Pt Multi Bintang Indonesia

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TITLE OF THE CASE:Pt. Multi Bintang Indonesia

TIME CONTEXT:1987

SUMMARY:

Mr. Abeng joined Pt. Perusahaan Bir Indonesia in late 1979. A few months later, he became President Director. One of his earliest strategic undertakings was to rename the firm to Pt. Multi Bintang Indonesia. For several years, the company’s market share had been declining.

The company had so many strengths to boast. But despite these, it had also many weaknesses. The company had no strategic plans. It had little urgency in management to develop an excellently managed company. It had been content to do what had been done in the past. And it lacked in imposing personnel policies.

Throughout the years of operation, production had been decreasing. Since the end of 1983, the company could not produce as much as what had been produced in prior years. Production figures indicated that the beer companies operated much below their respective installed capacities.

Imports of malt, which was the main basic material for beer brewing, rose from 1982 to 1983 but dropped in 1984. During the first six months of 1987, malt imports amounted to 4,133 tons valued at US$2.05 million—far beyond malt imports on 1986 of around 10,000 tons. Malt imports eventually stopped from some countries.

Government restrictions on imports, the weak domestic market, and aggressive sales promotion by local brewers had sharply reduced beer import. Since 1986, foreign-made beer was still circulating in the domestic market but had no longer recorded by Central Bureau of Statistics. Beer imports would not likely resume in the years to come due to the government import restrictions and the market dominance by local brewers.

The beer companies were still oriented largely to the domestic market but Pt. Multi Bintang had tried to penetrate the export market since the 1970s. Beer exports stopped in 1983 apparently due to the strong domestic market demand in that year. The beer companies apparently were not so interested in entering the highly competitive international market. Moreover, their freedom to sell overseas was also restricted.

Viewed from its big population, Indonesia is a potentially big market for beer but its per capita consumption was still very small. Beer consumption drastically fell in 1984 due to the weakening purchasing power of the general consumers and the 60% rise in beer excise tax duty. Projections were made and at about 1991, consumption would increase in line with the increase in population.

While other beer companies continue to suffer losses, Pt. Multi Bintang Indonesia tend to be at a profitable outcome and it strived to maintain revenues over cost in the years to come.

I. STATEMENT OF THE OBJECTIVES

A. To establish a management system that will boost employee morale and motivation in the organization.

B. To maintain, at least, the profitable operations of the company.

II. CENTRAL PROBLEM

How will Mr.Abeng manage the company at a profit while taking into consideration a productive labor pool of employees?

III. AREAS OF CONSIDERATION (SWOT Analysis)

A. Strengths

1. The company was strong financially and technologically.

2. The company’s cash flow was strong.

3. The company had the experience and knowledge of Heineken, whose brewing skills were among the best in the world.

4. The company’s beer was of premium quality.

5. The company’s operation ratio was lower than other beer companies.

B. Weaknesses

1. The company had little urgency in management to develop an excellently managed company.

2. Management had been content to do what they had done in the past.

3. There was no strategic plan.

4. There was no common goal.

5. The company had no real personnel policies.

6. The number of...
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