Strategy of Developing : Five Competitive Force Model Case Study: SMEs Fajarwonk

Abstract

. Micro, Small and Medium Enterprises (SMEs) is one of the government's efforts to tackle the problem of poverty. Empowerment and development of SMEs in Indonesia has several challenges that must be faced, including financial and non-financial problems. The Covid-19 pandemic has an impact on MSMEs, a lockdown policy that limits economic activity has resulted in a decrease in the amount of demand and disrupts supply chains for business actors. The researchers aimed to analyze the strategies Fajarwonk currently use and alternative strategies that could be developed by Fajarwonk using the five competitive forces model by Michael E. Porter. The results showed that the level of competition in the handicraft business of hanging leather was quite high, however, the threat from newcomers was quite low, while the bargaining power of customers was high due to different levels of purchasing power and the target market share, namely the middle to upper class. The bargaining power of suppliers is considered quite high and affects the quality of the final product. The strategies that Fajarwonk can develop are based on the identification of the five force model, namely: Adding more innovative product differentiation while maintaining quality, opening special outlets that are easily accessible to consumers, maintaining product quality supported by technological developments, marketing products through affiliate marketing.