Strategic Management Analysis: PT Samudera Indonesia Tbk.
- HAPTER 1
INTRODUTION
PT Samudera Indonesia Tbk is one of the pioneer in Indonesia’s shipping industry. This company has been stood for almost half of century. It is established on November 13th 1964, the head office is located in the central of Jakarta, Jl. Letjen S. Parman. PT Samudera Indonesia operates in major goods transportation and logistics field. Throughout its history, the Company has never stop to develop itself by embracing every opportunity. This has been in accordance with the vision of Mr. Soedarpo Sastrosatomo that Indonesia will be prosperous when its aspect of distribution and communications are within the control of Indonesia Nation.They managed to give the best services and values in the field of goods transportation and logistics by providing cargo transportation by land, sea, and air including warehouses and services through integrated supply chain.
Samudera Indonesia covers four different areas of shipments, such as samudera shipping, samuder agency, samudera logistics, and samudera terminal. These four areas connected with each other thorugh the process of shipping. The reason why this company is very successful and driven is because they have a distinctive vision in making global connectivity to meet people needs and wants. In order to achieve it, PT Samudera Indonesia has implemented several missions such as providing high quality services in goods transportation and logistics to meet demand of distribution activities all across Indonesia, actively participating in creating job employment and developing the competence of human resource skills, ensuring sustainable business growth an delver additional value to its shareholders, as well as contributing positively towards the economic growth by constantly delivering an efficient logistics services. In addition, PT Samudera Indoesia lives by its motto, this includes delivering what is best for customers, valuing resources such as 3P (people, process, and technology), integrity, encouraging and innovation, but most importantly, respecting every partnership and the community. Since it has an aim in providing high quality logistics services, this company’s focusing towards domestic customers who performs in large businesses with routine activities in delivering containers or bulks. Hence, they need to prioritize in aiming those market segment first. That way, Samudera Indonesia will be able to forecasts it demands because those customers are the ones who have potential in making purchases compared to the uncertain customers.
As for competitors, this company are up against PT Pelayaran Tempuran Emas, PT Buana Listya Tama, and PT. Humpuss Intermoda. PT Samudera Indonesia is at the fifth rank after Humpuss Intermoda. These logistics company are compete in improving business processes, enhancing customer service, improving supply chain visibility, technology advancement and sustainability. In addition to adequate competency, the Company also performed periodic Organization Development in order to increase the effectiveness and efficiency of the organization to achieve sustainable growth. To achieve it, human resources are a major tools for PT Samudera Indonesia. The company uses periodic Organization Development to increase the effectiveness and efficiency of the organization as well as to achieve sustainable growth. Furthermore, Samudera Indonesia has restructured its business to support maximal value creation for stakeholders, as well as to increase synergy.
Samudera Indonesia always continuing to make a better and innovative progress to maintain sustainability of company’s operations. Marketing operations is considered as a backbone of Samudera Indonesia. Its marketing strategy related with people, process, and technology in which enables Samudera Indoesia to operate efficiently and helps to scale quality and consistency. Samudera Indonesia’s HR department is dealing with managing human resource capital. Directors of the HR established five elements to support company’s transformation program, which are organization development, recruitment and selection, learning and career development. The implementation of its new organizational structure and job description is structured based on company’s strategy and director’s approval to improve the previous organization structures. In addition, HR has done some reviews of corporate human capital business processes. The process is done by mapping along the recent procedures in the directorate of human capital (CHC). HR has also upgraded the process of recruitment and selection through various stages in order to achieve worker’s requirement in quality and competency. Workers can be obtained through Samudera Indonesia’s Management Development Program (SMDP). Through this program, workers are being trained based on competency model of Samudera. There were two models of competency. The hard competency has an aim in making employees obtained the knowledge of company’s product and services. Meanwhile, the soft competency is grouped into core, leaders and job family competency. Furthermore, Samudera managers developed its competencies by implementing another program called Managers Development Program (MDP). Employees will be mentored to identify competencies and performance. Operational Development program (ODP) is another competencies management practices and design to drives improvement of the workers. ODP is specifically carried by Samudera Indonesia Ship Management (SISM). SISM provides shipping’s knowledge and skill practices for workers. Furthermore, this training program has been implemented in several universities to help improve recent training programs. Those HR programs are developed to boost efficiency as well as effectiveness of Samudera Indonesia company on an ongoing basis. Certainly, all practices are done in accordance to current environment and demand.
Information Technology (IT) is a major supporting aspects of PT Samudera Indonesia. Because IT is its main tools in operating and monitoring the levels of productivity and efficiency. Samudera Indonesia has implemented a system to support the interests of the company. The strategy of implementation required 5 years in the making started from strategic infrastructure framework development in 2011, and transformation of service quality in 2012, and enterprise integration in 2013. Integration of HR administration, finance, and the workflow process is automated in 2014. In the following year, Samudera Indonesia corporate shared its services to Samudera’s business units. The improvement of IT has impacted business process positively. The flow of shipments has become much better, faster and advanced. Moreover, the process of administration has been simplified in which analytical reports that are paper based and printings are decreased. Every processes and data are being saved in database form. Thus, it helps cut costs, saves lots of money. The IT’s overall facility strategy is to implement and make integration towards services and marketing operation in Samudera Indonesia’s business units.
CHAPTER 2
STRATEGIC MANAGEMENT ANALYSIS
THE I/O MODEL
- External environment
The establishment of PT Samudera Indonesia is based on the analysis of several external environment factors. The placement of Samudera is determined based on what’s the market focus and where’s the best strategic location this company going to be built. The reason on why Jakarta is the best option for Samudera Indonesia because Jakarta is considered as a metropolitan city across Indonesia. Furthermore, Jakarta is one of the most active city and many industries are established and operate in Jakarta. Hence, a lot of multi national companies most likely to approach this city as its source for partnerships. Moreover, big companies usually needs transportation services to help ships large goods that in bulks or containers, hence, this was a good opportunity for the company. Besides looking at geographical point of view, PT Sanudera Indonesia also analyse the availability of potential labors and also natural resources.
- An attractive industry
Samudera Indoesia has a lot of opportunities coming ahead in the future. On the previous statement, it is proved that samudera Indonesia has a good connection/networks with locals and international logistics company. Therefore, this company has a potential in developing its business across Asia and othe developing countries across the world. Furthermore, a good record of Samudera Indonesia can results in a good portfolio for foreign logistics companies in terms of impression. Moreover, this can be act as a start of future partnerships for Samudera Indonesia
- Strategy formulation
Based on its vision in making global connectivity to meet people needs and wants. The way to achieve it is by doing its mission in providing high quality services in goods transportation and logistics to meet demand of distribution activities all across Indonesia, actively participating in creating job employment and developing the competence of human resource skills, ensuring sustainable business growth an delver additional value to its shareholders, as well as contributing positively towards the economic growth by constantly delivering an efficient logistics services. Hence, PT Samudera Indonesia began to penetrate its strategy formulation which contains company’s core values which are based on integrity and professionalism.
- Assets and skills
Samudera Indonesia always value Human Resource (HR) as company’s biggest asset. Because through professional trainings and development which are implemented by the HR department, successfully trained and is resulting in an active and motivated employees with high competency. Furthermore, with various programs, employees are able to obtain and perform best skills. Therefore, making a positive work environment that can result in more effective and efficient workflow.
- Strategy implementation
Samudera Indoneisa provides unique strategies in making each resources to be useful. One of Samudera Indonesia strategy is improve work performances on employees. Since the company undertand that human resources is such an important assets, Samudera Indonesia implemented a system that can combine the function of information technology, financial and HR administration. These functions are planted under “enterprise application” system. The company believe through this system, it will increase leaderships and importantly develop knowledge which can boost up employees motivation.
- Superior returns
Through those five stages, it enables us to gain earning above-average returns.
RESOURCE BASED MODEL
- Resources
In 2014, PT Samudera Indonesia achieved the highest productivity rate against shipping competitors which has been mentioned on the first part introduction. Hence, the operations of the company is enchanced day by day. One of the reason is because Samudera Indonesia has a really good resources such as technology. The technology is constanty integrated to achieve the best shipping service performancs. In addition, Samudera Indonesia has always been able to make the most efficient costs and optimize every shipments unit facilities in order to enhance company’s margin. However, the company are still trying to improve its operation because Samudera is still lacking providing supporting utilities in operations. And there are limited quantity of ships to fulfill all shipments order. Therefore, operations still needs to be monitored intensively.
- Capability
Samudera Indonesia is primarily operates in transportation of bulks and containers cargo through container shipping and bulk segments. Hence, transporting cargo is considered as its core capability. Through the years, the company has been able to established a strong competitiveness in the regional container shipping industry, that is why this makes them differ amongst the existing competitors. Because they have an wide range of connection and networks, since they have a strong foundation of HR departments, Samudera Indonesia have successfully managed to build good relationships with fellow industries. Furthermore, this company has do various partnerships. Therefore, it enables Samudera to expand its business area units, starting only in the locals (Indonesia), to numerous countries such as India, Singapore, Hongkong, and more. Furthermore, Samudera is going to continue to take further strategic approach to enhance management operations. Also, Information Technology (IT) has also been Samudera Indonesia’s powerful tools in delivering a fast shipments and performance.
- Competitive Advantage
To manage and support an integrated shipping activities, PT Samudera Indonesia provides list of professionals to gain efficiencies shipments to customers. Therefore, human resources are one of the best and biggest asset of Samudera Indonesia. Moreover, Samudera Indonesia Ship Management (SISM) recruits some of the best and highly competent people and expertise to operate ships well and safe in order to match market needs, since one of the company’s mission is to provide a safety practices in work environment.
- An attractive Industry
Samudera Indoesia has a lot of opportunities coming ahead in the future. On the previous statement, it is proved that samudera Indonesia has a good connection/networks with locals and international logistics company. Therefore, this company has a potential in developing its business across Asia and othe developing countries across the world. Furthermore, a good record of Samudera Indonesia can results in a good portfolio for foreign logistics companies in terms of impression. Moreover, this can be act as a start of future partnerships.
- Strategy implementation and formulation
Samudera Indoneisa provides unique strategies in making each resources to be useful. One of Samudera Indonesia strategy is improve work performances on employees. Since the company undertand that human resources is such an important assets, Samudera Indonesia implemented a system that can combine the function of information technology, financial and HR administration. These functions are planted under “enterprise application” system. The company believe through this system, it will increase leaderships and importantly develop knowledge which can boost up employees motivation.
- Superior returns
Through those five stages, it enables us to gain earning above-average returns.
FIVE FORCES OF COMPETITION MODEL
- Threats of new entrants
PT Samudera Indonesia has some of the biggest rivals in shipping industry. Most of them started in the same period. PT Wintermar is one of Samudera Indonesia older competitors because both of this company began at the same era (1964-1970). There has not been any threats of new entrants because establishing a new company especially in this specific industry is quite difficult to compete and requires big costs to operate the system. Hence, the threats of new entrants is low for Samudera Indonesia.
- Bargaining power of suppliers
PT Samudera Indonesia does have variety of suppliers in help building and inventing machine tools for shipping wise. Therefore the bargaining power of supplier is quite high.
Because the material needed for this industry is require innovative and specialization to optimize the performance. Hence, suppliers has a chance in increasing the costs to fulfill the orders.
- Bargaining power of buyers
Bargaining power of buyers will have to be quite high. Since Samudera Indonesia is about aiming domestic buyers especially the ones who operates in large business such as oil industry, food or electrical industries. Hence, it increases customers and more power towards Samudera Indonesia.
- Threats of substitute products
It is hard for customers to find substitute products because Samudera Indonesia has a wide range of shipping methods. The company provides cargo transportation by land, sea, and air including warehouses and services through integrated supply chain. Furthermore, Samudera Indonesia strives for aiming cost leadership. Hence, Samudera Indonesia gives benefits to customers which this can be a great impact for Samudera Indonesia to reduce the possible threats of substitute products.
- Rivalry among competing firms
Since PT Samudera Indonesia are competing against top competitors, they have to be able to gain more competitive advantage as its strength and keep increasing performance to give more effective and efficient services to tackle down its rivals and attract more customers. Hence, rivalry among competing firms is rather high for Samudera Indonesia.
FIVE BUSINESS LEVEL STRATEGY
Source : listed on the last page
PT Samudera Indonesia is focused on striving cost leadership against competitors. Thereforore, the company is continuously implementing low costs on warehouses while still managed to develop an integrated distribution centers. This proves Samudera Indonesia is able to make the use of existing facilities while reducing costs at the same time to maintain its overall margin. Since it has an aim in providing high quality logistics services, this company’s focusing towards domestic customers who performs in large businesses with routine activities in delivering containers or bulks. Hence, Samudera Indoesia is focusing on narrow market segment. At the beginning, PT Samudera Indonesia has an aim in providing shipping facilities which runs on container, bulks, tanker, and offshore carriers. It is not considered as broad market because each operation tools are specially designed customers who wants to transport warehouse goods which usually came in form of containers/bulks. Therefore, this definitely attracts specific consumers who generally need this type of shipping services to operate their businesses.
TYPES OF DIVERSIFICATION
Source : listed on the last page
The details of the performance of the company’s revenue per business line are as follows :
- Shipping and agency services
- Samudera shipping
The main revenue is collected mainly from the shipping services. Because there a lot of components include in shipping such as freight, tax rates, shipping insurance, packaging cost, and more. Each of shipping are differentiated into categories such as container shipping, tanker, bulk, and offshore carrier. Each ship services comes with different cost. Therefore, its revenue regularly streams from this segment.
- Samudera agency
PT Samudera Indonesia agencies are spread across countries (offices). People can easily find according to its local area. Hence, it attracts more customers into choosing Samudera as their source of shipping logistic. This surely increase shipping demands and generate higher revenue. Based on the data, Samudera Indonesia head offices are operates at over 20 cities in Indonesia and 6 countries such as Malaysia, Singapore, India, Thailand, UAE, Vietnam.
- Affiliated companies / Shareholders
Other factor which supports PT Samudera Indonesia revenue streams is its affiliated companies. There are 13 companies which are signed under PT Samudera Indonesia, lists are as follows :
Source : listed on the last page
The parent company (Samudera Indonesia) generally owns less than a 50% interest in its affiliated company, and the parent keeps its operations separate from the affiliate.
After analysing PT Samudera Indonesia revenue streams, ‘low-level diversification’ is the appropriate fit for this company. They apply a ‘dominant business’ because 70%-95% of its revenue streams comes from single business (including companies which PT Samudera Indonesia is affiliated with).
COMPETITIVE DYNAMICS
- Industry Analysis
a method that helps to understand a company’s position relative to other participants in the industry. It helps them to identify both the opportunities and threats coming their way and gives them a strong idea of the present and future scenario of the industry. Furthermore, PT Samudera Indonesia have to know what are their resource capabilities and how to optimize those capabilities. In other words, making sure the company has their own competitive advantage and what offers can benefit customers compared to other existing rivals. By doing so, it helps company uncovers competitors strength and weaknesses in the market.
- Competitor Analysis (Growth)
After analyzing the internal sector of the company, PT Samudera Indonesia have to do an external research in terms of learning which rivals that might be potential to tackle. This includes finding competitor’s strength and weaknesses. One of the biggest rivals which Samudera Indonesia has been competing is PT Humpuss Intermoda Transportasi. Therefore, it is necessary for PT Samudera Indonesia to look at their growth report throughout the years in terms of annual report such as revenue and income growth.
Source : listed on the last page
According to the source, it can be concluded that PT Humpuss Intermoda Transportasi has a productive performance company growth. Hence, through this data PT Samudera Indonesia can conduct an internal evaluation to maintain its company’s growth and keeps on improving to compete against them.
- Competitor Value Analysis
In addition, it is also necessary to analyse what are exactly competitor’s value (what they can provide, that we couldn’t). PT Humpuss Intermoda Transportasi has been maintaining the track record of positive performance annually. Its core value is to deliver energy to mankind in everyday life in Indonesia. It is more than just a service.
- Competitive Performance Analysis
The improvement of IT has impacted business process positively. The flow of shipments has become much better, faster and advanced. Moreover, the process of administration has been simplified in which analytical reports that are paper based and printings are decreased. Every processes and data are being saved in database form. Thus, it helps cut costs, saves lots of money. The IT’s overall facility strategy is to implement and make integration towards services and marketing operation in Samudera Indonesia’s business units. Furthermore, The company is continuously implementing low costs on warehouses while still managed to develop an integrated distribution centers. This proves Samudera Indonesia is able to make the use of existing facilities while reducing costs at the same time to maintain its overall margin.
- Slow cycle market analysis
PT Samudera is not categorized as a “slow cycle market”. According to its mission, Samudera Indonesia seek to increase its margin by strategic investments and addition of equipment and fleet to compete in both local and international markets. Moreover, Samudera Indonesia priorities efficiency in operating and transporting method. Hence, its goal is to have a integrated technology to not only make the process going effectively but also to gain its strength in delivering the best services in locally and internationally. But most importantly, Samudera Indonesia is not “imitating” from other rivals for gaining competitive advantage. Because they are the first shipping logistics who implemented integrated practices in logistics industry.
- Fast cycle market analysis
PT Samudera is categorized as a “fast-cycle market”. As a national shipping company, the Company is supported by a vast network in almost all of the major ports in Indonesia and decades experiences in the business. What makes PT Samudera Indonesia a fast driven company is because it provides value-added services to its customers related to knowledge about the port and preferred transportation system. The cargo delivery process begins with engineering analysis, followed by designing accurate and proper operational plan while maintaining intensive communication with customer. The design plan can be updated depends on the situation in the field, Samudera Indonesia always prepare the best planning in order to reduce risk and avoid problems.
- Standard cycle market analysis
PT Samudera is not categorized as “standard-cycle market”. Based on the previous explanation above, since PT Samudera Indonesia are mainly focusing on implementing ingrated shipping method to overcome challenging situation in shipments industry. For instance, Samudera Indonesia has very large agencies and subsidiaries all across the nation. Therefore, it may be hard for other firms to imitate.
- Competitive Behavior Analysis
PT Samudera Indonesia implements integrity and reputation in every sector of their company. Until now, it is continually maintained as it has proven so many times as the Company’s own liability to gain trust and confidence in any business ventures. Hence, Samudera Indonesia provides one stop solution of integrated end-to-end logistics services that makes customers easier in transporting goods effectively and efficiently. Therefore, this is one of the main traits that differs PT Samudera Indonesia than other rivals in the industry.
CHAPTER 3
CONCLUSION
In conclusion, PT Samudera has never stop to develop itself by embracing every opportunity and challenges to achieve company’s vision. Samudera Indonesia always continuing to make a better and innovative progress to maintain sustainability of company’s operations. Its marketing strategy are related with people, process, and technology in which enables Samudera Indoesia to operate efficiently and helps to scale quality and consistency. Each of company’s practices and training programs has an aim to boost efficiency as well as effectiveness of Samudera Indonesia company on an ongoing basis. Certainly, everything is done in accordance to current environment and demand. Samudera Indoesia has a lot of opportunities coming ahead in the future Samudera Indonesia has a good connection/networks with locals and international logistics company. Therefore, this company has a potential in developing its business across Asia and othe developing countries across the world. Hence, Samudera Indonesia always value Human Resource (HR) as its biggest asset. Because through professional trainings and development which are implemented by the HR department, successfully trained and is resulting in an active and motivated employees with high competency. Furthermore, with various programs, employees are able to obtain and perform best skills. Therefore, making a positive work environment that can result in more effective and efficient workflow throughout the organization. However, there are several improvements which can be made to enhance Samudera Indonesia’s effectiveness and efficiency. The company still have to manage resources such as adding more transport vehicle units in order for company to perform fast distribution process because it is still remains limited. This will impact the overall shipping service process. Also, Samudera Indonesia has to invest in several supporting tools to improve company’s operation in the future. All these suggestions is to enables vast and advanced shipping performance of Samudera Indonesia.
SOURCES