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.