AEC (ASEAN ECONOMIC COMMUNITY)

Hello there folks! We finally meet again. Today we're gonna discuss about AEC or in bahasa many people call it Masyarakat Ekonomi ASEAN. What is this? So basically this agreement was made in order to enhance the competitiveness of ASEAN countries to compete along China and India to gain more foreign investment, and not only limited in trading for goods and services, AEC also took part in skilled professional labor, and this agreement requires the countries to eliminate a few rules about foreign labor acceptance, so the point is those foreigners will have easier access to work in ASEAN countries, and easier access for goods and services to be sold between ASEAN countries. How is this agreement affecting our beloved country? It literally could be both. There are few positive impact such as Indonesia right now has 250 million of potential market, but with AEC there are expected of 625 million potential market that Indonesia could target, another thing is the reduced cost for import and export tariff which could significantly lowering the cost of Indonesia’s product to penetrate even greater market.

A few negative impacts such as harsher competition for both our labor and goods & services to compete nationally due to the foreign factors, because right now our standard of labor and product and also infrastructure is still behind other ASEAN countries.

Based on the effects mentioned above, how do we arm ourselves? There are few basic things we could do. First of all, we need to increase the quality of our manpower and standardization of our good and services produced. With better quality we believe we could compete in AEC.

Second of all is we need to pay more attention to our SME's (Small Medium Enterprise). As for the government such rules and policy that can protect our SME's such as tax settings, easier access to obtain credits, and many others. As for the SME's, we need to be focus and passionate in creating value. The most easiest technique is to do benchmarking, to make us at least on the same level with our competitors, next step would be observe, replicate, and modified or in bahasa people refer this as ATM Theory (Amati, Tiru, Modifikasi) which seems simple yet so powerful IF we could execute it on target. Because more than 90% of business in Indonesia is still counted as SME's, so the economic condition of our country mostly supported by these Small Medium Enterprise. So it's our job to be as creative as possible, to fulfill the needs of our costumer, and remember creating a business is never as instant as a cup noodle haha ;) time and energy are needed to raise it. We never meant to scare you about AEC with this article, but we wanted to remind all of us, that the competition is out there and they are ready while most of us are still denying it. WAKE UP GUYS!!! It's time for us to shine!! Another quote for today:

"If you don't drive your business, you will driven out of business" -B.C. Forbes-

Ibnu Prabowo

Scenario Planning

Hi guys, we’re back again.

Today I would like to share with you how to make scenario planning in decision making. Do not worry, it is not like scenario for making sitcom, it is actually the way you predict the movement of your company.

Here is, the sample of making scenario planning for healthy food and beverage company, called Treatmeal

Stage 1: Orientation

The focal issues: how could Treatmeal could survive in this niche market and harsh competition of healthy food & beverages market?

Stage 2: Exploration

Driving Forces:

• Market Demand
• Mature Competitors
• Market Size
• Resources (Human & Natural)
• Permit & Regulations
• Cost & Capital
• Technology Improvement
• Import goods
• Exchange  Rate

Critical Uncertainties:

These uncertainties are raked by its importance:

1. Market Size
2. Mature Competitors

Stage 3:  Scenario Creation

TreatMeal critical uncertainties are market size and mature competitors

Stage 4: Options Considerations

Stage 5: Integration

Early Warning Signals:

1. Bigger market size through time
2. Even more harsher competition
3. Advanced Technological innovations, leads to new product creation (plenty of capital are needed)

PESTEL Analysis

Hello guys,

What is a kind of thing that we will talk about today? Something useful for marketers to analyze and monitor macro-environmental (external marketing environment) factors that have an impact on a business, PESTEL analysis. PESTEL is an acronym for Political, Economic, Social, Technological, Environment, and Legal. PESTEL analysis is used to determine how these factors will affect the performance and activities of the business in the long term.

PESTEL

Political

This factor determines how far the government influences the economy or certain industry.

Economic

Economic factor is about how big the impact of economic performance to the profit and business process of the company.

Social

Social factor also is known as socio-cultural factor. It is the about the shared belief and attitudes of the population.

Technology

This factor is related to innovation in technology that affects the operations of the industry favorably or unfavorably.

Environment

Nowadays, environment factor becomes popular in various industries. This factor includes all those that influence by surrounding environment.

Legal

This factor involves internal and also external analysis of company. This is about how certain laws that affect the business process of he company in a country. And also what kind of policies that company applies.

By using PESTEL analysis, we can know the condition of macro-environment of business. In SWOT analysis, PESTEL help us to determine the threats and the opportunities represented by macro-environment forces that the business usually cannot control. So, after we know the condition, we can create the best strategy for the business.

Written by Dera Hafiyyan

Marketer Sins

No, no, and no, it is not luring people to buy the products; please wake up that is what they do for a living. So, what are the biggest sins of marketers?? The sins are assuming and thinking that they can have it all.

Assuming is a big bold no in marketer dictionary, how could you assume something will go well as you plan? No one in this world has the ability of predicting the future {even though some make it as jobs, we as MBA students are pretty realistic here}. As a marketer, data has highest value in the job. The demographic condition, customer trend even the climate pattern and tradition are more reliable than assuming things without basis. So, like what we all said in previous articles, find the most reliable and valid data out there. Use all your research tools to analyze the pattern from this data then create your amazing marketing plan. Realistically speaking, if assuming can lead to a success then every product in the market should be able to tell a success story, nonetheless, the reality is far from that.

The second biggest sin with the highest level of temptation is targeting mass market. Like stated above, you cannot have it all in this life, it is either choose A or B, C or D and so on. Nevertheless, large audience true is tempting, but the product will go nowhere if targeting this market. For one, there will be a confusion of who is the right customer for the product. Next, the product will face many competitors because of their wide range of target market. Just learn from Pond’s mistake. It is a strong facial skin care brand; however, we all know what happened when they decided to diversify the product by adding hand body to the product portfolio in Indonesia.  Ponds hand body proves that even strong brand from big company cannot have all of the market.

Now, you already read this article right, this article might not sound so serious but important enough for you to not fall into these two sins.

written by Claudya

Porter’s Five Forces Model

Welcome back guys,

Today let’s talk about one tool that very important when you want to start your business and also when you have run your business, is called porter’s five forces model. By using five forces model, you can know what kind of environment that your company stands in and also how attractive the industry.  This tool developed by Michael E. Porter, one of the Bishop William Lawrence University Professor at The Institute for Strategy and Competitiveness based at the Harvard Business School. He create the tool for industry analyzing with five component that are involved in company’s environment are the risk of new competitors entering the industry, threat of potential substitutes, the bargaining power of buyers, the bargaining powers of suppliers, and the current competition in the industry.

Porter’s Five Forces Model

Threat of New Entrants

Threat of new entrants is the ease with which new competitor s can enter the market if they see that you are making good profits (and then drive your prices down). In this component, you must consider about the time and cost of entry, specialist knowledge, economies of scale, cost advantages, technology protection, and barriers to entry. When the barrier entry is low, the threat of new entrants will be high. It makes the industry is not attractive.

Threat of Substitutes

Threat of substitutes is defined as the extent to which different products and services can be used in place of your own. The items that you must focus in this component are substitute performance and cost of change. If there are many products in the market can substitute our product, it will make the industry not attractive.

Buyer Power

The meaning of buyer power is the power of your customers to drive down your prices. You must consider the number of customers, size of each order, differences between competitors, price sensitivity, ability to substitute, and cost of changing. When there is only one customer for our product, it will make our business depend highly with the customer. So, the industry is not attractive.

Supplier Power

Supplier power is the power of suppliers to drive up the prices of your inputs. There are several things that you must consider in this component, which are: number of suppliers, size of suppliers, uniqueness of service, your ability to substitute, and cost of changing. If your supplier is only one, you have high dependency to your supplier. It makes the industry is not attractive.

Competitive Rivalry

The definition of competitive rivalry is the strength of competition in industry. In this component, you must focus on number of competitors, quality differences, other differences, switching costs, and customer loyalty. Where your business is in tight competition, it makes the industry is not attractive.

By using Porter’s five forces model, we can know the condition of our company’s industry. This analysis will be the best consideration to make decision for the right strategy for your company to face and to lead the industry. So, let’s analyze your company and chose you’re the best strategy!

Written by Dera Hafiyyan