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Research Project Starbucks Assignment

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RESEARCH PAPER

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Introduction

A research paper is prepared which consists of academic writing based on the articles, journals or books written by authors. That is, it consists of reference to the write-ups and research made previously by other authors from his or her original research work. The references are usually regarding the topic that is concerning the academic writing and definitely an interpretation of the findings of research by other researchers. However, it may present a totally different or new invention.

In this assignment, a report is prepared concerning the case study which is regarding the Indonesian organisation, Semen. The report has been made after a careful identification and analysis of the various issues that are evident in the organisation. The issues that are projected in the report are regarding the strategic issues of the chosen company, regarding management of different aspect of business and the strategies that are applied to enter a new market of a different country or to handle cross-border competitions too.

Company overview and current position in operation

PT Semen Indonesia Tbk or Semen Indonesia is a building material producing company in Indonesia (semenindonesia.com, 2018). It was formerly known as Semen Gresik Group. The company was founded in 1957 and currently headquartered at Gresik in Indonesia. The company is believed to be one of the largest cement production companies in the world, due to the fact that in 2012 the company produced 29 million tonnes of cement. In a shareholders’ meeting, it was decided to change the name of the company from Semen Gresik Group into PT Semen Indonesia Tbk.

Currently, the company has cement plants which are located in the islands namely Java, Sulawesi and Sumatra. These cement plants are supported and backed up by an intensive distribution network. This helps to distribute cement to all parts of the country, Indonesia.  Considering the sales of domestic cement in all parts of Indonesia, the company has owned the largest share in the market owing to forty percent. The company is the first to be a state-owned company to appear and go public in the Stock Exchange of Jakarta as well as the stock exchange of Surabaya. Apart from production of cement, the company is also into industrial real estate, mining as well as manufacturing of cement bags. In recent years, with the increasing demands of cement in the domestic market along with the establishment of new plants at different locations within the country, the company has been able to fulfil the demands in the market as well as increase the sales to record heights. Currently, the company has acquired c.41% of the market share according to Stock Exchange of Indonesia as well as the OTC markets of US (Wiharto, 2018). It is the largest producer of cement in Indonesia (Sulaiman, 2018). However, the recent flattish growth of housing market in Indonesia will affect the state soon.

Review of International strategies of competition

As Indonesia was suffering from an economic downturn, it was affecting the economic status of the company. In order to add up to the edge of competition, the company has implemented several policies or strategies which may be regarding effective cost management, development of programs of distribution as well as productions of cement. In this phase, the company has implemented the strategy of diversification in business ventures and explored the international market. In case of entry and management of international market, the company has been strict to the practices of its basic strategies of effective management of costs and network of distribution.  The company has largely invested into the concept of improving the quality of products and executed plans to bring in assurance of long-term growth by overcoming the challenges of competition in the international markets. The company has excessively used the strategy of cost management and cost-cutting to increase the level of competition in the international marketing, even though reducing the margin for the company's profit. However, on the whole, the strategy of cost-cutting and low pricing increase the sales for the company which ultimately add up to the total estimated profit for the company. Then the company has implemented cost management in case of production of cement by adopting techniques of production which have reduced the overall cost of production and saves the costs of maintenance. The company has also implemented strategies to optimise the use of packaging as well as to increase the efficiency of the cost of distribution which has ultimately helped to reduce the cost of operation of the business irrespective of all the costs relative to the different aspects of business. As per reports, these strategies have increased the ratio of cost to revenue and the ratio of operational cost to the sales revenue has been stable even in the rising market of Semen in the international market (Bouncken et al. 2015, p.580).

Design of organizational structure and issues of control

The organisational structure provides the insight into the internal structure relative to the business organisations. The structure of the organisation depicts the hierarchy of the specific roles in the business and the associated responsibilities (Cascio, 2018, p.345). In case of Semen Indonesia, the company is headed by the President Director who is entitled to all the aspects of the organisation. Next below, the president is the directors of the department of production as well as R&D (Research and Development), engineer and project, marketing and supply chain, finance, business strategy and development of enterprise and HR and legal. The director of business strategy and development enterprise are required to plan and develop business strategies and also manage the department of raw material, corporate development as well as the corporate support of business. The director of R&D manages services, technologies and products of R&D. The director of engineering as well as project development manages the planning, designing and the engineering products, technology as well as services (Eastman, 2018, p.231). The director of marketing as well as supply chain manages the concerned department and provides corporate planning and marketing. The director of HR and legal issues manages the development of HR systems and legal matters.

Even if there is a considerable framework of hierarchy in the structure of the organisations with specific responsibilities defined for each role, there are issues that come up which are issues of control. There is the existence of shadow bureaucracy which is often overlooked by the management. Even though the roles and responsibilities are well defined, during execution, not every employee can be considered a team player as the managerial heads are often in the process of consolidating his or her power rather being a player. The lack of managing control in the organisation is also evident due to scarcity of the resources available for control management, inaccurate measurement as well as incorrect flow of information. Absence of resources like supervisory staffs, tools or even skilled specialists can measure the control of the systems of the business. Moreover, when the company is into international business, then the company has to face the issues of implication of international laws and system of international accounting in the policies of the company.

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