Business Strategy and Enterprise Modeling Margaria Batik (PT Margaria Group)

A. Company Profile

1. Company History

History of Margaria Batik was marked in 1960, at that time, the store of Wisma Margaria Batik was located at Ahmad Yani Street 69, which was in the business district of Malioboro Yogyakarta. Since its establishment, Margaria has engaged in the batik retail, which later evolved to have some kind of business outlets, namely Batik Boutique Margaria, Margaria Galeria Batik, Batik and Nandia Rotowijayan Batik.

The emerging of Margaria Batik was truly contextual with conditions of Yogyakarta people, who appreciate batik as the identity of every culture. In Yogyakarta, batik grows as identifying self-image, which will not be found in any geographical area. The type and theme of Yogyakarta batik are so typical, indicating the identity of the users which of course idealize being cultured. Margaria Batik hold the business on the peculiarities that show Yogya’s color batik which is still unobjectionable. This is become Batik Margaria’s responsibility in trying to preserve the culture and traditions of the nation in the breath of business. Footing the culture, heritage emerges as a variant quite urgent enough and as the appointment of nationalism to tradition. Therefore, this attitude is worth keeping and well developed. The form of the business development, of course, can be seen from the widening of the business branches.

Variations of the batik business from handmade batik to silk material batik can be used as concrete evidence of the existence of batik business “Margaria Batik”. Therefore, with the increasing of business Margaria Batik, then formed a new outlet which in 1982 was marked by the opening of the 2nd floor of Wisma Batik Margaria. In 1996, Margaria  set up branches in Margaria Batik Galeria Mall, Jl. Sudirman Yogyakarta and 1997 set Margaria batik boutique in Jl. Ahmad Yani 65 Yogyakarta.

Consistency of the batik industry branch which penetrates to the many tastes of motives makes it feasible. Margaria is seen as a forerunner of Traditional Batik Motif Yogyakarta.

Margaria Group Headquarters is located in Jalan Babaran 34 B Warungboto, Umbulharjo, Yogyakarta Tel. 0274-377565 Fax. -418 282 0274. With 30 business units spread across various cities, Margaria Group is able to employ approximately 700 employees. The philosophy of PT Margaria Group is “One is important to all, all is important to one”, andcarry the slogan as “Top – Victory – Special”,  and greeting “SMART”.

Ethical code of PT Margaria Group is:

  1. Fears of the Almighty God.
  2. Applies and be truthful.
  3. Able to respect himself and others.
  4. Understands and positive thinking to work
  5. Always wants to get a better working results
  6. Always wants to learn and think.
  7. Be able to be a member of a group with good

Here is the organization structure in PT Margaria Group:

Figure 1. Organization Structure of PT Margaria Group

Figure 2 below represents PT. Margaria Group’s new organizational structure, where now the company has two different organizational structures: head office and business unit. After the new organizational structure is implemented, the company will unavoidably experience changes in its decision-making process, reporting mechanisms, appraisal systems, and other alterations that is hoped to eliminate problems related to the previous organizational structure.

Figure 2. New business unit organizational structure

2. Mission and Vision

Vision and Mission of PT Margaria Group is:

Visi:

“Become the Qualified Company, High-Image and Innovative”

Mission

  1. Provides qualified products
  2. Provides up-to-date and innovative products
  3. Provides products with competitive prices
  4. Provides products with exclusive image
  5. Provides a friendly, helpful and fast service 
  6.  Provides stores in strategic places
  7. Market segment is for the up-middle cass
  8. Earns the proper profit in order the company can alive and develop
  9. Has strength financial structure
  10. Provides knowledge and fair return to the employers in accordance with the role, contribution, and loyalty given to the company’s development
  11. Has a strength affiliation to all parties
  12. Provides advantage to the company’s environment

B. Current Performance

Nowadays, the owner included Margaria Batik into PT Margaria Group as one of the unit business. Margaria Group’s business lines in retail Muslim clothing, batik retail & services, with a backup unit for the production of fashion & Boxes. Margaria Group target market is high, some market specific unit family, young or female. To tenure, some single ownership unit, several other units to ownership by several parties. Margaria Group develops in line with demand and needs of the community. Margaria Group has shown the consistency and commitment to always provide the best for all customers in various regions in Indonesia.

Margaria Group grows rapidly with 32 business units, now they are exploring their business in Bandung and Surabaya with a positive response. Moreover, with competition in the DIY fashion is so tight, without innovation Margaria Group lagged far he can go. Through several of its business units namely Margaria, Karita, Griya Anissa Muslim, Al-fath and also Nandia batik, Margaria Group also annually presents the latest Muslim fashion trends. Margaria Business Group is engaged in the retail and services are currently growing at 15-20%, and the trend is dominated by the fashion business unit.[1]

C. Company Issue

1. Description of issue faced by the company

Margaria Group runs the business formerly in Yogyakarta. However, the competition of fashion industry in Yogyakarta become very strict and pushes the company to expand the business beyond the area. PT Margaria has planned to expand the business in Bandung, Surabaya, Jakarta, Solo, Purwokerto, and Semarang because both town show positive respond toward the fashion products from Margaria. As one business unit that has a large network in Jogjakarta, Margaria Group is ready to expand its business outside Java. This year is targeted for business expansion by setting up a new unit in Pekanbaru, Riau and Balikpapan, East Kalimantan.

Margaria Group continues to create ever new products for consumers. People’s purchasing power is being dropped. However, it does not make Margaria Group come down. When many companies are first requests the efficiency of the workforce reduction, Margaria Group did not do the same. Entering 2016, Margaria plans to establish cooperation with various media to expand its promotional media. In addition to the rise of IoT in all fields including fashion business, Margaria does not want to miss to continually optimize the online business so that all market segments can be achieved.

2. Level of strategy required to solve the strategy

To solve the strategy, PT Margaria Group uses Corporate Level Strategy. According to Andrews (1980: 18-19), the corporate strategy is the strategy in a business, when the company will compete by altering the distinctive competence into competitive advantage. At the corporate level, the corporate strategy of trying to answer the following two questions:

  1. What business activities are favored to be able to compete?
  2. How each of these business activities do?

Michael Porter suggests that the formulation of corporate strategy, we need to know in advance the competitive advantage held, or to be created, and place them on their respective business units. The creation of competitive advantage refers to the new players coming in this industry, consumer purchasing power, power suppliers, as well as other similar substitute products which can be considered to analyze a competitor for the products.

D. Owner of the Issue

This issue comes to the PT Margaria Group which is challenged to be feasible in the emerging market. The owner of Margaria Batik give the authority to settle this issue to  Retail Manager per unit , marketing support Manager, Management Information and System Manager, Director of Operational, General Affair Manager, Internal Auditor, and Corporate Secretary

ENVIRONMENTAL SCANNING – EXTERNAL

A. PESTEL ANALYSIS

Issue Impact of the Business
Political
The owner Margaria Group (Dyah Suminar) is the wife of the former mayor of Yogyakarta (Herry Zudianto). Party supporters of Herry Zudianto want Dyanh Suminar to propose to the next mayoral election.Number of legal and political macro ‐ environmental factors affects small businesses in the clothing industry.  The existence of political stability in each area is possible to make Indonesia become the leader market of Muslim wear in the world in 2020. This led  is to sharp the increasing in trend and the growth of fashion in Indonesia With the owner’s identity in the political environment, indirectly these conditions facilitate PT Margaria promotion.   PT Margaria is challenged to be a leader of moslem and traditional batik wear in the area.
Economic
Trend fashion business is growing in line with the needs of the community and clothing increased.Muslim clothing became one of the hallmarks of the creative economy of the future. The market potential is huge assessed.Creative economy allows any entrepreneur to create innovation and creativity to make their products different and demanding public.There are many fashion-based artisans or entrepreneurs of SMEs in the area of YogyakartaThe National Statistics Bureau reported that Indonesian total exports in handicrafts in 2004 were valued at US$ 447 million, increasing 4.06% in 2005 to US$ 466 million. This excludes handicrafts bought directly by consumers or transported by tourists. Support continues to flow to make the Muslim fashion could be one of the hallmarks of the creative economy in the future of Indonesia.PT Margaria Group can create the latest fashion collections acceptable youth market Jogja well. This is in line with the company’s commitment to be the trendsetter in the affairs of Muslim clothing for young children.Cooperation with local craftsmen to form CSR PT Margaria Group and local communities can share in the advancement of the industry. The cooperation conducted by PT Margaria with small business owners is not only done in the case of batik, but also prayer beads, clothing and other crafts. In addition, it also cooperates with the suppliers, where there are currently 80% in 1300 which is a large supplier together with PT Margaria Group. Leads are not only located in Yogyakarta alone but spread across several cities.The economic linkages between tourism and handicraft production are interdependent of each other. PT Margaria take an opportunity by the condition to optimize Batik as a souvenir merchandise from Yogyakarta.
Social/Culture
Batik is one of the icons of the pride of the city of Yogyakarta and became a tourist destination travelersThe need for CSR to improve the culture and the company’s image in the public eyeMany of the young women wearing the hijab are fashion forward and tech savvy. They take pictures of themselves and their friends wearing stylish hijab and upload the images onto social media sites like Facebook, Twitter and Instagram. That in turn feeds awareness about what looks good, as Muslim women see what their peers are doing. If the tourism sector in the city is progressing, it can be ascertained batik will be increasingly rapid development. Margaria own batik sales to around 15%.Margaria Group began serious work on the education sector. There are several educational unit that worked like a tutoring agency, kindergarten.
Technological
Technological advancements have also changed the mindsets of people around the world by giving them a multiplicity in clothing items. With the advent of many latest machinery, people can have the opportunity of having cost effective, quick, ready to wear, easy to care and easy to handle Batik-making.Technology batik in Indonesian batik industry is already quite good. With careful manufacturing process, the colors of batik production Indonesian batik industry remain untreated. This is not shared by batik from Malaysia and China. The technology used but take a long time. So it can hit production of batik printing batik and batik. But to give priority to the quality of batik artisans still use to keep batik quality is maintained Business Margaria Group venturing into the online business to enable customers to get the products they want Margaria.Staining batik used natural materials such as teak, noni and Soga. Therefore we need support from the government to develop a technology that batik production to meet market demand.
Legislation
The Act No. 19 year of 2002 on Copyright  (later called as UUHC 2002Since the early of 1990 the government has required SOEs (State Owned Enterprises) to set aside 1-5% of its net profit for the empowerment of small and medium enterprises and cooperatives. PT Margaria has its own line of fashion products in accordance with your company name that has copyrighted. Target this year there are five business units were already incorporated limited company. “It’s a commitment to improve the professionalism as a business entity.
Environmental
Batik industry in Indonesia is characteristic of the culture which is historical heritage. So it is the responsibility of all the people of Indonesia to preserve batik. It seemed to be strange if the art of batik is more recognized by people from outside Indonesia.  
  • Porter’s Five Forces

Industry analysis models provide a means to manage that complexity by organizing the analysis and presenting conclusions in a coherent manner. Michael Porter’s 5 forces analysis provides a useful framework for industry analysis. The benefits of using the framework is that PT Margaria Group could readily capture the full richness of a phenomenon with a limited number of dimensions. Porter’s contribution was to develop a framework for analyzing industries that could be generalized from a few core elements, in this case the five forces framework Porter’s 5 Forces Analysis here will provide a powerful illustration of how the level of competition from the fashion industry, from the supply chain (suppliers and customers) and market (new entrants and subtitutes). Fourth of forces (impulse) is to contribute to the competitive rivalry of the level of competition in the industry.

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