Proposed Development Strategy for Green Diesel Product in Industrial Fuel Market

Abstract

PTM is one of Indonesia Energy Enterprise which is carried out integrated energy business by covering exploration & production, refinery, marketing & distribution, and new & renewable energy business based on strong commercial principles. Industrial Fuel Marketing (IFM) division is part of Company’s Commercial & Trading business, established to bring various of product into domestic industrial fuel market and marine sectors. Currently IFM as market leader which is hold the market more than 70% Share. PTM is assigned by shareholder to develop Biorefinery with capacity 20,000 Barrel/Day in 2019. Biorefinery will produce Green Diesel from Crude Palm Oil (CPO) as main product with catalytic processing. Shareholder willing to implement the Biorefinery for alternative fuel sources to reduce dependence on petroleum-based fuels, as well as to reduce climate change and reduce fossil fuel import. There are several issues regarding Biorefinery business in term of Green Diesel Market which are higher CPO price than crude oil price therefore the Green Diesel price will be higher than Petroleum Diesel. In accordance with those issues, it will need business strategic in Biorefinery implementation. In this case, Author will propose strategic marketing of Green Diesel to penetrate domestic Industrial Fuel Market. Unfortunately, In Industrial Fuel sector there is open competition among fuel suppliers which currently more than 230 suppliers. The object of this research is developing business strategy for Green Diesel product in Industrial Fuel Market (IFM). To develop business strategy, the conceptual framework is necessary to have right alternatives strategies that are appropriate for the company. This research will carry out the external and internal analysis, for external analysis using Market Analysis, Porter Five Forces Analysis, Competitor Analysis and Consumer Analysis. Whereas the internal analysis will use 4P Marketing Mix, Existing Business Model Canvas and VRIO Framework. The first stage will be internal external factor evaluation, then the matching stage will use TOWS (Threats, Opportunities, Weakness, Strengths) Matrix to develop alternative strategies, in the end of the stage the final analysis will use QSPM (Quantitative Strategic Planning Matrix) to evaluate the feasibility of each of these alternative strategies. Based on QSPM there are top five strategies feasible to be implemented which is Development of target market priority on SOE and government institution, coopetition strategy, development of digital marketing, development of employee capabilities on Green Diesel Business and development of flexibility term of Payment (TOP).