asian agri case study - toko bunga surabay - 082139391217
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Case Study #4 Marketing Management
ANALYZING BUSINESS MARKET:
CASE STUDY OF ASIAN AGRI Asian Agri and The Future of Palm Oil
Presented by:
Dian Atika
Rafika
Rery Indra Kusuma
MM UGM Jakarta Executive B Class 27 C
History
Year Activities
1979 Sukanto founded ASIAN AGRI; 10,000 ha
1984 Built a mill for extraction CPO and plam kernels
1986 Asian Agri began participating integrating smallholder former plasma program
1989 Asian Agri expansion 30,000 ha
1989 – 1999 Expanded its growing R&D, husbandry practices, fertilizer inputs for different types of soil, higher-yield, pest and disease controls, upgraded its refining capacity, built a plant for production of margarine and shortening.
2010 (at the time case
was written)
Plantation and Mills, Refining and Exporting, Customer and Markets.
Holding Group of Asian Agri: RGE (Royal Golden Eagle) 1. APICAL: Asia Pacific Resources International
Limited 2. Sateri International 0 3. Pacific Oil & Gas
ASIAN AGRI TRIED TO ENTER CONSUMER MARKET TO GROW THEIR BUSINESS TROUGH APICAL ONE OF THEIR HOLDING GROUP.
Asian Agri Challenges in Up Stream market:
1. Sustanaibility of Resource
2. Plantation Expansion
3. Enter the Consumer Market or Focus on Business Market?
NGO Critics to CPO company: ◦ Allegedly forest biodiversity/endangered species
◦ Deforestration, high leve of carbon
◦ Conflict indigenous population and grower
Result Pressure on Actual Business:
CPE companies had stopped sourcing palm oil accused of environtmental mismanagement
Calling on bank and investment fund
Ernomous challenges on Plantation Expansion:
Two years freeze on new land concession in May 2010, limited land
Country Risk
Poverty
Infrastructure was poor
Controversial land-right disputes between grower and indigenous population
Complex govenment concession process
Opposition from NGO
Asian Agri had started enter the consumer market trough their holding company APICAL.
Downstream market will give them several benefits:
Force the company to mature
Customer and process management
Capture more value utilize all part of oil
But...
Is it worth to be focussed on consumer market while Asian Agri had upstream competitive advantages?
Should Asian Agri aggresively expand the plantation despite all the challenges on land expansion? And make their upstream business STRONGER?
Should Asian Agri put more effort on their downstream business?
Asian Agri had already started to apply below strategy:
Leverage its foothold, expanding 160,000 into 300,000 ha by 2015. Enhance its upstream competitive advantage
But would bring many practical challenges.
Develop more trading and refining operation or market a portfolio of branded products
Transfer Asian Agri’s plantation assets to its sister business, APRIL, a highly succesful pulp and paper operator.
Give best effort both to upstream and downstream business as their capital also strong.
The strategy is on the right track, in term of expanding branded product they should create more serious plan.
Continous improvement on resource sustainability. It improved the company profile and assured the company sustainability.