Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Loading in …3
×
1 of 156

Strategic Management of PT HM Sampoerna Tbk.

2

Share

Download to read offline

This slides is the bundle of HM Sampoerna's group assignment consist of materials in Strategic Management

Related Books

Free with a 30 day trial from Scribd

See all

Related Audiobooks

Free with a 30 day trial from Scribd

See all

Strategic Management of PT HM Sampoerna Tbk.

  1. 1. Compiled by: Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno © 2015 International ICT Business Lecturer by: Dr. Ir. Yudi Pramudiana, MM., MT. Risris rismayani, SMB., SPd, MM.
  2. 2. © 2015 International ICT Business
  3. 3. “What do company want to become?” Strategies are the means by which long-term objectives will be achieved. “What is company business?” Result = Strengths and weaknesses •Are an organization’s controllable activities that are performed especially well or poorly. •Strengths and weaknesses are determined relative to competitors • Strengths and weaknesses may be determined relative to a firm’s own objectives. Result = Opportunities and Threads •Economic •Social •cultural •Demographic •Environmental •Political •Legal •Governmental •Technological •Competitive trends and events that could significantly benefit or harm an organization in the future As specific results that an organization seeks to achieve in pursuing its basic mission. “Long-term” means more than one year. They state: • direction •aid in evaluation •create synergy •reveal priorities •focus coordination •provide a basis for effective planning, organizing, motivating, and controlling activities. Objectives should be: •Challenging •Measurable •Consistent •Reasonable •clear. In a multidimensional firm, objectives should be established for the overall company and for each division. Successful strategy implementation requires the support of, as well as discipline and hard work from, motivated managers and employees. Successful strategy implementation depends on cooperation among all functional and divisional managers in an organization. Effective strategy evaluation allows an organization to: •capitalize on internal strengths as they develop •exploit external opportunities as they emerge •recognize and defend against threats •mitigate internal weaknesses before they become detrimental. Business strategies may include : •geographic expansion •Diversification •Acquisition •product development •market penetration •Retrenchment •Divestiture •Liquidation •joint ventures. © 2015 International ICT Business
  4. 4. Although not a guarantee for success, strategic management allows organizations to make :  effective long-term decisions  execute those decisions efficiently  take corrective actions as needed to ensure success. © 2015 International ICT Business
  5. 5. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 2 Business Vission and Mission © 2015 International ICT Business
  6. 6. © 2015 International ICT Business
  7. 7.  PT Hanjaya Mandala Sampoerna Tbk. ("Sampoerna") is one of the leading cigarette manufacturer in Indonesia.  produce a number of brands of cigarettes are known, such as Sampoerna Kretek, A Mild, as well as the "King of Kretek" legendary Dji Sam Soe.  An affiliate of PT Philip Morris Indonesia and part of Philip Morris International, the leading cigarette manufacturer in the world. © 2015 International ICT Business
  8. 8. 1913 Liem Seeng Tee, a Chinese immigrant, began making and selling hand-rolled cigarette in his home in Surabaya, Indonesia. His small business was one of the first companies to produce and market cigarettes and white cigarettes. © 2015 International ICT Business
  9. 9. 1930  Liem Seeng Tee later changed the family name and the name of his company to Sampoerna, which means "perfection".  After developing his business, he moved both his family and his factory to an abandoned complex of buildings in Surabaya later renovated and named Taman Sampoerna. © 2015 International ICT Business
  10. 10. 1959 Sampoerna Leadership switch to the second generation under the leadership of Aga Sampoerna, which focuses on the production of Clove Cigarettes Hand (SKT) premium. © 2015 International ICT Business
  11. 11. 1978 The third generation family Sampoerna, Putera Sampoerna, took over the company, and accelerated the growth of Sampoerna. © 2015 International ICT Business
  12. 12. 1989 Sampoerna launched brand A mild in Indonesia 1990  Sampoerna into a public limited company with modern corporate structure and initiate a period of investment and expansion.  Sampoerna managed to strengthen its position as one of the leading companies in Indonesia. © 2015 International ICT Business
  13. 13. 2005 Sampoerna's success attracted the attention of Philip Morris International Inc. (PMI), one of the leading tobacco company in the world. Finally, in May 2005, PT Philip Morris Indonesia, an affiliate of PMI, acquiring majority ownership of Sampoerna. © 2015 International ICT Business
  14. 14. 2008 Sampoerna inaugurated cigarette clove machines (SKM) in Karawang, West Java, with an investment of USD 250 million. 2013 Sampoerna commemorate the 100th anniversary of the founding of the company © 2015 International ICT Business
  15. 15.  At the end of 2013, the number of employees of Sampoerna and its subsidiaries have reached about 33,500 people. In addition, the Company is also working with 38 units Cigarette Production Partners (MPS), which are in various locations on the island of Java in producing Clove Cigarettes Hand, and overall has more than 56,500 employees. © 2015 International ICT Business
  16. 16. © 2015 International ICT Business
  17. 17. Sampoerna A Mild launched in 1989 and is a pioneer of tobacco products LTLN category (low tar low nicotine) in Indonesia. In 2013, A Mild retaining the position as a cigarette brand with the largest market share in Indonesia. © 2015 International ICT Business
  18. 18. Dji Sam Soe variants include segments SKT and SKM. Dji Sam Soe Filter, Dji Sam Soe Magnum Filter, and Dji Sam Soe Magnum Blue which was launched in early 2014, is part of SKM segment. While Dji Sam Soe Kretek and Dji Sam Soe Super Premium is part of SKT segment. © 2015 International ICT Business
  19. 19. Sampoerna Kretek is hand-rolled cigarettes were first produced in 1968 in Denpasar, Bali, by Aga Sampoerna, the second generation of the Sampoerna family. By combining quality tobacco and cloves, Sampoerna Kretek successfully be hand-rolled cigarettes best-in-class. © 2015 International ICT Business
  20. 20. U Mild launched in 2005 as part of a portfolio of products LTLN with Sampoerna A Mild . U Mild sales keep increasing since the launch, reaching 35.6% in 2013. © 2015 International ICT Business
  21. 21. Marlboro was launched in Indonesia in 1984 by PMID and is one of the largest international brands in the market. Sampoerna distribute Marlboro in Indonesia. Currently there are five variants comprising Marlboro Marlboro Red, Marlboro Lights, Marlboro Black Menthol, Menthol and Marlboro Lights and Marlboro Ice Blast. © 2015 International ICT Business
  22. 22. © 2015 International ICT Business
  23. 23. Adult smokers Three Hands Philosophy Employees and Business partners Society © 2015 International ICT Business
  24. 24. Delivering high quality products in their preferred price category Provide competitive compensation and good working condition for employees Giving back to society Building relationship with business partners Continually seeking out in period of time what adult smoker wants and match their expectations © 2015 International ICT Business
  25. 25. •SpecificS •MeasurableM •AchievableA •RealisticR •TimedT Sampoerna explained what their goals, and what need to be done. Through deliver the high quality products, and build the relationship with partners and society The measurement is when the goals are already achieved. So far, Sampoerna already obtained their goals and objectives The visions of Sampoerna are able to accept. It proofed with what already done by those responsible for achieving it The visions of Sampoerna are possible to attain. It reflects by what Sampoerna done until now Sampoerna clearly stated that they continually seeking out in period of time to their customer needs and tried to match their expectations© 2015 International ICT Business
  26. 26. 1. Providing high quality products to adult smokers in the price category of brand choice 2. Provide competitive compensation and a good working environment for employees and foster good relationships with business partners 3. Giving contribution to the wide community © 2015 International ICT Business
  27. 27. Aspects in our analysis that match with company mission statement’s: 1. Costumers 2. Product or Services 3. Philosophy 4. Self Concept 5. Concern : Public Image 6. Concern : Employees © 2015 International ICT Business
  28. 28.  Sampoerna mission is to provide a high quality products to adult smokers in the price category of brand choice.  In facts Sampoerna consumers are not limited to adults only, but also a favorite choice for teenagers in Indonesia especially in their Mild Variants.  It still meets the criteria of the missions. © 2015 International ICT Business
  29. 29. Firm major products and services are : 1) Sampoerna A Including Sampoerna Clove Machine variants such as A Mild 2) Dji Sam Soe Sampoerna The first Handmade Clove Cigarette produce by HM Sampoerna. 3. Sampoerna Clove (Handmade Clove Cigarette produce in Denpasar, 1968) © 2015 International ICT Business
  30. 30. 4. U Mild Release in 2005 as a portfolio products along with A Mild release. 5. Marlboro • Made by Phillip Morris International and distribute in Indonesia by HM Sampoerna. • Consist of 5 variant such as : Marlboro Red, Marlboro Lights, Marlboro Lights Menthol, and Marlboro Ice blast © 2015 International ICT Business
  31. 31.  The basic beliefs, values, aspirations, and ethical become priorities of the firms.  As mentioned in their mission statement that they also focus on the activities of economic empowerment, education, environmental protection, and disaster management. © 2015 International ICT Business
  32. 32. The firm commit their major competitive advantage as mentioned in their mission statement. Such as : 1. Provide high quality products 2. Price category of brand choice 3. Competitive compensation 4. Good working environment for their employees 5. Maintains good relationship with business partners 6. Contribution to the wide community © 2015 International ICT Business
  33. 33.  The firm is highly response to the social, community, and environments. As their mission to give a contribution to the wider community.  By giving a contribution to the community, they also build their public image. © 2015 International ICT Business
  34. 34.  Employees become a valuable asset in the HM Sampoerna.  Compensation, work environment and good opportunities for career development and self-esteem is a key element in building employee motivation and productivity in the firm as mentioned in the mission statements. © 2015 International ICT Business
  35. 35. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 3 The External Assessment © 2015 International ICT Business
  36. 36.  Highly unattractive =1  Mildly unattractive =2  Neutral =3  Mildly attractive =4  Highly attractive =5 © 2015 International ICT Business
  37. 37. Current Future Number of quality balance competitor 2 2 Product features 3 3 Capacity increase 3 4 Diversity of competitors 3 3 Overall 2,75 3 © 2015 International ICT Business
  38. 38. Current Future Economic of scale 5 4 Product differentiation 3 3 Brand identification 4 4 Switching Cost 3 3 Access to distribution channels 3 3 Capital Requirement 1 1 Access to technology 3 3 Government protection 3 3 Experience effect 4 4 Overall 3.22 3.44 © 2015 International ICT Business
  39. 39. Current Future Assets specialization 3 3 Cost to exit 1 1 Government and social restriction 2 3 Overall 2 2.33 © 2015 International ICT Business
  40. 40. Current Future Number important buyers 4 4 Buyers switching cost 2 3 Buyers threat of backward integration 2 2 Industry threat of forward integration 2 2 Contribution to quality or service of buyer’s product 4 4 Buyer’s profitability 4 4 Overall 3 3.17 © 2015 International ICT Business
  41. 41. Number of important suppliers 2 2 Availability of substitutes for supplier product 2 2 Differentiation or switching cost of supplier’s product 3 3 Suppliers of contribution to quality or service of the industry product 4 4 Important of the industry to suppliers profit 4 4 Overall 3 3 © 2015 International ICT Business
  42. 42. Current Future Availability of close substitutes 3 3 User’s switching cost 2 3 Substitute producer’s profitability & aggresiveness 3 3 Substitutes price/ value 2 2 Overall 2 2.75 © 2015 International ICT Business
  43. 43. Current future Barriers to entry 3.11 3 Barriers to exit 2.33 2.67 Rivalry among competitors 2.75 3 Power of buyers 2.5 2.67 Power of suppliers 3.6 3.6 Availability of substitutes 3.75 4 © 2015 International ICT Business
  44. 44. Current Future Overall industry assesment 3 3.16 © 2015 International ICT Business
  45. 45. Industry Analysis: The External Factor Evaluation (EFE) Matrix CompetitivePoliticalCultural TechnologicalEnvironmentalSocial GovernmentalDemographicEconomic Summarize & Evaluate © 2015 International ICT Business
  46. 46. WEIGHT  indicates the relative importance of that factor to being successful in the firm’s industry.  ranges from 0.0 (not important) to 1.0 (very important).  The sum of all weights assigned to the factors must equal 1.0 RATING  indicate how effectively the firm’s current strategies respond to the factor. 4 = the response is superior 3 = the response is above average 2 = the response is average 1 = the response is poor. © 2015 International ICT Business
  47. 47. EFE – HM Sampoerna tbk. Key External Factors Weight Rating Wtd Score Opportunities 1. Plan affirmation of "RUU Pertembakauan" 0.10 2 0.20 2. Indonesian smokers are the second highest in the world 0.20 4 0.80 3. Demand for cigarette increasing (8%) anually 0.15 3 0.45 4. Exporting of cigarette growing (7,4%- 10%) anually 0.10 3 0.30 5. Indonesia is growing 1.49% anually in population 0.10 3 0.30 © 2015 International ICT Business
  48. 48. EFE – HM Sampoerna tbk. (cont’d) Key External Factors Weight Rating Wtd Score Opportunities (cont’d) 7. Variant invention 0.13 4 0.52 8. Smoking has became a new urban lifestyle 0.12 3 0.36 9. Inovation Of LTLN In Cigarette Product 0.10 4 0.40 Total 1.00 3.33 © 2015 International ICT Business
  49. 49. EFE – HM Sampoerna tbk. (cont’d) Key External Factors Weight Rating Wtd Score Threats 1. Increase in cigarette’s tax rate of 8.72% on average 0.20 3 0.60 2. Trend towards healthy life 0.20 4 0.80 3. Increase in cigarette industry total production of 5.55% 0.10 2 0.20 4. Government Regulation Of Tobacco Advertising Restrictions 0.10 2 0.20 © 2015 International ICT Business
  50. 50. EFE – HM Sampoerna tbk. (cont’d) Key External Factors Weight Rating Wtd Score Threats (cont’d) 5. Increasing on tobaco price of 25% 0.20 3 0.60 6. Demand for electric cigarette growing recently 0.05 1 0.05 7. Probability Indonesia join FCTC 0.10 1 0.10 8. MUI statement of cigarette prohibition 0.05 1 0.05 Total 1.00 2.60 © 2015 International ICT Business
  51. 51. HIGHEST POSSIBLE Total weighted score is 4.0  Organization response is outstanding to threats and weaknesses Industry Analysis EFE LOWEST POSSIBLE Total weighted score is 1.0 •Firm’s strategies not capitalizing on opportunities or avoiding threats AVERAGE Total weighted score is 2.5 © 2015 International ICT Business
  52. 52. opportunity Total weighted score of 3.33 • Is near to the highest score of 4 • Indicates that HM Sampoerna tbk. is doing excellent, taking advantage of the existing opportunities in its industry. threats Total weighted score of 2.60 • Is above the average (midpoint) of 2.5 • Indicates that HM Sampoerna tbk. is pretty well in minimizing the potential adverse effect of external threats © 2015 International ICT Business
  53. 53. Industry Analysis: Competitive Profile Matrix (CPM) Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s strategic positions 4 = major strength 3 = minor strength 2 = major weakness 1 = major weakness © 2015 International ICT Business
  54. 54. Sampoerna Gudang Garam CSF’s Wt Rating Wt’d Score Rating Wt’d Score Market share 0.25 4 1 3 0.75 Fin position 0.15 4 0.60 2 0.30 Prod. Variant 0.10 3 0.30 4 0.40 Cons. Loyalty 0.10 4 0.40 3 0.30 Sales Distr 0.15 3 0.45 3 0.45 Global Exp. 0.15 4 0.60 3 0.45 © 2015 International ICT Business
  55. 55. Sampoerna Gudang Garam CSF’s (cont’d) Wt Rating Wt’d Score Rating Wt’d Score Price competitive 0.05 2 0.10 4 0.20 Mgt. experience 0.05 3 0.15 4 0.20 Total 1.00 3.60 3.05 © 2015 International ICT Business
  56. 56. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 4 The Internal Assessment © 2015 International ICT Business
  57. 57.  Refers to the process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing product(s) to marketing those products. © 2015 International ICT Business
  58. 58. HM SAMPOERNA GUDANG GARAM Raw materials are mostly sourced domestically The raw materials, notably tobacco leaf and cloves Invested in logistic infrastructure to enhance our inventory control system in our warehouses. © 2015 International ICT Business
  59. 59. HM SAMPOERNA GUDANG GARAM •Supporting the business entirely by providing high quality products to the adult smokers in Indonesia •Delivering quality and innovation as well as high corporate quality standard •Serving both the fast growing light and mild segment and the full flavour segment, providing both the choice and the quality associated with Gudang Garam’s name © 2015 International ICT Business
  60. 60. HM SAMPOERNA GUDANG GARAM Sampoerna sells and distributes cigarettes through a total of 105 sales offices located on the islands of Sumatra, Java, Bali,Kalimantan, as well as Eastern Indonesia Produced sound revenue and earnings, and has embarked on a significant investment drive to sustain the prospects © 2015 International ICT Business
  61. 61. HM SAMPOERNA GUDANG GARAM Providing competitive compensation and good working conditions for employees and building good relationship with business partners Employee welfare remains a priority both at all operational premises and through the provision of social and sports facilities, health and safety routines. © 2015 International ICT Business
  62. 62. HM SAMPOERNA GUDANG GARAM •Sampoerna operates 9 manufacturing facilities in Indonesia •Sampoerna has partnership with 38 third-party operators Foreign exchange exposure does arise from time to time in periodical purchases of machinery/equipment from overseas suppliers and, to lesser degree, from the routine procurement of imported raw materials such as filter material, flavours, and spare parts © 2015 International ICT Business
  63. 63. HM SAMPOERNA GUDANG GARAM Sampoerna commit to running the company’s program for serving the all stakeholders through develop, and maintain the standard and integrity of the company. As part of our overall branding strategy, we refreshed the pack design of our leading SKM (machine made) and SKT (hand made) products © 2015 International ICT Business
  64. 64. IFE – HM Sampoerna tbk. (2013) Key Internal Factors Weight Rating Wtd Score Strengths 1. Increasing in ROE 33% from 1750 to 2269 IDR 0.10 4 0.40 2. Best company in term to satisfy the customers (2013award) 0.20 4 0.80 3. HMS is the market leader in Tobacco Industry 0.15 4 0.60 4. Increasing in total revenue by 12.6% 0.10 3 0.30 5. HMS has lot of variant product 0.10 3 0.30 © 2015 International ICT Business
  65. 65. IFE – HM Sampoerna tbk. 2013 (cont’d) Key Internal Factors Weight Rating Wtd Score Strengths (cont’d) 7. HMS has loyal customers 0.10 4 0.40 8. HMS achieve 2013 Top Brand Award 0.15 4 0.60 9. Increased in customer 8,6% 0.10 3 0.30 Total 1.00 3.70 © 2015 International ICT Business
  66. 66. IFE – HM Sampoerna tbk. 2013 (cont’d) Key Internal Factors Weight Rating Wtd Score Weaknesses 1. Decreasing in sales volume of SKT 13% 0.10 2 0.20 2. Work termination of 2700 labors in 2 main factories 0.30 4 1.20 3. Unaffordable price caused by promotion and material cost 0.25 4 1.00 4. Slow growth on certain product 0.10 3 0.30 © 2015 International ICT Business
  67. 67. IFE – HM Sampoerna tbk. 2013 (cont’d) Key Internal Factors Weight Rating Wtd Score Weaknesses (cont’d) 5. Haven’t had the ability to compete in a Global Market 0.10 2 0.20 6. Inappropriate in capital allocation 0.15 4 0.60 Total 1.00 3.50 © 2015 International ICT Business
  68. 68. HIGHEST POSSIBLE Total weighted score is 4.0  Organization response is outstanding to threats and weaknesses Industry Analysis IFE LOWEST POSSIBLE Total weighted score is 1.0 •Firm’s strategies not capitalizing on opportunities or avoiding threats AVERAGE Total weighted score is 2.5 © 2015 International ICT Business
  69. 69. strengths Total weighted score of 3.70 • Is near to the highest score of 4 • Indicates that HM Sampoerna tbk. is doing excellent optimizing their ability and resulting giving a power for them to stand as a market leader in its industry. weaknesses Total weighted score of 3.50 • Is near to the highest score of 4 • Indicates that HM Sampoerna tbk. Is doing excellent managing their weaknesses so it won’t threaten their position in the market. © 2015 International ICT Business
  70. 70. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 5 Strategies in Action © 2015 International ICT Business
  71. 71. © 2015 International ICT Business
  72. 72.  To offer the best smoking experince to adult smokers in Indonesia  Continually seeking out what adult smokers prefer and delivering the best products to match their expectations  Create a reputation for quality innovation as well as high corporate governance standard © 2015 International ICT Business
  73. 73.  Definition: Strategy is organization’s pattern of response to its environment over a period of time to achieve its goals and mission  Concept:The concept of strategy has been borrowed from the military and adapted for use in business © 2015 International ICT Business
  74. 74.  Implemented Integrated Marketing Communication (IMC) especially in building A Mild brand (late 1980) Sales  Division has a good digital mapping technology which able the company to be more accurately do the brand building in with their traditional retailer © 2015 International ICT Business
  75. 75.  Backward  Philip Morris International Inc.  Forward  PT ASIA TEMBAKAU  PT HARAPAN MAJU SENTOSA  PT PERSADA MAKMUR INDONESIA  PT UNION SAMPOERNA DINAMIKA  PT AGASAM  PT GOLF TAMAN DAYU  PT HANDAL LOGISTIK NUSANTARA  PT PERUSAHAAN DAGANG DAN INDUSTRI PANAMAS  PT SAMPOERNA PRINTPACK  PT TAMAN DAYU  PT WAHANA SAMPOERNA © 2015 International ICT Business
  76. 76. Market Penetration Market Development Product Development •Advertising expenditure •Publicity effort © 2015 International ICT Business
  77. 77. © 2015 International ICT Business
  78. 78. liquidation Retrenchment  In May, 2005, Philip Morris International, at that time a subsidiary of the Altria Group, completed the acquisition of 97.95% of the company. Sampoerna reported 2006 net sales of 29.55 trillion rupiah (approximately $3.22bn using the February 22, 2008 exchange rate) resulting in 3.53 trillion rupiah net income.  PT HM Sampoerna cut off 2.700 it’s workers in 2 of it’s handmade cigarette clove (SKT) factories in East Java (Lumajang and Jember) because the costumer preference of that product was change which lead SKT market to constantly decreased since 2012 until 2013. © 2015 International ICT Business
  79. 79.  Focus – Best Value HM Sampoerna is a little bit expensive rather than other cigarette’s product. Because, they offer best quality of tobacco © 2015 International ICT Business
  80. 80. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 6 Strategy Analysis and Choice © 2015 International ICT Business
  81. 81. Opportunities: 1.Plan affirmation of "RUU Pertembakauan" 2. Indonesian smokers are the second highest in the world 3. Demand for cigarette increasing (8%) anually 4. Exporting of cigarette growing (7,4%- 10%) anually 5. Indonesia is growing 1.49% anually in population 6.Variant invention 7. Smoking has became a new urban lifestyle 8. Inovation Of LTLN In Cigarette Product Threats: 1.Increase in cigarette’s tax rate of 8.72% on average 2. Trend towards healthy life 3. Increase in cigarette industry total production of 5.55% 4. Government Regulation Of Tobacco Advertising Restrictions 5. Increasing on tobaco price of 25% 6. Demand for electric cigarette growing recently 7. Probability Indonesia join FCTC 8. MUI statement of cigarette prohibition Strengths: 1. Increasing in ROE 33% from 1750 to 2269 IDR 2. Best company in term to satisfy the customers (2013award) 3. HMS is the market leader in Tobacco Industry 4. Increasing in total revenue by 12.6% 5. HMS has lot of variant product 6. HMS has loyal customers 7. HMS achieve 2013 Top Brand Award 8. Increased in customer 8,6% Weaknesses: 1.Decreasing in sales volume of SKT 13% 2. Work termination of 2700 labors in 2 main factories 3. Unaffordable price caused by promotion and material cost 4. Slow growth on certain product (Avolution) 5. Haven’t had the ability to compete in a Global Market 6. Inappropriate in capital allocation 1. New products innovation for global target market 2. Looking for investor 3. Increasing the promotion to gain brand awareness and expand the business 4. Maintaining the market power of HM Sampoerna popular product(mild) 1. Making the strategies to promote the certain product (Avolution) in the global market 2. Making new variant inventions 3. Promotion through sponsoring the big events to gain brand awareness of the customer 1. Decrease the producing of the certain products 2. Making the CSR strategy to deal and anticipate the MUI statement and government regulation 3. Brand image of a certain products 4. Taking the advantage from the annually events to promote the products 1. Joining to the anti-cigarette campaign to gain brand awareness 2. Controlling the market through decreasing prices of the certain product 3. Conduct the research to find the cheaper raw materials 4. Promoting the Brand image “The Finest Quality” to the customer © 2015 International ICT Business
  82. 82. FINANCIAL POSITION (FP) Ratings HMS current ratio is higher 79% compared to GG 5.0 HMS give ROE (76.4%) significantly higher than GG (14.9%) 5.0 HMS has 5385 billion less than GG in net working capital 4.0 Earning per share for HMS (Rp 2468) is higher than GG (Rp 2250) 4.0 18.0 COMPETITIVE POSITION (CP) Ratings HMS got highest percentage of market share in cigarettes industry with 36.1% -1.0 HMS can satisfy their customer needs; proven by award -2.0 -3.0 © 2015 International ICT Business
  83. 83. STABILITY POSITION (SP) Ratings The exchange rate for rupiah has weakened -5.0 The new regulation for tax of 10% of excise duty has made the industry not stable -4.0 The price range for cigarette products within industry is not significantly different, but still have influence on sales of products -2.0 Barriers to exit from cigarette industry is really costly -5.0 -16.0 INDUSTRY POSITION (IP) Ratings -5.0 -4.0 -2.0 -5.0 © 2015 International ICT Business
  84. 84.  SP Average is -16.0÷4 = -4.0  IP Average is –  FP Average is 18.0÷4 = -4.5  CP Average is -3.0÷2 = -1.5 Directional Vector Coordinate : X-axis -1.5+(ip) Y-axis -4.0 -4.5= © 2015 International ICT Business
  85. 85. The Internal and External (IE) Matrix © 2015 International ICT Business
  86. 86. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 7 Management and Operation Issues © 2015 International ICT Business
  87. 87. Key resources Customer segment Cost structure Revenue stream Distribution channel Customer relationship Value proposition Key partnership Key activities INFRASTRUCTURE CUSTOMER OFFER FINANCE © 2015 International ICT Business
  88. 88.  MAN  MONEY :profit, shareholder investment  MATERIAL :tobacco leaf & clove  MACHINE :SKM  INFORMATION © 2015 International ICT Business
  89. 89. © 2015 International ICT Business
  90. 90. 1. Providing high quality products to adult smokers in the price category of brand choice 2. Provide competitive compensation and a good working environment for employees and foster good relationships with business partners 3. Giving contribution to the wide community Three Hands Philosophy © 2015 International ICT Business
  91. 91.  Sampoerna has a good relationship among it’s costumer. Sampoerna are fully committed to producing high quality with reasonable price for adult consumers. By committed to keep the costumer satisfaction level higher, indirectly Sampoerna also maintain it’s relationship with them. Sampoerna can reach their good performance in costumer relationship. This is achieved through offering relevant products and innovations to meet the costumer changing preferences. © 2015 International ICT Business
  92. 92.  PT Panamas as the sole distributor of PT HM Sampoerna’s product. © 2015 International ICT Business
  93. 93. Adult smokers © 2015 International ICT Business
  94. 94.  EXTERNAL -CUSTOMER PREFFERENCE -SKM INTENSIVE -  INTERNAL -LOT OF VARIANT -ACQUISITION BY PHILIP MORRIS INTERNATIONAL -PIONEER OF LTLN CIGARETTE © 2015 International ICT Business
  95. 95. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 8 Marketing, Finance/Accounting, R&D, and MIS Issues © 2015 International ICT Business
  96. 96. MARKETING © 2015 International ICT Business
  97. 97. A-mild, more toward that effort Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, pekerjaann, education, religion, race and nationality. Sampoerna A-mild, divide society into segments of educated people who will truly understand the dangers of smoking but still choose to smoke. In the segment of educated people, there is a potential consumer for cigarette manufacturers, namely well-educated young people who know the effects of smoking, but to take the risk for smoking. Later can become long term customers for the company, because smoking can cause entanglement. If the young consumers are bound, then the company will have the potential to be loyal consumers in the long run. © 2015 International ICT Business
  98. 98. For the PT HM Sampoerna Tbk will continue to try to penetrate the premium for tobacco products. Such as by launching a new product named Avolution. Avolution been thrown into the market to enliven the market in Indonesian kretek segment with a target market for adult smokers. The target market of cigarettes Avolution is aged adults aged between 25 to 29 years © 2015 International ICT Business
  99. 99. LOW PRICE LOW QUALITY HIGH PRICE HIGH QUALITY Sampoerna Bentoel Djarum Gudang Garam Dunhill Pall Mall Apache Marlboro Esse La Light © 2015 International ICT Business
  100. 100. Finance © 2015 International ICT Business
  101. 101. © 2015 International ICT Business
  102. 102. © 2015 International ICT Business
  103. 103.  Current assets were IDR 21.2 trillion as of December 31, 2013, relatively the same as at 31 December 2012  Noncurrent assets were slightly higher at IDR 6.2 trillion as of December 31, 2013 compared with IDR 5.1 trillion as of December 31, 2012  Total assets increased from IDR 26.2 trillion as at December31, 2012 to IDR 27.4 trillion as at December 31, 2013 © 2015 International ICT Business
  104. 104.  Net cash used in investing activities increased from IDR 0.9 trillion in 2012 to IDR 1.1 trillion in 2013  Driven primarily by higher capital expenditure by IDR 0.7 trillion to IDR 1.5 trillion in 2013 © 2015 International ICT Business
  105. 105.  Revenue: Sampoerna’s excise payment contributed 29.6% of Government excise revenue from tobacco products in 2013 of IDR 103.6 trillion* © 2015 International ICT Business
  106. 106.  In 2013, total financing income was IDR 49 billion, mainly representing interest income generated from cash in bank and receivable from related parties  Profit attributable to the Owner of the Parent for 2013 was IDR 10.8 trillion, up by 8.8% from the IDR 9.9 trillion achieved in 2012 © 2015 International ICT Business
  107. 107. Research & Development © 2015 International ICT Business
  108. 108. As we know from the HM Sampoerna long term objectives :  To offer the best smoking experince to adult smokers in Indonesia  Continually seeking out what adult smokers prefer and delivering the best products to match their expectations  Create a reputation for quality innovation as well as high corporate governance standard In order keep it’s competitive advantages in balance, HM Sampoerna should conduct a proper Research & Development methods that can fulfilled those objectives as a parameter for their proper research developments. © 2015 International ICT Business
  109. 109. We emphasize several aspects that suitable with the company long term objectives : 1. Conduct a periodical survey regarding to the costumer satisfaction of their smoking experiences while they are consuming HM Sampoerna products & compare with the other brand. 2. After the surveys and questionnaires, the results from the data collection were analyzed by HM Sampoerna R&D department in order to analyze the changing pattern of the costumer preferences and match with their demands. 3. HM Sampoerna was the pioneer of the mild clove cigarette since a long time ago, so it is very famous among Indonesian smokers and HM Sampoerna has a strong brand identity. Beside the strong brand identity that the company has, HM Sampoerna comitted to keep it’s a quality in a sustainable top performace. That’s why all of it’s product line has their own costumer segmentation that keep grows the time by time. 4. As we know that hM Sampoerna was sold to Phillip Morris international, so the business activities starting from it’s acquition period untill are using the same R&D method from the previous owner (Putera Sampoerna). 5. Even that the price of the Sampoerna mild variants are a little bit higher that the other competitiors, but the line of products for Sampoerna Mild dominate the market of the mild cigarette machine in Indonesia. © 2015 International ICT Business
  110. 110. We couldn’t find the exact contribution percentage of the total cost that HM Sampoerna spend since in R&D activities because it is not mentioned in it’s annual report. © 2015 International ICT Business
  111. 111. MIS © 2015 International ICT Business
  112. 112.  ERP (enterprise resource planning ) from ORACLE Information systems that support the transaction or the daily operations in the management of company resources. The resources include money, people, machines, spare parts, time, materials and capacity.  PeopleSoft HR © 2015 International ICT Business
  113. 113.  Make the supply chain management (supplier, warehouse,distribution,etc) more efficient and effective  Monitoring key performance indicator more better  support customer service, better support specific industry vertical (vertical industry), and also more supportive of the decision- making process (decision support) © 2015 International ICT Business
  114. 114. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 9 Strategy review, Evaluation and Control © 2015 International ICT Business
  115. 115. 1. Conduct the specific advertisement for the marketing 2. Personal Selling efficiency 3. Quality control 4. Products concistency © 2015 International ICT Business
  116. 116. STRATEGIC EVALUATION ASSESMENT MATRIX - HM SAMPOERNA TBK HAVE MAJOR CHANGES OCCURED IN THE FIRM’S INTERNAL STRATEGIC POSITION ? HAVE MAJOR CHANGES OCCURED IN THE FIRM’S EXTERNAL STRATEGIC POSITION ? HAS THE FIRM PROGRESSED SATISFACTORILY TOWARD ACHIEVING ITS STATED O BJECTIVES? RESULT NO YES YES TAKE CORRECTIVE ACTION © 2015 International ICT Business
  117. 117.  Alternatives 1. Budget cutting cost 2. Reduces marketing cost 3. Increase product price 4. Layoff current workforce = so they can maintain their profit margin at least in the same rate as their current position © 2015 International ICT Business
  118. 118.  HM Sampoerna is a pioneer cigarette company in Indonesia, so they have a strong brand awareness and for this short term period, they don’t need to change and implement any new strategy.  HM Sampoerna just have to be consistent with their current strategy, especially in their product variants quality. © 2015 International ICT Business
  119. 119. EFE – HM Sampoerna tbk. Key External Factors Weight Rating Wtd Score Opportunities 1. Plan affirmation of "RUU Pertembakauan" 0.10 2 0.20 2. Indonesian smokers are the second highest in the world 0.20 4 0.80 3. Demand for cigarette increasing (8%) anually 0.15 3 0.45 4. Exporting of cigarette growing (7,4%- 10%) anually 0.10 3 0.30 5. Indonesia is growing 1.49% anually in population 0.10 3 0.30 © 2015 International ICT Business
  120. 120. EFE – HM Sampoerna tbk. (cont’d) Key External Factors Weight Rating Wtd Score Opportunities (cont’d) 7. Variant invention 0.13 4 0.52 8. Smoking has became a new urban lifestyle 0.12 3 0.36 9. Inovation Of LTLN In Cigarette Product 0.10 4 0.40 Total 1.00 3.33 © 2015 International ICT Business
  121. 121. EFE – HM Sampoerna tbk. (cont’d) Key External Factors Weight Rating Wtd Score Threats 1. Increase in cigarette’s tax rate of 8.72% on average 0.20 3 0.60 2. Trend towards healthy life 0.20 4 0.80 3. Increase in cigarette industry total production of 5.55% 0.10 2 0.20 4. Government Regulation Of Tobacco Advertising Restrictions 0.10 2 0.20 © 2015 International ICT Business
  122. 122. EFE – HM Sampoerna tbk. (cont’d) Key External Factors Weight Rating Wtd Score Threats (cont’d) 5. Increasing on tobaco price of 25% 0.20 3 0.60 6. Demand for electric cigarette growing recently 0.05 1 0.05 7. Probability Indonesia join FCTC 0.10 1 0.10 8. MUI statement of cigarette prohibition 0.05 1 0.05 Total 1.00 2.60 © 2015 International ICT Business
  123. 123. opportunity Total weighted score of 3.33 • Is near to the highest score of 4 • Indicates that HM Sampoerna tbk. is doing excellent, taking advantage of the existing opportunities in its industry. threats Total weighted score of 2.60 • Is above the average (midpoint) of 2.5 • Indicates that HM Sampoerna tbk. is pretty well in minimizing the potential adverse effect of external threats © 2015 International ICT Business
  124. 124. IFE – HM Sampoerna tbk. (2013) Key Internal Factors Weight Rating Wtd Score Strengths 1. Increasing in ROE 33% from 1750 to 2269 IDR 0.10 4 0.40 2. Best company in term to satisfy the customers (2013award) 0.20 4 0.80 3. HMS is the market leader in Tobacco Industry 0.15 4 0.60 4. Increasing in total revenue by 12.6% 0.10 3 0.30 5. HMS has lot of variant product 0.10 3 0.30 © 2015 International ICT Business
  125. 125. IFE – HM Sampoerna tbk. 2013 (cont’d) Key Internal Factors Weight Rating Wtd Score Strengths (cont’d) 7. HMS has loyal customers 0.10 4 0.40 8. HMS achieve 2013 Top Brand Award 0.15 4 0.60 9. Increased in customer 8,6% 0.10 3 0.30 Total 1.00 3.70 © 2015 International ICT Business
  126. 126. IFE – HM Sampoerna tbk. 2013 (cont’d) Key Internal Factors Weight Rating Wtd Score Weaknesses 1. Decreasing in sales volume of SKT 13% 0.10 2 0.20 2. Work termination of 2700 labors in 2 main factories 0.30 4 1.20 3. Unaffordable price caused by promotion and material cost 0.25 4 1.00 4. Slow growth on certain product 0.10 3 0.30 © 2015 International ICT Business
  127. 127. IFE – HM Sampoerna tbk. 2013 (cont’d) Key Internal Factors Weight Rating Wtd Score Weaknesses (cont’d) 5. Haven’t had the ability to compete in a Global Market 0.10 2 0.20 6. Inappropriate in capital allocation 0.15 4 0.60 Total 1.00 3.50 © 2015 International ICT Business
  128. 128. strengths Total weighted score of 3.70 • Is near to the highest score of 4 • Indicates that HM Sampoerna tbk. is doing excellent optimizing their ability and resulting giving a power for them to stand as a market leader in its industry. weaknesses Total weighted score of 3.50 • Is near to the highest score of 4 • Indicates that HM Sampoerna tbk. Is doing excellent managing their weaknesses so it won’t threaten their position in the market. © 2015 International ICT Business
  129. 129. CSR AND BUSINESS ETHIC © 2015 International ICT Business
  130. 130. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 10 Business Ethics/ Social Responsibility/ Environmental Sustainability © 2015 International ICT Business
  131. 131. Controversial Tobacco Ad Pulled Following Public Outrage © 2015 International ICT Business
  132. 132. Sampoerna believes that a sustainable business should look beyond financial growth and performance. Instead, we must also make socially responsible investments in support of both people and planet. We are committed to sustainable social investments that benefit our employees and business partners, environment, and communities where we operate and source tobacco and cloves. © 2015 International ICT Business
  133. 133. ACCESS TO EDUCATION ECONOMIC OPPORTUNITY EMPOWERING WOMEN DISASTER RELIEF AND PREPAREDNESS © 2015 International ICT Business
  134. 134. © 2015 International ICT Business
  135. 135. © 2015 International ICT Business
  136. 136. © 2015 International ICT Business
  137. 137. © 2015 International ICT Business
  138. 138. © 2015 International ICT Business
  139. 139. Restoration Spring Mountains Region Arjuna June 25, 2013 PT HM Sampoerna Tbk. ("Sampoerna") today launched a restoration program springs Arjuna Mountains Region. With the launch of the program, Sampoerna 27,000 trees planted bamboo and manufacture of 100 recharge wells throughout the year 2013. © 2015 International ICT Business
  140. 140. © 2015 International ICT Business
  141. 141.  Labour rights: ◦ child labour ◦ forced labour ◦ right to organise ◦ safety and health  Environmental conditions ◦ water & air emissions ◦ climate change  Human rights ◦ cooperation with paramilitary forces ◦ complicity in extra-judicial killings  Poverty Alleviation ◦ job creation ◦ public revenues ◦ skills and technology © 2015 International ICT Business
  142. 142. Agung Andara Rafa Najiya Akyes Dapilca Kenang Kana Zul Asmi Retno Chapter 11 Global/International Issues © 2015 International ICT Business
  143. 143. INTERNATIONAL EXPANSION MODEL -Brunei Darussalam © 2015 International ICT Business
  144. 144.  Population: 408,786 people  Smoker: 9% from population or about 37,000 people  GDP in 2013: 24184.67 US dollars  GDP growth: 2.9% © 2015 International ICT Business
  145. 145.  Political stability Brunei has outstanding record of political stability that has been led by a benevolent monarchy that can be traced back, in an unbroken line of succession, over 600 years to when the first Sultan was installed in 1363. © 2015 International ICT Business
  146. 146. Smokefree HealthCare Facilities Yes Smokefree Universities Yes Smokefree Government Facilities Yes Smokefree Indoor Offices Yes Smokefree Restaurants Yes Smokefree Pubs & Bars Yes Smokefree Public Transport Yes All Other Indoor Public Places Smokefree No Funds for Smokefree Inforcement No © 2015 International ICT Business
  147. 147.  Brunei does not allow the tobacco industry to participate in health policy development, accepts no contributions from the tobacco industry or CSR activities, gives no benefits to the industry, has no unnecessary interaction with the industry, and requires the industry’s representatives to provide information periodically. It must be noted that Brunei does not grow tobacco, has no cigarette manufacturing facilities, and has a very small tobacco market.  Brunei Darussalam became a Party to the WHO Framework Convention on Tobacco Control © 2015 International ICT Business
  148. 148. A. Culture and Lifestyle  Smoking in Brunei in the days of old was seen as a cultural thing. They said “if you do know how to smoke you have not grown up yet”  Cigarettes were not only served during wedding ceremonies but were also served during other social events as well, even strictly religious ones such as "tahlil" and "doa selamat" ceremonies, as well as circumcision events and the likes — in fact at any social gathering. Without cigarettes being served at the end of the meal, the event was seen as incomplete © 2015 International ICT Business
  149. 149. B. Procedure of Investment  The regulations require any person who imports, distributes, sells or offers for sale, permits to be sold or offered for sale or has in his possession for sale, any tobacco product to be licensed by the Director-General  Tobacco (Licensing of Importers, Wholesalers and Retailers) Regulations, 2007 establish the requirements to apply for and maintain a retail license and set forth the sanctions related to licensure violations © 2015 International ICT Business
  150. 150.  All tobacco products are imported, and the Ministry of Health, as the Tobacco License Authority, requires licenses for all importers and retailers of tobacco products. A retail license costs BND 300 per year, while an import license costs BND 2,500 per year Number of Licensed Tobacco Retailers and Importers in Brunei Darussalam, 2008-2012 © 2015 International ICT Business
  151. 151.  Government revenue from tobacco tax 2005 – 2011 (figures in USD)* © 2015 International ICT Business
  152. 152.  MANY small vendors have ceased selling tobacco products saying it is no longer profitable due to costly licensing and stricter policing from health authorities.  Business owners said the annual license to sell cigarettes has risen from $500 to $2,500, under amendments to the Tobacco Order, making the profit margin for selling cigarettes negligible for small businesses  Other convenience stores have also stopped selling cigarettes after the Ministry of Health informed them they were in violation of laws that prohibit businesses from selling tobacco products within a kilometre radius of schools © 2015 International ICT Business
  153. 153. key success factors for preliminary investment stage in Brunei  Supportive Environment  Infrastructure  Flexible Policies  Finance, Bank and Insurance  Taxation © 2015 International ICT Business
  154. 154.  The country with the lowest level of tobacco industry interference was Brunei (29) – the only country in Shoutheast Asian with a score under 50.  list of countries by annual per capita consumption of tobacco cigarettes brunei ranking is 72 with number per cigarette per adult per year 751. © 2015 International ICT Business
  155. 155.  have a diverse and experienced team of professionals from seven different countries with an average experience of nearly 20 years in HM Sampoerna across a wide range of markets and functions  one key to the success of Sampoerna is adherence to the principles of good corporate governance,  Training programs are held regularly and closely monitored employee participation © 2015 International ICT Business
  156. 156.  Seeing the condition and the opportunity in Brunei’s tobacco market. The best strategy to enter the market would be export products considering that Brunei doesn’t provide any facilities to support tobacco industry. Export can neither direct or indirect method such as agent or retailer. © 2015 International ICT Business

×