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YOGYA GROUP STRATEGIC OBJECTIVE AT RISK

“TAKING YOGYA GROUP TO THE NEXTLEVEL”

YOGYA GROUP is faced with savage competition, with price war beingcarried on the competition rivals are pushed to lower their price in orderto remain competitive to their customer. Profit margin is diminishing, evenin some products they have to reduce their price below their marginal cost just to keep their customer out of their rival’s territory. Now profitability isvery difficult to retain. YOGYA GROUP needs to make action towards thissevere condition. There are not many options, whether to achieve costleadership or make a significant differentiation to keep the firms alive andachieve their strategic objectives.

RETAIL BUSINESS IN INDONESIA

Retail business is direct sale of goods in any type of outlet such askiosk/stall, traditional/modern market, department store, boutique, etcincluding delivery service, which generally supplies for purchaserspersonal consumption.Retail business in Indonesia can be classified into two main groups, i.e.Modern Retail and Traditional Retail.Modern retail is basically an expansion of traditional one. This retailformat emerged, growing side by side with economic, technologydevelopments, as well as changing in society life style which demands amore comfortable shopping experience.

Modern retail first emerged in Indonesia when Sarinah Department Storewas established in 1962 and this system continued to grow during 1970-1980. Early 1990 is a milestone for foreign retailer entrance intoIndonesia, marked by the first operation of the largest Japanese’s retailchain ‘Sogo’. Modern retail grew rapidly when the Government, byPresident Decree No. 99/1998, removed the retail business out fromforeign investment negative list. Before the decree was issued, there werevery few foreign retailers operated in Indonesia.At present, there are various types of modern retail ranging from ModernMarket, Supermarket, Department Store, Boutique, Factory Outlet,Specialty Store, Trade Centre, and Mall / Super Mall / Plaza. Growth of these types of modern retail outlets will continue to follow economicdevelopment, technology and demands made by society lifestyle.

Challenges in Retail competition

Afterwards, Retail Market, which has experienced high performance, willface several challenges. One of the major challenges will be the possibleslowing down of turnover growth as an impact of economic slowdown dueto 2008 global crisis.At present, people’s purchasing power has been affected and is predictedto continually decrease due to the slowing down of economic growth.However, as Modern Market offers consumer’s basic need, this type of market is forecasted to remain developing, although not as high asbefore. If during 2004-2008 modern market turnover grew on average20% per year, thus, in 2009-2010 - when the negative impact of globalcrisis on real sector reach its peak, turnover of modern market isforecasted to increase at only 5-10%. Yet, as global economy improves, byyear 2011, turnover growth will bounce back to its level of growth asbefore global crisis.

Another challenge comes from regulatory framework. A fact that Traditional Market is weighing down gradually, which is shown fromdeclining of their turnover and the lesser consumers shop in TraditionalMarket, have forced the Government to issue several policies thatregulate harmony between Modern Market and Traditional Retail.

YOGYA GROUP

Back sixty years ago, Gondosasmito established Toko Djogdja in Kosambi,Bandung. The shop was focused on Batik which made in solo and Yogyakarta. at that moment they still taking goods from Cibadak with areal minim capital not rarely payee behind a.k.a owes at the shop owner . The Shop was 100 m2 large with only ten workers. The shop managed tohold out to twenty four years without significant progression. Changeswas finally occurred when Boedi Siswanto Basuki join the family business.He married to Gondosasmito’s daughter, Tina Handayani. The Shop enterits new regime under Boedi siswanto’s control. a big opportunity comewhen Budi Siswanto Basuki the owner of Djogdja is offered a land inSunda street, blessing of saving which he has save for many years hefinally bought that land. And that is the first breed of Djogdja, Named Toserba Yogya, located at Jln Sunda 60 Bandung, 300 m2 large with 40workers. To cope with the existing competition, Toserba Yogya begins its expansionoutside Bandung. At the beginning of 1984 Toserba Yogya established itsbranch in Cirebon. Four years after Cirebon expansion Yogya spread itwings to Tasikmalaya, followed by Sukabumi, Jakarta, sumedang,kuningan, indramayu, majalaya, Garut and subang.When monetary crisis knocks over Indonesia Yogya almost experiencesbankruptcy but blessing of sprier and readiness of thinking from theowner and his team Capability and Character which strong Yogyasuccessfully rise and reach feather in one's cap though resides in middle

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YOGYA GROUP STRATEGIC OBJECTIVE AT RISK (case study)

this is a case study wrote by arya hidayat, student of MM UNPAR, an assignment of strategic management class, 2009

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Category:	Research > Business & Economics
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Upload Date:	12/09/2009
Copyright:	Attribution Non-commercial
Tags:	Soar Strategic Management case study yogya group strategic objective at risk Soar Strategic Management case study yogya group strategic objective at risk (fewer)