EXCUTIVE SUMMARY
PT. UltraJaya is the market leader in the food and
beverages industry with 55% of market share, this is the reason for the company
to keep growth and aggressive. As the company positioned to be an aggressive
company, the strength of the company is the effective weapon in constructing
the strategic marketing plan.
The main problems of the company is how to fulfill
the Indonesia dairy market demand as milk consumption in Indonesia is still
around 10-11 liters per capita, while neighboring country more than 3 times as
much and taking the opportunity of milk market that is estimated to grow by
10-15% per year.
I had proposed four strategies with different degree
of priority as well as the time frame of the length but it serves to accomplish
one marketing objectives which is to achieve growth 10-15% in 2012.
INTRODUCTION
PT. ULTRAJAYA MILK INDUSTRY TBK
is manufacturer and sell a wide range of UHT fresh dairy products, fresh
ready-to-drink tea. Up to today, PT. ULTRAJAYA are the pioneer and Indonesia’s
leading producer of aseptic dairy products and beverages for consumer throughout
the country under some well-known brands such as Ultra Milk for dairy products,
Teh Kotak, Sari Kacang Hijau, Sari Asem, and Teh Bunga for Healthy Drink
product and some other beverages for export.
The plant is strategically
located in the center of the rich agricultural hinterland of Bandung which
provides it with an abundant and reliable source of high quality, fresh
ingredients, from milk to tea and tropical fruits. The freshness of these
ingredients as well as their natural, nutritional quality is preserved through
an Ultra High Temperature (UHT) process and the latest aseptic packaging
technology without adding any preservatives.
In 1975, the company commercially
produced UHT milk product bearing the brand name of “Ultra Milk”. In 1978, it
produced UHT fruit juices product bearing the brand name of “Buavita” and in
1981 produced UHT tea product bearing the brand name of “Teh Kotak”.
In 1982, the Company was granted a
license by Kraft General Food Ltd., USA, to produce and market cheese products
bearing the commercial name of "Kraft". In 1994, this partnership was
upgraded into a joint venture company, PT Kraft Ultrajaya Indonesia and the
Company was assigned as an exclusive distributor to market products manufactured
by PT Kraft Ultrajaya Indonesia. Since 2002 however, the Company no longer
markets products manufactured by PT Kraft Ultrajaya Indonesia, to allow the
Company to concentrate on marketing its own products.
In 1994, the Company expanded by
entering the Sweetened Condensed Milk (SCM) market and Powdered Milk market,
and in 1995 it started to produce powdered milk. In 2008 the Company sold the
trademarks of “Buavita” and “Go-Go” to PT Unilever Indonesia. The Company
entered into production cooperation agreements with several multinational
companies like Unilever, Morinaga, and others. The Company conducted its
initial public offering (IPO) in July 1990.
Until today the Company has produced
more than 60 different types of UHT drinks and constantly strives to
continually meet their consumers’ needs and tastes. The Company constantly
seeks to improve the quality of its products, and always attempts to be the
market leader in the field of aseptic beverage industry.
Nowadays, 90 percent of the
company’s total production volume is sold domestically throughout Indonesia,
while the remainder is exported to various countries in Asia, Europe and the
Middle East, as well as Australia and the United States of America. The
products sold to local and export markets are identical.
Lastly, the company still
upholding their vision and mission of the company. Vision is to become the best
and largest Food and Beverage industry in Indonesia, by always prioritizing
consumer’s satisfaction and to highly uphold trust out our stakeholders and
business partners.
Mission is to conduct business
based on high sensitivity always oriented to the market and consumers while
remaining environmentally conscientious with the end goal of optimally
conducting business to achieve value added performance in our responsibility to
our shareholders.
SITUATIONAL
ANALYSIS
The company has managed to
maintain its position as the highest market share holder in the sales of
beverages product in aseptic carton packaging with more than 55% out of more
than 10 similar products. The company also managed to increase net sales by
more than 11% compared to net sales of previous year (annual report 2011).
SWOT ANALYSIS
STRENGTH
|
WEAKNESSES
|
1. Indonesia’s leading producers of dairy products
and others Ready to Drink (RTD) beverages products.
2. Largest producers of UHT products in the Asia
Pacific.
3. The distribution system covers more than 25,000
groceries which collectively supply to over 65,000 retail outlets.
4. This location is very strategic because it
located at the junction of dairy and agricultural produce.
5. Strong brand value.
6. Computerized system/technological
7. Produce product without preservatives
|
1. High production cost
2. The availability of raw material/resources.
3. Quality of raw material/resources is declining.
4. Skill and knowledge of human resources.
5. Distribution time is too long
|
OPPORTUNITY
|
THREAT
|
1. Milk consumption level in Indonesia still low
compare to another country.
2. Indonesia is the fourth most populated country in
the world.
3. Domestic dairy demand in Indonesia is still not
able to be fulfilled by the milk producers.
4. Economic stability.
5. Satisfaction level of customers
6. Variety of product
7. Certificate of standard quality
8. Competitive price
|
1. Instability of exchange rate.
2. Competitive competition.
3. Decreasing of purchasing powers.
4. Increasing of raw material and packaging price.
5. Natural disaster.
6. Negative issue toward the company.
|
The
year 2011 was a challenging one of the company, as the world economy is not
fully recovered yet from the 2008 economic crisis such, public confidence in
the business world remains uncertain. However, Indonesia’s economy was
relatively safe and stable due to strong and solid economic fundamentals.
Social and political turmoil that occurred in the community does not interfere
with or affect the growth of the national economy and the market of food
beverages industry in general.
Throughout
the year 2011, the market of food products and beverages was more competitive
as compared to previous years. It is reflected by the increasing number of
companies and investors who are active in the food and drink industry. And in
the midst of this more severe competition, the Company successfully increased
net sales by more than 11% from Rp. 1,9 trillion in 2010 to Rp. 2,1 trillion in
2011. The company also managed to maintain its market position taking control
of the UHT beverage product industry with 55% market share of over 10
manufacturers of similar products. Sales volume of UHT products in total grew
by 10% while sweetened condensed milk products grew by 20%.
In
the field of marketing and distribution, the Company has consistently sought
to expand its market and enhance consumer loyalty. During 2011 the Company held
a variety of festivals, charity programs, races, and sport activities, as a
mass communication strategy to further enhance brands, such as Make Your Move
and Brand Education in the dairy sector, and Thanks To Nature for Teh Kotak
products. The Company also strengthened In store Branding – Gondola in
supermarkets and hypermarkets by being active and consistent.
The
Company always endeavors to maintain a good relationship as well as to further
improve cooperation by coaching and guiding our agents and distributors spread
across Indonesia.
In
Manufacturing, in 2011 the Company has added several new machines and manufacturing
equipment, including additional receiving tanks for fresh milk, to support
production capacity. In the previous year the Company completed a plant
expansion that included the addition of new buildings of more than 15.000 m2 of
floor space, 60.000 m3 of waste water treatment, additional robotic warehouse
with a capacity of 8.000 pallets-position, etc, complete with equipment and
machinery
In
HRD, the company consistently conducts regeneration and training programs to
enhance the capabilities, competence, technical skills, managerial skills, and
other soft skills of all the Company’s managers, staff and employees.
MARKETING OBJECTIVES AND GOALS
The
Company believes that market prospects of UHT milk are very strong and promising.
This is due to the low level of milk consumption among Indonesian people. In
2011, milk consumption in Indonesia is still around 10-11 liters per capita,
while in our neighboring countries like Singapore, Malaysia, and Thailand, they
consume more than 3 times as much. Also our population has reached more than
230 million with a growth rate of 1 to 1,5% per year.
With
an economic growth rate of 5 to 6% per year, our people’s income and purchasing
power will continue to grow along with the change towards a healthier
lifestyle. Such conditions are expected to encourage increased consumption of
milk, so that in the coming years Indonesia’s milk market is estimated to grow
by 7-8% per year, and UHT-milk market will grow approximately 18% for the next
5 years.
With
this assumption and the hard work of all parties, the Company is quite confident
it will be able to achieve a growth of 10-15% in 2012, at least the same as the
growth of the milk market.
MARKETING STRATEGIES AND PROGRAMMES
In order to identify company’s position we can
assess through internal and external assessment. Internal assessment is to
understand the strength and weaknesses of the company while external assessment
to have the knowledge the opportunity and threat toward the company. From those
factors, we can weighted each of the variable and rating by using SWOT matrix.
Results of the weighted, as follows:
Internal Factor of the Company
STRENGTH
|
WEIGHT
|
RATING
|
WEIGHTED SCORE
|
Indonesia’s leading producers of dairy products and
others Ready to Drink (RTD) beverages products.
|
0.19
|
4
|
0.76
|
Largest producers of UHT products in the Asia
Pacific.
|
0.14
|
4
|
0.56
|
The distribution system covers more than 25,000 groceries which
collectively supply to over 65,000 retail outlets
|
0.17
|
3
|
0.51
|
This location is very strategic because it located at the junction of
dairy and agricultural produce
|
0.09
|
3
|
0.27
|
Strong brand value
|
0.14
|
3
|
0.42
|
Computerized system/technological
|
0.12
|
2
|
0.24
|
Produce product without preservatives
|
0.15
|
2
|
0.3
|
1
|
21
|
3.06
|
WEAKNESSES
|
WEIGHT
|
RATING
|
WEIGHTED SCORE
|
High production cost
|
0.25
|
2
|
0.5
|
The availability of raw material/resources.
|
0.29
|
3
|
0.87
|
Quality of raw material/resources is declining
|
0.20
|
2
|
0.40
|
Skill and knowledge of human resources
|
0.12
|
1
|
0.12
|
Distribution time is too long
|
0.14
|
2
|
0.28
|
1
|
10
|
2.17
|
External
Factor of the Company
OPPORTUNITY
|
WEIGHT
|
RATING
|
WEIGHTED SCORE
|
Milk consumption level in Indonesia still low
compare to another country.
|
0.19
|
3
|
0.57
|
Indonesia is the fourth most populated country in
the world.
|
0.22
|
4
|
0.88
|
Domestic dairy demand in Indonesia is still not able to be fulfilled by
the milk producers
|
0.12
|
3
|
0.36
|
Economic stability
|
0.05
|
3
|
0.15
|
Satisfaction level of customers
|
0.1
|
3
|
0.3
|
Competitive price
|
0.12
|
3
|
0.36
|
Variety of product
|
0.15
|
3
|
0.45
|
Certificate of standard quality
|
0.05
|
2
|
0.1
|
1
|
3.17
|
THREAT
|
WEIGHT
|
RATING
|
WEIGHTED SCORE
|
Instability of exchange rate
|
0.13
|
2
|
0.26
|
Competitive competition
|
0.26
|
2
|
0.52
|
Decreasing of purchasing powers
|
0.21
|
3
|
0.63
|
Increasing of raw material and packaging price
|
0.18
|
2
|
0.36
|
Natural disaster
|
0.11
|
1
|
0.11
|
Negative issue toward the company
|
0.11
|
1
|
0.11
|
1.99
|
Based
on the result from the internal and external analysis from the above table, the
result as follows:
1. Total weighted score of strength : 3.06
2. Total weighted score of weaknesses : 2.17
3. Total weighted score of opportunity : 3.17
4. Total weighted score of threat :1.99
As we get the weighted score, we can decide the
position of PT. UltraJaya which will be show in the below figure.
Calculating the coordinate, as follows:
Internal Analysis Coordinate (Total weighted score of strength – total weighted score of
weaknesses):2 = (3.06-2.17): 2 = 0.45
External Analysis Coordinate (Total weighted score
of opportunity – total weighted score of weaknesses):2 = (3.17-1.99): 2 = 0.59
Hence, coordinate point located in (0.45,0.59).
QUADRANT
|
COORDINATE
|
MATRIX
DIMENSION/WIDE
|
RANKING
|
STRATEGY
PRIORITY
|
I
|
3.06,3.17
|
10
|
1
|
Growth/Aggressive
|
II
|
2.17,3.17
|
7
|
2
|
Conservative/Stability
|
III
|
2.17,1.99
|
4
|
4
|
Competitive/Diversification
|
IV
|
3.06,1.99
|
6
|
3
|
Defensive
|
|
I
|
Based on the result that we get from each variable
of SWOT analysis as it has been presented, we can determine the company
position which is located in quadrant I. Quadrant I is aggressive or growth
quadrant with coordinate of (0.45,0.59). Therefore, general strategy that
should be applied is taking into account the company strength in every
decision/strategy is going to being made.
PRIORTIY
|
STRATEGY
|
I
|
Extension of
product line (new flavor and new product )
|
II
|
Produce
product with good quality
|
III
|
Build new
factory/warehouse
|
IV
|
Regular
maintenance of production machine
|
ACTIVITY
|
OUTPUT
|
OUTCOME
|
IMPACT
|
Extension of product line (new
flavor and new product )
|
Increasing sales with new product and new flavor
|
More costumers targeted who like the new flavor and new product
|
Increasing of net profit margin
|
Produce product with good
quality
|
Product is in good quality and had been certified by food quality board
|
Number of costumer is increasing who are interested in products with
good quality
|
Sales of all product range is increasing
|
Build new factory/warehouse
|
New asset in form of factory or warehouse
|
Distribution to wholesaler and retailer more effective and easy to be
control
|
If there is control in distribution process , it will impact to
increasing demand of the product
|
Regular maintenance of
production machine
|
Machine function properly
|
Machine can effectively work and support the production process
|
Production process is run smoothly as well as can produce product in
good quality.
|
KEY
PERFORMANCE INDICATOR
Strategic Business Unit
|
Key Performance Indicator
|
Measurement
|
Base Line
|
Target
|
Actual
|
Achievement (%)
|
Performance Score
|
||
Result
|
Time
|
Result
|
Time
|
||||||
Extension of product line (new
flavor and new product )
|
More costumers attract/buy the new flavor and new product
|
Number of new
product/flavor
|
5
|
10
|
365 days
|
5
|
365 days
|
50%
|
50%
|
Produce product with good
quality
|
Number of costumer is increasing who are interested in products with
good quality
|
Sales Volume in rupiah
|
200 million rupiah
|
300 million rupiah
|
30 days
|
300 million rupiah
|
30 days
|
100%
|
100%
|
Build new factory/warehouse
|
Distribution to wholesaler and retailer more effective and easy to be
control
|
Time accuracy
|
3 days
|
2 days
|
2 days
|
2 days
|
2 days
|
100%
|
100%
|
Regular maintenance of
production machine
|
Machine can effectively work and support the production process
|
Production output
(liter)
|
200,000 liter
|
300,000 liter
|
1 day
|
300,000 liter
|
1 day
|
100%
|
100%
|
IMPLEMENTATION AND CONTROL
Strategy
1: Extension of product line (new product and flavor)
I would like to recommend six new products and four
new flavors in Ultra Jaya product line. In order for this strategy to apply
successfully we are needed research and development to work harder to invent
the new product and flavor with maintaining good quality of product.
Nevertheless, the packaging should be attractive with an aseptic carton and
offering competitive price. Strategic and annual plan control would be
effective in controlling this strategy.
Strategy
2: Produce Product with good quality
In order for this strategy to apply effectively, we
do not need to incur a lot of money. We are only need to enhance more in the
quality control of the company. Meaning that the people should more supervise
the product with zero defects. Efficiency control would be effective as it more
to line staff management/daily operation.
Strategy 3: Building new factory/new warehouse.
The decision to build new factory and warehouse
should come to the understanding of more effective and efficient process. There
are different approach of building new factory and warehouse. For a company to
expand or building new factory, the first things should be consider is the
location of the factory whether it is located in the functional of agricultural
area or near the resources and large landscape, secondly the human resources
available and situation of the area whether it is safe or conflict area.
If the company wants to build new warehouse meaning
that they want to shorter the distribution time to wholesaler. At this moment,
the factory located at Bandung, therefore the company can build new warehouse
in Medan (West side of Indonesia) and Makassar (East Side Indonesia) to control
the distribution. Secondly, the warehouse should in the form of cold storage.
Furthermore, the company should encourage the milk consumption by promoting
through school event and other event by giving free milk.
Strategy 4: Regular maintenance of production
machine
The company should produce standard operating
procedure in order to help the staff to control the maintenance of the machine.
It should do daily, weekly, monthly, quarterly or yearly depend on the type of
the machine. Second step is control the staff/mechanic whether they do the
regular maintenance according to the standard operating procedure or
maintenance procedural.
CONCLUSION
Through using the SWOT matrix analysis and weighted
each of the variable contain in the internal and external assessment, we found
that PT. UltraJaya positioned themselves as a aggressive or growth company
meaning that the strength of the company will be take into account in taking
every decision in the company.
Therefore I had been proposed 4 strategies to
support the company; they are extension of product line (new product and
flavor), produce product with good quality, building new factory and warehouse,
and regular maintenance of the production machine.
Each of strategy has different time length/duration
to be accomplished and different measurement as well as the type controlling
however, the four strategies has the same objective which is to help the
company to achieve the marketing objective and goals to achieve growth 10-15%
in 2012.
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