PORTER'S FIVE FORCES BLUE BIRD

While the industry analysis can be explained by using the five forces analysis approach that is
lookng at the force that will threaten the profitability of the company.

A. Threat OF NEW Entrants

The need for transportation means resulted in the emergence of new entrants. Especially with
the development of transportation services using mobile applications. From the type of Taxi
there is Uber Taxi. The presence of Uber Taxi is very interesting for market share
because they follow the current trends that utilize technology in its business strategy. The
threat of new entrants/newcomers is described in the following table :
The threat of New Entrants
No Variables Indicator
The services that new entrants are preparing on a large
1 Economic scale
scale
Product
2 New entrants have differentiated products
differentiation
3 Capital Requirements Capital requirements for fleet inventory and maintenance
4 Government policy Establishment of tariff / KM
5 Transfer fees The cost of switching from new entrants products
a. Threat OF NEW Entrants Analysis
1. Economic scale
The declining of Indonesia's Gross Domestic Product since the end of 2014, has
caused the performance of the passenger service transportation sector to make a
slowdown in growth. Futhermore the rise in fuel prices, make simultaneous increases
in freight rates. In addition, emerging newcomers to testimony, such as Uber Taxi
expanded its operations in more than one city, reducing opportunities for Blue Bird to
make more profits.

2. Product differentiation
As a newcomer, Uber Taxi utilizes virtual payment as a differentiator with existing
taxis. The service allows passengers do not need to pay cash to the driver at the time
when got out of the taxi, because it can be paid by credit card debit. In addition Uber's
fleet is not like a regular taxi that uses a sedan car, but a minivan. Its fleet classified
into Uber X for less with a fleet of class MPV, like Avanza, Xenia, Rush, Terios or
APV, even Innova. Uber Black for premium class with a fleet of Innova, Camry even
Alphard, Mercedes Benz S Class and BMW. Faced with the threat, Blue Bird
improve service in terms of technology that the reservation can be made via the Call
Center or the mobile application My Bluebird. Blue Bird fleet is now also available the
first MPV that is Honda Mobilio, so that the carrying capacity more but still
comfortable. Blue Bird also keep the driver who picked up on time and safe in driving.
3. Capital needs
Blue Bird still excels in how to obtain capital because it has Go Public compared to
newcomers, Uber. In addition, Blue Bird's fleet is a company asset that is not a rental
vehicle. However this is a bit of a threat due to the emergence of depreciation cost of
on the fleet and also the cost of building for the needs of the terminal (pool). In 2013
to 2014 Blue Bird has bank debt to purchase capital goods exceeding 20% of
equity. One of them is for the provision of a Toyota Limo taxi fleet with a loan value
of Rp 72,500,000,000. The loan period is 4 years from the signing of the agreement
with an interest rate of 9% -12.2% per year.
 4. Government policy
The mechanism of taxi tariff determination in various cities can not be separated from
the local government rules, which are shown in the table below :

City Taxi fare Determined by

Medan One tarrif Local
Government
DIY One tarrif Local
Government
Bandung Upper limit, lower limit Organda
Semarang Upper limit, lower limit Organda
Macassar One tarrif Local
Government
DKI Jakarta Upper limit, lower limit Local
Government,
Organda
Based on the lower tariff limits set by the government and Organda, since 2014 Blue
Bird rates lower limit of Rp 7500 for an initial tariff and Rp 4,000 for argometer / KM
where as large as taxi fare Express. As a newcomer, Taxis Uber have lower rates of
3000 for an initial tariff Uber X and Rp 7,000 for the initial rate Uber Black, and Rp
2.850 for each argometer / KM. Other taxi tarrif such as Taxi Putra are still low at Rp
6000 for the initial rate and Rp 2500 / KM.

5. Transfer fees
Blue Bird threatened no longer get maximum profit on the minimum order taxi cost,
due to newcomer Uber Taxi comes with offering services without setting a minimum
order payment commonly done taxi companies in general.

b. Analysis Result

The Threat of new entrants

No Variables Weight Ranking Value
1 Economic scale 0.2 5 1
2 Product differentiation 0.3 7 2.1
 3 Capital Requirements 0.1 8 0.8
4 government policy 0.2 3 0.6
5 Transfer fees 0.2 4 0.8
Total 1 3.3

B. Threat OF SUBSTITUTE PRODUCT

The substitute product in this business is Gojek. As already known by the rampant passenger
vehicle service booking applications, no longer taxis that can approach the customer but the
motorcycle taxi can also meet the demand. In addition passengers also have other
transportation options such as buses, trains, or angkot at cheaper rates and can avoid
congestion. The threat of newcomers is described in the following table:

Threat of substitute product

No Variables Indicator
1 Substitute Product There are other products besides taxis
2 Replace product tariff The cheaper replacement product tariff
3 Market share The replacement product has better leverage

a. ANALYSIS OF THEME OF SUBSTITUTE PRODUCTS

1. Substitute Product
There are many choices of land vehicles that become an option. If passengers look for
air conditioned vehicles such as taxis, they can choose a taxi or city trans bus that also
has a comfortable fleet.
2. Replace product tariff
The government continues to improve vehicle facilities including more economical
pricing, making it an alternative for passengers and could threaten the taxi industry.
3. Market share
Damri market share / trans city bus has better market share than taxi because the price
is cheap. With good facilities now damri / trans bus becomes the choice not only for
the middle market share.

b. RESULTS ANALYSIS
Threat of substitute product
No Variables Weight Ranking Value
1 Substitute Product 0.4 5 2
 2 Replace product tariff 0.4 4 1.6
3 Market share 0.2 6 1.2
Total 1 4.8

C. Bargaining power OF BUYER

The buyer in this case is a taxi passenger as a customer. The number of taxis that can be
selected in addition to Blue bird is empowering customers to switch from Blue Bird taxi to
the others if doesnt satisfied with the service Blue Bird. The bargaining power of the buyer
is explained in the following table:

The bargaining power of the buyer

No Variables Indicator
1 Buyer's market share The customer's position in using the product
2 Product information The buyer has product information
The cost of switching to
3 Un t uk cost option to switch to another product
another product

a. ANALYSIS OF THE POWER OF BUYERS 'BIDS

1. Market share buyers
Blue Bird's role in conducting its passenger market segmentation can be a source of
corporate profits. For upper-class market segment available Silver Bird so as to
answer buyer's request.
2. Product information
BlueBird as incumbent get benefit because of known and has a good brand image not
only young people but also older. The product information is utilized by adjusting
the set rate, the customer has the right to decide whether to switch to a cheaper taxi or
not.
3. The cost of switching to another product
Available local taxis like Gemah Ripah for the city of Bandung which offers cheaper
rates can be a threat for the Blue Bird.

b. RESULTS ANALYSIS
The bargaining power of the buyer
No Variables Weight Ranking Value
1 Buyer's market share 0.3 6 1.8
2 Product information 0.4 8 2.4
 The cost of switching to 6 1.8
3 0.3
another product
Total 1 6

D. SUPPLIER OF bargaining power

Suppliers in this business are car dealers. Spare parts of vehicles that are so expensive that the
influence of suppliers to the Blue Bird is very large. This condition is slightly unfavorable to
the Blue Bird, let alone financing the maintenance of large fleet percentage is done
independently by Blue Bird, as shown in the graph below

Source: Blue Bird prospectus

E. AMONG EXISTING COMPETITORS Rivalry

Blue Bird's competitors in this industry are Express Taxes due to PT Express Transindo Utama
Tbk as a player in the taxi industry that has been going public like Blue Bird Group Tbk. The
total fleet owned by Blue Bird as much as 23.932 units in 2014. Competition is based on the
number of fleets dominated by Blue Bird for Taxi Express only has a fleet of 10.550 units in
2014. The variables and competitor indicator same industry outlined in the following table:

Competition between competitors in the same industry

No Variables Indicator
1 Number of Competitors are diverse
competitors
 2 Product Between products is only a slight difference da
differentiation
3 Industrial growth Industrial growth slows due to GDP and fuel price hike
4 Fixed cost High fixed costs

a. ANALYSIS OF COMPETITION BETWEEN COMPETITORS IN THE

MANUFACTURE OF SAME
1. Number of competitors, many of the number of taxi companies that became
competitors Blue Bird. But in this case Blue Bird is not too anxious because as the old
Blue Bird players excel with the number of fleets that more than other companies.
2. Product differentiation, there is little difference between Blue Bird and other
taxi companies.
3. Industrial growth, slowing growth of the industry experienced by all taxi companies
not only Blue Bird related to fuel price hike.
4. The large number of fleets is certainly comparable to the driver that owned, making
Blue Bird must spend more fixed costs to meet the salaries of each driver.

b. RESULTS ANALYSIS
Competition among competitors in the same industry
No Variables Weight Ranking Value
1 Number of competitors 0.4 8 3.2
2 Product differentiation 0.2 6 1.2
3 Industrial growth 0.1 4 0.4
4 Fixed cost 0.3 5 1.5
Total 1 6.3

RESULTS ANALYSIS OF PORTER'S FIVE FORCES BLUE BIRD

Having analyzed from 5 things that affect the business of the Blue Bird, the result parameter
assessment with :
LOW : If a value between 0-3
MEDIUM : If the value between 3.1 - 6
 HIGH : If the value between 6.1 9

For threats to new entrants, the threat of substitute products, and the bargaining power of
buyers RESULTS MEDIUM. These results conclude that Blue Bird is in a good position to
run the business and face the market.
For competition among competitors in the same industry, Express Tax is rated HIGH, because
at this time in terms of liquidity TAXI company entered into LQ45 index in 2013 and 14 while
not for Blue Bird.

PORTER'S FIVE FORCES ANALYSIS ASSA

Adi Sarana Armada carry on business in the field of services and trade is not limited to vehicle
maintenance services but also other services. Such as ASSA Rent, ASSA Logistics, ASSA
Driver Servive and Car Gallery.

A. THREAT OF NEW ENTRANCE (Newcomer threat)

New arrivals of car auctions are emerging, but which can not afford a large share of the
corporate market. So the threat tends to be weak for ASSA Rent business

B. THREAT OF SUBSTITUTE PRODUCT (Threat of replacement product)

The threat of substitute products tend to be weak meki Rent ASSA there are other alternatives
include using taxis as an alternative to the same relative superior in terms of quality and
switching costs, but may be attractively priced as a rental car for a day or more.

C. Bargaining power OF BUYER (Strength bargain shoppers)

The buyers in this case are Adi Sarana Fleet's business customers ie corporations in
Indonesia. Adi Sarana Armada serves more than 1,000 corporations in Indonesia. One of them
is PT Sumber Alfaria (Alfamart) which uses more than 200 units of ASSA trucks for the
distribution needs of goods from central distribution to retail outlets. In this case ASSA is
facing negotiations by consumers to comply with the warranty over its travel goods. The
ability of the company to fulfill the special services has a role in obtaining customer loyalty.

D. SUPPLIER OF bargaining power (Power of the bargain suppliers)

 Suppliers have no effect on ASSA Rent because the purchase of cars for the fleet is done in
large quantities and can be through any dealer. In addition, customers do not question which
suppliers are ASSA partners.

E. Rivalry Among Existing Competitors (competition among the same industry competitors)
The real competitor that should be the concern of ASSA is TRAC which is a subsidiary of PT
Astra International Tbk. (ASII), because of the number of TRAC's fleet has more fleets and
is the largest vehicle tenant company.