Case number: 107-1016-001
Case Author: Pierre Wirawan
Course Major: Marketing, Management of IS
Related Topics: Internet Marketing Strategy, E-Commerce
Teaching Note Availability: –
In December 2002, Hendrik Tio was ready for strategic meeting with board of directors to discuss the future of P.T. Bhinneka Mentari Dimensi. As Director and founder, Hendrik felt that the company has gone through a lot; Indonesian’s economic crisis in 1998, the dotcom crash, and now, once again, the company faced something that nobody was familiar with: the internet.
During economic crisis in 1997, due to deterioration of market buying power, Bhinneka was forced to diversify its business from IT solutions provider to a computer accessories manufacturer, furniture manufacturer and shrimp business. In June 1999, Hendrik decided that the company should return to its original business of providing IT solutions and insisted that the company start building its reputation as the pioneer of e-commerce by going online.
The dotcom euphoria didn’t last very long, because in 2001, the dotcom crash started. However, some strong companies actually survived the crash in US, such as Amazon.com. The same phenomenon happened in Indonesia. Some online shops such as Bebita.com, Dialmart.com, even Lipposhop.com could not get enough revenue to cover their operational costs; the only reason why they were still in the market was due to their belief that the internet would be the future of business. Bhinneka.com likewise was not making enough profit. However, it had gained high brand awareness due to its website and the number of visits grew steadily.
As Hendrik walked toward the meeting room, some thoughts came to mind;: should he stop the online retail business before it’s too late, or should he continue it by altering his existing business model? Some facts that happened around the world as well as in Indonesia worried him. What should Bhinneka.com do to maintain its position and grow given the unpredictable nature of cyberworld?
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