The Indonesian business landscape 2000
The Indonesian business landscape 2000
By Hermawan Kartajaya,
Finally, we are leading ourselves into a new century and a new millennium safely and smoothly. Y2K worries are behind us and temporarily unproven. But this does not mean that we can be complacent because there are big and fundamental changes happening to Indonesia's business landscape.
As we all know, since mid-1997 we have experienced a chain of crises, starting with an economic crisis, which evolved into a political crisis and finally an immense social crisis. This chain of crises and far-reaching and fundamental changes in technology, the political-legal sphere, economy, sociocultural activities, market, competition and certainly, customers. The total change has put forward a brand new Indonesian business landscape.
To comprehend the format of New Indonesia in the first year of the new millennium, MarkPlus Strategic Consulting has proposed a review of Indonesia's business landscape in the year 2000. Suitable to our own model, The Sustainable Marketing Enterprise, our office has assessed three business-landscape components and they are Change (Technology, Political-Legal, Economy, Sociocultural and Market), Competitor and Customer, often called the 3Cs. The other component of the business landscape -- the Company -- is excluded from our assessment because the review applies to all companies. From the 3Cs review, we have successfully identified 18 types of change that will have an influence on Indonesian business life in the future, or what is called 18 significant forces of change.
The 18 significant forces of change can, in fact, be classified into three major types of change on the Indonesian business landscape, creating three new rules of the game within Indonesian business. However, bear in mind that new rules of the game are not a guarantee for a company to be a winner. Based on our proposed review, to be a winner, the company must familiarize itself with the 10 new competitive value propositions and 10 customer value requirements. In addition, to be a winner the company should also choose one of the five formulas or the winning value app (apps: short for applications).
Here I will try to explain all the current changes and the matching responses, beginning with the first C: Change, that bears the 18 significant forces of change as mentioned above, has been classified into three types. It will be followed by a discussion on three new rules of the game. Right after that will be a discussion on the 2Cs -- Competitor and Customer -- followed by the 10 new competitive value propositions and 10 customer value requirements, as well as the five winning value apps.
According to Prof. Zuhal, there actually exist three kinds of technology having a large influence on our lives at the moment, comprising information technology (IT), biotechnology and material technology; in the case of Indonesia, there is only one technology that acts as a change catalyst and that is IT.
From the political-legal point of view, there are four important changes. The first change is a transition from centralization to decentralization of national economy development management. The second change is a transition from an authoritarian country to a modern democratic country. The third change is a transition from power supremacy to the supremacy of law. Last but not least, the fourth change shows a transition from a business paradigm marked by corruption to the business paradigm of BTP.
From the economic vantage point, there are also four important changes. First, that our economy is still controlled by the IMF, subsequent to the loan awarded by IMF to overcome the Indonesia's economic crisis. Second is the change triggered by the formation of a legitimate democratic government. There is a growing sense of optimism by the Indonesian people regarding the future of Indonesia's economy, especially for the ethnic Chinese. This change has more or less given its contribution to regenerating the Indonesian economy recently. Third is the emergence of a region-state economy in Indonesia as a consequence of the validation of the Law of Regional Autonomy and the Law of PPKPD. Fourth, the people's economy that is no longer associated with asset redistribution.
Meanwhile, from the market point of view, there are the important changes. First is the market-level of playing field that applies to any business player in Indonesia. Second, is the market player proliferation that, among others, is stimulated by the emergence of new entrepreneurs with new paradigms. Third is the pressure on market efficiency.
Change that is generated by IT development can be categorized as informationalization. The changes in the field of political- legal, economy and socioculture can be categorized as democratization. Meanwhile, change in the market can be classified as liberalization. Informationalization, democratization and liberalization will later bear new rules of the game for companies operating in Indonesia. Informationalization will complement the rule of the game in the form of deep customer knowledge.
This means that a company will become successful by not only focusing on information about its customers, but also good comprehension about its customers. Democratization will initiate rules of the game in the form of good corporate governance. Because democratization will lead to the creation of fair and transparent business practices, including to three main stakeholders. On the other hand, liberalization will address a rule of the game in the form of competitive core competence, because the key success factor is greatly determined by its core competence.
For the other two Cs, Competitor and Customer, there are three major changes. In terms of Competitor, there are three Competitive Setting Indications: Rationalization, Multinationalization and Extenderization. Rationalization is a form of change that stimulates the creation of efficient industrial structure. Multinationalization is a change stipulated by the higher role of MNCs in the national economy, as well as the impact of ownership transfer from national to international parties. Extenderization is a form of change that is set out by a certain will to expand the market basis from domestic to regional. In contrast, in terms of Customer, there are three Customer Profile Indications: Universalization, Fortification and Justification. Universalization is a value adoption phenomenon and universal lifestyle. Fortification is a self-identity protection phenomenon based on ethnicity, religion and regions. Justification is a phenomenon that is rendered by the economic crisis, where people tend to be budget-conscious with their spending.
Three changes in the competitive setting will later bear 10 new competitive value propositions -- quality, on-time delivery, customization, brand, variety, flexibility, low prices, service, value-added and warranties. In contrast, three changes in term of the customer profile will bear 10 new customer value requirements -- solutions, on-time delivery, personalization, image, choice, convenience, low-cost, reliability, value-in-use and security. To face value propositions and value requirements like this, a company can choose one of five value applications: more for more, more for same, more for less, same for less and less for less.