| Summary: | Profit performance of PT Java Inti Sarana since the year 2008 � 2010
continues to decline. Management considers that this is caused by the difficulty of
getting a reasonable project price. It is caused by a very high level of competition,
where the construction sectoris included in the category of perfect competition.
This has resulted inthe strategy taken by the bidders is the strategy of price
competition. Competition has reached the price competition very unnatural.
Seeing these conditions then the management decided to take steps to pursue
diversification strategies of new products. With consideration of the selected
range of precast concrete products as new products for the company.
Selection of precast concrete products is based on the consideration that
the sector is still close and related (related diversification) with the previous
business of construction services. Location proximity is assessed will simplify and
reduce business risk. Besides, the management assessed not many companies that
manufacture of precast concrete in the region of Yogyakarta and Central Java
maybe aspects that will make it easier to competeby relying on the location
proximity of the market. Besides that aspect of precast concrete market is still
very open, especially for Trans Java toll road, a primary consideration. After 2
(two) years running, the management needs toassess whether the diversification
that has been done to answer the problem that has been encountered, and how the
strategies that need to be done by the company in competing with precast concrete
companies that already existed before.
The results of the analysis showed that the factors that can be the key to
competitive success in the precast concrete industry is (1) the proximity to market,
(2) flexibility and service payment scheme, and (3) unloading service on project
site of the precast product. These aspects are wholly owned by PT Java Inti
Sarana. The results of the financial analysis also shows a very positive trend in
profitability aspect, and ROA after the company followed a strategy of
diversification.
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