Knowledge Management

Final Exam
NuSkin Indonesia

Gayatri Aisyah Ardhinindya 29115677

Hanifa Razali - 29115509
Ragasatya Safrianda - 29115503
Sumbario Harjanto - 29115461
General Management 2

MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS AND MANAGEMENT
INSTITUT TEKNOLOGI BANDUNG
JAKARTA
2016
PAGE LIST

Chapter I : Introduction
a.
b.
c.
d.
e.

Company Profile
Vision and Mission
Value of the company
Company Competitive Advantage
Problem

Chapter II : The Map of Existing Knowledge

a. Current BMC
Chapter III : The Proposed Innovation
a. The objective of Innovation
b. Process Model of KM for Proposed Innovation
Chapter IV : The Map of Required Knowledge for the Innovation
a. Innovation Business Model Canvas
b. KM Process Model
Chapter V : Implementation Plan
a. Activities and Time

Chapter I
Introduction
Company Profile
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NuSkin is entering the Indonesian market at 2005. They sold many products of
cosmetics for middle class and bellow. But in that time they were wrong about their
strategy and customer segments. As a distributor, NuSkin should have a proper
segment target to make money from their sales. In 2006 they fired 70% of their
employees, because of their recklessness. But in 2007, they find their way to be
successful, which is selling premium product and keep the loyal customer.They try to
lead the market of Anti-Aging product with direct selling method. They also keep their
employees and members by giving them rewards like scholarships and trips.

Vision & Mission

Mision
Our mission is to be a driving force for good throughout the world by empowering
people to improve the lives through a profitable business opportunity. Innovative
products, and a culture that promotes and deceives life
Vision
Became the leading direct selling company by providing better revenue for the sales
leader compared to other companies
Value of the Company
People
people are the heart and strength of Nu Skin Enterprises - they jointly demonstrate their
difference every day to improve lives around the world and become a part of life
Product
Innovation is the core of our products. Nu Skin has created a series of the latest antiaging products. Anti-Aging Scientific advisory council with the directives of the Nu Skin
Nu Skin scientists, combines the best minds in the field of research perawatran skin,
nutrition, science of genes, and bio-informatics
Culture
Nu Skin's culture of giving to help others unite distributor, customer and staff in
innovative humanitarian efforts that multiply the company's ability to nourish and
empower kids around the world
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Opportunity
Our vision to provide the most revenue for the sales leader is the core of our business
opportunity Nu Skin and the millions of lives that have helped and increased the
evidence of our difference

Company Competitive Advantage

Competitive Advantage of PT. Nusa Selaras Indonesia (NuSkin Indonesia) is about cost
leadership and differentiation. NuSkin have the direct selling method, so they didnt
have to make offices branches. They also leading in premium product, which is different
with other competitor that have lower price and quality. So they will keep innovate and
adapt in this technology era.
Problem
As distributor and seller of premium anti-aging product, the target of NuSkin is middle
age segment with high income, which is why the payment method is only through credit
card. The CEO of NuSkin Indonesia has mentioned that he wanted to target the new
segment, which is middle age segment with middle income. However at the same time,
the CEO does not want to cut the price of the product as the product is already cheap
compared to other premium anti-aging and also it can reduce the revenue

Chapter II
The Map of Existing Knowledge
Current BMC
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Picture 1.0: Nu Skin Business Model Canvas

This picture showed how NuSkin run and develop their business. They focused on
customer engagement to make more profit and revenue, by word of mouth. To sell and
promote their premium product, they must know how to mantain their reputation
constantly until now. NuSkin should keep innovate, especially to keep the customer
convinient in using their product. Customer retention is the important to gain the
customer engangement, so they keep the quality and premium product in order to fulfill
the customer needed especially the member.

Chapter III
The Proposed Innovation

The objective of Innovation

The innovation proposed to deal with the problem above is in term of the payment
method, which can be categorized as process innovation. The proposed Innovation is to
provide additional payment method option, which is making payment through virtual
account. By enabling the virtual account transfer payment, it can target both middle and
high-income middle-aged segment because most of the middle income do not own a
credit card, therefore this innovation is classified as competence enhancing process as
it enables NuSkin to target both middle and high-income segment. Furthermore, this
innovation is merely an incremental innovation because it does not change the previous
process radically. In the Doblins types of Innovation, the proposed innovation fall to
process innovation, product system and customer engagement types of innovation.
Process Model of KM for Proposed Innovation
Virtual account transfer payment method is an innovation for NuSkin because
previously the company only accepts payment through credit card. In order to
implement the payment through VA, there are several phases that must be passed to
achieve this innovation.

Chapter IV
The Map of Required Knowledge for the Innovation

Innovation Business Model Canvas

KM Process Model
a. Discovery Phase
In this phase, NuSkin must know what are the knowledge required for implementing
payment through VA. First, NuSkin must search any means to scan potential knowledge
source for the importance of innovation. In NuSkins cases, they must know how to
develop a smartphones application feature to enable Payment through VA and how to
operate VA payment system by asking to banks and companies who already use
payment through VA, knowledge caf for internal employees also encouraged as they
may be knowledgeable about this process. Second, they have to capture the knowledge
by knowing how to make clear process for customer/member to pay through VA and
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make customers/member database. Company must enter data and picking up relevant
signals and communicating them within and across the organization to relevant players
(IT and Finance Staff). Third, to articulate the captured knowledge, company must have
high literacy in IT, banking and network in order to develop the concept definition of VA
and making strategic and operational cycles from outline feasibility to detailed
operational plan of payment through VA.
The source of knowledge in this phase is both on external and internal of the
organization, NuSkins IT and Finance staff can be a source to dig the tacit knowledge
needed, while banks and other company that have payment through VA also can be a
source as they have explicit knowledge on how to develop and manage VA
b. Realization Phase
KM process model realization is divided into two parts such as contextualize and
apply. First step is contextualize means by which articulated knowledge is placed in
particular organization context. The knowledge required for this part is knowledge that
have discovered provide to build the application program and also dealing with bank.
NuSkin must know the data is needed to build the apps and then make a deal with the
bank and become partnership. The sources that needed is external such as trainer from
bank and also from IT division, the types of knowledge is explicit and tacit while the
activities are build the application to enables payment through VA and also people to
people between member to introduce the application and the KM tools that need is
SECI.
Next step is apply means by which contextualized knowledge is applied to
organizational challenges. The knowledge required for this part is establishing the
application and also educate the member to use it. The source for that knowledge is
from internal such as workshop for member, seminar, and transfer knowledge. The
types of knowledge are tacit and explicit. The activity that must do by NuSkin in this
phase are dealing with bank to make partnership so VA payment through several bank
can be enabled. NuSkin must reach the highest popularity among member in bank so
the member can find the difficulties to adjust their bank. Another activity is put the VA
payment option in the NuSkin smartphones application, this is must be known by the
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member so the member can use it and find the easiness from there. Then the objective
of this innovation can be fulfilled. The KM tools that needed for this phase is SECI.
c. Nurture Phase
This phase focus on how NuSkin maintain and operate the VA payment system.
NuSkin should pay attention to the improvement and development for VA payment
system in order to make it sustainable for the company.
First step is evaluate. NuSkin must know which knowledge that used to make
assesment for the VA payment system. The main knowledges that required for NuSkin
are customer experience and sales analysis/customer behaviour. IT division in NuSkin
have all member database, based on that NuSkin can collect feedback from their
customer and staff to find out how VA payment system works. To know how effective
this payment method, NuSkin should make sales analysis. Transaction history from
bank that provide the VA and credit card payment system are required to make this
analysis. Based on that analysis, NuSkin get the comparison of their sales using VA
payment system and the credit card payment system. Moreover, NuSkin must monitor
how often VA payment system and credit card payment system are being used by the
customer/member.
Next step in this phase is support. NuSkin must know which knowledge that used to
make VA payment system sustained over time. NuSkin should ensure that all their
members understand how to use va payment system. NuSkin can use word of mouth
method for knowledge sharing process among their member.Therefore, NuSkin need to
make some of their member really understand the new payment system. Since NuSkin
implement for direct selling method, the members can share their knowledge and
experience by mentorship. In addition, NuSkin need to create manual guidance using
the VA payment system in the application. If the member still confused how to use VA
payment system, they can easily learn from this guidance.

Chapter V
Implementation Plan
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Timeline

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