business model cnavs tesis itb

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CHAPTER 4

ANALYSIS

This chapter represents the result of data analysis. Data were collected and processed in

order to response the problem statement that already stated in chapter 1. The first step in

analyzing the whole data is mapped PT Bahama Rotan’s business model. Business

model canvas has nine building blocks and each block has a different element that needs

to be identified. Also to be filled and analyzed to capture the current situation in PT

Bahama Rotan. The next step, use Osterwalder and Pigneur SWOT assessment of each

building block and analyze company’s strengths and weaknesses and identify potential

threats and opportunities by giving score of each nine building block of the business

model canvas. For strengths and weaknesses assessment, score is given into two parts,

the current condition of the company to analyze the performance and the importance for

the company. Respondent has to indicate the score, in range from 1 (not important) until

10 (important), how important the attributes to the company. Then, the respondent also

asked how PT Bahama Rotan’s performed with the attributes (Table 4.1), score rated in

range from -5 (poor) until 5 (excellent). Because of that, IPA (Importance Performance

Analysis) is the suitable tools to analyze the strengths and weaknesses. It is comparedwith the importance and performance using IPA to know which aspect can be maintain

or eliminate. For the opportunities and threats, the respondent asked based on the

attributes to give scores in range from 1 (strongly agree) and 5 (strongly disagree), that

will identified the current opportunities and threats. The current business model of PT

Bahama Rotan is adjusted with the result of SWOT assessment so the business model

innovation can be made.

Table 4.1 Strength and Weakness Attributes (Osterwalder and Pigneur, 2010, p. 217-219)

Code Attribute

VALUE PROPORSITION

1 Our value propositions are well aligned with customer needs

2 There are strong synergies between our different products and services

3 Our customers are very satisfied

4 Our value proposition is unique

COST/REVENUE



5 We benefit from strong margins

6 Our revenues are predictable

7 We have recurring revenue streams and frequent repeat purchases

8 Our revenue streams are diversified

9 We collect revenues before we incur expenses

10 Our pricing mechanisms capture customers willingness to pay

11 Our costs are predictable

12 Our operations are cost efficient

13 We benefit from economies of scale

INFRASTRUCTURE

14 Our key resources are difficult for customers to replicate

15 Resource needs are predictable

16 We deploy the right resources at the right time

17 We efficiently and effectively execute key activities

18 Our key activities are difficult to copy

19 We have the right balance between internal and outsourced activities

20 We have productive partnerships with other organizations

21 We have partnerships with world-class organizations

22 We have a good relationship with our strategic partners

CUSTOMER INTERFACE

23 Our customer churn rates are low

24 Our customer base is well segmented

25 We truly understand our customers

26 We are continuously acquiring new customers

27 Our channels are efficient

28 Our channels are effective

29 Customers can easily see and access our channels

30 Our channels are strongly integrated

31Our channels can be used across multiple products and services (economies of

scope)

32 Our channels are well matched to our customer segments

33 We have strong customer relationships

34The quality of the customer relationships matches the customer segments we

serve

35 Relationships create switching costs

36 Our brand is strong



Table 4.2 Opportunity Attributes (Osterwalder and Pigneur, 2010, p. 222-223)

Code Attribute

VALUE PROPORSITION

1 We could generate recurring revenues by converting products into services

2 We could expand our market reach by converting services into products

3 We could better integrate our products and services

4We could eliminate elements of our offering to make it simpler and more

valuable

COST/REVENUE

5 We can replace one-time transaction revenues with recurring revenues

6 We have cross selling opportunities that we are not leveraging

7 We can increase prices

8 We can reduce costs

9 We can collect revenue before we incur costs

INFRASTRUCTURE

10 We could use less costly resources to achieve the same result

11 We have key resources that are under-exploited

12We could access key resources from partners that will add significant value to

what we do

13 We could standardize some key activities

14Collaboration with key partners will enable us to focus more effectively on our

key business

15 There are cross selling opportunities with partners

16 Partner relationships could significantly add to our value proposition

CUSTOMER INTERFACE

17There are new customer segments emerging that are likely to be interested in our

products or services

18 We can better serve our customers through finer segmentation

19 We could find new complimentary channels

20 We could better align channels with customer segments

21We could increase margins and/or improve the customer experience by directly

serving customers

22 There is the potential to improve customer follow up

23

We could create a community of customers centered around our product or

service

24 We could make more of an effort to interact with and listen to customers



Table 4.3 Threat Attributes (Osterwalder and Pigneur, 2010, p. 220-221)

25We have groups of unprofitable customers that could be “fired” to improve

profitability

26 We can increase switching costs

27 We could automate some elements of relationship management

Code Attribute

VALUE PROPORSITION

1 Substitute products and services are available

2 Competitors are threatening to offer better price or value

3 Our offering is likely to become obsolete in the medium term (next three years)

COST/REVENUE

4 Our margins are threatened by competitors or by technology

5 We depend excessively on one revenue stream

6 Some revenue streams are likely to disappear

7 Significant costs are likely to become unpredictable?

8 Some of our costs are likely to grow more quickly than revenues

INFRASTRUCTURE

10 We could face disruption in the supply of certain resources

11 The quality of our resources are threatened

13 Key activities are likely to be disrupted

14 We are in danger of losing key partners

15 Our partners may collaborate with competitors

16 We are too dependent on certain partners

CUSTOMER INTERFACE

17 The market could soon be saturated

18 Customers are likely to defect

21 Our channels are in danger of becoming irrelevant to customers

22 Our customer relationships are deteriorating



4.1. Business Model Canvas

Below is the description of current business model of PT Bahama Rotan by using

business model canvas by Osterwalder and Pigneur.

Figure 4.1 Current Business Model Canvas of PT Bahama Rotan

• Customer Segments

Europe is the first and largest customer of PT Bahama Rotan before expanding its

market as now. Beginning from 1991, PT Bahama Rotan saw the high interests of

Europeans to the rattan and transact with customers in Europe such as Holland,

Germany, Belgium, and England. Since it offers the high quality furniture, it targeted its

customer based on social class, which is the upper middle class that occupies the upper

part of the middle economic range in the community. The customers of PT Bahama

Rotan mostly are upper middle class hospitality industry that needs high quality of the

furniture in a large number. Moreover, individual customer also the targeted customer

since it delivers the product to the stores in Europe.

• Value Propositions

Production rate was one factor in corporate welfare, so it is important to build a product

with high value in order to make high production.



In this case, PT Bahama Rotan produce goods that have a high quality, as selected from

high quality raw materials and production techniques with a high level of crafts. Its

main products are furniture from rattan. Because the diameter of the trunk is big

enough, strong, and sturdy then most of the final results of the products used for the

purposes of making the framework of chairs, tables, beds, sofas, and more. In addition,

the products offered are not only rattan, but there is also the production of furniture that

comes from the loom and wood. Loom is processed using a machine and can be

directly mounted on the frame of the furniture. Thus by using the loom production

systems becomes more efficient and faster, so it can be quickly to mass-produced.

Rattan is very popular with customers from Europe since the 80's, but as time passed

and the rapid advancement of technology, the rattan innovation called loom started

getting a lot of attention from buyers in Europe. The most popular products are diningchair and bar stool. In addition, wood that used for the raw materials to make furniture

is teak, pine, and mahogany.

Based on the decades of experience in rattan business, PT Bahama Rotan learned how

to maximize the customer satisfaction. Customer can propose the designs that they

desired and PT Bahama Rotan keep ensuring its products arrive on time. To compete

with other competitors, PT Bahama Rotan offers a competitive price to customers. In

setting competitive prices in the market, PT Bahama Rattan looks at competitors' prices

and uses it as a benchmark to price their products.

• Channels

To make the products better known and recognized in other businesses segment, PT

Bahama Rotan sets up several indirect channels to reach market segments. This channel

aims to attract new customers segment and also to maintain the customer's loyalty. The

strategy is consist of some major channel tools which are:

a.

Business Partner

As mentioned in Chapter 1, B2B has more advantages for PT Bahama Rotan because of

the volume of B2B transactions is higher than the volume of B2C (Business to

Customer) transactions. PT Bahama Rotan is creating value from the wholesalers which

sales furniture to customers. In order to deliver the value company to the end-customer

directly, then the business partner must be compatible. The targeted end-customer of the

company is the upper middle class that occupies the upper part of the middle economic

range in the community.



Likewise, the chosen business partner must be has the same target as well. The

wholesalers usually deliver the products through the stores which sells to the end-

customer. The end-customer might be individual or hospitality industry such as

restaurant and hotel. But, PT Bahama Rotan has a relationship with the UK wholesaler

that deliver the products directly to the hospitality industry not individual customer. To

maintain the business partner’s loyalty, PT Bahama Rotan always gives samples to the

wholesalers in twice a year or when the new model is coming up. The sample shipped

in a container with the height about 20 feet that can be fulfilled with 150-200 chairs.

b. Stores

The product does not just stop at the wholesaler. Wholesaler only intermediaries and

will deploy the product to a few furniture stores that will sell directly to customers.

• Customer Relationships

Type of customer relationships built by PT Bahama Rotan is customer service by

electronic media. Some representatives of PT Bahama Rotan will communicate with

consumers. Communication is usually in the form of email because email is the most

efficient in communication between countries and also not cost consuming.

Communication can be either an offer of new products, consultancy, or complaints from

consumers. However, the communication takes more time because it does not directly

given from the end customer to the company. Below is the flow chart of

communication:

Figure 4.2 Communication Flow Chart

If there is a complaint or comment from the customer, the customer must report to thestore, and the store will deliver to the wholesaler, and PT Bahama Rotan will get any

messages from customers through wholesalers.

• Revenue Streams

The company gets overall revenues from customers in the form of the sale of the

product. Income earned continuously based on demand from the wholesaler. It could be

repeated purchases every week, two weeks, or once a month.

End-customer Store WholesalerPT Bahama

Rotan



• Key Resources

Resources and assets needed by the company to run the business model is as follows:

a. Physical assets

PT Bahama Rotan has a factory for the production of raw materials into finished goods

or furniture. The factory is located in Tegalwangi, Cirebon and office building located

in the same location with an area of 26.759 m2. In addition to the factory and buildings,

PT Bahama Rotan has a machine that will process the product. The interesting thing is

there are only two machines looms in Indonesia and PT Bahama Rotan owns one of

them. Loom machine is part of the company's confidential and therefore should be

confidant of the company who can see.

b. Human resources

Employees are one of the most important assets in the company. The number of theemployees reached until 500 people. Companies can run well if it is supported by the

quality of human existence. An employee of PT Bahama Rotan is divided into sections

according to the task.

c.

Natural resources

Raw materials that used by PT Bahama Rotan are natural and need some common

senses that maintained its continuity. The good thing is supplier from PT Bahama Rotan

is under the supervision of Perum Perhutani. Perum Perhutani stands for Badan Usaha

Milik Negara that has authority and duty to protect the forests in some Indonesia

regions. The natural resources that used by PT Bahama Rotan were known by Perhutani

and safe from illegal logging.

• Key Activities

On this element describes what the company should do so the business model goes well.

Every activity has its major significance output and one of most important sections in

the business model. For more structured explanation, stated below the key activities that

has a big influence to the company:

a. Research and Development

To know the current conditions the market in Europe, the company held direct visits to

the destination country. By visiting business partners, companies can conduct surveys

and interviews to partner on what is desired by the customer, such as the current trend,

and so on. This visit was only made in the uncertain times.



b. Production

There are three raw materials processed by the company, ie rattan, loom, and wood. So

below is a flow chart of the production process for the three products.

• Rattan

• Loom

Raw materials of

rattan

Rattan frame

assembly

Weaving rattan

Packing

Finishing process

Sandpaper process

Wood materials

Wood

component

Wood frame

assembly

Wood frame

processWeaving Loom

Packing

Finishing

Sandpaper

process

Figure 4.3 Rattan Production Flow Chart

Figure 4.4 Loom Production Flow Chart



• Wood

c.

Marketing

Perform continually exhibition is the main marketing activities undertaken by the

company since public relations is one of the most effective strategies and efficient for

the furniture business with large number coverage. Producer and the customer is always

continues to meet and gather information to update on all products within the scope of

the local event and international exhibitions. The exhibition is the most strategic place

and good moment to attract new partner and customer because PT Bahama Rotan has

the opportunity to directly touch the consumer by giving them a presentation and a

personal approach. PT Bahama Rotan already joined several exhibitions in Singapore,

Jakarta, China, Holland, and so on.

• Key Partnerships

Key partnerships describe the relationship with the third party, which is important so the

business model can be run smoothly. There are three main partners that help PT

Bahama Rotan to optimize the business model:

a. Supplier

PT Bahama Rotan establishes good relationships with the suppliers of high quality

supply materials are spread in Indonesia, such as Tangerang, Majalengka, Sumedang,Jepara, Sulawesi, Kuningan.

Wood materials

Wood frame

assembly

Component process

Wood frame

process

Packing

Finishing

Sandpaper process

Figure 4.5 Wood Production Flow Chart



Each region has different resources, such as paint colors from Tangerang, solid wood

from Majalengka, Sumedang, Kuningan, and rattan from Sulawesi. PT Bahama Rotan

cares about the legal logging and nature conservation, so the gained natural resources

under the supervision of Perhutani.

b. Technological experts

Without guidance from the technological experts, a business can end up wasting time

and money in production process. The technological expert offers production machines

to the client, PT Bahama Rotan, from advances in technology. Modern technology is

still dependent on foreign, especially related to design and engineering machinery.

These partners come from various countries according to the purpose, such as wood

processing machines from Germany and Taiwan, and looms processing machine arefrom England.

c. Freight forwarder

The company uses a freight forwarder services in delivering the product to the

destination country. Domestically, the services used is already includes shipping the

products by truck from Cirebon to the port of Tanjung Priok Jakarta. The system used

by PT Bahama Rotan is the FOB (Free On Board), or the price until the goods are on

board or that the seller will bear all costs incurred until the goods are on board.

Selection of ships based on an agreement by the company and the buyer.

d. Business partner / Wholesaler

PT Bahama Rotan has a business method that considered as the right type for its

products is business-to-business or better known as B2B. Understanding of business to

business is transactions between business institutions with other business institutions,

such as between a manufacturer and a wholesaler, or between a wholesaler and a

retailer. Business partner or wholesaler that helps companies to reach the their markets.

More specifically, retail or wholesaler can conduct transactions once a month or even

every week.

• Cost Structure

Below is an overview of the structure of the costs incurred by the company in the

business process. The cost structure is assumed for every one container of 40 feet,

covering products of dining chair and bar stool.



Table 4.4 Cost Structure

4.2. SWOT Assessment Analysis

4.2.1. Strengths and Weaknesses


Keep up the good work

To find the value to be created, of course, PT Bahama Rotan doing research to find out

what the customer needs. This is done by directly visiting the destination country, such

as visiting the wholesaler. Therefore, PT Bahama Rotan can know the needs of their

customers well and make loom furniture is the priority of the sales because loom starts

to get more attentions from customers in Europe. Experience for many years also makes

the company knows customers better. The attributes in value propositions indicates

keep up the good work or the major strength as seeing that PT Bahama Rotan performs

very well and the attributes were placed in high importance. They include ‘Our value

propositions are well aligned with customer needs’, ‘There are strong synergies between

our different products and services’, ‘Our customers are very satisfied’, and ‘Our value

proposition is unique’.

Cost of good sold (1 container – 40 feet) USD 17000.00

Distribution USD 390.00

Research and Development USD 50.00

Marketing USD 150.00Administration USD 50.00



As mentioned before, PT Bahama Rotan offers competitive prices, on time shipping,

high quality, various materials and models, and customized design. Those values

successfully delivered to customer needs. The company always run the production in

one theme, it means all of the products stand in furniture line. Therefore, there are

strong synergies between all variant products. Not only that, customer feels satisfied

with the products and services. PT Bahama Rotan provides a customer care through

email to receive any feedback from their customers. The attribute ‘Our customers are

very satisfied’ indicates the highest performance and importance. It is a good start to

maintain the loyal customer.

Overall, PT Bahama Rotan show its best in deliver the value propositions and majority

of the customers were satisfied with its performance.

• Cost/Revenues

Figure 4.6 IPA Matrix of Cost/Revenue


Six attributes clearly scattered in the first quadrant, which keep up the good work or the

major strengths of the company. ‘Our revenues are predictable’, ‘We have recurring

revenue streams and frequent repeat purchases’, ‘Our pricing mechanisms capture

customers willingness to pay’, ‘Our costs are predictable’, ‘Our operations are cost

efficient’, and ‘We benefit from economies of scale’. The revenue that obtained by PT

Bahama Rotan is from the proceeds of the sale.



In determining the price of products, the company conducted research in the form of

price comparisons with other rattan companies (competitors) and price changes (if

needed) each year, adjusted to the financial condition of Indonesia. Price can also be

determined through an agreement with the customer; so the price of the product is also

based on the buyer's willingness to pay. In addition, PT Bahama Rotan has some loyal

customers that always make frequent repeat purchases in variant times. It might be

repeated every week, two weeks, or months depends on the customer needs. From the

cost side, only one attribute fell in this quadrant. The cost that spent by the company

was structured well so it can be predictable. Economies of scale are defined as a

decrease in the average cost of unity as the number of products or volume of production

activity increased. The company benefits from economies of scale because most

companies accept the order in the form of numbers. It has been mentioned why thecompany chose B2B method.

However, there are two attributes that fall in quadrant border between one and four

quadrants, including ‘We benefit from strong margins’ (attribute 5) and ‘We collect

revenues before we incur expenses’. According to the interview, the attribute number 5

and 9 has a tendency to rise to the quadrant one. Indicated by the statement that

companies often subsidized by holders of the company to carry out expenditure was due

to the policy of export the raw material from Indonesia to other countries and make the

furniture company dropped its earnings. The respondent optimist that the second half of

2012, the export value of rattan is getting better because there is a tendency of

consumers in the European region taking advantage of rattan furniture is light and not

too extravagant place. The prohibition exports of raw rattan exports products made of

rattan and furniture in the first half of this year increased by 40 percent over the same

period last year. Director of Industri Hasil Hutan dan Perkebunan Kementerian

Perindustrian said that Indonesia rattan exports during January to July 2012 reached

131 million U.S. dollars, grew 40 percent compared to the first half of last year

amounted to 91 million U.S. dollars. (Antara news, 2012)

Low priority

‘Our revenue streams diversified’ is the only one attribute of cost/revenue that fell to the

third quadrant. This quadrant means low priority to the attribute equal to company’s low

priority. Diversify the revenue streams may reducing all risks that will be happened, can

be called as the revenue octopus. (Lopiano, D.)



It has many hands to received revenue and makes more powerful business. Otherwise,

PT Bahama Rotan only depends on a single revenue stream, which is from sales margin.

The performance shows the low score as well as the importance. The company does not

consider it as the attribute that should be in the priority and indicates the importance for

3 points. Yet, this occurred may be because the only potential source of income of the

buyer.

• Infrastructures

Figure 4.7 IPA Matrix of Infrastructure


Almost of half the attributes in infrastructure fell in the first quadrant, including ‘Our

key resources are difficult for customers to replicate’, ‘Resources needs are predictable’,

‘We deploy the right resources at the right time’, ‘We efficiently and effectively execute

key activities’, ‘Our key activities are difficult to copy’. Confidential is the key of the

business process in PT Bahama Rotan to keep all the good things not to be known by

others. Key resources are of the most important basis in the making of products; good

quality raw materials usually producing products that have good quality as well.

Besides the quality, the uniqueness of the raw materials needs to be kept confidentially

in order to not easily imitated. Loom furniture is a top priority of sales in Europe and

kept hidden from public from the production machine to the making process. Only

certain people can see the whole process. In addition, the repetitive production and

always in the same field to make the raw material can be predicted more easily.



Concentrate here

The ‘We have productive partnerships with other organizations’ attribute has tendency

to fall into this quadrant. According to respondent, this attribute is indeed one of the

weaknesses of the company are less outgoing. One key to success is to have a network

or a wide networking. Networking to build professional relationships that aim to help

each other with the hope the two sides can help each other to achieve their stated

objectives. Build networking through organizations as possible is the right advice.

Because by having extensive networking they could later become "connectors". They

will be the "link" of important information that may be the company needs.

Low priority

PT Bahama Rotan shows the low performance and not too special importance in ‘Wehave the right balance between internal and outsourced activities’ and ‘We have the

partnerships with world-class organizations’. PT Bahama Rotan execute too many or to

few activities itself and too busy with the interests of the company. Besides, the

outsource activities may has benefits to the company. Partnership is a relationship

between individuals or businesses in business world; true partnering can give some

advantages to both of them. “Partners can expect to spend more time talking about

process, direction, and coordination. Yet, they can also expect increased quality,

capacity, performance, and, perhaps most valuable, an ally in the ever-changing,

complex world of organizations.” (Townsend, 2012) But PT Bahama Rattan not think

partnership is important because organizational furniture that was in Indonesia is not

fully supported by the government. An example of organizations furniture in Indonesia

is Asmindo, as a source of information for a furniture company. However, the lack of

support from the government such as free exhibitions in various countries around the

world. But respondents noted that the company has not found any organizational level

of world-class furniture in Indonesia or abroad.



• Customer Interfaces

Figure 4.8 IPA Matrix of Customer Interface


Surprisingly, a lot of the attributes of customer interface fell on the first quadrant.

Although they are in the same quadrant, but not all of the attributes indicate the

maximum number. Then it will be classified by the coordinates. The highest score fell

to ‘We truly understand our customers’ and ‘We have strong customer relationships’.

The relationship between PT Bahama Rotan and the customers seems well-established,

so that needs to be preserved by maintaining a technique that has been used or much

better if improved. The next stage is ‘The quality of customer relationships matches the

customer segments we serve’ also ‘Our customer base is well-segmented’ and ‘Our

channels are well matched to our customer segments’. Company has succeeded in

determining the market segments that will be addressed and running is good. The

selected channel is also good through wholesaler and partner stores.

‘We are continuously acquiring new customers’, ‘Our channels are efficient’, ‘Our

channels are effective’, ‘Customers can easily see and access our channels’, ‘Our

channels are strongly integrated’ are in the high importance but not really good

performance however they are in the best quadrant. This shows that although it should

be maintained but should be increased for maximum results. This attribute indicates

much involved with the channel as well as information.



Last is that in the border area and has upward tendency in quadrant one are ‘Our

customer churn rates are low’, ‘Our channels can be used across multiple products and

services’, and ‘Relationships create switching costs’. Customer churn is the loss of

customers who may leave a company for a number of reasons including pricing issues,

customer service, network coverage, competing technologies and contract conditions. It

can be avoided and will be better in the future as one that makes down the company and

make customers switch to other companies is a matter of policy to export the raw

material to overseas so that competitors in Europe sells the products cheaper. In

addition, the channel is useful for selling products and services so that economies of

scope can be maximized.

Concentrate here‘Our brand is strong’, this attribute became one of the highlights for this company and

not only PT Bahama Rotan but almost all furniture companies in Cirebon due to lack of

insight into the importance of a brand. It is very necessary improved to be better known

and remembered by customers and of course a plus compared to other companies.

4.2.2. Opportunities

•

Value PropositionsTable 4.5 Value proposition Opportunities

Can be seen the score that given by respondent that the opportunity for PT Bahama

Rotan in value propositions is could eliminate elements of products to make more

simple and valuable. The example given by the company is now being minimalist

trend and also the practical thing. Then the furniture designs can be made in order to

form the multifunctional innovation, eg chairs and tables into one piece and not

have to spend a lot of space.

Score Attribute

4 We could generate recurring revenues by converting products into services

3 We could expand our market reach by converting services into products

3 We could better integrate our products and services

2We could eliminate elements of our offering to make it simpler and more

valuable



• Cost/Revenues

Table 4.6 Cost/Revenue Opportunity

In terms of cost/revenue, find opportunities that may occur are as discussed previously

regarding the company can collect revenue before incur costs. Prohibition of the export

of raw materials to make the company's performance improved. This shows that the

support given by all parties concerned has shown positive results.

• Infrastructures

Table 4.7 Infrastructure Opportunities

'Collaboration with key partners will enable us to focus more on our key business' is an

attribute that is considered as an opportunity. According to respondents, the same

collaboration as cooperation between the two sides or more and have similar goals. The

efforts of the two had an advantage in both parties.

Score Attribute

3 We can replace one-time transaction revenues with recurring revenues

3 We have cross selling opportunities that we are not leveraging

3 We can increase prices

3 We can reduce costs

2 We can collect revenue before we incur costs

Score Attribute

3 We could use less costly resources to achieve the same result

4 We have key resources that are under-exploited

3We could access key resources from partners that will add significant value to

what we do

4 We could standardize some key activities

2Collaboration with key partners will enable us to focus more effectively on our

key business

3 There are cross selling opportunities with partners

3 Partner relationships could significantly add to our value proposition




Table 4.8 Customer Interface Opportunities

‘We could increase margins and/or improve the customer experience by directly serving

customers’ and ‘We could automate some elements of relationship management’ are the

opportunities for PT Bahama Rotan in customer interface section.

4.2.3. Threats


Table 4.9 Value Proposition Threats

Raw materials other than rattan, wood, and a loom that used furniture is a lot. Such as

bamboo and plastic. Therefore, respondents strongly agreed that if the 'Substitute

products and services are available' is a threat to the company.

Score Attribute

3

There are new customer segments emerging that are likely to be interested in our

products or services

3 We can better serve our customers through finer segmentation

3 We could find new complimentary channels

3 We could better align channels with customer segments

2We could increase margins and/or improve the customer experience by directly

serving customers

3 There is the potential to improve customer follow up

4 We could create a community of customers centered around our product or

service

3 We could make more of an effort to interact with and listen to customers

3We have groups of unprofitable customers that could be “fired” to improve

profitability

3 We can increase switching costs

2 We could automate some elements of relationship management

Score Attribute

1 Substitute products and services are available

3 Competitors are threatening to offer better price or value

4 Our offering is likely to become obsolete in the medium term (next three years)



• Cost/Revenues

Table 4.10 Cost/Revenue Threats

It turns out in terms of cost and revenue, there are many threats and need to be aware of.

The threats are 'Our margins are threatened by competitors or by technology', 'We

depend excessively on one revenue stream', 'Some revenue streams are likely to

disappear', 'Significant cost are likely to become unpredictable’.

• Infrastructures

Table 4.11 Infrastructure Threats

Only one attribute is a threat in the infrastructure section of the 'Key activities are likely

to be disrupted’. According to respondents, this threat comes from the company itself as

the loyalties of the employees were fading.


Table 4.12 Customer Interface Threats

Score Attribute

2 Our margins are threatened by competitors or by technology2 We depend excessively on one revenue stream

2 Some revenue streams are likely to disappear

2 Significant cost are likely to become unpredictable

3 Some of our costs are likely to grow more quickly than revenues

Score Attribute

3 We could face disruption in the supply of certain resources

3 The quality of our resources are threatened

2 Key activities are likely to be disrupted

4 We are in danger of losing key partners

3 Our partners may collaborate with competitors

3 We are too dependent on certain partners

Code Attribute

3 The market could soon be saturated

4 Customers are likely to defect



As with the previous analysis, customers look looks good with the company.

Respondents noted that this attribute is not fit to be a threat.

4.3. Proposed Business Model Innovation

Current business model of PT Bahama Rotan has been successfully mapped and SWOT

has been analyzed through Importance Performance Analysis. These two things are

compared in order to produce a business model innovation; the results of the

comparison are as follows:

Figure 4. 9 Proposed Business Model Innovation

• Customer segments

Based products made by PT Bahama Rattan has a high quality and selection of market

segments measured by the purchasing power of buyers. Therefore, PT Bahama Rattan

market segment sets the upper middle class as a market segment that assessed a

potential for the company and useful in conducting the sale. Market the intended form

of hospitality industry such as hotels and restaurants because it requires large amounts

of furniture. In addition, the individual customer is also a target market of PT Bahama

Rattan. It would be nice if more specifically the 'Upper-middle class of the hospitality

5 Our channels are in danger of becoming irrelevant to customers

5 Our customer relationships are deteriorating



industry and individual customers in Europe that has interest in modern design

furnitures' because the products offered by the company is a modern design.


From the existing business model canvas, PT Bahama Rotan offers competitive prices,

on time shipping, high quality, various materials and models, and customized design.

Those values successfully delivered to customer needs. Analyzed by IPA, all attributes

in value proposition are in quadrant one that means the company already has good

performance and put attributes in a high importance. Although it is good, there are

opportunities and threats that must be considered. An opportunity for value proposition

is to make products simpler and more valuable. If possible, the products offered may be

more valuable than ever. Respondents noted that the product is minimalist and does notrequire a lot of space, current trends, possible if the product can be made more simple

such as chairs and tables into one or a bed and chest of drawers. But companies must be

careful with the substitute materials that may be dropped rattan. Innovation and

maintains customer's loyalty is needed to protect companies from the threats.

• Channels

The channel built by PT Bahama Rattan is through wholesaler and partner stores. Both

are indirect channel to reach customers. In the assessment of customer interface, the

selected channel is considered to indicate a good performance. There also needs to be

maintained and improved. IPA showed that almost all channel attributes were in

quadrant one. Direct channel is an opportunity for the company. However, since the

long distance market, it can be helped by a tool that is booming at the moment and low

cost which is online store. This option is optional, because the online store may change

the management of the company but may be considered for this opportunity.

To be clearer, could be made a suitable channel phases that can make company deliver

the value propositions better:



Table 4.13 Channel Phases

Channel Types Channel Phases

I n d i r e c t

Wholesalers

1. Awareness

Company

raises

awareness

about

products

through

marketing

2. Evaluation

Provide

information

about the

products

3. Purchase

Customer

purchase the

products

through

partners

4. Delivery

Deliver the

value

proposition

customer

through

experience

5. After sales

Maintain

customer

loyalty with

customer

serviceStores

• Customer Relationships

Based on the existing business model, the distance between the company’s

communications with customers is too long, and takes the risk of human error.

Recommended to use online technology for long-distance customers. An example is PT

Bahama Rotam create a website and provide customer service features. In addition,

company can include 'contact us' on the website, such as phone numbers, addresses,

email, or online messenger. Although through IPA overall the company didn’t have any

problem with the customers, the improvement still needed to maintain the customer’s

loyalty. Of the total, the customer and the company have established a good

relationship. However, there is one that needs to be improved is the brand. This is one

of the weaknesses of the PT Bahama Rattan, even almost all the furniture company in

Cirebon. Through the brand, companies can increase customer awareness about

products from PT Bahama Rattan and increase customer loyalty.

• Revenue Streams

The company gets overall revenues from customers in the form of the sale of the

product. Income earned continuously based on demand from the wholesaler. Overall,

strengths and weaknesses attributes of the revenue streams were analyzed by IPA

showed good results. However, there is one that is a low priority that is on only one

source of income. This is understandable because the only possible source of income

can be earned through the sale. The spotlight is a threat in many revenue streams,

namely 'Our margins are threatened by competitors or by technology', 'We depend

excessively on one revenue stream', 'Some revenue streams are likely to disappear',

'Some revenue streams are likely to disappear '.



• Key Resources

PT Bahama Rattan has three key resources: raw materials, physical assets, and human

resources. SWOT assessment showed good results and need to be maintained and

improved. The increase can be through the provision of educational facilities and

training for human resource capacity building, technology upgrades to improve quality

and efficiency.

• Key Activities

R&D, marketing, and production are the current key activities of the company. IPA

analysis didn’t show any significant weaknesses, but there needs to be justified in terms

of marketing in order to balancing other building blocks. Recommended for the

company to make the design and marketing as well as nicknames (tagline) will addconsumer desire to buy rattan production in Indonesia. PT Bahama Rotan already have

a logo but first since Bahama Rattan established has never changed or modified

adjusted with the changing times. Exhibition still need to be maintained to a certain

time and promotion kits are also needed such as informative website and catalog in

physical form. Catalog can be sent along with the delivery of the product to the

customer easy to see the collection produced by the company. Only one attribute is a

threat in the infrastructure section of the 'Key activities are likely to be disrupted’.

According to respondents, this threat comes from the company itself as the loyalties of

the employees were fading. It seems reward is needed to increase the employee’s

loyalty.

• Key Partnerships

Partnership is a relationship between individuals or businesses in business world; true

partnering can give some advantages to both of them. Based on the IPA, PT Bahama

Rotan has major weaknesses in partnership and the respondent not think partnership is

important because organizational furniture that was in Indonesia is not fully supported

by the government. An example of organizations furniture in Indonesia is Asmindo, as a

source of information for a furniture company. However, the lack of support from the

government such as free exhibitions in various countries around the world. According

to interview, respondent said there is an organization that have been supported by the

government, which is AMKRI (Asosiasi Mebel Kayu dan Rotan Indonesia). Join an

organization or more and expand the networking are highly recommended in order to

make the partnerships wider and make advantages to the company.

business model cnavs tesis itb

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