Strategy Formulation for Improving the Business Performance on Property Family Company: A Case Study of PT XYZ, Bogor City, Indonesia

Abstract

PT XYZ is a family owned company with a business focus in construction contractor. PT XYZ transformed into housing developer company in 2007. Business transformation occurs when the leadership is run by the second generation of families, which is the eldest son. Together with his friends and his younger sister, they managed the company and are able to increase the growth of its assets. Ownership of the company's land bank reaches 150 hectares, assumed to be managed in the form of housing project, will result in a value of Rp. 2 trillion. The second generation of this family is very expansive. In the last 10 years, company has managed 21 projects from subsidized housing, real estate or commercial housing until managed the traditional market in Bogor. But the assets growth is not matched with the profit that can be accepted by the company. Until 2016, debt to equity ratio (DER) reached 4,62. The revenue from sales will always be used to fulfill the liabilities. The family often make short-term moves by making loans to banks and colleagues. The brave decision of the eldest son who served as CEO for issuing bonds in 2015, which will be used to acquire 92 hectares land in Bogor, became the major contributor to DER rising.  Adequacy of liquidity becomes the main issue of the company, and it depends on the company's business performance. PT XYZ must immediately improve its business performance, and to improve business performance, is not just from the marketing and sales. Successful conversion of marketing and sales into revenue, is the success of the business process that connects every part of the company. Improving the business performance is also improving the company organically. This research seeks to analyze the causes of business performance decline in PT XYZ. This research will use the analysis of corporate strategy by first using strategic audit tools to get a description about the whole condition of the company. The TOWS analysis will be used to analyze the opportunities and threats also strengths and weaknesses of the company, so that from the business level can be formulated various strategies to improve the business performance.