Group 1 - Final Project Revision

STRATEGIC MANAGEMENT
FINAL PROJECT
M. Ihsan Firdaus 09111740000026

Maria Angelia K.W. 09111740000043
I Gusti Agung Ayu Dinda Pramesthi Putri 09111740000103
Devita Ayu Nur Fajrina 09111740000107
DOSEN PENGAMPU
Dr. Oec. HSG. Syarifa Hanoum, S.T., M.T.
DEPARTEMEN MANAJEMEN BISNIS
FAKULTAS BISNIS DAN MANAJEMEN TEKNOLOGI
INSTITUT TEKNOLOGI SEPULUH NOPEMBER
SURABAYA
2019
i
STRATEGIC MANAGEMENT
FINAL PROJECT
M. Ihsan Firdaus 09111740000026

Maria Angelia K.W. 09111740000043
I Gusti Agung Ayu Dinda Pramesthi Putri 09111740000103
Devita Ayu Nur Fajrina 09111740000107
DOSEN PENGAMPU
Dr. Oec. HSG. Syarifa Hanoum, S.T., M.T.
DEPARTEMEN MANAJEMEN BISNIS
FAKULTAS BISNIS DAN MANAJEMEN TEKNOLOGI
INSTITUT TEKNOLOGI SEPULUH NOPEMBER
SURABAYA
2019
ii
PREFACE
Praise the presence of God the Almighty because of His grace and guidance, the
author can write this Final Report. Application for this work, the author has
received from various parties in a relatively short time that can be relied upon.
Therefore, the author is pleased to express his appreciation and gratitude to:
1. God Almighty who gave health and duty to make this task
2. Parents who are very helpful
3. Dr.oec.HSG. Syarifa Hanoum, S.T., M.T as a lecturer who has provided
constructive material and advice.
4. Other parties that provide assistance in providing benefits and benefits to those
who work in this field.
Using this paper is far from perfect. Therefore, the author expects constructive
criticism and suggestions from all parties. With a prayer accompaniment,
hopefully this can help in developing our shared thinking education and discourse.
Amen.
Surabaya, November 6 , 2019
Author
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Table of Contents
PREFACE .............................................................................................................. iii
CHAPTER 1 ........................................................................................................... 6
1.1 Background ................................................................................................... 6
1.2 Objectives ...................................................................................................... 7
1.3 Benefits of the study ..................................................................................... 8
1.4 Scope ............................................................................................................. 8
1.5 Constraint ...................................................................................................... 8
1.6 Assumption ................................................................................................... 8
CHAPTER II ........................................................................................................... 9
2.1 Value Chain Analysis.................................................................................... 9
2.2. Porter’s Five Force Model ......................................................................... 10
2.3 SWOT Analysis (TOWS Matrix) ............................................................... 12
CHAPTER III ....................................................................................................... 14
3.1 Research Object .......................................................................................... 14
3.1.1 Profile Company...................................................................................... 14
3.2 Research Plan .............................................................................................. 18
3.3 Research Flow Diagrams ............................................................................ 18
3.4 Data Collection Techniques ........................................................................ 19
3.5 Input Phase .................................................................................................. 20
3.6 Matching Stage ........................................................................................... 21
3.6.1 Strength-Weakness-Opportunity-Threat Matrix (SWOT) ...................... 21
3.6.2 Internal and External Matrix (IE matrix) ................................................ 23
3.7 Decision Stage ............................................................................................. 24
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3.7.1 Quantitative Strategy Planning Matrix (QSPM) ..................................... 24
4.1 SME’S SubSector Profile............................................................................ 25
4.1.1 Odi Store.................................................................................................. 25
4.1.2 Original Apparel Shop............................................................................. 26
4.2 Internal Analysis ......................................................................................... 27
4.2.1 4P (Product, Price, Place, Promotion) ..................................................... 27
4.2.2 STP .......................................................................................................... 28
4.2.3 Value Chain Analysist ............................................................................. 28
4.3 External Condition Analysis ....................................................................... 32
4.3.1 PESTEL Analysis .................................................................................... 32
4.3.2 Porter’s Five Forces................................................................................. 37
4.4 External Factor Analysis Summary ............................................................ 38
4.5 Internal Factor Analysis Summary ............................................................. 39
4.6 IE (INTERNAL-EXTERNAL) MATRIX .................................................. 40
4.7 QSPM .......................................................................................................... 42
4.8 TOWS MATRIX......................................................................................... 49
4.9 Key Success Factor (KSF) .......................................................................... 52
4.10 Priority Scale ............................................................................................. 53
4.11 Action Plan ............................................................................................... 54
CHAPTER V......................................................................................................... 59
5.1 Conclusion .................................................................................................. 59
5.2 Recommendations ....................................................................................... 59
REFERENCE ........................................................................................................ 60
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List of Pictures
Picture 1 Fashion Retail Industry Revenue ............................................................. 7
Picture 2 Value Chain Analysis .............................................................................. 9
Picture 3 Porter’s Five Force Model ..................................................................... 12
Picture 4 Odi Store Bagpack ................................................................................. 15
Picture 5 Odi Store Cloth ...................................................................................... 15
Picture 6 Odi Store Product .................................................................................. 16
Picture 7 Photo Product ......................................................................................... 17
Picture 8 Original Apparel Shop Product ............................................................. 17
Picture 9 Matrix SWOT ........................................................................................ 22
Picture 10 IE Matrix .............................................................................................. 23
Picture 11 Odi Store Organization Structure ........................................................ 25
Picture 12 Original Apparel Shop Organization Structure ................................... 27
Picture 13 Value Chain Analysis .......................................................................... 28
Picture 14 Inbound Logistic .................................................................................. 29
Picture 15 original apparel shop operation............................................................ 29
Picture 16 packaging process ................................................................................ 30
Picture 17 Original Apparel Shop ......................................................................... 30
Picture 18 Odi Store Social Media ........................................................................ 30
Picture 19 e-commerce .......................................................................................... 31
Picture 20 e-commerce .......................................................................................... 31
Picture 21 Firm Infrastructure ............................................................................... 32
Picture 22 GDP Indonesia ..................................................................................... 33
Picture 23 PDRB Surabaya ................................................................................... 34
Picture 24The Average Expenditure per Capita.................................................... 35
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Picture 25 Peta E-Commerce Indonesia ................................................................ 36
Picture 26 Internal –External Matrix..................................................................... 40
Picture 27 Priority Scale ....................................................................................... 53
4
List of Table
Table 1 SWOT Analysis ....................................................................................... 12
Table 2 EFAS Analysis ......................................................................................... 39
Table 3 IFAS Analysis .......................................................................................... 40
Table 4 TOWS Matrix .......................................................................................... 45
Table 5 QSPM ....................................................................................................... 48
Table 6 Action Plan ............................................................................................... 58
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CHAPTER 1
INTRODUCTION
In this chapter will contain the background of the holding of research, the
formulation of the problem, the objectives to be achieved in research, the benefits
of research, the scope of which contains limits and assumptions in this study.
1.1 Background
Business is a dynamic thing and will always experience development over

time. Along with increasingly qualified technology makes the movement more
visible. Many types of businesses began to color the industry in Indonesia. One
sector that is experiencing growth is the creative industry. In Indonesia, the
creative economy sector has developed rapidly. The three main subsectors that
underpin the creative economy in Indonesia, are culinary, fashion and crafts. In
2017 for example, this sector contributed Rp 990 trillion and absorbed 17.4
percent of the workforce and this year it is projected to contribute Rp 1,041
trillion in GDP and absorb 18.2 percent of the workforce. BPS data also shows
that Surabaya as the city with the largest number of creative economy actors in
Indonesia with a figure of 6.41% in 2016. With this, a lot of cooperation for the
contribution of the creative economy is increasing. Bekraf was also held in
Surabaya to increase public awareness of the potential of the creative economy.
Of the many types of creative industries in Surabaya, the sector that

continues to experience progress is the fashion industry. The fashion sector itself
is the second largest contributor after the culinary sector. According to Bekraf's
data, the total contribution of Small Medium Enterprise has reached a value of
seven percent of national income. The contribution of fashion itself is 18 percent.
The existence of e-commerce is very visible to have an impact on the number of
small and medium businesses that are present in the fashion sector. There are
many local fashion brands managed by young people who have their own
segments and enthusiasts. In Surabaya itself many local fashion brands are
founded by young people. The fashion industry include retail fashion as well.
Retailer for well-known brand and sporty brand has a big segment espeacially in
younger generation. The data below show that the projection revenue of the retail
fashion is growing every year. In the fashion retail industry the biggest renevue is
from apparel and the lowest is from accessories. This projection expect that the
retail industry is always growing and this could be a great opportunity for the
retailer to make a good strategy so that the retailer can conduct a good stategy to
maximize the opportunity.
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Picture 1 Fashion Retail Industry Revenue
The demand for randed retail fashion is big enough because of the leads of
the trend. An addition to thet there is not much retailer for an original product. So
the people like this kind of business, because their needs are being fulfilled.
Study Formulation
In this study, the authors make the following problem formulations:
1. What is the condition of the fashion retail industry in Indonesia in external or
internal ?
2. What is the strategic design that can be recommended for businesses in the
Surabaya Fashion retail industry?
3. What is the recommended implementation strategy plan for the next 5 years?
1.2 Objectives
The objectives to be achieved by the author in this study are as follows:
1. Knowing the internal and external conditions in the fashion retail industry in
Surabaya
2. Knowing the analysis of design strategies that suitable for Surabaya's local
fashion industry.
3. Knowing the implementation strategic plan that is appropriate for the local
fashion retail industry in Surabaya
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1.3 Benefits of the study
The benefits obtained from this research are categorized into 3 (three)
parts, including: benefits for the writer, benefits for the business of a sheet of
cloth, and benefits for local fashion brand in Surabaya. The following is an
overview of the benefits of this research based on these three categories:
1. Benefits for Authors:
This study is useful for writers to add insight and experience in
the identification of internal and external conditions as well as the
formulation of strategies local fashion industry, In addition, this study
also becomes a car or container for applying the Strategic Management
Science that has been obtained by the author in an effort to formulate a
strategic plan which is most suitable for local fashion industry
2. Benefits of a day's business:
This research is useful because it can provide information
related to internal and external conditions of the business, which later
will be used as a strategic design that can be recommended for a day's
business.
3. Benefits for Readers
This study provides benefits for readers in the form of adding
insight related to internal and external conditions along with strengths,
weaknesses, opportunities and business challenges local fashion brand.
In addition, through this writing the reader can also know how to
formulate a strategy.
1.4 Scope
The scope of research is used in order to focus research on the formulation
of the problem and the objectives to be achieved. As well as processing data
relating to the fashion industry in Surabaya especially in retail industry.
1.5 Constraint
The constraint of this research was conducted in the fashion industry sub-
sector in Surabaya.
1.6 Assumption
The assumptions used in this study are the data obtained from observations
of SMEs a day a piece of cloth becomes the basis in determining the
conditions of existing fashion industry businesses.
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CHAPTER II
THEORITICAL
2.1 Value Chain Analysis
Value chain analysis (VCA) is a process where a firm identifies its
primary and support activities that add value to its final product and then
analyze these activities to reduce costs or increase differentiation.Value chain
represents the internal activities a firm engages in when transforming inputs
into outputs.
Picture 2 Value Chain Analysis
M. Porter introduced the generic value chain model in 1985. Value chain
represents all the internal activities a firm engages in to produce goods and
services. VC is formed of primary activities that add value to the final product
directly and support activities that add value indirectly.
Primary Activies
The main activity is directly related to the physical creation, sale,
maintenance and support of a product or service. They consist of:
• Inbound Logistics
All processes related to receiving, storing, and distributing internal
inputs.
• Operations
Transformation activities that convert inputs into outputs that will be
sold to customers.
• Outbound Logistics
This activity provides products or services to customers.
• Marketing & Sales
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The process used to persuade customers to buy products for sale.
• Service
Activities related to maintaining the value of the product or service to
the customer after purchasing the product.
Support Activites
• Procurement (Purchasing)
The organization's activities to obtain the resources needed to operate.
• Human Resource Management
How well a company recruits, trains, motivates, rewards and retains its
employees.
• Technological Development
This activity deals with managing and processing information, and
protecting the company's knowledge base.
• Infrastructure
The company's support system, and functions that make it possible to
maintain daily operations such as accounting, law, administration and
management.
2.2. Porter’s Five Force Model

The tool was created by Harvard Business School professor Michael
Porter, to analyze an industry's attractiveness and likely profitability. Since its
publication in 1979, it has become one of the most popular and highly
regarded business strategy tools.
Porter recognized that organizations likely keep a close watch on their
rivals, but he encouraged them to look beyond the actions of their
competitors and examine what other factors could impact the business
environment. He identified five forces that make up the competitive
environment, and which can erode your profitability. These are:
1.Competitive Rivalry. This looks at the number and strength of your

competitors. How many rivals do you have? Who are they, and how
does the quality of their products and services compare with yours?
Where rivalry is intense, companies can attract customers with
aggressive price cuts and high-impact marketing campaigns. Also, in
markets with lots of rivals, your suppliers and buyers can go elsewhere if
they feel that they're not getting a good deal from you.
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On the other hand, where competitive rivalry is minimal, and no one else
is doing what you do, then you'll likely have tremendous strength and
healthy profits.
2.Supplier Power. This is determined by how easy it is for your suppliers to

increase their prices. How many potential suppliers do you have? How
unique is the product or service that they provide, and how expensive
would it be to switch from one supplier to another?
The more you have to choose from, the easier it will be to switch to a
cheaper alternative. But the fewer suppliers there are, and the more you
need their help, the stronger their position and their ability to charge you
more. That can impact your profit.
3.Buyer Power. Here, you ask yourself how easy it is for buyers to drive
your prices down. How many buyers are there, and how big are their
orders? How much would it cost them to switch from your products and
services to those of a rival? Are your buyers strong enough to dictate
terms to you?
When you deal with only a few savvy customers, they have more power,
but your power increases if you have many customers.
4.Threat of Substitution. This refers to the likelihood of your customers

finding a different way of doing what you do. For example, if you supply
a unique software product that automates an important process, people
may substitute it by doing the process manually or by outsourcing it. A
substitution that is easy and cheap to make can weaken your position and
threaten your profitability.
5.Threat of New Entry. Your position can be affected by people's ability to
enter your market. So, think about how easily this could be done. How
easy is it to get a foothold in your industry or market? How much would
it cost, and how tightly is your sector regulated?
If it takes little money and effort to enter your market and compete
effectively, or if you have little protection for your key technologies,
then rivals can quickly enter your market and weaken your position. If
you have strong and durable barriers to entry, then you can preserve a
favorable position and take fair advantage of it
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Picture 3 Porter’s Five Force Model
2.3 SWOT Analysis (TOWS Matrix)

A TOWS analysis is a variant of a SWOT analysis and is an acronym for
Threats, Opportunities, Weaknesses and Strengths. Similar to a SWOT, a
TOWS analysis will involve the identification of an organisation’s strengths,
weaknesses, opportunities and threats; however, often a key criticism of a
SWOT analysis is that it doesn’t show the relationships between the different
factors and categories. For example, a particular threat might make a weakness
much more significant. Whereas a TOWS analysis will look to match internal
factors to external factors to help identify relevant strategic options that an
organisation could pursue. It can help an organisation to see how it can take
advantage of opportunities, reduce threats, overcome weaknesses and exploit
any strengths. A TOWS is a commonly used strategic planning tool and
can add real value to an organisation, helping to take strategic planning one
step further. Below is an example TOWS matrix.
IFAS Strengths (S) Weaknesses (W)

Tentukan 5-10 Tentukan 5-10
EFAS Faktor kekuatan internal Faktor kelemahaninternal
Strategi SO Strategi WO
Opportunies (O)
Ciptakan strategi yang Ciptakan strategi yang
Tentukan 5-10
menggunakan kekuatan meminimalkan
Faktor peluang
untuk memanfaatkan kelemahan untuk
eksternal
peluang memanfaatkan peluang
Strategi WT
Strategi ST
Treaths (T) Ciptakan strategi yang
Ciptakan strategi yang
Tentukan 5-10 meminimalkan
menggunakan kekuatan
Faktor ancaman eksternal kelemahan dan
untuk mengatasi ancaman
menghindari ancaman
Table 1 SWOT Analysis
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1. SO : A TOWS analysis enables an organisation to match its internal
strengths, and external opportunities (SO) to develop ‘maxi-maxi’
strategies – those with the greatest potential for success.
2. Kuadran ST and WO : mini-maxi (WO) and maxi-mini strategies (ST) are
designed to strengthen weaknesses, utilising opportunities, and minimise
threats utilising strengths. An example mini-maxi strategy (WO) is that an
organisation may have identified an opportunity to outsource some aspects
of its business operations, overcoming the weakness of lack of specific
skills within the organisation.
3. WT : At the other extreme, it highlights the organisation’s vulnerability to
threats based on its weaknesses and facilitates the development of
strategies that minimise these and avoid threats (WT) – ‘mini-mini’
strategies.
According to Ferrel and Harline (2005) the function of a SWOT
Analysis is to obtain information from a situation analysis and separate it
from internal issues (strengths and weaknesses) and external issues
(opportunities and threats). The SWOT analysis will explain whether the
information indicates something that will help the company achieve its
objectives or give an indication that there are obstacles that must be faced
or minimized to meet the desired income.
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CHAPTER III
RESEARCH METHODOLOGY
In chapter 3 the research methodology will be discussing on several things,
including provide research plans, research objects, research flow diagrams, and
research studies ranging from data collection to conclusions and suggestions.
3.1 Research Object
3.1.1 Profile Company
3.1.1.1 About the Industrial Sector
Creative industries are industries that come from the use of

individual creativity, skills and talents to create prosperity and
employment by generating, exploiting creative power and
individual’s creativity. In 2019, there are three sub-sectors that
have become leading because they contribute the highest GDP to
Indonesia, including culinary, fashion and crafts. The fashion
sector is included in the types of creative industries that are
involved in manufacturing a clothing product, clothing
accessories, opening fashion consultations and distributing
fashion products that have been created. Fashion trends are
always changing rapidly. In a months, new fashion mode always
appear. This can’t be separated from the productivity of
innovative local fashion designers that design new model clothes,
and the emergence of creative young generation who are
enthusiastic about the fashion industry. Society as a market is
getting smart and have a high taste in choosing fashion.
On the other hand, this subsector must face many challenges.
Local fashion is still a stepchild, the market prioritize space for
imported products, so that local fashion has lack of space. While
another important challenge is the synergy of the upstream to
downstream industries, ranging from textile / garment factories,
fashion designers, to market affairs.
With optimism that the fashion industry can compete in the
Asean Economic Community (AEC), Bekraf will provide
assistance through facilitation that can encourage this sub-sector
to become even greater. Bekraf will issue a policy to encourage
the use of domestic fashion works, strengthen the availability of
raw materials until the promotion of domestic fashion products in
the domestic and global markets.
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Retail is one way of marketing products including all activities
that involve selling goods directly to end consumers for personal
and non-business use. Understanding online retailing is a form of
electronic commerce that allows consumers to directly buy goods
or services from a seller through the internet without
intermediary services. Online retail opens hope for small
entrepreneurs. Many of them use various types of e-commerce to
run their businesses. Apparently online retailing still has a future
for small entrepreneurs.
3.1.1.2 About Odi Store
There are many online retail store in Indonesia. In this case

is in Surabaya, one of them are “Odi Store” business which is
inspired by trend of jersey in the begining. But the demand of
jersey is getting low so they change to sell surf clothes, bag,
shoes etc.
3.1.1.3 About The Product
Picture 4 Odi Store Bagpack
Picture 5 Odi Store Cloth
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Picture 6 Odi Store Product
Price : From Rp 170.000- Rp 999.000

Type of Product : Original brand of Clothes, Bagpack, Hat,
Waistbag, Shoes, Wallet and Sandals
3.1.1.4 Value Preposition
Each packaging of “Odi Store” always give a greating card to

buyers in special day. They also provide for refund or change the
product if it has a defect.
3.1.1.5 About Original Apparel Shop
It is in the same sub sector with Odi Store which is online

retail store. Original Apparel Shop is a trusted original business
that especially sell clothes and shoes, but also cap dan bag.
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3.1.1.6 About The Product
Picture 7 Photo Product
Picture 8 Original Apparel Shop Product
Price : From Rp149.000 – Rp449.000

Type of Product : Original brand of clothes, shoes cap dan bag.
3.1.1.7 Value Preposition
This business provide money back guarantee, affordable price and

absolutely trusted original store.
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3.2 Research Plan
Research in the Odi Store case study uses descriptive analysis by
analyzing primary and secondary data. To determine and formulate an
appropriate strategy design, the writer will conduct some preliminary research
which is the initial data collection, input input, matching input, and renewal of
policy implementation.
3.3 Research Flow Diagrams
The following is a flow chart in this study.
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Start
Defining Object of Observation
Problem Identification
Research Methodology :
1. Primary Data
2. Secondary Data
Analisis dan Pembahasan
1. External Analysis (PESTEL & Five Force Porter’s ) (EFAS)
2. Internal Analysis (Value Chain) (IFAS)

Input
3. Analisis Competitive Profile Matrix (CPM)
1. Analisis TOWS Matrix

Matching
2. Analisis IE Matrix
Decision Making
QSPM
Conclusion
Finish
3.4 Data Collection Techniques

The process of collecting data in this study uses several ways:
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a. Primary data (observation, interview, etc)
b. Secondary data (eg. Bekraf, BPS)
3.5 Input Phase
Important strategy formulation techniques can be integrated into a two stage
decision making framework, namely:
a. Internal Factor Evaluation Matrix
IFE matrix use a company’s major strenghts and weaknesses as the
key internal factors evaluation. According to this matrix is developed in
the following five steps:
1) List key internal factors as identified in the internal-audit process. Use
a total of from 10 to 20 internal factors, including both strenghts and
weaknesses. Be as specific as possible, using percentages, ratios, and
comparative numbers.
2) Each key factor should be assigned a weight ranging from 0.0 (low
importance) to 1.0 (high importance). The weight given to a factor
indicates the relative importance of the factor to being successful in the
industry in which the company is engaged. Regardless of whether the
key factor is internal strength or weakness, the factors considered to
have the greatest influence on organizational performance are given
the highest weight. The sum of all weights must be 1.0.
3) Give ranks 1 to 4 for each factor to indicate whether these factors
represent major weaknesses (rank = 1), small weaknesses (rank = 2),
small strengths (rank = 3), or major strengths (rank = 4). Ratings are
given based on company circumstances, while weights in Step 2 are
based on industry circumstances.
4) Multiply each factor weight by rank to determine the weighted value
for each variable.
5) Add up the weighted values for each variable to determine the total
weighted values for the organization.
b. External Factor Evaluation Matrix
The EFE matrix use a company’s major opportunities and threats that
are affecting or might affect the company as the key external factors
evaluation. Developing an EFE matrix consists of five steps that are similar
to developing IFE matrix such as:
1) List the external factors identified in the external audit process.
Look for between 10 and 20 factors, including opportunities and
threats that affect the company and its industry. List of opportunities
first then threats. Be as specific as possible, use percentages, ratios,
and comparison figures if possible.
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2) Give weight to each factor from 0.0 (not important) to 1.0 (very
important). Weight indicates the relative importance of these factors
in order to succeed in the industry. Opportunities often get more
weight than threats, but threats can also receive high weights if they
are heavy or threatening. A reasonable weight can be determined by
comparing successful competitors with those who fail or by
discussing these factors and reaching group consensus. The sum of
all weights given to the above factors must be equal to 1.0.
3) Give a rating of 1 to 4 for each critical success factor to show how
effective the company's current strategy is to answer this factor,
with notes 4 = superior answers, 3 = answers above average, 2 =
average answers, 1 = answers not good. Ratings are based on the
effectiveness of the company's strategy. The rating is based on the
state of the company, while the weights in Step 2 are based on the
industry.
4) Multiply each weight by rank to determine the weighted value.
5) Add up the weighted values for each variable to determine the total
weighted values for the organization.
3.6 Matching Stage
In this research, the researchers will discuss alternative strategies that
make sense by taking into account the main external and internal factors. At
this matching stage there are several techniques, namely:
3.6.1 Strength-Weakness-Opportunity-Threat Matrix (SWOT)
This SWOT matrix is an important matching tool that can help managers
develop four types of strategies:
a. A-SO Strategy (strength in opportunity)
SO utilizes the internal strengths of the company to take advantage

of external opportunities. If the company has considerable
weaknesses, then the company will struggle to overcome them and
turn them into strengths.
b. J-WO Strategy (weakness in opportunities)
WO aims to fix internal weaknesses by taking advantage of

external opportunities. Sometimes opportunities will arise, but the
company has internal weaknesses that can prevent the company
from taking advantage of these opportunities.
c. A-ST strategy (force on threats)
ST uses the power of a company to avoid or reduce the impact of

external threats. This does not mean that a strong organization
must always face threats directly in the external environment.
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d. A-WT strategy (weakness on threats)
WT is a defensive technique that is directed to reduce the

company's internal weaknesses and avoid external threats.
There are several steps in creating a SWOT matrix

1.Make a list of the main external opportunities of the company
2.Make a list of the main external threats from the company
3.Make a list of the main internal strengths of the company
4.List the main internal weaknesses of the company
5.Match internal strengths with external opportunities, then record the

results in the SO strategy cell
6.Match internal weaknesses with external opportunities, then record

the results in the WO strategy cell
7.Match internal forces with external threats, then record the results on
the ST strategy cell
8.Match internal weaknesses with external threats, then record the

results in the SO strategy cell
This matrix is a four-quadrant framework that can show whether

aggressive, conservative, defensive, or competitive strategies are most
appropriate for a particular organization. The axis of the SPACE matrix
shows two dimensions of internal (financial strength-FS) and
competitive advantage (CA) and two external dimensions
(environmental stability-ES) and industrial strength (IS strength). These
four factors are probably the most important determinants of an
organization's overall strategic position.
Picture 9 Matrix SWOT
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3.6.2 Internal and External Matrix (IE matrix)
This IE matrix positions various divisions within an organization in

nine-cell views. The IE matrix means that the two tools place organizational
divisions in a systematic diagram. That is the reason why IE is called a
portfolio matrix. The IE Matrix is a strategy formulation tool at the matching
stage that focuses on creating alternative logical strategies by combining the
results of the weighting of IFE and EFE. The X axis of the IE matrix is IFE
and the Y axis of the IE matrix is EFE. The purpose of using this model is to
get a more detailed corporate-level business strategy. The company can
identify 9 cell corporate strategies, but in principle from the nine cells can be
grouped into 3 main strategies, namely:
a) Recommendations for divisions included in cells I, II, or IV can be

described as growing and developing. Incentive or integrative
strategies can be most suitable for divivisions in these cells.
b) Divisions that enter cells III, V, and VII can be managed in the best
way with guard and defense strategies.
c) General recommendations given for divisions included in cells VI,

VIII, and IX are harvest or divestment.
Picture 10 IE Matrix
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3.7 Decision Stage
At this stage of the decision only involves one technique, the
Quantitative Strategic Planning Matrix (QSPM). QSPM can show the relative
attractiveness of various alternative strategies and thus can provide an
objective basis for selecting the best alternative strategy. The purpose of using
this model is to obtain a more detailed business-level business strategy
3.7.1 Quantitative Strategy Planning Matrix (QSPM)
Conceptually, QSPM determines the relative attractiveness of various
strategies that are built based on important external and internal success
factors. The relative attractiveness of each strategy in a series of alternatives is
calculated by determining the cumulative impact of each external or internal
success factor.
a) QSPM Privileges
• A set of strategies can be observed sequentially or together
• Encourage strategists to incorporate relevant external or internal

factors into the decision making process. Developing QSPM can
reduce the likelihood that major factors will be missed or
overweighted.
b) QSPM Limitations
• QSPM always requires intuitive judgment and basic assumptions
• QSPM will only be useful if the prerequisite information and matching

analysis is the basis.
24
CHAPTER IV
ANALYSIS
4.1 SME’S SubSector Profile
4.1.1 Odi Store
The sector we studied was strategic planning and formulation,
it’s fashion sector and the sub sector we selected is retailer store. The
store that we chose is Odi Store. At the begining, Odi Store business is
inspired by trend of football jersey. But because there are already a lot
of store that sell the product and the demand of fottball jersey is getting
low, so they change to sell surf clothes, bag, shoes, etc. This business
was established in. Until now they still don’t have a store, they just
have a warehouse in Jombang.
At this time Odi Store just have 3 employees. There are the
desainer who has a job as a design maker for the marketing plan that
has been prepared and scheduled by marketing division. And then there
are marketing who has a job as marketing plan compiler, either through
social media or the marketplace and has a job as the controlers and
evaluates the performance of the design division. And the last there are
operational who has a job as a sender of the products, recording stock of
the products, and providing stock of goods and the needs of Odi Store.
The gross income thaht Odi Store gets is RP 35.000.000 until Rp
55.000.000 per month, meaning they can sell they’re product around
150 products. The marketplace that used by Odi Store is Shopee,
Tokopedia, etc. Odi Store will do promos on every big day, for an
example is, in November thre is a Children’s Day, Odi Store will give
the buyer a discount, and the 11% of the profits will be donated to
children in need.
Organizational Structure
CEO
Marketing Operational
Desain
Picture 11 Odi Store Organization Structure
25
Job Description:
CEO :
• Conduct business control over the ODI Store strategic plan
Operation :
• Delivery of goods
• Doing inventory records
• Providing stock of goods and ODI Store needs
Marketig :
• Arrange marketing plans either through social media or the
marketplace
• Conduct control and evaluation of the performance of the design
Desain :
• Designing a marketing plan that has been prepared
4.1.2 Original Apparel Shop

The sector we studied was strategic planning and formulation, it’s
fashion sector and the sub sector we selected is retailer clothes online store.
Another store that we chose is Original Apparel Shop. From the beginning of
its establishment, this store already sells original clothes from Vans,
Converse, etc. As time goes by, they also sell hats, shoes, bags, etc. This
business was established in 2017. Like Odi Store, Original Apparel Shop still
don’t have a store.
At first this shop only had 1 worker, it’s the owner himself. However,
as time goes by they have 2 employees consisting of marketing and
operations. The marketing has a job to make a plan about their marketing and
make the design that already in their marketing plan. And than there are
operational who has a job as a sender of the products, recording stock of the
products, and providing stock of goods and the needs of the store. The gross
income that Original Apparel Shop is Rp 20.000.000 until Rp 25.000.000 per
month. Original Apparel Shop didn’t use marketplace to sell their product,
Original Apparel Shop just use Instagram and Line to sell their product.
26
CEO
Picture 12 Original Apparel Shop Organization Structure
Job Description:
CEO :
• Conduct business control over the ODI Store strategic plan
Operation :
• Delivery of goods
• Doing inventory records
• Providing stock of goods and ODI Store needs
Marketig :
• Arrange marketing plans either through social media or the
marketplace
• Conduct control and evaluation of the performance of the design
• Designing a marketing plan that has been prepared
4.2 Internal Analysis

4.2.1 4P (Product, Price, Place, Promotion)
4.2.1.1 Odi Store
• Product : Odistore sell variety of clothing and apparel with original
quality.
• Price : Odistore offer a lot of products with price range from
Rp130.000,00 to Rp600.000,00
• Place : This business is based on Surabaya and sell their products through
online platform and marketplace.
• Promotion : Odistore use several way to promote their products such as
using social media influencer to promote the products, using social media
advertisement and always do giveaway and big sales
4.2.1.2 Original Apparel Shop
• Product
27
The products that are being sold in this store are graphic T-shirts, shoes,
and caps from brands such as DC, New Balance, and Converse.
• Price
The prices range from Rp 159.000 – Rp 559.000
• Place
This store solely focus its business in social media, mainly Instagram.
• Promotion
The promotion that the store gives is mainly discount.
4.2.2 STP
4.2.2.1 Odistore
1. Segmenting
The segmentation of Odistore are the younger generation who have interest in
fashion and sporty brands
2. Targeting
From the segmentation, Odistore want to targets 18 - 30 years old people in big
cities in Indonesia, middle class and above.
3. Positioning
Odistore offers good and original quality of products of sporty fashion brands
with competitive prive.
4.2.3 Value Chain Analysist
Picture 13 Value Chain Analysis
Primary activities include the following:
28
• Inbound logistics, Odi Store and Original Apparel for inbond logistic,
share the same flow chart which includes receiving goods from the
suppliers such as fashion shirt, bags, caps, and shoe. After receiving all of
the goods then it will go directly to the inventory. The retail strore will
analyze the materials first before saling them in market place. The goods
will arrive every month. And then for the product that haven’t been sold in
a long time they will sell it with Big Sale promo.
Picture 14 Inbound Logistic
• Operations, many of the stores sell their products by market place and
social media. After products arrive it will go to the inventory for clustering
and organizing. After that they will analyze the materials, variety and size
for the products. After the products launch at the market place then there
will be packaging process. This process likely to be done every day since
there is always an order for the store. Also, social media and market place
likely to be included in the operations process since they haven’t launch a
pop up store.
Picture 15 original apparel shop operation
29
• Outbound logistics, From the suppliers to the inventory there is a
packaging process and after thet the products that have been ordered by
market place or social media, it will be send by shipping courrier in which
they currently use there are JNE, J&T,and POS Indonesia.
Picture 16 packaging process
• Marketing and sales, to promote the products, Online fashion store only
use Market place such as Shopee, Bukalapak, and Tokopedia. And for the
Social Media they use Instagram and Facebook. Unfortunately they only
have Online store for current time, but Odi store are planning to have a
pop up store as well.
•
Online Media
Picture 17 Original Apparel Shop

Picture 18 Odi Store Social Media
30
Picture 19 e-commerce
Picture 20 e-commerce
• Service, these online stores offer a good quality product from several
sporty brand and also they provide shipping to every city in Indonesia.
Support activities include the following:

• Procurement, To receive the products online retail stores usually have a
several suppliers because of variety of the products they offer to the
costumers. These suppliers are from different city including Jakarta, Bali,
and Kupang, and other place.
• Technology development, to promote the products they currently use
market place and social media. But they are planning to launch a website
so they can engaged with the costumers even more.
• Human resource management
1. Online fashion stores only require a small amount of employees
around 3 to 10 because it is a retail store the operational aspect is
not big.
2. There is still no official recruitment system for hiring new
employee because they are still small and family based business.
31
• Firm infrastructure
CEO
Design
Picture 21 Firm Infrastructure
CEO : Controlling the business and building a Strategic planning for the Retail
stores
Operational : Shipping process, control the inventory and stocking the products
Marketing : creating the marketing plan for the social media and market place,
and in charge to control and evaluate the marketing design from Design sub-
devision
Design : Creating visual and graphic content for the marketing plan that have been
created.
4.3 External Condition Analysis

4.3.1 PESTEL Analysis
Political Forces
Government is supportive and encourage the growth of the online fashion
industry. It is predicted by 2022, Indonesia will have 44 million online-
commerce shoppers, with an estimated worth of $55 billion to $65 billion.
Significantly, 30 percent of online commerce will be new consumption
that would not have existed without digital platforms. E-commerce will
also create 26 million full-time-equivalent jobs by 2022, a staggering 20
percent of Indonesia’s total workforce. The e-commerce tax regulation that
was scheduled to come into effect on April 1 could potentially become a
roadblock for Indonesian e-commerce, sellers and platforms alike.
Provisions included requiring online marketplace operators to report
details of each seller’s turnover, mandating online sellers to register for a
tax payer number (NPWP), and clarifying income tax rates to be paid by
online sellers. Those making at least 4.8 billion rupiah (US$340,000) are
required to charge customers’ VAT (value added tax), while online
32
business classified as small and medium enterprises (SMEs) must pay 0.5
percent income tax on turnover or 25 percent corporate tax for larger
enterprises.
Economic Forces
Gross Domestic Product (GDP) is the total amount of the total value of
goods and services produced by a country in a certain period (generally
one year) and used as a benchmark for the level of economic growth in the
country. Indonesia’s GDP in 2018 is at 1.042 trillion US$ which is higher
than the year before. Gross Regional Domestic Product (GRDP) is one
indicator of economic statistics commonly used to know the development
of the economic sector. The value of GRDP generated by the city of
Surabaya in 2017 reached Rp. 495 trillion. The amount is greater than the
value 2016 GRDP Rp. 451 trillion. Average GRDP value increase since
2011 to in 2016 it reached 11 percent. More than 27 percent of the City's
GRDP value Surabaya in 2016 was formed from the value of the Large
and Retail Trade businesses.
Picture 22 GDP Indonesia
33
Picture 23 PDRB Surabaya
Social Forces
The population of Surabaya City in 2017 reached 2.87 million people.
49.40 percent of the total population is male and 50.60 percent are female.
The population of Surabaya City continues to increase every year.
Average Surabaya City population growth rate in 2013 to 2017 is 0.49
percent per year. With the increasing numbers of residents, making the
City of Surabaya increasingly denser. Household expenditure or the value
of consumption (food and non-food) is a reflection of people's purchasing
power. According to the 2017 Susenas results, the average expenditure per
capita for the population of Surabaya City is Rp. 1.90 million per month.
The average monthly expenditure per capita used for non-food
consumption is Rp. 1.14 million. This value is the sum of expensesfor
housing, various goods and services, clothing, durable goods, taxes and
insurance, as well as other expenses such as ceremonies and party.
34
Picture 24The Average Expenditure per Capita
Technological Forces
Technological factors are one of they key player in the context of the e-
commerce industry since it relies heavily on technology. Technology
decides several things in the e-commerce world from popularity to profits.
In the case of online retail store, its business relies heavily on online
market place such as Shopee, Bukalapak and Tokopedia. To reach its
target customers, it also uses social media platforms such as Instagram to
promote its product. Recently, iPrice released a report on the E-commerce
Competition Map in Indonesia Q2 2019 to give a further picture of the
dynamics of the domestic e-commerce industry. In compiling the study,
iPrice collaborated with two analytics companies, namely Similar Web
and App Annie. From the report, we can take some interesting findings
that can illustrate the competition map of e-commerce players in
Indonesia, as well as the condition of this industry in Q2 This 2019.
According to data released by iPrice, Tokopedia became e-commerce with
the highest monthly active user (MAU) in Indonesia. Their site is visited
by around 140 million users every month. The company consistently
occupies the top position for the average number of monthly visitors the
most since the second quarter of 2018. Another Indonesian e-commerce,
Shopee, occupies the second position with an average number of visitors
of 90 million per month. After that, Bukalapak, Lazada, and Blibli occupy
the positions of three, four, and five.
35
Picture 25 Peta E-Commerce Indonesia
Environmental Forces
Environmental impact of the e-commerce fashion industry is considerably
very low. Even so, this factor too have a special importance and it still
focuses heavily on sustainability such as sustainable packaging to waste
reduction. Most online retail store uses a cardboard box as its packaging.
Compared to plastic, cardboard is a material that is more environmentally
friendly because it is easily recycled and also more easily biodegradable.
Cardboard is made of pulp (pulp), some are made of organic wood, or
synthetic.
Legal Forces
Since online retail store is based only in social media platforms and market
such as Instagram, Tokopedia, Bukalapak and Shopee, most of its
customer interactions are done through the screen. According to the
Ministry of Communication and Information Technology, the protection
of consumer in digital transaction has been regulated in Undang-Undang
no. 11 year 2008 concerning Electronic Information and Transactions (ITE
Law) and Peraturan Pemerintah no. 82 of 2012 concerning Operation of
Electronic Systems and Transactions. According to Article 28 paragraph 1
in Chapter VII of the Prohibited Acts it reads "Everyone intentionally, and
without the right to spread false and misleading news that results in
consumer harm in Electronic Transactions." Criminal provisions related to
violations are contained in article 45 paragraph 2. For violating parties,
they can be sentenced to a maximum of six years imprisonment and or a
maximum fine of Rp1 billion. Referring to the sentence, when the
merchant gives a description of the product that is not in accordance with
the actual product, this law applies. One of the main problem in the use of
big data in this era is the illegal transactions of private data of consumers.
The Indonesian Telecommunications Regulatory Agency (BRTI) asserted
36
that the sale and purchase of personal data is an unlawful activity and is an
abuse. The government is preparing regulations for protecting personal
data that will be contained in the Personal Data Protection Act.
Nevertheless, the protection of personal data in general has been regulated
in Undang-Undang Dasar 1945 Number 39 of 1999 concerning Human
Rights, and Undang-Undang Nomor 23 of 2006 concerning Population
Administration.
4.3.2 Porter’s Five Forces

Rivalry Among Competing Firms
Fashion can be sold both offline and online so the prospect of it is very
tempting for most people. The current fashion trend shows the popularity
of streetwear especially in the man section. Some of the offline streetwear
retail store in Surabaya are ORE Small Business & Cafe, Legasy,
Secondorder Store, Brother Streetwear Surabaya, etc. The rivalry in this
indusrty is quite high and the price of the products are sensitive to the
demand in the market.
Potential Entry of New Competitors
The fashion industry is a large segment and is currently recording the
highest production growth among other sectors during the first quarter of
2019. Based on data from the Badan Pusat Statistik (BPS), in the first 3
months of this year fashion industry production grew by 29.19% on an
annual basis. Fashion businesses are now considered to be booming in the
market and it continue to grow because to make such business is quite
easy which means it has a high threat of new entrants. One would only
need capital and finding the right supllier to pursue this type of business.
Potential Development of Substitute Products
The fashion retail industry is a mass production type of industry which
means someone can have the same clothing as the other person if they
shop at the fashion retail store. However, not everyone likes to shop there.
Some people prefer to shop at exclusive brands or private-label which
produces only a limited amount of clothing pieces. Those particular brands
make the consumers feel differentiated from the general crowd.
Bargaining Power of Suppliers
This side will analyze how much this company needs or is dependent on
its suppliers. Online retail store that does not produce its own brand, it
heavily dependent on its suppliers. The products can only be purchased
through certain suppliers, with prices that are different from the market
due to large scale production, so if there is a problem with the supplier it
will make the production process hampered because already dependent on
the supplier. This illustrates high supplier power.
Bargaining Power of Consumers
37
Buyers holds a big deal in buying and selling activities, but here it is more
directed to the choice of buyers for existing product. Due to the growing of
the fashion retail industry and it’s difficulty in distinct its business from
one another, buyers have many choices to buy the same product produced
by other companies because there are many types sold in the market which
illustrates high buyers' power.
4.4 External Factor Analysis Summary

External environment analysis was carried out using the EFAS (External
Factor Evaluation) matrix. The EFE matrix functions to find out how big the
role of external factors in the retail sub sector. Based on the EFE matrix, it can
be seen that there are five opportunities and six threats faced by this sub
sector. The main opportunity is marked with the highest weighted score,
which is level of purchases of Surabaya people for clothes is always
increasing every year and the main threats is marked with the lowest weighted
score, which is threat of spreading false and misleading informating about
product that results in consumer harm in electronic transactions. Table 2 is the
EFE matrix that explains the opportunities and threats of online retail sub
sector, the results of the rating and weighting by group members.
EXTERNAL FACTORS WEIGHT RATING WEIGHTED

SCORE
OPPORTUNITIES
The changing style of Surabaya people who
0,1 4 0,4
prefer to make online purchases
The level of purchases of Surabaya people for
0,1 4,5 0,45
clothes is always increasing every year
Although online shopping is practical, there is
still people who enjoys shopping directly at
0,08 2 0,16
the store so they can now how the clothes fit
and its fabric
The number of populations in Surabaya
0,08 2 0,16
always increasing
The number of e-commerces visitors continue

0,1 3 0,3
to increase per year
THREATS
38
Retail cloth online is dependent on its
suppliers so there are chances of high
0,09 1 0,09
switching costs and if the supplier is out of
stock, the business will also slow down
Changes in consumer fashion tastes every
0,1 4 0,4
time
Since the business is purely based online, it is
0,1 2 0,2
vunerable to hacking
Intense competition in the industry so
0,15 2 0,3
customers can easily switch stores
New business can easily enter the industry 0,05 2 0,1
Threat of spreading false and misleading
informating about product that results in 0,05 1 0,05
consumer harm in electronic transactions
TOTAL SCORES 1 2,61

Table 2 EFAS Analysis
Conclusion: The total value of the EFE for the online retail sub sector is 2.61,
which shows that companies make good use of the opportunities available and are
quite prepared to face the threats that arise. Nevertheless there is a space for
companies to make improvements.
4.5 Internal Factor Analysis Summary

Internal environmental analysis is carried out using the IFAS (Internal Factor
Evaluation) matrix. The IFE matrix functions to find out how big the role of
internal factors in retail sub sector. Based on the IFE matrix, it can be seen that
there are eight strengths and seven weaknesses that are owned by this sub sector .
The main strengths is marked with the highest weighted score, which are excellent
customer service. The main weakness is marked with the lowest weighted score,
which is the organizational structure are too simple. Table 3 is the IFE matrix
explaining the strengths and weakness of retail sub sector, rating results and
weighting by group members.
INTERNAL FACTORS WEIGHT RATING WEIGHTED

SCORE
STRENGTH
39
Affordable price
0,05 4 0,2
Since it is based online, the customers can
look at the catalogue anytime they want 0,06 4.5 0,27
Excellent customer service
0,1 4.2 0,42
Varieties of payment options such as bank
transfer, COD, etc 0,1 3.5 0,35
Sales product that are trendy
0,04 3 0,12
Most of the SME’s are still not registered
0,04 3 0,12
Most of the online ritel have original product
0,06 4,5 0,27
The market is form children to adult and for
woman and man 0,06 4 0,24
WEAKNESS
The retail stores are only based online and it
does not have an offline store in which 0,06 2 0,12
customers can shop at.
Lack in social media marketing and presence 0,1 1.5 0,15
Lack of funding 0,06 2 0,12
Online ritel sub sector does not have a good
0,05 3 0,15
financial report, sometimes they don’t have to
Lack of customer engagement 0,1 3.5 0,35
Some of the employees have no experience in
0,1 2 0,2
their fields
The organizational structure are too simple 0,02 3 0,06
TOTAL SCORES 1 3.14
Table 3 IFAS Analysis
Conclusion: Retail sub sector has quite good and strong internal values. This is
proven by the IFE value for this subsector is 3.14 which shows that the company
can focus all its strengths in overcoming and reducing internal weakness.
4.6 IE (INTERNAL-EXTERNAL) MATRIX
Picture 26 Internal –External Matrix
40
From the IE Matrix above, it can be concluded that fashion retail sub
sector has an Internal Factor Analysis Summary (IFAS) value of 3.14 which is the
high category, and has an External Factor Analysis Summary (EFAS) value of
2.61 with the high category. It shows that the Sub Sector's condition is in a good
performance, so it can determine and manage strategies in the Grow and Build
category. Strategies that can be applied include intensive strategies (market
penetration, market development, and product development) or integrative
(backward integration, forward integration, and horizontal integration) can be the
most appropriate choice for fashion retail sub sector.
Market development strategy is a strategy to introduce products or services
that already exist in new (geographical) regions, as well as expand distribution
networks. Whereas product development is a strategy that aims to increase sales
by improving existing products and/or developing new products. Based on the
analysis and data obtained, the fashion retail sub-sector has opportunities where
the changing style of Surabaya people who prefer to make online purchases and
the level of purchases of Surabaya people for clothes is always increasing every
year. Integrative Strategy is a strategy relating to suppliers and dealing with
distributors and retailers to get closer to consumers in this subse
41
4.7 QSPM
QSPM OF SO, WO STRATEGIES
Strategy Strategy
Weight Strategy 2 Strategy 3 Strategy 4
Key Factors 1 5
Strength AS TAS AS TAS AS TAS AS TAS AS TAS
Affordable price 0,05 3 0,15 3 0,15 2 0,1 2 0,1 4 0,2
Since it is based online, the customers

can look at the catalogue anytime they 0,06 4 0,24 4 0,24 0 0 0 0 3 0,18
want
0,1 3 0,3 2 0,2 3 0,3 3 0,3 3 0,3
Varieties of payment options such as

bank transfer, COD, etc 0,1 4 0,4 4 0,4 3 0,3 3 0,3 4 0,4

0,04 3 0,12 3 0,12 2 0,08 3 0,12 4 0,16
Most of the SME’s are still not

0,04 0 0 0 0 3 0,12 4 0,16 0 0
registered
Most of the online ritel have original

0,06 2 0,12 0 0 1 0,06 0 0 3 0,18
product
42
The market is form children to adult
0,06 4 0,24 3 0,18 4 0,24 3 0,18 4 0,24
and for woman and man
Weakness
The retail stores are only based online
and it does not have an offline store in 0,06 0 0 3 0,18 4 0,24 4 0,24 0 0
which customers can shop at.
Lack in social media marketing and
0,1 4 0,4 4 0,4 1 0,1 1 0,1 4 0,4
presence
Lack of funding 0,06 4 0,24 4 0,24 4 0,24 4 0,24 4 0,24
Online ritel sub sector does not have a

0,05 3 0,15 3 0,15 2 0,1 4 0,2 4 0,2
good financial report
Lack of customer engagement 0,1 3 0,3 4 0,4 2 0,2 3 0,3 4 0,4
Some of the employees have no

0,1 1 0,1 0 0 0 0 2 0,2 3 0,3
experience in their fields
The organizational structure are too
0,02 1 0,02 0 0 0 0 1 0,02 2 0,04
simple
Sum Weight 100% 2.78 2.66 2.08 2.46 3.24
Opportunity
The changing style of Surabaya people
0,1 4 0,4 4 0,4 0 0 0 0 4 0,4
who prefer to make online purchases
The level of purchases of Surabaya
0,1 4 0,4 4 0,4 4 0,4 4 0,4 4 0,4
people for clothes is always increasing
43
every year
Although online shopping is practical,

there is till people who enjoys
shopping directly at the store so they 0,08 3 0,24 3 0,24 4 0,32 4 0,32 2 0,16
can now how the clothes fit and its
fabric
The number of populations in
0,08 4 0,32 4 0,32 4 0,32 4 0,32 4 0,32
Surabaya always increasing
The number of e-commerces visitors
0,1 4 0.4 1 0.1 0 0 0 0 1 0.1
continue to increase per year
Threat
switching costs and if the supplier is 0,09 4 0,36 0 0 2 0,18 0 0 3 0,27
out of stock, the business will also
slow down
Changes in consumer fashion tastes
0,1 3 0,3 3 0,3 3 0,3 3 0,3 4 0,4
every time
Since the business is purely based
0,1 2 0,2 0 0 0 0 0 0 4 0,4
online, it is vunerable to hacking
0,15 4 0,6 3 0,45 4 0,6 4 0,6 4 0,6
New business can easily enter the
0,05 3 0,15 4 0,2 4 0,2 3 0,15 3 0,15
industry
44
Threat of spreading false and
misleading informating about product
0,05 3 0.15 4 0.2 0 0 0 0 4 0.2
that results in consumer harm in
electronic transactions
Sum Weight 100% 3.52 5.27 4.4 4.55 6.64
QSPM OF ST, WT STRATEGIES

Strategy Strategy
Weight Strategy 7 Strategy 8 Strategy 9
Key Factors 6 10
Strength AS TAS AS TAS AS TAS AS TAS AS TAS
Affordable price 0,05 3 0,15 0 0 4 0,2 4 0,2 4 0,2
Since it is based online, the customers

can look at the catalogue anytime they 0,06 4 0,24 2 0,12 4 0,24 0 0 4 0,24
want
0,1 2 0,2 2 0,2 3 0,3 0 0 4 0,4
Varieties of payment options such as

bank transfer, COD, etc 0,1 2 0,2 3 0,3 3 0,3 3 0,3 4 0,4

0,04 5 0,2 0 0 4 0,2 4 0,2 4 0,2
45
Most of the SME’s are still not
0,04 0 0 1 0,04 0 0 3 0,12 0 0
registered
Most of the online ritel have original

0,06 3 0,18 0 0 3 0,18 0 0 0 0
product
The market is form children to adult

0,06 4 0,24 2 0,12 2 0,12 1 0,06 2 0,12
and for woman and man
Weakness
The retail stores are only based online
and it does not have an offline store in 0,06 4 0,24 3 0,18 1 0,06 4 0,24 1 0,06
which customers can shop at.
Lack in social media marketing and
0,1 4 0,4 1 0,1 1 0,1 0 0 4 0,4
presence
Lack of funding 0,06 0 0 4 0,24 4 0,24 4 0,24 2 0,12
Online ritel sub sector does not have a

0,05 0 0 3 0,15 4 0,2 4 0,2 2 0,1
good financial report
Lack of customer engagement 0,1 2 0,2 0 0 4 0,4 1 0,1 4 0,4
Some of the employees have no

0,1 1 0,1 0 0 2 0,2 0 0 0 0
experience in their fields
The organizational structure are too
0,02 0 0 3 0,06 1 0,02 1 0,02 0 0
simple
Sum Weight 100% 2.35 1.51 2.76 1.68 2.64
46
Opportunity
The changing style of Surabaya people
0,1 3 0,3 4 0,4 4 0,4 3 0,3 4 0,4
who prefer to make online purchases
The level of purchases of Surabaya
people for clothes is always increasing 0,1 4 0,4 4 0,4 4 0,4 3 0,3 4 0,4
every year
Although online shopping is practical,
there is till people who enjoys
shopping directly at the store so they 0,08 4 0,32 3 0,24 2 0,16 4 0,32 2 0,16
can now how the clothes fit and its
fabric
0,08 4 0,32 4 0,32 4 0,32 4 0,32 4 0,32
Surabaya always increasing
The number of e-commerces visitors
0,1 4 0.4 4 0.4 4 0.4 0 0 4 0.4
continue to increase per year
Threat
switching costs and if the supplier is 0,09 3 0.27 2 0.18 4 0.36 4 0.36 0 0
out of stock, the business will also
slow down
Changes in consumer fashion tastes
0,1 4 0.4 3 0.3 4 0.4 3 0.3 4 0.4
every time
Since the business is purely based 0,1 2 0.2 4 0.4 1 0.1 0 0 0 0
47
online, it is vunerable to hacking

0,15 4 0.6 4 0.6 4 0.6 4 0.6 4 0.6
New business can easily enter the
0,05 4 0.2 4 0.2 3 0.15 3 0.15 2 0.1
industry
misleading informating about product
0,05 1 0.05 4 0.2 4 0.2 0 0 4 0.2
that results in consumer harm in
electronic transactions
Sum Weight 100% 5.81 5.15 6.25 4.33 5.62
Table 4 QSPM
48
4.8 TOWS MATRIX
S W
Affordable price The retail stores are only

based online and it does
not have an offline store
in which customers can
shop at.
Since it is based online, the Lack in social media

customers can look at the marketing and presence
catalogue anytime they want
Excellent customer service Lack of funding
Varieties of payment options Online ritel sub sector

such as bank transfer, COD, does not have a good
etc financial report,
sometimes they don’t
have to
Lack of customer
engagement
Some of the employees

Most of the SME’s are still
have no experience in
not registered
their fields
Most of the online ritel have The organizational

original product structure are too simple
The market is form children

to adult and for woman and
man
O SO Strategies WO Strategies
49
The changing style of Strategy 1
Surabaya people who prefer S2, O1
to make online purchases
Increasing clothing stocks Strategy 4
and varieties of clothes such W1,O2,O3
as shirts, T-Shirts, pants, and
Make an offline store so
outerwear so that customers
The level of purchases of everyone can visit and
can have more options
Surabaya people for clothes is buy there at a strategic
always increasing every year location such as a mall.
Strategy 2
Although online shopping is O2, S3
Strategy 5
practical, there is till people
Creating an interesting social W2 , O1,O2
who enjoys shopping directly
media presence in order to
at the store so they can now Increase the promotions
attract more customers
how the clothes fit and its on social media
fabric
Strategy 3
Surabaya always increasing O3 , S5
Join event such as bazar,

The number of e-commerces PAMMITS, to attract more
visitors continue to increase customers and also the
per year customer can try the clothes
T ST Strategies WT Strategies
Retail cloth online is Strategy 6

dependent on its suppliers so S2,T2 Strategy 9
there are chances of high
Every month doing research T3, W3
switching costs and if the
on the latest fashion that is
supplier is out of stock, the Look for investors such as
famous in the community.
business will also slow down from family or friends to
50
fund the business so that it
Changes in consumer fashion
can create offline store
tastes every time Strategy 7
Since the business is purely S5,T3

Strategy 10
based online, it is vunerable Improve the security of
to hacking technology used to protect T4,W6
customer data Increase customer
engagement to create
customer loyalty
Strategy 8
S5,T4
Intense competition in the Offer different type of

industry so customers can clothing or brand from its
easily switch stores competitor
New business can easily enter

the industry

misleading informating about
product that results in
consumer harm in electronic
transactions
Table 5 TOWS Matrix
51
4.9 Key Success Factor (KSF)
This part will be explained a few things about key success factors for the company to
continue to exist in the sub sector ritel online clothes:
1. The Diversity of Products
Although the concept is a retail business, the completeness of the availability of products
sold can be one of the factors supporting the success of a company in the retail field.
With more and more items being sold, it will make buyers have more choices, in other
words a complete product can certainly expand the reach of buyers.
2. Right price
In the retail business, there will definitely be many rivals from other fashion. Therefore,
as a retailer, the seller is required to be able to carry out price controls appropriately. Do
not let the selling price be too high, because this will make customers move to another
place. However, don't also sellers set prices too low because it can result in consumers
not trusting the product and the benefits we receive are small.
3. The Seller of Genuine Goods Does’nt own an online store
Usually the original seller of goods does not have an online store. This will be an
opportunity for online retail stores because if there are customers who are lazy to shop
directly then the customer will buy the clothes online. For example, NIKE does not have
an online store in Indonesia, so customers who are lazy to shop directly in the offline
store, they will buy it in online retail store.
4. Ease of Customer Getting
Ease of buying or getting product is also a success factor of this online clothing retail
sub-sector, if the way to order is too difficult and many conditions must be done, the
customers will be to lazy to buy at the SMEs. Therefore, if the customer is easy to get the
product offered it will provide added value to the product and will increase customer
loyalty to SMEs.
5. Good Service
Good service is also a success factor in this online clothing retail sub-sector. If the seller
is not friendly to the buyer, the buyer will not be interested in buying in the SMEs. In
addition, at the online clothing retail they offer to change the size if it does not fit this is
an advantage of online clothing retail stores because if the original shop usually they do
not accept changing clothes sizes.
52
4.10 Priority Scale
Picture 27 Priority Scale
Based on Priority Scale diagram above can be known the alternative strategies. The
priority scale diagram divided by 4 quadrant that classify the conditions that must be
implemented in each alternative strategies. This diagram has 2 axes, X and Y. X axis symbolizes
the Urgent Strategy Level, while the Y axis symbolizes the Importance of Strategy.
The first is Quadrant One, which is classified as an alternative strategy that has a high
level of importance and requires implementations time as soon as possible (Urgent) which is
called the “Do It Right Now” which indicates that the strategy must be carried out immediately.
Strategy included in Quadrant One are alternative strategies number 5,6,and 8.
The second quadrant is classified for alternative strategies with a category of high
importance and has a low level of urgency, so it does not to be done immediately which is called
“Put It Off” which indicates an alternative strategy to continue to be implemented but not in the
near future. Alternative strategies included in the quadrant is alternative strategies number
2,7,and 10.
Then the third quadrant is classified as alternative strategies that are in condition of low
importance and low urgency level, so it is called the “Delete It” quadrant which indicates that the
alternative strategy must be removed and there is no interest to do. Alternative strategies
included in quadrant three in strategies number 3,4,and 9.
For the last quadrant which classified as an altenative strategy that is in condition of low
interest rate but has a high enough level of urgent which is called the “Leave It For Couple
Days“ quadrant which signifies alternative strategies to be abandoned and carried out later if
needed. Alternative Strategies included in this condition are strategies number 1.
53
From the 10 alternative strategies offered by the researcher, the strategy that must be
done and made immediately for planning implementation is the strategy in quadrant one,
strategies 5,6,and 8 which are increase the promotions on social media, every month doing
research on the latest fashion that is famous in the community and offer different type of clothing
or brand from its competitor.
4.11 Action Plan

An action plan is a detailed plan outlining actions needed to reach one or more goals. The
purpose of an action plan is to clarify what resources are required to reach the goal, formulate a
timeline for when specific tasks need to be completed and determine what resources are required.
This following table is the Action Plan from the 10 strategy of fashion retail industry :
54
ACTION PLAN
Stakeholder Year
No. Program Success Indicator
External Internal Others 2019 2020 2021 2022 2023
Strategy 1 : Increasing clothing stocks and varieties of clothes such as shirts, T-Shirts, pants, and outerwear so that customers can have
more options
Classifying the data
of costumers so they the owner
- v
Research of data of customers can increase the and the
1 by age and gender variety of product head unit
Find a new suppliers
Updating information about that can support for
- v
suppliers and do a expanding variety of
2 comparisons the products the owner
Strategy 2 : Creating an interesting social media presence in order to attract more customers
Catalogue of the
product more
v
Collaborate with affordable organized and The
1 photographer interesting photographer Marketing
The design and
Making standard and grand template of the social
- v
design for graphic visual in media have a Design
2 social media standardization team
Strategy 3 : Joint event such as Bazaar, PAMMITS to attract more customers and also costumers can try the clothes
Doing an observation about Finding events that is Marketing v

1 the closest event suitable for the brand
55
Making branding
Design
Using promotional stuff to stuff about the store v
Team
2 promote at the event to attract peoples
Strategy 4 : Make an offline store so everyone can visit and buy there.
Observing strategic land and
place that has a big Finding strategic The v
1 opportunity place for offline store Consultant owner
Have a unique The
Designing store’s concept concept for offline Interior owner and v
2 and decorations store designer Head unit
Sign up requirement
Prepare the requirement for such as for NPWP The v
3 offline store to be fulfilled Tax Office Owner
Make sure the
Prepare the requirements for requirements are The
Notary v
“Usaha Berbadan Hukum” correct and has been Owner
4 such as CV accept
Strategy 5 : Increase the promotions of Social Media
Make a promotional
bundle for - Marketing v
1 Using social media ads Advertisement
Having a data about
The
the costumers to
- owner and v
Observing costumers make segmenting for
Marketing
2 specification for segmenting social media ads
Strategy 6 : Every month doing research on the latest fashion that is famous in the community
56
Knowing what’s the
trends and what to The
- v
Update and follow fashion sell for the next Owner
1 brands that related to the store season
Strategy 7 : Improve the security of technology used to protect customer data

Always saving costumer’s Having costumer’s
- Marketing v
1 data after buying big data
Avoiding transaction
directly from social
media instead having v
Minimalize flowchart for costumers service The The head
2 costumers service using messenger Customer unit
Strategy 8 : Offer different type of clothing or brand from its competitor

Launch a product in
The
Finding more diverse bigger type of style Supplier v
Owner
1 suppliers and size
Strategy 9 : Looking for Investor from family and friends to gain money to create offline store
Finding people to
The
Using close relations from support funding for - v
Owner
1 close people the business
Building a good company
The
structure and conducting data Making projection,
Owner
about the business so that making financial - v
and Head
people interest to be the statement
unit
2 investor
Strategy 10 : Increase customer engagement for costumers loyalty
57
Making strategy to
connect to costumers
Using data to track the
for example member - Marketing v
costumer
card or coupon for
1 loyal costumers
Making giveaway and Always give a promo The
- v
2 discount for the costumers and gift mothly Owner
Table 6 Action Plan
58
CHAPTER V
CONCLUSION
5.1 Conclusion
The results of PESTEL analysis above shows that the condition of the fashion retail
business still interesting with the growth consumption in Surabaya. Based on the analysis of
Porter's Five Forces, the fashion industry is a large segment and is currently recording the
highest production growth among other sectors during the first quarter of 2019, it’s
difficulty in distinct its business from one another and buyers have many choices to buy.
Based on our research, fashion retail has some strength such as affordable price, since it is
based online so the customers can look at the catalogue anytime they want, excellent
customer service, varieties of payment options such as bank transfer, COD, etc, sales
product that are trendy etc.
In value chain analysis found on inbound logistic which is all processes related to
receiving, storing, and distributing internal inputs.. Retail cloth online is dependent on its
suppliers so there are chances of high switching costs and if the supplier is out of stock, the
business will also slow down. This can affect increased cost in the event of uncertainty so
they have to focus on inbound logistic to mantain the cost. Based on priority of scale
analysis using QSPM against 10 strategies from TOWS matrix. The results shows that there
are strategy 5,6,and 8 are priority that should be done immediately.
5.2 Recommendations
Based on the internal and external factors that are occured by fashion retail sub
sector is expected to be able to maximize the strengths and opportunities that exist and
minimize weaknesses and threats using appropriate strategies.
The writers want to give advice to this fashion retail sub sector to make this sub
sector getting better than before. The suggestion is fashion retail sub sector can implement
the strategies that are important and urgent based on our research using QSPM which are
strategy 5 (increase the promotions on social media), strategy 6 (every month doing
research on the latest that is famous in the community) and strategy 8 (offer different type
of clothing or brand from its competitor.)
59
REFERENCE
Hunger, J. David dan Wheelen, Thomas L., Manajemen Strategis, Andi, Yogyakarta, 2003.
David, Fred R., Strategic Manajemen, Manajemen Strategis, Konsep, Edisi Kesepuluh, Penerbit
Salemba Empat, Jakarta, 2006
Kesepuluh, Penerbit Salemba Empat, Jakarta, 2006E-Commerce dorong perkembangan industri
fashion lokal. (2019). Dipetik November 28, 2019, dari www.technologue.id:
https://technologue.id/e-commerce-dorong-perkembangan-industri-fashion-lokal/amp/
Industri Kreatif punya kontribusi pada pertumbuhan ekonomi Indonesia. (2019, August 16).
Dipetik November 28, 2019, dari www.kompas.com:
https://money.kompas.com/read/2019/08/16/204100026/industri-kreatif-punya-
kontribusi-pada-pertumbuhan-ekonomi-indonesia
David, F. R. (2010). Strategic Management: Concept and Cases (Thirteenth Edition ed.). Prentice
Hall.
Alamsyah, M. (2018). Statistik Daerah Kota Surabaya 2018. Surabaya: CV. Azka Putra
Pratama.
CNN Indonesia. (2018, December). Kominfo: Perlindungan Konsumen E-Commerce Telah
Diatur UU ITE. Retrieved from CNN Indonesia:
https://www.cnnindonesia.com/teknologi/20181213200948-185-353530/kominfo-
perlindungan-konsumen-e-commerce-telah-diatur-uu-ite
Kharisma, G. (2019, May). Meninjau Peta E-commerce Indonesia di Awal 2019, Siapa Jadi
Juara? Retrieved November 2019, from Technasia: https://id.techinasia.com/peta-
ecommerce-indonesia-q1-2019
Kurnia, D. (2019, February). Ekonomi Jatim Tumbuh 5,5 Persen pada 2018. Retrieved from
Republika: https://republika.co.id/berita/ekonomi/keuangan/19/02/06/pmht0h370-
ekonomi-jatim-tumbuh-55-persen-pada-2018
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Desember 4, 2019, from The Jakarta Post:
https://www.thejakartapost.com/academia/2019/04/01/welcoming-the-revocation-of-e-
commerce-tax-regulation.html
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60

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STRATEGIC MANAGEMENT

M. Ihsan Firdaus 09111740000026

DEPARTEMEN MANAJEMEN BISNIS

FAKULTAS BISNIS DAN MANAJEMEN TEKNOLOGI

INSTITUT TEKNOLOGI SEPULUH NOPEMBER

M. Ihsan Firdaus 09111740000026

DEPARTEMEN MANAJEMEN BISNIS

FAKULTAS BISNIS DAN MANAJEMEN TEKNOLOGI

INSTITUT TEKNOLOGI SEPULUH NOPEMBER

Surabaya, November 6 , 2019

1.1 Background ................................................................................................... 6

1.2 Objectives ...................................................................................................... 7

1.3 Benefits of the study ..................................................................................... 8

1.4 Scope ............................................................................................................. 8

1.5 Constraint ...................................................................................................... 8

1.6 Assumption ................................................................................................... 8

2.1 Value Chain Analysis.................................................................................... 9

2.2. Porter’s Five Force Model ......................................................................... 10

2.3 SWOT Analysis (TOWS Matrix) ............................................................... 12

CHAPTER III ....................................................................................................... 14

3.1 Research Object .......................................................................................... 14

3.1.1 Profile Company...................................................................................... 14

3.2 Research Plan .............................................................................................. 18

3.3 Research Flow Diagrams ............................................................................ 18

3.4 Data Collection Techniques ........................................................................ 19

3.5 Input Phase .................................................................................................. 20

3.6 Matching Stage ........................................................................................... 21

3.6.1 Strength-Weakness-Opportunity-Threat Matrix (SWOT) ...................... 21

3.6.2 Internal and External Matrix (IE matrix) ................................................ 23

3.7 Decision Stage ............................................................................................. 24

4.1 SME’S SubSector Profile............................................................................ 25

4.1.1 Odi Store.................................................................................................. 25

4.1.2 Original Apparel Shop............................................................................. 26

4.2 Internal Analysis ......................................................................................... 27

4.2.1 4P (Product, Price, Place, Promotion) ..................................................... 27

4.2.2 STP .......................................................................................................... 28

4.2.3 Value Chain Analysist ............................................................................. 28

4.3 External Condition Analysis ....................................................................... 32

4.3.1 PESTEL Analysis .................................................................................... 32

4.3.2 Porter’s Five Forces................................................................................. 37

4.4 External Factor Analysis Summary ............................................................ 38

4.5 Internal Factor Analysis Summary ............................................................. 39

4.6 IE (INTERNAL-EXTERNAL) MATRIX .................................................. 40

4.7 QSPM .......................................................................................................... 42

4.8 TOWS MATRIX......................................................................................... 49

4.9 Key Success Factor (KSF) .......................................................................... 52

4.10 Priority Scale ............................................................................................. 53

4.11 Action Plan ............................................................................................... 54

5.1 Conclusion .................................................................................................. 59

5.2 Recommendations ....................................................................................... 59

Picture 1 Fashion Retail Industry Revenue ............................................................. 7

Picture 2 Value Chain Analysis .............................................................................. 9

Picture 3 Porter’s Five Force Model ..................................................................... 12

Picture 4 Odi Store Bagpack ................................................................................. 15

Picture 5 Odi Store Cloth ...................................................................................... 15

Picture 6 Odi Store Product .................................................................................. 16

Picture 7 Photo Product ......................................................................................... 17

Picture 8 Original Apparel Shop Product ............................................................. 17

Picture 9 Matrix SWOT ........................................................................................ 22