BUMN OFTEN LOSE BUSINESS BECAUSE OF BIG, IDLE ASSET

Marketing expert Hermawan Kertajaya rated that State Owned Enterprises [BUMN] often lost business due to big idle assets. Therefore the board of directors should be wise about choosing the right market niche. “If necessary unproductive assets better be released.” Hermawan remarked after acting as speaker at the discussion forum at the PELNI head office in Jakarta on Friday [19/4].

               

According to Hermawan, what must be done by BUMN today was rightsizing, i.e. to place business proportionally according to size, because big asset, unless productive, could be disadvantageous instead of profitable.

               

In this case Hermawan praised PELNI’s strategy to change business course from serving inter-insular ship passengers into cargo shipment to the east Indonesia region. However, besides being eagle eyed to see business opportunities, the BUMN board of directors must also consider branding, i.e. to strengthened brand awareness and brand strategy among the people. We could copy KAI’s strategy who offered tourist train service. By rendering tourist train service like KAI, although the profit was not sizable it could create exotic branding for KAI.

               

Other BUMN companies which managed to survive from collapse, beside PT PELNI and PT KAI was also PT Garuda Indonesia. The three governments owned companies had succeeded in doing rightsizing. Garuda and KAI almost went bankrupt due to their image as low cost airline like lion air. “By being low cost airline, Garuda was disadvantaged. Finally they decided to become full service airline. Second example was PT KAI railway, this mode of transportation was almost overrun because of its low cost image. But Jonan the director of KAI was smart. He ran tourist train service, and developed cargo services also transporting coal for Bukit Asam” Hermawan remarked

               

Hermawan’s statement was in response to presentation of the directors of PELNI who described the lost they had borne over the past decade, when they had to fill up losses of Rp2 billon per day. Thankfully, after the management re-oriented business strategy to inter-insular cargo shipment, this BUMN liner managed to reap profit since 2011 and set profit target of Rp 55 billion this year. (SS)  

Business News - April 24,2013