BUSINESS STRATEGY AND BUSINESS MODEL IMPROVEMENT PRIVATBANDUNG

Tegar Ditya Pragama and Wawan Dhewanto.

School of Business and Management
Institut Teknologi Bandung
tegar.ditya@sbm-itb.ac.id
Abstract -- Privatbandung.com is a company in the field of organizing non-formal education institutions

that provide private or semi-private services for the middle class to upper class, either per individual or
group. The lack of customer occur because the business still uses conventional means to compete in the
industry with high competition. If Privatbandung does not make changes, then it is likely the company
has the inability to compete and thus will lead to bankruptcy.
Based on business strategy planning, this can improvise stable profitability of the company in the future.
A solution on the root cause used improvement business model developed from TOWS matrix and
Business model epicenter driven is customer-driven to develop proposition based on customer needs,
namely: easy process, easy accessibility and high availability.
Keyword: Business Strategy, Porter Five Forces, PEST Analysis, Business Model Canvas, Education, Technology

1. Introduction
Privatbandung.com is a company in the field of
organizing non-formal education institutions that
provide private or semi-private services for the
middle class to upper class, either per individual
or group.
Vision of privatbandung is to educate and
moral cultivation, manners and character to the
students. In this case, the tutor who performs has
a vital role in delivering this vision. The tutor
roles are not only as a transmitter or facilitator
of the learning material, but also play an active
role in motivation, inspiration, exemplary or
even a good friend for their students. The result
is a student with a decent character, and it will
be easier for tutors to deliver material and
understanding to students.
The
scope
of
business
field
of
Privatebandung.com.com is in the field of nonformal education. With the products on offer
from privatbandung.com are:
a. School Programs
b. Pathways to UN (National Exams) and
SMPTN (National Exams for State
University Entrance
c. English Program
d. Al quran Program

Market Trends for non-formal tutoring agency is

currently growing, driven by demographic
factors which are favorable and adoption of new
technologies in various educational practices.
but in privatbandung the education agency that
has been running less than one year has not
undergone many changes in terms of net income
that was obtained. The average recorded net
income only Rp1.700.000,- /moth
The lack of other income are caused by several
factors: The ability to handle limited customer,
where the location of which can be handled only
about privatbandung.com office location and a
location near the campus.
The other side many resources available tutors
Recorded in 2014 who entered via the website
application are 450 application. With an average
of 40 applications each month there is a field of
study with various capabilities. However from
the incoming total applications, only 25% had
ever taught ( 8% were active teaching, 12% non
active and 5% have not teach) and 75% others
(Not called).
Of the problems that occurred, then the business
issues that this research is focused on business
improvement models of privatbandung.com.
Which are expected to plan a business strategy
that can improvise stable profitability of the
company in the future. With good profitability is
1

expected to achieve Sustainable Competitive

Advantage
2. Business Issue Exploration

2.1 External Environment Analysis

External analysis of privatbandung.com analysis
is divided into two parts, namely the general
environment analysis and Industry Analysis.
General environment analysis in this study is
done with tools such as PETS and Industry
Analysis using force Five models.
General Analysis :
Table 2.1 General Analysis

Parameter
Analysis
Political
Factor

Figure 2.1 Conceptual Framework

The authors will describe the existing business

model of the company to identify the issues and
make proposals to improve plans to achieve a
sustainable competitive advantage. Stages of this
research are:
Analysis of the internal environment of
privatbandung.com will use a value chain
analysis
External analysis is done by PEST analysis
(Political,
Economic,
Social,
and
Technological)
SWOT analysis. Strengths, weaknesses,
opportunities, and threats (SWOT) used to
describe the business model used today and
root cause of the business
After get the root cause, the proper strategy is
developed to solve the main cause of business
issue.
The next step of designing a new business
model for privatbandung.com

Information

the policy of the government to

provide security to transact in the
online world.
Technolog With the changes in the
ical Factor consumption patterns increases the
changes for the industry players
towards the online store. Growing
e-marketplace, e-commerce, epurchasing, Online payment for
consumers
Social
The development of tutoring
Factor
outside of school
Economic Private service providers belonging
Factor
to the service provider at a
premium price, so it is suitable for
areas that have a good economic
level.
Industry Analysis
Threat of new entrants (High) : High Potential
Market, Low capital requirement, Low Product
differentiation
Threat of substitute products (High) :
Innovation Technology, Many subtitute Product
Bergaining power of customer (Low) : Price
Insensitive, Exclusive Product
Bergaining power of suppliers (Low ): Many
alternative
Competittors in an Industry (High) : Many
Innovation
from
Competitors,
Subtitute
Education industry is very high
2.2 Internal Environment Analysis
Analysis of internal factors is done by using the
value chain approach Analysis (Porter 1985).
Value chain method is used because the
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conditions of intense competition, value is the

amount that would be paid by consumers on the
benefits gained. Value is measured over the total
revenue, a reflection of the price of a product
that can be sold, while profit new is gain if the
value obtained exceeds the cost of manufacture
of the product. Therefore, the value must be
analyzed to determine the competitive position
of the company with the increasingly fierce
competition conditions.
Value activities itself is divided into two types,
primary activities and support activities.

(X), which includes five dimensions: Price (X1),

Quality (X), Promotion (X), Brand (X4),
Distribution (X5)

Figure 2.4 Design Variable

Figure 2.2 Primary Activities

The data in this analysis was obtained from a

survey conducted on respondents in Bandung
which
are
distributed
online
through
GoogleDocs. From calculations may be
mentioned that the sample for this study is of
100 respondents
The design of data analysis in this study include,
validity,
reliability,
correlation
and
determination analysis as follows
Correlation and Determinant Analysis
Table 2.2 Correlation X and Y

Figure 2.3 Support Activites Privatbandung

2.3 Customer Analysis

In order to increase the interest of potential
customers for the services provided by
privatbandung, then doing research on the needs
of potential prospects is needed. Factors that
determine to choose the non-formal education or
looking for online teachers.
The variables of this study consists of two kinds
of variables, the dependent variable or a variable
that depends on other variables, as well as the
independent variables or variable that is not
dependent on other variables. the variables used
in this study was:
The dependent variable is interest to find an
online teacher (Y). Independent variables that is

variable X (Interest Products Services) With

variable Y (purchase decision). This relationship
for variable distribution (easy process, easy
accessibility and high availability), quality
(tangible, reliability, responsive, assurance and
empathy) and Brand awareness. are included in
the strong category, while the Price and
Promotion is categorized Medium
Summary Potential Customer Analysis
From potential customers analysis through
surveys conducted can show that the trend in
consumer behavior led to the use of online
media as the fulfillment of almost everything,

including the changing consumer needs to seek

informationfor courses or tutors.
2.4 SWOT Analysis (EFAS and IFAS)
After conducting an external analysis of the
company, then the next step is to identify and
measure about opportunities and threats (OT).
EFAS (External Factor Analysis Summary) is a
way to group external factors into the generally
accepted categories of opportunities and threats.

Internal Factor Analysis Summary (IFAS),

analyze how well a particular company's
management responds to certain factors in light
of the perceived importance of these factors for
the company (Wheelen & Hunger, 2008, p.129)
Table 2.4 Internal Factor Analysis Summary Matrix

Table EFAS is shown by following the steps

from Wheelen and Hunger (Source: Wheelen
and Hunger, Strategic Management and
Business Policy, 2010, P 146)
EFAS (External Factor Analysis Summary) is a
way to group external factors into the generally
accepted categories of opportunities and threats
Table 2.3 External Factor Analysis Summary Matrix

2.5 Root cause

After conducting an external analysis, internal
analysis, customer analysis, and SWOT analysis.
Therefore it can be formulated privatbandung
root cause, the cause is the lack of consumer for
privatebandung.com since the founding of this
institution. Some points of the rootcouse are
grouped based by source analysis obtainment
which is illustrated in the diagram Figure 2.5.
Shifting social behavior of consumers on
technology will also cause the players in the
education services industry to innovate on their
products. Tutoring, Institutional course or
product substitution related to education have
started to take advantage of technology to
provide educational services or improve their
services.
4

alternative strategies in the other hand, the

business model canvas is needed as a tool for
creating strategic business in developing
Privatbandung business towards business
models that can be grown widespread in order to
increase the number of transactions or customers
and compete with competitors.
3.1 Stratregic Positioning of privatbandung

Figure 2.5 RootCouse Diagram

On the internal problems for it to emerge is

because the failure of the company to meet the
needs of consumers such as accessibility, ease
the process for customers, easy for the tutor to
teach, the transaction process which is still done
manually, as well as other technological
innovations.
If privatbandung still use the business model of
private provider conventionally it has been
ascertained privatebandung can not compete in
the higher education industry competition where
the number of customers will increase
significantly each year. Customers will be
looking for better products to accommodate their
needs. For that, privatbandung have to adjust the
current customer developments and be more
sensitive to any changes in the business
environment.
3. Business Solution

In describes the comparison and the relationship

between internal and external factors in the
SWOT analysis with the four types of Porters
generic strategies. Based on the assessment
system score the right strategic position to
Privabandung is the strategy of differentiation in
delivering customer service process.
The aim of this strategy is to achieve uniqueness
either in the product or service offered by the
company. This differentiation can be achieved in
technology, design or brand image, features,
customer service, dealer networks etc.
Differentiation can be provided by the company
to improve customer loyalty. Thus will maintain
its customer strength against the threat of
competitors or other substitute products.

Figure 3.1 Generic Strategies (Porter)

(Source : Wheelen and Hunger 2010, P .148)

3.2 Generic Strategies by Using TOWS

matrix
To generate a TOWS Matrix for privatbandung
use the External Factor Analysis Summary
(EFAS) Table and Internal Factor Analysis
Summary (IFAS) Table listed in Chapter 2. To
build

To be able to grow and achieve larger market

and can compete with new competitors,
Privatbandung have to adjust to the new
business
environment
which
is more
competitive. TOWS matrix is needed to ensure
5

Table 3.1 (TOWS Matrix Table)

Changing customer habits as described in this

chapter 2 causes customers and potential
customers to expect better service in terms of
accesbility, easy process, availability of services
and confectionary interference. Potential
customers and existing customers also require
support with IT-based services
3.4 Proposed Business Model Canvas for
Privatbandung
Table 3.2 New Business Model Privatbandung
Customer
DEMOGRAPHY
segment
Active Internet User
Age from 15-40
Smart phoner User

Income > Rp.3.000.000

3.3 Business Model Development

According to Alexander Osterwalder and Yves
Pigneur, a business model is describes the
rationale of how an organization creates,
delivers and capture value. The driven strategy
for business model could be come from each
nine building block of business model. We can
distinguish four epicenters of business model
innovation:
resource-driven,
offer-driven,
customer-driven, and finance-driven.
Seeing from the analysis done in the previous
chapter, where Privatbandung must have
differentiation to be competitive in the current
competition, therefore changes business model
on Privatbandung using methods that Customerdriven by creating innovations based on
customer needs, facilitating access to or increase
the comfort . which affect the value of other
building blocks

Value
Proposition

Channel

Customer
Relationship
Revenue
Stream
Key
Resource

Psychographic
Individual, group or company who needs
exclusive educational/tutoring service
Geographic
Densely populated urban areas
Tutoring variation program
Report of study results
Service system that is easy and
comfortable
Prices are according to quality
Quality Assurance of tutors and
curriculum
Available Customer Service and
disorders
The process is easy (registration,
payment, evaluation, billing
information)
Group social networking forum,Social
Media Ads,
Offline promotion: brochures, Sticker,
Website, Information system and Mobile
App
Sharing community or conventional
private tutoring
Customer Support
Personal Assistance, Self-service,
automated service, communities
Service Sales
Sales of learning aids
Ads Mobile app or website
IT Infrastructure
Human resource
Customer Service

Figure 3.2 Epicenters Of Business Model Innovation

(Source : Alexander Osterwalder and Yves Pigneur,
Business Model Gneration, 2010:138

Key
Partnership

Key
Activities

Cost
Structure

Private tutoring providers or

conventional education/tutoring
providers
Software house
Online Payment Providers
Tutor coordinator
Community education
Marketing Agency

Teacher Recruitment
Preparation of program / package and
curriculum
Service sales
Training Teaching and operational
Business development
IT Connection Maintenance
IT Infrastructure
R&D
Cost of fund for liquidity

The business model above is about the actions to

developing new product and develop existing
product, and to boosting sales. Changing
customer habits as described in this chapter 2
causes customers and potential customers to
expect better service in terms of accesbility, easy
process,
availability
of
services
and
confectionary interference. Potential customers
and existing customers also require support with
IT-based services.
3.5 Business strategy formulation
In the formulation of business strategy, Strategy
positioning
of
Privatbandung
uses
a
differentiation strategy due to develop products
and ability to compete. Where the latter can
improve customer satisfaction or give impact to
increase sales. In which the strategy is based on
the needs of consumers.
There are 4 focus in the business strategy
formulation, which are:

New Product portofolio

Product development

Create Customer relationship Program

Create marketing Program

Figure 3.3 Business Strategy formulation

4. Business Implementation
The lack of customer occur because the business
still uses conventional means to compete in the
industry with high competition. If Privatbandung
does not make changes, then it is likely the
company has the inability to compete and thus
will lead to bankruptcy.
4.1 Conclusion
Based on business strategy planning, this can
improvise stable profitability of the company in
the future. It is concluded several points at this
stage of the development of this strategy,
including:
Root cause Privatbandung problem is its lack
of customer
To a solution on the root cause used
improvemet business model developed from
TOWS maatrix
Positioning strategy used is differentiation
customers will be technology that is easy
process, easy accessibility and high
avalilability
The epicenter driven business model is
customer driven
The existing strategies are proposing product
development, and new product development
to increase of the sales service.
The proposed new portfolio product
marketplace learning and sharing
The strategies are proposing to build
customer relationship marketing programs
creating programs to boosting sales
4.2 Implementation Based of Business
Strategy
In the implementation of this program is used
scheduling planning, which consists of 12
months, from January 2014 to December 2016.
7

It would be explained some planning to be built.

There are several main parts: New Product
portfolio development, Product development,
Create Customer relationship Program, Create
Marketing Division
New Product Development
First of all that is done by Privatbandung is to
describe changes in the products is to design a
new logo. In the logo is written privatBDG,
because to create in the minds of consumers
diverentiation. In Figure 4.1 is Privatbandung
new logo along with the development of its
products.

Figure 4.1. New Logo of Privatbandung

On these new products of Privatbandung will be

raised the fullest subject area, courses or skills
that can be served. At the outset, the published
products that are much in demand from the
customer, based on previous discussion therefore
services privatbandung brings music, sports,
Quran, schools, languages and for company. In
the new service of Privatbandung, using internet
based or mobile application that will be
developed.
Customer Relationship Management
To Implement the customer relationhip
management is needing technology, automate
and synchronize sales, marketing, customer
service and technical support. The main action
to provide CRM is by develop the IT system by
creating database of customer. The database is
used to record the transactions activity of
customers, the identity of customers, and can be
used as the tools to create the customer
relantionship program
Create Marketing Program
The marketingprogram is used to increase the
customer awareness and at the end the customer
buy the service. The community activity such as
social education, event and sponsorship. Those

program will increase customer awareness and

also increase the sales.
4.3 Action Plan and Time Scheduling
Privatbandung needs to develop new action plan
to compete at the market. Action plan is
developed to implement activities in certain
schedule. So, the first step of business
implementation is compose action plan and
arranged the timeline scheduling to provide
guidance on implementing the solutions. Based
on the action plan, time scheduling can be
compose.
In the implementation of this program will be
done Scheduling planning, which consists of 12
months, from January 2014 to December 2015.
It would be explained some planning to be built.
There are several main parts: New Product
portfolio development, Product development,
Create Customer relationship Program, Create
marketing program
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