KASUS LGD 3 - en

PT X Cement Business
PT X is a domestic cement company that was established 10 years ago. They have few factories
built on the island of Kalimantan. Started as a small-scale business, this company has grown
substantially, employing a total of 300 workers in all sectors (factory labor, marketing
department, logistic/supply chain, back office/support) of the company. One of the company’s
core missions is to fulfill customers’ needs by producing the best available product and
maintaining control over product quality and the overall production process.
Back when it was first established, the company focused its efforts on the growth of its domestic
market. The company’s main market demographic were customers with tailored and customized
needs (such as office districts, the hotel industry, consultants on the fields of architecture or
construction), and not so focused on the retail market. After the initial goal was achieved, the
company sought expansion to overseas territory, mainly European countries.
The first step in introducing the market back then was by participating in international-scale cement
product exhibitions in several countries in Europe and the United States. The main goal at that time was
to introduce the brand and to exhibit the quality of the products the company offered. This turned out to
be a success because the company provided customers with the freedom to choose the type of product
they desired, helped by the positive reputation Indonesian cement products have for their quality.
Additionally, the ability to negotiate for fast delivery times also added value in the eyes of the customers.
Thanks to these factors, within a short period, the company managed to attract several well-known
clients, both domestically and internationally.
Unfortunately, the company has often received complaints from loyal customers who have been using its
products recently. The complaints were related to a decrease in product quality, frequent deviations from
the agreed upon delivery contracts, and difficulties in contacting the marketing team for agreements and
product orders. This has been disappointing for the customers, especially because they consider
themselves early adopters who contributed to the company's success. There is even information that
some of them have tried switching to products from the competitor, PT. D.
PT. D is a relatively new company. They were only established 6 years ago, but with substantial capital
support and mass production capabilities imported from China, they can be considered a noteworthy
competitor for PT. X. While their business is more focused on the retail market, they also accommodate
customized requests. Several production employees from PT. X have been recruited by PT. D, creating a
similarity in product quality.
Not only does it face pressure from external competition, but the company also encounters internal
challenges. Firstly, differences in opinions have arisen among the Board of Directors regarding the
direction of business expansion. Some of them want to expand into the international market by increasing
the export target from 20% to 50%. However, there is another group within the Board of Directors who
wants to pursue acquisitions to compete with PT. D, particularly because they want to enter the retail
business segment currently dominated by PT. D. No decision has yet been made, but these ideas have
reached middle management and have caused division, creating an unconducive work environment and
affecting daily operational coordination.
Each decision made will present its own challenges and will make an impact to the organizational work
environment. Firstly, in terms of human resources, there is a need to enhance employee’s competency to
accommodate higher export targets, which necessitates recruiting and training new employees. In terms
of acquisitions, the company's readiness to enter the retail business needs to be considered because up
until today, PT. D has relied on mass production. Meanwhile, the Board of Directors wants to bring
production in-house if this step is taken. Additionally, PT. D's existing infrastructure has developed rapidly,
raising concerns about potential workforce reduction at PT. X, which could ultimately lower motivation
and work morale, especially at lower levels. Another dilemma is the sustainability of PT. X's company
culture, which is deeply connected to Kalimantan values. Acquisitions have the potential to create
conflicts in integrating different cultures.
You are acting as a consultant appointed by the Board of Directors of PT. X this year and are asked to
provide advice regarding the emerging challenges:
1. According to your analysis of the two investment plans proposed by the Board of Directors, which one
offers better long-term prospects? Is it the expansion into foreign markets or the acquisition of PT. D? Or
are there other more profitable investment options to consider? Please explain your reasons.
2. From one of the options you choose, outline a business development strategy and explain the
fundamental concepts that will be implemented in the future. Consider costs, the use of technology, and
identify the parties that need to be involved to support the implementation of this strategy.
3. Considering the decline in product quality and increased competition, what strategies can you propose to
develop human resources and system infrastructure within the company and the business as a whole?
4. Regarding the complaints raised by customers, outline the steps for improvement that need to be taken
to address these issues.

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PT X Cement Business

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