Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Competitive Advantages Strategy of Fertilizer Industry in Java, Indonesia

Author(s): Kuntari Laksmitadewi Wahyuningdyah, Sucherly, Imas Soemaryani, Rita Komaladewi

Fertilizer Industry in Indonesia is important as it serves Agriculture sectors of the country. While some major government-owned companies had been taken market advantages for some decades through natural monopoly, the recent regulation on the fertilizer market allows other sellers enter into the industry. Therefore, the state-owned companies should re-identify their strengths as well as weaknesses to ensure their ability to stay in the market.

This paper attempts to identify some determinant factors of competitive advantage strategy of the fertilizer industry, by using the case of a state-owned company which distributes most of the fertilizer product in Java, Indonesia. Using a Partial Least Square of the Structural Equation Modelling and 115 samples collected from Fertilizer Distributors in Java Indonesia, this paper identify the determinant factors of market attractiveness, customer’s business requirements and company reputation towards competitive advantage strategy of the industry and its impact to the customer share.

The result reveals that customer’s business requirement has the strongest contributed factors to the strategic competitive advantages of the fertilizer industry, followed by company reputation and market attractiveness. Following the increased competition in fertilizer markets, the result suggests fertilizer company should prioritize in fulfilling customer expectation among other determinant factors in order to maintain its customer share.

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