Value Creation Analysis on Indonesian Furniture Manufacturers: A Case Study of PT. Furniture Indonesia

Abstract:     
PT. Furniture Jerman (“PTFJ”) is a German furniture wholesaler that has operated in the furniture industry for about twenty years. In mid-2006, PTFJ decided to build PT. Furniture Indonesia (“PTFI”), as an exclusive supporting unit in Semarang, Indonesia, PTFI acts as the sole furniture manufacturer for PTFJ.

Taking on the perspective of theory of the firm, including its later development, and taking into account the importance of factors of productions for firms, this paper attempts to analyze the value creation of PTFI, and investigate ways to enhance the existing value and competitiveness in international market.

Qualitative and quantitative methods are incorporated in the study to learn detailed activities of PTFI, which include; interview sessions, observations, and secondary data gathering from the organization’s financial records, will also be integrated in this paper to learn the underlying production process in PTFI. These analyses cover the period from early opening production activities of PTFI up to the year of 2008. Few selected strategic management measurements are included to show comparisons of figures on the most likely value creation of the firm. Low cost labors and manufacturing overheads appear to become the basic reason to set up PTFI.

Number of Pages in PDF File: 17

Keywords: value creation, furniture, low cost production

JEL Classification: m10

Accepted Paper Series