Information Systems Management

Nama:

Joshua Christianto – 1901804761

Lorenzo Niro –

Bhinneka: Be Online or Be Average?

Executive Summary

PT. Bhinneka Mentari Dimensi or commonly called Bhinneka.com is a company engaged in

the IT industry found by Hendrik Tio and 5 colleagues in 1993. Initially an IT solution
company made changes to Computer Accessories, furniture manufacture, and shrimp
business. Then Hendrik decided to go back to Bhinneka again as it was originally. Bhinneka
has faced many obstacles in its business trips such as the economic crisis in 1997-1998,
dotcom crashes, and now internet problems. Hendrik thinks that this business should be
stopped or continue to change the existing business model?

Competitor

• Lipposhop.com

Parts of Lippo group are very optimistic about the future of the internet in Indonesia, they can
only survive until 2001 because the internet infrastructure in Indonesia is not developing even
though they have spent around Rp. 100 billion.

• Bebita

Retail companies that sell daily necessities such as rice, milk, sugar, etc. They fulfill the
consumer's request via telephone, then collect the order then send it to the server via the
system IVR.

• Fres’Mart

Collecting orders via telephone, but they develop their business with an MLM system.

• 2000 auctions

The first auction site in Indonesia that gets revenue from the administration of its fees.
Positioning

Bhinneka has the thought of joining competitors to get more offers and even more customers.
Bhinneka believes that the integration between the online store and the payment mechanism
will be the main key to success for the company, but it turns out that many still use the old
payment method with the process system that buyers send e-mails to various buyers to buy
goods, then the customers call consumers to get detailed information and asking consumers to
transfer to various accounts. After the payment has been approved, the item will be delivered
to the customer's address.

Bhinneka realizes that payments like this are not ideal, but according to Hendrik this scheme
is an e-commerce scheme with Indonesian style. Thus it can be seen, that Indonesian public
trust regarding this online store is still small. Finally, the community found a way for many
consumers who were interested in visiting their website by advertising in the city news. As a
result, their brand awareness has increased significantly, there are also more visitors to the
website. However, what happened was that Bhinneka had not yet gotten a significant profit,
they were only able to cover operational costs.

Bhinneka.com's Customer Profile & Image

Bhinneka customers come from Indonesia as many as 96%, aged 20-35 years are 71%, and
66% are from high school students and employees in private companies. Many people buy at
Bhinneka because it's cheaper. They know this from a computer magazine. Hendrik realizes
that most consumers who visit Bhinneka are only to compare prices from other places.
Although many visited the website, their total transactions were actually still low.

In December 2002, Hendrik Tio was ready for strategic meeting with board of directors to
discuss the future of P.T. Bhinneka Mentari Dimensi. As Director and founder, Hendrik felt
that the company has gone through a lot; Indonesian’s economic crisis in 1998, the dotcom
crash, and now, once again, the company faced something that nobody was familiar with: the
internet.

During economic crisis in 1997, due to deterioration of market buying power, Bhinneka was
forced to diversify its business from IT solutions provider to a computer accessories
manufacturer, furniture manufacturer and shrimp business. In June 1999, Hendrik decided
that the company should return to its original business of providing IT solutions and insisted
that the company start building its reputation as the pioneer of e-commerce by going online.

The dotcom euphoria didn’t last very long, because in 2001, the dotcom crash started.
However, some strong companies actually survived the crash in US, such as Amazon.com.
The same phenomenon happened in Indonesia. Some online shops such as Bebita.com,
Dialmart.com, even Lipposhop.com could not get enough revenue to cover their operational
costs; the only reason why they were still in the market was due to their belief that the
internet would be the future of business. Bhinneka.com likewise was not making enough
profit. However, it had gained high brand awareness due to its website and the number of
visits grew steadily.

As Hendrik walked toward the meeting room, some thoughts came to mind;: should he stop
the online retail business before it’s too late, or should he continue it by altering his existing
business model? Some facts that happened around the world as well as in Indonesia worried
him. What should Bhinneka.com do to maintain its position and grow given the unpredictable
nature of cyberworld?