FINAL ASSIGNMENT

BLUE OCEAN STRATEGY

OTONG.COM Recycling Waste
Management

EMBA Batch 3
GROUP 2
Jahja
Pricillia Taarea
Stefanus Indra
Ari Mulyono
Dewi Hayati

I.
II.

Executive Summary
The Industry Analysis
A. Industry Overview
B. The Opportunity
C. Our Services
D. The Company (Vision, Mission, Objectives)

III.

Market Analysis
A. The Clients
B. Market Size
C. The Environment (Macro PESTEL Analysis & Micro Porters 5 Forces Model Analysis)

IV.

Marketing Plan
A. Product
B. Pricing Strategy
C. Place (distribution channel)
D. Promotion

V.

VI.

VII.

VIII.

Operation Plan
A. Facilities
B. Operations
C. Key Resources
D. Key Partners
Human Resources and Entrepreneurial Team
A. The Entrepreneurial Team
B. Organizational Culture
Financial Plan
A. Hyphotesis and Assumptions
B. Sales Forecasting
C. Income Statements
D. Breakeven analysis and profitability
E. Financial Sources
Control and Performance Assessment
A. Financial Perspective
B. Customer Perspective
C. Internal Business Process Perspective
D. Learning & Growth Perspective

I. Executive Summary
Poverty is one of the social problems in Indonesia that is not easy to overcome. Various efforts and
programs undertaken to overcome, however there are still many of us encounter poor neighborhoods in
almost every corner of the city. The complaint most often delivered on the settlement of the poor are
the poor quality of the environment is considered as a part of town that must be removed. In Indonesia,
around 28 million people live in poverty line and 400,000 poor people lived in Jakarta.
This poverty problem can cause to criminal problem and slow down the economic growth. People at
the bottom of the pyramid lived with a lots of limitation. They hardly have a good access for nutritious
food, good education, job opportunity and finding capital. Their only access is only through garbage or
waste that left behind. People at the bottom of the pyramid in Jakarta always have struggled to survive.
Their average income has around Rp 8,000 Rp 10,000 per day equal to less than US$ 1. The current
situation only bring them to live daily, from day to day and would not be able to prepare their future
for any urgent situations (sick, accident, etc.)
Looking at the people at the bottom of the pyramid s condition and their available access towards
garbage and waste, The company is planning to provide the services to see the opportunity to empower
them to become our partner. In order to improve their standard of living, they need work together with
us by utilising and recycling garbage or waste. Our services will act as distribution centre for
collecting raw unused material, produce industrial raw material for plastic and paper industry from
plastic and paper waste, create home industry producing floor mat from fabric waste and also to create
and develop community of poor people to become early entrepreneurs.
Because of the similarity of vision to run a business that also contribute to improved social welfare for
the poor, we established Otong.com as a means for the people at the bottom of the pyramid to improve
their quality of life and encourage them to start thinking about their future and the generation to come.
II.

The Industry Analysis

Industry Overview
Indonesia is one of the ASEAN countries with the highest population (about 220 million people) with
growth rate of 1.2% per year (World Bank 2009). The population growth brings about the increasing
amount of the waste which becomes a problem faced by the government. Plastic is one of the biggest
issues from the waste. Plastics offer society lots of helpful properties, and they are also eco-efficient in
many ways - including when a product comes to the end of its useful life. This is when end-of-life
management becomes necessary. All plastics can either be recycled as material and/or chemical
feedstock for further use; or the embedded energy can be recovered. The high calorific value of
plastics is actually similar to that of fuel oil. Therefore, plastics waste can either be recycled into new
products or it can partly substitute for fuel conserving primary resources. Plastic is just too valuable to
waste.
In order to achieve the economically and ecologically optimised management of plastics waste, society
needs to learn how. To achieve the high level of waste recovery, which is already in evidence in several
European countries (optimising the value of plastics and diverting plastics waste from landfill), a
combination of all end of life management techniques is required.
Moreover, education is a key part of this. Plastic industry has invested in a widespread program to
transfer its knowledge about end of life waste management and share it with relevant stakeholder.
Business Goal and Objective:

To alleviate flood and traffic jams in the rainy season by reducing flooding caused by waste, through
effective waste management system also at the same time provide opportunities to the people at the bottom
of the pyramid.
Otong.com seeks to minimize the waste in densely populated urban and city environments that caused
flooding during raining season. This aims is to reduce the incidence of flooding caused by indiscriminate
waste disposal and providing opportunities to people at the bottom of the pyramid, the scavengers and
families.
The Company Otong.com
Otong.com is a start-up waste management company which is located in Jakarta, Indonesia. The Company
will provide waste management services. Align with partners (scavengers community), Otong.com will
take and process the waste and turn into recycling products, reused by factory, home industry and others.
The Company is founded in 2015 by team of five executive MBA students which becomes the stakeholder
in the company and concurrently holds executive positions. The partners have extensive experience in
human resources, finance, sales and operations
Products and services Otong.com
Products that the company will recycle are plastics, paper and fabric.
Otong.com will partner with scavengers community to deliver the products to our warehouse and
processing and provide incentives for waste collectors. After process the products, Otong.com will sell the
recycling products to factory, home industry even to end customers.
The Market Otong.com
There is a growing market for recycled products in Indonesia, driven by the large amounts of waste
generated through consumption per capita. These waste products from a key resource base to generate
revenue. The poorer segment such as scavengers and the communities has an important role to play in
this market, through collecting the waste and delivering it to Otong.com. In return, they receive
incentives and some of them can sharpen their skill to process the waste to be recycle products.

Vision OTONG.com
To be a leader in the development, implementation, and maintenance of innovative and sustainable
waste reduction, recycling and collection services within an engaged community.
Mission OTONG.com
To ensure the delivery of an integrated, cost-effective, and environmentally sound solid waste
management system, and to promote sustainable community programs and policies throughout Jakarta
and the archipelago of Indonesia
Values OTONG.com
Responsiveness:
Providing solid waste, recycling products and recovered materials services to serve the needs of our
society.
Stewardship:
Acting as wise and responsible caretakers of the financial, constructed, natural and human resources
entrusted to the community.
Innovation:
Embracing new and better ways to achieve improved and efficiency results though creativity,
teamwork and adoption of appropriate new process and technology to reduce and reused waste
products.

Environmental Responsibility:
Ensuring the collection, the process and the management of waste also recovered materials in an
environmentally sound manner and in accordance with regulatory requirements.
Continuous Improvement:
Focus on improving the divisions efforts through coordination, participation and education with
various communities at the bottom at the pyramid.
Strategic Thinking:
Committed to implementing projects, programs, and processes that promote sustainability, meeting our
current needs and challenges while anticipating the needs and challenges of the future.
Integrity:
Acting in an honest, ethical, professional, and respectful manner with each other and our community,
taking personal responsibility, and being accountable for achieving results.
Teamwork:
Promoting unity and cooperation among staff, as well as with our community, suppliers, customers,
and stakeholders, to meet our purpose of achieving the mission, vision, and work of the division.
Education:
Continually educating ourselves and our community regarding sustainability, environmental
responsibility, recycling, and proper waste management.
Strategic Objective OTONG.com

Build partnerships with factories, home industry, hotels, etc. who have a history of caring
recycling products

Ensure skill partner compliance with established quality standards for giving best result to
the partners

Build community awareness of the need to minimize the production of waste, and the need
to consider solid waste management from an environmental perspective

Deliver sound and cost-effective solutions for waste management

Ensure solid waste management best practices are deployed in the field

Effectively use our assets, tools, systems, and personnel

Enhance the abilities and knowledge of our personnel to support superior service to our
customers

Create Entrepreneurs among scavengers and enhance their skill.

III.

Market Analysis

A. The Clients
plastic industries : There are 1356 companies in Indonesia(year 2010) registered in Indonesian
Ministry of Industry (IMoI) that produce plastic product. IMoI also stated that the plastic industry
still lacking in raw materials suppliers. (http://www.kemenperin.go.id/)
paper industries: 485 companies listed at 2010 as participants in this industry
(http://www.kemenperin.go.id/), and at the end of 2014, Indonesia still has to import 60-70% of its
7 ton waste paper demand (http://www.sinarharapan.co/news/read/141224077/ri-masih-imporkertas-bekas)
garment industries: 2024 companies as 2010, even though not all of them will use recycled material,
but we also develop our own home industries participant from the scavengers family.

B. Market Size
C. The Environment (Macro PESTEL Analysis & Micro Porters 5 Forces Model Analysis)
PESTEL
Political : Indonesias government, mainly Jakarta, has a big problem regarding waste
Economic: Theres an increasing demand for downstream industries product
(https://www.google.co.id/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwi51q_ovabJAhUIG
o4KHUz4Aq0QFggaMAA&url=http%3A%2F%2Fkemenperin.go.id%2Fartikel
%2F7336%2FIndustri-Plastik-Terbatas-KapasitasProduksi&usg=AFQjCNHphayfGcv09V9zqWiQZRumJ829Eg&sig2=UQ1ybmMTtzeaGwx3fFrGp
A&bvm=bv.108194040,d.c2E),
mainly
plastic
product
and
paper
pulp
(https://www.google.co.id/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjHlcD_vabJAhXH
Po4KHUCzBE0QFggaMAA&url=http%3A%2F%2Fwww.sinarharapan.co%2Fnews%2Fread
%2F141224077%2Fri-masih-impor-kertasbekas&usg=AFQjCNF0sSFrm5XDeddHA0U1gY82bO5G6g&sig2=iq_U3tscLaE741iIfnZo6A&bv
m=bv.108194040,d.c2E); Providing cheaper raw materials needed for home industries (garment);
Social : 4% (400,000) of Jakarta population is poor
Technological : The technologies needed for processing has already been established
Legal : waste processing dictated by Law no.18/2008, in which everybody can do the waste
processing after getting permit from the government.
Environmental : improving environment condition by processing waste (increase in waste
consumption)
Porter
bargaining power of input : low
bargaining power of output : plastic (high), paper (medium), fabric (medium-low)
new entrants threat : high (very easy to enter)
substitutes threat : plastic (high, easy to get alternatives), paper (low), fabric (low)
rivalry : medium
IV.

Marketing Plan

In the marketing plan for Otong.com, we will define the target market, its characteristics and attributes,
which will scope the nature and extent of our marketing strategy. In summary, we found that our target
market, recycling industry in Jakarta, is based on a Business-2-Business (B2B) model whereby the
recycling companies source for raw materials for the recycling process. Therefore, we have developed
a B2B marketing strategy, based on our value proposition in the upstream recycling process.
A. Product
The waste product that is recycled can be expanded to include other types of waste, depending on the
availability, volume and cost to collect these items. Notwithstanding these considerations, the system is
already in place through this business model.
Otong.com currently only focusing on three waste products to collect, process and resell to the market:
Plastic
The Company collects for all kind of plastic from scavengers community and process the
waste product into plastic pellets.
Paper
All wasted paper will be collected and recycled to be pulp

Fabric
Fabric collected by scavengers to be process in the workshop into good products (floor mate,
pajama, etc) to be sold at the marketplace

B. Pricing Strategy
The company main strategy is to cut the distribution line to bring more incentive for the scavengers
community. Otong.com will always buy the waste products 5% higher than competitor and sell the
process product 5% lower than the market price
C. Place (distribution channel)
The main concept of Otong.com is to have a direct sales to industry for plastic and paper industry and
sell to small medium enterprises (UKM) for fabric products (floor mate, etc.)
D. Promotion
We have deep marketing networks in low income communities that give us the capability to collect
waste from what are mostly inaccessible locations for bigger recycling companies. These informal
networks are ground up and do not rely on new infrastructure.
As the company need to educated and do promotion to promote Otong.com, we divide into two kinds
of promotions:
Otongers we will open workshop to educate the scavengers regarding recycling product
and business process through Market Fair and movable big screen (layar tancap).
Customers to aim users and small medium enterprises, Otong.com will promote the
products through website and social media (Facebook, Twitter, Kaskus, etc.) and sell with
5% lower than the market price.
V.

Operation Plan

A. Facilities
Single/multiple facilities : back office, input (collecting), processing, output (storage and delivery)
ideally all of the units are in 1 place, which will consist a warehouse as input, factory like
installation for the processing part, and returned to the same warehouse for storage
The warehouse will be divided into two parts, for the input and for the output. Each of respective
part will be divided into three parts, which will consist of each subtype of the waste (p/p/f), and
there will be a specially designated place for the type of waste we cant process.
The factory will consist of three parts (p/p/f). The plastic part will have a washing pool, shredder,
and melter. The paper part will have a sorting area, and paper pressing machine. The garment part
will consist of a washing pool (which can be used together with the plastic), drying area, and sorting
area.
The back office will have a working area and data storage facility. This will be the place for the
managers to work and control everything.
B. Operations
Collecting (walk-in / trucks)
We will collect the scavenging result from the scavengers in hot spot area using trucks that will
have a fixed schedule so the partners will be able to prepare and wait for the pick-up to be made.
We will also accept a walk-in delivery from scavengers, or other garbage collector, as long as the
waste has been sorted according to our terms.

Another source of waste will be industries that has plastic, paper, or garment waste, such as offices,
garment industries, etc. We will also collect waste from them.
processing (plastic, paper, fabric)
plastic: the plastics we have received will be sorted and washed. After that we will put
them into the shredder which in turn will be put into the melter to produce plastic pellets.
paper: The papers will be sorted according to the already established grading system,
and then they will be pressed together to save space.
fabric: The fabric will be washed. After that they will be dried on the drying area then
sorted according to size and colour.
storing and delivery
Storing will be divided into two parts, the input and output part. Each part will store the
materials according to the type of the waste/product. There will also be a special place to store the
waste we cant process.
For delivery, a different type of trucks (closed, such as box trucks) will take the goods from the
storing area and send it to the customers.
management role
We will need some people to manage the whole process, starting from admin for the input,
supervisor/operational manager for the processing, and another supervisor/ sales manager to handle
the delivery. We will also need a relationship manager to manage the relationship with the collectors
and other sources, and also the scavengers.
C. Key Resources
waste (p/p/f)
relationship with collector, other sources
relationship with product user
consultant / trainers
machines
D. Key Partners
input:
industry with p/p/f waste (including home industries)
collectors
communities
output:industry that use p/p/f material (including home industries)
communities
VI.

Human Resources and Entrepreneurial Team

A. The Entrepreneurial Team

In the formation of the team for this business, there are some skills and competencies required. We
split our team into two parts, namely the operational team and support team. Operational team
consisting of sales & marketing division and production division. Support team consisting of finance
and accounting division and human resources divisions. Skills and competencies required by each
division has a uniqueness and specialization of each in accordance with the description of the task
performed.
1. Sales & Marketing Division

This division is responsible for determining variants of the product to be sold, cooperation with
plastic and paper manufacture company in Indonesia, selling products online and offline, as well
as providing information services and handling customer complaints.
Competencies required as a sales and marketing are as follows:
a) In collaboration with colleagues and customers that can be implemented by means of
communicating in the workplace, provide excellent service to customers, working with the
standards and can work in a team.
b) Working in a different social environment (i.e. how to communicate with customers and
colleagues with different backgrounds, able to handle customers and colleagues
misunderstandings due to different backgrounds).
c) Handle conflict, which identifies a conflict situation, implementing ways of handling conflict
and responding to customer complaints
2. Production Division
This division is responsible for coordinating with supplier in term of raw material supply (plastic,
paper, fabrics), running the production process from raw material to semi-finished material, and
also produce finished goods from fabrics waste.
Competencies required as an operational are as follows:
a) Understanding the production business process and machine operation.
b) Having a guiding effective planning for production planning and inventory control
c) Understand the uniqueness of raw material so can be produced in proper way.
4. Finance & Accounting Division
This division is in charge of managing the company cash flow, transaction payments, cooperating
with the bank for receiving payments received from customers, prepare financial statements and
perform budget control and manage purchasing.
Competencies required as a finance and accounting are as follows:
a) Managing Cash and Bank Administration and managing Petty Cash
b) Managing Purchasing Administration and Sales Administration
c) Managing Debt Administration and Accounts
5. Human Resource Division
This division is responsible for the recruitment of employees, to prepare the necessary
infrastructure company, to pay the salaries of employees, making employee training plans, and
assessing employee performance.
Competencies required as a human resources are as follows:
a) Ability to create entrepreneurship culture in the workplace
b) Aligning functions and human resources planning
c) Build innovations to improve organizational performance
d) Establish standard operating procedures in human resources management
e) Ability to develop people skill through training, coaching and mentoring.
B. Organizational Culture
The organizational structure is lean business structure to reduce the bureaucratic chain. System of
centralized decision-making is done while providing the freedom of each division to provide ideas and
decisions for the division. Management style performed by companies adopting a more participatory
leadership style. Each division is expected to participate actively in providing input and advice to the
management and the company. For the development of employee skills, the management is committed
to provide regular training to improve the competence of employees. Placement of employees who
have expertise related to the field of work will also be undertaken to achieve optimum performance.

In line with the plan fulfillment of labor based on an organizational structure that has been set up, the
company will also provide compensation in accordance with the expertise and performance results.
Other benefits provided include health insurance, incentives for existing employee.
VII.
Financial Plan
A. Hyphotesis and Assumptions
B. Sales Forecasting
C. Income Statements
D. Breakeven analysis and profitability
E. Financial Sources
VIII.
A.
B.
C.
D.

Control and Performance Assessment

Financial Perspective
Customer Perspective
Internal Business Process Perspective
Learning & Growth Perspective