STRATEGIC MANAGEMENT

Asprillya Balqist
Reza Fahlevi Rahman
Dwinanda Rizal
Arfan Nur Akbar
Kevin Patria
 COMPANY PROFILE
• PT. Indofood CBP Sukses Makmur Tbk., better known as Indofood, is
a major Indonesian company involved in the food industry The company's
headquarters are in Jakarta
• Indofood was founded in 1968 as Panganjaya Intikusuma till 1993, before
changing to its current name in 1994. It is one of the companies owned by the
family of Sudono Salim under the Salim Group.
Brief History
1990
• Incorporated as PT Panganjaya Intikusuma. Established 51:49
joint venture (“JV”) with Seven-Up Netherlands B.V., an affiliate
of PepsiCo Inc. to enter into snack foods industry (The JV has
been transferred into ICBP in 2010 as part of the restructuring of
CBP Group)
1994
• Changed its name to PT Indofood Sukses Makmur. IPO of 763
million shares at Rp1,000 par value per share, listing on the IDX.
1995
• Acquired Bogasari flour mill
1997
• Acquired 80% equity stake in a group of companies involved
implantations, agribusiness and distribution.
2006
• Acquired 55.0% equity in shipping company Pacsari Pte. Ltd.
(“Pacsari”).
• Acquired additional plantation companies in West Kalimantan.
2011
• On June 9, 2011, SIMP, a direct and indirect subsidiary of the
• Company, conducted an IPO and listed its shares on the IDX.
2012
• ICBP established two JV companies with Asahi Group Holdings
Southeast Asia Pte. Ltd. (“Asahi”) to enter into the non-alcoholic
beverage market in Indonesia.
2014
• ICBP and Asahi, through its JV subsidiaries, acquired assets
related to the packaged water business including the brand of
Club.
Employee
To be sustainable, Indofood recognizes that its rapid progress
depends largely on the support of its human resources. Its workforce
of some 80 thousand employees is an invaluable asset to support the
Company’s current performance and growth. However, to maintain
and improve its performance in the future, Indofood needs a highly
competent and qualified workforce that is oriented towards the
Company’s future needs. Company performance is dependent upon
workforce quality, as a sound business strategy is difficult to execute
without the support of competent human resources. Therefore, the
Company is committed to continue building its human resources
and organization to address both current and future challenges.
Products - Noodles
The Noodles Division produces and markets a range of bag noodles,
cup noodles, egg noodles and instant vermicelli, and represents one
of the world’s largest instant noodle producers with an annual
capacity of more than 16 billion packs. Its diverse brand portfolio
includes Indomie, Supermi, Sarimi, Sakura, Pop Mie, Pop Bihun and
Mi Telur Cap 3 Ayam, catering to all market segments. These brands
are renowned for their quality and high level of acceptance by
consumers, and have won numerous awards for excellence and
brand status.
Products - Dairy
The Dairy Division is operated by Indolakto, a 68.57% indirect
subsidiary of ICBP and one of the leading producers of dairy
products in Indonesia. It produces a variety of dairy products
including sweetened condensed milk (“SCM”), ultra-high
temperature (“UHT”) milk, sterilized bottled milk, pasteurized liquid
milk, powdered milk, butter and ice cream. Its flagship brand
Indomilk has enjoyed strong market presence for more than 40
years and is one of Indonesia’s best-known brands. Other brands
include Cap Enaak, Tiga Sapi, Indomilk Champ and Calci Skim for
milk products, Orchid Butter for butter, and Indoeskrim for ice
cream.
Products – Snack Foods
The Snack Foods Division comprises two business units, snack foods
and biscuits. The snack foods unit is a JV company with PepsiCo
that produces modern and traditional snacks including potato,
cassava and soybean chips, curly and prawn crackers, and extruded
snacks marketed under brand names such as Chitato, Lays, Qtela,
Cheetos and JetZ, all of which enjoy strong market presence. The
biscuits unit is solely operated by ICBP and produces a range of
biscuit brands targeted at two different market segments: Trenz for
youths, and Wonderland for families.
 Vision and Mission
Year Vision Mission
2009 To Become a Total Food Solutions • To continuously improve our
Company people, our process and our
technology
• To produce high quality,
innovative, and affordable products
which are preferred by customers
• To ensure availability of our
products to customers domestically
and internationally
• To contribute to the improvement
of the quality of life of Indonesians
with emphasis on nutrition
• To continuously improve
stakeholders’ value
Vision and Mission
Year Vision Mission
2013 A Total Food Solutions • To provide sustainable
Company solutions for food needs
• To continuously improve our
people, processes and
technologies
• To contribute to the welfare
of the society and
environment in a sustainable
manner
• To continuously improve
stakeholders’ value
Vision Graphic Directional Focused Flexible Feasible Desirable Easy To
Communicate
A Total YES YES YES YES NO YES YES
Food
Solutions
Company
Mission Criteria
• To provide sustainable solutions for food needs Employee
• To continuously improve our people, processes Customers
and technologies Products
• To contribute to the welfare of the society and Market
environment in a sustainable manner Technology
• To continuously improve stakeholders’ value Survival growth profit
Philosophy
Self concept
Public image
Rivalry Among Competitors
Current Future

Number of quality balance 4 3

competitor

Product features 4 3

Capacity increase 4 4

Diversity of competitors 2 3

Overall 14 13
Barriers to Entry
Current Future

Economic of scale 4 4
Product differentiation 4 4
Brand identification 4 3
Switching Cost 3 3
Access to distribution channels 4 4
Capital Requirement 5 5
Access to technology 5 5
Government protection 4 3
Experience effect 4 5
Overall 37 36
Barriers to Exit

Current Future

Asets specialization 3 3

Cost to exit 4 4

Government and social restriction 4 4

Overall 11 11
Availability of Substitutes
Current Future
Availability of close substitutes 4 4

User’s switching cost 4 4

Substitute producer’s 3 3
profitability & aggresiveness

Substitutes price/ value 4 4

Overall 15 15
Power of Buyers
Current Future
Number important buyers 4 4
Buyers switching cost 3 3
Buyers threat of backward 2 3
integration
Industry threat of forward 4 4
integration
Contribution to quality or service of 4 4
buyer’s product
Buyer’s profitability 4 4
Overall 21 22
Power of Supplier
Current Future

Number of important suppliers 4 4

Availability of substitutes for supplier product 4 4

Differentiation or switching cost of supplier’s product 3 3

Suppliers of contribution to quality or service of the industry product 3 3

Important of the industry to suppliers profit 4 4

Overall 18 18
Overall Assessment
Current future

Barriers to entry 4 4
Barriers to exit 4 4
Rivalry among competitors 5 5

Power of buyers 4 4

Power of suppliers 3 3
Availability of substitutes 4 4
Overall Industry Assessment

Current Future
Overall industry 4 4
assesment
External Factor Analysis
• weight ranges : 0.0 (not important) to 1.0 (very
important)
• rating : between 1 and 4 the firm’s current strategies respond to
the factor, where :
• 4 = the response is superior,
• 3 = the response is above average,
• 2 = the response is average, and
• 1 = the response is poor.
• Weight Score : weight x rating
 Key external factor Weight Rating Weight score

OPPORTUNITIES

Domestic and global market is still wide open to be exploited, 0.2 3 0.6
either as a new area of expansion and the birth rate is quite high.
Instant noodle market in Nigeria has 38 million customers. It
also Indomie exported to more than 50 countries.

Rising demand, due to the decline in purchasing power caused 0.1 4 0.4
by the rise in food prices but the national minimum wage only
increase by 10%.

The pattern of consumption of instant foods are high, which is 0.07 2 0.14
estimated to have a lifestyle community that is approximately
50% of the total population.

Slow technological change in the noodle industry 0.05 3 0.15

 THREATS Weight Rating Weight Score

The existence of such a substitution for instant food and instant 0.05 2 0.1
porridge instant rice

Competitors who have a quality product with aggressive advertising 0.2 3 0.6

The possibility of the anti MSG and other harmful substances as well 0.1 4 0.4
as the threat of anti-monopoly law (Article 52 paragraph 2 of the
Antimonopoly Law)

High dependence with suppliers of raw materials wheat in Australia, 0.13 3 0.39
where wheat prices are likely to rise, resulting in lower profit margin
of 3.7% in 2006 to 2.1% in 2007. The price of wheat rose due to bad
weather and the level of world wheat supplies low.

Low credit availability in the market due to the global financial crisis 0.1 3 0.3
to fund overseas expansion, namely Nigeria and Saudi Arabia

TOTAL 1 3.08
 EFE MATRIX PT INDOFOOD
The total weight score of Indofood is 3.08 which means Indofood is
responding in outstanding way to existing opportunities and threats
in industry. The firm strategies effectively take an advantage of
existing opportunities and minimize the external threats.
 CPM
Indomie Mie sedap
Critical Success Factor Weight Rating Score Rating Score

Advertising 0.05 2 0.1 3 0.15

Product Quality 0.2 4 0.8 3 0.6
Product Innovation 0.1 4 0.4 2 0.2

Price competitive 0.15 3 0.45 3 0.45

Customer loyalty 0.15 4 0.6 3 0.45
Global expansion 0.2 5 1 2 0.4
Sales distribution 0.05 3 0.15 2 0.1
Availability of raw 0.1 3 0.3 3 0.3
material
TOTAL 1 3.8 2.65
INTERNAL EVALUATION MATRIX
Key internal Weight Rating Weight score
factors
STRENGTH
Product variance 0.3 4 1.2
Market share 70% 0.3 4 1.2
Wide distribution 0.2 4 0.8
channel
WEAKNESSES
MSG 0.2 3 0.6
TOTAL 1 3.8
The Internal Factors Evaluation Matrix of PT. Indofood is 3.8 which
means Indofood respond is outstanding to the strength and
weaknesses.
SWOT ANALYSIS
STRENGTH OPPORTUNITIES
• Product variance • Domestic and global market is still wide open to be
• Market share 70% exploited, either as a new area of expansion and the birth
• Wide distribution channel rate is quite high. Instant noodle market in Nigeria has 38
• Brand image million customers. It also Indomie exported to more than 50
• Have a reliable staff, supported by innovations that continue countries.
to rely on the team's performance • Rising demand, due to the decline in purchasing power

SWOT
• Has penetrated overseas markets
• Target markets reached all circle
caused by the rise in food prices but the national minimum
wage only increase by 10%.
• Aggressive in advertising • The pattern of consumption of instant foods are high, which
• Production has penetrated as far abroad is estimated to have a lifestyle community that is
• Has a separate group that handles the distribution of its approximately 50% of the total population
products • Slow technological change in the noodle industry
• Many stock points strategically located in the region
• Have internal R & D division that does not require an
external R & D
WEAKNESSES THREATS
• MSG • The existence of such a substitution for instant food and instant
• Has a huge marketing cost porridge instant rice
• Competitors who have a quality product with aggressive advertising
• The possibility of the anti MSG and other harmful substances as well
as the threat of anti-monopoly law (Article 52 paragraph 2 of the
Antimonopoly Law)
• High dependence with suppliers of raw materials wheat in Australia,
where wheat prices are likely to rise, resulting in lower profit margin of
3.7% in 2006 to 2.1% in 2007. The price of wheat rose due to bad
weather and the level of world wheat supplies low.
• Low credit availability in the market due to the global financial crisis
to fund overseas expansion, namely Nigeria and Saudi Arabia
 Business Model Of Indofood
Key Partner Key Activities Value Costumer Costumer
Proposition Relationship Segment
• Bogasari • Production • Advertisem
• AgriBusines • Marketing • Dairy ent to • Retail
s • Producing product Costumer Market
• Distributio Own • Food • Call Center • Traditional
n Key seasoning Channels Market
• China Resources • Snack food • Convenient
Minzhong • Edible oil • Large Scale Store
Food • Flour and fats Distribution
corporation • Distributio • Flour
limited • Pasta • Manual
n Distribution
• Packaging • Packaging Center
• AgriBusines
s

Cost Structure Revenue stream

• Sales From CBP, Bogasari,
• Marketing Agribusiness, and Distribution
• Distribution • Bulk sales
WINGS BUSINESS
Key Partner
• Group
MODEL
Key Activities Value
Proposition
Costumer
Relationship
Costumer
Segment
Djarum • Production • Advertiseme
(Pulau • Marketing • Wings nt to • Retail
Gadung • Producing Household Costumer Market
Trade Own • Wings Care • Call Center • Traditional
Center) (Wings • Cust service Market
• PT Key Resources Surya & Lion Channels • Convenient
Adyabuana Wings) Store
Persada • Flour • Wings Food • Large Scale
(Hercules • Distribution (Alam Segar) Distribution
Ceramic • Packaging
• Siam • AgriBusiness • Manual
Cement Distribution
Thailand Center
(Gipsum)
Cost Structure Revenue stream
• Advertising
• Marketing
• Distribution
• Production
• Packaging
Competitive Advantage
Internal
• Range almost all market segment.
• Affordable price.
• A lot of variant flavor
External
• Language Label
• Expand market to global world
• Make healthy noodle.
Porter Generic Strategies
Indofood Value Chain Analysis
Value Chain
Primary Activities
• Inbound Logistic
• Operation
• Outbound Logistic
• Marketing & Sales
• Services
Inbound Logistic
Indofood
This activity is regarding how Indofood
provide good quality products supported with
good ingredients that most are come from
their own subsidiary.
Wings Food
Understanding the purchase and chose to
evaluate suppliers, maintain relationships
with suppliers so as to improve the
smoothness and efficiency of the company
Operation
Indofood
- The operations of the Indofood Group
span six separate divisions namely
Noodles, Dairy, Snack Foods, Food
Seasonings, Nutrition & Special Foods and
Beverages.
- Customization on each product of
Indofood based on customer’s demand
Wingsfood
• To be responsible in maintaining the
production process to achieve production
targets while concentrating on the quality
of goods, equipment, maintenance, and
efficiency of use of raw materials.
Outbound Logistic
Indofood Wingsfood
• Spreading the product into retail market. • Spreading the product into retail market
• Exporting the product into more than 60 • Exporting the product into several
countries. countries, especially Saudi Arabia.
Marketing & Sales
Indofood
• It basically targets the people till the age of
55, including working people, families,
teenagers, children, and traveller.
• There are lot of variants of each product.
• Indofood has spread their product into a
large number of customer.
• Good ads on TV
Wingsfood
• Product marketing. Identifying target
markets and potential competitors.
Identifying customer needs, developing
integrated product strategies for each
brand and creating brand identity.
Working in collaboration with the sales
and R&D departments, as well as other
departments.
Services
Indofood Indofood
• Indofood provides call center for customer • Provides customer care by call center
care of each product.
Firm Infrastructure
INDOFOOD WINGSFOOD

There are 18 production

facilities in Indonesia, 1
malaysia, 8 China, 1 Brasil, 1
Philipine.
Procurement
INDOFOOD WINGSFOOD

• It basically deals with how to

get the required resources
• It has to maintain the quality
Their strategy to take some
ingredients from their own
subsidiary and get some
imported helps them maintain
the quality as well as low
prices.
Technology Development
Indofood Wingsfood
• Implementing ERP • Must have a good mastery of IT. Capable
• Must have a good of organizing hardware, software and
network infrastructure and of dealing with
any problems that arise in the field. Must
have a solid knowledge of programming
and systems analysis, and be capable of
providing solutions to problems. Capable
of developing and maintaining cutting-
edge communications and information
systems. Able to work with other
departments.
Human Resources
Indofood
• With a total workforce of approximately 62
thousand, Indofood believe that employees
are one of the most important group of
stakeholders and an important element in
the success continues. The Company
believes that every employee has the
capacity to excel and contribute to the
success of not only the company, but the
nation itself.
Wingsfood
• Committed to the development of human
resources and the organization so as to
improve business efficiency and
productivity and continuously increase
value both for the Company and
employees. Must have an in-depth
understanding and mastery of human
resources, recruitment and training
strategies, as well as compensation and
benefits.
Long term objective
Long term objective PT Indofood
• Provide the best quality product with affordable price
• Keep customer and distributor loyalty
STRATEGY of PT INDOFOOD
DEFINITION AND CONCEPT OF STRATEGIES
Strategy is derived from the ancient Greek language 'Stratos‘ which is a term in the
military field that refers to the action in general. Strategic management is the process
of crafting decisions, activities, or a set of managerial plans to achieve corporate
objectives within a specified period.
Process of managerial plans :
1. Environmental scanning
2. Strategic formulation
3. Strategic implementation
4. Evaluation and control

The purpose of company to make management strategic :

1. Stakeholder value
2. Customer value
3. Competitive advantage
Strategic in PT Indofood
1. Product development strategy : increase sales by improving present products or services or creating new one. For example :
Indomie in 2004 introduce Sarimi and Supermi to compete with the competitor (Mie sedap), in 2006 introduce Indomie goreng
kriuk with 3 diva as the endoser, in 2007 Sarimi Soto Koya with Luna Maya as the endorser, in 2008 Supermi Gobang, Gokar, and
Goso with event launching Supermi Go “Makan mie serentak dengan peserta terbanyak” (more than 30k person based on MURI)
2. Market development strategy : Introducing present products or services into new geographic area. In 2007, the consumption
of instant noodle in indonesia reached 11 million packs, one of the channel distribution of Indofood is Warung Indomie. The
effective way is teach the owner of warung to make an Indomie, support their warung with banner, and monitoring the availability
of the Indomie product.
3. Forward Integration : gaining ownership or increase control of distributors or retailers. Indofood has own distributor to
distribute Indomie which is “Indomarco” to every region in Indonesia.
4. Backward Integration : seeking ownership or increase control of firm supplier. Indofood cooperate with PT Bogasari to
provide wheat flour.
5. Market Penetration : seeks to increase market share for present products or services in present markets through greater
marketing efforts. In Indomie advertising with Gita Gutawa as the endorse, Indomie emphasize their segmentation to teenager
and family, Indomie also has a several event such as Jingle Dare for high school, Mama mia, and also the activity of ibu ibu PKK.
Vertical Integration
FORWARD INTEGRATION
Gaining ownership or increase control of distributors or retailers. The six guidelines indicate when forward
integration may be an effective strategic :
1. When a company present distributors are expensive, unreliable, incapable with the company needs.
2. When the availability of quality distributors is so limited as to offer a competitive advantage
3. When an organization competes in an industry that is growing and is expected to continue to grow markedly; this
is a factor because forward integration reduces an organization’s ability to diversify if its basic industry falters
4. When an organization has both the capital and human resources needed to manage the new business of
distributing its own products
5. When the advantages of stable production are particularly high; this is a consideration because an organization
can increase the predictability of the demand for its output through forward integration.
6. When present distributors or retailers have high profit margins; this situation suggests that a company profitably
could distribute its own products and price them more competitively by integrating forward
 BACKWARD INTEGRATION
Seeking ownership or increase control of firm supplier.
Seven guidelines for when backward integration may be an especially effective
strategy are:
• When an organization’s present suppliers are especially expensive, or unreliable,
or incapable of meeting the firm’s needs for parts, components, assemblies, or raw
materials.
• When the number of suppliers is small and the number of competitors is large.
• When an organization competes in an industry that is growing rapidly; this is a factor
because integrative-type strategies (forward, backward, and horizontal) reduce an
organization’s ability to diversify in a declining industry.
• When an organization has both capital and human resources to manage the new
business of supplying its own raw materials.
• When the advantages of stable prices are particularly important; this is a factor
because an organization can stabilize the cost of its raw materials and the associated
price of its product(s) through backward integration.
• When present supplies have high profit margins, which suggests that the business of supplying products or
services in the given industry is a worthwhile venture.
• When an organization needs to quickly acquire a needed resource.
Intensive strategies
MARKET PENETRATION
Seeks to increase market share for present products or services in
present markets through greater marketing efforts. These five
guidelines indicate when market penetration may be an especially effective
strategy :
• When current markets are not saturated with a particular product or service.
• When the usage rate of present customers could be increased significantly
• When the market shares of major competitors have been declining while total
industry sales have been increasing.
• When the correlation between dollar sales and dollar marketing expenditures
historically has been high.
• When increased economies of scale provide major competitive advantages
 MARKET DEVELOPMENT
Involves introducing present products or services into new
geographic areas. These six guidelines indicate when market
development may be an especially effective strategy:
• When new channels of distribution are available that are reliable,
inexpensive, and of good quality.
• When an organization is very successful at what it does.
• When new untapped or unsaturated markets exist.
• When an organization has the needed capital and human resources
to manage expanded operations.
• When an organization has excess production capacity.
• When an organization’s basic industry is rapidly becoming global in
scope.
 PRODUCT DEVELOPMENT
Seeks increased sales by improving or modifying present
products or services. These five guidelines indicate when product
development may be an especially effective strategy to pursue:
• When an organization has successful products that are in the maturity
stage of the product life cycle; the idea here is to attract satisfied
customers to try new (improved) products as a result of their positive
experience with the organization’s present products or services.
• When an organization competes in an industry that is characterized by
rapid technological developments.
• When major competitors offer better-quality products at comparable
prices.
• When an organization competes in a high-growth industry.
• When an organization has especially strong research and development
capabilities.
Diversification Strategies-
Diversification is a corporate strategy to enter into a new market or industry which the business is not
currently in, whilst also creating a new product for that new market

Related
Unrelated
It is when a business adds or expands its existing
It is when a business adds new, or unrelated,
product lines or markets. Example: a phone company
product lines or markets. For example, the same
adds or expands its wireless products and services by
phone company might decide to go into the
purchasing another wireless company is engaging in
television business or into the radio business. This
related diversification.
is unrelated diversification: there is no direct fit
with the existing business.
Advantage:
- understand the business and know what the industry
Why would a company want to engage in unrelated
opportunities and threats are
diversification? Because there may be cost
- number of related acquisitions fail to provide the
efficiencies
benefits or returns originally predicted.
 Advantages and Motivation to use diversification
strategy:
Most companies favor related diversification strategies in order to capitalize on synergies as
follows:

• Transferring competitively valuable expertise, technological know-how, or other capabilities from one
business to another.

• Combining the related activities of separate businesses into a single operation to achieve lower costs.

• Exploiting common use of a well-known brand name.

• Cross-business collaboration to create competitively valuable resource strengths and capabilities.

 Motivation to use diversification strategy:
1. Financial

Advantage: A company can gain financial advantages from diversifying its strategies. If company enters into
joint ventures or acquires other companies it can increase its profits, cash flow and borrowing power.
Disadvantage: However, some companies miscalculate the profitability of a venture versus the expense of
getting into it.

2. Market Share

Advantages: By introducing new products, exploring new regions or targeting new groups of customers, a
company can expand your customer base.
Disadvantage: Each of these moves exposes the company to more competition, potential changes in customer
preferences and seeing your products or services become obsolete due to new technology. These threats can
rear their heads while the company is increasing expenditures on marketing and delivering your products.
 Motivation to use diversification strategy:
3. Growth

Advantage: with measuring growth in terms of the number of employees, profits or sales, a diversified
strategy can help you get there. For example, a company could move into industries that it is not currently
involved in, form subsidiaries that act much like independent businesses and introduce global marketing as
part of its diversified strategy.

Disadvantage: The risk of this strategy is not being able to manage all of these activities simultaneously. This
can lead to inefficiencies that cut your profits. For example, if a company have several subsidiaries
independently ordering supplies, it may be duplicating orders and thus spending money it could've used on
marketing. The company has to make sure that each strategy pays for itself.
 Motivation to use diversification
4. Risk Protection
strategy:
Advantages: To protect company from the risk of failure. If product "A" fails, new products "B" and "C" may do
well and make up for the loss. Similarly, successful regional marketing may uncover lucrative opportunities
that make up for a sluggish sales region.

Disadvantages: This risk protection comes at a cost. It means you will most likely spend money on strategies
that don't pay off. Even though other strategies make up for the wasted money, a company might do better with
a less diversified strategy that focuses on its most effective efforts.
DEFENSIVE STRATEGY
Retrenchment : Regrouping through cost and asset reduction to
reverse declining sales and profit

Divestiture : selling a division or part of an organization

Liquidation : selling all of a company’s assets, in parts for their

tangible worth.
 Porter’s Five Generic Strategies
Target Scope Advantage Advantage

(Low Cost) Product Uniqueness

Broad (Industry wide) Cost Leadership Differentiation

Narrow (Market wide) Focus Strategy (Low Cos) Focus strategy differentiation
Cost Leadership
• Aiming to become Lowest Cost Producer
• The firm can compete on the price with every other industries and
earn higher unit profits.
• Cost reduction provides the focus of the organization strategy.
• Target a broad market.
• Competitive advantage is achieved by driving down costs.
• A successful cost leadership strategy requires that the firm is the
cost leader and is unchallenged in this position.
• Especially beneficial: where customers are price sensitive
Differentiation
• A differentiation strategy calls for the development of a product or
service that offers unique attributes that are valued by customers.
• Customers perceive the product to be different and better than
that of rivals.
• The value added by the uniqueness of the product may allow the
firm to charge a premium price for it.
• Differentiation can be based on product image or durability, after-
sales, quality, additional features.
• It requires flair, research capability and strong marketing.
Focus Strategy
• The focus strategy concentrates on a narrow segment and within that
segment attempts to achieve either a cost advantage or differentiation.
• The premise is that the needs of the group can be better serviced by focusing
entirely on it.
• A firm using a focus strategy often enjoys a high degree of customer loyalty,
and this entrenched loyalty discourages other firms from competing directly.
• Because of their narrow market focus, firms pursuing a focus strategy have
lower volumes and therefore less bargaining power with their suppliers.
• However, firms pursuing a differentiation-focused strategy may be able to
pass higher costs on to customers since close substitute products do not exist
Focus Strategy (Differentiation)
• This dimension is not a separate strategy for big companies due to small
market conditions. Big companies which chose applying differentiation
strategies may also choose to apply in conjunction with focus strategies
(either cost or differentiation). On the other hand this is definitely
appropriate strategies for small companies especially for those wanting
to avoid competition with big ones.
 GENERIC STRATEGY PT INDOFOOD
Cost Leadership
• PT Indofood has a several strategy to push the • Indomie has several flavor based on taste of
production and distribution cost.
• PT Indofood cooperate with PT Bogasari in
order to produce wheat which is one of the
ingredient to make noodles (Indomie).
• PT Indofood has their own distribution
channel to distribute Indomie, called
“Indomarco”
Differentiation
Indonesia such as Indomie goreng rendang,
indomie goreng cabe ijo, Indomie rasa soto
koya, Indomie Goreng Rasa Rendang Pedas
Medan Indomie Rasa Coto Makassar Indomie
Rasa Empal Gentong Indomie Rasa Kari
Ayam Medan Indomie Rasa Mi Cakalang
Indomie Rasa Mi Celor Indomie Rasa Mi
Kocok Bandung Indomie Rasa Sop Buntut
Indomie Rasa Soto Banjar Indomie Rasa Soto
Banjar Limau Kulit Indomie Rasa Soto
Betawi Indomie Rasa Soto Medan with
affordable price.
Strategy Evaluation
Asprillya Balqist
Kevin Patria
Arfan Nur Akbar
Reza Fahlevi
Dwinanda Rizal
Strategic evaluation allows an organization to capitalize on internal strengths
as the company develop, to exploit external opportunities as they emerge, to
recognize and defend against threats, and to mitigate internal weaknesses
before become detrimental
3 Basic Activities :
• Examining the underlying bases of a firm’s strategy
• Comparing expected results with actual results
• Taking corrective actions to ensure that performance conforms to plans
Three guidelines help determine if
organizational problems are due to Richard Rumelt’s Criteria for Evaluating
inconsistencies in strategy : Strategy
1. if managerial problem continue despite
changes in personnel and if they tend to
be issued-based rather than people-
based, then strategies may be
inconsistent. Consistency
2. If success for one organizational
department means, or is interpreted to A strategy should not
mean, failure for another department, present inconsistent goals
then strategies mau be inconsistent. and policies
3. If Policy problems and issues continue
to be brought to the top for resolution,
then strategies may be inconsistent

A strategy must represent an adaptive
response to the external environment and to be
critical changes occurring within it.
Examine whether an organization has
demonstrated in the past that it possesses the
abilities, competencies, skills, and talents
needed to carry out a given strategy.
Competitive advantage normally are the result
of superiority in one of three area : resources,
skills and position.
Richard Rumelt’s Criteria for Evaluating
Strategy
Consonance
The need for strategists to examine sets
of trends, as well as individual trends, in
evaluating strategies.
Feasibility
A strategy must neither overtax
available resources nor create
unsolvable sub problems
Adavantage
A strategy must provide for the creation
and/or maintenance of a competitive
advantage in a selected criteria of
activity (resources, skills, position)
Strategy Evaluation PT INDOFOOD
1. In 2004 Indomie made a mistake on the strategy to compete with Mie
Sedaap by following competitors by creating a brand which is Supermi
Sedaaap and Noodle wing. Unfortunately, the strategy can not stem the Mie
Sedaap. Knowing this, Indomie improve its strategy by not carrying out
attacks on opponents brand, but to strengthen its own brand, such as
innovation, improve retailer loyalty, and provide bonuses purchase.
2. In 2007, knowing that the huge production costs caused by external
factors, namely the increase in wheat prices, the cost of transportation and
electricity costs, resulting in lower profit margins, then Indomie make
savings by using low-cost fuel and efficient machines.
3. Evaluation and corrections made Indomie based on achieving strategic
objectives (loyalty, product quality, and innovation) and financial
objectives (market share and profit margin).
IE Matrix The total score weight of IFE
Kuat Rata-rata Lemah
The total score weight of EFE

I II III
Tinnggi

IV V VI
Sedang

VII VIII IX
Lemah
Space Matrix
Awareness
Product  The same name between web
site address with the company
name.
 The display designed
attractive and easy to use.
 The information presented on
the company's CSR program
is very clear and complete
Communication
 Provide information to the
customers through web site or
social networking.
Distribution  The ease in accessing
information on PT Indofood
Sukses Makmur Tbk in the
form of address and company
profiles
Exploration
 Provides easy navigation used
website for customers
Indofood.
 There is a detailed
explanation about the
information the company's
CSR program activities in the
website.
 Customer service artifacts in
the "Contact Us".
 Customers may comment on
the menu leave a comment
Commitment Dissolution
 Provide up-to-date
information on the activities
of companies in their CSR
program
 Contact us" and "leave
comment" aims to convey
suggestions from customers.
 Provide useful information to
the customers such as CSR
programs and information on
the activities to be
implemented or already
implemented.
 SWOT MATRIX
IFAS / EFI Strength (S) Weakness (W)
EFAS / EFE
Indofood has many • Bad for health if consumed
distribution channel across continuously
nation • Too many brands released
Most of the noodles market
share is owned by Indofood
Has many flavors of noodles,
adjusting with Indonesian
traditional taste
Affordable price for all
market segments
Strong image with its slogan
Good marketing strategy
Good advertising and
promotion strategy

Opportunities (O)
• Is a strong position in the market
• Increased condition of purchasing
power
• Utilizing e-Business in company
activities
• Has opportunity to cooperate with
other similar company
SWOT MATRIX
SO
Increase customer loyalty by
expanding the reach of
Indofood CSR program
activities in the various areas
where the firm produces.
Providing information via
the Internet by optimizing e-
publication as a publication
medium enterprise activity.
WO
Using information
technology to develop e-
publication system to help
business activities, as well as
increase customer loyalty
and public image.
Making activities / social
program by working with
companies that have similar
products and take advantage
of adequate manpower.
 SWOT MATRIX
Threats (T) ST
• The global financial crisis which affecting commodity Provide information about the company's
prices CSR program through online publication
system to enhance the corporate image and
• Tight market competition
win the competition in the industry.
• Healthy life-style issues
Maintain customer loyalty by improving
service for customers.
Threats (T) ST
• The global financial crisis which affecting commodity prices Provide information about the company's CSR
program through online publication system to
• Tight market competition
enhance the corporate image and win the
• Healthy life-style issues competition in the industry.

Maintain customer loyalty by improving service for

customers.
 Quantitative Strategic Planning Matrix (QSPM)
Strategy Alternative
Key Factor Weight Product Development Market Development
AS TAS AS TAS
Opportunity

Wide Open Market 0.2 3 0.6 4 0.8

Low Labor Wage 0.05 2 0.1 2 0.1

Increasing demand 0.1 4 0.4 3 0.3

Consumption pattern 0.15 3 0.45 3 0.45

Slow technology
0.05 2 0.1 2 0.1
change
Threat
New substitution
0.1 4 0.4 3 0.3
of noodle

Aggressive
advertising from 0.2 3 0.6 3 0.6
competitor
Increasing price
of wheat in the 0.05 2 0.1 2 0.1
world
MSG and
monopoly 0.05 3 0.15 2 0.1
regulation
The possibility of
a difficult 0.05 4 0.2 4 0.2
funding
Strengths

Product
0.2 4 0.8 3 0.6
Variance

Big Market share 0.15 3 0.45 3 0.45

Wide
0.2 4 0.8 3 0.6
distribution

Financial
0.2 4 0.8 3 0.6
support
Weaknesses

Not
adaptable
0.05 4 0.2 3 0.15
with
competitor

MSG towe 0.1 2 0.2 2 0.2

Total
attractivenes 6.35 5.65
s score

Based on the total attractiveness score, strategy development product > strategy development market, than Indofood
should implement strategy development product.
DISTRIBUTION CHANNEL
Indofood has their own distribution channel called “Grup Distribusi
Indofood”.
One of the product, Indomie also has own distribution channel,
called Indomarco to distribute the noodles for the store around
Indonesia.
In 2007 Indomie got 97% for The Most Powerful Distribution
Performance by Qasa Consulting compare with the Mie Sedaap only
got 73%.
MARKETING STRATEGY
SEGMENTATION
Indofood has 3 kinds of product of noodles :
1. Sarimi : Sarimi has a cheaper price than the other product of
Indofood noodles, so their segmented the market for the low
class
2. Supermie : Supermie has average price, so their segmented the
product for the middle class
3. Indomie : Compared with the other product, indomie has a little
expensive price, but also has a lot innovation for the indomie
product, so their segmented the product for middle up class
until high class
Research & Development
The Group’s R&D activities are centered on five key areas:
• Plant breeding: The development of top quality seed and planting materials through
traditional and advanced breeding methods, a diverse germ-plasm base and biotechnology,
supported by field trials that test progenies across a range of planting environments.
• Soils: Detailed soil survey maps that support site-specific, agronomic block management.
• Agronomy: Precision soil management and crop cultivation techniques that provide our
estates with optimal recommendations on crop management and planting densities,
providing insight for yield forecasts and block-by-block fertilizer and herbicide usage.
• Crop protection: The development of integrated pest management and biological pest
control systems to minimize crop losses and to monitor, prevent and eradicate pests and
diseases.
• Data capture, management and analysis: GPS surveys and remote sensing technology
enable detailed 2D and 3D topographic maps, while Geographic Information System (GIS)
tools provide analysis and troubleshooting to ensure optimum plantation management. An
integrated, real-time software system provides visibility of data across subsidiaries,
refineries and plantations.
CSR
Sustainable Plantations
Through its Agribusiness Group the Company is actively engaged in the sustainable
production of palm oil, and launched its Sustainability Report for the year 2012. The
Agribusiness Group has made a commitment to achieving the Roundtable on
Sustainable Palm Oil (“RSPO”) and Indonesian Sustainable Palm Oil (“ISPO”)
certifications for all of its estates and palm oil mills by 2019. As of 2013, the
Agribusiness Group has been awarded with ISPO certification for one palm oil mill
and three plantation estates in North Sumatra. The Agribusiness Group succeeded in
increasing its certified CPO production to close to 248 thousand tons, or some 28% of
total CPO production during 2013. On top of sustainable production, the Agribusiness
Group also engages in other initiatives including a zero burning policy to reduce
carbon footprint, the maintenance of conservation areas based on RSPO principles
and criteria, policies to reduce the use of paraquat-based pesticides, and waste
reduction through agriculture and palm oil mill waste recycling, such as using liquid
waste and empty fruit bunches as an energy source and as fertilizer.
Packaging Waste Bank
In compliance with Law No. 18 Year 2008 regarding Solid Waste Management,
and Government Regulation No. 81 Year 2012 regarding the Responsibilities of
Producers in Household Solid Waste and Household-like Solid Waste
Management, which require industries to implement these regulations within
the next ten years, the Company formed a coalition with five other consumer
goods firms to manage a “Packaging Waste Bank” pilot project in Pejaten,
Pasar Minggu, South Jakarta. In 2013, the coalition focused intensively on
conducting reviews, discussions and dialogs with various parties including
academics, the Government, various communities and environmental
observers, to seek an effective waste management model and communications
program. Currently, initial steps are being taken to form an association for
sustainable packaging, with Indofood as one of its founders. This has received
positive feedback from the Government and other community organizations.
Business Ethics
WHISTLE BLOWING
The Group has put in place a whistle blowing policy and procedure ("Policy").
This Policy provides employees with clearly defined processes through which
they may raise their concerns in good faith and in strict confidence, with
respect to suspected fraud, corruption, dishonest practices or other
malpractices that do not comply with the Group's standard operating
procedures, to the Head of IAD, the Exco or the AC & RMC.
The Policy aims to encourage the reporting of discrepancies and suspicious
behaviors with the confidence that employees making such reports will be
treated fairly and, to the extent possible, protected from reprisal.
The AC & RMC reviewed and approved the Policy and was satisfied that
independent investigation would be conducted for all whistleblowing reports
and the appropriate follow-up actions would be taken to resolve the issues.
International Expansion
Currently Indofood already fulfilled their objectives and already
done exporting the products to many countries especially for
Indomie as the main product which already exported and gain the
market share in other countries especially middle east countries.
And the other products except Indomie is only licensing from
another company for instance Lays and Pepsi. So we can conclude
that right now and for a few years, we don’t need to add more
countries as our market since except Asia, noodles are not that
preferred by the market.