Business Model Innovation of Indonesian Integrated Wood Depot For Furniture Industry

Adhitya Rahmana,Aswin Fajri,Yudha Heryawan Asnawi,Afdhal Afdhal

doi:10.17358/jma.18.3.351

Abstract

The wood-based industry is faced with various problems, both internal and external, especially the problem of availability and continuity of raw materials. The study aims to analyses the business model that has been implemented by this wood depot. Then, this study also analyses the feasibility based on the business model innovation of this wood depot initiative. This research uses an analytical framework of the Business Model Canvas (BMC) and Financial Feasibility Canvas (FFC). The Business Model Canvas presents a visual representation of the nine components of a business which are divided into the right (creative side) and left (logic side) on one page. The analysis uses the Financial Feasibility Canvas (FFC) which consists of 6 steps of analysis components consisting of rational investment, capital investments, assumptions, cash flows, financial returns, and decisions. The results of this study show that this business model innovation at this integrated wood depot can strengthen the speed of supply of raw materials and can maintain continuity to the furniture industry. The sustainability of this business model innovation is realized through vertical integration into the furniture industry. Based on the feasibility analysis, this business model has a feasibility in terms of investment for 5 years. In the future, the wood depot in this business model can be applied to industry players in Indonesia. Keywords: wood depot, financial feasibility canvas, wood-based industry, business model innovation, business strategy

Highlights

The wood-based industry has long been one of the pillars of the Indonesian economy
There is a business model innovation in this wood depot initiative, so this study aims to analyses the business model that has been implemented by this wood depot
The analysis of the canvas business model at the wood depot is analysed based on 9 elements of the canvas business model consisting of elements of value proposition, customer segments, channels, customers relationships, revenue stream, key resources, key activities, key partnerships, and cost structures

Summary

Introduction

The wood-based industry has long been one of the pillars of the Indonesian economy. The wood-based industry has a long history of contributing to the economy, both through foreign exchange and creating job opportunities. The history of the forest product industry began with the use of forest wood in the early 1970s through a wood processing development program. In the 1990s, Indonesia succeeded in controlling the export market of the tropical timber industry in the world. As the production of natural forest wood (HA) continued to decline, Indonesia was no longer a major player in the world market. During the economic crisis from 1999 to 2000, the forest product industry was at its lowest point, many wood processing companies went bankrupt

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