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


The Analysis of Market Orientation and Company Resources in the Business Strategy Preparation for Performance Improvement of Automotive Lubricant's Companies in Indonesia

Author(s): Nur Dina, Martha Fani Cahyandito, Sucherly, Joeliaty

Automotive lubricant production capacity in Indonesia continues to grow, where in the year 2014 its growth reaches 7% compared to the production capacity of previous year, which in the volume reaches 1.9 million kilolitres. However, despite the fact, the actual production achieved by the automotive lubricant industry is still under 50% of the production capacity. In terms of market share, PT Pertamina Lubricant dominates market share of automotive lubricant in Indonesia with achievement of market share ranging from 49-51% while the rest of automotive lubricant companies only able to control market share with the percentage is far below 20%. Such condition shows the not yet optimum performance of automotive lubricant company in Indonesia. It was allegedly related to the weaknesses in the implementation of business strategy and weakness in the development of market orientation and development of company resources. The research was conducted through an explanatory survey method. Primary data were obtained based on the results of the census to 32 national automotive lubricant companies. The hypothesis was examined by using Partial Least Squares Path Modelling (PLS-PM). The results show that business strategy has greater influence than market orientation and company resources in improving company performance. Market orientation has a greater influence rather than company resources in formulating more precise business strategy. The results of this study have implications for national automotive lubricant companies that to improve the performance of the company, then business strategy needs to be formulated more precisely through the development of market orientation supported by the development of company resources. 

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