Plan of Approach RNI Final Version

7/11/2014

Plan of Approach final assignment ( Version 4 ) Creating a new distribution channel for PT. Rajawali

Nusantara Indonesia

Mrs. Dewi Madayanti , S.Sos

Dana Arif Kurniawan - 346640 PT. RAJAWALI NUSANTARA INDONESIA MAY – SEPTEMBER 2014 SUPERVISED BY : MR. DIRK GIETHOORN AND MR. ROBERT ROHDE

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Plan of Approach final assignment ( Version 4 )

Table of Contents Introduction ............................................................................................................................................ 2

Objective ................................................................................................................................................. 4

Central Research Question ..................................................................................................................... 5

Sub-Questions ......................................................................................................................................... 5

Research Methodology ......................................................................................................................... 14

Project Setup ......................................................................................................................................... 16

Preliminary Table of Content Report .................................................................................................... 17

References ............................................................................................................................................ 18

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Introduction Rajawali Nusantara Indonesia corporation (PT RNI) is an Indonesian holding company,

conducting business in several industry, including agro-industry business, pharmaceutical and

medical devices supplier, as well trading distribution industry sector. Covering several industries, PT

RNI develops their own products, including sugar, tea, palm oil products, pharmaceutical products,

and latex condoms.

In 2012, PT RNI posted a net benefit in 2012 added up to IDR 270.32 billion. The sum

expanded fundamentally when contrasted with the past year. In 2011, PT RNI posted a misfortune of

IDR 68.45 billion. Pharmaceutical and Medical Devices business portion in 2012 figured out how to

procure incomes of IDR 513, 24 billion. That number expanded 14.51% contrasted with that

recorded in 2011 added up to IDR 448, 19 billion. Through the Trade portion, PT RNI figured out how

to procure incomes of IDR 120.85 billion in 2012. That number has diminished by 52.95% contrasted

with 2011, which recorded income of IDR 256.88 billion.

However, since the competitors for those commodities are very tight, the products of their

own have to compete with products from well-known brand in terms of retailer distribution as an

access to reach end customer, which will be difficult for their products. There are 2 biggest

competitors for PT. Rajawali Nusantara Indonesia which are Indomaret and Alfa-Mart who had

dominating in minimarket industry for the last 15 years. For both companies, they run their business

with a concept of targeting people in residential areas, by the time goes by, their business has

transform into a franchise business that allow them to spread out their business to many areas in

Indonesia. Moreover, there will be a future competitor called 7/11 ( seven-eleven ) which has totally

different strategy compared to both Indomaret and Alfa-Mart. Their strategy is to create a space for

teenagers to be able to hangout and dine-in. However, currently, 7/11 has no strategy to open their

minimarket outside Jakarta.

Therefore, with their products and external products from their trading business, PT RNI

plans to create their own retail access in Lampung, specifically minimarkets that will fully provide

their products. This plan will be a better system as well for the trading sector instead of investment

in warehouse and transportation and rely on other retailers, and able to increase market share of

their very own products.

Lampung is a province located on southern tip of Sumatera Island, Indonesia, with a total

area of ±34.623km2, subdivided into twelve regencies and two anonymous cities. Lampung province

has total population of 9.890.538 at the 2012 census with a population growth by 6%1. Under the

local government about city classification based on its total population (See Supplementary

material2), city is divided into 5 types which are township, rural, big cities, metropolitan and

megapolitan. Based on that, Lampung province can be classified with 4 metropolitan city and 9 big

cities. The total population of metropolitan cities is 5.122.915 while the total population of a big

cities is 4.731.623.

1 Official demographical statistic of Lampung Province on the year 2008 – 2012 by government of Lampung 2 The Suplementary material of city classification based on total population stated that:

1. Township = 20.001 - 50.000 people 2. Rural = 50.001 - 100.000 people 3. Big Cities = 100.001 - 1.000.000 people 4. Metropolitan = 1.000.001 - 5.000.000 people 5. Megapolitan = more than 5.000.000 people

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Currently, PT. Rajawali Nusantara Indonesia has its own brand of minimarket named as

“Waroeng Rajawali” which had operated for the last 2 years. Waroeng Rajawali’s main target is to

have over 6,000 branches in around Indonesia. To be able to reach the target, Waroeng Rajawali is

planning to have a partnership agreement with a smaler company in the same industry. The whole

project is about how RNI and the new partner could enter the Lampung market as their first target

market with a new logo and brand as a result of collaboration between RNI and new partner.

As a student from Saxion, with a given opportunity from the company and as well

experience and knowledge of business and local situation in Lampung, Indonesia, I will conduct a

business plan research to apply the retail access plan in several areas in Lampung province,

Indonesia. The research will then include the strategic location analysis in terms of local population

and distribution access, local consumer buying behavior analysis and so forth.

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Objective 1. Problem Description

a. Company Perspective

Over the past 30 years, RNI subsidiaries named Rajawali Nusindo which engaged in

the distribution and trading in more than 40 provinces and cities. During this period, RNI

business range is only limited as distributor. Furthermore, PT. RNI has its own

minimarket already named “Waroeng Rajawali” started in Bali, but the company itself is

planning to have a new system with a basis of “point system” which will be collaborating

with a new business partner to help PT. RNI to shorten the time needed to reach the end

customer.

The word “minimarket” itself is referring to a small market applying a system of cash

register point of sale for its sales, but not as complete as supermarket does. Additionally,

Minimarket has an area of 100 m2 – 999 m2 that is the smallest if compared to another

type of store (See Suplementary material3).

However, the fact that PT. RNI does not have enough knowledge about the current

market situation in Lampung and they did not have their own distribution channel

(Minimarket) to sell their product in Lampung province would be the main reason that

PT. RNI needs to acquire more data through market research to set up their products in

their own distribution channel.

b. Market Perspective Bandar Lampung as a target market has three issues in related to the project

research, which are the product offered should be a local product with a quality of

goods could be justified4. The term local product is referring to a product produced in

Indonesia, not imported products. As an addition, modern market industry in Bandar

Lampung has grown up to 31,4% in 2012.

Accordingly, it is exceptional expected that through these extend; the RNI Minimarket

could grow along with the trend going.

3 The Suplementary data about market Classification by Government :

- Minimarket (100 m2 – 999 m2)

- Supermarkets (1,000 m2 - 4999 m2)

- Hypermarkets (5,000 m2 and above)

- Wholesale ( 5,000 m2 and above )

4 The Suplementary data are available on Bandar Lampung Mayor Regulation No. 17 Year 2009 Chapter 2 Article 3. “ The condition of product offered should prioritize local product and the quality of the product is justified”

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2. Objective The overall objective of this research is to submit a distribution plan for the

management of PT. Rajawali Nusantara Indonesia by September 15 2014 to create a market

share for PT. Rajawali Nusantara Indonesia in Lampung by 25%.

Central Research Question Central Research Question

Which combination of products and which specific locations will be strategic plan for the minimarkets to be able to maximally reach the end customers, increase market share and market interest?

Sub-Questions

Internal Analysis

Sub-question # Sub-Sub Question

Sub-Research

Way of data collection

Outcome

A What is the organization structure that applied in the company?

A.1 How does the company manage the internal organization? (includes the organization structure and corporate culture)

Descriptive Research

Internal research

Finding out how the company system of managing internal organization

B. What are the competitive advantages of the company?

B.1 What are the winning points of the company in terms of entering the market of Lampung?


Internal research

Determining what are the factor that could be the competitive advantage

C. What are the competitive advantages of the product itself?

C.1 What are the competitive advantages of the product itself in terms of entering Lampung market?


Internal sources research and Questionnaire

Determining what are the competitive advantages of RNI's product

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D. How is the physical distribution of the product organized?

D.1 How does the company manage the physical product distribution process?


Internal Research

Finding out how the company product distribution process

E. What are the strengths and weaknesses of the company?

E.1 What are the strengths and weaknesses of the company related to Lampung market entry?


Internal research

Finding out what are the company strength and weaknesses

F. What is the need of the company?

F.1 What is the innovation need for the company according to the internal analysis?


Internal sources research and studying literature

Determining what innovation should be applied in the minimarket

G. How will PT.Rajawali be financially capable to invest in this project?

G.1 How much capital needed to execute this project?

Explorative Research

Internal sources research

Finding out the capital needed to execute the minimarket

G.2 How much the company is willing to invest in the project?


Internal sources research

Finding out how much the company is willing to invest

H. How will PT. Rajawali Nusantara Indonesia be capable to enter and succeed in the market?

H.1 Which aspects will make PT.Rajawali Nusantara Indonesia capable in entering the market of Lampung?


Internal sources research and studying literature

Finding out the aspects to make PT. RNI able to compete and survive in the market

Macro Analysis

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Sub-research


Outcome

J. What is DESTEP analysis of Lampung Province

J.1 How much is the total population of Lampung? (based on age and gender)


Desk research through websites

Finding out how is the demographical situation in Lampung

J.2 How is the economic situation in Lampung



Finding out how is the current economic situation in Lampung, including income level

J.3 What is the socio-cultural background of Lampung?



Finding out the socio-cultural background in Lampung

J.4 How is the current supporting technology in minimarket industry that occurred in Lampung?



Finding out how the technology, specifically, the software and hardware capabilities to support the run-going system

J.5 How is the ecological environment situation in Lampung?



Finding out how is the climate, energy, sustainability and waste information as an external forces that could affect the entire business

J.6 How is the political situation in Lampung?



Determining the legal and political stability in Lampung Province

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K. How big is the level of corruption in Lampung

K.1 How many corruption issues occurred in the past 10 years?



Finding out how big is the corruption issue in Lampung

K.2 How many issues that related with minimarket industry?



Determining the risk created by the corruption issue

K.3 Who are the subject ( Corruptor ) that have been found guilty in the past 10 years?



Finding out which sector of industry that has bigger risk of corruption based on historical evidence

Meso Analysis


Sub-research


Outcome

L. Does Lampung has specific socio-cultural issue?

L.1 What are the specific cultural issues that might become constraints for specific products that will be sold in the mini market? (e.g. condoms)


Questionnaire and Desk research through websites

Determining the cultural issues that might affect the products being sold in the mini market

M. What are the government regulations related to minimarket?

M.1 How to get the business license?


Desk research through official government websites and interview 2 experts in legal fields

Finding out how to get legal license

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M.2 What are the local regulation regarding properties?



Determining what are the related local regulation

M.3 What are the policies for product offered in minimarket?



Finding out what product are able being sold and product aren't able being sold according to government regulations

M.4 What is the maximum / minium area of minimarket?



Finding out the field requirements to set up a mini market

N. How the trend will affect the business?

M.1 What are the ongoing trends in minimarket industry?


Desk Research through internet and Questionnaire

Finding out what are the current trends in minimarket industry

Micro Analysis

N. What product would create a maximum market interest?

N.1 How the dairy product create interest?


Desk research and Internal sources research

Determining what factors of medical product attractiveness

N.2 How the medical product create interest?



Determining what factors of dairy product attractiveness

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N.3 How the market being attracted to healthy product?



Finding out how the healthy product offered could be attractive

N.4 What are the combination of RNI's products that would create optimum market interest?


Desk research, Internal sources research and Questionnaire

Finding out the combination of the product that create maximum market interest

O. Which area could give maximum benefits?

O.1 Where are the potential areas for the minimarket?


Desk Research and Primary Data Collection

Finding out where are the most potential areas to be assessed further

O.2 What is the demographic and geographical condition on the potential location?


Desk Research and Questionnaire

Finding out the demographical and geographical condition on each potential location

O.3 Which area could give maximum market share?


Desk Research

Finding out which area is the most attractive

O.4 Which area has the least number of competitors?


On the street research

Finding out which location have the minimum level of competition

O.5 How location could affect potential customer’s interest?


Questionnaire Finding out how the location become one of the buying decision factor

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P. How “point system” would attract potential customers?

P.1 What is the most suitable reward system?


Interview with 5 experts in rewarding, networking and point-systems

Finding out what reward system with most attractiveness

P.2 What are the potential members’ expectations in joining the community?


Questionnaire Finding out what are the expectation of the member in joining the community

Q. With whom do the potential customers visit minimarket?

Q.1 How often do the buyers visiting with family


Questionnaire Finding out how the customer usually visit the mini market Q.2 How often do

the buyers visiting with friends?


Questionnaire

Q.3 How often do the buyers visiting alone?


Questionnaire

Q.4 How many people are in the buyer’s household?


Questionnaire Finding out how many people are in one household in average

R. What are the criteria for buyers in choosing minimarket?

R.1 Which additional services do the potential customers expect?


Questionnaire Determining the additional services needed to satisfied the customer

R.2 Which element of criteria create more interest? For example place, price, promotion, etc.


Questionnaire Determining the combination of buyer's decision making of choosing the mini market

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S. How often do the potential customers usually shop in minimarket?

S.1 Which are the factors that affect buyers to shop in minimarket?


Questionnaire Determining the factors that affect buyer's decision making in choosing mini market

S.2 How do the buyers go to the store?


Questionnaire Finding out how the buyers are going to the mini market which will represents the importance of location

Competitor Analysis


Sub-research


Outcome

T. Why the buyers choose minimarket rather than supermarket?

T.1 Why they choose minimarket rather than supermarket?


Questionnaire Determining the factors why people choose mini market rather than supermarket

T.2 How social class become a factor in choosing retail shop?


Questionnaire and desk research

Finding out how social class become a factor in choosing retail shop

U. How the competitor run their business?

U.1 What are their strategy in reaching the end customers?


Desk Research and Interview with the related responsible staff of 5 mini markets

Finding out the competitor's strategy in reaching the end customers

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U.2 What are the possible potential competitors that are not competitors but can be in future?


Desk Research

Finding out of future competitor

U.3 What are their product and services?



Determining the products and services offered by the competitors

U.4 Where are their products or services in relation to ours?



Determining what product offered in RNI mini market and also in competitors' mini market

U.5 What are the elements that they are better than ours and which not?


Interview with 3 experts in mini market industry

Finding out what are their competitive advantage compared to RNI mini market

U.6 How do the competitors be able to survive in the competition?


Interview with 3 experts in mini market industry and desk research

Finding out the strategies used by the competitors to survive in the industry

U.7 How do the competitors able to react in to the change of trend?


Interview with the responsible branch manager from 5 mini markets

Finding out how the competitors reaction to the change of the trend

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U.8 How do the competitors supply their products?


Interview with 3 experts in mini market industry and desk research

Finding out where is the warehouse and how they distribute the products

U.9 How do they promote their products?


Desk Research

Finding out how the competitors promoting products in the right way and right time

Research Methodology Research method generally alludes to particular exercises intended to create information5. This

section will sum up how the researcher will conduct the research to generate related data.

1. Research Type

The type of design will be descriptive research, where the research will study the base of

measurement, which is current market situation. The aim is to describe the problem with descriptive

central question such as ‘who’,’what’,’which’,’how’,’when’6.The data gathered will be used as a

foundation to make forecasting and recommendation to conduct successfully business plan.

2. Research Approaches

As the research required all elements related to minimarket such as competitors, potential

customers and government analysis, the mix between qualitative and quantitive research will be the

most suitable methodology. The research will evaluate the customer’s needs and wants through

survey / questionnaire, government regulations through desk research, and semi-structured

interview for the existing competitor.

The research will conducted through deductive research which the information gathered

from the research will be fully used as a tool to testing the theory and hypotheses made by the

researcher. Furthermore, the information gathered will be used to help the researcher and PT.

Rajawali Nusantara Indonesia to generate a further strategy to enter Lampung’s market.

3. Time Horizon

In view of the research, range needs to be covered with a limited amount of time, the time

horizon would be cross-sectional studies, which will be focused on considering at variables at a

specific theme in time

4. Data Collection Method

The way to colect the related data to be used in the distribution plan.

5 Dr. Sue Greener. Business Research Method 1st edition, (2008) page 11. 6 IBMS Deventer.How to write a Research Proposal.

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a. Desk Research

The desk research or secondary research will be used to gather data from the available

domain such as Internet, analytical report, library, media, including published business, government

regulation and Journals. This method is basically used to answer the general idea about the local

trend, regulation and published news of Bandar Lampung.

The domain accessed will be a current government regulation, some of the competitor

information, market situation in Bandar Lampung, and/or the related article that shows a relevant

data to the activity. The desk research will do both online and offline activity.

b. Interview

The aim of the interview is to gain a relevant knowledge from the expert to help the

researcher to conduct a successful business plan. The interview will be conducted by telephone and

on-the-street survey. The type of the interview is semi-structured interview to help the researcher to

gain a maximum close and open answer. Here are the list of targets for the activity :

o Interview the related project manager of PT. RNI and partner company regarding

the potential product offered

o Interview 5 existing minimarkets / convenience stores such as Indomart and Alfa-

mart by visiting the specific minimarkets and interview the responsible staff /

manager.

o Interview 2 Supermarkets such as Hero and Carrefour by visiting the supermarket

o Interview 2 experts to gain knowledge regarding law and legal system by telephone

to arrange an appointment to do an interview

o Interview 5 experts in reward, networking, and point system by telephone to

arrange an appointment to do an interview

o Interview the company to determine the possibility of CSR Plan as an additional plan

c. Survey / Questionnaire

The aim of the survey is to know the current market demands and needs related to the

minimarket industry. According to the theory in determining the sample size, the researcher should

consider the confidence level, confidence interval, and the total population. The researcher use a

confidence level of 95% with a confidence interval of 10 and the total population of lampung is

9.890.538 resulting in 96 sample size need to represent the total population in Lampung.

However, the researcher has decide that there will be a minimum of 100 sample taken from

Lampung residential area and minimarket customers which represent a current market needs,

wants, and expectation of an upcoming minimarket idea. The research will mostly conducted in the

metropolitan areas, which has more population and easier access to conduct the research. The data

will be used to answer most of the sub-question related to market knowledge. The sample of the

product offered will be brought to help the corresponden get the future idea of the product.

The researcher will conduct the questionnaire by visiting 5 existing minimarkets and ask the

minimarket’s customers. Also, the researcher would create an online survey and questionnaire to be

able to make it shorter time needed to reach the minimarket’s customers, the result will be used as

an comparison from both result.

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Project Setup 1. Time Planning

Task Start Date # Days

Required

Percent

Complete

Official start (Research) 5/26/14 1 100

Develop detailed plan 5/27/14 10 90

Develop research proposal 5/30/14 16 70

Present research proposal 6/16/14 1 100

Collect all relevant data 6/17/14 33 30

Conduct the data collecting

(interview+survey) 6/30/14 33 0

Analyse the data 7/8/14 30 0

Develop first draft version 7/8/14 31 0

Submit first draft version 8/10/14 1 0

Develop the report (1st

occasion) 8/12/14 12 0

Submit the report (1st

occasion) 8/25/14 1 0

Develop the Final Report 8/26/14 19 0

3/2

2/1

4

4/5

/14

4/1

9/1

4

5/3

/14

5/1

7/1

4

5/3

1/1

4

6/1

4/1

4

6/2

8/1

4

7/1

2/1

4

7/2

6/1

4

8/9

/14

8/2

3/1

4

9/6

/14

9/2

0/1

4

10/4

/14

Official start (Research)

Develop detailed plan

Develop research proposal

Present research proposal

Collect all relevant data

Conduct the data collecting…

Analyse the data

Develop first draft version

Submit first draft version

Develop the report (1st…

Submit the report (1st…

Develop the Final Report

Submit the definitive version

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2. Budgets and Other Constraints

- Budgets

As the research involved direct interview, field research and a plane ticket from Amsterdam –

Jakarta, Jakarta – Bandar Lampung and return. However, Bandar Lampung and Jakarta are the

researcher’s hometown, moreover, extra living cost is calculated on a minimum basis. Here are the

proposed budget for the research :

Amsterdam – Jakarta plane ticket ( return ticket ) : ± € 870*

Jakarta – Bandar Lampung plane ticket ( return ticket ) : ± € 60*

Transportation expense : ± € 50*

Phone Expense : ± € 25*

Extra Living Cost : ± € 15

Total Estimated Budget ± € 1,200

*based on changing ticket price

- Other Constraints

a. Limitation on difficulties gathering the real data from the future customers

b. Limitation on difficulties to access data from future competitors

c. Limitation on time available to conduct research

Preliminary Table of Content Report

1. Executive Summary

2. Company Background

3. Internal Analysis

4. Customer Analysis

5. Competitor Analysis

6. Market Analysis

7. Conclusions

8. Recommendations

9. Bibliography references

10. Appendices

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References

- Bandar Lampung Mayor Regulation No. 17 Year 2009 Chapter 2 Article 3.

http://www.bandarlampungnews.com/index.php?k=politik&i=10979-

Wamendag:%20Perkembangan%20Pasar%20Tradisional%20Terhimpit%20Pasar%20Modern

- Bouten, Borggreve and Booy. How to draw up a Plan of Approach for my final assignment? .

(July, 2014).

- City Classification based on Total Population.

http://gurugeobandung.blogspot.nl/2012/11/klasifikasi-kota-menurut-jumlah.html

- Dr. Sue Greener. Business Research Method 1st edition. (2008).

- GANTT CHART, ASQ : THE GLOBAL VOICE OF QUALITY. (N.D.). RETRIEVED JUNE 15, 2014, FROM

HTTP://ASQ.ORG/SIXSIGMA/2008/07/GANTT-CHART.XLS

- Population Statistic Based on Gender. (2014).

http://regionalinvestment.bkpm.go.id/newsipid/id/demografipendudukjkel.php?ia=18&is=3

7

- PT. Rajawali Nusantara Indonesia annual reports year 2012.

http://www.rni.co.id/sites/default/files/Annual%20Reports%20RNI%202012.pdf

- Required Table of Contents Format For Business Plan

http://www.socialimpactexchange.org/page/business-plan-table-contents

- Van Renssen, S. How to write a Research Proposal. (2013). Version 1.

http://www.bandarlampungnews.com/index.php?k=politik&i=10979-Wamendag:%20Perkembangan%20Pasar%20Tradisional%20Terhimpit%20Pasar%20Modern

http://www.bandarlampungnews.com/index.php?k=politik&i=10979-Wamendag:%20Perkembangan%20Pasar%20Tradisional%20Terhimpit%20Pasar%20Modern

http://asq.org/sixsigma/2008/07/gantt-chart.xls

http://regionalinvestment.bkpm.go.id/newsipid/id/demografipendudukjkel.php?ia=18&is=3

http://www.socialimpactexchange.org/page/business-plan-table-contents

Plan of Approach RNI Final Version

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