Chapter5-AnalysisofInternalBusinessEnvironment
Chapter5-AnalysisofInternalBusinessEnvironment
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Aditya Wardhana
i
BUSINESS STRATEGY AND POLICY
IN THE DIGITAL EDGE 4.0
ISBN : 978-623-516-510-3
Redaksi :
Jalan Banjaran, Desa Banjaran RT 20 RW 10 Kecamatan Bojongsari
Kabupaten Purbalingga Telp. 0858-5343-1992
Surel: eurekamediaaksara@gmail.com
ii
PREFACE
The author realizes that this book is still far from perfection.
Therefore, constructive criticism and suggestions are needed to
improve this book. Finally, we hope that God Almighty will repay
all the kindness of all those who have helped. Hopefully this book
will bring benefits to the development of science.
iii
TABLE OF CONTENTS
iv
UNIT 3 VISION, MISSION, GOALS, AND COMPANY
VALUES ........................................................................... 152
A. Corporate Vision ........................................................ 152
B. Corporate Mission ...................................................... 159
C. Company Objectives .................................................. 165
D. Company Values ........................................................ 167
REFERENCE .................................................................... 172
UNIT 4 EXTERNAL BUSINESS ENVIRONMENT
ANALYSIS....................................................................... 178
A. Understanding the External Business
Environment ............................................................... 178
B. Factors of the External Business Environment ........ 179
C. Importance of the External Business
Environment ............................................................... 190
D. External Factors Analysis (EFAS) Matrix ................. 191
REFERENCE .................................................................... 197
UNIT 5 ANALYSIS OF INTERNAL BUSINESS
ENVIRONMENT ............................................................ 200
A. Definition of Internal Business Environment .......... 200
B. Factors of Internal Business Environment ............... 201
C. Importance of Internal Business Environment ........ 209
D. Dimensions of the Internal Business
Environment ............................................................... 211
E. Internal Factors Analysis (IFAS) Matrix ................... 213
F. IFAS Matrix................................................................. 216
REFERENCE .................................................................... 225
UNIT 6 GENERIC COMPETITIVE STRATEGIES .................. 228
A. Definition of Generic Competitive Strategies .......... 228
B. Key Aspects of Generic Competitive Strategy ......... 244
C. Characteristics of Cost Leadership Strategy ............ 244
D. Characteristics of Differentiation Strategy ............... 245
E. Characteristics of Cost Focus Strategy ..................... 247
F. Characteristics of Differentiation Focus Strategy .... 248
G. Characteristics of Stuck in the Middle Strategy....... 250
REFERENCE .................................................................... 252
v
UNIT 7 SELECTION OF BUSINESS STRATEGIES AND
POLICIES ......................................................................... 259
A. Understanding Company Competitive Position ..... 259
B. The Process of Analyzing a Company’s
Competitive Strategy .................................................. 263
C. Factors Affecting Performance and Relative
Position of a Company in the Market ....................... 268
D. Strategic Position and Action
Evaluation (SPACE) ................................................... 272
E. Boston Consulting Group Matrix (BCG Matrix) ...... 272
F. Internal External Matrix (IE Matrix) ......................... 274
G. Market Penetration Strategy ...................................... 275
H. Market Development Strategy .................................. 278
I. Product Development Strategy ................................. 278
J. Backward Integration Strategy. ................................. 279
K. Forward Integration Strategy .................................... 280
L. The Horizontal Integration Strategy ......................... 281
M. Grand Strategy (GS) ................................................... 281
N. Quantitative Strategic Planning Matrix (QSPM)...... 283
O. Diversification Strategy .............................................. 285
P. Company's Ability to Execute Strategy .................... 293
Q. Maximizing Company Resources in Strategy
Implementation........................................................... 295
REFERENCE ..................................................................... 297
UNIT 8 EXECUTION OF BUSINESS STRATEGIES AND
POLICIES ......................................................................... 304
A. Definition of Strategy and Business Policy
Execution ..................................................................... 304
B. Implementation of Strategy and Business Policy..... 305
C. Implementation of Strategy into Work Programs ... 305
D. Techniques for Evaluating the Effectiveness of
Strategy Implementation............................................ 307
E. Connection Between Strategy Execution and
Policy Implementation ............................................... 316
F. The Importance of Business Policies in Guiding
Organizational Activities ........................................... 317
vi
REFERENCE .................................................................... 318
UNIT 9 BUSINESS STRATEGIES AND POLICIES IN
THE INTERNATIONAL MARKET ............................. 321
A. Understanding Business Strategies and Policies
in the International Market........................................ 321
B. Forms of International Strategies Based on
Flexibility and Global Efficiency ............................... 322
C. International Business Strategies Based on
Business Situation and Objectives ............................ 330
REFERENCE .................................................................... 341
UNIT 10 COMPANY HUMAN RESOURCE STRATEGY ........ 355
A. Definition of Human Resource Strategy and
Policy ........................................................................... 355
B. Approaches to HRM Strategy ................................... 355
C. HR Recruitment Strategy ........................................... 358
D. HR Selection Strategy ................................................ 366
E. HR Training Strategy ................................................. 368
F. Human Resource Compensation Strategy ............... 371
G. Strategic Career Alignment ....................................... 375
H. Talent Management Strategy. ................................... 376
I. E-HR Strategy. ............................................................ 380
REFERENCE .................................................................... 382
UNIT 11 COMPANY MARKETING STRATEGY ..................... 386
A. Definition of Company Marketing Strategy ............ 386
B. Benefits of an Effective Marketing Strategy in
Business Operations ................................................... 388
C. Characteristics of a Successful Marketing
Strategy ....................................................................... 390
D. Marketing Strategy Development Process ............... 392
E. Forms of Marketing Strategies .................................. 394
REFERENCE .................................................................... 403
UNIT 12 COMPANY FINANCIAL STRATEGY ........................ 413
A. Definition of Corporate Financial Strategy .............. 413
B. Main Areas of Corporate Finance Study .................. 414
C. Stages in Formulating Corporate Financial
Strategy ....................................................................... 420
vii
D. Forms of Corporate Financial Strategies................... 424
REFERENCE ..................................................................... 432
UNIT 13 CORPORATE OPERATIONS STRATEGY................. 440
A. Definition of Corporate Operations Strategy ........... 440
B. Importance of Corporate Operations Strategy ......... 441
C. Decision-Making Process in Operations
Management ............................................................... 441
D. Indicators and Strategies in Company
Operations ................................................................... 442
REFERENCE ..................................................................... 451
UNIT 14 ETHICS AND CORPORATE CULTURE..................... 454
A. Definition of Corporate Ethics ................................... 454
B. Forms of Corporate Ethics ......................................... 457
C. Models of Ethics and the Environment .................... 465
D. Impact of Ethical and Environmental
Relationships ............................................................... 468
E. Understanding Corporate Culture ............................ 471
F. The Importance of Corporate Culture ...................... 472
G. Models of Corporate Culture..................................... 473
H. Corporate Culture Styles ............................................ 477
I. Quality Corporate Culture ......................................... 480
REFERENCE ..................................................................... 482
UNIT 15 CORPORATE LEADERSHIP STRATEGY .................. 487
A. Understanding and Role of Leadership.................... 487
B. The Role of Leadership in Management ................... 490
C. Leadership Process in Management ......................... 492
D. Leadership Strategy Approaches .............................. 493
REFERENCE ..................................................................... 516
UNIT 16 EVALUATION OF BUSINESS STRATEGIES
AND POLICIES ............................................................... 528
A. Understanding Business Strategy and Policy
Evaluation ................................................................... 528
B. Stages of Business Strategy and Policy Evaluation .. 529
REFERENCE ..................................................................... 551
AUTHOR PROFILE ........................................................................ 553
viii
LIST OF FIGURES
ix
Figure 2.17 Leadership Theory by Warrem Bennis .................. 130
Figure 2.18 Business Strategy and Policy Implementation
Theories..................................................................... 131
Figure 2.19 Forms of Business Models in the Era of
Industry 4.0............................................................... 140
Figure 3.1 Key Elements of a Vision ......................................... 155
Figure 3.2 Associated Word Generation .................................. 157
Figure 3.3 Success Word Generation........................................ 158
Figure 3.4 Steps in Formulating a Vision ................................. 159
Figure 3.5 Criteria for an Effective Mission ............................. 162
Figure 3.6 Important Elements of a Mission............................ 163
Figure 3.7 Steps in Developing a Mission ................................ 164
Figure 3.8 SMART Goals ........................................................... 165
Figure 3.9 The Importance of Company Values...................... 169
Figure 3.10 Steps to Formulate Company Values ..................... 170
Figure 4.1 Macro External Business Environment Analysis
(PESTEL) ................................................................... 186
Figure 4.2 Factors of Micro External Constraints .................... 190
Figure 5.1 Internal Business Environment............................... 202
Figure 5.2 Internal Business Environment............................... 209
Figure 5.3 Dimensions of the Internal Business
Environment ............................................................. 213
Figure 6.1 Generic Competitive Strategy ................................. 243
Figure 6.2 Characteristics of Cost Leadership Strategy .......... 245
Figure 6.3 Characteristics of Differentiation Strategy ............. 246
Figure 6.4 Characteristics of Cost Focus Strategy ................... 248
Figure 6.5 Characteristics of Differentiation Focus Strategy .. 249
Figure 6.6 Characteristics of Stuck in the Middle Strategy .... 251
Figure 7.1 The Process of Creating a Company’s
Competitive Advantage .......................................... 262
Figure 7.2 Process of Analyzing Company Competitive
Strategies ................................................................... 267
Figure 7.3 Stages of the Competitive Strategy Formulation
Analysis Process ....................................................... 268
Figure 7.4 Key Factors Influencing a Company's
Competitive Position ............................................... 271
x
Figure 7.5 Strategic Position and Action Evaluation
(SPACE) .................................................................... 272
Figure 7.6 BCG Matrix .............................................................. 274
Figure 7.7 Internal External Matrix (IE matrix) ...................... 275
Figure 7.8 Market Penetration Strategy ................................... 277
Figure 7.9 Internal External Matrix (IE matrix) ...................... 282
Figure 7.10 Quantitative Strategic Planning Matrix (QSPM) .. 284
Figure 7.11 Diversification Strategy........................................... 293
Figure 8.1 Stages of Implementing Strategy into Work
Programs .................................................................. 307
Figure 8.2 Steps for KPI Analysis ............................................. 316
Figure 9.1 Forms of International Strategy Viewed from
Global Integration and Local Responsiveness ...... 329
Figure 9.2 International Business Strategies Based
on Business Situation and Objectives .................... 340
Figure 10.1 Four Company Approaches to HRM Strategy ...... 358
Figure 10.2 Recruitment Strategy ............................................... 365
Figure 10.3 HR Selection Strategy .............................................. 367
Figure 10.4 Human Resource Training Strategy....................... 371
Figure 10.5 Compensasion Strategy .......................................... 375
Figure 10.6 Talent Management Strategy ..................................... 379
Figure 10.7 E-HR Strategy .......................................................... 381
Figure 11.1 Characteristics of a Successful Marketing
Strategy ..................................................................... 392
Figure 11.2 Marketing Strategy Development Process ............ 394
Figure 11.3 Forms of Marketing Strategies ............................... 402
Figure 12.1 Main Areas of Corporate Finance Study ............... 416
Figure 12.2 Considerations in Formulating Corporate
Financial Strategy .................................................... 421
Figure 12.3 Stages in Forming a Company's Financial
Strategy ..................................................................... 423
Figure 12.4 Forms of Corporate Financial Strategies ............... 424
Figure 13.1 Corporate Operation Strategy ................................ 450
Figure 14.1 Work Ethics .............................................................. 456
Figure 14.2 Corporat Internal Ethics.......................................... 462
Figure 14.3 Ethics and Environment Models ............................ 468
xi
Figure 14.4 Leadership Guidelines Related to Corporate
Culture ...................................................................... 477
Figure 14.5 Gaya Budaya Perusahaan........................................ 479
Figure 15.1 Elements of Successful Leadership Abilities ......... 489
Figure 15.2 Main Functions of Leadership ................................ 492
Figure 15.3 Leadership Process .................................................. 493
Figure 15.4 Traits of Successful Leadership .............................. 503
Figure 15.5 Vroom-Yetton Decision-Making Model................. 508
Figure 15.6 Behavioral Leadership Style.................................... 510
Figure 15.7 Leadership Approaches........................................... 515
Figure 16.1 Business Strategy and Policy Process ..................... 529
Figure 16.2 Business Strategy and Policy Process ..................... 550
xii
LIST OF TABLES
xiii
BUSINESS STRATEGY AND POLICY
IN THE DIGITAL EDGE 4.0
Aditya Wardhana
xiv
UNIT ANALYSIS OF
5
INTERNAL BUSINESS
ENVIRONMENT
ANALYSIS OF INTERNAL BUSINESS ENVIRONMENT
200
be controlled by management, including employees, the board
of directors, the board of commissioners, shareholders, and the
physical working conditions (Wardhana et al., 2021;
Dwiningrum, 2011; Purwanti and Fattah, 2011; Margaretta,
2012).
According to Syntia and Mulya (2018), organizations are
always in a state of mutual influence with their internal
environment. The interaction between business entities and their
internal factors results in various impacts. Changes in business
entities are usually responses to changes in the environmental
conditions in which they operate. Therefore, companies must
continuously adapt to the dynamics of changes in their internal
environment.
The internal business environment encompasses all
internal elements that affect business operations. This concept is
dynamic and includes aspects such as corporate governance
trends and internal resource management. To support the
development and use of business information and internal
decisions, companies need to have a robust conceptual
framework and policies. This framework will help the company
understand its internal business values, goals, and priorities
(Cherulinam, 2012).
201
3. Materials/Raw Materials (Material). Materials refer to
various types of inputs in the production process, including
raw materials, work-in-progress, and other components used
in production.
4. Production Equipment (Machine). Production equipment
includes all supporting components that facilitate the
production process, including machinery, production tools,
and other components.
5. Methods (Methods/Managerial). Methods encompass
structured work procedures (Standard Operating
Procedures/SOP) and the managerial capabilities of
company leaders in executing various business operations.
202
Wardhana et al. (2021) and Hans (2019) indicate that the
internal business environment involves elements within the
business entity that influence its approach and operational
success, including:
1. Organizational Culture. This internal environmental factor
involves the cultural elements within the business entity that
affect the atmosphere and organizational characteristics. It is
often referred to as the system of values, value framework,
vision, norms, and habits held by members of the business
entity. Business culture impacts how employees interact, both
among themselves and with customers, as well as with other
stakeholders. Value systems and ethical standards are also
crucial considerations for many companies when selecting
suppliers, distributors, partners, and so on. Some aspects of
organizational culture (Schein, 2018; Bakhri and Daryono,
2017; Herath and Walls, 2017; Kumar, 2016; Lee and Jennifer,
2014; Cameron and Quinn, 2011; Hans, 2016) include:
a. Company Values. Values embraced by organizational
members, such as integrity, innovation, or sustainability.
b. Organizational Norms. Rules and guidelines governing
member behavior in various situations.
c. Work Habits. Typical ways of performing daily tasks,
work processes, and routines that are part of the
organization's daily operations.
d. Vision and Mission. Long-term goals and strategic
approaches set by the organization to achieve its vision
and mission.
e. Communication Culture. How information is
communicated and managed within the organization,
including transparency and information sharing.
f. Collaboration Culture. The extent to which cooperation
and collaboration are emphasized within the
organization.
g. Leadership Culture. The dominant leadership style and
values upheld by the organization's leaders.
203
h. Employee Satisfaction and Well-being. The
organization's focus on employee well-being and
satisfaction as part of the company culture.
i. Flexibility and Innovation. The extent to which the
organization encourages diverse ideas, innovation, and
flexibility in their business approach.
j. Customer Culture. Focus on customer satisfaction and
high-quality service.
204
d. Value-Based Leadership. Leaders and the organization
prioritize certain values, such as integrity, sustainability,
or fairness, in decision-making and actions.
e. Collaborative Leadership Style. Leaders promote
collaboration and teamwork at all levels, creating an
inclusive work culture.
f. Innovation-Oriented Leadership. Leaders encourage
creative ideas, experimentation, and innovation in
business processes.
g. Employee Well-being Focused Leadership. Leaders place
emphasis on employee well-being, satisfaction, and
development as a primary priority.
h. Visionary Leadership Style. Leaders have a long-term
vision that inspires and provides direction for the entire
organization.
205
a. Vision. "To be a global leader in technology innovation
that empowers everyday life and creates a positive impact
on society."
b. Mission. "To produce and develop advanced technology
solutions that enhance the quality of life for our customers,
while considering environmental and social impacts
sustainably."
c. Objectives.
1) Sustainable Innovation. To produce at least two
innovative products each year that transform how
people live and work.
2) Environmental Sustainability. To reduce carbon
emissions per unit of production by 20% over the next
five years and achieve eco-friendly certifications for all
major products.
3) Superior Customer Service. To increase customer
satisfaction levels to over 90% within two years
through responsive customer service and reliable
technical solutions.
4) Global Growth. To expand global presence by
entering new markets in at least three countries within
the next three years.
5) Social Responsibility. To contribute to local
communities through corporate social responsibility
programs, including education and local infrastructure
development.
206
decision-making body that sets the direction for
organizational development and oversees performance,
making the quality of the Board of Directors a key factor in
company development and performance. Management
Structure and Characteristics can vary depending on the
industry type, company size, and business strategy adopted.
Choices regarding organizational structure, Board of
Directors composition, management professionalism,
decision-making styles, and approaches to innovation can
contribute to a company's unique characteristics. Here are
examples of Management Structure and Characteristics from
a company (Suratman, 2021; Wardhana, 2021; Susilowati and
Basuki, 2005):
a. Organizational Structure. Company ABC implements a
matrix organizational structure, where employees have
two reporting lines: one based on their function (e.g.,
marketing, production) and one based on specific projects
being undertaken.
b. Board of Directors Composition. The Board of Directors
consists of professionals with diverse expertise, including
finance, technology, and business strategy. Special
committees are formed to address issues such as audit,
compensation, and sustainability.
c. Management Professionalism. The company's
management demonstrates a high level of professionalism
with a solid education and extensive work experience in
the relevant industry. Training and employee
development are priorities to ensure consistent levels of
expertise.
d. Decision-Making Style. The company adopts a
participative decision-making style, where important
decisions involve contributions from various levels and
functions within the organization, encouraging
collaboration and shared understanding.
207
e. Innovation and Flexibility. The structure that promotes
innovation is integrated with organizational flexibility.
Innovation project teams are formed periodically,
allowing creativity and adaptability in responding to
market changes.
208
e. Adaptability and Flexibility. For example, a successful e-
commerce company has a highly adaptive team to market
changes, with employees quickly adjusting to new
technologies and consumer trends.
f. Diversity and Inclusivity. For example, a multinational
company promotes diversity and inclusivity, with teams
encompassing a variety of cultural backgrounds and
expertise.
g. Human Resource Management. For example, a
company's HR division focuses on employee development
through ongoing training, employee wellness programs,
and effective performance management.
209
create conditions favorable for long-term growth and
sustainability. Some examples of the importance of the internal
business environment and examples include (Schrodt, 2002):
1. Operational Efficiency. For example, an efficient
management system and well-structured operational
processes can enhance employee productivity and optimize
resource use, thereby supporting the company's growth.
2. Employee Satisfaction. For example, a positive work culture,
employee development programs, and supportive
management can increase employee satisfaction, which in
turn affects retention rates and individual performance.
3. Product or Service Quality. For example, well-managed
production processes and strict quality control can produce
high-quality products or services, build a positive reputation,
and increase customer satisfaction.
4. Innovation and Product Development. For example,
adopting an innovation culture and investing in research and
development can create an environment that supports the
creation and launch of new products that meet market needs.
5. Business Strategy and Management Decisions. For example,
effective management in formulating and implementing
business strategies, including goal setting, resource
allocation, and risk management, can lead to achieving
company targets.
6. Organizational Culture. For example, a company culture
that promotes collaboration, creativity, and accountability
can create a positive work environment, enhance team spirit,
and support the achievement of shared goals.
7. Financial Management and Risk Management. For example,
a good financial management system and effective risk
management can help the company manage finances wisely,
avoid unnecessary risks, and maintain financial stability.
210
D. Dimensions of the Internal Business Environment
Wardhana (2021) and Hans (2019) state that the internal
business environment can be described through various
dimensions that encompass key aspects of an organization's
operations and management. Each of these dimensions interacts
and influences one another to create a unique internal business
environment for each organization. Recognizing and
understanding these dimensions helps management design
effective strategies, improve efficiency, and achieve the
company’s business objectives. Some main dimensions of the
internal business environment include:
1. Organizational Structure. Refers to how tasks and
responsibilities are organized and linked within a company.
Examples include hierarchical structure, matrix structure, or
team-based structure.
2. Organizational Culture. Includes the shared values, norms,
and beliefs that shape how people interact and work within
the organization. Examples include innovative culture,
result-oriented culture, or collaborative culture.
3. Human Resources. Concerns aspects of employees such as
expertise, morale, commitment, and skills that can impact
company performance. Examples include workforce quality,
employee satisfaction levels, and employee retention rates.
4. Operational Management. Includes processes and policies
used to manage the company's daily activities. Examples
include production processes, supply chain management,
and quality control policies.
5. Finance and Risk Management. Involves the management of
company finances and efforts to identify, measure, and
manage risks. Examples include financial reports, budgeting,
and risk management policies.
6. Technology and Information Systems. Related to hardware,
software, and information systems that support operations
and decision-making in the company. Examples include IT
infrastructure, business applications, and analytics platforms.
211
7. Innovation and Product Development. Concerns the
company's ability to generate new ideas, develop products,
and maintain competitiveness. Examples include research
and development processes, product portfolio, and
innovation strategies.
8. Marketing Management. Related to the marketing team,
marketing strategies, organizational culture focused on
marketing orientation, marketing values, and customer
relationship sustainability. Examples include customer
satisfaction orientation, product innovation, and quick
response to market trends.
9. Policies and Compliance. Related to the company’s internal
policies and compliance with external regulations and norms.
Examples include security policies, sustainability policies,
and legal compliance.
10. Internal Accounting. Plays a crucial role in providing
accurate and relevant financial information to company
management, helping them make informed and strategic
decisions. Internal accounting involves recording, reporting,
and analyzing the company’s financial activities for internal
management purposes. Examples include transaction
recording, financial reporting, cost analysis, budgeting,
performance measurement, investment evaluation, internal
auditing, and compliance with applicable rules and
regulations.
212
Figure 5.3 Dimensions of the Internal Business Environment
Source: Wardhana (2021) & Hans (2019)
213
impact of all key factors on the company. The formula for
calculating weights is:
214
8. Based on the weighted score calculation in the Internal
Factors Analysis Summary Matrix (IFAS) above, a result of
3.97 is obtained. This figure indicates that the company
generally faces strengths, as the IFAS score of 2.45 is lower
than the cutoff value of 2.5 (value 2.45 < 2.5).
215
Table 5.2 External Threat Factors
F. IFAS Matrix
After identifying the strategic internal factors of a
company, an IFAS table is created to detail these factors in terms
of strengths and weaknesses. The IFAS table includes internal
factors, weights, ratings, and scores. The process involves
organizing the factors of strength and weakness, followed by
calculating the weights, ratings, and scores using data obtained
through questionnaires distributed to top-level management,
consisting of five respondents.
To create the IFAS weight calculation table, the initial
stage involves identifying the factors. After that, each factor is
detailed into a questionnaire distributed to the respondents.
Subsequently, the data from the questionnaire distribution is
processed through specific steps to determine the weights in the
IFAS table. Here is an example of the weight calculation process
using the strength variable indicator, which is service quality.
216
Responden
Element A Geomean Element B
1 2 3 4 5
Company
0.11 0.14 0.20 0.14 0.20 0.15 collaboration
with vendors
The
company’s
products
0.11 0.14 1 0.13 0.13 0.9
have
competitive
prices
Service Coordination
quality and
9 5 1 1 2 2.46 relationships
between
employees
Company
9 5 1 1 1 2.14 collaboration
with vendors
The
company’s
products
1 1 1 3 3 1,55
have
competitive
prices
Coordination Company
and 1 1 4 3 2 1.89 collaboration
relationships with vendors
between The
employees company’s
products
1 1 1 3 2 1.43
have
competitive
prices
Company The
collaboration company’s
with vendor products
1 1 0.25 1 1 0.75
companies have
competitive
prices
217
is performed using the formula =GEOMEAN. For example, in
the comparison between service support facilities (Element A)
and service quality (Element B), the formula = GEOMEAN
(questionnaire data from respondents 1-5) is used, resulting in a
geomean value of 0.21. This process is repeated for each involved
factor. The following steps are then taken:
1. Create a Comparison Matrix
218
2. Creating the Normalizing the Matrix by summing each
column of the factors.
Sum the column for service quality with the values 0.21
+ 1 + 0.41 + 0.47 + 0.65 = 2.74 as the total sum. The next step
is to input the values from the business ecosystem division
0.21/2.74 and do the same for all the numbers in the column.
219
Coordination Company
Supporting and Cooperation products
Service
service relationship with vendor have Total
quality
facilities between companies competitive
employees prices
Service
0.20 0.36 0.51 0.33 0.40 1.80
quality
Coordination
and
relationship 0.25 0.15 0.21 0.9 0.36 1.26
between
employees
Cooperation
with vendor 0.28 0.17 0.11 0.15 0.19 0.90
companies
Company
products
have 0.,22 0.24 0.14 0.20 0.26 1.06
competitive
prices
220
In business ecosystem analysis, the average of the
previous business ecosystem total is calculated as 1.80/5,
derived from 5 comparison factors, resulting in 0.36. Next, the
Weight Sum Vector (SWV) is calculated using the formula
"=MMULT". For example, for the service quality variable, we use
"=MMULT" to multiply the service quality block from the first-
stage comparison matrix horizontally with the entire average
block vertically, resulting in a value of 2.73.
To achieve the consistency vector, we divide the sum
weight vector (SWV) by the average, such as for service quality,
which has an SWV of 2.73/0.36 as the average, resulting in a
consistency vector value of 7.58. Additionally, the weight value
(%) is calculated by multiplying the average service quality (0.36)
by 100, resulting in a value of 36.
5. Weighting
221
Table 5.9 Weakness Factors of Internal Factors
No. Threat Variables Indicators Bobot
1 Company Location 0.03
2 Lack of Promotional Media 0.03
3 Lack of Product Variety 0.01
4 Availability of product services to meet 0.04
consumer needs
5 Product Pricing Dependent on Supplier 0.02
Prices
Total 0.13
6. Evaluation
The evaluation is based on the results from the
questionnaire regarding the current conditions:
222
respondents. Next, the evaluation score of 3.20 is entered into
Table 5.11 IFAS, specifically in the Rating column for the
service quality variable indicator.
223
Facilities, Service Quality, Coordination and Relationships
Among Employees, Cooperation with Vendor Companies,
and Competitive Pricing. Through the questionnaire and
AHP calculations, the Service Quality factor stands out with
the highest weight of 0.99, indicating a significant impact on
the company's growth. Conversely, the lowest strength factor
is Cooperation with Vendor Companies, with a weight of
0.15, indicating its lower importance compared to other
strength factors in the growth of PT XYZ.
On the weakness side, the scores highlight factors such
as Company Location, Lack of Promotional Media, Lack of
Product Variety, Availability of Product Services to Meet
Consumer Needs, and Product Pricing Dependent on
Supplier Prices. The factor Availability of Product Services to
Meet Consumer Needs has the highest weight of 0.04,
indicating a high level of importance in the company's
growth. Meanwhile, the factor Lack of Product Variety has
the lowest weight of 0.01, indicating a lower level of
importance compared to other weakness factors in PT XYZ's
growth. The overall score on the IFAS table is 3.97, with a
strength score of 3.59 and a weakness score of 0.38, showing
that the company's strengths are more dominant than its
weaknesses.
224
REFERENCE
Deal, Terrence E., Kennedy, Allan A., et al (2000). The New Corporate
Cultures: Revitalizing TheWorkplace After Downsizing, Mergers,
And Reengineering. New York: Pearsus.
225
Lee, Choong Y., Lee, Jennifer Y. (2014). South Korean Corporate
Culture and Its Lessons for Building Corporate Culture in
China. The Journal of International Management Studies, 9(2),33-
42
Syntia, Rita., Mulya, Miswar Budi. (2018). The Effects of Internal and
External Environment on SMEs Empowerment-based
Environmental Management. International Conference on
Multidisciplinary Research, 6-3-608
226
Wardhana, Aditya. (2023). Strategi dan Kebijakan Bisnis Di Era Digital.
Purbalingga: Eureka Media Aksara
227
AUTHOR PROFILE
553
554
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