CHAPTER 5 CONCLUSION

CHAPTER 5
CONCLUSION
5.1. Summary
The summary of this study will be described based on research question
that describe in the first chapter. Those research questions are:
7. What is the landscape according to the history of broadcasting
television industry in Indonesia?
8. How is the business process in broadcasting television industry in
Indonesia?
9. What is the history of TRANS TV?
10. How TRANS TV achieve its successful?
11. How TRANS TV determine the acquisition process with TV7?
12. What is the result after the acquisition process in short term?
What is the Landscape According to the History of Broadcasting
Television Industry in Indonesia?
According the history, the landscape of this industry divided into three
major periods based on the growth of the industry itself. Within 18 years
of this industry, the business practice has been change. Until finally,
since 2001 until now, the number of national televisions has been fix
with 10 private TV stations based on government regulation. Those are
RCTI, SCTV, TPI, IVM, STAR ANTV, TRANS TV, LATIVI, METRO
TV, TRANS7, and GLOBAL TV.
Those players compete to reach high position through rating, share, and
ADEX. Since the beginning, competition in this industry was depending
on the pioneer player in this industry. RCTI become the benchmark for
the entire stations. The entire stations used the same methodology by
offering the sales package. Until finally, appear TRANS TV with
offering customize sales package in the year of 2001. Since that moment,
the business competition becomes more dynamic with optional offering
strategy and services approaching.
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18 years is not enough to create maturing condition in this industry. The
growth level of this industry is continuing to high with so many
uncertainty conditions that involve the industry itself.
How is the business process in broadcasting television industry in
Indonesia?
The business in this industry is depending on selling airtime. There are
two types of customers, audience, and advertisers. TV stations compete
to reach the highest rating, share, and ADEX. To provide sales package,
this industry cooperate with AGB Nielsen to provide positioning
performance data for each TV stations. This is the open competition
business. For that major reason, the regulation that related with business
practice is depending on the agreement from all players and stakeholders.
With those agreements, TV stations able to deal the business transaction
with advertiser through advertising agency.
What is the history of TRANS TV?
TRANS TV broadcast for the first time on December 15 th 2001. Mr.
Chairul Tanjung as the owner pointed expertise with high experiences in
this industry to create and become the first board of director in TRANS
TV. As a result, TRANS TV came as a station with high class image.
Since it first appearance, TRANS TV offered a new and different concept
of broadcasting compare to others. Start with cash discount, customize
sales package, until bonus management, delivering TRANS TV to reach
break even point in last then 4 year. After achieved its financial goal,
TRANS TV intent to expand by cooperated with TV7 through
acquisition. As the result, TRANS TV and TRANS7 broadcast under
TRANS Corp.
How TRANS TV achieve its successful?
TRANS TV shows a tremendous performance since it first appearance.
The key success factors of TRANS TV are providing it product line’s
value chain constantly, and keep its promise based on its guaranty.
TRANS TV able maintains its key success factors according to its
fundamental building blocks. High quality image and sales oriented
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culture become the basic concept for performance. Consistency and high
integrity become the main reasons of TRANS TV success story.
How TRANS TV determine the acquisition process with TV7?
Learn from its experience, TRANS TV delivered its value to TV7.
Through acquisition on August 4th 2006, TV7 transformed into TRANS7
with similar fundamental concept of high quality image and sales
oriented culture through similar value chain. The main concept is to
implement TRANS branding concept to create efficiency as a main
purpose of benefit to improve their performance.
What is the result after the acquisition process in short term?
At the first quarter 2007, both stations showed a great performance.
Positioning performance result and ADEX growth increased for both
stations, especially for TRANS7. TRANS7 increasing fast, while
TRANS TV keep decreasing in rating point but still achieve great
positioning performance. Entering the second quarter 2007, the situation
shows an indication of decreasing performance. Positioning result of
TRANS TV drops from 2nd position to 4th position. Until now, there are
no research studies that determine the source of the problem in this
condition. Both stations still provide the result data for second quarter
2007 until the end of August. However, the indication shows that the key
point of this problem is the integration for both stations not yet reveal.
5.2. Lesson Learned
According to this case study, there are three major lesson learned that
influence metamorphose of branding from the lead company into target
company.
5.2.1. Provide Detail Data and Fact
The study shows the importance of providing strategy to improving
company’s performance. Management must be able to provide every
detail data and fact that supports the corporate strategic decision. To
create a sophisticated corporate strategic, management also should know
and fully understand the actual condition and business process related
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with the industry. Analysis all the possibilities situations that will appear
before take the decision. Those analyses should determine the advantages
and also the disadvantages that will happen.
5.2.2. Intensive Analysis then Deciding the Strategic
It’s already proof by TRANS TV. At the beginning, all the founders did
an intensive analysis through supporting data, experiences, until the
detail event that involved the business process in this industry. With the
vision to be the best TV stations in Indonesia, TRANS TV appears with
new and different broadcasting concept. As a result, TRANS TV
achieved high performance in less then 4 years with it’s’ product line’s
value chain.
The opposite conditions also happen in TRANS TV. After reach break
even point, TRANS TV intent to expend. Only take less then 6 months,
TRANS TV provide acquisition process with TV7. Apparently, the result
of acquisition process showed a good result in first quarter 2007. The
indicator of the problems appears in second quarter 2007. According to
the discussion of this study, the result shows there are so many
inappropriate condition that not relevant with the basic concept of
merging the brands and branding the merger theory, and also with the
corporate strategic value.
5.2.3. Minimize Competition, Maximize Integration
If there is only one player who offer different value, then the player
become special with its differences. But if the value is able to provide by
other players, then the value itself become a common strategy and not
special. The differences must be created among two cooperative
companies. The key point of cooperative is to create a synergy and
integration, and it’s not to create a competition inside the organization.
5.3. Recommendation
The study shows basic problem that faced TRANS TV and TRANS7.
The problem is there are no differentiation between TRANS TV and
TRANS7 after the acquisition process. To solve the problem, both
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stations must reveal the integration among them. The challenge inside the
metamorphose TRANS brand into TV7 is to determine the specific
product line’s value chain that can support the integration without
disturbing the decision of acquisition process. The fact is, the acquisition
process is already done and the corporate culture already set. Both
stations can keep broadcasting with high class image with focused on
SES AB, because this is the fundamental building blocks of TRANS to
gain a successful.
Firm Infrastructure
(Expertise board of director, cooperative strategy: build in, competitive
strategy: create high rating)
S
U
P
P
O
R
T
Human Research Management
(Recruiting youngster as employees, recruiting people with sales
experiences as A/E, and training customize sales package and post
analysis, internalizing sales oriented culture)
Technology Development
(Invented and develop bonus management traffic software, video server)
Procurement
(Uniform for employees and vinyl design for OB Van, using sophisticated
and resent technology, lowest channel frequency, increasing coverage area)
Broadcasting
Technical
(Clear, bright,
and sharp contras
pictures, clear
voice,
maintaining
periodically
Program
(60% to 80%
program
with in
house
production,
re-run)
Sales and
Marketing
(Customize
sales package,
amortization
program, 30%
production cost
from net
revenue)
Service
(24 hours
maximum
media order,
last 2 hours
order, max 3
months bonus
payment, post
analysis)
P
R
O
F
I
T
M
A
R
G
I
N
PRIMARY
Figure 5.1 TRANS Value Chain
With all the product lines value chains of TRANS brand, the integration
will be creating by determine several product line that able to provide
together, and others that should be provide different.
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Backing the Stronger Horse: Strategy 1
The new target company adopts the visual identity of the lead company
Employees
Customers
Investment
Community
Benefits
Challenges
Sales oriented culture
already internalized in both
TRANS TV and TRANS 7
employees.
Customized sales package
and post analysis
knowledge.
Different TV stations.
Different logo and uniform.
Compete in the same
market with same
segmentation.
Audience
Able to watch TRANS’s
programs segmentation in
two channels.
Same target audience
segmentation.
Similar or even same
programs categories.
Too many programs
choices at the same time
(loss control).
Customized sales package
and post analysis are no
longer special services.
Competition in increasing
rating and ADEX
Advertiser
Customized sales package
and post analysis from two
stations.
Single investment for two
TV stations (under TRANS
Corp.).
Investors can not choose
only one station
High risk if one station is
better then another in
overall performance
.
Figure 5.2 TRANS TV’ Backing the Stronger Horse: Strategy 1. (Richard
Ettenson and Jonathan Knowles, 2006: 44)
5.3.1. Create TRANS Center
I recommend a new external functional division. The purpose is to
combining product line’s that have a power to increasing competition. In
this case, product line that related with revenue.
TRANS center must be held independently and will have an obligation to
provide product line for both stations. According to TRANS product
line’s value chain, there will be 2 primary activity and 2 supporting
activity that must be able to provide by TRANS center. Those are:
 Primary Activity:
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1. Sales and marketing
2. Service
 Supporting Activity:
1. Human Resource Management
2. Technology Developing
Only TRANS center that able to provide those product line.
For the human resource, TRANS center will be occupied with all A/E,
traffic division, and HR division from both stations. Their status will be
no longer as TRANS TV or TRANS7 employees. But they will have a
status as TRANS center employees. To support working culture, these
employees should be provided with their own uniform and logo. TRANS
Center only provides activity that related with sales. Main obligations
consist of:
 Providing customize sales package with combination of spot,
program, and format from both stations.
 Service activity and traffic order followed it’s customize sales
package and able to implement for both stations.
 HRM activity such as recruiting, training, and salary will be
providing in TRANS Center only.
 R&D will be held only in TRANS Center.
The purposes of this acquisition process are efficiency in production cost,
human resource, technical equipment, and production equipment. Both
TRANS TV and TRANS7 will get the same treatment from TRANS
Center. TRANS Center will be the motor of both stations.
5.3.2. Different Product Line
To minimize the competition, both stations must reveal its uniqueness.
Uniqueness means each station should determine its own basic concept
of appearance. They should create their own boundaries. Uniqueness will
be determined also based on product line. Those are:
 Firm Infrastructure
 Procurement
 Broadcasting program
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 Broadcasting technical.
This is the main concept of integrating. The different segmentation will
be creating based on program gender. It means that, both stations will not
provide the same program gender. For example:
 TRANS TV is a station that able to provide and broadcast news,
blockbuster movies, children, drama, and variety show.
 TRANS7 is a station that able to provide and broadcast talk show,
traveling, cuisine, sports, infotainment, and information
TRANS TV has a concept as an entertainment and news television, while
TRANS7 has a concept as a life style and hobbies television. By
providing this concept, actually TRANS maintaining one station with
two channels. But the number of spot and duration is more then the
standard. If a regular station has maximum 576 spots within 24 hours
broadcasting time. TRANS through TRANS TV and TRANS7 has
maximum 1152 spots within 24 hours broadcasting. With this concept,
both stations able to do the re-run. Take a look Discovery or STAR
network. Actually they only broadcast not more then 10 programs a day
with average duration an hour, and maintaining re-run. I believe TRANS
is able to create it.
The key point to prevent the problem and minimize the competition is by
creating integration between TRANS TV and TRANS7, then creating
synergy in business practice to preventing winner/loser perception inside
the companies.
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Firm Infrastructure
(Expertise board of director,
cooperative strategy: build in,
competitive strategy: create high
rating)
Procurement
(Uniform for employees and vinyl
design for OB Van, using sophisticated
and resent technology, lowest channel
frequency, increasing coverage area)
S
U
P
P
O
R
T
Broadcasting
T
R
A
N
S
T
V
T
R
A
N
S
C
E
N
T
E
R
T
R
A
N
S
7
Technical
(Clear, bright,
and sharp contras
pictures, clear
voice,
maintaining
periodically
Program
(60% to 80%
program with in
house production,
re-run)
Entertainment,
News
P
R
I
M
A
R
Y
Human Research Management
(Recruiting youngster as employees, recruiting people with sales
experiences as A/E, and training customize sales package and post
analysis, internalizing sales oriented culture)
Technology Development
(Invented and develop bonus management traffic software, video server)
Sales and Marketing
(Customize sales package, amortization program, 30% production cost
from net revenue)
Service
(24 hours maximum media order, last 2 hours order, max 3 months bonus
payment, post analysis)
Technical
(Clear, bright,
and sharp contras
pictures, clear
voice,
maintaining
periodically
Program
(60% to 80%
program with in
house production,
re-run)
Life Style,
Hobbies
P
R
O
F
I
T
M
A
R
G
I
N
P
R
I
M
A
R
Y
Broadcasting
Procurement
(Uniform for employees and vinyl
design for OB Van, using sophisticated
and resent technology, lowest channel
frequency, increasing coverage area)
Firm Infrastructure
(Expertise board of director,
cooperative strategy: build in,
competitive strategy: create high
rating)
S
U
P
P
O
R
T
Figure 5.3 TRANS Center
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