A. The Story of Disc Tarra.

Almost everyone knew about Disc Tarra, in 2000s this music store was famous to buy
something related to music and film. But did you know how this store begin and how are they
bankrupt? This is how the story begin. Disc Tarra was established in 1980s, with the first store
was in Hayam Wuruk, Jakarta Kota. They just sold 30 compact disc every month. It was never
easy to begin with. Nevertheless they grew from time to time, but they were having difficult
time when the financial crisis hit Indonesia in 1998. However they can survive.

They had 1000 employees with 100 stores all over the big cities in Indonesia. Having team
that love their job and have knowledge about their product was one of their key of success.
Tarra group prepared this team seriously. They have excellent training center which became
a home for the team to study how to treat customer with hospitality. Their business strategic
was to participate in the school events, university events, and many things related to music.

In addition Disc Tarra expand their music retail with franchise system. Having only 200 million
rupiah, money owner can have franchise right to open this retail. Disc Tarra has always been
monitoring their franchisee to have the same standard as them. In the result they have 20-
30% market share in 2011.

In 2012, they had another issue with the president of Disc Tarra was having blockage in his
brain. The doctor suggested to eat organic vegetables. Because of this Mr.Wirawan had new
business inspiration to open new business related to hydroponic. Hydroponic business is still
growing until now replacing their music store that already closed.

One of the enemy of music store and industry is piracy. With the piracy everywhere made
Disc Tarra in the edge of a cliff. They struggled.

The development of digital music made Disc Tarra in difficult position. Moreover, they had to
face the piracy that are never stop. In order to survive in a new era of digitalization, they
made several innovations, for example they made their store into lifestyle store so that the
customer can enjoy music while having a cup of coffee and snack, another effort they made
was to sold music into downloaded format and digital streaming, but unfortunately they can’t
compete with Spotify, Amazon, and iTunes. They were too late to realise that the
development of digital era is in blink of eye. Short story they had to close all of their store in
the end of 2015.
B. Analysis

1. Business Plan

Business plan is a guidance for a business to reach its success. Why? Because by making
business plan, prospective entrepreneurs can spot the gaps where they need to fill up
before starting a business and spot how is the chance that the business will be success.

A good business plan should state the goals and details to achieve those goals including
three primary elements:

a. Business concept, consists of the business structure, product/service explanation,

strategy, details of task and responsibilities;
b. Market concept, deals with opportunities, potential obstacles, possible ways to
overcome problems, tactics;
c. Operational concept, explains the standard operating procedure in producing
product/service;
d. Financial concept, like income, cash flow statement, balance sheet, financial resources
like equity financing and debt financing;
e. and many other details essential to a successful business.

As a guidance, a good business plan should not be seen as a limitation to business’ flexibility
and decision-making ability. That is why, as time goes by, a business plan should be
evaluated and revised periodically to adapt to changes in the environment.

In this case, Disc Tarra already evaluated their business plan and tried to do some
innovations like changing from conventional music store to a lifestyle store and selling CD
and DVD online. But, unfortunately, their new concept was deviate too far from their core
business. Their lifestyle shop is not in line with their music store concept and even they did
not have competencies on their new concept. It only shows that they could not totally
transformed. Besides that, their initial action in digital downloads and streaming was just
too late so that they failed to predict markets and to take chance and opportunity.

2. Type of Corporation

Disc Tarra belongs to a private corporation which is a corporation owned only by relatively
small number of people, usually a family, who are closely involved in running their business.
The shareholders own all corporate shares, and do not offer or trade shares to the public
on the stock market exchanges.
 This type of company allows slow and unreliable evaluation of company performance and
the process of making decisions may rely on the oldest people. When in public company,
decisive action will be made to a manager who does not perform well and will immediately
replaced by new people who have more ability. This may be one reason why Disc Tarra is
not fast enough in making decision to change their business into more digitalized concept.

3. Organizing Business

Franchising is simply a method for expanding a business and distributing goods and services
through a licensing relationship. In franchising, franchisors (a person or company that
grants the license to a third party for the conducting of a business under their trademarks)
not only specify the product and services that will be offered by the franchisees (a person
or company who is granted the license to do business under the trademarks and trade
name by franchisor), but also provide them with an operating system, brand and support.
There are two different types of franchising relationships: business format franchising and
traditional or product distribution. Business format franchising is the type most identifiable
to the average person. In a business format franchise relationship the franchisor provides
to the franchisee not just its trade name, products and services, but an entire system for
operating the business. The franchisee generally receives site selection and development
support, operating manuals, training, brand standards, quality control, a marketing
strategy, and business advisory support from the franchisor.
While less identified with franchising, traditional or product distribution franchising is
actually larger in total sales than business format franchising. In a traditional franchise, the
focus is not on the system of doing business, but mainly on the products manufactured or
supplied by the franchisor to the franchisee. In most, but not in all situations, the
manufactured products generally need pre-sale and post-sale service as found in the
automobile industry.

The advantage of the starting a business by buying franchise is the business already have
its own standard, so that franchisee only have to run the existing standards. However, if
there is a business concept problem, a franchisee cannot do some movements to overcome
 problem according to his own. This also happened to the Disc Tarra franchise. When Disc
Tarra is doing late in making innovation or have a failure in its business, this certainly has
an impact on the franchisee business. Though it might be that the franchisee has a more
brilliant idea but cannot be applied in his/her business.

C. Solution and Recommendation

To overcome this situation so that Disc Tarra could survive in music store business, the
company has several things to do.
1. Sell premium music box set album
In these recent years, many Indonesian musician have released premium music album in
box set version. In this package, they offered not only original CD or vinyl but also many
kinds of interesting merchandise like t-shirt, mini speaker, books that revealed story
behind the creative process of those music albums, and exclusive ownership certificate
that signed by the musician. For instance, several musician such as Iwan Fals, Endank
Soekamti, Rizky Febian, NTRL, Seringai have released this new type of music album to their
die-hard fans.
The exclusive packages were sold at premium price.
2. Maintain communities
Internet-based digitalized music product maybe took over market in a massive portion,
but it could not provide personal experience listening to music from audio recording like
vinyl, CD, or audio cassete. There are a lot of collector that still prefer to choose physical
product rather than soft file one. Disc Tarra can focus on this niche. They had been
identified as market leader for more than two decades in music store business. They
already had network with several music labels and musicians. Those facts are competitive
advantage of Disc Tarra that could be support them to survive. Disc Tarra can sell rare
album or exclusive items that the collectors need.
3. Create live music performance
 Les Aldrich Music, a music store that established in 1945 in north London, introduced a
campaign to persuade people to get off the internet and come into the shops. They hosted
series of instore thematic shows that performed by reputable musician whose CDs were
sold in that store. This performance attracted various visitors, from elderly people, young
playes both amateur and professional, and schoolchildren learning their first instruments.
Not only visited store, they also bought several items like CDs or music sheets.
Disc Tarra could apply what Les Aldrich Music did to stay survive. They could collaborate
with musician or local band that look for chance to promote their new brand albums. It
would be a mutalism partnership.
4. Distribute albums of indie or local band
It is quite hard for indie or local band to widely distribute their albums. They do not have
distribution chain that cover nationwide area. Disc Tarra and those bands can collaborate
that beneficial to each other. With more than 100 stores all over the big cities in Indonesia,
Disc Tarra can easily distribute albums of indie or local band that have segmented fans.
5. Diversify items and services
To keep survive, Disc Tarra need more crowd that boost their business. By adding more
product and services for customers, the probability to earn more money increase. Disc
Tarra can provide additional items and services in their stores like musical instruments,
music sheets, music course, or musical instruments service.