a medium-sized international IT services company delivering various solutions to financial institutions, garment, and hospitality industries. Innovation, quality and on-time delivery of IT solutions had always been part of the strategy that Stefanus Mulianto believed was the key driver to PT. Hollitech’s success.

Budi Raharjo has been interested in participating in the digital music business since he saw the big music market still ignored by the Major Labels recoding companies.  In his blog, Budi often receives complaints from the amateur musicians who want to take action in the recording world or distribute their music recording product, but they still meet with a lot of obstacles.

According to Budi Raharjo, a Canadian doctor graduate, to run a musical digital shop is to meet the continuous need for music which becomes more personal day by day.  The consumers need more choices of songs.  Unfortunately Budi thinks, there are still many people who like to buy pirated CD and MP3 or illegally downloading songs in the internet.  He thinks then why don’t we provide software that makes downloading legal.