Strategic Management Analysis: PT Trakindo Utama

19 Oct 2021

Uncategorized

CHAPTER 1

INTRODUCTION

1.1 BRIEF HISTORY

PT Trakindo Utama is a leading authorized dealer of CAT brand which specializes in heavy equipment for forestry activities, agriculture activities, construction activities, energy & transportation activities, and mining activities. It is a subsidiary of PT Tiara Marga Trakindo founded by AHK “Met” Hamami on 23 December 1970. PT Trakindo Utama became the only authorized dealer of Caterpillar (CAT) on 13 April 1971. The company operates in Indonesia with the headquarter located in South Jakarta. Its branches and training centers are located in many big cities across Indonesia. It is a very big company and its name is already famous for Indonesian people especially those who work in construction, mining, forestry, agriculture, and energy & transportation area. From here, it can be concluded that the business field of PT Trakindo Utama is heavy equipment industry as the heavy equipment provider available for customers to purchase or rent.

1.2 VISION

Vision is all about the destination or goal that a company wants to achieve in the end. All companies have their own visions. For PT Trakindo Utama, the vision is “To be the world-class provider of Caterpillar equipment solutions.” Since PT Trakindo Utama is the only authorized Caterpillar brand products dealer, of course its vision is to be the best provider of Caterpillar products.

1.3 MISSION

Mission is about all the things and activities that a company does to achieve its vision. Every company has its own missions to accomplish. For PT Trakindo Utama, its mission is “To set up an entity that creates worthwhile and challenging job opportunities to as many Indonesians as possible, while incorporating the following values: Continuous development of employees, consistent capital growth (financial, intellectual, brand identity) and reinvestment of capital into the business, and maintaining highly ethical business practices.” From here, it is clear that to be the world-class provider of Caterpillar equipment solution, PT Trakindo Utama must do its mission stated above.

1.4 OBJECTIVE

Objective is all about the managerial commitment to achieve results in short-term period. A company clearly describes all the targets, the work performance needed, the timeline, and the people needed to support the objectives which can also support long-term goals. For PT Trakindo Utama, to reach the long-term goal, it separates its organizational structures well so that short-term goals can be achieved on time to ensure progress on the long-term goal. The people who work in PT Trakindo Utama are given trainings so that they can hone their skills and abilities to support the short and long- term goals of the company.

1.5 CORE VALUES

Core values are beliefs and values that a company has, and all the activities done inside or outside of the company are based on the core values that are rooted in the company’s history. The core values of PT Trakindo Utama are:

Integrity: We enforce the highest ethical and moral standards, demonstrating honesty and fairness in all activities.
Continuous Development: We are committed to continuously developing both our companies and employees.
Excellence: We continuously strive to achieve the highest standard of result.
Proactive: We pursue and adopt new techniques and approaches to improve our business quality.
Accountability: We assume responsibility to stakeholders for all the decisions and actions taken.
Teamwork: We promote and support a multicultural workforce based on trust and respect, achieving goals by communicating appropriately.

1.6 BRAND SPIRIT

The brand spirit of PT Trakindo Utama is “Advancing You Forward”. PT Trakindo Utama is committed to be the driver that empowers and advances our audiences capabilities and performance forward to reach their goals and nurture sustainable success.
Advancing means the acts of going the extra miles to improve, enrich and empower greater results, impacts and benefits.
Going the extra mile or beyond expectation means:

Always push yourself forward to be better by increasing your capability and capacity, and project it through real actions.
Always challenge yourself and be in constant search for self-improvement to advance yourself and others.

You represent our diverse targeted audience (employee, customers, partners, society, shareholders) who will experience and benefit from the impact of Trakindo in their lives.
Forward means moving people farther in their performance and higher in their achievements as to bring them even closer to their goals.

1.7 MARKET AND CONSUMER SEGMENT

The market and consumer segment of PT Trakindo Utama is very niche because it focuses on focused differentiation as its business level strategy. With that being said, it can be concluded that the market and consumer segment of PT Trakindo focus only on people who are in the area of work that requires heavy equipment products and services to accomplish their jobs. Consumers whose jobs are in construction, mining, agricultural, forestry, energy & transportation area are the most favorite market and consumer segment for PT Trakindo Utama. Therefore, the company really focuses all the resources it has got for this targeted market and consumer segment.

1.8 BUSINESS COMPETITORS

PT Trakindo Utama faces fierce competitors in the heavy equipment industry. All of them have their own strengths and competitive advantages that PT Trakindo Utama may not have. Those competitors are:

PT United Tractors Tbk with Komatsu, UD Trucks, Scania, Bomag, and Tadano: Astra’s heavy equipment, mining, construction and energy business line is managed by PT United Tractors Tbk (UT), a subsidiary of Astra with 59.5% ownership.
PT Hexindo Adiperkasa Tbk with Hitachi and BELL: Hexindo is focusing in heavy equipment sales & after sales services from well-known products such as Hitachi and Bell. As an integrated services approach to offers various kind of heavy equipment solutions that meets with customer requirement, Hexindo has many facilities that equipped with complete services like remanufacturing, welding center, e-service and training center as well.
PT Intraco Penta Tbk with Volvo, Kobelco, Hyundai, and Doosan: Established since 1970 and began its operations in 1975, with a proven experience in the field of heavy equipment solutions, INTA is now growing into a corporation with five business lines synergizing.
Other brands from China and South Korea

1.9 THE EXTENT OF MARKETING OPERATIONS

The extent of marketing operations of PT Trakindo Utama is it uses the combination of people, process, and technology. PT Trakindo Utama launched an application earlier this year to adapt to the new normal situation and as the beginning of digitizing the business. This application eases PT Trakindo Utama to offer the latest products, services, as well as promotions. This way, PT Trakindo Utama can be closer to customers as part of its Customer Relationship Management.

The company also held some competition as part of training for employees in many companies so that they are able to operate the heavy equipment in the right way. This is also a part of marketing operations that PT Trakindo Utama has done to market their products by demonstrating the way to operate their products.

CHAPTER 2

ANALYSIS AND DISCUSSION

2.1 TYPE OF DIVERSIFICATION

A corporate-level strategy specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets. PT Trakindo Utama is one of many companies out there which is fighting in the markets and trying to win them. Therefore, PT Trakindo Utama separates its business to three different categories or types of diversification to fulfill the customers’ needs regarding heavy equipment:

A) Purchase and rental of heavy equipment

PT Trakindo Utama always provides the best and highest quality heavy equipment products for construction, mining, forestry, energy & transportation activities from Caterpillar or CAT. Since Joko Widodo became the president of Indonesia, the building of infrastructure has been the main focus until now. This stimulates the market for heavy equipment. In constructing infrastructure, construction companies need heavy equipment to support the construction process. Hence, the demand for heavy equipment increase significantly, and of course this is a good sign for PT Trakindo Utama as heavy equipment provider to generate more revenue and profit. This is the biggest donator to the company’s revenue streams with more than 90 percent of the revenues generated. The purchase and rental of heavy equipment is the backbone of economy for PT Trakindo Utama because purchase and rental give the company the biggest revenue streams.

B) Purchase of heavy equipment parts and work tools

PT Trakindo Utama also provides parts and work tools as the complementary products for the heavy equipment. There may be a situation where companies have already owned the CAT heavy equipment purchased or rented from PT Trakindo Utama, but they need the parts and work tools to help them in the construction process. Thus, PT Trakindo Utama should always be prepared to provide the parts and work tools for customers who need them to ensure the heavy equipment is working as guaranteed. The revenue stream obtained from this category is less than five percent of the total revenue. This is the other source of its revenue which also plays an important role to PT Trakindo Utama’s revenue streams since people do not only need the heavy equipment but the parts and tool kits as well to support the workflow in construction, mining, forestry, energy & transportation activities.

C) Services for the heavy equipment

PT Trakindo Utama also provides services to fix and maintain the heavy equipment purchased or rented from the company. This is a part of PT Trakindo Utama’s ways to always be there for the customers when needed. The services provided are also proofs that the company really takes good care of its products and customers. The revenue generated from this category is also less than five percent from the total revenue. The services provided by PT Trakindo Utama also plays an important part of the company’s revenue streams. Services such as equipment management solution, Trakindo fast and assured commitment, machine rebuild, component rebuild, preventive maintenance kits, SOS service, and CAT connect are all offered by PT Trakindo Utama to ensure that customers are happy and satisfied with the company as a reliable heavy equipment provider.

From the analysis conducted above, it can be concluded that PT Trakindo Utama has a low level of diversification (dominant business). This is because the revenues are mostly from heavy equipment purchase and rental (more than 90%) and the rest is from the purchase of parts, tool kits and services (less than 10%). PT Trakindo really pays its focus on the purchase and rental of heavy equipment because it is its main and most important business area. But that does not mean that the company ignores the other business units, PT Trakindo Utama takes every business unit seriously because all of them take part in the company’s revenue stream.

2.2 COMPETITIVE RIVALRY

Competitive rivalry is a set of competitive actions taken by a company to defend its position in the market and stay relevant to the market and its competitors that compete in the same market. Every company has its own competitive rivalry, including PT Trakindo Utama.

A) Competitor Analysis

Competitors: In the business, PT Trakindo Utama as the only dealer of Caterpillar heavy equipment products deals with few competitors that also compete in the same market. The main competitors are:

PT United Tractors Tbk with Komatsu, UD Trucks, Scania, Bomag, and Tadano
PT Hexindo Adiperkasa Tbk with Hitachi and BELL
PT Intraco Penta Tbk with Volvo, Kobelco, Hyundai, and Doosan
Other brands from China and South Korea

Market commonality: The market commonality of the industry is high with high difficulty to enter the market. This is because the market is a focused market focusing on very specific purpose and people who engage in construction, mining, forestry, energy, and specialized transportation. There are a number of players in the heavy equipment industry as mentioned above. All of them compete in the same market, with same market segments and targets.

Resource similarity: The resources between PT Trakindo Utama and its competitors are pretty much the same because all of them compete in the same market. The differences between them is the technology used in building the products and the materials used to make them. Other than that, the difference is located within these companies. Meaning that how they operate, how they innovate, and how they manage to stay in the market with different strategies.

B) Competitive Behavior

Competitive behavior is a set of competitive actions to attack competitors and defend a company’s competitive behavior. The competitive behavior of PT Trakindo Utama is always providing high quality heavy equipment products that correspond with the buyers’ expectations and standards. This is driven by:

Motivation: The motivation of PT Trakindo is to take part in building Indonesia to be a better country through providing the best heavy equipment to help the construction of Indonesia and be the best heavy equipment provider in Indonesia, leaving all the competitors behind and be the market leader for heavy equipment in Indonesia.

Ability: PT Trakindo Utama is able to provide the best quality products to ensure that it is taking its part in building better Indonesia. As the only official distributor or dealer of Caterpillar products in Indonesia, PT Trakindo Utama has the competitive advantage that others do not have. Caterpillar products are famous for their high quality and durable heavy equipment for many situations and landscapes in construction or mining sites. The machines and engines available for purchase are also high quality and durable for long-term use.

Awareness: PT Trakindo Utama is aware that the construction of Indonesia will be massive, therefore, the company is always prepared to give the highest quality heavy equipment to assist the construction of Indonesia. PT Trakindo Utama is also aware that the construction of properties will keep on growing due to population increase therefore, PT Trakindo Utama is always ready to support the construction of properties in Indonesia.

C) Likelihood to Attack

First mover benefits: PT Trakindo Utama was established in 1970 and it got the license as the only dealer of Caterpillar products in 1971. It is safe to say that PT Trakindo Utama is the first mover in the industry, after that it is followed by other competitors. So, PT Trakindo Utama has the benefits to gain competitive advantage as well as defending it. It took part in building the first toll road in Indonesia, Soekarno Hatta International Airport, and other roads as well as dams. This is the competitive advantage that PT Trakindo Utama has as the first mover in the industry.

Organizational size: The company organizational size is massive with more than sixty branches all across Indonesia. This is to make sure that PT Trakindo Utama is engaged in the customer relationship even more. The products offered are easily found and the response from the company is also better. This way, PT Trakindo Utama can have better reputation and positioning in the customers’ minds.

Quality: The products provided by PT Trakindo Utama are always the best quality ones that meet the customers’ standards and expectations. Every product must pass the quality control to ensure that it is built with excellent standard before selling the products to end users. Thus, the quality of PT Trakindo Utama’s products always meet the quality control standards to deliver superior value for customers regarding the products of PT Trakindo Utama and customers can be satisfied with what they purchase or rent from the company.

D) Likelihood to Respond

Type of competitive action: To gain more market share and defend the competitive advantage, PT Trakindo Utama always provides the best quality heavy equipment products as well as its customer relationship engagement. Not long ago, it launched a mobile application to better understand the customers and ensure that the company is always there with customers. PT Trakindo Utama always wants to be the best in the heavy equipment industry. Thus, it is always prepared and ready to attack the competitors through continuous innovation on the heavy equipment products, parts, tool kits, and services.

Actor’s reputation: PT Trakindo Utama has been in the business for fifty years now. The reputation of the company is excellent in the industry because the company has gained experiences whilst also being able to innovate and add value for its customers.

Market dependency: The market dependency on PT Trakindo Utama is high, especially for construction, mining, forestry, energy, and transportation sector since Indonesia is now aggressive in constructing new infrastructures. To do this, heavy equipment is needed. Therefore, the market dependency is high on PT Trakindo Utama’s heavy equipment.

E) Outcomes

Market position: PT Trakindo Utama is the leader in the heavy equipment industry a long time ago, precisely in 1998. Now, the market position of PT Trakindo Utama declines to second place, losing only to PT United Tractors Tbk as the market leader in heavy equipment industry. The market position of PT Trakindo Utama is now the challenger to PT United Tractors Tbk. Until today, PT Trakindo Utama is still fighting with the market leader to regain its position on the top of the list.

Financial performance: The financial performance of PT Trakindo Utama is profitable with profit growth of around twenty percent. considering the very tight competition among heavy equipment. The profit mainly comes from the sales of heavy equipment. This is made possible because the government of Indonesia right now focuses on building infrastructure to boost the economy of the country. From this, it can be concluded that the financial performance of PT Trakindo Utama is profitable despite tight competition in the market.

2.3 FIVE BUSINESS LEVEL STRATEGY

Business-level strategy is a set of strategy that a company uses to emphasize its competitive advantage in the market to retain its uniqueness from the rest of the competitors in the same market. There are five strategies: Cost leadership, focused cost leadership, differentiation, focused differentiation, and integrated cost leadership and differentiation.

A) PT Trakindo Utama’s Business Level Strategy

Out of the five-business level strategy, the business strategy that PT Trakindo possesses is focused differentiation. Judging from the products that the company offers, they are only for specific group of people, in a specified working area. The company focuses on providing heavy equipment from CAT for forestry, construction, transportation & energy, and mining activities. So, people or companies who will purchase and use the equipment are the ones who focus on those industries.

B) How does the company focus?

PT Trakindo Utama focuses its business in heavy equipment industry as the only dealer of Caterpillar products from the United States. It focuses on providing and offering the most reliable and high-quality heavy equipment and services for its customers. The customers of PT Trakindo Utama is very focused because the products and services offered are very niche. They are only for those who work in areas that need heavy equipment products and its services.

C) How does the company differentiate?

PT Trakindo Utama has one major differentiation beside its competitors. The company gains differentiation advantage through first mover benefit. PT Trakindo Utama is the first and the only company in Indonesia that is able to provide heavy equipment products from Caterpillar since 1971. This is the main difference between PT Trakindo Utama and its competitors.

2.4 INTERNAL ANALYSIS

An internal analysis is the thorough examination of a company’s internal components, both tangible and intangible, such as resources, assets and processes. An internal analysis helps the company decision-makers accurately identify areas for growth or revision to form a practical business strategy or business plan.

A) Resources

Tangible resources: The tangible assets are the things that can be observed and quantified. The tangible assets of PT Trakindo are the products that the company sells, the equipment for the operational, its office and other subsidiaries below the parent company, its employees, and other partners of the company.

Intangible resources: The license or authorization that PT Trakindo Utama got to be the only dealer of Caterpillar heavy equipment products and its services. The other intangible resource that PT Trakindo Utama has is the competitive advantage gained from being the first mover in the heavy equipment industry in Indonesia.

B) Capabilities

With the available resources, PT Trakindo Utama knows what it is capable of doing. Its capabilities include providing heavy machinery for forestry, agricultural, mining, transportation & energy, and construction. Other than just providing, the company also offers some services such as machine rebuild, component rebuild, preventive maintenance kit, equipment management solution, maintenance & service, SOS service, and CAT connect. It also provides training for its employees and customers.

C) Core Competencies

The core competencies of PT Trakindo Utama are discovered through four criteria of sustainable advantages and value chain analysis.

Four criteria of sustainable advantages:

The value capabilities of the company are very powerful since it is the second leading dealer of heavy equipment and machinery in Indonesia. It has a really wide opportunity range with a very minimum threat.

The rare capabilities are also strong, not many companies in Indonesia, especially construction companies can match what PT Trakindo Utama does in the industry. PT Trakindo Utama has been delivering superior value to its customers.

The costly-to-imitate capabilities are no match to other companies. It is not easy to imitate or be like PT Trakindo Utama as the only distributor of CAT products, also the cost to build the equipment and machines are not cheap at all.

The non-substitutable capabilities are also quite strong. As the leading and only authorized Caterpillar products dealer, it is difficult for customers to switch to competitors because PT Trakindo Utama has already had excellent reputation in the industry as well as one of the biggest market share holders in heavy equipment industry in Indonesia.

Value chain analysis:

The value chain analysis is all about completing tasks from the start to finish until it is in the customers’ hands. To maintain this, PT Trakindo Utama has had a good relationship with other business partners and subsidiaries to ensure supply chain surplus for the whole supply chain since in this industry, having a good supply chain management is essential.

The value chain surplus is also supported by well-managed organizational structure so that the flow of information from different departments within the company can be well received and turned into revenue streams for the company.

PT Trakindo Utama also has its own strategies when it goes to sales and marketing. The company often gives promotions to customers so that the interests of potential buyers can be sparked through the promotions offered such as discounts and competitions as the ways to market the product to boost the sales of heavy equipment that the company offers.

PT Trakindo Utama also has excellent follow-up service for its customers. This can be seen from one of its services which is “Trakindo fast and assured commitment”. This means that PT Trakindo Utama is a customer-oriented company where it puts customers and their satisfactions first regarding Caterpillar heavy equipment products.

D) Competitive Advantage

PT Trakindo Utama’s competitive advantage is by doing a focused differentiation. This is due to the capability of the company which is able to provide the best quality machinery from a famous company from the United States, Caterpillar for specific customer segment. Furthermore, its reputation in the industry and its involvement in building Indonesia is extraordinary. Another point to remember, PT Trakindo Utama is the first mover in the heavy equipment industry in Indonesia.

E) Strategic Competitiveness

PT Trakindo Utama’s strategic competitiveness is clearly visible from the previous explanations. It has dominated the industry, so it is safe to say that the company has obtained strategic competitiveness. It is a very strong company internally and externally with many opportunities and really few threats. It has been contributing in building Indonesia to be the country it is today. PT Trakindo Utama has also gained the market position as the second-best heavy equipment provider, losing only to PT United Tractors Tbk as the market leader. Nonetheless, PT Trakindo Utama has done its best to utilize its internal resources and capabilities trying to dethrone the market leader and trying to claim the top spot once again.

2.5 THE FIVE FORCES OF COMPETITION MODEL

The five forces of competition model is a framework for analyzing a company’s competitive environment. The number and power of a company’s competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company’s profitability.

A) Threat of New Entrants

The threat of new entrants for PT Trakindo Utama is low. It is true that new heavy equipment provider companies from China and South Korea have started to enter the market. However, it will be very difficult for them to do what PT Trakindo Utama has done in the heavy equipment industry. PT Trakindo Utama has had a strong customer base and excellent reputation among the competitors. So, it is safe to say that in the end, PT Trakindo Utama does not have to fear about the threats concocted by new entrants in the market because it has the major competitive advantage than other competitors, especially new players in the market.

B) Rivalry Among Competing Firms

The rivalry among competing firms in the heavy equipment industry is very tight. All heavy equipment companies in Indonesia compete against one another in the same market. PT Trakindo Utama is one of the competing firms in the market. Its competitors are PT United Tractors, PT Hexindo, PT Intraco Penta, and other brands from China and South Korea. Each of them has their own strengths, weaknesses, and advantages that may not be possessed by the others. Therefore, the competition in the heavy equipment industry is very tight since everyone wants to win and be on top of the market. Each has its own strategies to win against others in the competitive industry.

C) Bargaining Power of Supplier

The bargaining power of the suppliers in the heavy equipment industry in Indonesia is moderate because there are a few major players in the industry. PT Trakindo Utama is one of the key players there. Due to similarity of products and services being sold by these major companies, make the bargaining power of PT Trakindo Utama and others moderate. This is because customers have choices in purchasing heavy equipment products other than from PT Trakindo Utama. PT Trakindo Utama cannot set the price too low for its products because it will gain only little profit if it does so. The same goes if PT Trakindo Utama sets the price too high. Customers will not want to buy from PT Trakindo Utama and try to find other alternatives from other companies which can give them more value. Hence, the bargaining of suppliers or sellers is moderate.

D) Bargaining Power of Buyer

The bargaining power of buyers in the heavy equipment industry is also moderate. This is because they have choices if they want to buy heavy equipment products. Customers can purchase from PT Trakindo Utama or other major heavy equipment providers in the industry. However, the choices are also very limited since the market is very niche. There are only a few players in the industry, and they are irreplaceable. If customers want to purchase heavy equipment, the choices are PT Trakindo Utama, PT United Tractors, PT Hexindo, PT Intraco Penta and other brands from China and South Korea. Thus, due to limited number of choices, the bargaining power of buyers is moderate.

E) Threat of Substitute Products

The threat of substitute products for PT Trakindo Utama is low. This is because no other products that can replace heavy equipment for construction, mining, forestry, energy & transportation activities. All of these activities must be supported with heavy equipment so that these activities can be done faster and more efficient. There is no alternative that can substitute the existence of heavy equipment products. Therefore, the threat of substitute products for PT Trakindo Utama is low.

2.6 EXTERNAL ANALYSIS

External environment analysis is a key input into strategy formulation. It is an external environment analysis framework that helps guide your prospecting in the political or legal, economic, social-cultural and demographic, technological, environmental or sustainable physical, and global spheres of an organization’s external environment.

A) Political or Legal

Political or legal aspect is all about the regulations that are enacted by the government of a country. Indonesia’s political or legal decisions have helped PT Trakindo Utama to develop into a bigger and better company. Since Joko Widodo became the president of Indonesia, the building of infrastructure has been the main focus until now. This stimulates the market for heavy equipment. In constructing infrastructure, construction companies need heavy equipment to support the construction process. The government has since then made regulations that ease the process of issuing the permission to build infrastructures all across Indonesia. This is a brilliant opportunity that PT Trakindo Utama must not avoid.

B) Economic

The economy of Indonesia is still growing despite the current situation. This is stimulated by the ongoing infrastructure constructions that happens all over Indonesia. PT Trakindo Utama takes part in helping to boost the economy of Indonesia by providing the highest quality and the most reliable heavy equipment products to assist the infrastructure constructions to be faster and more efficient which can lead to better economic performance for Indonesia. PT Trakindo Utama has solemnly taken the role as the helper to make Indonesia’s economy better through providing the best heavy equipment needed for any infrastructure constructions.

C) Socio-cultural and Demographic

The socio-cultural and demographic aspect that should be given extra attention for PT Trakindo Utama is the latest trend that is going on in Indonesia. In the last few years, the trend for Indonesia is continuous improvement in building infrastructure such as toll roads, dams, railways, and other infrastructures. This shapes the trends and people’s opinions about the ongoing infrastructure constructions. Some people have positive opinions while others may have negative ones. At the end of the day, PT Trakindo Utama is aware of the current ongoing trend and is always prepared and ready to face the ongoing and upcoming trends.

D) Technological

PT Trakindo Utama ensures that every product from Caterpillar offered to customers has the latest technology innovations that can support them to be faster and more efficient in doing their jobs in construction, mining, forestry, energy & transportation. PT Trakindo Utama has the ability to invent new features to Caterpillar products such as more powerful machines with more horse powers but more efficient in fuel consumption so that the people who use Caterpillar products can stay focus on their works longer without having to worry about the heavy equipment will be damaged or out of order.

E) Environmental or Sustainable Physical

PT Trakindo Utama is committed to achieve the highest possible standards of performance in the field of Quality and Safety, Health & Environment (QSHE) Management System, including Operational Safety, across its work areas. Trakindo will always use QSHE Management System as the first priority to improve operational performance in all areas of work.
Employees’ awareness and the management’s full support are the key to the company’s safe operation. At PT Trakindo Utama, employees are considered as asset, to whom attention is always given, whose lives and health are protected. Based on that, PT Trakindo Utama has put SHE as the main approach in creating healthy and safe workplace. Employee’s health is highly related productivity. PT Trakindo Utama regularly performs trainings and socialization about general health and healthy work environment.
PT Trakindo Utama is also committed to protecting the environment by preventing pollution from waste, emissions, and discharges impacted by the operations.

F) Global

PT Trakindo Utama focuses its market segment and target as well as competition only in Indonesia. With that being said, PT Trakindo Utama must not be afraid of global threats but to prepare and face them. Global impact will not affect PT Trakindo Utama much due to its competitive advantages and reputation that it has gained in the market. Furthermore, the Caterpillar products are also very famous globally, so there will not be any major problems that PT Trakindo Utama has to face to retain its business in the heavy equipment industry.

CHAPTER 3

SUMMARY AND SUGGESTIONS

3.1 SUMMARY

PT Trakindo Utama is a leading authorized dealer of CAT brand which specializes in heavy equipment for forestry activities, agriculture activities, construction activities, energy & transportation activities, and mining activities. It is a subsidiary of PT Tiara Marga Trakindo founded by AHK “Met” Hamami on 23 December 1970. PT Trakindo Utama became the only authorized dealer of Caterpillar (CAT) on 13 April 1971. PT Trakindo Utama also supported the construction of important buildings and roads in Indonesia. In 1978, It supported the construction of Jagorawi toll road, the first toll road in Indonesia. In 1980, the company took part in the construction of Soekarno Hatta International Airport. PT Trakindo Utama was also involved in dam construction during the 1980s as well as other toll roads. Moving to present day, with a proud history of more than 45 years, Trakindo has grown today into a company that actively contributes to Indonesia’s national development. Committed to delivering excellence, enabling progression towards success, Trakindo is Advancing You Forward.

It has a vision of “To be the world-class provider of Caterpillar equipment solutions.” With missions “To set up an entity that creates worthwhile and challenging job opportunities to as many Indonesians as possible, while incorporating the following values: Continuous development of employees, consistent capital growth (financial, intellectual, brand identity) and reinvestment of capital into the business, and maintaining highly ethical business practices.” It also has core values that guides the company, which are: Integrity, continuous development, excellence, proactive, accountability, and teamwork. It also has the brand spirit of Advancing You Forward.

The analyses conducted in this paper are: Internal analysis, external analysis, competitive rivalry, five business level strategy, types of diversification, and five forces of competition model. From the analyses conducted above, we can see the position of PT Trakindo Utama in the market, its competitors, its market and consumer segments, its business level strategy, its internal processes and strengths, its external environment, its competitive behavior, and its resistant to threats.

3.2 SUGGESTIONS

PT Trakindo Utama has been in the heavy equipment industry in Indonesia for a very long time. When people hear about Trakindo, they always think about one thing: Caterpillar heavy equipment products. Now, PT Trakindo Utama is not the market leader in the industry like it used to be in 1998. The top spot was stolen by PT United Tractors.
Currently, PT Trakindo Utama holds the market share for the total 20% of the whole heavy equipment industry. While PT United Tractors Tbk holds 32% of the market share.

In order for PT Trakindo Utama to gain the top spot back, there are a few ways that the company can do:

Giving the right promotion at the right time. This is necessary to increase market share of the company and to steal the market from PT United Tractors. PT Trakindo Utama is already famous in the heavy equipment industry in Indonesia so, to do this, will not be a difficult for the company.
Cooperate with the government for major infrastructure projects. This way, PT Trakindo Utama can show what it is capable of doing and take control of the industry even more.
Utilize the tangible and intangible asset to ensure more competitive advantage to win in the market.
Focus on customers so that the company can fulfill what the customers’ needs and wants regarding the Caterpillar heavy equipment products.

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