Analysis of the Strategy for Growth Executions of Telecommunication Companies in Indonesia

Kusworo, Fendy, Agus Setiawan, Dr., M.Soc.Sc.

2008 | Tesis | S2 Magister Management

Growth has become an important goal of CEO's, but the task of combining revenue growth and profitability is not simple and therefore just a few had successfully balanced to achieve growth and improve share price at the same time, in other words to achieve profitable growth. The growth of the company can be mapped using A.T. Kearney's Growth Matrix that compares companies' revenue growth and value growth relative to industry average. Other than this matrix, we can also assess the company's growth by assessing the growth pattern, including year-on-year performance and centers of gravity. The select company that outperforms their peers in both criteria at the same time constitutes the growth champion, which also can be seen from the upper-right quadrant of the matrix. Telecommunication industry in Indonesia is the case study to be analyzed in this research because this industry has been one of the most growing industries in the country especially in terms of market size and number of industry players. Using Pareto analysis the selected companies to study only is limited to top three largest operators, including Telkom, Indosat, and Excelcomindo. Meanwhile, the time period will be based on the performance between fiscal year 2002 and third quarter of 2007. The in-dept analysis of the growth champion of telecommunication industry has found out that Telkom was the only growth champion that outperformed peers in both revenue growth and value growth. Indosat and Excelcomindo were respectively profit seeker and simple grower. As the growth champion, Telkom engaged in the portfolio diversification to some emerging telecommunication products that would be the new sources of revenue, such as data and internet service and the fixed wireless business. Like Indosat, the growth champion Telkom leverages their core competencies and value chains among business units and commits to the reinvestment activities. Previous study believes that the main route to growth is through a combination of internal and external growth. In this case, Telkom only pursued internal growth while they did a minor M&As. Keywords: Strategy for Growth, Value-Building Growth, the Growth Champion

Kata Kunci : Strategy for Growth, Value-Building Growth, the Growth Champion