FORMULATING BUSINESS STRATEGY: A CASE OF TUTORING AGENCY IN INDONESIA

PT. XYZ Indonesia is a holding company with a collection of thebusiness unit that has a primary focus on education. One of their business units is XYZthat is an education consultant or tutoring agency. The main problem faced by XYZ is their target revenue in 2017 has not been reached or only 70% realization of total target revenue. In this research, use strategic management process to formulate appropriate strategies for XYZin order to achieve their target. Primary and secondary data collection techniques consisting of aquestionnaire, interview, research internet, document review, and company report. This research results in 9 strategies to increase their sales and market shares including corporate, business, and functional level strategy. The implementation plan of the new proposed strategies implemented by its priority to solve the issues. Suggestion for subsequent research was to add other tools in the environmental scanning and strategy formulation phase to deepen the analysis result. Also can use another performance management framework to evaluate the strategies.

PT. XYZ Indonesia is a holding company with a collection of companies that have a primary focus on education. Currently PT. XYZ already has several subsidiaries such as XYZ which is the core business, ABC School (Elementary, Junior, and Senior High School) and XYZ cafe and co-working space.
The unit that will be the focus of the analysis is XYZ as an Education Consultant or tutoringagency. The author focuses on strategic management process approach to achieve their target, pursues strategic competitiveness and earns the 271 above-average return. These analyses are completed to identify opportunities and threats in the external environment and identify strength and weakness in the internal environment. External and internal environment analysis as strategic inputs for choosing one or more strategies and deciding how to implement them.

Conceptual Framework
XYZ needs to have the right strategies to achieve their target which can only be reached when the company successfully formulates and implements a value-creating strategy.In order to achieve company objective, pursue strategic competitiveness, and earn an above-average return, the author combines the strategic management process from (Hitt, Ireland, & Hoskisson, 2011), (Wheelen & Hunger, 2012), and (David, 2011). Strategic man-JAM 16, 2 JUNE 2018

Zulkifli, Harimukti Wandebori
The environmental scanning is the first step in strategic management process consists of external environment analysis, internal environment analysis, and business model canvas. Furthermore, the most important factors from this analysis that influenced company business will be summarized in SWOT.
The second step is strategy formulation, often referred to as strategic planning or long-range plan-ning, and is concerned with developing a corporation's missions, objectives, strategies, and policies. It begins with situation analysis: the process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses.
The third step is strategy implementation shows the total of activities and choices required for the execution of a strategic plan. This process put the  agement process is a process of managerial decisions and actions that determine the long-run performance of a corporation (Wheelen & Hunger, 2012). Figure 1shows the step by step of strategic management process that consists of environmental scanning, strategy formulation, strategy implementation, and strategy evaluation.
objective, strategies, and policies to an action by developing program, budget, and procedure. The last step is strategy evaluation. The evaluation ensures that a company is achieving what it set out to accomplish. It compares performance with desired results and provides the feedback necessary for management to evaluate results and take corrective action, as needed.

METHOD OF DATA COLLECTION
After defining the problems and research objectives, the authoruses several methodologies in conducting this research, as the purpose of this research is to identify internal and external environments that affect business performance in order to solve XYZ's problem and determine the suitable strategies, implementation, and evaluation for XYZ.
Based on the purpose, this research included in applied research because this research aimed to obtain information that could be used to solve problems in the organization. Based on methodology type, this research included in caseof study research because it was done in a particular organization and aimed to analyze and interpret the uniqueness of the individual and situation in the organization.
Primary and secondary data analysis are conducted in this research through several sources and tools as a source of data. Secondary data obtained from literature studies using books, researching the internet, Badan Pusat Statistik (BPS), Kemendikbud publication, and company reports. Also, theauthoruses secondary data from an employee survey conducted by XYZ via an online questionnaire. The sample unit is XYZ's employee with sample size 181 employee from 221 total employees per 1 October 2017. The sample employee consists of 91 teachers, 63 branch management, and 27 central management.
In order to complement secondary data, mixed research approaches are also used by the author to collect primary data by using both of qualitative and quantitative approach. When collecting primary data, author use survey research approaches through instrument questionnaire and interview. Questionnaire instrument used to determine the customer satisfaction and interview as an instrument to gather information about the internal situation in the company by asking the employee.
For customer satisfaction survey through aquestionnaire, the population is the total number of XYZ student. They are finite and consists of 3,402 students. For asample, theauthoruses nonprobability convenience sampling to select the easiest population members from which to obtain information because they are willing and available to be studied. The sample unit is XYZ students. The sample size is 150 students. To determine the sample size, theauthorusessolving formula with a margin of error 8%.Which mean the number of samples needed is:

Environmental Scanning or Business Situation Analysis
The first step in strategic management process is environmental scanning or also known as business situation analysis. This phaseconsists of external environment, internal environment, business model canvas, and summarized in SWOT analysis. The external analysis consists of general environments, industrial environments, competitor analysis, and customer satisfaction analysis. For internal analysis, an author uses resource-based view and value chain analysis.
The general environment is composed of dimension in the broader society that influences an industry and the firms within it. Below Table 1. General Environment analysis summary that might impact education industry.
An industry's profit potential is a function of Porter five forces of competition: the threats posed by new entrants, the power of suppliers, the power of buyers, product substitutes, and the intensity of rivalry among competitors. Below Table 2. Five porter analysis of education consultant industry. 1 meaning strongly disagree and 5 meaning strongly agree. JUNE 2018 Zulkifli, Harimukti Wandebori Table 1 General Environment analysis summary

Factors Description
Political -Potential regulation of UN will be abolished in the year of 2017 -Admission regulation of new student at state universitiesimpacting competition for the entrance exam to a state university is getting higher Demographic -The population of Indonesia increases 3 million every year-Provinces that has the highest number of high school student Economic -Low B.I 7 day repo rate around 4.5%-A stable inflation rate that measured by consumer price index.-The province with high growth GRDP per capita Physical -Provinces that have a high amount of tutoring institution-Distribution of uneven tutoring institution Sociocultural -The province with high human development index (HDI)-School participation rate from High school and college Global -Establishment of ASEAN economic society (AEC) in 2015 Technological -Technology changes rapidly-Technology that can change teaching and learning process (Source: author analysis) (Source: Author analysis)

Forces
Scale Conclusion 1 2 3 4 5 There are many education consultants that can be chosen by the customers. It depends on the geographical situation, business type, products, marketing, price, and the segment can be used to analyze the competitor. Although there are lots of institutions offering the education consultancy, there are several institutions that almost similar with XYZ. They are Sony Sugema College (SSC), Ganesha Operation (GO), and Neutron.
In order to gauge the satisfaction of the customer with the XYZ performance, the author did a survey for the students. The method to measure the customer satisfaction is used SERVQUAL five dimensions (Zeithhamal, Parasuraman, & Berry, 2009). Overall the customer satisfaction index is 80%. Below the Table 3 Some of a firm's resources are tangible while others are intangible and capabilities exist when resources have been purposely integrated to achieve a specific task or set of tasks. Resourcesand capa-bilities that are valuable (V), rare (R), costly to imitate (I), and non-substitutable (N) are asource of competitive advantage.Below Table 4. XYZ's competitive advantage analysis. Develop new product and service Existing product and service

PRIMARY ACTIVITIES
Business model canvas analysis can be used to analyze the factors that drive XYZ in their business process.A business model is a framework that describes the rationale on how an organization creates, delivers, and captures value (Osterwalder & Pigneur, 2010). Below Figure 3. XYZ Business Model Canvas Summary.

MARGIN
Value Chain Analysis can be used to analyze and define values that drive XYZ in their business process. The service industry does not have the real operation of inbound and outbound logistic. So need to have a different version of the value chain which can well describe the service industry especially in the education sector (Gabriel, 2006). Below Figure 2. XYZ value chain analysis.
After the analysis environment, the next step is to summarize the result of the analysis in the SWOT analysisThis analysis will be used to identify the most important factors and provide strategy formulation. Below Table 5. SWOT Analysis Summary.   After analyzing SWOT analysis, try to find the causes of the business issue. Currently, XYZ has a business issue. The target revenue in 2017 has not been reached. XYZ could only achieve revenue 70% of the total target revenue. There is a gap between target revenue and realization revenue that can be categorized as a problem according to the definition of the problem. A problem is any deviation from the standard expected, or desired which is outside the accepted tolerance, norm, or benchmark (Business

RESULTS AND DISCUSSION Strategy Formulation
After analyzing the environmental, the second step is finding business solutions through strategy formulation. The phase stages are found alternative strategy using TOWS matrix, analysis the corporate level strategy, business level strategy, functional level strategy.
The TOWS matrix illustrates how the external opportunities and threats facing a particular corporation can be matched with that company's internal strengths and weaknesses to result in four sets of possible strategic alternatives. BelowTable 6.XYZ's TOWS Matrix.
To determine corpor ate level strategy, theauthoruses Internal-External (IE) Matrix. This matrix is based on two dimension IFAS total score on x-axis and EFAS total score on the y-axis. XYZ's IFAS and EFAS total weighted score are 3.14 and 3.20. So, XYZ's position in the cell I Grow and Build. There are several strategies in this cell: market penetration, market development, product development, backward integration and horizontal integration.
To choose suitable growth strategies, theauthoruses Ansoff Matrix or product-market strategy created by (Ansoff, 1957) that focused on the firm's present and potential product and markets (customers).To choose the suitable strategies from four alternative strategies, author compare eachalternative strategies using pros and cons. Below Table 7. Comparison of Alternative Growth Strategies. dictionary, 2017). To determine the root causes of this problem, the authortries to use root cause analysis method. One of the tools that can be used is fishbone diagram or cause and effect diagram. Below Figure 4. Fishbone diagram of XYZ.   Based on Table 7, theauthorchooses Market Penetration and Market Development as suitable corporate growth strategies to be implemented by XYZ because these strategies can increase revenue and market share through existing product and new or existing markets without cannibalization existing product and high risk like diversification strategy.

Human Resources Branches
To find which business level strategy suited best for the current condition for XYZ, score used for the requirement of the generic competitive strategy. The score is 1 until 5, which indicate the lowest to highest. The score evaluation is done by consultation with the XYZ management. Below Table  8. Comparison of Generic Competitive Strategy.  As shown inTable 8, the average score for cost leadership is 2.44 and 3 for differentiation. So, differentiation is the suitable competitive strategy for XYZ. Another consideration is because currently XYZ using differentiation competitive strategy, so it is hard to change from differentiation to cost leadership.
The functional level strategy depends on the corporate and business level strategy. The functional strategy consists of marketing, operation, human resources, financial, technology, and RandD.For marketing, XYZ needs to develop anew marketing plan to support market penetration strategy. For HR department, retain their employee because employee turnover rate is high through improve their compensation system and working environment.Also, HR department needs to improve their employee competencies. For technology strategy, XYZ needs to JUNE 2018 Zulkifli, Harimukti Wandebori develop and improve mobile and web application for students to differentiate their service from the competitor. For financial strategy, acquiring needed capital, preparing financial budgets anddeveloping projected financial statements, and feasibility study for evaluating the worth of market development strategy. For operation department, the team focuses on building renovation and increase facility in some branches.

Strategy Implementation
The third step is strategy implementation. The implementation plan of the new proposed strategies implemented by its priority to solve the business issues. Based on priority matrix, XYZ needs to implement 9 strategies based on importance and urgency of the strategies. There are 5 strategies classified into quadrant 1 (important and urgent) and 4 strategies into quadrant 2 (important but not urgent). When implementing the strategies, there are action programs, division on a charge, distinctive competency, optimal success factor, and procedure need be implemented for each strategy. For RandD, proposesXYZ needs to establish a small RandD unit.

Strategy Evaluation
The last step is strategy evaluation. The evaluation ensures that a company is achieving what it set out to accomplish. It compares performance with desired results and provides the feedback necessary for management to evaluate results and take corrective action, as needed. This paper uses Balanced Scorecard as a framework to evaluate XYZ strategies because the BCS is one of popular performance management framework. Also, use strategy maps to describe relationships between strategic objectives.
Strategy maps are a one-page graphical representation of what company must do well in each of the four perspectives in order to successfully execute their strategies (Niven, 2006) and it describes the casual relationships between strategic objectives (Kaplan, 2010  The Balanced Scorecard (BSC) is an important strategy evaluation tool that allows a firm to evaluate strategies from four perspectives: financial, customer, internal business processes, and learning and growth (Kaplan, 2010).The evaluation ensures that a company is achieving what it set out to accomplish. It compares performance with desired results and provides the feedback necessary for management to evaluate results and take corrective action, as needed. Below Table 9. Balance Scorecard of XYZ.

CONCLUSIONS
This research aimed to propose strategy and implementation for XYZ through strategic management process as the conceptual framework.There are 9 suitable strategies for XYZ to increase the sales and market shares including corporate, business, and functional level strategy.The implementation plan of the new proposed strategies implemented by its priority to solve the business issues. When implementing the strategies, there are action programs, division on a charge, distinctive competency, optimal success factor, and procedure need be implemented for each strategy.

FURTHER RESEARCH
Suggestions for subsequent research was to add other tools in the environmental scanning and strategy formulation phase to deepen the analysis result. Also can use another performance management framework to evaluate the strategies. Furthermore, more extensive literature study could be done so that the factors that influence tutoring industry and business could be identified much more.