MODUL PERKULIAHAN

Strategic Management

Multi Business Strategy

Fakultas Program Studi Tatap Muka Kode MK Disusun Oleh

12
Ekonomi & Bisnis Magister W351700003 Dr. Baruna Hadibrata, SE., MM
Manajemen 2B2351EL

Abstract Competence
This module illustrates long-term goals Adequate to analyze multi business
and grand strategy. strategy.
Pembahasan

In an organization required a strategy to support a certain goals and long-term advice.

Essentially, strategy is also an evolutionary planning and process for future targets. In a study
of organizational and administrative theory there is sometimes a lack of understanding about
the strategy itself as well as the differences between organizational strategy and objectives,
corporate effectiveness, levels within the strategy itself, the relationship between strategy
and organizational performance with the Balanced Scorecard model, and the role of
administration within a strategic planning. For this paper is intended to discuss the lack of
understanding of it as well as a source of reference for the readers who need it.

Business strategy as a concept, is not the only determinant of organizational success to

achieve the strategic objectives that have been applied. The success of the strategy should be
understood as the success of its implementation. A conceptual business strategy may be
good, but if the implementation is bad, the result is a failure.

Initially a multi business company is one company that has one very successful product in the
market. Operationalization of the company is controlled with a functional structure, making
it easier to control marketing activities, production, human resources and of course finance.
The company then undertakes business development by entering different territories or
geographical divisionsisation, and / or enhancing the type of product offered or product
divisionalisation.

The company's chosen growth strategy at this stage is generally horizontal integration. It
continues to grow through its current business expansion, while still maintaining the same
product-market structure as it is today. This can be done by expanding geographically, from
one region to another, even from local scopes to international and even global. Furthermore,
area expansion is usually followed by product expansion and market expansion.

Having grown horizontally no longer provides significant benefits, companies will generally
grow through vertical integration. The trigger of this strategy is mainly the desire of the

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company to control the activities or resources that are very significant for its business.
Especially activities and resources are important for value creations that make it strategically
different than competitors.

There are two kinds of vertical integration, upstream approaching the supplier or backward
vertical integration and downstream approaching the consumer or forward vertical
integration.

When vertical saturation of growth is achieved, then the next logical step is to grow by
entering new business through a diversification strategy. The nature of business
diversification may relate to or enter the areas of business related to core business or
concentric diversification, or it may be unrelated. This latter type is commonly referred to as
a conglomerate or conglomerate diversification.

This pattern is the result of empirical observation of decisions made by many multi-business
companies for 10 years. Interestingly, many multibusiness companies do not embrace the
patterns outlined above. In some interviews and observations, the company's decision to
expand market (region, product) and development to different business is done
simultaneously.

In one of the interviews, the owner conveyed the amount of "temptation" that came in the
form of a cooperative offer, an offer to buy a company, a thought to develop a product into
a line unrelated to the current product line, or a desire for expansion to another region /
country . As a result too many cost centers (cost centers) or cash users (cash users) in the
management of business groups. While the profit center (profit center) and its cash generator
(cash generator) the amount is limited, or not produce as much as needed. As a result there
is no value creation, business growth slows down, income eroded and the owners are forced
to sell their own companies.

Multi-business company is a company that owns and manages more than one business. For
example in Indonesia ; Cipaganti business group which has business in the field of land
transportation (taxi, travel, car rental), tourism business (tour, ticketing, bus rental), hotel

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business, cargo business, mining business (gold, coal), heavy equipment rental business ,
property business, and syariah financial business (BPRS). Also a business group of Kompas
Gramedia who owns media business (newspaper, magazine, tabloid, television, book
publishing, printing, bookstore), MICE business, hospitality business, education and training
business, electronics and multimedia business, manufacturing) tissues. State-owned
enterprises (SOEs) such as PT. Wijaya Karya, Tbk. It also manages many businesses in various
industries.

Diversification Benefits
Diversification is commonly associated with risk minimization, whether in investing or
business operation. If you operate in multiple product categories or business types, you are
more likely to survive failure of one format or industry. By diversifying, you can expand your
supplier base, business partners and associates. This enables you to draw in other experts and
talents. A diversification strategy also gives you greater revenue potential if your company
effectively serves the needs of customers in each business format.

Diversification Challenges
The extreme of diversification is spreading yourself too thin. If you try to do more than your
resources, strengths and market potential can afford, you may end up not succeeding at
anything. You also put more pressure on company leaders to stay on top of goals, strategies,
partnerships and market factors in a diversification strategy. Diversification requires more
investment in product development and marketing, which makes it difficult to distribute extra
cash through dividend payments to owners.

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Daftar Pustaka

Amit, R., Christoph Zott, and Lorenzo Massa., 2011, Strategic Management Journal, The
Business Model: Recent Developments and Future Research
Ankaraju, S., 2010, Business Models, Business Strategy, Operating Model, What is a Multi-
sided Platform
Andrei Hagiu., 2006, Multi Sided Platform: From Microfoundations to Design and Expansion
Strategis
Batchelor, J., 2012, INTERNATIONAL FACTFILE: Indonesia,
http://www.mcvuk.com/news/read/ international-factfile-indonesia/0108127
(diakses pada 02 mei 2013, pkl 21.05)
Blackwell, E., 2004, How to Prepare a Business Plan, 4th edition, London & Sterling
Budzinski, O., Satzer, J., 2008, Sports Business and the Theory of Two-Sided Markets, MAGKS
Joint Discussion Paper Series in Economics 11

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