2022

Mid Exam Business

Strategy and Enterprise
Modelling

GM12 - 29320449
MUHAMMAD RHEZA RAMADHANA P A

INSTITUTE TEKNOLOGI BANDUNG | MBA PROGRAM JAKARTA

 Case 1 - Traveloka
Company Profile

Traveloka is a prominent technology-based start-up company across Southeast Asia.

Traveloka provides solutions in many are of services such as transportation, accomodation,
activities, lifestyle, and finances. Established in 2012 by Ferry Unardi, Derianto Kusuma and
Albert Zhang. Currently traveloka holding the status of unicorn startup from Indonesia that
provides online services and focusing on expansion. Traveloka’s equity injection began in
2012 where traveloka announces initial investment from East Ventures. Furthermore, 2013
is the year traveloka top-up its equity through investment scheme of series A venture which
is Global Founders Capital. Through this investment traveloka ofcourse seek for growth and
encompassing market share firstly in domestic area. The initial concept of this startup was
an online travel agent which customers could search and compare the price of flight tickets
from many other websites such as agoda. Thus in 2013 and 2014, Traveloka enlarge its
services to become a website that can book for flight ticket and hotels, respectively. Other
than that, traveloka also got its funding from Expedia and fresh investment from GIC in 2017
and 2019 respectively.
Amid COVID-19 pandemic outbreak traveloka break the limit through reaching its
new funding for 250 million USD in 2020. In 2015, Traveloka already its market within Asia
coverage area. As Traveloka is the most visited site of airline booking application in
Southeast Asia (Similarweb.com 2020). In contrary as of 2019, traveloka experieced a
decreasing number of its online visitiors especially decreasing visitor from Indonesia.
Application or website visitors is one of the key factors that drive Traveloka’s success in
sales revenue. It is perhaps of the fierce competition in Indonesia incorporating for
discounts, promos, services, facilities and other similar benefit yet also unique. Customer in
Indonesia is also diverse, price sensitive and they are more likely to sacrifice features using
the marketing conducted by other competitor. So that it is very important for Traveloka
seekng for market share through many strategies that can sustain the business in customer
perspective of view. As now on the author often see traveloka expand its strategies through
endorse, social media engagement content, making reference content that can guide
customer buy services using the terms of “staycation” in many platforms of social medias.
For instance, Tiktok that are used to endorse influencers in referencing many kind of new
places, attraction or entertainment area and provding promos through its app which is in-app
categories namely Traveloka Xperience.

Traveloka Services and Traveloka Xperience

Traveloka has many various services ranging from transportation, accomodations,
things to do, finance bills and to-ups and other add ons. In transportation there are airline
booking services that are partners with traveloka either domestic and international. From
citilink, Thailink, JAL, KLM, Jetstar and many more. Its one of specialization is that traveloka
owns a smart algorith that allow the system to rank the price, availability, transit time and
airline combination to the best result to the customers. Traveloka also offers real time update
on prices and give notifications for buyer when the price is matched and updated by the
airlines partners. It also provides a bundle with hotel and based on the destination Traveloka
will arrange the flight tickets and also the hotel or accomodation in various price range not
only in Indonesia but also other countries. One of the best features is the Honeymoon
package deals with combination of flexibility in choosing airlines and hotels in the
applications and website.
Other than airline, Traveloka is the booking partner for rail transportation and become
official partner KAI and Railink. While KAI concerning for Covid-test, Traveloka also provides
options for train passenger to get its COVID test first prior using the services and become
bundle in the booking line. Not only in Indonesia, Traveloka also provide Japan Rail Pass
that can be use to commute in Japan by Japan train or other transportation mode. Traveloka
also can suit by our destination and provide recommendation of what kind JR Pass that the
traveller should buy.
Traveloka is also a platform in booking a bus travel shuttle tickest with complete
information regarding its routes, schedules, price, boarding point and its facilities. It also
partnering with bus and shuttle operators in Indonesia. This feature is introduced new in 16
March 2018 as online travel agent and provides intercity or interprovince commuting. And
from there until today Traveloka has already partnering with 57 well known bus (PO) and
shuttle operators across Indonesia.
One of the latest features of Traveloka answering customer’s needs is providing
airport transfer. It provides transportation either public transportation that has more flexibility
of its drop off points or private transportation that no waiting in the queue and door to door
service to destination, be it from or to airport and domestic or international airports.
Other services by traveloka is car rental that answer the needs of people during the
pandemic era while using private vehicle is one of the preferable option to choose to travel
safely. Traveloka also partners with big player and reliable of car rental supplier domestic
and globally. Traveloka provides option in using driver or without driver. Thus, providing the
type of car that could rented in short hours of 3 to six hours as not many cars rental in
conventional side.
Other than accomodation and transprtation services, Traveloka seize the opportunity
to incorporate entertainment unique activites. One of the categories is Attraction that provide
booking services and information of the spesific tourism destination such as in Indonesia
there are Dunia Fantasi, Jakarta Aquarium, Jatim Park, Bali Zoo and many others.
International destination of attraction also available in traveloka’s platform. Besides, there is
also Beauty and spa filled with the best saloon, spa, barbershops available in spesific area.
In Playground categories, Traveloka offers best option providing vouchers to play in
Timezone, KidCity and many more. While Traveloka branding as lifestyle and Superapp, it is
reflected from the exixtence of Traveloka Xperience whereas also provide for health
category for COVID test, vaccination, dental care to book using application. Local tour and
sports are also the most popular to dive in the Traveloka apps. In addition of the category,
there are classes and workshop and entertainment.
In overall, Traveloka’s products and services is reflected from its vision and mission
which is fulfilling customer’s lifestyle aspirations utilizing human-centered technology. In
achieving this Traveloka has built its comprehensive ecosystem to provide solutions for
customers’ lifestyle needs. From it products and services, Traveloka converted between
traditional booking method to a sophisticated platform as technology is their main core
competence and also innovative ideas to create a one stop solution platform for all lifestyle
needs. It also highlights the function of its core competence which is technoogy is to
empower peoples life. Despite of the customers, Traveloka thrives in empowering its
employee as a place to grow through various challenges and opportunity. One of the
examples is that Traveloka sets the environment of its employee culturally diverse and came
from many different backgrounds which enable people to adapt and to be more agile to the
particular sitution.
1. With the pandemic is still on going and there is no certainty that tourism industry
will rebound in short term, what would be the best strategy for Traveloka Xperience to
penetrate the market?
From the initial of the COVID-19 pandemic outbreak in China, the impact of the crisis
on many industries was significantly great especially for tourism industry. Even because of
its uncertainty of today’s condition it is impossible or hard to capture the scenario and effects
towards the pandemic outbreaks. Mostly for tourism destinations are complying regulation to
the policy makers and practitioners which is focusing on minimizing capacity and also
operational sustainability of the tourism destination towards COVID-19 protocol. Most
government also took the decision in closing international borders and only accepting
essential business travel to still support economic as well as lockdown in the early of
COVID-19 spread. This resulted in many of business and non-business travellers was
stranded in overseas and travel and tourism industry sector experienced downfall. According
to the latest research report of the World Travel and Tourism (WTTC), there are several
policies and regulation by the government to reduce uncertainties thus risk management in
preventing COVID-19 impact spesifically for tourism industry. For instance, for EU
(European Union), in May 2020, EU countries agreed towards a framework of restrictions
level of each country. Thus in 2021 EU initiated a digital COVID-19 certificate which
incorporates the status of a person toward vaccination and COVID-test. Other cases, in
Spain there is expenses of a tourist tested positive and didn’t have insurance coverage.
Those are several government restrictions and regulation related to tourism industry.
Adapting to the situation of COVID-19 that has had a major effect on travel industry
become easier because the nature of the sectors and the humanity behind it. Currently
despite of the past almost 2 years, now travel and tourism sector at the adapting and
recovering phase that every firm related to the industry have to collaborate to seize the
opportunity. As according to the World Travel & Tourism Council (2021), there has been
financial losses up to US$ 4.5 trillion and 62 million job losses. The recovery challenge every
aspect of the industry despite the discussion that COVID-19 pandemic will be recognized as
endemic. WHO also stated that the end of the pandemic will not be a diminished virus, yet
the virus will still be there for several years which means there are possibilities of another
travel restrictions? It is stated in WTTC report that business travel demand is slower to
recover than nonbusiness travel which driven by corporate policies and needs and national
restrictions. For the supply side, the industry experienced significant changes of its
operations as the nature of today business shifting to digital using sophisticated technology.
For business travels, there are increasing digitalisation of corporate world in the scheme of
hybrid or fully online event. Other than that decreasing profitability also one of the key factors
of the downfall of the industry impacted to laying off its labours. The environment also affects
the ongoing recovery for tourism businesses and all stakeholders. The rules, policies and
regulations that needs to be highlighted by the firm.
Recovering business travel in Asia is speculated faster than any other countries in
European or American. As this is driven by the manufacturing, pharmaceuticals and
construction sector. Given the ongoing disruption in business travel segment, it is important
for company to renew its revenue model by providing more services with added value and
improve more digital services. In addition, all related parties and stakeholders have to
collaborate in seizing opportunity in the nonbusiness and domestic markets.
Focusing on Traveloka Xperience is not a conventional leisure and business travel
agent. It is a digitalized platform and one stop solution apps for lifestyle. This tourism and
tech sector has experienced continous growth throughout the last decade. According to
UNWTO report (2021), approxiamately USD 55 billion has been injected to tech-travel
startups from 2010 to 2019. The trend remains continous of the investment despite the crisis

in 2020. This means that notwithstanding the pandemic situation, investors is perhaps
seeing the bright future ahead of this industry in tech-travel startups. As we can see in
Figure 1, the 2020 value capital not experiencing downfall otherwise it slightly increased
from in the end of 2020.
Figure 1 Value Capital funded for travel and tourism tech startups (USD Billion)
Source: UNWTO Report (2021)

It is also stated that, community and lifestyle base industry within travel and tourism
tech startups dominated the amount of funding invested above USD 1 million from 2010-
2020. It means that historically data shows that there is ongoing growth and continous trend
toward this spesific industry. Thus, through the pandemic there is opportunities for providing
solutions related to safety, health, air quality, sustainability etc. Moreover, given the current
risk and challenges the shift towards B2B market is feasible as strategic initiatives amidst
COVID-19. It is also reported that there is possible shifting towads personalized services and
innovation that provides and stressed on experiences align with Traveloka Xperiences such
as AI, big data, AR, and VR technology.
Whilst there is uncertainty in the market and macroeconomically yet still there is open
opportunity room for growth. Therefore, diversification of portfolios would be an essential
factor to thrive for growth interms of stabilizing the flows of capital and consolidating
Traveloka Xperience subsectors and creating a new ones. In penetrating the market, it is
also important to look at the demographic of consumer. Traveloka Xperience would be
driven by the behaviour of Gen Z consumer which is tech-savvy and more likely to travel
than elders because of health issues and risk. To achieve and maintaining this market,
engaging in financial services in the middle of Traveloka value chain would create a better
outcome not only for the firm but also for its stakeholders as Gen-Z s consumer considered
financially unstable yet. Traveloka Xperiences could added features concerning towards
green tourism sector as this is a powerful opportunity in seizing particular potential
customers.

Figure 2 Traveloka’s website user age distribution

Source: SimilarWeb.com (2022)

It is shown in figure above the age distribution of Traveloka users, Millenials (25-34) have
higher pproportion followed by Gen-Z (18-24).
Currently, Traveloka Xperiences or Traveloka as a whole using technology of Big
Data, providing information, reviews, guides, etc. The technology is not limited to big data
only, from 5 regions in the world only in the Asia Pasific that incorporates big data as its
main technology rather than other technologies such as Artificial Intellegence (AI) and cloud
services.
To sum up below are strategies for Traveloka Xperience in penetrating the market:
1. Traveloka Xperience should cater more on technology of Artificial Intellegence, Virtual
Reality, Augmented Reality, blockchain and many more. It could also involve to be in
Metaverse by investing it for the long term manner as the current uncertainty in tourism
industry. As there are many disccussion of this spesific topic statin that is metaverse a
friend or foe for tourism and travel industry. It is stated that travel industry could be
more competitive in the metaverse as for instance in the employee side, a firm in the
metaverse could hire anyone in any country. They can hire employee from new
zealand to run a New York hotel. In other words, this shows that the virtual workspace
is pretty obvious and the on-going pandemic uncertainty situation accelerated the
shifting towards this issue. In addressing this Traveloka Xperience otherwise could
also develop partnership with other platforms in facilitating as well as educating
consumer towards Metaverse. The main idea is to provide solutions for consumers
that are interested on joining events on the Metaverse as for example selling justin
bieber concert tickets in the Metaverse etc.
 2. Traveloka Xperiences could not only focusing on lifestyle-based activities but also
concerning on green tourism and sustainability. Providing safety and health
solutions for consumers. As in COVID-19 has accelerated the shifting towards green
investment. This would add value to the customers prior they spend their money on
the Traveloka Xperience. Traveloka couldd provide information in regards of the
destination place health and safety protocols. COVID-test nearby the area also could
be offered to consumers before leisure travelling to ensure safety for all stakeholders.
3. Other strategy for Traveloka Xperiences is the easiness of financing scheme
integrated with finacial partners or with Traveloka’s personal wallet using Traveloka
Pay or Uangku. This strategy is considerable as Traveloka Xperiences brand of
lifestyle and offering unique activities which is mostly targeted for millenials or Gen-Z
customers. The financing scheme is a make sense opportunity in penetrating to this
market as Gen-Z and millenials more likely of their unstable financially yet. Thus for
those generations is more likely to leisure travelling rather than older people which
have higher risk toward health issues especially COVID-19.
2. Using The Boston Consulting Group Growth-Share Matrix - what would be the right
positioning for Traveloka? and positioning for Traveloka Xperience?
Traveloka initially when it was established in 2012 i which have low growth and low
market shares. They started as local and small platforms that think as a local providing
online travel agent. Short after they defining their business and try to cope with investors,
they got multiple equity injections which benefits traveloka in stimulating growth. Million
dollars funded through a series of investment company globally and they became the
Question Mark. Traveloka had rapidly growing in the market with its solution. This phase
when all the challenges are arrived, and they grew to a bigger platform as well as trying to
leverage its market share.
RANK APPS
1 Gojek
2 Traveloka
3 Maxim
4 Tiket.com
5 KAI Access
6 Agoda
7 OYO
8 RedDoorz
9 Grab Driver
10 Pegipegi
 Table 1 Top Mobile Applications in Indonesia
Source: Similar Web (2022)

As we can see in Table 1, Traveloka ranked 2nd in overall travel industry. However, if
we compare to macro-mobility unlike Gojek traveloka categorized in the first rank followed
with Tiket.com, Agoda and finally Pegipegi. For years, the company has dangled discounts
and promos enlarrging its market share. One survey by local research firm Alvara Strategic
found Traveloka was by far the most popular booking app, with 79% of nearly 1,200
respondents being regular users. Rival Tiket.com attracted 8.9%, while Tiket’s parent,
Blibli.com, mustered 5.6%. Eventually unlike many other startups company, Traveloka
shows itss seriousness towards Initial Public Offering (IPO) and seeks for profitability by
less-discount and promos on the app. This has brought Traveloka to a Star phase
As the economic goes down amidst COVID-19 outbreak it received the series A
funding from investment company that will also stimulate growth higher than any other
competitor in the pandemic situation. However, the crisis hit travel and tourism badly as their
regulation of movement restriction, international borders, strict safety and healh protocols
etc. Traveloka must cut off employees for 100 of workers or 10% of all employees. Thus,
refund value accounted for 100 million USD. Traveloka managed succesfully conquering the
crisis as a company. In the middle of the pandemic there is also ongoing trends regarding
Staycation that escalate Traveloka transaction volume to 50%. In the end Traveloka
categorized back to Question mark phase, while there is still a question whether Traveloka
successfully going through the uncertainty condition as the ups and downs level of COVID-
19 and fighting for another wave. However, the recovering condition not only in Indonesia
but also in Southeast asian region as traveloka is the biggest travel and tourism platform in
the region. So that Traveloka focuses more on within the region of Southeast Asian
especially investing in domestic market. With its diversification of the products and services
Traveloka also can be successful through in the long-term manner as there are opportunity
in shifting to digital Metaverse and provide lifestyle solutions through financial service; which
is those 2 branding is for Traveloka Xperience.
Traveloka Xperience first launched in Southeast Asia and Australia in 2019 as a
booking service platform in attraction and entertainment activities. Traveloka Xperience still
categorized as question mark as it is not really clear that there are market needs for this
kind of services. Going forward with the crisis, Traveloka Xperience diversify its categories
and brought virtual tours, Online Xperience, and especially COVID-test booking services that
are most essential in the market. However, the Question Marks highlights that the volume of
transaction in offline Traveloka Xperiences must be decreasing as there are regulation
protocols and movement restriction or lockdown during the pandemic situation.
 3. If you were the CEO of Traveloka, what would be your decision in relation to
business continuity of Traveloka Xperience based on your answer of question no 2?
(Yes, pandemic is one of key consideration)
As stated in my answer in question no 2, I would consider Traveloka Xperience as
Question mark in BCG matrix which have strong and high market growth. In this regards,
as CEO of Traveloka, I believe the domestic market will have strong fundamental and
potential especially amidst the COVID-19 pandemic. International business travel forced to
be cancelled. Although domestic markets will also face a decreasing number of transactions,
it will recover soon as the enrollment of vaccination rollout handed by all stakeholders. This
is already aligned with Traveloka Xperience’s services in exploring the local tourism, cultural
and diverse unique places across Indonesia. Traveloka also could act stimulating growth in
Indonesia tourism and travel align with government vision stated by Kemenparekraf (2021).
It is stated that the tourist development policies and strategies are focused on quality tourism
supported by many attractions, accessibility, amenities, and human resources quality. This
aspects is fulfilled by the existence of Traveloka Xperience providing diverse tourism and
travel diversification services.
Travel and tourism industry based on Badan Pusat Statistika (2021), Indonesia is
experienced decreasing of its domestic travels from 711.16 million in 2019 to 519 million
travels. The data means that Indonesia’s tourism got great hit crisis towards the pandemic,
yet Traveloka Xperience should keep innovating their features ahead of COVID-19
recovery. Innovations in services could also align with Traveloka main core competencies
which is technology. Traveloka could adjust its revenue model not only from conventional
attractions but also to seize the market on affordable virtual tours around the world with
sophisticated technology and marketing. Regarding its feature, Traveloka Xperience could
expand the products focuses on sports feature as in the middle of COVID-19 pandemic
has impacted more people on its exercise or sport habits due to personal health matters.
This is a quite potential market for Traveloka Xperiences to master the lifestyle app brand.
Another diversification could also be developed by Traveloka Xperiences which is providing
solutions for people that want to have their online experience of exercise/sport/workout.
For instance, pilates session using video conference call, online coaching golf training and
etc. Traveloka could seize this opportunity to have a partnership with personal online
workout organizers in Indonesia.
Other than that, Traveloka Xperience should highlight the environment and health
matters due to COVID-situation. Especially for rural places that have limited facilities and
awareness towards this issue. There I think traveloka should also flow its capital to invest
more in unique and rural places in Traveloka Xperiences to be more environmentally
friendly and strict health and safety protocols. Traveloka Xperiences could offer not only
COVID-19 test but also provide solutions by partnering with fogging and disinfectant services
company in addition of Traveloka Xperiences features.
Business continuity is not only about the sustainability in the perspective of gaining
revenue but also concerning socio-cultural crisis and as there are considerably many
evidence about the relation between crime and tourism is significantly related. Thus, in the
middle of the pandemic covid-19 the crisis has strengthen organized crime globally (Global
Initiative Annual Report 2020). Traveloka Xperience could also provide detailed
information the possible crimes conducted in the tourism destination. To ensure the
tourist aware about the situation and could prepare for the worst using guidance from
Traveloka Xperience information. As crimes includng terrorism or current cultural conflict is
endangering the tourist. Besides there is also cyber security risk where Traveloka
Xperiences uses the tehcnology more as its core competencies and the safety of customer’s
data is top priority. Especially in securing big data from outside hackers by building
awareness on cyber security not only for IT division but also for all divisions.
The prior discussion is related to short-term plan and strongly driven by the COVID-
19 pandemic effects and recovering economy of travel and tourism industry. In terms of
Long-term, if I were in CEO shoes, after the recovering economics and pandemic has
become endemic, I will invest more capital to enhance Traveloka’s main core competencies
of technology. Meta verse, a virtual space in 10-15 years will be the potential future market
for Traveloka. Especially the shifting industry paradigm of Travel and Tourism Industry going
digital as well as disrupted industry in long term manner.

4. How do you see the competition between Traveloka and Booking.com in Asia?

Figure 3 Asia Pasific Travel and Tourism Competitiveness Index Score by Country (2019)
Source: World Economic Forum Report (2020)

The overall travel and tourism competition in Asia show in the figure above by World
Economic Forum (2020). Asia Pacific region’s competition in Travel and Tourism industry
are more fierce competition rather than in global. It can be concluded that the tourism
industry itself considered as a oligopoly form of competitive structures. As in Asia, there are
more conventional based online travel agent rather than the sophisticated online travel
agent. Traveloka and Booking.com face tough competitive market particularly in Asia region.
Moreover, Asian market’s consumer behaviour more prefer towards discounting and
couponing. To achieve this and achieving market share firms would sacrifice its profit at a
transaction in order to grow rapidly. Therefore, it is important for Asia’s business player in
Travel and Tourism industry to be competitive in pricing and it is adversely affected by the
level of economy in Asia countries mostly still categorized as mid level economy or
developing countries. Asian countries also prefer a platform that provide financing solution to
process its transaction not only in travel and tourism industry but also in other transaction
such as billing and ecommerce. Thus, in Asia country credit cards are not readily avalable
that it is essential for the platform to concern regarding its method of payment scheme.
This could be done in partnering with financial services such as Alipay, Paytm and Wechat
Pay. In the middle of pandemic situation, the growth of online travel and tourim services had
slowed in markets such as North America and Europe where online tracsactions and e-
commerce already established. Compared to Asian countries, Asian countries have more
growth especially in Asia Pasific where incomes keep rising uickly and the using of mobile
devices has been significantly increases. Average Daily Rate known as ADR in Asia also
lower compared to europe and america despite having its rapid grow which resulted in more
competitive market. This impacts where the strengthening of of the US Dollar towards other
currencies resulting in declining ADR. Penetrating to this market also needs to compete with
local travel and tourism platform that already has its market share in terms of international
business outside Asia. In some countries for example China travel firm found difficulties
because of its regulation that prohibited foreign business and limiting foreigh business
participation.

Booking.com
Booking.com has its user interface in its website to provide attractions based on its
region rather than the activities. Booking is originally come from netherlands consider as one
of the world’s leading digital travel and tourism company. Its mission to make it easier for
everyone to experience the world. Booking.com is also a technology-based company.
Booking.com core competencies also related to technology to achieve its mission.
Booking.com also focuses in global expansion. Booking.com sustainable report in 2021
stated that Booking rolling out programs which aligned with sustainable tourism through
better support properties. Booking.com also have 30 certifications approved officially by
Global Sustainable Tourism Council (GSTC) and also align with hotels sustainability
programs. It shows that Booking.com has its competitive advantage towards sustainability
tourism conduct not limited in Asian countries. While the market is on pause while the crisis
hit especially in Asia, Booking.com has made its efforts to recover as well as raising the
awareness of sustainable travel with its customer and partners.
 Partnering in Asia Booking has made a vertical integration with Didi Chuxing the
leadeng micro travel hailing services in China and Grab Holdings. Inc whereas Booking.com
allows the customer to access both companies. For instance, there is customer travelling in
Southeast Asia so that the customers can book a local ride with grab. Other than that,
Booking.com also partnering with restaurants which enlarge Booking.com services but also
allow restaurants to benefit the marketing services and well-known brand by Booking.com.
Horizontal Integration also conducted by Bookings.com as in July 2017 and
Novemnber 2018 they acquired Momondo Group and Hotelscombined respectively In order
to reach global markets. Other than that bookings.com improving its attraction features by
acquiring FareHarbour in 2018. This shows that Bookings.com have its mission to engage
more customers with acquiring competitor which also most likely would be happened in local
strong competitors in Asia. In Asia, Booking.com has made an investment to one of the
leading e-commerce in China valued for $450 million which is considered as the firm’s long-
term investment
As an established company and a holding company Booking.com actively diversify
its brand to ensure long term strategies and business continuity. In Asia Pasific
Booking.com has its service offerings namely Agoda which provides accomodation services
in Asia Pasific region to strengthen its geographical expansion. Its headqarter located in
Singapore and operated in Bangkok, Thailand and other Asian countries. It offers flight,
ground transportation and activities reservation for customers. Booking.com also seek to
invest in profitable and sustainable growth through maximizing resources andd keep
innovating align towards its vision. Therefore Booking.com regularly evaluate and sseek to
pursue potential strategic acquisition not limited to joint ventures or investment in order to
gain market share.

Traveloka
Traveloka in Asia has been the primary choice as it provides a super-app that
includes every online activity all in one app and conducted primarily in mobile device
applications. Traveloka as Travel and Tourism platform and also a lifestyle superapp also
broaden its diversification of its brand through merger and acquisition. One of the Traveloka
competitor in Indonesia namely Pegipegi.com was acquired by Traveloka in 2018 which is
considered as horizontal integration between companies. Pegipegi is one of the
subsidiaries from Japan Recruit Holdings. There are more travel and tourism platform from
the parent cmpany that was also acquired by Traveloka which are Mytour and Travelbok that
based on Vietnam and Phillipines respectively. It is indicated that Traveloka is focused
to expanding and strengthening its market share domestically and arround Asia. Traveloka
apps is not only travel and tourism app, it is a lifestyle superapp that provide customer daily
needs and currently also working towards micro travel such as traveloka ride. In vertical
integration point of view, this acquisition by Traveloka in Asian country would be beneficial
for traveloka in channeling and penetrating to the market as Traveloka done is basically
considered as a forward vertical integration. Traveloka also focused on its payment system
delivering various method of payment in its application such as E-wallet, Traveloka paylater
and many more. E-wallet or conseidered as financial technology (Fintech), Traveloka
strategy is to acquire Dimo a finance startup under Sinarmas grup and has its products of
Cashbac and Uangku which is Uangku is basically also default payment system that
Travelokan offers. This also considered as a forward vertical integration strategy whereby
Traveloka synergize with its potential financial partners in order to serve customers.
In overall the above-mentioned discussion regarding the competitiveness between
Traveloka and Booking is summarized as follows:
1. Traveloka is preferable as it is a lifestyle superapp as well as ecommerce that
the data showed that Asian people are having rapid growth in digital
transaction especially in e-commerce, billing, and travel and tourism in one
platform.
2. One of the potential competitors of Traveloka is a brand named Agoda by
Booking.com that based on author experience and small research, Agoda
have lower price (20-30k IDR cut compared to Traveloka). Booking should
address this pricing strategy to enlarge its market share.
3. Although Agoda by Booking.com payment is available using any kind of credit
cards and debit cards, Traveloka has its added value which is
TravelokaPaylater. This method of payment scheme is also preferable in
many developing countries in Asia compared to Europe and America market
that considered as established country.
4. Traveloka as a company based in Asia has its benefit to many access that
Booking.com or agoda don’t have. In contrary Agoda under Booking.com is a
more established global company and well-known brand internationally that
have the financial stability to face risk in an emerging country and considered
more stable company.
5. What would be the best strategy for Traveloka to win the competition over
Booking.com in Asia?
Competing in overcrowded industries is no way to sustain high performance. The real
opportunity is to create blue oceans of uncontested market space (Mauborgne 2004 on
Harvard Business Review). Based on the discussion above Traveloka should apply following
strategic initiatives using blue ocean strategy framework:
1. Raise:
- Maintain in financial services market would give Traveloka more
market share in Asia. As emerging countries don’t have readily finance
infrastructure and the economy itself enable Traveloka to more focused in
providing payment scheme especially in Travel and Tourism industry.
- Engage more in Traveloka Xperience and green tourism industry as
people nowadays is already concern in regard to sustainability and
Traveloka has more access as homebased company to unique rural
areas in Asia compared to Booking.com that based in Europe.
2. Create:
- Build more vertical integration and horizontal integration in other
country to potential competitors in order to ease for Traveloka in
penetrating the market. As for Booking.com, they integrate its application
to Grab holdings application so that customer could enjoy accessing in
only one app.
- Diversification of new features and pricing & discounting strategy is
proved preferable by Asian countries. Traveloka could explore more
feature in terms of its mode of transportation from macro-transportation
that provide long distance travel to a micro-transportation following Gojek
to embrace a new market and fulfilling its vision to empower more people
and as a Lifestyle superapp.
- Embrace long-term plan as well as maintaining ccore competencies.
Traveloka should think of the future market especially in technology
knowing that there will be many disruption to travel industry such as
Metaverse
3. Reduce:
- Minimizing investment to global markets as the world is currently
facing economic crisis and Traveloka should focus first on enlarging the
domestic market.
4. Eliminate:
- Eliminate investment toward countries that have un supporting
regulation and laws towards foreign firms such as China. It is better for
Traveloka not to get market share in there because of China already have
established similar company and it is perhaps impossible to penetrate the
market while complying regulations.
 Case 2 – Redbull
Market Overview
Indonesia as the most fourth population in the world has been an interesting market
for retail industry. In 2018 with the population of 265 million and most of the population
located in Java accounted for 60%. It is also stated that $5.9 billion of agricultural imports
was consumer-oriented product. So that locally in Indonesia the competion towards retail
market of food and beverage has been a fierce competition which also categorized as food
and beverage processing industry. Other than that data by Global Agricultural Information
Network (2019) stated that Indonesia’s retail sales exceeded $100 billion in 2018 which is
the highest number in Southeast Asia. This accounted modern market for less than 20%. In
the demographic side there are increasing numbers of young people, urban lifestyle and
educated consumers along with rising incomes as Indonesia in among emerging countries.
More importantly it is stated that on the go lifestyle probably increasing and a product that
offer health benefits increasingly searched for. In terms of regulation, all imported products
have to be registered in BPOM which is Indonesia’s Food and Drug Agency. Here are the
Indonesia retail sales value historical data for RTD (Ready to Drink) beverages by
Euromonitor (2018).
30
RTD
25
20
15
10
5
0
2013 2014 2015 2016 2017 2018
Figure 4 Retail Sales Value Indonesia (US$ million)
Source Euromonitor (2018)

Besides, the data also shows that the ready to drink and healthy beverage would
have a good potential sale as now on there are not many significant competitors. This is
supported also by the data by Technavio (2022) that forecasted that retail industry in
Indonesia in 2021-2025 will experience growth of CAGR about 4%. Thus from 2020-2025
the market value set to grow by USD 37.32 billion. However because of the pandemic
situation the forecasted growth is not the same as expected and the Indonesian beverage
marketwas dragged down. Data by consumer research firm GlobalData (2021) stated that
the sales volume fell by 1.7 % yoy on Q4 2020.

Figure 5 Sales Volume Decreasing in Q4 YOY 2021

Source: GlobalData (2021)

The figure above shows that the energy drinks experiencing sales decreasing due to
COVID-19 pandemic outbreak of about 12.1%. As COVID-19 in some countries including
Indonesia was restricting its business activities thus forecasted will experience increasing
number towards vaccine rollout in Indonesia.
In energy drinks there are 2 classification which is liquid ready to drink and powdered
energy drinks. Other data by Proffhub.com in 2019 showed that total energy drinks for the
past 3 years are facing declining growth for 5-10% align with the data by Euromonitor in
decreasing market value for RTD beverages. Thus, based on Nielsen data the RTD for
energy drinks is accounted for 41% of the total energy drinks market. In Indonesia there are
growing education and challenges of health conciousness among Indonesian consumers for
energy drink producer. This has been the cchallenges as energy drink in Indonesia has
perceived that will adversely bad impact to the body as its content of caffein that could drag
to addiction and may cause side effects. However in contrar the market in Indonesia could
have been the opportunity for energy drink producers as the consumption in Indonesia
relatively low compared to Indonesia’s population of approxiamately 530 million to 795
million bottle per year. The strategy that could be applied is to broaden the distribution
channel and cater low income market selling in traditional market rather than big
supermarket player. Targeting millenials would also be suitable as their lifestyle match with
the benefit offered by consuming energy drinks.
1. Which local company in Indonesia that has product of energy drink that is currently
competing with Krating Daeng Red Bull for local market?

Local Competition
Competition in thiss energy drinks industry remain fierce especially in local market.
Although Red Bull or Krating Daeng has dominated the market share of bottled energy drink
with 63-65% market share. The competition in Indonesia also participated in liquid segment
are Panther, Hemaviton Energy, Proman, Kuku Bima, Ener-G, Sting and M-150. Thus in
powdered energy drink there are Extra Joss, Kuku Bima Ener-G and Hemaviton Jreng are
the main players. Osotspa also the main rival for redbull in its origin market of Thailand. In
Indonesia there is M-150 brand since 1992 as its proposition in removing tiredness during
long work hours and contained more caffeine and sweeter and stronger compared to redbull.
Other than that there is also PT Kino Indonesia which recorded the only energy drinks
company that registered positive growth among the top five. Kino marketed its brand of
Panther targetting to a wider group which is teenagers and also adult men. Kukubima Ener-
G also included in the main players of energy drinks market in Indonesia and has its
competitive advantage of having various taste ranging from grap, orange, guava, mango,
pineaople, coffee, original and also milk soda variants. Lastly, the prominent brand Extra
Joss from Kalbe that is the pioneer in the powdered energy drink as its core competency.
Other than that Extra Joss propositioned itself as a healthy beverage that offers to maintain
body health and refreshing also in energy metabolism. Extra Joss has its key ingredients
with various taste format in its liquid brand which is Korean Ginseng and Arabian Dates
variants to set the brand as a healthy brand.
2. What sort of global strategy that you consider as a set of key success strategy to
bring this company (the one that you chose in no 1) to compete with Red Bull in
global market?
Despite the challenges and threats of global health conciousness Is arising and along
with the changing consumer lifestyle the energy drink market industry is mostly driven by the
rise of popularity among teenagers. Allied Market Research Report stated that global energy
drinks market size was valued at $53.01 billion and expected to grow at a 7.20% to reach
$86.01 billion by 2026. Recently the market in North America is dominatting for global
energy drinks market. While Asia pasific has the highest growth of 7.30% through 2026 and
expected to increase as in disposable incomes and change in demographics. Other than that
there is also forecasted data by Euromonitor Internationak that in 2024 the sales of energy
drinks will increase from 14 billion to $20 billion by 2024. In global market such as Monster
beverage, despite of the ongoing COVID-19 pandemic the company achieved record third
quarter net sales. This shows that the market is not adversely impacted by the crisis and
there is opportunities to grow for other firms related to energy drink industry. There are
challenges for local brand entering the global market industry such as the distribution
channel, shelf space and also have to offer something unique towards better competition
among the top brand. In this opportunity the author chose Extra Joss as it is already well
known brand in low to middle income market in local market and based on the product
development Extra Joss has the opportunity to grow in middle to high income market as it
offers health solution to its products. Based on the global market overview above the key
success strategy that could be done are:
1. Strategic partnership in the form of vertical integration and horizontal
integration. Picking the right partners for expanding globally would be the key
success strategy for Extra Joss penetrating global market. In vertical integration,
Extra Joss could benefit for its forward vertical integration to ease the distribution and
Extra Joss as a pioneer in powdered energy drink will give much larger capacity
within the distribution as its core competencies. Thus, partner could benefits from
Extra Joss as it’s considered unique product where mostly in the global market they
are in the form of liquid energy drinks. So that Extra Joss could give the unique value
propositions that can benefit if Extra Joss will be partnering through horizontal
integration scheme to a competitor that don’t have the capabilities to produce
powdered energy drinks but want to expand their market share in low to middle
income energy drink consumers.
2. Partnership in the form of Brand Ambassador. Extra Joss strategy in partnership
with football club for instance in international market they partnering with english
football club Manchester City and in Indonesia they partnered with Liga 1 to sponsor
the event. This strategy should be continuing as to expand the market Extra Joss
could partnering or sponsor in ssports event for example Football club in Myanmar,
Phillipines and any toher emerging countries.
3. Focus expanding the market geographically initially on Asia Pasific. The market
on Asia Pasific region has grow rapidly throughout forecasted in 2026. Extra Jos
could utilize this market as in Asia Pasific there is much more emerging countries
compared to Europe and America. Therefore, the powdered energy drink could be
more favorable as it is cheaper and easy to get in terms of its distribution.
4. Diversification of innovation products and services. In the middle of COVID—19
pandemic people activities towards sport is increasing as the health conciousness of
people are arising. This could be the opportunity for Extra Joss in placing their brand
for sports use. For example, Extra Joss could brand them self instead of not only
being a healthy products it also give consumer stamina boost as a dope before doing
 sports. Therefore, diversification of Extrajoss products is the key success strategy in
expanding globally.

3. Which one is better for this company, winning the competition locally or expanding
into global market? Explain in detail.
In my opinion the best strategy is divided into two segments which is short term and
long-term strategy and combine while winning in the competition locally as well as keep
expanding to global market as the two of those has huge opportunity for Extra Joss to
penetrate in.
Occupying short term strategy Extra Joss would need a market to drive in more and
try to disrupt the Redbull market in Indonesia. Redbull in Indonesia has the boggest market
share of 63-65%. As mentioned above that consumers in Indonesia is moving towards
healthier lifestyle and health conciousness among them are increasing. Extra Joss or any
energy drinks is perceived as an unhealthy and has side effects to the body. In contrary,
Extra Joss is developed by PT Kalbe which is a pharmacy industry and under Bintang
toedjoe. In this regards, Extra Joss could win the competition in local market as if they insist
to change the product as the market perceived. Extra Joss must create more market share
to low- and middle-income people partnering with local groceries store or traditional
coffeshop in Indonesia giving benefits for the owner such as health facilities and Extra Joss
could benefit through using the name of Extra Joss. Other than that, there is other market
that Extra Joss would need to develop which Is a middle to high income consumers. They
tend to prefer bottled products rather than powdered products. So that Extra Joss would
need to transform its product through diversification towards liquid products rather than
powdered products. In local market, Extra Joss could broaden its distribution as Indonesia
is an island country that products price could be different throughout the country. Therefore,
to make Extra Joss could be more competitive it is important to concern about the
distribution process that could leverage Extra Joss brand in all across Indonesia and
increase the buying power of low-income consumers. All that strategy is perhaps Extra Joss
can win in the market in low income consumers as well as high income consumers that
Redbull as the main competitor only focusing on middle to high income consumers.
For the long-term strategy after winning the competition locally, it is better for Extra
Joss could expand its business internationally to Europe, America, Africa and especially Asia
Pasific. It is recorded by the data that Asia Pasific currently have the highest growth
forecasted in energy drink industry. It is realistic for Extra Joss making expanding business
in Asia Pasific as its for strategic objective at least in 5 years as a source of new growth for
Extra Joss. One of the Asia Pasific countries is China which it dominated the market share in
Asia Pasific. However, in terms of law and regulation concerning about foreign company it
would be hard and costly for Extra Joss penetrating market in China unless Extra Joss could
make a partnership within China’s company offering unique powdered energy products from
Indonesia. On the other hand, Extra Joss could expand in other market in Asia Pasific region
as those countries are many emerging countries as one of the key drivers of energy drinks
sales is hectic lifestyle and the need for instant energy rather than for sports. In developed
countries, Extra Joss could also raise its brand awareness through Indonesia’s culture.
For example, the advertisement for Extra Joss in Indonesia is related to the culture of Bali
and using the brand ambasadorr of Cristiano Ronaldo as international superstar.

Case 3 – Brodo
About Brodo
Brodo is a gentleman retail and e-commerce fashion company headquartered in
Bandung, Jawa Barat. The products they developed are shoes, T-shirt, Bags and many
others man accessories. Initially named Brodo Footwear and consequently received its
funding to develop the brand into Brodo Indonesia that not only sells footwear but for
gentleman lifestyle and accessories matters. Brodo now has many outlets across Indonesia
and has become the offical partner for PSSI Indonesia Football Association since 2017.
Brodo was born to be innovative and different along wih its founder background of
engineering it follows engineering principles. Brodo optimizing the value of the shoes
through analysing its examination of the function. Its first innovative products is one of the
shoes alled Signore whereby it used the element of Batik Parang and Indonesia Map to the
shoes outsole. Then in 2014 Brodo started to penetrate in apparel and accessories industry.
Thus, as a startup Brodo is concerning more towards cost efficiency on marketing budget in
order to grow. In local market Brodo has become a vertical integrated e-commerce
partnering with domestic vendors located in Bandung and Cisarua. Other than that, in
vertical integration Brodo also partnering to continouing marketing through advertising
agency, analytic platform and video content. More over, the vertical integration conducted is
betwee Brodo and Information and Technology matters where Brodo as an E-commerce
would need a powerful server establishing e-commerce platform.
1. With its competitive price, what would be your corporate strategy proposal to start
selling it into Africa? Explain in detail
Africa: A Market Overview
Back then the previous centrury the globa footwear market was dominated by
producers from Europe and American footwear designers and brands. Nowadays, the
existing of Asian market and African footwear industry too has picked up the pace in the
globalization. Africa now has the skillful labours related to this industry. Thus, internationally
well-known designers is also available and also the overall market demand is massive. The
top 2 countries are South Africa and Euthopia. For South Africa it produced a value of $0.37
billion dollars of footwear industry. In Ethiopia, they export shoes massively for about $30
million worth of shoes annually. According to the Times of Africa (2020), it is expected that
the footwear industry in Africa will cross the borderline of $1 billion in 2023 and making it the
largets industrial sector in the world.
Other data from marketresearch.com report (2021), it shows that in South Africa’s
Apparel and footwear industry is forecasted to grow at CAGR 6.7% and 7.5% respectively in
2025. It is also stated that in South Africa there will be an increase in sales and expected
that the men’s footwear going to be the fastest growing among all categories. In addition, the
Foschini Group is currently dominating the market share with 7.7% followed by Nike and
Adidas as the figure below.

Figure 6 South Africa Mens’ Footwear Market Share

Source: MarketResearch.com (2021)

The second top country is Ethiopia where the footwear industry in Euthopia has been
established since 1991 from only 2 factories to 21 factories today. The industry itself now
employed 14.000 people nationally according to Central Statisical Agency. One of the
prominent brands in footwear industry is the Kangaroo Shoe Factory. In the past few years,
the industry experience significant progress in terms of its technology and talented labours.
In a whole, Ethiopoia exported for the value of 33.7 million dollars of footwear products with
its key importers of US. However, in Ethiopia many industries expert says that the leather
they used is lack of its quality.
For Brodo expanding its business to Africa based on the overview above here are the
proposed corporate strategy divided into vertical integration, divesification and geographic
scope.
1. Vertical Integration
 For vertical integration, the corporate strategy define in what value chain do Brodo
needs to partnering to compete in the Africa minarket. Based on above explanation it
is clear that the maniufacturers in Africa did not align with Brodo vision to provide
high quality products with affordable prices. If Brodo going to make partnership to
one of the local brand of footwear it is important to ensure that they has the same
vision addressing quality issues. In the short term I would recommend Brodo to look
for forward vertical integration as the distributor of the products and understanding
the business environment in Africa. After that Brodo could make a strategic
partnership with other brand to engage in local demand and conseuently Brodo could
proceed in making factories in Africa with the availability of talented resources in
Africa
2. Diversification of products
Second, diversification of Brodo’s products could be done as there are may slight
differences regarding the preference of shoe design in Indonesia and Africa.
However, the men’s footwear is still leading in the market which aligned with Brodo’s
main product. Other than that, it is known that Africa is considered as low to middle
class consumers. Which it is differs from indonesia which have majorly middle to high
income customers. Overseeing this, Brodo could diversify its products from high
quality products into lowering its quality but sacrificing its values of Brodo. In this
regard, Brodo could penetrate more market share in low to middle growing class in
Africa. Other than that, Brodo could also diversify its products bringing Indonesia’s
culture such as Batik Parang as Brodo’s first launched in Indonesia using the motive
to the footwear outsoles. This could attract Africa customers and raising Brodo as
Indonesia’s brand in Africa.
3. Geographical Expansion
Geographically, it is realistic for Brodo to engage in top 2 countries in Africa that have
emerging footwear industry, which is South Africa and Euthopia. As the discussion
about the market overview up above it is recorded that the market in South Africa is
rapidly growing that expected to be valued of 1 billion dollars in 2023. Thus in
Eutopia, there are skilled labours and emerging industry of footwares and apparel
that could be beneficial for Brodo setting up factories in Euthopia.
2. From the perspective of diversification, what would be the best strategy to do
diversification in Brodo?
Initially Brodo is only a footwear product which provide shoes with high quality and
affordable price. In relation to this Brodo broaden its product through a product
diversification. Ranging from formal shoes to sport shoes that recently launched which is
shoes that are made with spikes to play golf. This is called as product diversification
strategy. The diversification of the products in Brodo is not only addressing in footwear
industry but also regarding craftmanship of leather goods such as wallet, bags, and other
non leather products for instance T-shirts, sweater and many more. In overall, the
diversification strategy is on the theory of related constrained diversification strategy which is
a corporate strategy where the company pursue a line of business in which they can apply
the resources and core competencies available in the main core business. Below is the The
core competence-market matrix

Figure 7 The Core Competence – Market Matrix

Classifying the diversification done by Brodo, Brodo launching new models’ pair of
shoe is categorized as lower left quadrant which basically Brodo core competency is
making high quality leather shoes. Furthermore, Brodo also launched footwear related to
sports for instance Brodo launched shoes that made for tennis its is categorized as lower
right quadrant which is Brodo embracing new sport market but still using leather shoes
witth high uality products as their core competency. Moreover, Brodo also made
diversification to making T-shirt, sweater, caps, and other products that are unrelated to
leather products as their core competence. This is categorized in a new market and new
competence or in the upper right quadrant. Lastly, brodo diversification providing outsole
called “Re-Bro” or repairing brodo shoes is categorized as a new core competence and
providing solujtions existing market or in upper left quadrant.
Besides, there is also an opportunity of diversifcation apart from the products which
is diversifying geographically. This strategy also done by Brodo as Brodo already diversifying
its brand geographically but still in the form of domestic market. Internationally exporting the
products could stimulate growth for Brodo along with strategic partnership with other Brand.
Gaining international awareness of brand through sponsoring golf player or tennis player
using Brodo’s products could be the best strategy for Brodo in order to grow. In overall, the
best strategy for Brodo’s diversification based on the explanation above is to combine
between product-market diversification strategy.
3. What would be the best organization structure in Brodo to accommodate the need
of market expansion in domestic market?
Organization structure type itself is divided by 4 categories which is specialization,
formalization, centralization & decentralization, and hierarchy. The structure that an
organization chose has to be aligned with its strategies and could not be separated to its
values, vission and mission. In the case of Brodo, Brodo considered as a startup-based
company that consumer oriented and offer diverse of lifestyle products directly to consumer.
Brodo wide range of products regarding leather products is one of the specializations of
Brodo’s core competencies. Brodo also have to broaden its product to Tshirt, sweater, and
other mens apparel product so that also could become generalist. However, the main
organizational structures is remain specialization in leather and footwear products. In terms
of the formalization, that usually used by manufacturing company, airlines even Mcdonalds
towards quality and service. The formalization would suits well for Brodo organization
structure as its vision to ensure offering high quality products to consumer brodo should
have some kind of standards operation procedure towards the vendor or suppliers that
partnered with Brodo. Other than that, Brodo basically a startup company that would need to
grow rapidly in the market and providing customer satisfaction also one of the criteria
growing the business. Therefore, decentralization is most fitted to Brodo’s organizational
structure that needs to be agile, fail fast and more rapidly growing. In the hierarchy, there is
a tall structure and flat structure. Again, for a startup company Brodo is more suitable when
the employees are in flatter structure. So that the employees are having roughly equal
position to others and could minimize the border of organization to make the organizations
more agile.
To conclude, in domestic market itsel Brodo needs to address various model of
footwear and other products. Therefore a startup based organization structure is needed to
develop innovations and more agile to any issues to fail fast. Other than that in Indonesia as
Brodo’s local markets would be important if Brodo have unique marketing strategies that
attract local customers as it is stated by Brodo that acquiring new customers is 7 times
harder rather than maintaining loyal customers. Therefore, Brodo would importantly needs
decentralization and flatter structure on its organizational structure. Thus on specialization
and formalization is also a form of care to customers as maintaining product quality has
been the key values for Brodo and added value for customers
4. How to develop strategic alliance in the value chain of Brodo?
 Strategic alliances is done between 2 firms that are sharing its resources, knowledge,
and capabilities with the intention of developing products and services. Strategic alliances in
the value of chain Brodo could be done in forward and backward mechanism. Following the
strength of the company is Brodo partnered with its suppliers in backward vertical integration
Brodo no need to worries about all of the aspects towards production process. Brodo could
be more focus on strengthening higher value adding activities such as researching and
design process. Other than that, It is also save much cost from this mechanism. However,
this strategy might need broad diversifications in terms of suppliers in order to reduce risk.
The figure below shows the backward and forward vertical integration strategy.

Figure 8 Backward and Forward Vertical Integration along Industry Value Chain

It can be concluded from the figure above that from stage 1 to stage 3, Brodo done
fully outsourcing to other suppliers. However, in terms of outsourcing there must be contract
between 2 company that made it as a strategic alliance and not as a whole 1 company. In
stage 1 of raw materials, the raw materials for leather goods may differ from camel, goat, or
buffalo skin and other raw material such as canvas or fabric to make the shoes. Thus, in
stage of 4 and 5 especially in stage 4 Brodo have not done forward vertical integration. the
marketing itself is partnered or outsourced with advertising agency, analytic platform, and
video content. Therefore, it is categorized as strategic partnership. In stage 5 related to
support, Brodo also outsourced its industry value chains in IT services such as maintaining
servers as Brodo core competency in e-commerce platform. This shows that Brodo are less
vertically integrated but having many outsourcings or partnership along the industry value
chain.
 This is also one of the strategies conducted by one of the prominent brands in
footwear industry which is Nike. Nike only focuses on design, marketing, and retailing. The
same thing also applies to Apple, while other value chain activities are outsourced. Looking
at the successful market leader such as Nike, with the same vision as Brodo, Brodo could
apply this method to the business. The reason for many companies does not integrate its
value chains is because the stages among the value chain is not equally profittable. In
conclusion, the best strategy for Brodo currently as startup is by doing partnership or
alliances or outsourcing its industry value chain in order to reduce cost, maintaining quality,
more flexible & agile and also reducing the risk of legal repercussions.

Case 4 – GoTo (Gojek and Tokopedia)

Company profile: Gojek
Gojek is one of the SuperApps in Indonesia that has its services from transport to
food delivery. As digital economy in Indonesia considered as in a fierce competition. Initially
Gojek also known as Aplikasi Karya Anak Bangsa which is a company that creates on-
demand services apps for micro-travel or ride hailing and many other services. Th firm’s
services including transportation and logistics, food ordering and delivery, digital payment,
shopping, news and entertainment. These services allow users to access travel, logistic
support and other activities only based on the application of their smartphones. The
milestone for Gojek Indonesia, in 2010 the started out as a call center connecting customers
with courier delivery and ride hailing business. Initially there are only 4 services which is
GoRide, GoSend, GoShop and GoFood started in 2015.
Currently, Gojek as a decacorn now valued at $10 billion transformed into a
superapp which offers 20 different services. One of the uniue services that is new is GO-
academy which is a software development training program.
 Figure 9 Gojek logo changin from time to time

Gojek company logo at first reflects that gojek is an online motorbike services and
has been changing throughout the years following Gojek’s transformation into super app that
offers a number of clever methods to overcome difficulties. It is a customer centric goals
where Gojek trying to minimize people or users problem in their life through the applications.
Gojek’s mission statement stated that Gojek is dedicated to creating and scaling up positive
socio-economic impact on the ecosystem of users, driver-partners, business and micro-
small-medium enterprise partners as well as service providers.
The gojek app that released in 2015 has approxiamately downloaded by th users for
about 30 million downloads in less than 2 years and has partnering with singapore biggest
bank DBS. Initially Gojek sees the problem by addresing in the perspective of conventional
ojek and clients. Gojek saw that they were wasting time waiting for passengers and walking
around looking for available ojek respectively. Therefore, the platform was allowed mutual
synergy between client and ojek driver using technology and as phone center.
Exploring other Gojek products it is known that Go-pay is the fourth largest e-wallet
service in Indonesia. Other than that, there is also Gomart that ccustomers can shop for
groceries in Gojek app until Go-pertamina that can provide users with fuel delivery services
through this app. Through this applications services Gojek revenue model is generated by
the commisions of companies or merchants, consumer’s commision and also commision
from the drivers. From this Gojek reported that the value of its annualized gross transaction
in 2020 will be USD 12 Billion increasing 10% from 2019 and during the COVID-19
pandemic outbreak the gopay transaction and paylater services had threefold increases in
transactions. Other than that, the Gomart or gojek groceries services also spikes in fivefold
annualized GTV adversely impacted by the pandemic situation.
Company profile: Tokopedia
Tokopedia is a technology company based in Indonesia with its mission to cover
economic distribution and to support it through a digital platform. The company records that
its coverage to 99% district, 100 million active users, 11 million sellers, 86.5% sellers is a
newbie business owner. This shows that Tokopedia supporting the economic development
in Indonesia. Amidst COVID-19 pandemic outbreak it is known that online selling has
become the savior for economic recovery towards the crisis. Business owners is adversely
impact through this crisis and Tokopedia has become the platform digitally environment in
providing e-commerce in order to support economic development.
 Figure 10 Orders frequency growth in PSBB area throughout 2020 (%)
Source: LPEM FEB UI (2021)

The figure above shows that Tokopedia as e-commerce has been the top choice in
stimulating business growth in the middle of pandemic situation. The average frequency also
shown that the behaviour of shopping is now moving towards online shopping in fully digital
platform such as Tokopedia. Tokopedia also has become the preferable platform for
business owner even before the pandemic situation. Besides stimulating growth in medium
and small enterprises the method of payment in Tokopedia has strengthen the financial
inclusion through e-wallet, mobile banking, credit cards and many more. It is stated that E-
wallet and virtual account transaction is the most preferable option to choose in terms of
product payment.
Tokopedia business line using technology to connect and encourage the ecosystem,
reaching the untouched population in the financial inclusion also to give value added to the
producers such as farmers and fisherman. Its marketplace with the registered 11 million
sellers from official merchant and logistic partners as well as payment system to give the
best for the users. Besides, tokopedia also offering for financial services.
GoTo: Gojek and Tokopedia
Gojek and Tokopedia as the largest technology startups in Indonesia
integrate itself to the ecosystem in the form of GoTo on 17 May 2021. Under the Goto group
gojek and Tokopedia remain the same entity and under PT Karya Anak Bangsa. Initially
Gojek and Tokopedia has already the same vission and mission as Gojek to develop the
ecosystem and Tokopedia to facilitate growth in medium small enterprises as well as
economic development in Indonesia. GoTo values also believed that through technology
they can bring power to the society and benefits the stakeholders. While tokopedia
empowered people to grow business in online platform, Gojek also change the urban
lifestyle of 2 its stakeholders the ojek driver and client to live a better life. This also supported
by the data that 2% of GDP Indonesia is generated by Gojek and Tokopedia.
1. From the perspective of vertical integration and diversification, how do you
consider GoTo as the new form of Gojek and Tokopedia post-merger?
The first partnershiop between Gojek and Tokopedia has made since 2015 its first
partnership of using ride hailing services to the deliveries of products in Tokopedia. Thus in
2021, the 2 companies made a strategic alliance in the form of GoTo Group. Here we
discuss about the vertical integration and diversification in the perspective of Gojek and
Tokopedia.
Vertical Integrations:
First, In the perspective of Gojek, it has made the backward vertical integration
strategy where it held between if any Tokopedia’s products sold there will be Gojek that
serve the logistics needs of instant deliveries. In the point of view of Gojek it is considered as
backwards because Gojek would only needs to deliver the products and maximizing on
Gosend features of sameday and Instant delivery. So that the Gojek is considered as the
downstream industries rather than upstream industries. Second in terms of Tokopedia,
Tokopedia has made a forward vertical integration as the merger of Gojek means that
Tokopedia not to worry regarding the logistic fulfillment that handed by the Gojek and Gojek
has its payment feature namely Gopay that will give seamless operation to users if they
integrate each other and may give more benefits to customer when customer using
Tokopedia. Besides this forward vertical integration strategy also affect in consumer cost of
shipping that would be lower since the 2 companies are integrated each other. In overall,
Gojek and Tokopedia alliances and partnership in the 2 business is aim to cater a new
market, integrate in many features such as trabnsportation, groceries, food delivery and
many other features. Thus aiming to become the largest technology group in Indonesia and
Southeast Asia.
Diversifications:
Diversification in this regard is divide by 2 categories namely diversification of
products and services and diversification in terms of geographical expansion. The 2
companies is basically technology company which provide solutions for consumers in e-
commerce, ondemand and financial services. The diversification can be look through the
similarities of feature of Gojek and Tokopedia could have integrated each other. This results
in the diversification that the 2 companies is still on their main entity but under the GoTo
group. It can be concluded that consumers could use either Gojek or Tokopedia to pay their
bills or to buy groceries. This is what I think as diversification in terms of the platform itself
not only from the products and services. The figure below is the illustration of how the GoTo
group ecosystem will works.

Figure 11 GoTo flow illustration example

Source: Gotocompany.com

2. From the perspective of strategic alliances and M&A, how do you consider GoTo
as the new form of Gojek and Tokopedia post-merger?
In the perspective of strategic alliances and M&A of GoTo it is considered as a major step to
expand the business geographically for more than domestic market but to complement each
other in expanding their business in Asia region. This merger of GoTo also considered the
move to address the challenges in Indonesia tech industry. According to Center for Digital
Society (2021) the value of digital economy of indonesia is shown in figure below.
 Figure 12 Indonesia Digital Economy Value Expected in 2025 (billion USD)
Source: Center for Digital Society (2021)

It shows that forecasted the value of internet economy will be worth for 100 billion
USD. It shows that there is significant amount of increase of the digital economy. It also
means that the move by Gojek and Tokopedia to merge in GoTo group is realistically to
cope with these challenges and thrive to be more profitable and impactful company through
digital platform. Besides, there is also report by Boston Consulting Group exploring the
digital and technological opportunities emerging in markets worldwide. It is stated that
Indonesia is categorized 2 % of 10000 technology comopanies in emerging markets which
have small but rapidly expanding technology sector. Indonesia is favorably positioned the
well-known tech hubs such as Singapore and Israel. This is relating to Gojek and Tokopedia
which fueled its impressive growth by expanding into new markets and additional products
and services through in house development as well as M&A and partnership. This would
result in GoTo readiness to face the market challenges as Indonesia considered as a fast-
growing ecosystem of digital innovative platform.
In terms of the theory the strategic alliances between Gojek and Tokopedia is also
refer to Equity Alliances. The form of equity alliance is a partnership in which at least one
partner takes partial ownership in the other partner. In this case Gojek has 58% GoTo
shares and Tokopedia has 42%. The equity alliances also targetting in the short term for
initial public offering (IPO) in Indonesia as well as in United States. As IPO is importantly
needed by the 2 companies to always generate grow and expanding the business.
3. What is your analysis and opinion about the above statement of creating a new
financial technology giant? Key point: fintech vs techfin
GoTo Financial: Fintech or Techfin?
Creating a financial industry towards Gojek and Tokopedia is considered as one of
the diversifications of products and services done by Gojek and Tokopedia. However, it is
still aligned with the value of Gojek and Tokopedia or GoTo as providing the solution for the
development of economy as well as the stakeholders. Pursuing financial industry for these 2
companies is considered using existing core competencies which is technology to seize the
opportunity of an emerging countries working towards this financial industry. While the key
discussion on financial world is the terms of Fintech and Techfin. Basically, the Gojek and
Tokopedia is categorized as Techfin. As GoTo is a technology group that serve for
ecommerce, on demand as well as payment services such as GoPay as an e-Wallet in
Indonesia that highly used for ride hailing activities.
One of the business lines in gotofinancial is Gopay that compete with many other e-
wallet in Indonesia such as OVO and DANA. The figure below shows the amount of market
share of those 3 e-wallet main players.

Figure 13 Indonesia E-wallet Market Share in 2020 (%)

Source: Ipsos Media market resesarch firm report

It shows that the Gopay ewallet is leading the market for e-wallef for approxiamately
60% market share. Followed by OVO and Dana for about 29% and 9% market share
respectively. In terms of consumer base, it shows that Gopay has strong fundamentals to
keep expanding their business to another level through GoTo financial strategiuc alliances.
Besides that the Financial product from gotofinancial is not only about the e-ewallet for
payment but also they develop the products through technology that ease the users as in
merchant for a better business such as they have cashier management namely Mokapos
and a sophisticated keyboard technology in invoicing named Selly. This is aligned with
Tokopedia values in empowering medium and small enterprises in expanding their business.
Therefore, interms of the discussion towards Fintech and Techfin, Gotofinancial is
considered as Techfin that based on its core competencies on technology and can not be
categorized as financial technology as the definition for financial technology is a financial
services industry that going to find their way to digital platform such as the evolution of
banking. I would also say that this move towards technology and financial industry is one of
the fresh diversifications for Gojek and Tokopedia as in the pandemic situation the shifting
towards digital payment from debit or credit card is significantly high where debit and credit
now only have 9% of all transactions during the pandemic. Thus, the digital payment is
rapidly growing.
4. Find possible organizational inertia inside new GoTo management and give
example
Organizational inertia that possibly happened in the environment of GoTo are listed
below:
1. Complex organization structure required to be agile
Although Gojek and Tokopedia is remain the same entity under the group, The GoTo
group has its own management that might have collided between the two
organizations. For example, Polaroid is a market leader in photography world and
they face organizational inertia when the new digital photography came on the scene.
This means that the complex structure of the organizations even though Gojek and
Tokopedia already came up with digital products and the employees are more
towards technology, it is important for Gojek also to hire not only engineers but also
in businesss savvy side of the management as the market is growing rapidly and no
one knows the uncertainty towards digital and business platform.
2. Overcoming Cyberthreats
Amidst COVID-19 pandemic outbreak, it is reported that cyber threats, such as data
leaks/data breach has been increased significantly. Phishing and financial fraud has
also become a threat due to uncertain economic condition. Moreover, it is stated by
the cyber security company Trend Micro that Indonesia is categorized as elevated
risk and currently experiencing an increase of cyber attacks. This showcases
Indonesian companies need to be more aware of cyber risks, especially for tech and
big data-based company such as Gojek and Tokopedia (GoTo).
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