CHAPTER 4

ANALYSIS

This chapter represents the result of data analysis. Data were collected and processed in
order to response the problem statement that already stated in chapter 1. The first step in
analyzing the whole data is mapped PT Bahama Rotans business model. Business
model canvas has nine building blocks and each block has a different element that needs
to be identified. Also to be filled and analyzed to capture the current situation in PT
Bahama Rotan. The next step, use Osterwalder and Pigneur SWOT assessment of each
building block and analyze companys strengths and weaknesses and identify potential
threats and opportunities by giving score of each nine building block of the business
model canvas. For strengths and weaknesses assessment, score is given into two parts,
the current condition of the company to analyze the performance and the importance for
the company. Respondent has to indicate the score, in range from 1 (not important) until
10 (important), how important the attributes to the company. Then, the respondent also
asked how PT Bahama Rotans performed with the attributes (Table 4.1), score rated in
range from -5 (poor) until 5 (excellent). Because of that, IPA (Importance Performance
Analysis) is the suitable tools to analyze the strengths and weaknesses. It is compared
with the importance and performance using IPA to know which aspect can be maintain
or eliminate. For the opportunities and threats, the respondent asked based on the
attributes to give scores in range from 1 (strongly agree) and 5 (strongly disagree), that
will identified the current opportunities and threats. The current business model of PT
Bahama Rotan is adjusted with the result of SWOT assessment so the business model
innovation can be made.

Table 4.1 Strength and Weakness Attributes (Osterwalder and Pigneur, 2010, p. 217-219)
Code Attribute
VALUE PROPORSITION
1 Our value propositions are well aligned with customer needs
2 There are strong synergies between our different products and services
3 Our customers are very satisfied
4 Our value proposition is unique
COST/REVENUE




































5 We benefit from strong margins
6 Our revenues are predictable
7 We have recurring revenue streams and frequent repeat purchases
8 Our revenue streams are diversified
9 We collect revenues before we incur expenses
10 Our pricing mechanisms capture customers willingness to pay
11 Our costs are predictable
12 Our operations are cost efficient
13 We benefit from economies of scale
INFRASTRUCTURE
14 Our key resources are difficult for customers to replicate
15 Resource needs are predictable
16 We deploy the right resources at the right time
17 We efficiently and effectively execute key activities
18 Our key activities are difficult to copy
19 We have the right balance between internal and outsourced activities
20 We have productive partnerships with other organizations
21 We have partnerships with world-class organizations
22 We have a good relationship with our strategic partners
CUSTOMER INTERFACE
23 Our customer churn rates are low
24 Our customer base is well segmented
25 We truly understand our customers
26 We are continuously acquiring new customers
27 Our channels are efficient
28 Our channels are effective
29 Customers can easily see and access our channels
30 Our channels are strongly integrated
31
Our channels can be used across multiple products and services (economies of
scope)
32 Our channels are well matched to our customer segments
33 We have strong customer relationships
34
The quality of the customer relationships matches the customer segments we
serve
35 Relationships create switching costs
36 Our brand is strong

Table 4.2 Opportunity Attributes (Osterwalder and Pigneur, 2010, p. 222-223)
Code Attribute
VALUE PROPORSITION
1 We could generate recurring revenues by converting products into services
2 We could expand our market reach by converting services into products
3 We could better integrate our products and services
4
We could eliminate elements of our offering to make it simpler and more
valuable
COST/REVENUE
5 We can replace one-time transaction revenues with recurring revenues
6 We have cross selling opportunities that we are not leveraging
7 We can increase prices
8 We can reduce costs
9 We can collect revenue before we incur costs
INFRASTRUCTURE
10 We could use less costly resources to achieve the same result
11 We have key resources that are under-exploited
12
We could access key resources from partners that will add significant value to
what we do
13 We could standardize some key activities
14
Collaboration with key partners will enable us to focus more effectively on our
key business
15 There are cross selling opportunities with partners
16 Partner relationships could significantly add to our value proposition
CUSTOMER INTERFACE
17
There are new customer segments emerging that are likely to be interested in our
products or services
18 We can better serve our customers through finer segmentation
19 We could find new complimentary channels
20 We could better align channels with customer segments
21
We could increase margins and/or improve the customer experience by directly
serving customers
22 There is the potential to improve customer follow up
23
We could create a community of customers centered around our product or
service
24 We could make more of an effort to interact with and listen to customers








Table 4.3 Threat Attributes (Osterwalder and Pigneur, 2010, p. 220-221)











































25
We have groups of unprofitable customers that could be fired to improve
profitability
26 We can increase switching costs
27 We could automate some elements of relationship management
Code Attribute
VALUE PROPORSITION
1 Substitute products and services are available
2 Competitors are threatening to offer better price or value
3 Our offering is likely to become obsolete in the medium term (next three years)
COST/REVENUE
4 Our margins are threatened by competitors or by technology
5 We depend excessively on one revenue stream
6 Some revenue streams are likely to disappear
7 Significant costs are likely to become unpredictable?
8 Some of our costs are likely to grow more quickly than revenues
INFRASTRUCTURE
10 We could face disruption in the supply of certain resources
11 The quality of our resources are threatened
13 Key activities are likely to be disrupted
14 We are in danger of losing key partners
15 Our partners may collaborate with competitors
16 We are too dependent on certain partners
CUSTOMER INTERFACE
17 The market could soon be saturated
18 Customers are likely to defect
21 Our channels are in danger of becoming irrelevant to customers
22 Our customer relationships are deteriorating

4.1. Business Model Canvas

Below is the description of current business model of PT Bahama Rotan by using
business model canvas by Osterwalder and Pigneur.



Figure 4.1 Current Business Model Canvas of PT Bahama Rotan
Customer Segments
Europe is the first and largest customer of PT Bahama Rotan before expanding its
market as now. Beginning from 1991, PT Bahama Rotan saw the high interests of
Europeans to the rattan and transact with customers in Europe such as Holland,
Germany, Belgium, and England. Since it offers the high quality furniture, it targeted its
customer based on social class, which is the upper middle class that occupies the upper
part of the middle economic range in the community. The customers of PT Bahama
Rotan mostly are upper middle class hospitality industry that needs high quality of the
furniture in a large number. Moreover, individual customer also the targeted customer
since it delivers the product to the stores in Europe.

Value Propositions
Production rate was one factor in corporate welfare, so it is important to build a product
with high value in order to make high production.


In this case, PT Bahama Rotan produce goods that have a high quality, as selected from
high quality raw materials and production techniques with a high level of crafts. Its
main products are furniture from rattan. Because the diameter of the trunk is big
enough, strong, and sturdy then most of the final results of the products used for the
purposes of making the framework of chairs, tables, beds, sofas, and more. In addition,
the products offered are not only rattan, but there is also the production of furniture that
comes from the loom and wood. Loom is processed using a machine and can be
directly mounted on the frame of the furniture. Thus by using the loom production
systems becomes more efficient and faster, so it can be quickly to mass-produced.
Rattan is very popular with customers from Europe since the 80's, but as time passed
and the rapid advancement of technology, the rattan innovation called loom started
getting a lot of attention from buyers in Europe. The most popular products are dining
chair and bar stool. In addition, wood that used for the raw materials to make furniture
is teak, pine, and mahogany.

Based on the decades of experience in rattan business, PT Bahama Rotan learned how
to maximize the customer satisfaction. Customer can propose the designs that they
desired and PT Bahama Rotan keep ensuring its products arrive on time. To compete
with other competitors, PT Bahama Rotan offers a competitive price to customers. In
setting competitive prices in the market, PT Bahama Rattan looks at competitors' prices
and uses it as a benchmark to price their products.

Channels
To make the products better known and recognized in other businesses segment, PT
Bahama Rotan sets up several indirect channels to reach market segments. This channel
aims to attract new customers segment and also to maintain the customer's loyalty. The
strategy is consist of some major channel tools which are:
a. Business Partner
As mentioned in Chapter 1, B2B has more advantages for PT Bahama Rotan because of
the volume of B2B transactions is higher than the volume of B2C (Business to
Customer) transactions. PT Bahama Rotan is creating value from the wholesalers which
sales furniture to customers. In order to deliver the value company to the end-customer
directly, then the business partner must be compatible. The targeted end-customer of the
company is the upper middle class that occupies the upper part of the middle economic
range in the community.

Likewise, the chosen business partner must be has the same target as well. The
wholesalers usually deliver the products through the stores which sells to the end-
customer. The end-customer might be individual or hospitality industry such as
restaurant and hotel. But, PT Bahama Rotan has a relationship with the UK wholesaler
that deliver the products directly to the hospitality industry not individual customer. To
maintain the business partners loyalty, PT Bahama Rotan always gives samples to the
wholesalers in twice a year or when the new model is coming up. The sample shipped
in a container with the height about 20 feet that can be fulfilled with 150-200 chairs.
b. Stores
The product does not just stop at the wholesaler. Wholesaler only intermediaries and
will deploy the product to a few furniture stores that will sell directly to customers.

Customer Relationships
Type of customer relationships built by PT Bahama Rotan is customer service by
electronic media. Some representatives of PT Bahama Rotan will communicate with
consumers. Communication is usually in the form of email because email is the most
efficient in communication between countries and also not cost consuming.
Communication can be either an offer of new products, consultancy, or complaints from
consumers. However, the communication takes more time because it does not directly
given from the end customer to the company. Below is the flow chart of
communication:

Figure 4.2 Communication Flow Chart
If there is a complaint or comment from the customer, the customer must report to the
store, and the store will deliver to the wholesaler, and PT Bahama Rotan will get any
messages from customers through wholesalers.

Revenue Streams
The company gets overall revenues from customers in the form of the sale of the
product. Income earned continuously based on demand from the wholesaler. It could be
repeated purchases every week, two weeks, or once a month.

End-customer Store Wholesaler
PT Bahama
Rotan

Key Resources
Resources and assets needed by the company to run the business model is as follows:
a. Physical assets
PT Bahama Rotan has a factory for the production of raw materials into finished goods
or furniture. The factory is located in Tegalwangi, Cirebon and office building located
in the same location with an area of 26.759 m
2
. In addition to the factory and buildings,
PT Bahama Rotan has a machine that will process the product. The interesting thing is
there are only two machines looms in Indonesia and PT Bahama Rotan owns one of
them. Loom machine is part of the company's confidential and therefore should be
confidant of the company who can see.
b. Human resources
Employees are one of the most important assets in the company. The number of the
employees reached until 500 people. Companies can run well if it is supported by the
quality of human existence. An employee of PT Bahama Rotan is divided into sections
according to the task.
c. Natural resources
Raw materials that used by PT Bahama Rotan are natural and need some common
senses that maintained its continuity. The good thing is supplier from PT Bahama Rotan
is under the supervision of Perum Perhutani. Perum Perhutani stands for Badan Usaha
Milik Negara that has authority and duty to protect the forests in some Indonesia
regions. The natural resources that used by PT Bahama Rotan were known by Perhutani
and safe from illegal logging.

Key Activities
On this element describes what the company should do so the business model goes well.
Every activity has its major significance output and one of most important sections in
the business model. For more structured explanation, stated below the key activities that
has a big influence to the company:
a. Research and Development
To know the current conditions the market in Europe, the company held direct visits to
the destination country. By visiting business partners, companies can conduct surveys
and interviews to partner on what is desired by the customer, such as the current trend,
and so on. This visit was only made in the uncertain times.



b. Production
There are three raw materials processed by the company, ie rattan, loom, and wood. So
below is a flow chart of the production process for the three products.
Rattan


Loom
Raw materials of
rattan
Rattan frame
assembly
Weaving rattan
Packing
Finishing process
Sandpaper
process
Wood materials
Wood
component
Wood frame
assembly
Wood frame
process
Weaving Loom
Packing
Finishing
Sandpaper
process

Figure 4.3 Rattan Production Flow Chart
Figure 4.4 Loom Production Flow Chart

Wood


c. Marketing
Perform continually exhibition is the main marketing activities undertaken by the
company since public relations is one of the most effective strategies and efficient for
the furniture business with large number coverage. Producer and the customer is always
continues to meet and gather information to update on all products within the scope of
the local event and international exhibitions. The exhibition is the most strategic place
and good moment to attract new partner and customer because PT Bahama Rotan has
the opportunity to directly touch the consumer by giving them a presentation and a
personal approach. PT Bahama Rotan already joined several exhibitions in Singapore,
Jakarta, China, Holland, and so on.

Key Partnerships
Key partnerships describe the relationship with the third party, which is important so the
business model can be run smoothly. There are three main partners that help PT
Bahama Rotan to optimize the business model:
a. Supplier
PT Bahama Rotan establishes good relationships with the suppliers of high quality
supply materials are spread in Indonesia, such as Tangerang, Majalengka, Sumedang,
Jepara, Sulawesi, Kuningan.
Wood materials
Wood frame
assembly
Component
process
Wood frame
process
Packing
Finishing
Sandpaper
process
Figure 4.5 Wood Production Flow Chart

Each region has different resources, such as paint colors from Tangerang, solid wood
from Majalengka, Sumedang, Kuningan, and rattan from Sulawesi. PT Bahama Rotan
cares about the legal logging and nature conservation, so the gained natural resources
under the supervision of Perhutani.

b. Technological experts
Without guidance from the technological experts, a business can end up wasting time
and money in production process. The technological expert offers production machines
to the client, PT Bahama Rotan, from advances in technology. Modern technology is
still dependent on foreign, especially related to design and engineering machinery.
These partners come from various countries according to the purpose, such as wood
processing machines from Germany and Taiwan, and looms processing machine are
from England.

c. Freight forwarder
The company uses a freight forwarder services in delivering the product to the
destination country. Domestically, the services used is already includes shipping the
products by truck from Cirebon to the port of Tanjung Priok Jakarta. The system used
by PT Bahama Rotan is the FOB (Free On Board), or the price until the goods are on
board or that the seller will bear all costs incurred until the goods are on board.
Selection of ships based on an agreement by the company and the buyer.

d. Business partner / Wholesaler
PT Bahama Rotan has a business method that considered as the right type for its
products is business-to-business or better known as B2B. Understanding of business to
business is transactions between business institutions with other business institutions,
such as between a manufacturer and a wholesaler, or between a wholesaler and a
retailer. Business partner or wholesaler that helps companies to reach the their markets.
More specifically, retail or wholesaler can conduct transactions once a month or even
every week.

Cost Structure
Below is an overview of the structure of the costs incurred by the company in the
business process. The cost structure is assumed for every one container of 40 feet,
covering products of dining chair and bar stool.

Table 4.4 Cost Structure






4.2. SWOT Assessment Analysis
4.2.1. Strengths and Weaknesses
Value Propositions



















Keep up the good work
To find the value to be created, of course, PT Bahama Rotan doing research to find out
what the customer needs. This is done by directly visiting the destination country, such
as visiting the wholesaler. Therefore, PT Bahama Rotan can know the needs of their
customers well and make loom furniture is the priority of the sales because loom starts
to get more attentions from customers in Europe. Experience for many years also makes
the company knows customers better. The attributes in value propositions indicates
keep up the good work or the major strength as seeing that PT Bahama Rotan performs
very well and the attributes were placed in high importance. They include Our value
propositions are well aligned with customer needs, There are strong synergies between
our different products and services, Our customers are very satisfied, and Our value
proposition is unique.
Cost of good sold (1 container 40 feet) USD 17000.00
Distribution USD 390.00
Research and Development USD 50.00
Marketing USD 150.00
Administration USD 50.00

As mentioned before, PT Bahama Rotan offers competitive prices, on time shipping,
high quality, various materials and models, and customized design. Those values
successfully delivered to customer needs. The company always run the production in
one theme, it means all of the products stand in furniture line. Therefore, there are
strong synergies between all variant products. Not only that, customer feels satisfied
with the products and services. PT Bahama Rotan provides a customer care through
email to receive any feedback from their customers. The attribute Our customers are
very satisfied indicates the highest performance and importance. It is a good start to
maintain the loyal customer.

Overall, PT Bahama Rotan show its best in deliver the value propositions and majority
of the customers were satisfied with its performance.

Cost/Revenues


Figure 4.6 IPA Matrix of Cost/Revenue
Keep up the good work
Six attributes clearly scattered in the first quadrant, which keep up the good work or the
major strengths of the company. Our revenues are predictable, We have recurring
revenue streams and frequent repeat purchases, Our pricing mechanisms capture
customers willingness to pay, Our costs are predictable, Our operations are cost
efficient, and We benefit from economies of scale. The revenue that obtained by PT
Bahama Rotan is from the proceeds of the sale.


In determining the price of products, the company conducted research in the form of
price comparisons with other rattan companies (competitors) and price changes (if
needed) each year, adjusted to the financial condition of Indonesia. Price can also be
determined through an agreement with the customer; so the price of the product is also
based on the buyer's willingness to pay. In addition, PT Bahama Rotan has some loyal
customers that always make frequent repeat purchases in variant times. It might be
repeated every week, two weeks, or months depends on the customer needs. From the
cost side, only one attribute fell in this quadrant. The cost that spent by the company
was structured well so it can be predictable. Economies of scale are defined as a
decrease in the average cost of unity as the number of products or volume of production
activity increased. The company benefits from economies of scale because most
companies accept the order in the form of numbers. It has been mentioned why the
company chose B2B method.

However, there are two attributes that fall in quadrant border between one and four
quadrants, including We benefit from strong margins (attribute 5) and We collect
revenues before we incur expenses. According to the interview, the attribute number 5
and 9 has a tendency to rise to the quadrant one. Indicated by the statement that
companies often subsidized by holders of the company to carry out expenditure was due
to the policy of export the raw material from Indonesia to other countries and make the
furniture company dropped its earnings. The respondent optimist that the second half of
2012, the export value of rattan is getting better because there is a tendency of
consumers in the European region taking advantage of rattan furniture is light and not
too extravagant place. The prohibition exports of raw rattan exports products made of
rattan and furniture in the first half of this year increased by 40 percent over the same
period last year. Director of Industri Hasil Hutan dan Perkebunan Kementerian
Perindustrian said that Indonesia rattan exports during January to July 2012 reached
131 million U.S. dollars, grew 40 percent compared to the first half of last year
amounted to 91 million U.S. dollars. (Antara news, 2012)

Low priority
Our revenue streams diversified is the only one attribute of cost/revenue that fell to the
third quadrant. This quadrant means low priority to the attribute equal to companys low
priority. Diversify the revenue streams may reducing all risks that will be happened, can
be called as the revenue octopus. (Lopiano, D.)

It has many hands to received revenue and makes more powerful business. Otherwise,
PT Bahama Rotan only depends on a single revenue stream, which is from sales margin.
The performance shows the low score as well as the importance. The company does not
consider it as the attribute that should be in the priority and indicates the importance for
3 points. Yet, this occurred may be because the only potential source of income of the
buyer.

Infrastructures


Figure 4.7 IPA Matrix of Infrastructure

Keep up the good work
Almost of half the attributes in infrastructure fell in the first quadrant, including Our
key resources are difficult for customers to replicate, Resources needs are predictable,
We deploy the right resources at the right time, We efficiently and effectively execute
key activities, Our key activities are difficult to copy. Confidential is the key of the
business process in PT Bahama Rotan to keep all the good things not to be known by
others. Key resources are of the most important basis in the making of products; good
quality raw materials usually producing products that have good quality as well.
Besides the quality, the uniqueness of the raw materials needs to be kept confidentially
in order to not easily imitated. Loom furniture is a top priority of sales in Europe and
kept hidden from public from the production machine to the making process. Only
certain people can see the whole process. In addition, the repetitive production and
always in the same field to make the raw material can be predicted more easily.

Concentrate here
The We have productive partnerships with other organizations attribute has tendency
to fall into this quadrant. According to respondent, this attribute is indeed one of the
weaknesses of the company are less outgoing. One key to success is to have a network
or a wide networking. Networking to build professional relationships that aim to help
each other with the hope the two sides can help each other to achieve their stated
objectives. Build networking through organizations as possible is the right advice.
Because by having extensive networking they could later become "connectors". They
will be the "link" of important information that may be the company needs.

Low priority
PT Bahama Rotan shows the low performance and not too special importance in We
have the right balance between internal and outsourced activities and We have the
partnerships with world-class organizations. PT Bahama Rotan execute too many or to
few activities itself and too busy with the interests of the company. Besides, the
outsource activities may has benefits to the company. Partnership is a relationship
between individuals or businesses in business world; true partnering can give some
advantages to both of them. Partners can expect to spend more time talking about
process, direction, and coordination. Yet, they can also expect increased quality,
capacity, performance, and, perhaps most valuable, an ally in the ever-changing,
complex world of organizations. (Townsend, 2012) But PT Bahama Rattan not think
partnership is important because organizational furniture that was in Indonesia is not
fully supported by the government. An example of organizations furniture in Indonesia
is Asmindo, as a source of information for a furniture company. However, the lack of
support from the government such as free exhibitions in various countries around the
world. But respondents noted that the company has not found any organizational level
of world-class furniture in Indonesia or abroad.

Customer Interfaces


Figure 4.8 IPA Matrix of Customer Interface

Keep up the good work
Surprisingly, a lot of the attributes of customer interface fell on the first quadrant.
Although they are in the same quadrant, but not all of the attributes indicate the
maximum number. Then it will be classified by the coordinates. The highest score fell
to We truly understand our customers and We have strong customer relationships.
The relationship between PT Bahama Rotan and the customers seems well-established,
so that needs to be preserved by maintaining a technique that has been used or much
better if improved. The next stage is The quality of customer relationships matches the
customer segments we serve also Our customer base is well-segmented and Our
channels are well matched to our customer segments. Company has succeeded in
determining the market segments that will be addressed and running is good. The
selected channel is also good through wholesaler and partner stores.

We are continuously acquiring new customers, Our channels are efficient, Our
channels are effective, Customers can easily see and access our channels, Our
channels are strongly integrated are in the high importance but not really good
performance however they are in the best quadrant. This shows that although it should
be maintained but should be increased for maximum results. This attribute indicates
much involved with the channel as well as information.



Last is that in the border area and has upward tendency in quadrant one are Our
customer churn rates are low, Our channels can be used across multiple products and
services, and Relationships create switching costs. Customer churn is the loss of
customers who may leave a company for a number of reasons including pricing issues,
customer service, network coverage, competing technologies and contract conditions. It
can be avoided and will be better in the future as one that makes down the company and
make customers switch to other companies is a matter of policy to export the raw
material to overseas so that competitors in Europe sells the products cheaper. In
addition, the channel is useful for selling products and services so that economies of
scope can be maximized.

Concentrate here
Our brand is strong, this attribute became one of the highlights for this company and
not only PT Bahama Rotan but almost all furniture companies in Cirebon due to lack of
insight into the importance of a brand. It is very necessary improved to be better known
and remembered by customers and of course a plus compared to other companies.

4.2.2. Opportunities

Value Propositions
Table 4.5 Value proposition Opportunities







Can be seen the score that given by respondent that the opportunity for PT Bahama
Rotan in value propositions is could eliminate elements of products to make more
simple and valuable. The example given by the company is now being minimalist
trend and also the practical thing. Then the furniture designs can be made in order to
form the multifunctional innovation, eg chairs and tables into one piece and not
have to spend a lot of space.


Score Attribute
4 We could generate recurring revenues by converting products into services
3 We could expand our market reach by converting services into products
3 We could better integrate our products and services
2
We could eliminate elements of our offering to make it simpler and more
valuable

Cost/Revenues
Table 4.6 Cost/Revenue Opportunity

In terms of cost/revenue, find opportunities that may occur are as discussed previously
regarding the company can collect revenue before incur costs. Prohibition of the export
of raw materials to make the company's performance improved. This shows that the
support given by all parties concerned has shown positive results.

Infrastructures
Table 4.7 Infrastructure Opportunities

'Collaboration with key partners will enable us to focus more on our key business' is an
attribute that is considered as an opportunity. According to respondents, the same
collaboration as cooperation between the two sides or more and have similar goals. The
efforts of the two had an advantage in both parties.



Score Attribute
3 We can replace one-time transaction revenues with recurring revenues
3 We have cross selling opportunities that we are not leveraging
3 We can increase prices
3 We can reduce costs
2 We can collect revenue before we incur costs
Score Attribute
3 We could use less costly resources to achieve the same result
4 We have key resources that are under-exploited
3
We could access key resources from partners that will add significant value to
what we do
4 We could standardize some key activities
2
Collaboration with key partners will enable us to focus more effectively on our
key business
3 There are cross selling opportunities with partners
3 Partner relationships could significantly add to our value proposition

Customer Interfaces
Table 4.8 Customer Interface Opportunities


We could increase margins and/or improve the customer experience by directly serving
customers and We could automate some elements of relationship management are the
opportunities for PT Bahama Rotan in customer interface section.

4.2.3. Threats

Value Propositions
Table 4.9 Value Proposition Threats

Raw materials other than rattan, wood, and a loom that used furniture is a lot. Such as
bamboo and plastic. Therefore, respondents strongly agreed that if the 'Substitute
products and services are available' is a threat to the company.

Score Attribute
3
There are new customer segments emerging that are likely to be interested in our
products or services
3 We can better serve our customers through finer segmentation
3 We could find new complimentary channels
3 We could better align channels with customer segments
2
We could increase margins and/or improve the customer experience by directly
serving customers
3 There is the potential to improve customer follow up
4
We could create a community of customers centered around our product or
service
3 We could make more of an effort to interact with and listen to customers
3
We have groups of unprofitable customers that could be fired to improve
profitability
3 We can increase switching costs
2 We could automate some elements of relationship management
Score Attribute
1 Substitute products and services are available
3 Competitors are threatening to offer better price or value
4 Our offering is likely to become obsolete in the medium term (next three years)

Cost/Revenues
Table 4.10 Cost/Revenue Threats

It turns out in terms of cost and revenue, there are many threats and need to be aware of.
The threats are 'Our margins are threatened by competitors or by technology', 'We
depend excessively on one revenue stream', 'Some revenue streams are likely to
disappear', 'Significant cost are likely to become unpredictable.

Infrastructures
Table 4.11 Infrastructure Threats

Only one attribute is a threat in the infrastructure section of the 'Key activities are likely
to be disrupted. According to respondents, this threat comes from the company itself as
the loyalties of the employees were fading.

Customer Interfaces
Table 4.12 Customer Interface Threats
Score Attribute
2 Our margins are threatened by competitors or by technology
2 We depend excessively on one revenue stream
2 Some revenue streams are likely to disappear
2 Significant cost are likely to become unpredictable
3 Some of our costs are likely to grow more quickly than revenues
Score Attribute
3 We could face disruption in the supply of certain resources
3 The quality of our resources are threatened
2 Key activities are likely to be disrupted
4 We are in danger of losing key partners
3 Our partners may collaborate with competitors
3 We are too dependent on certain partners
Code Attribute
3 The market could soon be saturated
4 Customers are likely to defect





As with the previous analysis, customers look looks good with the company.
Respondents noted that this attribute is not fit to be a threat.

4.3. Proposed Business Model Innovation

Current business model of PT Bahama Rotan has been successfully mapped and SWOT
has been analyzed through Importance Performance Analysis. These two things are
compared in order to produce a business model innovation; the results of the
comparison are as follows:

Figure 4. 9 Proposed Business Model Innovation

Customer segments
Based products made by PT Bahama Rattan has a high quality and selection of market
segments measured by the purchasing power of buyers. Therefore, PT Bahama Rattan
market segment sets the upper middle class as a market segment that assessed a
potential for the company and useful in conducting the sale. Market the intended form
of hospitality industry such as hotels and restaurants because it requires large amounts
of furniture. In addition, the individual customer is also a target market of PT Bahama
Rattan. It would be nice if more specifically the 'Upper-middle class of the hospitality
5 Our channels are in danger of becoming irrelevant to customers
5 Our customer relationships are deteriorating

industry and individual customers in Europe that has interest in modern design
furnitures' because the products offered by the company is a modern design.

Value Propositions
From the existing business model canvas, PT Bahama Rotan offers competitive prices,
on time shipping, high quality, various materials and models, and customized design.
Those values successfully delivered to customer needs. Analyzed by IPA, all attributes
in value proposition are in quadrant one that means the company already has good
performance and put attributes in a high importance. Although it is good, there are
opportunities and threats that must be considered. An opportunity for value proposition
is to make products simpler and more valuable. If possible, the products offered may be
more valuable than ever. Respondents noted that the product is minimalist and does not
require a lot of space, current trends, possible if the product can be made more simple
such as chairs and tables into one or a bed and chest of drawers. But companies must be
careful with the substitute materials that may be dropped rattan. Innovation and
maintains customer's loyalty is needed to protect companies from the threats.

Channels
The channel built by PT Bahama Rattan is through wholesaler and partner stores. Both
are indirect channel to reach customers. In the assessment of customer interface, the
selected channel is considered to indicate a good performance. There also needs to be
maintained and improved. IPA showed that almost all channel attributes were in
quadrant one. Direct channel is an opportunity for the company. However, since the
long distance market, it can be helped by a tool that is booming at the moment and low
cost which is online store. This option is optional, because the online store may change
the management of the company but may be considered for this opportunity.
To be clearer, could be made a suitable channel phases that can make company deliver
the value propositions better:







Table 4.13 Channel Phases
Channel Types Channel Phases
I
n
d
i
r
e
c
t

Wholesalers
1. Awareness
Company
raises
awareness
about
products
through
marketing
2. Evaluation
Provide
information
about the
products
3. Purchase
Customer
purchase the
products
through
partners
4. Delivery
Deliver the
value
proposition
customer
through
experience
5. After sales
Maintain
customer
loyalty with
customer
service
Stores

Customer Relationships
Based on the existing business model, the distance between the companys
communications with customers is too long, and takes the risk of human error.
Recommended to use online technology for long-distance customers. An example is PT
Bahama Rotam create a website and provide customer service features. In addition,
company can include 'contact us' on the website, such as phone numbers, addresses,
email, or online messenger. Although through IPA overall the company didnt have any
problem with the customers, the improvement still needed to maintain the customers
loyalty. Of the total, the customer and the company have established a good
relationship. However, there is one that needs to be improved is the brand. This is one
of the weaknesses of the PT Bahama Rattan, even almost all the furniture company in
Cirebon. Through the brand, companies can increase customer awareness about
products from PT Bahama Rattan and increase customer loyalty.

Revenue Streams
The company gets overall revenues from customers in the form of the sale of the
product. Income earned continuously based on demand from the wholesaler. Overall,
strengths and weaknesses attributes of the revenue streams were analyzed by IPA
showed good results. However, there is one that is a low priority that is on only one
source of income. This is understandable because the only possible source of income
can be earned through the sale. The spotlight is a threat in many revenue streams,
namely 'Our margins are threatened by competitors or by technology', 'We depend
excessively on one revenue stream', 'Some revenue streams are likely to disappear',
'Some revenue streams are likely to disappear '.

Key Resources
PT Bahama Rattan has three key resources: raw materials, physical assets, and human
resources. SWOT assessment showed good results and need to be maintained and
improved. The increase can be through the provision of educational facilities and
training for human resource capacity building, technology upgrades to improve quality
and efficiency.

Key Activities
R&D, marketing, and production are the current key activities of the company. IPA
analysis didnt show any significant weaknesses, but there needs to be justified in terms
of marketing in order to balancing other building blocks. Recommended for the
company to make the design and marketing as well as nicknames (tagline) will add
consumer desire to buy rattan production in Indonesia. PT Bahama Rotan already have
a logo but first since Bahama Rattan established has never changed or modified
adjusted with the changing times. Exhibition still need to be maintained to a certain
time and promotion kits are also needed such as informative website and catalog in
physical form. Catalog can be sent along with the delivery of the product to the
customer easy to see the collection produced by the company. Only one attribute is a
threat in the infrastructure section of the 'Key activities are likely to be disrupted.
According to respondents, this threat comes from the company itself as the loyalties of
the employees were fading. It seems reward is needed to increase the employees
loyalty.

Key Partnerships
Partnership is a relationship between individuals or businesses in business world; true
partnering can give some advantages to both of them. Based on the IPA, PT Bahama
Rotan has major weaknesses in partnership and the respondent not think partnership is
important because organizational furniture that was in Indonesia is not fully supported
by the government. An example of organizations furniture in Indonesia is Asmindo, as a
source of information for a furniture company. However, the lack of support from the
government such as free exhibitions in various countries around the world. According
to interview, respondent said there is an organization that have been supported by the
government, which is AMKRI (Asosiasi Mebel Kayu dan Rotan Indonesia). Join an
organization or more and expand the networking are highly recommended in order to
make the partnerships wider and make advantages to the company.


Cost Structure
The cost structure is set up with the company seems to be going well when viewed
from the Importance Performance Analysis. The performance shows positive results
but there are threats to watch out for. Significant cost is likely up to become
unpredictable might happen if a wholesaler ordering of the erratic and unstable. This
can be overcome by clear communication with partners.