International Journal of ASRO Volume 10, Number 03, pp. 172-177 July-Dec 2019 STRATEGY FOR MICRO, SMALL AND MEDIUM BUSINESS DEVELOPMENT STRATEGIES ECONOMY IN COASTAL COMMUNITIES (Case Study on Shrimp Sambal Business in Lamongan District)

Wahyu Endriyanto, Sutikno Wahyu Hidayat, Fa’iq Mumtaz M

1Indonesian Naval Technology College, Bumimoro-Morokrembangan, 60187,

ABSTRACT This study aims to determine the development strategy of Micro, Small and Medium Enterprises (UMKM) in strengthening the populist economy of coastal communities in shrimp sauce business in Lamongan . The approach used in this study is a qualitative approach. The subject of the research is the shrimp chili business owner in . The data analysis techniques used are qualitative analysis techniques and SWOT analysis. Where qualitative analysis uses triangulation data collection techniques while SWOT analysis is used to identify various factors systematically and formulate a company's strategy. The results of this study indicate that the strategy of developing small businesses in strengthening the people's economy in the shrimp chilli business in Lamongan Regency that can be used is the development of markets and products, as well as intensive market penetration by increasing promotion, quality, and innovation of marine products of Lamongan Regency.

Keywords: Development strategy, strengthening people's economy, UMKM.

1. INTRODUCTION Lamongan City and other areas. However, the sale One of the strategies carried out by the of the Lamongan shrimp sauce business has now government in sustaining economic development is begun to decline, especially in the Lamongan to empower and grow Micro, Small and Medium district. At present the shrimp chilli business tends to Enterprises (UMKM) as the basis for popular be empty of visitors. This is due to customers who economic development. History has shown that generally are people who travel across the city both UMKM in Indonesia still exist and develop despite to and back from Lamongan city, preferring to buy the economic crisis. other types of food products to be used as But on the other hand, UMKM also face many souvenirs. One factor that causes this is the lack of problems, namely the limited working capital, the low available parking. In addition, the monotonous taste quality of Human Resources, and the lack of variant is also an inhibiting factor in the development mastery of science and technology. Other problems of shrimp chili business in Lamongan Regency. faced by UMKM are the connection with the lack of Efforts to increase economic development on clarity about business prospects and planning, and the coast, especially spurred in increasing people's the lack of vision and mission. This happens income, cooperatives are an alternative to empower because in general, UMKM are income gathering, the community's economy. For cooperatives to grow which is to increase revenue. These characteristics and develop, supporting factors must also be can be seen in micro, small and medium businesses developed. The results of observations in the field today, generally are family-owned businesses, the found several factors supporting regional economic use of technology is still relatively simple, lacks development through cooperative development, access to capital (bankable), and there is no including: 1) community potential; 2) businessman; separation of business capital with personal needs. 3) credit institutions; 4) related institutions; and 5) This condition also occurs in UMKM in the cooperatives as business entities (Almasdi Syahza, coastal regions of East , especially in the 2010). Lamongan Regency. In Lamongan Regency there Seeing this, business actors should have a are 130,006 Micro and Small and Medium strategy in overcoming the problem. This is because Enterprises (UMKM) that have absorbed 327,422 the development of the shrimp chili business workers. This data is data in 2016 based on the industry in Lamongan Regency has a very good Economic Census conducted by the Central prospect in supporting the economic growth of the Statistics Agency (BPS). Of the existing UMKM, the Lamongan Regency. majority are dominated by businesses or industries The shrimp chili business is important and utilizing sea products in Lamongan Regency, one of quite interesting to be investigated because of the which is shrimp sauce. Lamongan shrimp sauce growing development of the shrimp chili business business is one of the special souvenirs of industry in the area, it is also needed a fairly large Lamongan Regency which is a special attraction for market to be able to market the results of the shrimp local tourists from various regions who are visiting chili business. Stable finance is also needed to

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maintain the stability of the shrimp chili business. ideas, is efficient in funding, and has tactics to After gathering a variety of strategic issues that need achieve goals effectively. Strategy is also a broad to be considered in the development of UMKM, set of organizational plans for implementing especially in the development of Lamongan shrimp decisions taken to achieve organizational goals. The sauce business products, the needs of markets and strategy into three groups that can be considered to financial access were identified. In order to develop be applied in a company, namely: (1) corporate UMKM products, in this case the Lamongan shrimp strategy (corporate strategy), (2) business strategy chili business product, it is necessary to examine or competitive strategy, and (3) functional strategy what strategies can be done to develop the shrimp (Sudaryanto, 2011). chili business in the Lamongan Regency. Based on the description above, the problem 2.2. Definition of People's Economy formulation in this research is what strategies can be The people's economy can be understood formulated in the development of shrimp chilli from two approaches, namely: first, the approach of business in strengthening people's economy? While economic activities of small-scale economic actors the purpose of this research is to formulate a (people's economy). Empowerment of the people's strategy for developing shrimp sauce business in economy in this approach is intended as an strengthening people's economy. empowerment of small-scale economic actors. In the writing of this journal is also used a lot Second, the economic system approach, namely of literature as a reference to support the research economic democracy or a democratic development conducted, such as including the following: Analisis system (participatory development). Empowerment Strategi Pengembangan Usaha Kopi Luwak (Studi of the people's economy in this approach is intended Kasus UMKM Careuh Coffee Rancabali-Ciwidey, to apply the principles of democracy in development. Bandung) (Supriatna, 2014). Strategi This means that the people's economy is an Pengembangan Usaha Pada “Rihana Bakery” economic system that includes the entire community Sidoarjo” (Primawardana, 2015). The results of his in the development process as a driver of research show that Yulia bakery has several development. Thus the second approach is also interrelated strengths, weaknesses, opportunities referred to as a populist economy or a populist and threats. Business development strategies that economic system (A. Z. Yasin, 2002). are consistent with the results of the SWOT analysis. Some things that must be considered in the The strategies that can be used by Rihana Bakery economic system that leads to populist economy are market penetration, market development, and are: (1) the characteristics of the region and the product development. Business development background of the expertise of the majority of the includes several aspects, such as marketing, local community, (2) a people-based economy that is finance, production and human resources. economic activities in accordance with the expertise This research is organized as follows, chapter of the majority of the local community, (3) regional 1 introduction, chapter 2 shows material and characteristics namely increasing the value (value) methodology, chapter 3 shows the results of data of regional potential, (4) the role of local government and discussion, chapter 4 conclusion. that is encouraging the growth of the people's economy through the improvement of facilities and infrastructure so that the people's economy grows 2. MATERIALS AND METHODS and develops rapidly, (5) local / UMKM potential that 2.1. Strategy Definition is encouraging the growth of potential-based industries local / UMKM by empowering the Strategy is a tool to achieve long-term goals. formation of cooperatives or productive units In addition, the strategy is also interpreted as a (Zulkarnain., 2003). potential action that requires top-level management This research was conducted in Lamongan decisions and company resources in large numbers Regency on shrimp sauce business. The site (David, 2006). selection technique was carried out deliberately by UMKM Strategy and Development Strategy is first observing to find out what agro-economic the way a company's business leader realizes his potentials could be developed in Lamongan District, philosophy. This understanding emphasizes strategy then one of the outstanding potentials was chosen, should be related to large decisions faced by namely the shrimp chili business, the research was individuals or organizations in doing business that is conducted in July 2016 until August 2016. The a decision that determines the failure and success of informants of this study were the shrimp chili individuals or organizations (Kuncoro, 2005). business owners in Lamongan Regency. Data In general, the strategy is a comprehensive sources from this study consisted of interviews with approach related to the implementation of ideas / business owners of shrimp sauce and data obtained ideas, planning, and implementation of an activity from internet sites, journals and other articles related within a certain period. A good strategy requires to this research. Data collection techniques used in more work team coordination, has a theme, this study are observation, interviews, and identifies supporting factors that are in accordance documentation. Data analysis techniques used in with the principles of rational implementation of 173

this study are qualitative analysis and SWOT analysis. Target: the purpose of this study is to produce a strategy in the development of shrimp chili 2.3. Definition of coastal communities business in the empowerment of the populist Coastal communities are meant to mean economy of coastal communities. people who live in coastal areas and their sources of Steps: the steps of this research are step 1 economic life depend directly on the use of marine Determine the criteria step 2 determine the suitability and coastal resources through fishing and cultivation of each alternative rank on each criterion step 3 activities. Poverty as an indicator of backwardness enter interview data in the table, quantitative test of coastal communities is caused by three main analysis Good step 2, step 3 on normalizing the things, namely structural, superstructural, and behavior adjusted for attributes attributes or cost cultural poverty (Nikijuluw, 2003). benefits) so that the normalized matrix is obtained, Structural poverty is the social-economic step 4 the final result is obtained from the ranking structure of society, the availability of development process that is the sum of the normalized incentives or disincentives, the availability of multiplication matrix, step 4 provides suggestions for development facilities, the availability of technology, improvement and testing. and the availability of development resources, especially natural resources. 3. RESULT AND DISCUSSION a. Superstructural poverty is poverty caused by Factors That Influence UMKM Development macro policy variables that do not or do not favor the Strategies in Strengthening Community Economy development of fishing communities. b. Cultural poverty is poverty that is caused by 3.1. Internal Factors (Strengths and variables that are inherent, inherent, and become a Weaknesses) certain lifestyle that makes the individual concerned There are several internal factors that have difficult to get out of poverty because these factors been identified as the strength of the UMKM are not realized or unknown by the individual development strategy, especially the shrimp sauce concerned. business in strengthening the populist economy of coastal communities, namely: 1) Convenience of 2.4. Research Methodology. strategic places and locations, 2) Relatively To solve problems in the observed research, affordable prices, 3) Raw materials that are always steps are needed and determined to describe the available, 4) Taste variations of Lamongan shrimp approach and model of the problem. The steps sauce, 5) Various kinds of companion products taken are: offered, and 6) Good communication and familiarity of employees. After being identified, there are also some internal factors that become the weakness of UMKM development strategies, especially the natural shrimp sauce business to strengthen the populist economy of coastal communities, namely: (1) Limited capital, (2) Business management systems that are still weak, (3) Quality and quantity Limited human resources, (4) Marketing (promotion) that has not been intensive, and (5) Supporting production equipment is still limited.

3.2. External Factors (Opportunities and Threats) External factors that provide opportunities for developing UMKM strategies, especially shrimp sauce business in Lamongan Regency, are: (1) Support from the government, (2) Technology and information development, (3) Business expansion (expansion), and (4) Good relations and customer loyalty . Whereas the threats to the UMKM development strategy especially the shrimp sauce business in Lamongan Regency are: (1) Unstable raw material prices, (2) The emergence of new competitors with the same product, (3) The emergence of Competitors offering different products, and (4) Location between businesses that are close together. Internal Factor Evaluation (IFE) and External Factor Evaluation (EFE) matrices. Fig. 1. Research Methodology Flowchart.

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Table 1. Evaluation of Internal Factors of Shrimp position to facilitate the provision of alternative Sauce in Lamongan District strategies. EFE matrix value of 3.6 indicates that No Internal Factors Weight (a) Rating (b) Value (a)x(b) shrimp chili business has a high ability to take

1 Strength (+) advantage of opportunities and avoid existing 1. Convenient Location and threats. While the IFE matrix value of 3.45 shows 0,15 4 0,6 Strategic Location that the shrimp chili business has a high internal 2. Prices are relatively 0,05 2 0,1 affordable factor in utilizing the strengths it has to overcome the 3. Variations in taste 0,15 3 0,45 existing internal weaknesses. Lamongan shrimp sauce Based on the EFE and IFE matrix values, 4. Various kinds of companion 0,05 3 0,15 products offered obtained the competitive position of shrimp sauce 5. Good communication and 0,1 4 0,4 business in quadrant I. In that position, the best familiarity of employees strategy to do is the strategy of shrimp sauce 2 Weakness (-) 1. Limited capital 0,1 3 0,3 growth, market and product development, as well as 2. The business management 0,05 3 0,15 intensive market penetration by increasing system is still weak 3. Limited quality and quantity promotion, quality, and product innovation 0,15 4 0,6 of human resources Lamongan shrimp sauce business. 4. Marketing (promotion) that 0,15 4 0,6 has not been intensive 5. Supporting production tools SCORE TOTAL IFE 0,05 2 0,1 are still limited 3,0 2,0 1,0 Amount 1 3,45 4,0 STRONG MEDIUM WEAK Table 2. Evaluation of External Factors of Shrimp STRONG 3,0 I II III Sauce in Lamongan District No. Eksternal Factors Weight (a) Rating (b) Value (a)x(b) MEDIUM 2,0 IV V VI 1 Opportunities (+) 1. Support from the 0,2 4 0,8 government SCORE TOTAL IFE TOTAL SCORE WEAK 1,0 2. Development of technology VII VIII IX 0,15 4 0,6 and information 3. Business expansion Figure 2. Matrix I-E Lamongan shrimp chili business 0,05 3 0,15 (expansion) 4. Good relations and 0,2 4 0,8 Table 3. SWOT analysis matrix customer loyalty 2 Threat (-) Internal factors Strengths (S): 1. Comfort of place Weakness (W): 1. Limited capital. 2. 0,15 4 0,6 1. Unstable raw material prices IFAS and strategic location. 2. Prices Limited quality and quantity. 3. The 2. The emergence of new are relatively affordable. 3. Raw business management system is still competitors with the same 0,1 3 0,3 materials that are always available. weak. 4. Marketing (promotion) that product 4. Variations in chili sauce. 5. has not been intensive. 5. Supporting 3. The emergence of Various kinds of companion production tools are still limited. 0,05 3 0,15 Competitors who offer products offered. 6. Good 4.products Location between stores that EFAS communication and familiarity with 0,1 2 0,2 are close together employees. Amount 1 3,6 Eksternal Factors Opportuny (O) SO Strategy WO Strategy Table 2 shows that the highest scores for 1. Support from the 1. Doing innovation and product 1. Capital limitations and production opportunity aspects are support from the government 2. variations in attracting and growing support tools can be overcome by Development of customer loyalty and supporting government funding (W1 and O1) 2. government (0.8) and good relations and customer technology and business expansion in the future. Improving and tightening the loyalty (0.8), technological development (0.6), and information 3. Expansion customers (S4, S5, W3, and W4) management system and employee business expansion (0.15). So it can be said that the (expansion) of the 2. Increase business potential by recruitment so as not to hamper business 4. Good utilizing strategic locations and the business progress. (W2, W3, and O3) support factor from the government and good relations and customer development of access to 3. Maximize the use of promotional relations and customer loyalty can be used as the loyalty technology and information. (W1 media such as print and electronic main opportunity in developing the business. and O2) 3. With the government's media to reach more consumers. support the production and sales (W4, O2, and O4) Efforts to improve Meanwhile, the factors that pose a threat with the processes can be maximized, and business management systems, highest value are unstable raw material prices (0.6), the stability of the selling price can human resources quality, intensive the emergence of new competitors with the same be maintained. (S2, S3, S6, and marketing patterns, and production W1) technology are needed in overcoming product (0.3), location of stores that are close existing problems and existing together (0.2), and the emergence of competitors business competition. (W1-W5 and with different products. The factor with the highest O4) value indicates that the factor is a serious threat to Threats (T) ST Strategy WT Strategy 1. Unstable raw material 1. Maintain and enhance customer 1. Efforts to improve business the sustainability of the business going forward. prices 2. Emergence of satisfaction through consistency in management systems, human new competitors with the the quality, variety and innovation of resources quality, intensive marketing 1.3. Analisis matriks Internal dan Eksternal (I- same product 3. the products offered. (S3, S4, S5, patterns, and production technology Emergence of T2, and T3). 2. Utilizing strategic are needed in overcoming existing E) Competitors offering locations and providing special problems and existing business The I-E (Internal-External) matrix is produced different products 4. promos for customers to attract competition. (W1-W5 and T1-T4) Locations between stores customers (S1, S2, S6, T1, and by combining information obtained from the EFE and that are close together T2) IFE tables to obtain information about the company's 175

Based on the results of the SWOT analysis include making variations in the taste of the and the value of the EFE (External Factor Lamongan shrimp sauce business, and adding to Evaluation) and IFE (Internal Factor Evaluation) the variety of products offered at the store. matrix, it can be seen the position of the e. Utilization of technology in conducting development of shrimp sauce business in Lamongan intensive promotions By promoting more Regency in quadrant I. In that position, the best aggressively, the shrimp chilli business in Lamongan strategy is a growth strategy. Shrimp sauce business Regency can overcome the weaknesses of less in Lamongan Regency develops markets and strategic places because the location is far from the products, as well as intensive market penetration by main road, as well as the weaknesses of aggressive increasing promotion, quality, and product innovation promotion. So the promotion will maximize and Lamongan shrimp sauce business. Overall, from the utilize the strategic location potential. Not just being analysis of these factors, several business a spectator among other entrepreneurs, but can be a development strategies can be formulated as player who is able to take the opportunities that follows. exist. a. Strategic location f. Implementation of business management Location is the location or place where a systems, especially in terms of financial and business is carried out. According to Kotler (2008: administrative records Business management is an 51) "One of the keys to success is location, location important element in running and maintaining begins by choosing the community". This decision is business continuity. Some shrimp chili business very dependent on the potential for economic growth owners have not done a good business and stability, competition, political climate, and so management system, especially regarding the on. The location greatly affects the number of shrimp existing financial or administrative recording system chilli business sales in Lamongan Regency. The which is a major weakness that must be addressed closer to the axle, the greater the opportunity for a immediately. Pagaya (2013) states that by making business to develop. good records it will be known in writing whether the b. Maximizing Capital Assistance from the costs incurred by SMEs are efficient, and it can also Government be known what expense points are inefficient so that Apart from private capital, capital is also the margins of shrimp sauce can be increased. obtained from the government in the form of g. Improving the quality of human resources in People's Business Credit (KUR). The government is order to maximize production capacity. Maintaining also responsible for the sustainability of micro small good relations and loyalty with all employees, as well and medium enterprises. This is in line with several as high motivation needs to be maximized again by opinions of experts, as stated by Hafsah (2004: making efforts to improve employee skills through 4344) that the development of SMEs is essentially a education and training. Wahyuningtias (2011) shared responsibility between the government and argues that with the improvement in the quality of the community. employees it is also expected to be able to synergize c. Increase sales capacity. with increasing production capacity. The strength factor in the form of the availability of stable raw materials can be used to 4. CONCLUSION take advantage of existing opportunities, namely Factors that become the strength of the improving the condition of the Indonesian economy shrimp chili business include the convenience of a followed by increased purchasing power, as well as strategic location and location, relatively affordable technological advances and assistance from the prices, variations in the flavor of the shrimp shrimp government, this opportunity can be taken by the Lamongan, various kinds of companion products Lamongan shrimp sauce business in Lamongan offered, as well as communication and familiarity of Regency, one of them is by increasing sales employees who are well-established. Meanwhile, the capacity. Maximize the number of repeat customers. factors that become weakness include limited By utilizing internal strengths in the form of ability to capital, a business management system that is still meet demand according to customer needs, able to weak, limited quality and quantity of human maintain continuity to meet existing demand, already resources, marketing (promotion) that is not yet have regular customers but still few in number, and intensive, and supporting production tools are still establishing good relationships with all customers limited. The factors that become shrimp sauce can be a capital to take advantage of opportunities business opportunities include support from the that exist namely relationships both with buyers / government, development of technology and customers, by utilizing the existing trust can be information, business expansion (expansion), as well increased to become regular customers of the as good relations and customer loyalty. While the Lamongan shrimp chili business. threat factors include unstable raw material prices, d. Doing innovation and product variations The the emergence of new competitors with the same number of competitors that have sprung up product, the emergence of competitors offering encourages the need for innovation and product different products (substitute products), as well as variations. This is necessary to maximize sales and locations between businesses that are close attract the attention of customers. These innovations together. 176

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