Articles

Application of the Analytical Hierarchy Process (AHP) for Innovative Technological Projects Evaluation and Prioritization in an FMCG Company

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The FMCG industry is known for its dynamic and competitive nature. To thrive in this business sector, companies must possess the ability to swiftly adapt to the market demand changes, continuously enhance operational efficiency and drive innovation. Those abilities are crucial for maintaining competitiveness and ensuring long term viability of the company. Over the past few decades, technology along with its advancement has emerged as a factor that disrupts the ecosystem of various industries by reshaping the way businesses operate and interact with the customers. In Indonesia, many organizations including FMCG companies have continuously embraced and adopted emerging and innovative technologies within their business operations. Although it offers various benefits for the companies, the execution process has usually encountered various challenges which causing the implementation projects to experiencing delays, especially during the decision-making process. This was also the case in one of the largest FMCG companies in Indonesia due to varying interpretations of project importance, as well as the absence of clear prioritization criteria and an unorganized decision-making process. In order to address the issues, the organization plans to develop a decision-making framework that harmonizes diverse stakeholder perspectives related to project importance based on a number of key criteria while also analyze the benefit and impact provided by the implemented technologies through the application of the Multi Criteria Decision Making (MCDM) approach using the Analytical Hierarchy Process (AHP) framework. There are three technology innovation projects to be analyzed and assessed in this research: AGV Implementation, and Digital Warehouse Management System, and Universal QR for Traceability. In order to evaluate the projects, eighteen criterion which are divided into eighteen sub criteria that has been established through Secondary Data Collection and Focus Group Discussion (FGD) process. The data were processed by leveraging the systematic decision-making structure provided by the AHP framework. The research yields two primary outcomes: a structured decision-making framework and a project prioritization scheme intended for application at the organization. The findings of the research highlight the critical role of structured decision-making in navigating the complexities of evaluating and prioritizing innovative technological projects, while also proposing a scalable model that can be repeatedly utilized by the company in the project evaluation and prioritization contexts.

Proposed Marketing Strategy to Increase Sales Snack Food Popcorn (Case Study: Karmellow)

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Karmellow is one of the popcorn snacks produced by PT Suara Matahari Trading (SUMATRA Group). Karmellow has three flavours of popcorn in 20 grams at an affordable price. Based on the research, there is a demand for snack food, especially popcorn, for consumers in Indonesia due to increasing snack food sales and the increasing global market size of popcorn snacks. However, the trendline of sales of Karmellow popcorn is declining, and the awareness of Karmellow is considered low. Therefore, this research was conducted to help Karmellow increase sales and brand awareness by creating an excellent marketing strategy. In this research, both qualitative and quantitative methods are used. In-depth interviews were conducted with the COO and employees of SUMATRA to know the internal conditions. Secondary data, such as textbooks, was also gathered to determine the external conditions. Besides this, the research also distributed online questionnaires to 252 respondents. This research results in the new segmentation, targeting, and positioning for Karmellow and a new marketing mix (4Ps), such as product, place, price, and promotion, as the proposed marketing strategy for Karmellow. It can be concluded that Karmellow has an opportunity in Indonesia but needs several marketing strategies.

Analyzing the Financial Efficiency and Stability of FMCG Companies in Indonesia: A Study of Inventory Turnover and Debt-to-Equity Ratios

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Fast Moving Consumer Goods (FMCG) companies tend to have rapid shelf turnover. It is identical with financial measurement on its inventory turnover rate. This is because FMCG companies typically have their inventory stored in warehouses in order to fulfill their customers’ fast demands of their products. Hence; when a company has a low inventory turnover; it means that their products are not selling as fast as they should; affecting their inventory management efficiency as well as their expenses. Where a company has successfully balanced their inventory management, a manageable debt-to-equity ratio is also good to avoid excessive financial risk for the company. Company’s solvability depends on how liquid is the company and how well they could pay off its debt; this also relates to how they finance their company which is where the calculation of D/E ratio is useful. This determines whether the company uses equity to finance their operations or instead rely on debt to finance their operational expenses. The result of analysis have shown that companies with high inventory turnover ratio like PT Buyung Poetra Sembada Tbk, PT Tigaraksa Satria Tbk, and PT Akasha Wira International Tbk with a positive net income and high inventory turnover rate tend to have stable and low numbers of D/E ratio while 64.37% of companies in Indonesia still have ITR that is way below nationwide average. A high inventory turnover translates to faster cash flow, allowing these companies to repay debt more quickly and maintain a low D/E ratio. This research will be designed qualitatively by using the quantitative numbers given from companies publicly posted financial statements and annual reports with complementary knowledge from secondary data derived from the company’s website and other resources including reputable journals, mass media, and online articles. Research will then begin with a preliminary analysis to obtain listed FMCG companies in Indonesia, then curate them based on their current inventory and D/E Ratio. Comparison of the companies’ financial performance is done by using their data from the year end 2022; the data obtained will then be calculated to produce numbers of inventory turnover ratio, D/E ratio, and ROA ratio to be able to draw the conclusion from the numbers produced. Three companies with the highest and lowest number of inventory turnover ratio and D/E ratio are then picked along with analyzing their financial statements to determine the companies’ net income. Additional list of some of the biggest FMCG companies in Indonesia is also included in order to be able to see the overall strategy of performance of a company who had been long in the industry. Through the analysis, the correlation of inventory turnover and D/E ratio within the company indeed impact financial performance stability of the company in a way that a lower D/E which means that they will have less financial risk and more stability. Companies can be benefitted to be able to stay stable in the market facing the volatile economic conditions and industry downturns; lower D/E can also mean more flexibility for future investment. Lenders will more likely to lend more money when indeed to the companies who have lower D/E ratio compared to other companies with higher D/E. A high ITR and low DER can make a company  more agile, reduce the burden of interest payments, which eventually will make it easier for the company to invest in profitable opportunities, and lead to  higher ROA.

Business Strategy to Increase Sales Performance: Case Study of a Mineral Water Product in Indonesia

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Currently, people in Indonesia are starting to become aware of consuming proper drinking water so the demand for proper drinking water increases every year. This is an opportunity for Club mineral water to meet market demand. Club’s drinking water brand has started to gain public attention, as shown by the Club’s brand being included in the category of five bottled drinking water based on consumer choice according to Indonesia’s Top Brand data. Even so, the Club has the lowest market share percentage when compared to its four competitors. Furthermore, looking at the internal sales performance of the Indofood CBP’s group, sales of the beverage division were smaller than other divisions. This shows that the Club needs to analyze its strategy to improve its sales performance so the company can become a leader in its market. This study further analyzes how the company runs its business from an external and internal perspective. This study uses external analysis such as PESTEL analysis, Porter’s five forces, consumer analysis, and competitor analysis. Moreover, there are also internal analyses such as analysis of the company’s core competencies, resource-based analysis, and VRIO. Then a further analysis was conducted by using a SWOT analysis to determine the strengths, weaknesses, opportunities, and threats to the Club’s mineral water products. This study uses qualitative and quantitative methods using a survey of Club mineral water customers. The researcher also analyzed the position of the Club’s mineral water compared to its business competitors in terms of sales, followers on Instagram social media, frequencies of Instagram posting, and how competitors use digital media. After that, the TOWS matrix will help the Club’s mineral water develop its business and sales. The recommendations given include that the company should know its core competencies to develop, makes product innovations that are different from its competitors, improve the way product promotions are delivered, and optimizes digital media as a sales tool. Strategy implementation in the form of a Gantt chart is made based on these recommendations so that PT ICBP Club could implement it properly.