Developing cluster strategy of apples dodol SMEs by integration K-means clustering and analytical hierarchy process method

Abstract

The purposes of this research were to determine the grouping of apples dodol small and medium enterprises (SMEs) in Batu City and to determine an appropriate development strategy for each cluster. The methods used for clustering SMEs was k-means. The Analytical Hierarchy Process (AHP) approach was then applied to determine the development strategy priority for each cluster. The variables used in grouping include production capacity per month, length of operation, investment value, average sales revenue per month, amount of SMEs assets, and the number of workers. Several factors were considered in AHP include industry cluster, government, as well as related and supporting industries. Data was collected using the methods of questionaire and interviews. SMEs respondents were selected among SMEs appels dodol in Batu City using purposive sampling. The result showed that two clusters were formed from five apples dodol SMEs. The 1stcluster of apples dodol SMEs, classified as small enterprises, included SME A, SME C, and SME D. The 2ndcluster of SMEs apples dodol, classified as medium enterprises, consisted of SME B and SME E. The AHP results indicated that the priority development strategy for the 1stcluster of apples dodol SMEs was improving quality and the product standardisation, while for the 2nd cluster was increasing the marketing access.