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Mustika Ratu

Nov 08, 2014

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radhihirzi

Case Study

NAVIGATING THROUGH SOCIAL AND ECONOMIC CRISISDelfiana Rahadi Reski Reza - Teguh

Vision To be a market leader in manufacturing traditional cosmetics and herbal with high quality of natural ingredients.

Missions constantly produces high quality products that are formulated by selected natural ingredients. Capture all segments.

BACKGROUND

1997

Mustika Ratu

Focus on Domestic

Speed up Internation al Expansion

Background

Mustika Ratu is Indonesias leading manufacturer of cosmetics and traditional herbal supplements. Mustika Ratu was established by Mooryati Soedibjo in 1975. The Company made initial public offering and recorded its shares in PT. Bursa Efek Jakarta in 1995. In 1998 there was a financial crisis in Indonesia, resulted in unpredictable prospect.

Core Competencies

Natural product ingredient expertise in formulation of jamus and cosmetics

Increase/D ecreaseNet Sales COGS Gross Profit Operating Expenses Selling General and Adm Total Operating Expenses Income From Operations Other Income (Expenses) Gain on foreign exchange - net Market Development Intereset Income - net Donation to Yayasan Dana Sejahtera Mandiri Gain on sale of property, plant and equipment Amortization of goodwill Miscellaneous other income - net Income Before Provision for Income Tax Provision For Income Tax Income Before Minority Interest in Net Loss (Earnings) of Subsidiaries Minority Interest in Net Loss (Earning) of Subsidiaries Net Income 0.33% -0.33% 4.72% 1.12% 5.84% -6.17% 12.89% -4.12% -1.19% -0.02% 0.26% 0.00% 0.18% 7.98% 1.81% 1.35% 0.47% 0.06% 0.53%

FinancialNet income slightly increase in unpredictable condition

STRONG FINANCIAL HEALTH

Situation of may 1998Sales Decrease

Worst Financial Crisis

-Decrease buying power -Decrease Profit Margin

Emerging Opportunities for speeding international expansion

Corporate Culture

Based on their motto Mustika Ratu believes customer satisfaction is number one priority. Inside the company Mustika Ratu believes in intimacy workplace, so each employee can be familiar to each other. Beside that Mustika Ratu encouraged their employee to work with high integrity and professionalism.

Corporate Resource

Their founder closed with government people at the moment. Has widespread distribution channel in Indonesia Has several foreign operation in Southeast Asia Has extensive brand products to cover wide segment

IFAS TABLEFactor Weigth 1 Strenght 2 Rating 3 4 5 Average Stdev CV Value

Has widespread distribution channel in IndonesiaHas several foreign operation in Southeast Asia Strong financial product Has extensive brand products to cover wide segment

0.1904760.142857 0.095238 0.142857

54 3 4

43 4 4

43 3 4

32 4 4

54 3 4

4.2 0.7483313.2 0.748331 3.4 4 0

0.80.457143 0.32381 0.571429

43 2 3

Weakness Many her customer is lower middle income Raw material dependency 0.142857 0.190476 3 2 3 3 3 3 4 3 4 3 2 3 4 2 3 3.4 0.489898 2.4 0.489898 3.2 0.485714 0.457143 0.304762 3.095238 3 4 2

Did not have strong foreign awareness outside Southeast Asia 0.095238 Total 1

EFAS TABLEFactor Weigth 1 Strenght 2 Rating 3 4 5 Average Stdev CV Value

Has widespread distribution channel in IndonesiaHas several foreign operation in Southeast Asia Strong financial product Has extensive brand products to cover wide segment

0.1904760.142857 0.095238 0.142857

54 3 4

43 4 4

43 3 4

32 4 4

54 3 4

4.2 0.7483313.2 0.748331 3.4 4 0

0.80.457143 0.32381 0.571429

43 2 3

Weakness Many her customer is lower middle income Raw material dependency Did not have strong foreign awareness outside Southeast Asia 0.095238 Total 1 3 3 4 3 3 3.2 0.304762 3.095238 2 0.142857 0.190476 3 2 3 3 4 3 3 2 4 2 3.4 0.489898 2.4 0.489898 0.485714 0.457143 3 4

GE MatrixElement Overall Market Size Competitive intensity Distribution channel Market Attractiveness Pricing package Product innovation Inflationary vulnerability Crisis impact Total Weight Rating 0.22 0.165 0.13 0.101 0.162 0.074 0.148 1 Value 5 1.10 3 0.50 3 0.39 2 0.20 3 0.49 3 0.22 4 0.59 3.49

GE MatrixElement Market share Share growth Product quality Competitive Position Brand reputation Performance efficiency Distribution network Performance productivity Total Weight Rating 0.169 0.076 0.318 0.114 0.138 0.061 0.123 1 Value 5 0.85 3 0.23 4 1.27 5 0.57 3 0.41 3 0.18 3 0.37 3.88

GE Matrix

GE Solution

Invest heavily in most attractive segment

Build up ability to counter competition

Emphasize profitability by raising productivity

QSPMOpportunitiesO1 O2 O3 O4 O5 T1 T2 T3 T4 T5

AS0.123 0.121 0.094 0.086 0.074 0.125 0.105 0.081 0.075 0.115 0 0 4 4 4 3 3 0 4 3

TAS0 0 0.38 0.34 0.30 0.38 0.31 0.00 0.30 0.35

AS0 0 3 3 3 4 4 0 3 5

TAS0.00 0.00 0.28 0.26 0.22 0.50 0.42 0.00 0.23 0.58

the fourth populous country in the worldForeign market reaching high income target market decreasing number of local competitor high entry barrier due to geographical condition Threat Economic crisis leads to increasing cost High raw material cost Increasing number of unemployement The retailer prefer to not hold many inventories Compete with foreign brand

1.0 StrengthS1 S2 S3 S4 W1 W2 W3

0.004 0 3 3 2 3 0 0.76 0.00 0.29 0.43 0.29 0.57 0.00 4.69 2 0 4 5 5 4 0

0.000.38 0.00 0.38 0.71 0.71 0.76 0.00 5.44

Has widespread distribution channel in IndonesiaHas several foreign operation in Southeast Asia Strong financial position Has extensive brand products to cover wide segment Weakness Many her customer is lower middle income Raw material dependency

0.190 0.143 0.095 0.143 0.143 0.190 0.095 1

Did not have strong foreign awareness outside Southeast Asia

Strategy: Concentration of Growth by entering foreign and domestic market

IMPLEMENTATION

Domestic Door to door marketing Direct selling Reaching wide segment International

Partnership with local brandDistribution channel via agent