strategic management telkom
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Strategic Analysis
PT. Telekomunikasi Indonesia, Tbk
Research and Analysis
Created by
Group FACTS
Members:
1. Antony Hartawan
2. Caroline Claudia Christy
3. Fabby Angelica
4. Reynaldi Sutrisno
5. Samgar Effember
6. Timothy Andhika
Table of Content
Table of content............................................................................................. 1
Company Description 2
Company strategies....................................................................................... 3
Vision and mission......................................................................................... 4
Total subsidiaries........................................................................................... 5
The Economics of Scales 6
Product differentiation................................................................................... 7
Level of competitiveness................................................................................ 8
The External Assessment 9
Porter five forces............................................................................................ 9
EFE matrix....................................................................................................... 11
CPM matrix..................................................................................................... 11
The Internal Assessment 12
Vision and mission analysis............................................................................. 12
Ratio analysis................................................................................................... 13
IFE matrix......................................................................................................... 14
Strategy Analysis 15
SWOT analysis.................................................................................................. 15
BCG matrix....................................................................................................... 20
References....................................................................................................... 23
1
Jl. Japati No. 1, Bandung 40133
Telephone: (62-22) 452 7101, Fax: (62-22) 424 0313
Company Description
Company Name : PT Telekomunikasi Indonesia, Tbk
Established Date : 23 October, 1856
IPO Date : 14 November, 1995
Total Employees : 25,011
Ownership : Government (53.14%) and Public (46.86%)
PT Telkom is the only state-owned telecommunication company, especially in fixed wireline
and fixed wireless connections, mobile communications, and internet and data
communication services.
Telkom Group continues to pursue innovation in sectors other than telecommunications to
new Business Wave. In other to increase its business value, Telkom Group changed its
business portfolio into TIMES (Telecommunication, Information, Media and Edutainment
Service). To accomplish this portfolio, Telkom has four subsidiaries, there are PT.
Telekomunikasi Indonesia Selular (Telkomsel), PT. Telekomunikasi Indonesia International
(Telin), PT.Telkom Metra and PT. Daya Mitra Telekomunikasi (Mitratel).
2
Company Strategies
The Telecom has a three strategies for improving market capitalization:
Directional strategy: sustainable competitive growth.
A & A Program
Implementation of A & A program is part of Telecom growth strategy which aim to
mitigate the risk, capital development, improving the competence and gain synergies
and contribute value in short time. In 2013, Telecom was already acquisition of all the
shares of PT Patra Telekomunikasi Indonesia (“Patrakom”) so we can integrate business
activities as a fix closed telecommunication operator with a satellite basis, as a service
provider and network communication with Micro Earth Station Communication System
permission.
Corporate Restructures
Corporate restructuring program was implemented through the development of a
business unit, a subsidiaries Initial Public Offering (IPO), the establishment of a new
subsidiaries and capital injection. In 2013, Telecom development a business with
establishment a new subsidiaries through expansion into overseas markets such as
Malaysia (MVNO), Australia (business process outsourcing), Timor Leste (MVO), Macau
(retail mobile services), Taiwan (retail mobile services), Myanmar (International
network), and United States (International network).
Portfolio strategy: converged TIMES portfolio.
Parenting strategy: strategic guidance.
Vision and Mission
3
Vision
To become a leading Telecommunication, Information, Media, Edutainment and Services
(TIMES) player in the Region
Mission
To provide ‘more for less’ TIMES services
To be the role model as the best managed corporation in Indonesia
Corporate Culture: The new Telkom way
Philosophy to be the best: Always the Best
Principle to be the star: Solid, Speed, Smart
Practice to be the winner: Imagine, Focus, Action
4
5
Telkom’s Subsidiaries Chart
The Economic of Scales
TELKOM INDOSAT XL AXIATA
in $ in % in $ in % in $ in %
Revenue 82.967.000 100,00% 23.855.890 100,00% 21.265.060 100,00%
Cost of Revenue
19.332.000 23,30% 9.956.533 41,74% 9.752.759 45,86%
Gross Profit
63.635.000 76,70% 13.899.357 58,26% 11.512.301 54,14%
23%
77%
TelkomCost of Revenue Gross Profit
42%58%
IndosatCost of Revenue Gross Profit
46%54%
XL AxiataCost of Revenue Gross Profit
Economic of scale arise as the result of reverse relationship between the product’s quantity
and fix cost per unit. The greater quantity that produced along one period, the fix cost per
unit is lower because the expense that covered, divided for a big quantities. Economic of
scale also reduce the variable cost per unit with a consideration on efficiency and synergy.
Along with the data above, cost that needed to provide income on Telkom has the biggest
cost efficiency refer to its competitor, Indosat and XL Axiata. The data above point that cost
of revenue percentage towards revenue that Telkom achieved, indicate the scope of
6
Telkom’s economic of scale in Telecommunication Industry. This arguments can be
supported with considering the Telkom’s domination in internal resources (total BTS tower,
total employee), total customer, capital structure, innovation, and product differentiation.
Product Differentiation
a) TelkomFlexi
Telkom Flexi is one of division of Telkom where Flexi is CDMA (Code Division Multiple
Access) service that is combined from Fixed Line and Wireless Service. Fixed Wireless
service based on CDMA TelkomFlexi as limited moving cable in one code area, it is
possible because TelkomFlexi has limited mobility.
b) kartuHalo Postpaid
Telkom provide prepaid service on its customer, that its customer can pay his/her fare
appropriate service that he/she used.
c) TELKOMSEL
simPATI
Prepaid Telkom’s service based GSM (Global System for Mobile Communication)
provide network for mobile phone user accompanied with some features and
other service like internet data and roaming service.
Kartu AS
Service that similar with simPATI, but with cheaper fare. Hence, its service also
less when it is refer to simPATI.
4G LTE
Extremely fast internet network technology based on IP (Internet Protocol) that
make data transfer process become more fast and stable so can give download
and upload speed 3 times more than its previous generation (3G).
d) Flash Internet
Very fast wireless internet service that provided by Telkomsel, can support smartphone
usage and Telkomsel users.
e) Use TV Cable
7
First IP Television service in Indonesia with feature that not owned by another cable TV
services, like pause and rewind on TV, video and demand, and video recorder.
f) IndiHome
IndiHome is Triple Play service from Telkom that consists of Home Telephone, Internet
on Fiber/High speed Internet, and UseeTV Cable along with its some feature that
consists of INDIHome View, Melon, and Trend Micro Internet Security.
Level of Competitiveness
Telkom XL IndosatTotal Employee 25,011 2,021 4,200 Asset 127,951,000,000,000 40,278,000,000,000 55,140,000,000,000
For internal resource, Telkom take the first place as telecommunication company that has the
biggest total employee and asset. With this data, Telkom has a big competitive level refer to
its competitor.
Market Segment 43% 27% 20%Total Customer 139,000,000 58,300,000 54,300,000
For the capabilities, Telkom has high ability to compete with its rival because Telkom’s still
has the biggest market segment and total customer in telecommunication sector.
Capital 60,542,000,000,000 15,300,000,000,000 6,309,941,000,000 Short-term Debt 20,284,000,000,000 7,931,046,000,000 13,494,400,000,000 Long-term Debt 28,437,000,000,000 17,046,433,000,000 24,471,600,000,000 Total Capital and Debt 109,263,000,000,000 40,277,479,000,000 44,275,941,000,000 % of Capital 55.41% 37.99% 14.25% % of StD 18.56% 19.69% 30.48% % of LtD 26.03% 42.32% 55.27%
From company structure that we analyze, Telkom has a big liabilities, however it is balanced
with its capital proportion. From this data, we conclude that Telkom still has a great company
structure, remind that Telkom’s capital > Telkom’s liabilities.
8
Net Income (US$) 14,046,000 1,032,817 -2,798,605EPS 145.77 121.00 -515.02 Net Income (IDR) 182,415,584,598 13,413,207,806 (36,345,519,517)
From the data we got, Telkom still has the biggest income from its competitor. This is indicate
that Telkom is the leader of telecommunication sector in Indonesia, and also remind that
Telkom is Stated Owned Enterprise. This make Telkom is the huge company with a defensive
stance.
The External Assessment
Competitive Analysis: Porter Five-Forces
Porter Five-Force Model
Source: Group Estimate
New Entrant: Weak
The most important role in Telecommunication Company is the ability to provide good
quality service with affordable price. To become a new telecom operator, a company must
have a license issued by the government which is not cheap and it became a huge barrier to
entry. Indeed, without high tech broadband switching equipment, fiber-optic cables, mobile
9
handsets, and billing software, telecom operators would not be able to do their job of
transmitting voice and data from place to place.
Industry Competitors: Strong
Telecom Company has its own way to acquire new customers. There are companies that
focus on minimizing cost and offer lower cost and some are focus on maximizing the quality
of service, and one of them is PT Telkom. PT Telkom provide great quality of service in fixed
wireline and fixed wireless connections, mobile communications, and internet and data
communication services relatively with higher cost compared with other providers. The
reason why PT Telkom is not offering lower cost strategy is the profitability factor. If the
company presses the price down, it will risk the company’s revenue and income. The
competition in telecom industry is strong because customer can switch from one provider to
other provider with very low cost and very simple procedure.
Bargaining Power of Customers: Strong
There are a lot of service provider that offer similar services with lower cost compared with
PT Telkom. Therefore, PT Telkom maximize the quality of service to equalize its higher cost.
Customer with their considerations has the power to choose which provider they will use
since there are a lot of options available and them able to switch to other provider easily.
Bargaining Power of Suppliers: Weak
Company in telecommunication industry need the supply of telecom equipment, such as
fiber-optic cables, mobile handsets, billing software, and other equipment. Company has the
power to choose which company offer the best deal of the supplies. Since there are large
number of vendor that capable of providing the supplies, vendors has a weak power.
Substitutes: Strong
PT Telkom provide 3 kind of services, such in fixed wireline and fixed wireless connections,
mobile communications, and internet and data communication services. PT Telkom is the
only home line phone service provider in Indonesia, but nowadays people tend to use their
mobile phones to make calls. PT Telkom’s mobile phone service has a lot of substitutes that
offer lower cost with similar services. Internet line service can be substitute with wireless
connections which more mobile and functional.
10
Industry Analysis: The External Factor Evaluation (EFE) Matrix
No. Key External Factors Weight
Rating
Weighted Score
Opportunity
1Growth of Indonesia's GDP in the first quarter of 2011 to 6.5% where in 2009 GDP growth is only 4.9% 0.10 2
0.20
2Indonesia is the third biggest wireless market in Asia with 235,8 million customer basis and expected to increase to 390,1 million in 2016
0.10 3 0.30
3Percentage of household with home-line phone and mobile phone nationally increasing in 2010 by 81.45% (9.45% home-line and 72% mobile phone)
0.15 3 0.45
4Percentage of household with PC and Laptop nationally increasing in 2010 by 13.89% (7.45% PC and 6.4% laptop)
0.20 3 0.6
0
5 Growth of wireless broadband in Indonesia estimated increasing over the year
0.10 2 0.20
Threat
1 Global economic condition 0.10
2 0.20
2 Telecommunication regulation change in 2013 0.10
2 0.20
3 Rapid technological change causing constant need for upgrade
0.15
3 0.45
1.00
2.60
Industry Analysis: The Competitive Profile Matrix (CPM)
No.
Critical Success Factor
WeightTELKOM INDOSAT XL AXIATA
RatingWeighted Score Rating
Weighted Score Rating
Weighted Score
1Signal coverage in Indonesia
0.15
4 0.60 2
0.30 3
0.45
2 Total BTS tower
0.10 4
0.40 2
0.20 3
0.30
3 Voucher variation
0.05 4
0.20 3
0.15 3
0.15
11
(re-paid)
4 Customer loyalty
0.20 4
0.80 2
0.40 3
0.60
5 Distribution channel
0.10 4
0.40 2
0.20 3
0.30
6 Price Competition
0.20 2
0.40 4
0.80 3
0.60
7
Provide other services (4g, wireless)
0.10
4 0.40 2
0.20 3
0.30
8 Dividend policy
0.10 4
0.40 3
0.30 2
0.20
1.00
3.60
2.55
2.90
Additional Information :No
.Company Total
BTSDividen
dVoucher Variation
1TELKOM
54,000 8,4 T 6 variation
2INDOSAT
21,930 375,1 M 5 variation
3XL AXIATA
31,230 1,152 T 5 variation
The Internal Assessment
Vision and Mission Analysis
No. Explanation Yes (O) / No (X)
1 Board in scope O2 Less than 250 words in length O3 Inspiring O4 Identify the utility of a firm's products O5 Reveal that the firm is socially responsible O6 Reveal that the firm is environmentally responsible O7 Customer x Products or services O Markets O Technology O
12
concern for survival components, growth, and profitability O Philosophy O Self-Concept x Concern For Public Image O Concern For Employees X8 Reconciliatory O9 Enduring O
Ratio Analysis
Financial RatioRatio 2010 2011 2012 2013 2014
Liquidity Ratios
Current Ratio 0.915
0.964
1.160
1.163
1.062
Quick Ratio 0.890
0.930
1.136
1.145
1.047
Leverage Ratios
Total-Assets Ratio 43.45% 42.54% 39.86% 39.49% 38.87%Debt-to equity ratio 97.58% 74.03% 66.28% 65.26% 63.59%Long term debt to equity ratio 51.49% 36.44% 30.28% 28.53% 26.69%
Activity Ratios
Inventory Turnover 133.12 93.98 133.23 163.00 189.23Fixed Assets Turnover 0.85 0.88 0.93 0.87 0.84Total Assets Turnover 0.69 0.69 0.69 0.65 0.64Accounts Receivable Turnover 17.52 13.21 14.26 12.92 13.10Average Collection Period
Probability Ratios
Gross Profit Margin 32.77% 30.57% 33.31% 33.56% 32.75%Operating profit Margin 31.21% 29.11% 31.41% 32.72% 32.09%Net Profit Margin 34.97% 30.57% 33.31% 33.56% 32.75%
Return on Total Assets 0.225
0.212
0.231
0.218
0.209
Return on Stockholder's Equity
0.505
0.369
0.384
0.360
0.341
Earnings per Share 586.54 553.7 669.19 147.142 149.83Price earnings Ratio 2.711 2.547 2.720 14.612
13
Growth Ratios
68,6
29 71,2
38 77,1
43 82,9
67 89,6
96 Sales 3.80% 8.29% 7.55% 8.11%
22,437
21,777
25,698
27,846
29,377
Net Income -2.94% 18.01% 8.36% 5.50% 586.54 553.7 669.19 147.142 149.83Earnings per Share -5.60% 20.86% -78.01% 1.83% 59.39 57.61 64.52 74.21 87.24Dividends per Share -3.00% 11.99% 15.02% 17.56%
IFE Matrix
No Key Internal Factors
Weight
Rating
Weighted Score
Strength
1Increasing market share
0.14
4 0.56
2Telkomsel has 550 thousands service center with the standard of ISO: 9001 version 2000, such as Call Center, GraPARI, GeraiHALO, KiosHALO, Outlet Dealer, and M-Kios.
0.12
4 0.48
3 Product diversification policies 0.11
3 0.33
4 Usage of IT-base application in improving the mechanism and measuring employee's performance
0.10
4 0.40
5 The effectiveness of price-setting policies 0.07
3 0.21
6 Cooperating with global telecommunication company 0.08
3 0.24
Weakness
1 Telkom's financial ratios is stable from 20014-2008, yet declining in 2008
0.06
2 0.12
2 Increasing in depreciation and maintenance cost 0.10
1 0.10
3 Existing research and development project is not directly relate to Telkom's core
0.10
1 0.10
4 Increasing in company's debt 0.12
2 0.24
Total 1.00
2.78
14
Strategy Analysis
SWOT Analysis
Strength:
The Biggest Telecommunication and Mobile Operator in Indonesia.
Telkom Group is the only state-owned telecommunications enterprise as well as
telecommunications and network service providers in Indonesia. Telkom Group serves
millions of customers throughout Indonesia with a complete range of telecommunications
services that includes fixed wireline and fixed wireless connections, mobile communications,
networking and interconnection services and Internet and data communication services.
Ownership by Government
Telkom Group is the only state-owned telecommunications enterprisee in Indonesia. About
53.46 % oh the shares equity owned by Government and the rest , about 46.86 % owned by
Public. Because of this , Telkom Indonesia has a good relation with the Indonesia
Government, Telkom Indonesia has been choosen to performed video confrence of “
Syukuran Rakyat “ preseident Joko Widodo inauguration. Telkom Indonesia also wil be
facilitated in terms of regulation indonesia .
Large Quantity of Customer
In 2014 the Customer Growth has increased 6.4 % , the customer has reached 131,5 million
customer over indonesia, an increase of 5.1 % from the previous year.
15
The need for such high data services also boosted the number of data subscribers reached
60.5 million, an increase of 10.8 % compared to the year before. In addition, the number of
subscribers of Telkomsel Flash increased 56.4 % to a figure of 17.3 million, while the
BlackBerry service subscribers grew 31.1 % to a figure of 7.6 million.
Strong Distribution Channel and Network Coverage
Telkom Indonesia is the only Telecomunication in indonesia that provides Fixed Wireline
services, it serves million customers through out indonesia with complete range. in Mobile
operator , telkomsel also has the most BTS tower in Indonesia about 67000 BTS in over
indonesia. In 2013 telkomsel has released 268 Mobile Gra PARI and 400 mobile Tower.
Strong Financial Performance
Telkomsel recorded revenue of Rp60 trillion, reaching double digits Grow 10.1 %, higher
than the Indonesian Telecommunications Industry Growing at about 7% in Whole Year 2013.
16
Revenue growth is supported Posted Telkomsel consisting of digital growth in broadband
data exceptions ( 35.6 % YoY ) and digital services ( 30.3 % YoY ) As well as the contribution
of the legacy that is the business of voice ( Grew 4.5 % YoY ) and SMS ( 3 Growing , 3 % YoY).
Telkomsel also awarded as the best emiten in the Stock Exchange with market
capitalization about 10 trillion in Capital Market Awards in 2014.
Weakness:
Telkom’s Products price much more higher than competitors price.
Telkom has a higher price than the other competitors for its quality service.
Low Broadband Quality
Speedy has a low quality of internet speed if compared with other ISP like Fastnet. The
Product cost also higher then other competitors products. The Internet speed is
unstabilized.
Opportunities:
Growth in Indonesia and South east Asia Internet Users In 2013
Internet users in indonesia has reached 74 million in 2013 , it is the biggest Internet users in
South East Asia.Although it reached 74 million but it still only 15 % of indonesian
population , it means still 85 % of indonesian population doesn’t get internet services. This
number of Internet user could be opportunities to get more customer and reached the are
that’s still not has internet.
Large mobile phone user in indonesia
Indonesia is ranked 4 in the most country with mobile phone ( smartphones) users in the
world in 2012. This massive mobile phones user can attracted people to use more mobile
operators , this could be opportunities to Telkomsel to get more customer to increse their
profits .
Threats:
Rapid Technological Changes causing constant need for upgrades. Many Mobile operators
in the world already use 4G/ LTE technology but in indonesian , but in indonesia the 4G
tehcnologies still not compatible yet.
17
Telecomunication Regulation Change in 2013
The regulation of telecomunication is tighter than before , because of the fraud that often
happened among the indonesian celluar user like SMS fraud. The regulation also make
limitation for the frequency of mobile operators in indonesia especially frequency of
merger company like XL with Axis.
18
19
Wea
knes
:H
igh
prod
uct p
rice
Low
Bro
adba
nd Q
ualit
y
Telk
om h
as th
e bi
gges
t ne
twor
k co
vera
ge in
Inon
esia
, an
d fr
om th
is q
ualit
y se
rvic
e,
mos
tly th
e cu
stom
er w
illin
g to
pa
y m
ore
for i
ts q
ualit
y. F
or
broa
dban
d pr
oduc
t, Te
lkom
m
ore
focu
s on
its
num
ber o
f cu
stom
er u
p to
rem
otes
are
a
With
Tel
kom
's lo
w b
road
band
qu
ality
and
this
tech
nolo
gy
rapi
d ch
ange
, it c
an b
e se
rious
pr
oble
m in
the
futu
re o
f te
lkom
. The
refo
re, t
elko
m
need
a m
aint
anan
ce fo
r its
br
oadb
and
qual
ity fo
r ov
erco
me
the
othe
rs
com
petit
or w
ith n
ew
tech
nolo
gy
Stre
ngth
:Th
e Bi
gges
t Te
leco
mm
unic
ation
Ow
ners
hip
by G
over
nmen
tLa
rge
Qua
ntity
of C
usto
mer
Stro
ng F
inan
cial
Per
form
ance
Stro
ng D
istr
ibuti
on C
hann
el
and
Net
wor
k Co
vera
ge
With
inte
rnet
use
rs a
nd
mob
ile p
hone
use
rs in
In
done
sia,
of c
ours
e Te
lkom
w
ill le
ad th
is o
ppor
tuni
ty w
ith
gove
rnm
ent i
nter
venti
on.
Base
d on
Pal
apa
Ring
Pr
ogra
m, T
elko
m h
as a
hug
e op
port
unity
for t
akeo
ver t
he
grow
th o
f mob
ile p
hone
use
rs
For o
verc
ome
rapi
d te
chno
logy
cha
nge
thre
ad,
Telk
om c
an e
asly
upg
rade
its
tech
nolo
gy w
ith it
s st
rong
fin
anci
al p
erfo
rman
ce. A
nd
for g
over
nmen
treg
ulati
ons
chan
ge, w
ith g
over
nmen
t ow
ners
hip
at 5
0% o
f sha
res,
te
lkom
can
eas
ily h
andl
e th
is
thre
ad
SWO
T An
alys
is
Opp
ortu
nitie
s :
Gro
wth
in
Indo
nesi
a an
d So
uth
east
Asi
a In
tern
et U
sers
In
201
3La
rge
mob
ile p
hone
use
r in
indo
nesi
a
Thre
ats
:Ra
pid
Tech
nolo
gica
l Cha
nges
ca
usin
g co
nsta
nt n
eed
for
upgr
ades
Tele
com
unic
ation
Reg
ulati
on
Chan
ge i
n 20
13
BCG Matrix
As a Telecommunication company, Telkom provides Multimedia services such as content
and applications, completing the business portfolio called Telecommunication, Information,
Media, Edutainment, and Services. The telecommunication business is the fundamental
platform of the company’s legacy based business, and the others business portfolio such as‐
information, media, edutainment, and services. Based on Telkom’s fundamental aspects,
Telkom has multiple product portfolio which should be asked on, how these various product
portfolio will managed to boost overall corporate performance to achieve the target stock
price and earnings. BCG (Boston Consulting Group) Matrix is one of the most popular
portfolio analysis technic. The Telkom’s BCG Matrix shows that the Information product is in
the stars area, Telecommunication product is in the Cash Cow Area and the Edutainment
and Media Product is in the Question Marks area.
1. STAR (High Market Growth Rate – High Market Share)
Information products contain internet, data and IT products is classified in Star Area
which Telkom should be maintaining their growth and market share in a very
20
Information (Internet,Data,IT)
Telecommunication(Fixed line, Cellular,
SMS)
Edutainment (Music,Games,Tele-edu)
Media(Cable TV, Web-Portal)
competitive field. Broadband internet is Telkom’s primary non cellular based
broadband internet services using ADSL and fiber optic package data. Leading with
innovation and resources, Telkom already launched “Indonesia Wi-Fi or @wifi.id” to
meet the need for Wi-Fi based internet service at public places such as airports,
shopping malls, hospitals, technology, is offered under the commercial name “Speedy”.
Telkom also provide a prepaid on-demand, “pay as you use” broadband internet service
using Speedy or Wi-Fi access under the commercial name of “Speedy Instant”. The
Telkom’s information products portfolio as should be maintaining their market share,
focusing on revenue and profit margin. Although Telkom is leading with a broad
distribution channel across Indonesia, Telkom has to wary about the price
competitiveness among the competitor for an affordable internet package data. In a
very competitive field of internet and data products, Telkom has to create a
competitive advantage in its product which is a brand value of a good and stable
connectivity as a brand image that will outplay against all the competitors.
2. QUESTION MARKS (High Market Growth Rate – Low Market Share)
Categorized in question marks, Edutainment and Media product portfolio have a
potential for success, but to step in to the Stars area it is need a lot of cash for a long
term development. Telkom should gain enough their market shares to become star
portfolio in a competitiveness of Edutainment and Media product since it is not the
pioneer in the field. Telkom offers television broadcast services comprising the
following Pay TV by satellite, a pay TV service broad casted over satellite links offering
premium-grade contents in news, sports, entertainment, and others.
The other are IPTV, an Internet Protocol-based television ("IPTV") under the
commercial name ”UseeTV Cable”, OTT TV (Over the Top TV), an internet TV service
under the commercial name ”UseeTV” that can be accessed from Telkom's internet
network offering free content such as video-on demand programming, live TV, internet
radio, and some pay video programming. Since the edutainment and media product is
all about creativity and innovation, Telkom has to develop and invest more in research
to get what the customer needs and create a sustainable innovative product which
hard to imitate by the competitors.
21
3. Cash Cows (Low Market Growth Rate – High Market Share)
As the pioneer in telecommunication sector, Telkom is a sole leader with 40% (125,1 M
subscribers) market share in Indonesia, followed by Indosat 18%(56,5 M subscribers),
and XL AXIATA 17%(54,2 M subscribers). As Telkom has the biggest network coverage in
Inonesia and mostly the customer willing to pay more for its quality. Also for broadband
product, Telkom more focus on its number of customer up to remotes area with
maintaining its distribution channel as a competitive advantage among the other
competitors. For the telecommunication product, there is low market growth rate,
which is the latest innovation is 4G connectivity that Telkom is the leader for the
application. To summarize, Telkom still become the sole leader for the
telecommunication product winning in the best connectivity so far and for the brand
image that stick in customer perspective for such a long time.
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