The Description of The Potential On Small and Medium-Sized Food Industries in Order To Improve Competitiveness

Talent Development & Excellence 44
Vol.12, No.2s, 2020, 44-58
The Description of the Potential On Small and Medium-Sized Food

Industries in Order to Improve Competitiveness
1*
Maman Suratman
Institut Koperasi Indonesia (IKOPIN), INDONESIA
Email : mamansuratman@ikopin.ac.id
2*
Obsatar Sinaga
Padjadjaran University, INDONESIA
Email : obsatar.sinaga@unpad.ac.id
ABSTRACT
To improve the added value and employment of the small and medium-sized food industries, a study need to be
done in order to map out the potentials, disadvantages, opportunities and threats towards the small and medium-
sized food industries, in order to face the globalization era. This activity aims to obtain data and information of
The Potential of Small and Medium-sized Food Industries. The study using a descriptive research method with
survey techniques. From the 16 aspects of the profile components of small and medium-sized food industries, 10
aspects (62.5%) had included in a good category. The last 6 aspects (37.5%) had included in the medium
category. Another threat faced by small and medium-sized food industries comes from China, associated with
the implementation of CAFTA. Yet behind this threat, there is an opportunity for small and medium-sized
industries to flood the markets of China and ASEAN. The challenge is the ability of the small and medium-sized
industries to produce innovative products.
Keywords : potential, small and medium, food industries, competitiveness.
I. Introduction
The Small and Medium-sized Industries (SMIs) in the macro scale can be a vital contribution to quality
and sustainable economic growth, and as a safety in the development and trade balance necessity. The Medium-
Term Development Plan (RPJM) 2010-2014 has determined, including the increase of added value and market
share in domestic and overseas. Based on the projection of RPJM in 2010, the added value of the Small and
Medium-sized Food Industries in food, beverages, and tobacco sectors reached Rp 106,23 trillion. In 2020 the
role of Small and Medium-sized Industries is expected to be balanced against the role of Large Industries in
providing a contribution towards national economic development.
Referring to the above, the Development Program of Small and Medium-sized Food Industry is directed
to develop SMIs as a regional economic activator in compliance between national SMIs development policy,
SMIs as regional development activator in technology, human resources management and quality, expand
business and working opportunities in the area, expanding the market scope of the local market, regional and
export. Priority commodity, including snacks, crackers, processed marine products, processed fruits, brown
sugar/palm sugar, and beverages. For enhancing the development effects in order to improve the added value
and employment of the small and medium-sized food industries, a study need to be done in order to map out the
potentials, disadvantages, opportunities and threats towards the small and medium-sized food industries, in
order to face the globalization era.
Related to that matters, this activity aims to obtain data and information on potential small and medium-
sized food industries. From those data and information then performed an analysis of the potential
competitiveness. In this regard, what is meant by potential food SMIs is small and medium industry in the food
sector, which has characteristics: a) raw and auxiliary materials are independent of export products, b) well
mastered in technology, c) availability of skilled human resources, 20-99 labor, and d) company investment
until RP 10 billion excluding land and business place.
The output of this study is: a) availability of 350 profiles of potential small and medium-sized food
industries, b) establishment database of potential small and medium-sized food industries of each target
province, c) establishment of program input and development activity of potential small and medium-sized food
industries in the future. The area of the study covers 6 provinces, that is: Banten, The Special Capital Region of
ISSN 1869-0459 (print)/ ISSN 1869-2885 (online)

© 2020 International Research Association for Talent Development and Excellence
http://www.iratde.com
Vol.12, No.2s, 2020, 44-58
Jakarta, West Java, Central Java, The Special Region of Yogyakarta, and East Java. The scope of the study can
be identified as follows: a) Which aspects are defined as profile component that has been reached by chosen
small and medium-sized food industries as a sample? b) Which aspects are already strong and which are still
weak?, c) What are the opportunities and threats for small and medium-sized food industries? d) What policies
and strategies should be established by government to develop food SMIs? This study is also limited to only
include food SMIs that has a potential food characteristics, among others:
a) Raw and auxiliary materials are independent of the export product
b) Well mastered in technology
c) Availability of skilled human resources
d) Small and medium level industries that owned TDI / IUI and PIRT / MD, and Halal license, 20-99
labor, the company's investment of up to Rp 10 billion, excluding land and buildings.
e) Selected food SMIs with orientation to increase the added value and competitiveness.
f) The examined aspects are included recent general condition, the problem of human resources,
marketing aspects, technology aspects, finance/capital aspects, economic aspects, environmental
aspects and impacts on regional growth and food industry development direction for the future.
II. Literatur Review

Prosperity or living standard of a nation is determined by the level of productivity, which is achieved
through the use of its resources, that is human resources, capital and natural resources. Productivity determines
wages and returns to capital, which became the main determinant of national income per capita. Later,
productivity became the basis of competitiveness of a nation. The level of productivity of a nation is determined
by the value of goods and services produced by companies in the country, which is produced due to the quality
and uniqueness, as well as the efficiency. Thus, the key issues of economic development of a country are how to
create conditions that can encourage, accelerate and maintaining productivity growth. Related to that matters,
prosperity ultimately depends on improving the level of microeconomics competitiveness (companies). This
microeconomics productivity, in turn, is determined by the interrelation of two things, that is the
company operational sophistication and, on the other hands, the quality of the micro business
environment. Overall, the state of the national economy would not be more productive, unless the companies
are operating more creative, innovative and productive. Obviously, this is a challenge for the managers of
companies (entrepreneurs), including companies of Small and Medium Industries. Raymond A. Noe (2000:7)
explained that current companies are facing 4 (four) challenge, such as : 1) the global challenge, 2) the quality
challenge, 3) the social challenge, 4) the high performance work system challenge. The first is connected to
company expansion to the world market and prepare the employee who will work overseas. Second is referred
to effort in fulfilling customer needs for goods and services. Third is connected to how to manage employees
which have different culture. Last is connected to new technology integration to the ways of working.
The previous thoughts can be described in brief as shown in Figure 1. Based on these figures,
competitiveness is a function of productivity, which in turn is determined by the efficiency, uniqueness and
quality. Furthermore, those three things are determined by innovation, which is a function (output) of
entrepreneurship activity (energy) (EE = Entrepreneurial Energy) which is influenced by Property Right (PR,
Right / Freedom Act), Motivation, Competency.
GLOBALIZATION
COMPETITIVENESSS
PRODUCTIVITY
EFFICIENCY UNIQUENESS QUALITY
INNOVATION
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EE = f (PR, M, C)
Figure. 1 Global Competitiveness Framework
Meanwhile, to understand the mindset and demeanor of society in achieving its economic goals, which
reflects the value system abided, it is necessary to understand the values of economic culture. In this case
Michael E. Porter (2000), defines that "economic culture is defined as the beliefs, attitudes and values that bear
on the economic activities of individuals, organization and other institutions". (Economic culture is defined as
the beliefs, attitudes and values that serve as the foundation of the individuals, organizations and other
institutions in economic activity). To get out of poverty, a nation must increase inputs, institutions and
capabilities (skills), so that its ability to improve competitiveness, which results in productivity. This requires a
capital increase of HR (Human Resources), improving the quality of entrepreneurship of the managers of
companies, infrastructure improvements, open to trade and foreign investment, protection of intellectual
property and so on. More importantly, is the beliefs and values that had developed by economic executives. In
this case, "The attitudes of individuals and organizations and their economic behavior are strongly affected by
what they perceive to be the way to win" (Michael Porter, 2000). That is, the attitude of individuals and
organizations and their economic behavior, strongly influenced by what they perceive as the way to win.
According to Michael Porter (2000), the productivity paradigm includes a series of basic values and
attitudes, that is:
Innovation is good, competition is good, accountability is good, high regulatory standard are good,
investment in capabilities and technology is a necessity, employees are assets, membership in a cluster is
a competitive advantage, collaboration with suppliers and customers is beneficial, connectivity and
network are essential, education and skills are essential to support more productive work, and wages
should not rise UNLESS productivity rises, Among other. (Innovation good, good competition, good
accountability, good high regulatory standard, investments in capabilities and technologies is a
necessity, employees are assets, membership in a cluster is a competitive advantage, collaboration with
suppliers and customers are profitable, important linkages and networking, education and essential skills
to support the productive labor, and wages do not go up unless productivity rises).
This is quite contrary to the attitudes and values that are not productive, that is: “Monopoly is good, power
determines rewards, rigid hierarchy is needed to maintain control, and self contained family relationships
should determine partnership”. (Umrani, Siyal, Ahmed, Ali Arain, Sayed & Umrani, 2019).
Furthermore, in line with the values above, Lawrence E. Harrison (2000), shows ten values, attitudes or
"mind sets", which distinguish between progressive culture and static culture, namely:
1) Time orientation : progressive culture emphasizes the future, while a static culture in the present and past.
Future orientation has implications for a progressive view of the world.
2) Work : Work is the center of the goodness of life in a progressive culture, while in a static culture it
becomes a burden. In progressive cultures, work affects daily life; craft, creativity and achievement are
valued not only financially, but also personal satisfaction and appreciation.
3) Frugality: Saving is a source of investment and financial security in a progressive culture, but a threat to the
"egalitarian" status quo in a static culture.
4) Education : Education is the key to progress in a progressive culture, otherwise it is considered unimportant,
except for the elite in a static culture.
5) Merit : Skill is the key to progress in a progressive culture, conversely connections and family are
considered in a static culture.
6) Community : In a progressive culture, the radius of identification and trust extends beyond the family
towards the wider community. In a static culture conversely, and this will bury a culture of corruption, tax
avoidance, nepotism.

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7) Ethical code : Ethical codes tend to be tougher in progressive culture.

8) Justice and fair play : justice and fair play are impersonal and universal expectations in progressive culture.
In a static culture, justice is personal, often a function of who you are and how much you can afford to pay.
9) Authority : Power tends to spread and horizontal to progressive culture, tends to center and vertical to static
culture.
10) Secularism : Secularism; the influence of religious institutions on the lives of citizens, minimal in
progressive culture, conversely in static culture.
By examining progressive cultural concepts related to economic development which was developed by
Michael E. Porter and Lawrence E. Harrison, it could be concluded that “Culture is a significant determinant of
a nation's ability to prosper because culture shapes individuals thoughts about risk, reward, and opportunity"
(Stace Lindsay, 2000).
Related to the discussion on improving competitiveness, SMIs must also be an important part of the
improvement process. In connection with this culture, Stace Lindsay (2000 : 284) developed what is called a
mental model. Mental model is “deeply ingrained assumptions, generalization, or even pictures or images that
influence how we take action...mental models are underlying beliefs that influence the way people believe”.
Mental model is a part of a culture, as stated that:“culture reflects the agregation of individual models
and in turn influences the types of mental models that individual haves. The real point of leverage in creating
change may well be helping to change mental models at individual level, beginning with the way individual
think about welth creation”.
From the quote above it is clear that mental models describe the way of thinking and affect the way to
act. One debilitating way of thinking that generally applies in developing countries is "comparative advantage
thinking", which considers natural resources and cheap wages as sources of comparative advantage. "It is a
mental model that resists change" (Stace, 2000; 291). Mental models that resist change. In order to develop into
a developed society, "comparative advantage thinking" must be changed to "competitive advantage thinking".
Comparative Advantage - Anti-Improvement Competitive Advantage – Pro-Improvement

Characteristics Characteristics
- Protected Market - Globalization and competition
- Focus to macro economics - Focus to micro economics
- Proximity to the authority - Company’s productivity
- Focus to capital/financial - Focus to human capital/knowledge
- Rigid and tiered organization - Flexible meritocratic organizations
- Economic of Scale - Flexible
- Dependent to foreign partner - Migration Strategy
- Reactive Approach - Proactive approach
- Government as strategy manager - Vision and cooperation sharing
- Redistribution of prosperity - Prosperity Creation
- Paternalism - Innovation
Source : Stace, 2000
The quote above illustrates that comparative advantage thinking has characteristics that are resistant to
improvement. Conversely competitive advantage thinking has characteristics that will lead to improvement.
In addition, business and government leaders in developing countries are generally trapped in patterns
of strategy and behavior that hinder their ability to create more complex sources of profit, thus ensuring success
in the global economy.
Strategy Scheme Behavior Scheme

- Very dependent on natural factors - Lack of cooperation
- Lack of understanding of customers - Defensive

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- Lack of understanding of relative position - Paternalism

- Weak vertical integration
Source : Stace, 2000
Based on the results of Stace's research, it is believed that this microeconomic problem is based on "culture".
The results of his research show the relationship between "culture" with economic competitiveness (Gill, Hassan
& Haseeb, 2019). The ways people think about business, economics or competition change the quality and
strategies they choose.
In accordance with the thoughts previously mentioned, the profile of SMIs that will be studied are
arranged by assigning 16 strategic elements or components, then visualized with a model of a spider's web as
illustrated below (see Figure. 2 The Selected SMIs Profiles). The sixteen elements are:
1 Quality Standardization 9 Production Control
2 Raw Materials and Auxiliary 10 Packaging
3 Production Process 11 Market
4 Production Environment 12 Distribution
5 Buildings and Facilities 13 Promotion
6 Production Equipment 14 Capital
7 Water Supply 15 Business Management
8 Facilities, Hygiene and Sanitation Activity 16 Business Growth
III. Methodology
This assessment of Potential Food SMIs uses the descriptive research method, with the survey technique.
Samples, in accord with the Term of Reference (TOR) has been determined as 350 SMIs were selected by simple
random sampling technique, spread across 6 study areas with details as follows: Banten 18, Special Capital
Region of Jakarta 33, West Java 105, Central Java 88, Special Region of Yogyakarta 18 and East Java 88. The
research procedures are done by the following stages: First stage, determined elements forming profiles,
Second, these elements are defined, Third, compiled indicators, Fourth, developed measurement instruments,
Fifth, training enumerators, Sixth, the implementation of data collection, Seventh data tabulation, Eighth,
arranging profiles, with a cobweb models, as shown in Figure 2.
Quality Standardization
Business Growth Raw Materials and
Auxiliary
Business Mgmnt
Production Process
ManagemeManage
men
100
80
Capital Production
60 Environment
40
20
0 Building and
Promotion Facilities
20
40
© 2020 International Research Association for Talent Development and Excellence Production
http://www.iratde.com Equipment
60
Distribution
80
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The profile of the cobweb model represents of achievement in the form of percentage, using a scale of 0
to 100. The achievement point obtained by comparing the ideal score with fact scores based on the results of the
survey, using the table below.
Achieved
NO Variables Ideal Scores %
Scores
A. Quality Standardization 19
B. Raw Materials and Auxiliary 14
C. Production Process 4
D. Production Environment 16
E. Buildings and Facilities 34
F. Production Equipment 8
G. Water Supply 6
H. Facilities and Hygiene, Sanitation Activity 8
I. Production Control 6
J. Packaging 13
K. Market 11
L. Distribution 4
M. Promotion 7
N. Capital 6
O. Business Management 20
P. Business Growth 9
Total 185
Table 1. Table of Score Research Area
IV. Results
The level of achievement of 16 aspects or components of the SMIs selected sample can be seen in Table
2 below.
No. Components Average Value Category

1. Quality Standardization (A) 56,70 Medium
2. Raw Materials and Auxiliary (B) 85,20 Good
3. Production Process (C) 67,01 Medium
4. Production Environment (D) 71,91 Good
5. Buildings & Facilities (E) 74,08 Good
6. Production Equipment (F) 84,23 Good
7. Water Supply (G) 90,58 Good
8. Hygiene, sanitation facilities (H) 78,04 Good
9. Production Control (I) 94,74 Good
10. Packaging (J) 74,84 Good
11. Market (K) 57,25 Medium
12. Distribution (L) 72,29 Good

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13. Promotion (M) 55,58 Medium

14. Capital (N) 77,55 Good
15. Business Management (O) 66,03 Medium
16. Business Growth (P) 61,73 Medium
Table 2. The average level of SMIs achievement against
the 16 profile components.
Assessment of the achievement is based on three categories: low, medium, and good, which is defined
using the following scale:
• Low (L) : < 33
• Medium (M) : 34 – 67
• Good (G) : > 68
Based on the above scale, Table 2 shows that the aspect of quality standard, production processes,
markets, promotion, business management and business growth are fit into the medium category. This
means that six out of sixteen (37.5%) of strategic components that giving considerable influence on the success
of the business, among others, characterized by the growth of the business, it still needs to be improved. Ten
other components (62.5%) were in the good category. If the values in Table 2, are incorporated into the profile
with cobweb model, the results are as shown below.

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Quality
Standardization
Business Growth Raw Materials and
Auxiliary
Business Management Production Process
Capital Production
Access Environment
Promotion Building and

Facilities
Production
Distribution Equipment
Market Water Supply
Packaging Facilities and Hygiene and

Production Sanitation Activities
Control
Figure 3. The Selected Profiles

of SMIS
Meanwhile, when the achievement of inter-provincial comparison, the data presented in Table 3, below.
Spec. Cap. Spec. Reg.

West Central East
No. Components Banten of Reg. of Average
Java Java Java
Jakarta Yogyakarta
1. Quality standardization 62,05 52,62 54,21 57,36 59,55 61,20 56,70
2. Raw Materials & Auxiliary 81,25 89,55 93,16 78,27 77,07 83,26 85,20
3. Production Process 64,06 71,15 66,45 78,77 61,67 90,00 67,01
4. Production Environment 60,16 77,97 74,98 66,97 76,88 78,50 71,91
5. Buildings & Facilities 75,18 69,23 71,27 74,48 69,23 77,81 74,08

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6. Production Equipment 93,75 78,96 83,62 83,48 81,67 87,50 84,23

7. Water Supply 98,96 98,72 96,29 91,89 98,89 100,00 90,58
Hygiene & Sanitation
8. facilities 78,13 79,81 74,85 77,79 82,22 88,00 78,04
9. Production Control 100,00 98,72 93,74 92,49 97,77 99,33 94,74

10. Packaging 84,13 83,99 79,47 69,48 74,34 64,92 74,84
11. Market 74,99 40,56 57,39 54,06 59,97 63,64 57,25
12. Distribution 75,00 57,69 76,52 67,69 65,00 82,00 72,29
13. Promotion 83,93 45,84 49,07 57,83 66,67 53,72 55,58
14. Capital 71,87 73,05 70,54 85,44 88,88 76,66 77,55
15. Business Management 67,19 62,31 65,49 64,33 73,33 71,00 66,03
16. Business Growth 66,49 53,03 63,66 63,29 57,75 52,45 61,73
Table 3. Ratio of Average Achievement of 16 Profile Components

Based on Region.
Based on table 3, for quality standardization, Banten Province obtains highest achievement score,
followed by East Java, Central Java, West Java and then the smallest is Special Capital of Region Jakarta.
Nevertheless, for quality standardization as mentioned in the previous section, is still in the medium category.
For component B, which is raw materials and auxiliary, all provinces do not seem to experience problems. But
for component C, that is the production process, Banten obtains the lowest achievement point, in the medium
category. Regarding the production environment, Banten also scored the lowest achievement value, compared to
other provinces. Also included in the medium category, while five other provinces are included in the good
category. Furthermore, aspects of building and facilities (E), all provinces recorded a good category. For the
components of F, G and H, that is production equipment, water supply, hygiene and sanitation facilities, all
provinces achieve good category, even for water supply component, East Java, achieves a perfect point. The
same thing for I (production control) and J (packaging) component, all provinces are in the good category,
except the East Java for packaging component only achieves the medium category. Moreover, for market
component, the entire province of Banten only achieves medium category, even the province of DKI Jaya
achieves the lowest level, approaching the limits of bad category. For the distribution component of SMIs in
East Java, attained the achievement point high enough and the highest among the five other provinces. While the
province of DKI Jaya, attained the lowest achievement point and included in the medium category. Then for the
promotion component (M), the province of Banten attained the highest achievement, included in the good
category, while the other five provinces are included in the medium category. For capital aspect, all provinces
are achieving the good category, with the highest achievement point attained by the province of DI Yogyakarta.
Last, business management and business growth aspects, all the provinces achieve the medium category, except
for the province of DI Yogyakarta and East Java are achieving the good category for business management.
When table 3 is converted into qualitative values, the result appears in table 4.
Spec.
Spec. Reg.
Cap. West Central East
No. Components Banten of Average
of Reg. Java Java Java
Yogyakarta
Jakarta
1. Quality standardization M M M M M M M
Raw Materials &
2. G G G G G G G
Auxiliary
3. Production Process M G M G M G M
4. Production M G G S G G G

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Environment
5. Buildings & Facilities G G G G G G G
6. Production Equipment G G G G G G G
7. Water Supply G G G G G G G
Facilities, Hygiene &
8. G G G G G G G
Sanitation
9. Production Control G G G G G G G
10. Packaging G G G G G M G
11. Market G M M M M M M
12. Distribution G M G M M G G
13. Promotion G M M M M M M
14. Capital G G G G G G G
15. Business Management M M M M G G S
16. Business Growth M M M M M M M
Table 4. Ratio of Average Achievement of 16 Profile Components
Based on Region.
V. Discussion
5.1 Weaknesses and Strengths
Using data from Table 2 and 3 can be described weaknesses and strengths of Food SMIs that have been
selected as survey respondents for arranging Potential Food SMIs profiles. As mentioned before, there are six
components that fit into medium category. Ideally, all components are included in the good category. The six
components can be seen as a strategic weakness associated with competitiveness. In the food industry, the
quality factor is a critical factor, which will determine the consumer to choose a safe food product. Another
factor, the production process, also determines of the product.
This component will be linked to CPPB (Good Food Production). Another component, which is not less
important is the market aspect, which in this case is measured by the potential, scope, differentiation and
diversification. The market aspect demands creativity and innovativeness of SMIs executives. Moreover, the
promotion component, is also very important in relation to the market scope. All five of these components will
affect the final result, that is business growth. It seems that this is the component that should receive the focus of
attention. While ten other components already in the good category, and thus it becomes the strength factor of
Food SMIs that has been selected as a sample.
5.2 Threats and Opportunities

The threat comes from competitors, both domestic and abroad. The approval of CAFTA (China, ASEAN
Free Trade Agreement), the real threat comes from China, which is famous for cheap products. Naturally, the
threat also comes from ASEAN countries themselves. But behind these threats, there are opportunities for Food
SMIs to flood overseas markets. The huge domestic market augmented with overseas markets, will expand
market opportunities. The problem is, will SMIs ready to compete?
5.3 Policies and Strategies

Considering the strengths and weaknesses, threats and opportunities, then what policies and strategies the
government should choose, in this case the Ministry of Industry? Firstly, regarding the policy. The policy should
be taken related to the components that are still included in the medium category, that is the quality
standardization, production processes, markets, promotion, business management and business growth.
Secondly, the Ministry of Industry still has to work harder to socialize the importance of quality, introducing

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CPPB, assist the market promotion and expansion, which can be taken on intensive training, coaching and
mentoring.
As for the strategy, it is advisable to encourage SMIs to run low cost strategy combined with value
innovation, so that in facing a free trade situation, the "red ocean" strategy, meaning to compete in the same
market, competing "desperately and painstakingly", which become a mainstream strategy was replaced by
using the "blue ocean" strategy, by developing a market entry strategy without any competitors, creating value
innovation. In addition, clustering strategy for the same SMIs is expected to attract the agglomeration process,
so as to create added value, in accordance with the blue ocean strategy.
VI. Conclusion
In accordance with the research identifications or questions, which are arranged in the previous
Introduction chapter, eventually it can be concluded as follows:
1. From the 16 aspects of SMIs profile components, 10 aspects (62.5%) had included in the good category,
that is: raw materials and auxiliary, production environment, buildings and facilities, production
equipment, hygiene and sanitation facilities, production control, packaging, distribution and capital. The
last six aspects (37.5%), are included in the medium category, that is: the quality standardization,
production process, market, promotion, business management and business growth.
2. Based on the conclusion number 1, then the profile components that regarded as the power are the ten
aspects that included in the good category. The last six are weaknesses that must be continuously
improved or enhanced.
3. In connection with the quality standardization, most Food SMIs does not have a charter of stars. It
means, the training related to health (hygiene) and food safety have not been attended.
4. Raw and auxiliary materials which have significance for the continuity of the production process of the
food SMIs almost entirely derived from local sources. It certainly is an advantage or strength, but the
climate threat is not easy to predict push the unstable prices. Besides this comparative advantage will be
more useful if it can be converted into a competitive advantage through the use of technology and
innovation.
5. Another threat faced by Food SMIs comes from China, associated with the implementation of CAFTA.
But behind these threats, there is an opportunity for SMIs to flood the markets of China and ASEAN.
The challenge is the ability of SMIs to produce innovative products.
6. Most of the Food SMIs states that never been received Government assistance related to capital and
production facilities. Only some of them has received capital, production facilities and training support.
VII. Limitation
1. For enhancing the development effectivity in order to improve the added value and employment of the
small and medium-sized food industries, a study need to be done in order to map out the potentials,
disadvantages, opportunities and threats towards the small and medium-sized food industries, in order to
face the globalization era
2. In accordance with the above conclusion, the number of recommendations to improve the performance of
Food SMIs in the future:
• In developing policy, government needs to make a paradigm shift from comparative advantage
thinking to competitive advantage thinking. It means leaving the focus from macro to microeconomics,
from physical/ finance capital (relying on natural resources) to human and knowledge capital by
relying on technology and innovation.
• The government also had to leave the government policy as a control, exchange to the shared vision
and cooperation, from a reactive approach to a proactive approach.
• Based on the policy development, the Food SMIs entrepreneurs besides developing the low cost
strategy, should also combine it by developing a blue ocean strategy through value innovation.
• In the last framework, strategies for coping with global competition, should be a strategy of
collaboration between governments and Food SMIs that creates a synergy, it means that the

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government's strategy has to be a derivative of the Food SMIs entrepreneur’s strategy at the micro-
level.
• To accelerate the adoption of the innovation value, the government should increase the units of
advocate for spreading the new technologies which produced by research and development institutions.
• The six components that construct the SMIs Profile are still in the medium category, as mentioned
above, needs government attention in order to assist the increasing, through the implementation of
socialization and training programs with training modules that are more effective and held on an
ongoing basis.
• Facilitation programs that need to be developed to help the availability of raw materials and auxiliary
for Food SMIs through the establishment of an organization (associations or cooperatives).
• The Government should develop a program that aimed to improve quality standardization, production
process, market and promotion, credit service provision, easy and inexpensive information access, as
well as business management and business growth assistance, through training and/or incentives.
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Talent Development & Excellence 44

Vol.12, No.2s, 2020, 44-58

The Description of the Potential On Small and Medium-Sized Food

ISSN 1869-0459 (print)/ ISSN 1869-2885 (online)

II. Literatur Review

EFFICIENCY UNIQUENESS QUALITY

Figure. 1 Global Competitiveness Framework

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7) Ethical code : Ethical codes tend to be tougher in progressive culture.

Comparative Advantage - Anti-Improvement Competitive Advantage – Pro-Improvement

Strategy Scheme Behavior Scheme

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- Lack of understanding of relative position - Paternalism

No. Components Average Value Category

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13. Promotion (M) 55,58 Medium

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Business Management Production Process

Promotion Building and

Market Water Supply

Packaging Facilities and Hygiene and

Figure 3. The Selected Profiles

Spec. Cap. Spec. Reg.

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6. Production Equipment 93,75 78,96 83,62 83,48 81,67 87,50 84,23

9. Production Control 100,00 98,72 93,74 92,49 97,77 99,33 94,74

Table 3. Ratio of Average Achievement of 16 Profile Components

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5.2 Threats and Opportunities

5.3 Policies and Strategies

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20. Iwantono, (2003). Kewirausahaaan. Jakarta : Pustaka Belajar.

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82. Wibowo, S.(2004). Sepuluh Pertanyaan WDP (Wealth Dynamic Profiling).Entrepreneur

ISSN 1869-0459 (print)/ ISSN 1869-2885 (online)

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