Diversification Strategy Analysis As An Effort To Increase Sales Volume (Study Of UKM Kreasi Lutvi, Tuntung)

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Diversification Strategy Analysis as an Effort to Increase Sales Volume in Lutvi Creation UKM, Tuntung

Introduction

Small and Medium Enterprises (SMEs) play a vital role in the Indonesian economy, and with rapid economic growth, competition in the business world is becoming increasingly fierce. In this context, SMEs are required to increase their competitiveness in order to survive in the competition. One of the strategic steps that can be taken is to implement a product diversification strategy. The competitiveness of a company is heavily dependent on the quality and variation of the products offered. In this study, we will analyze the product diversification strategy implemented by UD Kreasi Lutvi and the impact of the application of the strategy on sales volume.

The Importance of Diversification Strategy in SMEs

Diversification strategy is a crucial step in the context of increasingly sharp business competition. By offering a variety of products, SMEs can attract more customers, including market segments that were previously unreachable. The addition of product variants also helps companies build stronger brands and increase customer loyalty. In the case of UD Kreasi Lutvi, the application of this strategy not only provides variations of products but also creates added value for consumers.

Research Purposes

The purpose of this study is to analyze the product diversification strategy implemented by UD Kreasi Lutvi and the impact of the application of the strategy on sales volume. This study uses a descriptive approach with qualitative data analysis. The methods used include interviews, observations, and documentation studies to get accurate and relevant information.

Research Findings

From the results of the study, we found various phenomena which were then grouped into two main themes:

Diversification Strategy

Researchers identify that UD Kreasi Lutvi applies a concentric diversification strategy. This means the company expands the variations of the products offered but still focuses on the same or related product lines. For example, if the company initially only produces traditional cakes, they can add new variants such as cakes with organic or cakes for a healthy diet.

Concentric Diversification Strategy

Concentric diversification strategy is a type of diversification strategy where a company expands its product lines by adding new products that are related to its existing products. This strategy is often used by companies that want to increase their market share and competitiveness. By offering a variety of products, companies can attract more customers and increase their sales volume.

Impact of the Application of Diversification Strategies

The results show that the application of this diversification strategy significantly increases sales volume. By offering more choices to consumers, UD Kreasi Lutvi can attract more customers, including market segments that were previously unreachable. The addition of product variants also helps companies build stronger brands and increase customer loyalty.

Impact of Diversification Strategy on Sales Volume

The impact of diversification strategy on sales volume is significant. By offering a variety of products, companies can attract more customers and increase their sales volume. The addition of product variants also helps companies build stronger brands and increase customer loyalty. In the case of UD Kreasi Lutvi, the application of this strategy has resulted in a significant increase in sales volume.

Additional Analysis and Explanation

Diversification strategy is a crucial step in the context of increasingly sharp business competition. In the case of UD Kreasi Lutvi, the application of this strategy not only provides variations of products but also creates added value for consumers. Consumers tend to choose products that not only meet basic needs but also provide interesting innovations and variations.

The Role of Market Research in Diversification Strategy

Market research plays a crucial role in the development of a diversification strategy. By understanding the needs and preferences of consumers, companies can develop products that meet their needs and increase their sales volume. In the case of UD Kreasi Lutvi, market research played a crucial role in the development of their diversification strategy.

Conclusion

In conclusion, this study has shown that product diversification is not only a strategic choice but is also a necessity to survive and develop in competitive industries. By implementing the right strategy, as done by UD Kreasi Lutvi, SMEs can significantly increase competitiveness and sales volume. The study also highlights the importance of market research in the development of a diversification strategy.

Recommendations

Based on the findings of this study, the following recommendations are made:

  • SMEs should implement a diversification strategy to increase their competitiveness and sales volume.
  • Market research should be conducted to understand the needs and preferences of consumers.
  • Companies should develop products that meet the needs of consumers and increase their sales volume.

Limitations of the Study

This study has several limitations. The study was conducted in a single company, and the results may not be generalizable to other companies. Additionally, the study only analyzed the impact of diversification strategy on sales volume and did not consider other factors that may affect sales volume.

Future Research Directions

Future research should focus on the following areas:

  • The impact of diversification strategy on other performance metrics, such as profitability and market share.
  • The role of market research in the development of a diversification strategy.
  • The impact of diversification strategy on the competitiveness of SMEs in different industries.

References

  • [List of references cited in the study]

Appendix

  • [Appendix includes additional information, such as raw data, tables, and figures, that support the findings of the study]
    Frequently Asked Questions (FAQs) about Diversification Strategy Analysis

Q: What is diversification strategy?

A: Diversification strategy is a business strategy that involves expanding a company's product or service offerings to reduce dependence on a single market or product. This can help companies to increase their competitiveness, reduce risk, and improve their financial performance.

Q: Why is diversification strategy important for SMEs?

A: Diversification strategy is important for SMEs because it can help them to increase their competitiveness, reduce risk, and improve their financial performance. By offering a variety of products or services, SMEs can attract more customers, increase their sales volume, and build stronger brands.

Q: What are the benefits of diversification strategy?

A: The benefits of diversification strategy include:

  • Increased competitiveness
  • Reduced risk
  • Improved financial performance
  • Increased sales volume
  • Stronger brand building
  • Attracting more customers

Q: What are the types of diversification strategy?

A: There are several types of diversification strategy, including:

  • Concentric diversification strategy: This involves expanding a company's product or service offerings by adding new products or services that are related to its existing products or services.
  • Horizontal diversification strategy: This involves expanding a company's product or service offerings by adding new products or services that are unrelated to its existing products or services.
  • Vertical diversification strategy: This involves expanding a company's product or service offerings by adding new products or services that are related to its existing products or services, but at a different level of the value chain.

Q: How can SMEs implement a diversification strategy?

A: SMEs can implement a diversification strategy by:

  • Conducting market research to understand the needs and preferences of customers
  • Developing new products or services that meet the needs of customers
  • Expanding into new markets or geographic regions
  • Partnering with other companies to offer new products or services
  • Investing in new technologies or processes to improve efficiency and reduce costs

Q: What are the challenges of implementing a diversification strategy?

A: The challenges of implementing a diversification strategy include:

  • Managing risk and uncertainty
  • Allocating resources and budget
  • Coordinating and integrating new products or services
  • Managing cultural and organizational changes
  • Maintaining quality and consistency

Q: How can SMEs measure the success of a diversification strategy?

A: SMEs can measure the success of a diversification strategy by:

  • Tracking sales volume and revenue growth
  • Monitoring market share and competitiveness
  • Evaluating customer satisfaction and loyalty
  • Assessing the impact on profitability and financial performance
  • Conducting regular reviews and assessments to identify areas for improvement

Q: What are the future trends in diversification strategy?

A: The future trends in diversification strategy include:

  • Increased focus on digitalization and e-commerce
  • Growing importance of sustainability and social responsibility
  • Increased emphasis on innovation and R&D
  • Greater use of data analytics and artificial intelligence
  • Increased focus on global markets and international trade

Q: How can SMEs stay ahead of the competition in terms of diversification strategy?

A: SMEs can stay ahead of the competition in terms of diversification strategy by:

  • Staying up-to-date with the latest trends and developments in the industry
  • Conducting regular market research and analysis
  • Investing in new technologies and processes
  • Developing a strong and agile organizational culture
  • Fostering a culture of innovation and experimentation.