Authors:
Indarto Pamoengkas
and
Sulaeman Rahman
Affiliation:
Universitas Sumatera Utara, Indonesia
Keyword(s):
Market Attractiveness, Value Creation, Company Performance
Abstract:
In the business development of both organic and inorganic fertilizers in Indonesia, companies have not shown a high performance, while the demand for fertilizers continues to grow. This condition was allegedly caused by issues related to the development of the value creation in the fertilizer industry. Other aspects that are thought to have an impact on these conditions are related to adapting the attractiveness of the fertilizer market. Based on this background, this research aims at examining the effect of market attractiveness and value creation on the performance of fertilizer companies in Indonesia.
This research used a quantitative research approach. The unit of analysis in this research was fertilizer producers in Indonesia, especially producers registered with the Ministry of Agriculture. Observations were carried out using a cross section/one shot in the time horizon, which was year 2019. The observation unit was the management of fertilizer producer companies in Indonesi
a. The population in this research was all fertilizer producer totaling 55 companies, and a census was carried out on all fertilizer producers in Indonesia. Verification analysis was used to measure quantitative data and hypothesis testing was conducted using PLS (Partial Least Square).
The results showed that market attractiveness and value creation had a significant effect on company performance, where value creation had a greater influence than market attractiveness. The dominant value creation dimension in improving company performance was business domain, and then followed by business partners, and customer benefits. While the most dominant dimension of market attractiveness in driving company performance was market access, followed by market strength, and intensity of competition.
The results of this research have implications for the management of fertilizer companies in Indonesia that improving company performance rests on the development of value creation, especially in the aspect of the business domain, which is supported by the adaptation of market attractiveness especially in terms of market access.
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