Counterfeit Case Analysis

Counterfeit, or as known as “fake” products can be the most significant threat of substitutions. Especially for some popular brands, fake products are reached quite easily and inexpensively in Indonesia. However, it is not difficult to detect the authenticity of the products. It might be a disadvantage for the company at the beginning since potential customers could be suspicious about the origin of products, but once company achieves a considerable prestige, it should not be that problematic anymore. Therefore, threat of substitutions at the beginning is moderate.

In term of bargaining power of customers, it is absolutely high. There are a huge number of customers and normally the size of orders is considerably small. Fashion end-consumers

There are a great number of competitors, both direct and indirect, various sizes of scale and origins of products, which will definitely make it difficult to compete. However, the high profitability nature of the industry makes it attractive for newcomers. The costs for marketing and advertising can be predicted as high to attract customers. In order to exist and compete, it is very important to create brand identity as well as product differentiation from the beginning. In conclusion, Porter’s five forces analysis helps reveal that Indonesia SME market is a tough battlefield to enter.

Conclusion

The digital business industry still has a prospects to raise again although the threat of new entrants is high. This is because the opportunity to grow still has the growth pattern in a long term. Bargain power of suppliers is moderate, Indonesia SME’s can switch to local suppliers and the switching cost is low.

2.5.3. Value Chain Analysis

“Value chain analysis is a technique which helps us assess an organization’s resources and in determining its strength and possible weakness (Porter, 1985) (Porter 2011:107)”. Value chain analysis in this digital business is divided into two activities, which are primary activity that relates with the the production and distributing the product itself and support activity that relates with internal support of the company.

a. Traditional value

Since it is a digital company, the product, process, and resources development relies on technology/ digitalized.

Primary value chain activities

Inbound logistics

- Great equipment (software, hardware, etc.)

- Develop the production milestone and timeline schedule

- Develop the team and right person that would be responsible for each work and production scheme

- Gathering ideas and in-depth brainstorming (communication strategy, placement strategy, and analytics report analysis on each parties involved in the project phase).

Production

- Monitor and control the quality of each production phase and make sure everything is on the right track.

- Placement phase using the strategy concept that has been developed in the inbound phase.

Outbound

- Get the content to the end user and review the feedback. If a revision is found, the the process must be repeated to the operation phase

- Conclude the report and measure the activity level of success

- Review and write the case regarding the project for show reel and/or company