CHAPTER I INTRODUCTION 1.1 Research Object Overview 1.1.1.1
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CHAPTER I INTRODUCTION 1.1 Research Object Overview 1.1.1.1 An overview of PT Sumber Alfaria Trijaya Tbk Founded in 1989 by Djoko Susanto and family, PT Sumber Alfaria Trijaya Tbk (Alfamart/Company) started business in the field of trade and distribution. In 1999, it expanded the business to minimarket. Exponential expansion began in 2002 with the acquisition of 141 Alfa Minimart outlets and a new name ‘Alfamart’ (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Currently, Alfamart is at the forefront of the retail business, serving more than 2.7 million customers each day in more than 8,500 stores across Indonesia. Supported by more than 90,000 employees, Alfamart is currently one of the largest job providers in Indonesia (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Alfamart carries out its vision, mission and philosophy to be a community store. Therefore, in addition to trying to meet the needs and convenience of the customer by providing basic needs at affordable prices, convenient shopping place as well as an easily accessible location (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). The Company is also seeks to improving the community welfare through Corporate Social Responsibility programs based on 6 pillars: Alfamart Care, Alfamart Smart, Alfamart Sport, Alfamart Clean and Green, Alfamart SME’s and Alfamart Vaganza. In addition, Alfamart also empowers local people and institutions through franchising schemes that give rise to new entrepreneurs and new jobs (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Alfamart committed to fostering a service culture at each organizational level and for every stakeholder. It is the value that stands out as a differentiating factor and competitive advantage in order to gain a place in the hearts of more 1 people and win the competition (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Alfamart has received awards from various well-known institutions: Service Quality Award 2010-2013, Top Brand Award 2008-2013, Brand Award 2008-2013, Indonesia’s Most Admired Company 2009-2013, SPEX2 Award 2011-2012, Digital Marketing Award 2010-2013, Word of Mouth Marketing Award 2009-2013, Middle Class Brand Champion Award 2013, Woman No.1 Choice award 2013 (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). 1.1.2 Vision, Mission and Values 1) Vision Statement “To be Indonesia’s largest and globally competitive widely owned retail distribution network that empowers small entrepreneurs and fulfills customer needs and expectations” 2) Mission Statement a. To satisfy customer needs and expectations by focusing on high quality products and services. b. To implement ethical business practices, to be the best in all of our actions. c. To develop entrepreneurial spirits and skills in the Company and the society. d. To develop a reliable, healthy and growing organization which benefits all stakeholders. 3) Values 2IK3 Values a. High Integrity Honest, discipline, and consistent in working based on ethics as well as being responsible towards the duties. 2 b. Innovation for Better Improvement Work creatively, committed to make continuous improvements in work methods. c. Highest Quality and Productivity Able to perform tasks as well as being able to focus on better work outcomes. d. Teamwork Actively involved as well as encouraging team spirit and harmony. e. Customer Satisfaction through the Best Services To have high initiative to meet needs and to ensure customer satisfaction. 1.1.3 Brand Identity Figure 1.1 is Alfamart Logo. “Alfa” is the first letter in Greek alphabet arrangement which has a value of one. The word “Alfa” in Alfamart logo means Alfamart always wanted to be number one in the field they do. The blue color in the “Alfa” word means loyalty and perseverance, means that Alfamart and their employee always loyal and gives the best to the customer. And certainly they also have perseverance in carrying out the task to continue to push Alfamart be the best. (Source: http://jhekos.blogspot.com/, cited on March 2015) The red color in “mart” word means courage and a strong desire that characterizes the word, means that Alfamart will always be brave and strong desire to become the best in the field. (Source: http://jhekos.blogspot.com/, cited on March 2015) The presence of two lines under the word “Alfamart” in the logo is an affirmation for the word. While the red color has meaning brave and strong desire, and yellow which means glory and greatness means that Alfamart will always be brave and have a strong desire to achieve success and become the best in their field. (Source: http://jhekos.blogspot.com/, cited on March 2015) 3 Figure 1.1: Alfamart Logo with Pantone Source: http://www.alfamartku.com, cited on November 2014 Figure 1.2 is Albi the mascot of Alfamart. Albi, our friendly bee is a sweet guy ready to jump in anytime to help anyone in need for help. It represents Alfamart employee who is readily available to assist customers with sincere dedication to serve. Albi fosters communal living and goals, avoids conflicts, and is insightful of surrounding changes. He epitomizes Alfamart’s commitment to achieving a common goal: Fulfilling the needs of Indonesian households with quality products at competitive prices and with friendly services, by embracing the surrounding community and healthy competition. (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013) Figure 1.2: Albi the Mascot Source: http://www.alfamartku.com, cited on November 2014 4 1.1.4 Organization Structure There are 9 (nine) divisions in Alfamart’s organization structure which are operation, finance, property and development, information technology, marketing, human capital, merchandising & procurement, franchise, and corporate affairs. Board of Commissioners is the highest position in the Alfamart’s organization structure. Board of Commissioners Audit Committee Board of Directors Corporate Audit Operation Finance Property and Development Information Technology Human Capital Marketing Franchise Merchandising & Procurement Corporate Affairs Figure 1.3: Alfamart’s Organization Structure Source: Company 2013 Annual Report 5 1.2 Problem’s Background 1.2.1 Indonesia’s Current Economic Condition Table 1.1 shows Gross Domestic Product (GDP) per Capita of Southeast Asia country from 2009 until 2013. Indonesia’s GDP per capita in 2013 is about $1,731. Even though Indonesia is not the biggest GDP per capita compared with another Southeast Asia country, but Indonesian GDP is quite big for foreign company to expand their market. Table 1.1: GDP per Capitra Southeast Asia in (USD) GDP Per Capita Southeast Asia in (USD) Country 2009 2010 2011 2012 2013 Singapore 30,750 29,601 33,380 34,378 33,988 Brunei 25,186 24,341 24,586 24,746 24,947 Malaysia 6,185 5,984 6,302 6,512 6,764 Thailand 3,104 2,940 3,163 3,158 3,350 Indonesia 1,451 1,498 1,570 1,650 1,731 Philippines 1,332 1,325 1,403 1,433 1,501 Vietnam 775 808 854 895 931 Laos PDR 561 591 628 666 707 Cambodia 588 580 605 637 671 Source: Tradingconomics, 2014 6 Figure 1.4 shows GDP per Capita growth of Indonesia from 2009 - 2013. Indonesian GDP per Capita is in the uptrend from 2009 until 2012. In 2013 Indonesia experienced declining growth of GDP per capita by 0.29%. 1,800 6% 1,750 5.09% 5% 1,700 4.80% 4.90% 1,650 4% 1,600 GDP per Capita 1,550 3.23% 3% (USD 1,731 1,500 % Change 1,650 2% 1,450 1,570 1,400 1,498 1,451 1% 1,350 1,300 0.00% 0% 2009 2010 2011 2012 2013 Figure 1.4: Indonesian Annual GDP per Capita Growth However, in table 1.2 shows the Gross Domestic Product (GDP) in Indonesia expanded 5.72 percent in the fourth quarter of 2013 over the same quarter of the previous year. GDP Annual Growth Rate in Indonesia is reported by the Statistics Indonesia. GDP Annual Growth Rate in Indonesia averaged 5.43 Percent from 2000 until 2013, reaching an all-time high of 7.16 Percent in the fourth quarter of 2004 and a record low of 1.56 Percent in the fourth quarter of 2001. Indonesia can categorize as large economy in South East Asia supported with the growth of GDP. Industry accounts for the largest share of GDP (46.5 percent of total GDP). Within industry, the most important is manufacturing, which has been one of the main growth, engines (24 percent of total output), Mining and quarrying accounts for 12 percent, construction for 10 percent and electricity, gas and water supply for 0.75 percent. Services constitute 38 percent of total GDP. Within services, the most important are trade, hotel and restaurants (around 14 percent of GDP); transport and communication (7 percent of GDP); finance, real estate and business services (7 percent of GDP) and government 7 services (6 percent). Agriculture accounts for the remaining 15 percent (Trading Economics: 2014). BadanPusatStatistik (BPS, Statistics Indonesia) article stated that at the fourth quarter of 2013 the Gross Domestic Product (GDP) of Indonesia grew by 5.72 percent compared to the fourth quarter GDP of 2012. Even though GDP fourth quarter of 2013 dropped by 1.42 percent compared to Quarter GDP III- 2013. Decreasing of GDP was caused by a decline in the agricultural sector by 22.5% due to the seasonal cycle, but from the trade sector it was increase about 1, 47%. (Suryamin: 2014) Table 1.2: GDP Growth of Indonesia from 2008 to 2013 Indonesia GDP Annual Growth Rate Year Q1% Q2% Q3% Q4% Average 2008 6.24 6.38 6.41 5 6.0075 2009 4.53 4.08 4.16 5.43 4.55 2010 5.69 6.17 5.8 6.9 6.14 2011 6.5 6.5 6.5 6.5 6.5 2012 6.3 6.4 6.17 6.11 6.245 2013 6.03 5.81 5.63 5.72 5.795 Source: Tradingeconomics | Badan Pusat Statistik, 2014 GDP reflects the economic progress condition of a country.