the-syndicate5-blog

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1. INTRODUCTION

A company’s strategy is the set of actions that its managers take to outperform the company’s competitors and achieve superior profitability.  By action means what we do must be coherent, integrated, align, for example buying goods then sell them again at a more expensive price. Outperform relates to competitors in creating something different depending on the segment and how to create advantage. Achieve superior profitability means whether the goal is achieved or not.

Crafting an action plan for heading the firm in the intended direction, staking out a market position, attracting customers, achieving the targeted financial and market performance, and getting the firm where it wants to go is its strategy. Strategy is all about how to attract and please customers, to compete against rivals, to position the firm in the marketplace to capitalize on attractive opportunities for growth, to respond to changing economic and market conditions, to manage each functional piece of the business, and to achieve the firm’s performance targets.

Coffee Shop business field with the main menu made from coffee beans is still one of the business that can run and develop in Indonesia. the value of this business can also be used to satisfy consumers, because it will produce satisfaction that will always be remembered by the consumers. One of the innovations is the coffee beans that became espresso, can be made various variations for the types of drinks, both hot or cold.

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2. OBJECTIVE OF THE REPORT

The purpose of this research are:

Identifying Kedai Kopi Siliwangi, Sunnyside Coffee, Paulina Coffee and Gallery‘s strategy

To analyze internal and external environment of Kedai Kopi Siliwangi, Sunnyside Coffee, Paulina Coffee and Gallery

To understand the PESTLE and Five Forces Porter faced in running Kedai Kopi Siliwangi, Sunnyside Coffee, Paulina Coffee and Gallery

The benefits of this research are:

The results of this study can be used as a basic for decision making in solving business problems

Helps other students understand how the Coffee Shop business can grow and develop

Provide a more detailed view to the public about the Coffee Shop

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3. ANALYSIS OF EXTERNAL ENVIRONMENT

3.1 PESTLE Analysis

1. POLITICS

Based on the Ministry of Industry Indonesia (Kemenperin) provide that the Coffee Industry is one of the priority sectors, according to the “Rencana Induk Pembangunan Industri Nasional” (RIPIN) 2015-2035, and became the focus of development by Kemenperin especially Direktorat Jenderal Industri Kecil dan Menengah (IKM). In this case Kemenperin is trying to improve the competitiveness of Indonesian coffee in the global market as Indonesia is the third largest coffee producer in the world.

In 2017 there are several policy taken by the Ditjen of IKM, such as the development of human resources in coffee industry and the facilitation of coffee processing equipment in various centers of potential coffee industry. For example, the development of human resources from processing the green beans, roasting, into pure coffee products and coffee products diversification."

The Ditjen of IKM also conduct a series of coaching programs for coffee commodities, such as quality certification, technical guidance and roasting equipment assistance in some areas include Timika - Papua, Tanjung Jabung Barat  - Jambi, Tanggamus - Lampung, Sumbawa - NTB, Bandung - West Java, and DKI Jakarta. In 2018-2019, the Ditjen of IKM will continue various IKM development programs and activities (on farm or off farm) of coffee industry in Indonesia with objective to grow new entrepreneurs of IKM coffee industry in all potential centers that have “Standar Kompetensi Kerja Nasional Indonesia” (SKKNI).

Indonesian President Mr Ir. Joko Widodo support the development of creative industry competitiveness in Indonesia by visiting some creative business in Indonesia, one of them is Sedjiwa Coffee (Coffee shop) in Bandung. President try to encourage of young entrepreneurs Indonesians to improve their competitiveness into the international scene.

2. ECONOMICS

Economic growth in middle-class society and lifestyle changes of Indonesian society, able to improve the performance of national coffee industry. It showed by the growth of domestic consumption of coffee products increased in average of seven percent per year. However, Indonesia coffee consumption average only reached 1.1 kg per capita per year, far below from the importer countries such as USA 4.3 kg, Japan 3.4 kg, Austria 7.6 kg, Belgium 8.0 kg, Norway 10.6 Kg and Finland 11.4 Kg per capita per year.

Based on Euromonitor report, 2010, the growth of domestic coffee consumption increase the amount of coffee shop, reaches 16% every year. This is a big opportunity for coffee shop entrepreneurs in all of Indonesia, Not only in big cities, but also to the small cities.

3. SOCIAL

In modern era, coffee shop is not only a place to hang out and meet friends, but also as a working space, especially for urban society. They can work anywhere, without have to come to the office. Internet became the driving force of this working trend, and it is being used by the coffee shops entrepreneur, by offering free WiFi connections to invite the customers visit the coffee shop. This condition causes increasing of coffee shop business because people believe this business is profitable.

4. Technology

The internet makes business entities easier to get information quickly. This is a trigger for entrepreneurs to get information about the latest technological developments in their business. Similarly in the coffee industry, where the development of planting technology or post-harvest can be obtained easily. The development of technology in the post-harvest process such as coffee drying process, roasting, helping coffee entrepreneurs create coffee with a distinctive flavor. For example honey process, it is a drying method that can increase value of the coffee.

In addition, process of brewing coffee either manual or using machine make coffee entrepreneurs in the off-farm sector to create a distinctive taste of coffee beans in order to increase coffee consumption.

5. Legal

Coffee shop business activities are regulated by the Minister of Culture and Tourism Regulation No. PM.87 / HK. 501 / MKP / 2010 concerning Procedures for Registration of Food and Beverage Business Services. In addition, there are also local regulations on business registration procedures that must be considered such as taking care of Environmental Management Statement (SPPL) in Bandung. It says that business entities must be able to manage and monitor the environmental impact of its business activities.

6. Environment

Industrial activities especially in the agricultural sector should give attention to the environment, such as minimum quantity of chemical fertilizers usage or green waste management. Construction of business buildings such as coffee shops also should give attention to the impact on the surrounding environment, such as not interrupt the traffic or make noise pollution at night. This should be considered by business entities to running their business.

3.2 Five Forces Porter

1. Threat of New Entry  : High

Increasing of domestic coffee consumption and a new trend work on coffee shops for urban people increased the entry of new businesses in the coffee shop industry. In addition, the government policy to advance new IKM coffee entrepreneurs and the competitiveness of Indonesian creative industries will enable the new entrepreneurs to enter the industry.

2. Buyer Power : High

Many options with a variety of facilities provided by business entities in the coffee shop industry such as convenience, menu variations, WiFi connection, ambience, price, make the consumers have a strong power to determine the selected coffee shop.

3. Threat of Substitution : High

Food and beverage industry development in Indonesia is seeing changes in consumer behavior to eat or drink outside home as an entertainment and lifestyle. Variations of choices  of place to eat or drink with different experiences make the consumer don’t always choose coffee shop. It make coffee shop need to have competitive advantage to compete with other food and beverage company.

4. Supplier Power : High

Technological developments in the planting process and post-harvest make coffee beans has its own added value. The value of coffee with a distinctive taste becomes the power of coffee suppliers to increase their profits by providing a higher price for coffee beans.

5. Rivalry among Industry : High

There are a lot of similar businesses that provide a variety of choices to consumers that create a high competition in coffee shop industry. Business entities must create innovations in this industry to have their competitiveness to attract consumer interest. Development of technology such as social media as promotional place must owned by every business entity. In addition, technological developments in brewing coffee either manual or using machine make the coffee shop should be able to present a cup of coffee with a good taste that give different experience to each consumer.    

3.3 Analysis Internal Environment

1. Resources

There are several resources that should be owned by coffee shop business:

Building

Brewing mechanical

Roasting machine

Decoration / Concept

Barista

Menu variation

Coffee beans (Arabica, Robusta, Liberica, Specialty)

Wi-fi connection

Brand (experience of visiting coffee shop)

Marketing campaign

Access to supplier

2. Capabilities

There are several capabilities provide by coffee shop :

Provide convenience to its consumers in the coffee shop

Provide a good internet access

Give a distinctive taste of coffee

Give a nice experience to customer

Barista abilities to serve variant type of coffee

Provide others menu beside coffee based menu

Give a good service to the consumers

Provide an easiness parking access

Serve various beans of coffee

Give another attractive facility to the consumers

3. Competences

Competences of coffee shop business must attract the consumers to re-visiting the coffee shop, this competences will create sustainable competitive advantage to the business. There are several competencies that coffee shop should create:

Have an experience barista to served a good coffee

Uniqueness of decoration / concept on the coffee shop to make customer have unforgettable experience.

Served different specialty beans of coffee to attract customer re-visiting the coffee shop

Provide convenience on coffee shop that make consumers comfortable

Give added value to the customers after visiting the coffee shop

Provide an easy access to the customer visiting and parking to the coffee shop

3.4 Analysis of Business Strategy and Analysis of Strategy Implementation

To understand the business strategy and business implementation by the coffee shop business, we need to analyzed the resources, capabilities, and competences that company provide. Data collection from interview and observation of coffee shop needed in advance to be able to look business activities the company done to determine the business strategy from coffee shop and how the company run their activity to create winning strategy in order to compete with competitors in the industry.

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4. OBJECTS OF STUDY

1. Kedai Kopi Siliwangi

Located in Jalan Laswi, Bandung, Kedai Kopi Siliwangi was founded in 2015 by Fadillah Satria, an entrepreneur from Bandung. Kedai Kopi Siliwangi has 3 lines of business

RTS Division, serves Ready-to-Serve coffee

Retail Division, serves packaged coffee powder in an aluminum foil standing pouch printing packaging.

HORECA Division, supplying best quality coffee to hotel, resto, and cafe.

2. Sunnyside Coffee

With a small minimalist concept, Sunnyside Coffee was founded by Adityo Pratomo Putro in 2015. Located in Antapani, Bandung, Sunnyside Coffee serves arabican roasted beans with 100% Indonesian coffee beans.

3. Paulina Coffee and Gallery

Founded by Andhika S. Pratama, Paulina Coffee and Gallery is located in Jalan Belitung, Bandung. With the gallery concept, there are some paintings and artworks hung on its walls.

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5. METHODOLOGY

5.1 QUALITATIVE METHOD

The method used in this proposal is qualitative, which is doing interviews to gain data and insights from experts who are also the coffee shop’s owners. 
Qualitative research is a method of inquiry employed in many different academic disciplines, including in the social sciences and natural sciences, but also in non-academic contexts including market research, business, and service demonstrations by non-profits. Qualitative methods examine the why and how of decision making, not just what, where, when, or who.

5.2 DATA COLLECTION

Using secondary Data, the data collection in this proposal includes doing some data collection from previous researches about coffee shops, and also doing some interviews with coffee shop’s owners.

Secondary data refers to data that was collected by someone other than the user. Common sources of secondary data for social science include censuses, information collected by government departments, organizational records and data that was originally collected for other research purposes.