The Structure-Conduct-Performance of Indonesian Coffee Processing Industry

Abstract

Coffee industry in Indonesia in the short- and long terms has the potential to boost the country’s economy which can be seen in the form of structure, behavior, and performance. Market forces affect the market structure in an industry. The formation of the market structure affects a company’s behavior which further affects the performance of the company. The data used in this study is sourced from the Central Statistics Agency. The study measures the relationship of structure and other factors that affect the performance of the Indonesian coffee industry using a multiple regression model. Our findings show that the coffee processing industry in Indonesia has an oligopoly structure with a fairly high market barrier. The market behavior of the coffee processing industry is seen in terms of price strategy, products, and promotion. The performance of the coffee processing industry in Indonesia has an increasing trend every year. A positive trend results in good performance for the company so that it will increase the level of profit. Based on the regression results, the Minimum Cost Price which represents the performance of the Indonesian coffee processing industry is significantly influenced by the Efficiency Value. CR4 value and Labor Productivity have no real effect on the Minimum Price Cost. The pattern of the relationship between Efficiency and Labor Productivity to the Minimum Price Cost has a positive effect while CR4 has a negative effect. Keywords: structure, conduct, performance, coffee processing industry