Study on the Development of Furniture-Based Industry Competitive Advantage (Study on Teak Furniture Industry in Southeast Sulawesi-Indonesia)

Abstract

The small wood furniture industry in Southeast Sulawesi Province made a very small contribution to the Gross Regional Domestic Product (GRDP) in 2013-2017, less than 1.00 percent. Where in 2013 amounted to 0.55 percent, in 2014 amounted to 0.49 percent, in 2015 amounted to 0.47 percent, in 2016 amounted to 0.49 percent and in 2017 the contribution of small wood furniture industries to GRDP was 0.48 percent (Source: BPS Sulawesi Tenggara, 2018). The phenomenon of the low contribution of small wood furniture industries to Southeast Sulawesi's GRDP is: (1) The low managerial ability of company owners, (2) The industrial environment in small wood furniture industries is very dynamic when viewed from the strengths of the industry and the low ability of the company. This research aims to measure and analyze the factors causing the teak furniture industry to not develop. Besides that is to produce a model of teak furniture industry development that can create a competitive advantage. The research sample of 143 businessmen teak furniture. Data analysis techniques used are (1) qualitative descriptive analysis through in-depth interviews to get information on the factors that cause the development of furniture-making industry in Southeast Sulawesi Province, (2) Partial Least Square analysis, reinforced by SWOT analysis to obtain information about industrial development models that have a competitive advantage. Results of the research concluded that (1). Factors causing the teak furniture industry that is unable to develop are due to low ability: (a) making business plans, (b) establishing business relationships, (c) the existence of suppliers bargaining power, (d) Threat of substitute products, (e) profit growth which is not optimal yet. (2) The right model for developing the teak furniture industry that can create a competitive advantage is to use the "LIMAPEN" model and implement an aggressive growth strategy.

Keywords: industrial development model, teak furniture

DOI: 10.7176/EJBM/13-2-04

Publication date: January 31^st 2021