THESIS SUMMARY

BUSINESS PLAN DEVELOPMENT OF MI BASAH USING

MODIFIED CASSAVA FLOUR (MOCAF). . .

Master of Management Program .

. . . .

. Submitted By Arfan Hadi

11/325586/PEK/16067 .

.

. MASTER OF MANAGEMENT PROGRAM

FACULTY OF ECONOMICS AND BUSINESS UNIVERSITAS GADJAH MADA

2013

MEffiT'STIAIfiilANY

MoEr3mIr cAssAvA fl,ouR (ililffiAr)

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Apprcqrsd By:Theis Sryervissr

Dr. Sshid $usilo Nugre. M.Sc.

TABLE OF CONTENTS

Pages

CHAPTER I. Background ............................................................................ 1

CHAPTER II. Literature Review .................................................................. 2

CHAPTER III. Research Methods................................................................ 4

CHAPTER IV. Strategy and Planning .......................................................... 6

CHAPTER V. Action Plan ............................................................................ 13

xiii

ABSTRACT

Business creation and processed wet noodle and noodles derived from processed cassava flour (mocaf) have a huge opportunity. It can be seen from the patterns of consumption that makes instant noodles and noodles processed into staple foods, and the amount of cassava production reached 23.9 million tons in 2010, and the number of traders noodles and chicken meatballs are a growing number of particular areas of Yogyakarta special reached 1204 people in 2010. This business is also supported by a program of agricultural diversification and food diversification efforts by the Indonesian government to suppress people's dependence on rice. Based on the above data the business of making noodles from flour wet mocaf as raw chicken noodle and meatball noodle has excellent prospects.

This business uses a business model pattern bait & hook, by giving free samples of their products to consumers including the merchant noodles and chicken meatballs in the company's first run. Sampling focused so that consumers can recognize and have a willingness and curiosity to buy a wet noodle mocaf. The company's revenues come from the purchase of advanced mocaf flour that has been distributed free of charge to the company's promotional plan from start to walk. Consumers who became the company's main focus is a trader and meatballs and chicken noodle restaurant that uses a wet noodle.

Based on some of the data obtained from the observation, which comes with sample questionnaires and interviews, obtained positive results, where respondents had a positive response to the taste of the noodles mocaf and have a desire to buy the mocaf wet noodle. Therefore, the business outlook is very wide open. It is on show in the three business scenarios that show good financial performance for a period of 5 years. In the optimistic scenario, the NPV obtained Rp. 928 million, an IRR of 110% and Discounted Payback Period 1,05 years. In normal skenenario, obtained NPV Rp. 514 million, an IRR of 79% and Discounted Payback Period 1.51 years. In the Pessimistic scenario, NPV obtained Rp. 209 million, an IRR of 49% and Discounted Payback Period 2.53 years. In the third scenario, expected to see the opportunities and risks of a more scalable.

Keywords: agricultural diversification, bait & hook, wet noodles mocaf

1

CHAPTER I BACKGROUND

1.1. Problem formulation

According to the World Instant Noodle Corporation in 2011, Indonesia was

the second largest consumer of instant noodles in the world after China with an

estimate, there are 63 packs of instant noodles in Indonesia consumed each day

(TheIndonesianWay.com, July 8, 2012). Indonesian society changes in consumption

patterns as instant noodles and other processed noodles used as a replacement or side

dishes of rice, even as a substitute for rice.

According to the Chairman of the Standing Committee on Food Security

Franciscus Welirang of Kadin Indonesia, the needs of wheat and wheat flour in the

country will continue to increase, because almost all foods use flour as the raw

material. Indonesian wheat imports reached 4.6 million tons per year, while wheat

flour reached 1.1 million tonnes (Bisnis.com, July 8, 2011). With the high number of

imports of wheat and wheat flour used as raw materials in the manufacture of food,

especially noodles, mocaf flour is an alternative raw material apt as a substitute for

wheat flour in the manufacture of food, especially noodles. Besides, Indonesia

cassava plant is native and is very easy to obtain. Based on data from the Ministry of

Agriculture, cassava production in the year 2010 was as much as 23.9 million tons,

cassava production in 2009 was 22.0 million tons, and by 2008 was as much as 21.8

million tons (Bisnis.com, July 8, 2011).

Based on data from community sellersof chicken noodle and meatball

(PAPMISO) of Yogyakarta region, there are about 1204 sellers of chicken noodle and

meatball (Ikhwanudin, 27 april 2010). With the large amount of chicken noodle and

meatball vendors in Yogyakarta, mi basah business using alternative materials

processed from cassava flour (mocaf) has excellent prospects.

2

CHAPTER II

LITERATURE REVIEW

2.1. Literature Review

2.1.1 Definition of Noodles

Noodles originally came from China. Noodles are very popular in Asia,

especially eastern Asia. Noodles can be categorized as one of the food commodities

that can serve as a substitute for basic food (Sunaryo, 1985).

2.1.2 Types of noodles

Based on the size of the diameter, noodle products can be divided into three,

namely:

1. Spaghetti (2.8-6.9 mm)

2. Commercial noodles in general (1.8-3.2 mm)

3. Vermicelli (less than 1.02 mm).

Based on the origin of raw materials can be divided into two, namely:

1. the murky mi (noodle) of materials, especially wheat flour

2. Transparent noodles made from starches such as rice noodles (from rice starch)

3. Chinese noodles (from sweet potato starch).

2.2 Theoretical Methods

2.2.1 Business Plan

Maddy (2009) defines a business as all the activities carried out by individuals

or groups of individuals carried out legally by using and combining resources or

factors of production to provide goods and / or services to the public in order to

obtain financial benefits, ie business income or income from operations (business

profit). Planning is a management function relating to the election of the vision,

mission and objectives, strategies, policies, procedures, rules, programs and budgets.

From the two definitions above, the business planning process is determining the

3

vision, mission and objectives, strategies, policies, procedures, rules, programs and

budget required to run a business or a particular business.

2.2.2 Business Model Canvas

Canvas consists of 9 components,, also called 9Building Blocks. The nine

components are:

a. Customer segments

b. ValueProposition

c. Channel

d. Customer Relationship

e. Revenue Stream

f. Key Resources

g. Key Activities

h. Key Partnerships

i. Cost Structure

2.2.3 Business Model Patterns

Pigneur and Ostelwader (2010) tried to summarize the pattern of business

models into 5 types, namely:

a. Unbundling Business Models

b. the long tail

c. Multi-sided platform

d. free as business model

e. open business models

4

CHAPTER III RESEARCH METHODS

3.1. Analysis level

This study discusses the business plan that will be executed to create a

product that usingmi basah mocaf raw materials and are expected to contribute to

reducing the use of flour and product that has a competitive advantage over other mi

basah products.

3.2. Data sources

The data used for the study was obtained from multiple sources, including:

a. Study of Literature.

b. Observation.

c. Survey.

3.3. Data Collection Methods

Sources of the above data were obtained through several ways, including:

a. Primary

Primary data is data taken directly from the object of research, among others:

1) Survey

2) Interview.

b. secondary

Secondary data is data obtained through the research literature and is the result of

studies that have been done before, to explore the theory that will be used to support

research in solving problems, among others: Library Study

3.4. Method of Data Analysis

3.4.1. Financial Analysis

Analysis techniquesused is the financial analysis. The main function of the

financial analysis is to calculate the financial feasibility of the business, as well as to

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calculate the capital requirement for this business.

A. Net Present Value

B. Internal Rate of Return

C. Discounted Payback Period

3.4.2. analysis of Strategies

A. Porter's Five Forces

B. SWOT analysis

3.4.3. Marketing analysis

A. Market share

B. Market size

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CHAPTER IV

STRATEGY AND PLANNING

4.1. Business Model Canvas of CV.Telamie

CV.Telamies business model is described using a business model canvas and

following the pattern of business model. CV.Telamie;s business model canvas in this

study is as shown below:

Business Model Canvas of CV.Telamie

Customers

Supplier flour Mocaf

Noodles

production The mocaf

flour raw

material

(Newness)

Selling Price

Dedicated

personal

assistance

B2B

andB2C

Own store

Human

Machineries

Financial

Fixed cost & Variable cost Direct sales

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4.2. Functional Framework

The functional framework will be discussed in detail how the company will

run the business. Functional framework contains all aspects of corporate and

business, so the company can run, grow, and even includes an exit strategy if the

pattern of the business is not according to what was planned. Matters discussed in the

functional framework are:

Vision, Mission, Objectives

The vision of the company's business is "mocaf mi basah manufacturing

company on a national scale in five years time since the company's operations" to

cope with intense competition, the company will continue to innovate in a variety of

products to be able to dominate the market especially Yogyakarta area that can make

a significant contribution to the people of Yogyakarta in providing mocaf mi

basahwith good quality at a very affordable price for all walks of life.

This company's business mission is "to provide quality products and services

for customers at a very affordable price." Both of these are believed to be able to

make the best companies, where companies are able to meet the wishes of customers

who want high-quality products at low prices and maintain relationships with existing

customers.

Marketing Plan

Judging from its market size, the need for mocaf mi basahYogyakarta area

are:

Based on data from interviews with chicken noodle and meatball sellers in

Yogjakarta

Sales in average (days) = 5 kg wet noodle

The number of chicken noodle and meatball sellers= 1204 people

Total Consumption (days) = 1204 x 5 = 6020 Kg / Day

The initial target of the company is to adjust production capacity of the

machine, and by observation in the field. For the initial stage of the establishment of

the company, it is only able to produce a target of 350 Kg / day (optimist target) or a

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mocaf mi basahsupplier for 60 chicken noodle and meatball sellers in Yogyakarta

area was calculated as follows:

Target Company = (350 kg) / (6020 kg) x 100% = 5.81%

From the calculation above that the target of the company amounted to only

5.81% of the total consumption of mi basah in Yogyakarta or mi basahsupplier for 70

chicken noodle and meatball sellers out of 1204 sellers in Yogyakarta. By calculating

the target market, the company is very optimistic to reach the target market and the

production of mocafmi basahwhich will be circulated in the market. The marketing

plan will be able to introduce mi basahproducts that can be accepted in the market.

Plan of Operations

Day-to-day operational activities undertaken by the company will be

described by the following picture:

CV.Telamies operational activities

From the picture above, daily operational activities undertaken by the

company CV.Telamie can be explained, namely:

1) Raw materials of mocaf flour and lye from suppliers that are used as ingredients

are put into the manufacture of mi basah production warehouse.

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2) Inventory in the warehouse loading for stock production for 1-3 months of the

production process.

3) The production process starts from making dough, mixing lye and milling and

packing mi basah.

4) Prepackaged mi basahis put into stores that are the regions with production sites to

sell directly.

5) In addition to the direct sale, the company also received a delivery order to be

delivered by the salesmen. In addition it also serves as a sales marketer of mi basah to

chicken noodle and meatball sellers located in Yogyakarta.

Management Plan and the HR Plan

Company Organization Scheme

10

Manpower Data of CV.Telamie

Position Gender Age Education Total

General Manager m Min 25 yrs Min S1 Engineering field 1 person

Finance department f Min 24 yrs Min D3/S1 field of

Accounting

2 people

Marketing Department m Min 25 yrs min SMA 2 people

Operations section m/f Min 20 yrs min SMA 3 people

Financial Plan

In this business scenario, three scenarios will be created for a more detailed

profile of the business, such as: Pessimistic, Normal, Optimistic.

Required initial capital of Rp. 229,150,000.00

By optimistic calculation, then the following resultswere obtained:

a. Net Present Value : Rp 928.320.945,23

b. Discounted Payback Period : 1,05 years

c. IRR : 110%

With normal calculation, the results are as follows:

a. Net Present Value : Rp 514.800.500,39

b. Discounted Payback Period : 1,51 tahun

c. IRR : 79%

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With pessimistic calculation, the obtained results are as follows:

a. Net Present Value : Rp 209.524.372,10

b. Discounted Payback Period : 2,53 tahun

c. IRR : 49%

Strategic Plan

1) SWOT Analysis

a) Strength

Services provided excellent customer satisfaction

Provide free shuttle service for customers

The price is cheaper than other products

The price of mi basah can be more stable than other manufacturers

Fluctuations in the price of raw materials (input) does not affect the

performance of the company significantly.

Companies are more stable and avoid the scarcity of raw materials

The company has good management to manage and control all operational

activities.

b) Weakness

Mocaf mi basahis still new in the market so it requires the introduction of

product

The company is still dependent on the supplier of mocaf

The small number of distribution channels.

c) Opportunity

Fluctuations in the price of wheat flour and wheat flour price growth is unstable

High levels of consumption of mi basah and other processed noodles

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The number of cassava farmers in Indonesia

Awareness of the community to use local products is increasing.

d) Threats

There is a great player, both national and multinational companies engaged in

the production of wheat flour

The low ability of farmers to process cassava into mocafflour.

4.3. Environmental Impact Analysis

Production sites and sales offices are located in the region will facilitate the

control of the company. In the planning of site selection, the company plans to choose

a location that is in around Kaliurang, Sleman, Yogyakarta. For the environmental

impact, the company did not have a problem with waste and environmental pollution

because the production of mi basah usesmocaf raw materials so no waste and mixed

materials of manufacture in the form of alkaline solution that is safe for consumption

for the human body so the company does not have the environmental impact.

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CHAPTER V

ACTION PLAN

5.1. Time and Events

Business action plan needs to be done and is an important concern

comprehensively on time and in which the activities will be carried out in the

business plan. Activity is divided into three major domains, is to facilitate the

implementation and inspection, among others:

a. Operational technical activities

b. Promotional activities and customer relations

c. Supporting activities (back office)

Time ActivityTable

year 0 1 II

III IV

V

No month 1 2 3 4 5 6 7 8 9 10 11 12

A technical Operations

1 Search and rentalof accommodation

2 The design process of stores

3 The process of co-operation with the supplier of mocafflour

4 Booking and purchase of equipment

6 Production of mi basah mocaf

7 Division of mi basahfor free

8 Regular maintenance of machinery

B Promotion, advertising and customer relations

1 Promotion and advertising

3 Maintain relationships with customers

C Office and supportingactivities

1 The process of licensing companies

2 HR, accounting, finance, etc.

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5.2. responsible person

Each part or division is in charge of each activity undertaken. All personnel

are responsible to the founder and director of the company at the beginning of this

passage. Next will be the organizational structure more qualified in every division

that is in line with the increase in employees.

5.3. PerformanceSize

Performance measures are made to undergo personnel duties, to achieve the

target to be achieved. Measure of the performance is based on the activities

performed by each division and the personnel inside.

COVERAPPROVALTABLE OF CONTENTSABSTRACT CHAPTER I BACKGROUND CHAPTER II LITERATURE REVIEW CHAPTER III RESEARCH METHODSCHAPTER IV STRATEGY AND PLANNINGCHAPTER V ACTION PLAN