Vanilla Export Destination Country Selection Strategy in an Effort to Optimize the International Market (Case Study of CV. Tanda Sentra Indonesia

Abstract


INTRODUCTION
Indonesia, which is known as an agricultural country, has great potential in the agricultural sector with the majority of its population involved in this activity according to researcher (Setiawan, 2023).This is supported by the vast agricultural area and diversity of natural resources, which provide great potential for agricultural development (Laurance et al., 2014).Agriculture not only plays a role as the main support in meeting food needs, but also has a significant impact in creating jobs, improving the standard of living of rural communities, and encouraging economic growth and trade through the export of agricultural products and the development of agribusiness (He et al., 2021).Thus, agriculture has a central role in the structure and development of Indonesia as an agricultural country (Anggraeni et al., 2020).
Based on data in 2020, the area of people's vanilla plantations reached 9,291 hectares with a production output of 1,412 tons, as reported by the Directorate General of Plantations (Sawlani & SE, 2021).This fact shows that Indonesia has quite large potential in the vanilla industry.With the high demand for vanilla in the international market, especially from countries such as the United States, South Korea and the Netherlands, there is a significant opportunity to increase vanilla exports from Indonesia (Pektas & Hassan, 2020).An indepth analysis of market trends, consumer demand, and marketing strategies will help determine which countries have the most potential as vanilla export destinations (Baumgartner & Steenkamp, 1996); (Moravcikova et al., 2017).In conclusion, vanilla has great export potential for Indonesia, and further efforts need to be made to exploit this opportunity optimally (Nurhakim & Satar, 2015).
Exports play an integral role in supporting a country's economic growth by making an important contribution to trade in goods and services according to researchers (Karuniawati et al., 2023).Income earned through exports, based on the difference between the value of exports and imports recorded in the trade balance, is an important marker of a country's economic health.Steady growth in the export sector is often a leading indicator of overall economic growth, reflecting a country's ability to compete and capitalize on global markets.
According to Anggraeni., et al. (2019), vanilla is an important part of the plantation subsector in Indonesia which is experiencing rapid growth and has great potential in trade from the agricultural sector (Anggraeni et al., 2020).However, this research shows that although vanilla exports do not have a significant impact on Indonesia's Gross Domestic Product (GDP).
One way to achieve optimal export growth is to adopt a strategy for selecting the right export destination countries, (Aji, 2023).This means choosing countries where domestic production is not enough to meet domestic consumption needs.By doing this, the exporting country can meet the needs or consumption shortages of the export destination country.In addition, countries in a region have the potential to carry out international trade to meet their respective domestic needs.Further advantages can be gained from geographical proximity, which can save time and costs in import-export activities.
Vanilla, as a plantation crop, is not only famous for its valuable fruit which provides a distinctive taste and aroma used in various products such as cakes, ice cream, milk, biscuits, candy, etc., but also because the oil extracted from its fruit has applications.extensive, including in the manufacture of perfume and cosmetics.The researchers highlight that the diversity of benefits of vanilla makes it a highly valuable commodity in the food and beauty industries, while its unique characteristics add to its appeal in the global market, offering significant opportunities for the development of innovative products and new markets (Kaur et al., 2020).According to data taken from the World Population Review, in 2023, Madagascar will remain the leader as the world's largest vanilla producer, producing more than 3 million tonnes of vanilla.This figure exceeds the production of the second ranked country, Indonesia, by more than double at 1.456 million tons.Apart from being a history maker in the vanilla industry, Madagascar marks its dominant role as a global vanilla production centre.Indonesia, Mexico, Papua New Guinea and China followed as the top five producers afterward, confirming that vanilla is not only an important commodity in international trade, but also highlighting the geographical diversity and contribution of various countries to this industry.In the global market panorama, Madagascar's resilience as an irreplaceable leader highlights the importance of stable supply in meeting the growing demand for vanilla worldwide.
Indonesia has emerged as one of the world's largest vanilla producers, second only to Madagascar.High-quality vanilla from Indonesia has a strong, long-lasting aroma, and with growing global demand, offers significant potential for Indonesia to surpass Madagascar in the vanilla industry.Thus, it is not impossible for Indonesia to find new export markets in an effort to optimize international markets.According to data quoted from Mondor Intelligence, the estimated Vanilla market size will reach USD 1.04 billion in 2024, with projections increasing to USD 1.54 billion in 2029, indicating an average annual growth CAGR (Compound Annual Growth Rate) of 8.13% during the forecast period (2024-2029).Vanilla is considered as one of the highly traded spices in the international market as it has many applications in the food industry and related sectors.The main contribution to the aroma, taste, and pleasant impression of vanilla is vanillin, an important compound found in vanilla beans.Essential vanilla is an important component in the production of various products such as ice cream, chocolate, bakery products, puddings, medicines, alcoholic drinks and perfume.With continued growth in demand for these products, vanilla market projections show significant growth potential in the next few years.According to Straits Research, China is one of the main consumers of vanilla in the Asia-Pacific region through its use in various products such as ice cream, chocolate, drinks and various other items containing vanilla.This large presence in the market indicates significant potential for growth in the vanilla market in the future projection period.Data from the UN Food and Agriculture Organization also reveals that China is not only one of the largest consumers, but also a significant producer of vanilla in the world.Thus, with the continued increase in demand from China, the market potential for vanilla looks very promising in the coming time.The value trend of South Korean vanilla imports is more stable than Germany and China.South Korea always experiences an increase in the value of vanilla imports every year, in 2019 the value of South Korean exports reached USD 2.64 million, which will increase over the next 4 years in 2023, which is estimated to reach USD 3.25 million.South Korea is currently the 20th largest importer of vanilla in the world.This shows that vanilla products from these countries are increasingly in demand in South Korea, illustrating the significant market growth potential for vanilla.
Then the last one is Germany, in 2022, Germany will become one of the largest importers of vanilla in the world with an import value reaching USD $73.7 million, placing it as the third largest importer of vanilla globally.The value of German imports experienced a decline in 2020 with a value of USD $55.7 million, down from 2019 which was estimated to reach USD $68.8 million.The table above shows the export potential of three countries, namely Germany, South Korea and China.Germany's export potential is recorded at USD $7 million, while South Korea has an export potential of USD $234 thousand, and China at USD $205 thousand.This data comes from Trade Map and shows that these three countries have significant export potential, although with different values.
Indonesia emerged as the largest exporting country with a significant contribution.Data shows that the value of vanilla imports from Indonesia experienced a large increase during this period.In conclusion, Indonesia has a dominant position as the main vanilla supplier to the market in South Korea, showing the importance of Indonesia's role in meeting demand for vanilla commodities in that country.
Even though Indonesia is still behind in the value of vanilla imports compared to several of its competitors such as Madagascar, Uganda, the Netherlands and Comoros, it still has promising potential to increase exports to Germany.This is due to the high demand for vanilla imports in Germany, which makes the country one of the largest importers of vanilla in the world, placing it in third place.Even though there is competition from other countries, Indonesia still has a big opportunity to expand its vanilla market share in Germany, considering the large demand from industry and consumers in that country.With the right marketing strategy and guaranteed vanilla quality, Indonesia can take advantage of this promising market to increase its export volume to Germany.
In this research, CV Tanda Sentra Indonesia is the subject of a case study and the main object of this research.This company has been established since 2022 and has been producing vanilla for several years previously in collaboration with farmers in several regions in Indonesia.CV Tanda Sentra Indonesia produces a type of dry vanilla which is the only product they have with HS Code 09051000 which is dry vanilla after drying and has been produced directly by the company's assisted farmers under the cooperative.Farmers' harvests are only exported to destination countries; companies do not sell their vanilla products domestically because interest in vanilla abroad is higher than domestically.
The products sold by the company are divided into several types of vanilla, namely planifolia, Tahitians and dried, which are spread across several areas where farmers produce them.The places of origin for vanilla are Lombok, Papua, Kalimantan and West Java.The company's vanilla production activities range from planting to the process of drying the vanilla to packing the product and making it ready for export to the destination country (Abreu-Runkel, 2020).The total production of vanilla ready for export has sufficient quantity and always maintains the authenticity of vanilla from Indonesia which has distinctive characteristics and a different fragrance from vanilla produced in other countries.
Optimizing the International Market is considered to be important because foreign countries' interest in genuine Indonesian vanilla is very high, which makes Indonesia the second world vanilla producing country after Madagascar and better known in the world.In an interview conducted with the owner of CV Tanda Sentra Indonesia, he said that currently the company has tried to market to several countries.The company has successfully exported to Italy, France, and England.The company's exports to this country are still in small quantities, not exceeding 300 kilograms or 300 kilograms is the amount of vanilla exported by the largest company.In the process of exporting to other countries, the company wants to try exporting to other destination countries, namely Germany, China and South Korea.
Companies have problems in determining destination countries for vanilla exports, which are still limited.According to the head of CV Tanda Sentra Indonesia, expanding the destination of vanilla exports can optimize vanilla products from Indonesia and can help farmers in terms of providing profits because the price of vanilla is considered quite high and has its own attraction in the international market.
The aim of this research is to analyse vanilla export destination countries using the PESTEL method, identifying and analyzing 3 countries, namely South Korea, China and Germany as potential vanilla exports in an effort to optimize the international trade market.Next, the research will conduct a SWOT analysis to analyze the company's strengths, weaknesses, opportunities and threats on the company's external and internal factors that influence international market optimization.Apart from that, the research will also identify the company's position through the quadrants on the SWOT diagram.
Previous research by Suparyana (2023) The results showed that the highest strength factors can minimize the weaknesses in the development of Coffee Vanilla Product business for Women Farmer Groups in the Forest Area of Senaru namely as Tourist Destination Areas.While the highest opportunity factor at external environment is urban lifestyle in consuming coffee.Business development in Coffee Vanilla Product for Women Farmer Groups in the Forest Area of Senaru in the cell V position.The hold and maintain strategy are the best strategy to used.In this area it is very suitable to use product development and market penetration strategies.
The benefits of this research include: for companies, research can provide an indepth understanding of the potential market for vanilla exports, help in planning effective export strategies, and provide insight into the preparatory steps that need to be taken.For students, this research can be a direct practical learning experience regarding the export of vanilla commodities, so that they can gain deeper insight into vanilla business practices in Indonesia and in other countries.Meanwhile, for the public, this research can provide a deeper view of the potential of agricultural businesses in Indonesia, especially in the context of the vanilla commodity which is one of the main export products, as well as provide inspiration for local business actors to get involved in the vanilla industry.Overall, it is hoped that this research can provide a better understanding of the destination countries for Indonesian vanilla exports, so that it can improve Indonesia's image as a quality vanilla producer on the international market.

Types of research
This research uses a qualitative research method using PESTEL analysis to collect external data on export destination countries and uses the SWOT method to collect internal company data.This approach is inductive, with theories and conclusions emerging from the data collected, resulting in deeper and more contextual insights into the issues investigated.

Research Objects and Locations
The research object aimed at in the research is CV Tanda Sentra Indonesia's obstacles to optimizing destination countries for the export market for vanilla products by analyzing the company's internal and external analysis and identifying export destination countries to get the right steps to optimize the export market.The location of the case study company in this research is CV Tanda Sentra Indonesia which is located on Jl.Pondok Kopi Raya IV, East Jakarta 13460 -Indonesia.

Data Collection Techniques
This research uses a descriptive method in collecting data that describes the object or subject studied objectively.Primary and secondary data are the sources of data taken from this research.The following is a description of Primary and Secondary data collection 1.Primary data Primary data collection will be taken using the interview method through Mr. Ari as the head of the company, CV Tanda Sentra Indonesia will be the interview subject in collecting this data, relating to goods production activities, product sales and management functions within the company.

Secondary Data
This research will be supported by secondary data collection from various relevant sources.Data will be obtained from journals that discuss the topic of vanilla exports as well as the conditions of potential countries as vanilla export destinations.Apart from that, data will also be taken from credible sources such as go4worldbusiness, Trade Map, and OEC Publications.To obtain information about imports, data will be taken from sources whose reliability has been tested in this field.

Data analysis technique
External data will be processed using the PESTEL analysis method, to determine the best export destination country strategy by considering several things in it.In PESTEL analysis there are 6 factors that support external analysis in PESTEL.This analysis step includes: a. Political Factors, discussing the policies of potential destination countries for vanilla exports and cooperation between countries regarding the export and import of vanilla commodities.b.Economic factors, including currency exchange rates in potential export countries, inflation trends in destination countries.c.Social Factors, including cultural trends in the destination country and their lifestyle, vanilla consumer preferences in the destination country, population age and structure in the destination country.d.Technological factors, including technology in transportation and logistics, information and communication to improve the marketing of vanilla from Indonesia, as well as technology related to packaging and processing of vanilla products.e. Environmental Factors (Environmental), discusses the country's climate conditions which influence the demand for vanilla in that country, the environmental regulations that exist in the destination country.f.Legal factors (Law) include import-export trade regulations, health regulations, taxation and regulations regarding restrictions on imported goods entering the country.
By conducting a PESTEL analysis, researchers will be able to identify and understand external factors that influence export destination decisions.In this way, we can see political stability, economic conditions, social factors, technological developments, environmental policies and legal aspects in various potential countries as export destinations.This analysis will provide in-depth insight into market conditions and the business environment in these countries, which will be the basis for determining optimal export destinations based on suitability to existing conditions.

RESULTS AND DISCUSSION PESTEL Analysis
PESTEL analysis is an analysis method used to understand the external environment.This analysis covers various factors that can influence the performance and strategy of vanilla export destinations, which are grouped into six categories: Political, Economic, Social, Technological, Environmental and Legal.The following is a description of the PESTEL analysis which compares three destination countries for vanilla exports from CV Tanda Sentra Indonesia, namely Germany, South Korea and China, through the following table.

South Korea China
Germany has a population of 82.3 people according to the Statistisches Bundesamt, through the same source it is also said that currently it reaches 82% of the total population in Germany.
Ice cream is a popular processed product in Germany.This shows that according to Growth From Knowledge vanilla flavored ice cream dominates the German market with a value of 30%.
According to Bold Data, in 2023 Germany will have 12,100 perfume companies in the world.This places Germany as the 4th producer of perfume products in the world.After France, England and Italy.
According to Kosis (Korean Statistics) , the population in Korea has reached 51.7 million people, of which 80% are adult consumers.
According to data from Statista , South Koreans love candy products with a market value of $1.1 billion, and vanilla is one of the favorite flavors.Apart from sweets, sweet cakes with vanilla flavor are also very popular.This popularity drives an increase in demand for vanilla every year making it an important ingredient in the country's sweet food industry.
China is the second ranked country in the world with a population of more than 1.4 million people, of which 70% are adults over 18 years old.
Chinese people love the vanillaflavored drink with a value of around $2.2 billion.Apart from that, Chinese people like drinks with vanilla flavor by 50% according to data taken by statistics.Drinks with vanilla aroma account for 20% compared to other flavors.
China's cosmetics market is worth $1.5 billion which is increasing by 12% annually.This is caused by Chinese people looking for beauty products that are environmentally friendly and contain natural extracts.Based on the PESTEL analysis that has been carried out, the destination country for vanilla exports is CV.Indonesian Central Signs are analyzed by comparing the political, economic, social, technological, environmental and legal factors of each country.This analysis makes it possible to understand the various dynamics and challenges that may be faced in each market.By using the PESTEL framework, we can draw more comprehensive and strategic conclusions regarding the choice of export destination countries that are most suitable for CV vanilla.Indonesian Central Sign.

Environmental PESTEL Analysis
From a political perspective, Germany has advantages with a stable and wellestablished democratic system and strong trade relations with Indonesia through the IE-CEPA economic partnership agreement.On the other hand, even though South Korea also has a democratic system, its trade relations with Indonesia through IK-CEPA are still in the early stages of implementation and are not a comprehensive agreement with the European Union.On the other hand, China with its authoritarian political system shows potential risks due to higher policy uncertainty, even though it has good bilateral relations with Indonesia through ACFTA.
Economically, Germany is the third largest vanilla importer in the world with a stable market and strong purchasing power, reflected in a GDP of 4,072 trillion USD.This shows that the German market is more capable and ready to absorb large quantities of vanilla products compared to South Korea, which is ranked 20th in vanilla importers and has a lower GDP of 1,665 trillion USD (Demaria, 2020).China, despite having a very large GDP reaching 17,939 trillion USD, is only ranked 31st in vanilla importers, indicating that market demand for vanilla in China is still limited.
In the social aspect, vanilla has quite a lot of uses as an ingredient in processed food and drinks in Germany.Germany has more than 12 thousand perfume companies which use vanilla as their perfume extract.South Korea and China have their own preferences for vanilla processing but the scale is still not as big as Germany.Both countries use vanilla to make vanilla extract which is used to flavour food.China has significant consumption of vanilla-flavoured beverages and cosmetic products, but this market is still developing and not yet as high as in Germany.
These three countries have technological strengths in transportation and logistics services.Germany is present in leveraging digitalization and automation from large companies Siemens and DHL, IoT technology for logistics enables real-time tracking, ensuring the quality of vanilla is maintained during delivery.South Korea uses blockchain technology for supply chain security.Meanwhile, China uses AI in the logistics system by Cainiao Network to optimize delivery routes (Min, 2019).However, the implementation of German technology is more integrated and advanced, providing additional advantages in delivery efficiency.
Germany, South Korea and China do not have a suitable climate for cultivating vanilla.This is judged by the season in that country.China is the only one of the 3 countries that can cultivate vanilla but only in the south (Lubinsky et al., 2018).Germany's unsuitable climate will continue to encourage the country to import agricultural commodities, including vanilla.
Germany has strict but stable regulations regarding product information standards, pesticides and organic certification.Germany, which is a country that is part of the European Union, has import regulations that are similar to other European countries (Köthke, 2020).This regulation can be a consideration because CV.Tanda Sentra Indonesia has sent their vanilla products to countries in Europe.This is different from South Korea and China which have strict regulations and language limitations.South Korea and China have document requirements in the language they use.
Overall, Germany offers a combination of political stability, economic strength, high market demand, advanced technological support, a focus on sustainability, and clear and stable regulations.These factors make Germany superior to South Korea and China as the main destination for vanilla exports from Indonesia.

SWOT analysis
The SWOT analysis in this research identifies the internal strengths and weaknesses of the company.Opportunities and Threats uses analysis that occurs in Germany as a destination country for vanilla exports which is described in the following table.

IFAS (Internal Factor Analysis Summary) and EFAS (External Factor Analysis Summar ) matrices
The weight and rating calculations are adjusted to information obtained from interviews with several related business actors.The following is a table of the results of calculating weights, ratings and score values for the IFAS and EFAS matrices.Total (S+W) 1.00 3.17 In the table above, the strength factor has a score of 1.68.Meanwhile, the weakness factor has a score of 1.49.This shows the meaning that CV Tanda Sentra Indonesia has better strengths than weaknesses in determining the strategy for developing the quality of the vanilla product itself.The most dominant factor is the use of websites and e-commerce at 0.80.This shows that the importance of a website in the form of a landing page is very important to attract potential buyers from abroad.Because the use of websites in export and import trade greatly influences the attraction for potential buyers from different countries.Meanwhile, the most dominant weakness factor is plantation ownership that is not owned by CV Tanda Sentra Indonesia itself, which causes the costs required for vanilla production.In the EFAS matrix table above, it shows that the opportunity factor has a score of 1.67, while the threat factor has a higher point with a score of 1.82.This states that the company has greater threats than the opportunities themselves.There are huge challenges from foreign competitors facing Madagascar as the main competitor in vanilla exports.The highest opportunity factor with a score of 0.80 obtained from a good vanilla price causes the margin obtained to be greater.Meanwhile, the biggest threat factor is Madagascar as Indonesia's main competitor for exporting vanilla commodities.This is because Madagascar has good geographical and climatic conditions.This is supported by the threat that vanilla is a commodity that requires good storage quality so that the quality of the vanilla is maintained.Good storage quality is also needed considering the fluctuating demand for vanilla commodities which means that the continuity of vanilla production is maintained.The analysis results from the IFAS matrix were obtained at 3.17 and the results from the EFAS matrix were 3.49.The meeting point from the IFAS and EFAS matrix analysis results shows that this point is in cell I position.In cell me (growth) it shows the meaning that the company is in a strong position with high strengths and opportunities.Where in this cell, according to theory, the organization requires a grow and build strategy as its main strategy.Under these conditions, companies must utilize internal strengths to maximize external opportunities.

SWOT Matrix Analysis
The SWOT matrix functions as a tool for developing company strategy.Through this matrix, companies can clearly recognize opportunities and threats from the external environment and adapt them to their internal strengths and weaknesses (Laurance et al., 2014).This matrix allows company leaders to formulate four potential strategic options that can be implemented in the face of increasingly intense competition.Based on the analysis of the SWOT matrix table above, the company's market optimization strategy for Germany can be identified which will be used to support the company's strategy to expand the marketing of their vanilla products.

CONCLUSION
PESTEL analysis revealed that Germany emerged as the main destination for CV vanilla exports.Indonesian Central Signs compared with South Korea and China.Germany offers political stability with an established democratic system, economic strength with high purchasing power as the world's third largest importer of vanilla, as well as strong market demand for vanilla products in both the food, beverage and perfume industries.Advanced logistics technology support, focus on sustainability, and strict but stable regulations also provide additional advantages.The combination of these factors makes Germany superior in absorbing and developing the vanilla market compared to South Korea and China, which, although they have potential, still face challenges in trade relations, purchasing power and market demand that is not as strong as Germany.
SWOT analysis shows that CV.Tanda Sentra Indonesia has strengths in the high quality of vanilla products and the use e-commerce technology for export, as well as legal support and good packaging.However, companies still face human resources, uncertainty about the number of buyers, and dependence on farmer partners.Significant opportunities include the large potential market for vanilla in Germany and government support for international trade.On the other hand, threats include intense competition with other vanilla producing countries, strict regulations from the European Union, and logistical challenges due to long shipping distances and fluctuating market demand in Germany.The results of the analysis show that the company is in quadrant I (growth) on the Ifas & Efas diagram.This shows that the company is in a strong position with high strengths and opportunities.In this quadrant, the company must implement a "grow and build" strategy as its main strategy, namely by utilizing internal strengths to maximize external opportunities.

Figure 1
Figure 1 Total World Vanilla Production 2023 Source: World Population Review (2023)

Figure 2
Figure 2 Indonesian Vanilla Export Value Source: The Observatory of Economic Complexity World According to data published by The Observatory of Economic Complexity World, from 2019 to 2023 shows that the value of Indonesian vanilla exports is fluctuating.In 2019, Indonesia's export value reached USD 32.5 million.From 2020 to 2021, the value of Indonesia's exports decreased due to the impact of the Covid-19 pandemic with a value of USD 30.1 million in 2021 and USD 24.8 million in 2022.In 2022 the value of Indonesian vanilla exports increased with a total value of USD 28.7 million, in 2023 at an estimated value of USD 26.3 million.In the last 5 years, vanilla in Indonesia has been exported to several countries such as the United States, Germany, South Korea and China.

Figure
Figure 1Chinese Vanilla Imports Source: The Observatory of Economic Complexity World China's import value fluctuates in the 2019-2023 period.In 2021 & 2023, the value of Chinese imports is estimated to reach USD 2.5 million, which is the largest value in the last 5 years.In 2019 the export value touched USD 1.5 million, 1.7 in 2020 and a significant decline in 2022, namely USD 1.02 million.Chinese imports come from several countries, namely Madagascar, Indonesia and France as vanilla exporters for China.According to Straits Research, China is one of the main consumers of vanilla in the Asia-Pacific region through its use in various products such as ice cream, chocolate, drinks and various other items containing vanilla.This large presence in the market indicates significant potential for growth in the vanilla market in the future projection period.Data from the UN Food and Agriculture Organization also reveals that China is not only one of the largest consumers, but also a significant producer of vanilla in the world.Thus, with the continued increase in demand from China, the market potential for vanilla looks very promising in the coming time.

Figure 5
Figure 5 South Korean Vanilla Imports Source: The Observatory of Economic Complexity World