Strategic Management Analysis: Javara I

Vision, Mission, and Objectives

Javara vision is to maintain the heritage of the best local products that have begun to become extinct so that they can continue to be enjoyed and create a bridge for local farmers to market their products overseas.

Javara has two very important yet simple missions:

1. Safeguarding Indonesia’s rich living heritage on food biodiversity and local wisdom from local food systems.
2. Maintain the profession of Indonesian small farmers by improving their livelihoods, pride and dignity through creative agricultural entrepreneurship.

Objectives:

The main objective of Javara is to conserve Indonesia’s biodiversity and empower farmers to re-cultivate endangered plant varieties organically and facilitate their marketing.

Market and Consumer Segments

At the beginning, Javara targeted the middle to high class consumer segment in Indonesia. However, it had a very slow development and caused the company to lose heavily because the majority of Indonesian consumers at that time did not really care and believed that local products could also be premium products. Society also has not been educated about the added value that artisanal food products have. Therefore, the management began to rack their brains and in 2011, Javara began to enter and focus on the export market. Initially only 20% of Javara products were successfully exported, with assistance from the Swiss, Italian and Korean governments. However, due to its very rapid development and made for about 85 percent of Javara products successfully exported to Europe, the United States and Australia. In Australia Javara products can be found in several Michelin Hotels and in Italy, Javara can be purchased at several specialty food shops in Palermo. This proves that Javara is starting to successfully market products processed by local Indonesian farmers to the international market. In 2015, Indonesian people began to be interested in local premium products. This is also the bright spot of Javara. Javara began to gain the trust of the Indonesian government to be able to bring Indonesia’s good name to the world. We can find Javara products in various premium supermarkets ranging from Ranch Market, Food Hall, Kemchicks, Grand Lucky, and Hero. In addition, Javara products are also widely used by 5-star hotels in Jakarta.

Competitors

In the healthy food supply industry, Javara has major competitors from Indonesia, which are Sunria, Nourish Indonesia, and Club Sehat. Sunria itself is a brand that is very well known for its three types of organic rice from Tasikmalaya which are pandan rice, volcano rice, and rainforest rice. Sunria has also started exporting its products to Malaysia, Singapore, France, Germany, Italy, and USA. Next, there is Nourish Indonesia which is already famous for its various natural and organic product variants. Starting from coffee, tea, honey, rice, to special foods for babies and children are available. One of Nourish’s top products is Himalayan pink salt and organic black chia seed. Apart from Sunria and Nourish Indonesia, there is also Club Sehat which sells healthy and organic food ingredients. But unlike others, Club Sehat is more inclined to be a retail that provides a variety of healthy products. It does sell a lot of organic food under its own brand, but it also provides products with foreign brands such as Lowan Whole Foods and Australia’s Own Organic. Therefore, Club Sehat is categorized as an indirect competitor for Javara.

CHAPTER 2

ANALYSIS AND DISCUSSION

2.1       International Opportunities

• Identify International Opportunities – Basic Benefits

Seeing the development of the Indonesian market which has not been stable enough for Javara to continue to market its products, the founders of Javara saw a very brilliant opportunity to enter the international market through the guidance assistance program of the Swiss government. This program is specifically for micro, small, and medium enterprises in developing countries so that they can market their products on the European continent. After successfully enrolling in this program, Javara returned to study and was mentored for 3 years by the Swiss government to be able to adapt, starting from sales speech techniques, packaging manufacturing, to conducting market research. Javara must go through a complicated certification but it is still carried out so that Javara can prove that their product is very suitable for consumption in the international market. From this, Javara learned and gained access to consumers in emerging markets which will significantly increase their market size. Javara also sees the opportunity of location advantages where the European community is more concerned and open to healthy and organic food products.

• Explore Resources and Capabilities – International Strategy

Javara is a company that applies an international business-level strategy and is specifically focused on differentiation. This can be seen through premium organic products and based on local wisdom offered by Javara. This also does not worry Javara the slightly higher price tag. This is due to the lower production volume compared to mass food products in general, so that the logistic costs imposed on Javara products will be higher. In addition, Javara also only supplies its products from the best local farmers who share a vision with Javara by preserving endangered plants, producing their own fertilizers, and using a crop rotation pattern to avoid pests. Javara really pays attention to this which is the main attraction for a product produced by Javara.

• Use Core Competencies – Modes of Entry

Javara markets its products to the international market by doing the direct export because it is considered more suitable for the characteristics possessed by Javara. Javara can be easier to control the supply and cost that they will spend to do the export thing. By doing direct export, also make Javara can interact directly with importers from abroad which is actually very useful for Javara as their reference to expand to the other countries. The marketing process is also more efficient and effective since Javara has a direct interaction with the potential buyers.

• Strategic Competitiveness Outcome – International Diversification Strategy

The strategy adopted by Javara in the end in marketing its products abroad finally started from developing products with various flavors and textures. In addition, starting from packaging, branding, and each exhibition is also adjusted in each new country to suit the tastes of the international community. Javara still uses raw materials from Indonesia, but is only given an international premium touch and investment so that it can enter international tastes. Javara is never tired of making interesting innovations. One example is when the boba trend in the world is soaring, Javara presents boba with a mixture of pea flowers which can make the boba color turn blue. In addition, Javara also makes gourmet noodles based on organic plants produced by Javara’s local farmers. These innovations can ultimately give Javara superior value in the international market.

2.2       The Choices of International Entry

At the beginning of the establishment of Javara, it only sells its products in Indonesian premium supermarkets. However, due to a lack of interest from Indonesian consumers, Javara lost up to around 300 million rupiah. Arising from this, Javara decided to do a direct export to the international market. The beginning of the way Javara entered the global market and introduced its products was when the Swiss government launched a special program for micro, small and medium enterprises to be able to market their products in Europe. Javara enrolled in the program and was eventually accepted. From there, Javara was received very positively by the European market. This is because the European community, such as in Italy, for example, has a very high preference for slow food products and Javara answered this. Of the 750 products that Javara produces, 250 have been certified. As much as 80 percent of Javara products have also been exported to 21 countries on 4 continents. Javara’s success in the international market is not easy because Javara received guidance for 3 years by the Swiss government to be guided on sales techniques, packaging, and how to identify a good market. With the presence of Javara products in the global market, making Javara have to recognize the market tastes well. This can be seen from one of Javara’s superior products, namely biscotti. This biscotti is a coconut biscuit product made by Javara with various flavors ranging from original, peanut, ginger, vanilla, and chocolate. To export biscotti to other countries, Javara adapts it to the tastes of each different market. In Italy, biscotti is made harder because Italians often consume it as an accompaniment to coffee. So that when dipped in coffee, biscotti does not crumble easily. In the UK, biscotti is made more buttery and creamier because that is the preference of most British people. Meanwhile, in the United States, biscotti is made sweeter because Americans are more likely to like sweets.

Javara’s export network varies widely from direct supply to supermarkets. Some go through an importer distributor abroad. There are also those who go to factories such as chocolate factories in the Netherlands and Ecuador that use sugar from Javara. In addition, there is also a consortium that orders together up to one container, then when the containers arrive at their place, they will immediately distribute them to around 200 shops. This is what makes Javara more comfortable to do direct export than other entry modes, because each process can be controlled starting from the expenses and delivery modes. In addition, it has the potential to interact directly with potential buyers and create satisfaction for customers because they will be able to get to know Javara products personally.

2.3       Internal Innovation Process

In the internal innovation process, there are three important steps, which are having an entrepreneurial mindset which is then developed for cross-functional product development as well as facilitating integration and innovation which will ultimately produce new values through these innovations. Javara in this regard has a very good internal innovation process. Here is the analysis:

• Entrepreneurial mindset

The founder of Javara, Ms. Helianti Hilman, has a very good entrepreneurial mindset. This can be seen in its success in seeing the opportunity to be able to market local food products that have begun to become extinct to the wider community in order to revive farmers as well as introduce to the world that Indonesia has a very rich diversity of food heritage. In addition, the management of Javara also has a strong entrepreneurial mindset to be able to enter the international market when the Indonesian market is not responding well.

• Cross-functional product development as well as facilitating the integration and innovation

From the opportunity to market simple local food products, it can be packaged very well by Javara with strong branding and good product development so that Javara products can enter local premium products that are favored by the wider community. In addition, Javara is always making new innovations and is not afraid of challenges because it can always adapt, starting from developing products with various tastes and textures to entering markets that prefer very high-quality food such as Japan and Switzerland. Apart from focusing on its products, Javara is also very focused and concerned about the fate of local farmers. Therefore, Javara always tries to foster the approximately 50,000 farmer partners owned by Javara so that they can prosper and continue to preserve Indonesia’s food culture.

• Creating values through innovation

From that innovation, Javara has solid values in the eyes of its customers. Starting from guaranteed product quality, delicious taste, to the prosperity of the farmers who partner with Javara. The values that Javara offer are also very rarely found in its competitors because Javara dares to be different and voices its uniqueness with extraordinary results.

2.4       Competitive Rivalry

There are several steps to be able to analyze competitive rivalry carried out by Javara, from competitor analysis, competitive behavior, attack and response to competitive rivalry, and outcomes. Competitive rivalry itself is an operation carried out by a company and its competitors in responding to each other to determine its position in the market.

• Competitor Analysis

Javara, which is a premium local food brand that prioritizes organism and health for each of its products, has competitors who are also involved in the same industry as Javara. Its competitors include Sunria, Club Sehat, and Nourish Indonesia. Here, the competitors will be analyzed based on the market commonality and resource similarity. Sunria and Nourish Indonesia are targeted to become the direct competitors of Javara because they have very high similarities to the target market and main ingredients which are taken directly from local farmers and cultivated by them. While Club Sehat will be categorized as the indirect competitors of Javara since it provides ingredients not only from Indonesia but also from overseas. However, Sunria, Club Sehat, and Nourish Indonesia have the same market as Javara, which is focusing on national and international markets that are interested in a variety of healthy spices, plants and organic food ingredients.

• Competitive Behavior

Javara’s competitive behavior focuses on the differentiation strategy where they always provide the best and high-quality food products to all their consumers. They present quality assurance and good taste in each of their products because that is what they want to show the public that Indonesia has abundant wealth with unique and luxurious flavors. Besides being organic, Javara also emphasized that local wisdom is important for farmers for every product produced. Because every product that is organic does not mean they have a local wisdom thing, but products that have local wisdom are definitely organic. Javara does not forget to always stick to its value, which are good, clean, and quality. Good, which means that every food and product has a delicious and fresh taste plus part of Indonesia’s heritage. Clean, which means that each product is free from chemicals that can pollute the environment. Therefore, Javara farmers do not use urea as their planting medium. And finally, Quality, which means that each production process uses a proper method to prioritize the quality of each item produced.

• Competitive Rivalry

In the likelihood of attack, Javara holds the strength in organizational size. Javara only has less than 100 employees which makes it easier and faster for Javara to adapt against competitors and place itself in the market. In addition, one of Javara’s strengths is to make quality one of the requirements for the product that Javara produces. Javara is no joke when it comes to quality. It only provides the best products from the best farmers with a different process from modern industry. In each Javara package, consumers can also find out the story behind the production of each ingredient, even the farmers are also mentioned in the packaging. This is what makes Javara have more value in the eyes of consumers and suppliers, because Javara always prioritizes the integrity and smoothness of the supply chain by maintaining it properly and fairly. In the likelihood of response, Javara is included in the market dependence because since 2011, Javara products have been more in demand by the global market than the Indonesian market. This makes Javara more disturbed if anything happens in the process of marketing its products to the global market.

• Outcomes

The current market position of Javara is increasingly clear in the eyes of consumers that Javara is not only an organic product but also premium and prioritizes local wisdom. In the end, consumers will trust Javara more because by buying Javara products, consumers will know more about the story of each Javara product and who are the farmers or workers who produce Javara products. Consumers will also feel more like helping local farmers to continue to be creative in order to create quality local products.

CHAPTER 3

SUMMARY AND SUGGESTION

Summary

PT Kampung Kearifan Indonesia or better known as the Javara is a local brand that focuses on the development and marketing of Indonesian local heritage food products that consumers are starting to forget. Starting from the adventure of Javara founder, Ms. Helianti Hilman, accidentally found a network of organic farmers who still prioritize ancient food systems. This made the Founder of Javara even more interested and kept trying to learn this concept. Javara shared an in-depth understanding of products based on local wisdom because finally the founder of Javara believed that local wisdom should be preserved by today’s society. Javara is here not only for a business, but also as a bridge for local farmers to be able to market their superior products properly and in accordance with the market. Javara markets its products not only in the Indonesian market but also in the global market. In fact, Javara is much more capable of growing rapidly in the global market. This is believed to be because foreign people are more open and educated about slow food and organic food. The products from Javara are very diverse, even now there are a total of around 750 products ranging from tea, rice, sugar, coconut, spices, and so on. This product is produced from Javara’s selected local farmers who are competent in their fields and have the same vision as Javara. In fact, Javara also wrote the story behind the production of each product on each package. Apart from sharing stories, this is believed to be able to attract more attention from consumers to buy Javara products.

Javara has several competitors such as Sunria, Nourish Indonesia, and Club Sehat. However, to fight competitors, Javara remains confident in all the quality of the products it produces because currently only Javara always puts forward the nature of local wisdom in all its products. Javara is also a brand that is not tired of adapting and learning because it can be seen from its initial struggle when it wanted to export to Europe which went through so many requirements and adaptations but finally it was resolved. Javara believes that no effort will betray the results because it can be seen from now that Javara can start supplying its products to various countries with high food preferences like Switzerland and Japan.

Suggestions

With all the activities and operations carried out by Javara, here are some of my recommendations for improving Javara’s performance so that it can develop even better:

• By having supplier farmers and local workers with a total of 5000 people is not easy to manage, Javara must have a strategy how to be able to maintain its suppliers so that they always produce products that meet Javara’s criteria and there is no supply vacuum because it will disrupt the supply chain process from Javara.
• Regarding the growth of Javara, it needs to analyze the market opportunities that can be exploited. By doing that, Javara can estimate how much opportunity is available in marketing their products and determine whether the market is large enough to support other products and still provide profits.
• Javara needs to foster better aftersales with customers to start building a loyal customer network that makes Javara products are their go-to product all the time.
• Javara should not be caught off guard to lose opportunities in market expansion because the chances of Javara being successful in the export market are very high. Javara must always be ready to adapt and make breakthroughs in order to further increase market share.
• Javara needs to balance its champion products with proper marketing and promotion because its competitors are started to emerge. Javara needs to do things that can make Javara products much better known than competitors’ products, for example following advertising with the latest trends, and so on.

REFERENCES

Investorid. (n.d.). Jangan Jadikan Hidup Sebagai Beban. Retrieved February 16, 2021, from https://investor.id/national/jangan-jadikan-hidup-sebagai-beban

Membawa Warisan Pangan Lokal ke Pasar Dunia Lewat Javara. (2016, March 10). Retrieved February 15, 2021, from https://ilovelife.co.id/blog/membawa-warisan-pangan-lokal-ke-pasar-dunia-lewat-javara/

Pengembangan ‘Value Based Economy’ Akan Jadi Fokus Kemenkop. (2019, October 31). Retrieved February 16, 2021, from http://www.depkop.go.id/read/pengembangan-value-based-economy-akan-jadi-fokus-kemenkop

Javara. (2020, October 23). Our journey. Retrieved February 16, 2021, from https://javara.co.id/our-journey/

Simanjuntak, T. (2015, November 24). Tinggal Telepon, Beras Organik Berwarna hingga aromatik Bisa Diantar ke Rumah. Retrieved February 16, 2021, from https://food.detik.com/info-kuliner/d-3078890/tinggal-telepon-beras-organik-berwarna-hingga-aromatik-bisa-diantar-ke-rumah

World Intellectual Property Organization – WIPO. (2016, June 2). The Founder of Indonesia’s “JAVARA” Takes Brand Global. Retrieved February 15, 2021, from https://www.youtube.com/watch?v=jsgymZpSKQ0

Mutiara Indonesia DAAI TV. (2016, October 6). Mutiara Indonesia DAAI TV : Founder JAVARA Indigenous Indonesia “Helianti Hilman”. Retrieved February 15, 2021, from https://www.youtube.com/watch?v=DDYwN53j_rU

Idris, M. (2017, August 29). Hebat! di tangan Wanita Ini, Pangan RI Diekspor ke 4 Benua. Retrieved February 16, 2021, from https://finance.detik.com/wawancara-khusus/d-3619152/hebat-di-tangan-wanita-ini-pangan-ri-diekspor-ke-4-benua

Julianto. (2017, October 19). Strategi tembus Pasar Internasional VERSI Pendiri Javara. Retrieved February 16, 2021, from https://klasika.kompas.id/baca/strategi-tembus-pasar-internasional-versi-pendiri-javara/

Jatmiko, B. (2018, December 17). Kisah Javara Membawa Produk Pangan Indonesia ke Mancanegara. Retrieved February 15, 2021, from https://ekonomi.kompas.com/read/2018/12/18/060000626/kisah-javara-membawa-produk-pangan-indonesia-ke-mancanegara?page=all

Goodlife. (2020, September 01). Sediakan Bahan Makanan Alami dan Organik, 4 Toko Ini Surga bagi Pecinta hidup Sehat. Retrieved February 16, 2021, from https://goodlife.id/sediakan-bahan-makanan-alami-dan-organik-4-toko-ini-surga-bagi-pecinta-hidup-sehat/