Abstract
Profitability and growth are two important and essential measures to a firm existence and survivability. Profitability is critical to a company’s short-term existence, and growth is crucial to long term survivability. Every business wants to maintain its existence and bring value to its stakeholders. Divestment and merger acquisition are part of the company strategy to achieve business growth that fulfil the company objectives, purpose, vision, and mission. In the case of a multinational company, it normally would have a global corporate strategy. Subsidiary companies will follow the strategic guidelines from its parent company. Thus, subsidiary company needs to align its strategy to the parent global corporate strategy. Scenario planning used to answer the key focal issue about how to align subsidiary company strategy to its parent company global corporate strategy. One option for a firm to cope with uncertainty is scenario planning. Scenario planning is a unique tool compared to other decision analysis methodology. Scenario planning uses information on key uncertainties and certainties concerning the future to assemble an information rich illustration that provides eloquent descriptions of future worlds. The data collected in this study comes from literature studies, interviews, questionnaires with internal and external stakeholders. External analysis is using the PESTEL framework and Porter Five Forces model. While internal analysis is using Growth-Share matrix, VRIO framework, and Strategic Diamond model. Information is consolidated to give driving forces that would shape up the future. Two driving forces that give the highest impact and uncertainty, Indonesia economic growth and company Product Innovation, are defined as critical uncertainty and used to construct a 2×2 scenario matrix. The scenario matrix, implication, options, and early warning systems are explored for each scenario to align subsidiary company strategy to its parent global company strategies.
Highlights
To become successful and survive in business or we can summarize as sustainable, both profitability and growth are important and essential for a firm to survive and remain attractive to investors and analysts
Scenario planning is an alternative way of dealing with uncertainty that is unique compared to other decision analysis
Subsidiary companies will follow the strategic guidelines from its parent company
Summary
To become successful and survive in business or we can summarize as sustainable, both profitability and growth are important and essential for a firm to survive and remain attractive to investors and analysts. Arenas is the most fundamental choices that need to be defined are where, or in what arenas, the business will be active, or it can be simplified as “what business will we be in?” - Peter Drucker To answer this question, we can extend further with answering below factors: Product category : New Patented Product, Specialty chemical, and Commodity chemical Market segment : Consumer Care, Life Science, and Textile Geographic area : Indonesia and Asia Pacific Australia Value-creation : Product innovation, Brand, Technical expertise and Sustainability. PTCI will need to expand the commodity chemical category in Textile and Consumer Care sector while upgrading for its facility and expertise to adopt higher complexity product portfolios in Consumer Care until it can handle NPP products from Consumer and Life Sciences sector. Economic Logic to sustain revenue and profit growth is through shifting commodity products to specialty products portfolio
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