CHAPTER III BUSINESS SOLUTION 1.1 Business Strategy Analysis 1.1.1 Analysis of SWOT SWOT analysis is the framework that allows the decision maker to gather insights obtained from both internal and external analysis of a company's strengths and weaknesses with threats and opportunities to derive strategic implications for the project onwards (Rothaermel: 2017). Stated in the previous that PT Bahari Pratama wants to increase the revenue by expanding to India’s market through assessment of internal analysis (VRIO and Financial Position of Company) and external (PESTLE, Porter’s Five Forces and CAGE) we can understand about the strategy that can be considered due to PT Bahari Pratama situation. Figure 3. 1 Quadrant of SWOT Matrix Source: Rothaermel, 2017 Before we conduct the matrix for the 4 quadrants matrix, first we need to the individual factors based on the external and internal analysis: Table 3. 1 SWOT Analysis of PT Bahari Pratama in Penetrating India’s Source: Author STRENGTH ● PT Bahari Pratama has the experience in home country to operate the similar industry in India. ● Proven quality of probiotics and feed additives product. ● Have experienced employees that experienced in shrimp supplements product. ● Have infrastructure to perform trials and research. ● Have source of information and relation access with sister company. ● Strong financial capabilities and financial position in as an operating company (financial performance analysis). ● Product can be adaptive with the specific requirements of ponds/hatcheries. ● Standardized and Eco-friendly product. ● Products can be adjusted with local shrimp feed. WEAKNESS ● PT Bahari Pratama has no special relationship with KKP. ● Registration in Indonesia quite long before sending products to India. ● Low marketing capabilities in India. ● Trials process require more time to be implemented. ● Lack of product brand awareness in India ● Source of information in India is limited only from sister company. ● Lack of promotion and communication activities. OPPORTUNITY • Government of India fully support through legal and political decision, due to their target to improve shrimp production and exports. • Local SME shrimp farmers and hatcheries can be accessed easily with our products. • Customer of the sister company can be utilised to us as part of integration process. • Access of raw materials is quite easy from host country and home country. • Manpower cost is cheaper. • Energy and diesel costs cheaper. • Traditional shrimp farmers still common in India, the use of probiotics is higher. • Some disease issue can be tackled by our products. • Shrimp experts analyse that the growth of THREATS • Existing big companies for probiotics and feed additives is dominating the market. • Big shrimp farmers hard to be penetrated due to their contract with major competitors. • High power of buyer to pick other products. • Product substitution considered high due to generic products. • Characteristic of product rivalries are high. • As a new entrant company will face many risks of competition. • EHP and White muscle disease tend to hard to be exterminated with our products. • USD reach to IDR 16,000, will impact to source materials more expensive. production and export will increase. 1.1.2 Financial Performance Analysis Through Ratios The purpose of understanding the financial performance is to understand the capabilities in term of financial of PT Bahari Pratama whether should focus on what elements that should be do or what is the current state is PT Bahari Pratama to improve their financial performance. For example, PT Bahari Pratama focus on efficiency of costs operation, managing cost of operation, managing fixed asset, leverage its business or one of the capabilities to expand the market. Hence by understanding through the finance ratio we can assess the analysis before making the strategy. 1.1.2.1 Liquidity Ratio Liquidity ratio of the company will be measure from 2020 – 2022 using the current and quick ratio. From 2020 – 2022 current ratio was showing better growth, during 2020 – 2021 current ratio was 0.43 and 0.98, it means that current asset was smaller than the current liability. This range year can elaborate that the company will face an issue in fulfilling the obligation from the creditor to repay the short-term debt. Usually, bank has a standard of healthiness of the company by maintaining the current ratio above ratio of 1. If the company could not fulfil the ratio to 1, sometimes bank will offer “waivers” because the company scored or estimated could not manage the short-term liability with its current asset. Quick ratio also shown the same where in 2020 – 2021 the quick ratio range is from 0.28 to 0.45. This condition has the meaning that PT Bahari Pratama at that time did not have the sufficient liquid assets (assets that easily converted to cash) to repay its short-term obligations. 2022 PT Bahari Pratama current ratio and quick ratio showed the positive growth where the ratios are 1.19 and 0.51. This indicates that the company can mitigate its current liabilities with the current assets, even though the quick ratio still below 1 (majority of current asset is inventory for almost 62% of total current assets) the ratio still grows from the previous years. Below are the details of current and quick ratio: Table 3. 2 Liquidity Ratio Calculation PT Bahari Pratama 2020 – 2022 Source: Annual Report PT Bahari Pratama, 2022 1.1.2.2 Activity Ratio From activities ratio, below are the details of the activity’s ratio which from inventory turnover, days inventory turnover, average collection period, and assets turnover ratio: Table 3.