Perpustakaan Digital ITB

Australian Fine Food (AFF) as Australia's premium food exporters currently faces barriers in their business growth in Indonesia. Large market potential is not followed by revenue growth. Initially AFF saw some indicators on surface as cause of growth inhibition. The indicators are including government regulations that limit their business activities, the unbalance distribution and competitive landscape among similar industries. Currently government regulation requires all imported food products to have registration number as requisite for import activity and retail market distribution. AFF as a company who does not produce the goods by themselves, do not have exclusivity from brand owner to register in Indonesia market. This situation results on limitation of importing activities. AFF finds the air shipment is not as strict supervision as sea freight, but it causes the high cost. In addition, the lack of registration number results on difficulty to enter the retail market. It led to unbalance revenue distribution. AFF also see local distributor sells several brands on each category. It shows less commitment from local distributor that also not supportive for business growth. Indonesia's current market opportunity is considered large. Business Monitor International is reporting the opportunities of food imports in 2012 are expected to reach USD10, 539.7 million with a growth rate of 9.7%. Large market that grows rapidly is also followed by varieties of environmental changes. These changes are including government regulations trend where government increases the supervision of imported food products, changes in consumer behavior and changes in industry competition. Business practices that AFF has implemented for the last few years are no longer suitable with current market environment in Indonesia. Global strategy as corporate strategy is not applicable as this strategy is less responsive to local markets. Transnational strategy is a strategy that is considered more appropriate. With this strategy, AFF can still have a global portfolio but responsive and able to adjust minor changes in accordance with local demands. On business level, AFF need to review their value preposition. The focus of the strategy than combine between cost and differentiation is the most appropriate strategy in business level. However, AFF needs to ensure the strategy on business level can be implemented in country level. Therefore, it is necessary to have commitment from the local distributor to execute this strategy. Commitment from local will be difficult to achieve if the AFF still do exporting as entry mode strategy. AFF has to change its strategy by doing joint ventures, so that they can have control over its products in Indonesia. Business models must be able to adjust with environmental changes. AFF business model of that applied today is continuation of corporate strategy, business strategy and entry mode strategy. This model is no longer suitable with market environment as it inhibits their business growth in Indonesia. After AFF make several changes on its international strategy, it would require a new business model innovation especially for Indonesian market. Business model innovation includes the right consumer segment in demographic, social economic and geography; the exact value proposition as a of premium food provider from Australia that understand and responsive to local market; strategic at distribution channel in both retail markets and industrial market; establish two-way relationship with its consumers; focus on the main activity which are importing activity, logistical arrangements, commercial and consumer relationship; make investments on key resources and established partnerships with local parties.