30 Chapter IV : Result and Discussion 4.1 Internal Analysis The internal analysis in this research study use SWOT analysis and Porter’s Five Force Framework to analyze the competitive of the company compare to the industry. These framework enable author to develop holistic understanding of market dynamics and the specific challenges or opportunities a company faces. 4.1.1 TRAC’s SWOT Analysis In this research SWOT analysis is used to identify TRAC Astra internal strengths and weakness alongside external opportunities and threats because it provide structured framework to evaluate. By identifying the internal and external conditions allow TRAC Astra to stay relevant to tap into emerging market trends and also prepare to mitigate the risk, thus helping TRAC to remain competitive and adaptable in the dynamic car rental industry. Figure 4.1 TRAC SWOT Analysis S O T W TRAC has strong brand reputation as part of PT Astra International. TRAC Astra also has a large numbers and various of fleet model The challenges is high operational cost due to large numbers of fleet and operate in several area in Indonesia. TRAC still focus on local market. Business and tourism growth in Jakarta can have a positive impact on TRAC's business. TRAC can exploring the opportunities to open partnership with domestic and international Online Travel Agent Competitors offer better flexible service with on- demand convenience. Regulations on transportation and mobility services may change unexpectedly is one of threat that will be faced 31 Strengths TRAC Astra benefits from the strong brand reputation as part of PT Astra International, a market leader in automotive industry in Indonesia. TRAC Astra has a large numbers of fleet that caters to a wide range of customer needs, starting budget car to luxury car model. With nationwide presence in major cities and regions, TRAC Astra ensures accessibility and convenience for the customers. This is inline with the statement from K.L.M as an expert in road transportation industry in the interview session, where customers currently need a guarantee of safety and convenience while traveling. TRAC Astra also focus customer service support and well maintained vehicles, which enhance customers trust and satisfaction. TRAC Astra has diverse service offering, such as corporate leasing for B2B segmentations and short term rentals to attract B2C segmentations, customer has the option of choosing either self drive service or with driver service, TRAC provide flexibility for various customer segmentations. Weakness TRAC faces challenges like high operational cost due to maintaining a large numbers of fleet and operating in multiple locations. TRAC Astra heavily dependent on the local Indonesian market, making it susceptible to the economic fluctuations in Indonesia. TRAC limited global reach restricts their ability to compete with international car rental brands. Furthermore, TRAC Astra contends with price sensitive market and ride hailing platform offer competitive alternatives and it potentially impacting market share. A.P from Karcis dot kom mentioned with 32 the size of the existing market, competition in the market is also getting intense, each car rental company offers the best service at the competitive prices. Opportunities TRAC can leverage on Indonesia’s growing business and tourism industry by explore short term rental service. To drive competitiveness TRAC can embracing ASTRA FMS as fleet management system to give customer’s convenience and promote TRACtoGo Apps for online booking and to enhance customer experience. TRAC can strengthen partnership with online travel agent, airlines, and hotel as tourism ecosystem to broaden TRAC’s service reach. The surge in new car pricing has increased demand for car rental service, both corporate or retail segments, which in line with services offered by TRAC. Furthermore, A.P from Karcis dot kom stated with a various of car types available, customers are able to choose the car model that meet their requirements. Threats TRAC Astra faces strong rivalry from car rental companies like Golden Bird, Avis, Hertz, small medium enterprise car rental company, and also ride-hailing platforms like Gojek and Grab. Economic fluctuations in Indonesia impact to customer demand, and regulatory changes could impact to the operational process and standard. Technological disruption by competitors with more advanced digital platforms could demolish TRAC’s position in the market. H.F.I as TRAC Astra COO recognized that the increase environmental concerns may put pressure on TRAC to invest in eco-friendly solutions like electric vehicle, potentially increasing prices and demanding significant changes to the operations. 33 4.1.2 Porter’s Five Forces of TRAC Porter’s five forces framework is used for TRAC to strategically navigate challenges in the road transportation industry by analyzing competitive dynamics and identifying opportunities for sustainable advantage. By implementing this framework allows TRAC to identifying vulnerabilities and align TRAC’s resources with the market demand and ensuring resilience in a competitive business environment. According to Porter (1979), this framework remain essential to the development of corporate strategies, and the relevance can be shown and applied in current business conditions (Bruijl, 2018). Figure 4.2 Porter’s Five Forces of TRAC Threat of New Entrants The threat of new entrants for TRAC Astra is moderate due to high capital investment from parent company, PT Astra International, to maintain stock 34 management and meet customer requirements. TRAC’s established brand reputation and economics of scale provide significant advantages that dater smaller competitor. However, the increasing digitalization of the industry lowers entry barrier, enabling tech savvy startup company to compete, particularly in niche markets or with innovative service model, it because the competitors, such as ride- hailing, are basically is a tech companies and they can leverage technology to manage and analyze the data they have, as stated by G.A from Raih Indonesia. Bargaining Power of Supplier The bargaining power of supplier is low to moderate because TRAC benefits from sourcing vehicle from sister company within Astra International who provide automotive ecosystem. Additionally, there are multiple alternatives suppliers in the market, reducing dependency on single source. TRAC’s access to Astra Group extensive maintenance and spare parts network further minimize supplier influence and helps keep operational cost under control. Bargaining Power of Buyers Buyers have moderate to high bargaining power, as customer can easily compare rental prices and service through online platform, particularly for short term rental duration. Corporate customers, who often required negotiation due to long term contracts, wield significant influence and also demanding better terms and pricing. Numerous competitors and alternatives in the market increase customer expectations for competitive pricing, vehicle’s quality, and excellent service placing additional pressure on TRAC to maintain value proposition. As road transport customer, H.P.W stated that with more options for transpprtation services, 35 it will be better because customers can choose the services depending on their needs. Threat of Substitutes The threat of substitutes is high, with public transportation, ride hailing, and car sharing platforms offering convenient alternatives for certain customer segment. Competitors can offer flexible services according to your needs and simplicity in the ordering process. For customer who need longer term, customer currently have many options, due to growing number of car rental companies and local car rental players have started competing in the corporate segmentation and willing to offer more competitive price. A.K as road transport user conveyed that she prefer use ride hailing services for short trip due to the booking process is seamless and more convenient. To mitigate this threat, TRAC must emphasize the unique advantages, like flexible rental duration and terms, diverse fleet options, and added service to engage customer loyalty. Competitive Rivalry TRAC Astra faces high competitive rivalry in the car rental industry, with both international brands and local player compete for market share. The competition is especially focusing on pricing and making the service differentiation. TRAC can leverage the wide range of service beside car rental as main service, like Fleet Management System and Bus Rental.