STRATEGIC

CHANGE
MANAGEMENT
Cost Leadership &
Differentiation
Tanti Devita - 19022018
Ayu Jesica Swaharani - 19022037
Jeny Aurelia - 19022113
 EVALUATING A COMPANY WITH A
“INTEGRATED” STRATEGY:
ANALYZING KEY FACTORS OF COST
LEADERSHIP AND DIFFERENTIATION
 company overview

INDOMIE
Indomie, a flagship brand of PT Indofood, is a global
leader in instant noodles, known for its successful
blend of cost leadership and product
differentiation. By offering affordable, high-quality
noodles in a variety of flavors, Indomie caters to
both local and international tastes. Its large-scale
production keeps prices competitive, while innovative
products like Indomie Goreng ensure widespread
appeal. This strategy has made Indomie a household
name in over 80 countries, solidifying its global
dominance.
COST LEADERSHIP
ANALYSIS

Strategic Sourcing: Indomie negotiates long-term contracts

for raw materials, ensuring lower prices and consistent quality.
Local Sourcing: They prioritize local suppliers to reduce
transportation costs and support local economies.
Ingredient Innovation: Indomie continually optimizes its
Cost of Input ingredient mix to enhance cost-efficiency while maintaining
Factors flavor.

Mass Production Facilities: Operates large, automated plants

to produce millions of noodle packs daily, lowering per-unit
costs.
Distribution Efficiency: Utilizes a vast logistics network to
minimize transportation costs and improve product delivery.
Bulk Purchasing: Takes advantage of bulk buying to reduce Economies of
raw material costs and enhance supplier negotiation power. Scale
COST LEADERSHIP
ANALYSIS

Continuous Training: Invests in employee training to improve

skills and production efficiency, resulting in lower costs.
Process Improvement: Implements Six Sigma and lean
manufacturing to streamline operations and eliminate waste.
Product Development Feedback: Collects consumer and
production team feedback to refine processes and reduce
learning curve
production time.
effect

Market Presence: Leverages decades of industry experience to

understand market dynamics and optimize cost management.
Innovation and R&D: Invests in research to develop new products
and improve existing ones, maintaining cost-effectiveness.
Supply Chain Optimization: Refines supply chain processes to
reduce procurement and distribution costs through established
relationships. Experience curve
effect
DIFFERENTIATION
Product Features
Variety of Flavors: Offers a wide range of flavors, including unique local and international
options, catering to diverse tastes.
Quality Ingredients: Prioritizes high-quality ingredients for better texture and taste,
setting it apart from competitors.
Innovative Formats: Provides various convenient packaging options, including cup
noodles, enhancing user experience.
Consumer
Targeted Marketing: Tailors marketing strategies to resonate with different demographics,
highlighting affordability and convenience.
Cultural Relevance: Promotes flavors that reflect local tastes, fostering a strong emotional
connection with consumers.
Community Engagement: Builds brand loyalty through social media interactions and
community events, encouraging recipe sharing and consumer participation.

Complements
Recipe Integration: Positioned as a versatile ingredient for various recipes, enhancing its
appeal beyond a standalone product.
Partnerships: Collaborates with food brands for bundled meal solutions, making cooking
easier and more enjoyable.
Merchandising: Engages in promotions that pair Indomie with complementary goods,
creating additional sales opportunities.
 EVALUATING A COMPANY WITH A
“STUCK IN THE MIDDLE” STRATEGY:
ANALYZING KEY FACTORS OF COST
LEADERSHIP, DIFFERENTIATION
AND SUGGESTION ON WHAT TO
CHANGE
 company overview

MATAHARI
Matahari is Indonesia's largest fashion retailer,
operating over 140 stores across the country. Known
for offering affordable, stylish apparel and lifestyle
products, it caters to Indonesia's growing middle class.
Matahari blends cost leadership with some
differentiation by providing value-for-money fashion
products while also integrating digital platforms to
enhance customer experience. Despite facing rising
competition from e-commerce and international
brands, its focus on store optimization and e-
commerce integration positions it to maintain a strong
foothold in Indonesia's retail landscape.
COST LEADERSHIP
ANALYSIS

Private Label Brands: help reduce dependency on external suppliers and

control production costs, they can offer items at lower prices compared
to others.
Vendor Negotiations: Matahari has built long-term relationships with a
diverse range of local and international suppliers to negotiate lower prices
Technology in Procurement: Utilize technology to streamline procurement
Cost of Input and inventory management reduces unnecessary stock and lowers
Factors holding costs.

Extensive Retail Footprint: Matahari capitalizes on its vast retail

presence to achieve economies of scale in its supply chain,
distribution, and advertising costs to maintain low prices while
serving a wide customer base.
Centralized Warehousing: Matahari has a central distribution
system that consolidates inventory before it is shipped to individual
stores, optimizing transportation costs and improving distribution Economies of
efficiency. Scale
COST LEADERSHIP
ANALYSIS

Staff Efficiency Programs: By implementing robust employee training

programs focused on store efficiency, sales associates are equipped to
handle tasks more effectively, reducing time wastage and operational
costs.
Store Layout Optimization: Years of experience in retail has allowed
Matahari to continuously refine its store layouts to maximize customer
learning curve flow and product exposure, increasing sales per square meter while
reducing maintenance costs.
effect

Deep Market Knowledge: Matahari has a deep understanding of

local consumer preferences to tailor their product offerings,
avoiding unnecessary product lines and maintaining high turnover
on key items.
In-House Innovations: Matahari has developed trend forecasting
and product design, to reduce reliance on expensive external
designers while keeping product aligned with current market trends. Experience curve
effect
DIFFERENTIATION
Product Features
Affordable Yet Stylish: Focuses on offering stylish clothing at competitive prices for the
middle-income demographic.
Product Range: Combines private label brands with well-known international labels to
provide quality apparel without high-end pricing.
Competitive Challenge: Faces competition from cheaper imported goods, impacting
market share and pricing strategy.
Consumer
Personalization: Aims to enhance the shopping experience through personalized services
and loyalty programs.
Staff Training: Invests in training staff to provide knowledgeable assistance and create an
engaging shopping environment.
Adaptation Needs: Must continually adapt customer service strategies to compete with
online platforms that offer lower prices and convenience.

Complements
Omni-channel Strategy: Integrates online and offline shopping experiences for seamless
customer interactions.
Local Supplier Collaboration: Works with local suppliers to diversify product offerings and
support local economies, enhancing brand image.
E-commerce Competition: Faces challenges from e-commerce competitors that can
provide similar products at lower prices without physical store overhead.
Affordable Yet Stylish: Focuses
 WHAT CAN THEY DO?

Enhance customer loyalty

Enhance digital integration
Improving their e-commerce platform programs
Implementing a seamless online-to-offline Revamp their loyalty program to offer more
experience personalized rewards
Utilizing data analytics to personalize customer Use data from the program to inform
experiences and optimize inventory management product development and marketing
strategies

Strategic partnerships Optimize store network

Popular e-commerce platforms for expanded Review and potentially close
reach underperforming stores
Tech companies for improved digital Redesign existing stores to create more
capabilities engaging shopping experiences
International brands for exclusive Consider smaller format stores in strategic
collaborations locations
THANK YOU