Vanilla Export
Destination Country Selection Strategy in an Effort to Optimize the
International Market (Case Study of CV. Tanda Sentra Indonesia)
Attaya Irhab Narendra1 , Didi Widia2
Universitas
Padjadjaran, Indonesia
attayanarendra17@gmail.com1, 14didi.widia@gmail.com2
|
Keywords |
Abstract |
|
Export,
Vanilla, SWOT Analysis, PESTEL Analysis |
Indonesia is the second largest producer of vanilla in the
world. This is because Indonesia produces quality and durable vanilla. The
subject of the case study and the main object of this research is CV Tanda
Sentra Indonesia, which is a company that produces dried vanilla and works
with local farmers under the guidance of the company. CV Tanda Sentra
Indonesia has exported to several countries, namely Italy, France and the UK.
However, the company still has obstacles in determining export destination
countries to be able to cover other countries. Therefore, this study aims to
(1) analyze vanilla export destination countries using the PESTEL method, (2)
conduct a SWOT analysis of related export destination countries, and (3)
identify export strategies in optimizing the vanilla market. The research
method used in this study is a qualitative method using PESTEL analysis. For
data collection techniques, descriptive methods were used and analyzed using
the PESTEL and SWOT methods. Then, weighting was carried out using the SWOT
matrix and IFAS and EFAS weighting. |
Corresponding Author : Attaya Irhab Narendra
E-mail: attayanarendra17@gmail.com
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 in-depth 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).
Figure 1 Total World Vanilla Production 2023
Source: World Population Review (2023)
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.
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 3 World Vanilla Market Conditions
Source: Mondor Intelligence
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.
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 South
Korean Vanilla Imports
Source: The Observatory of
Economic Complexity World
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.
Table 1 Export Potential of Germany, South Korea &
China
|
Country |
Export Potential |
|
German |
$7 mn |
|
South Korea |
$234 k |
|
China |
$205 k |
Source: Trade Map
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 in-depth
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.
RESEARCH METHODS
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.
2.
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
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.
Table 2
Political PESTEL Analysis
|
POLITICAL |
|||
|
German |
South Korea |
China |
|
|
Germany is a federated republic with a democratic basis.
This system has been well established with a transparent and fair election
mechanism. Germany, which is a member of the European Union,
has the IE-CEPA agreement which is an economic partnership agreement that is
being negotiated, with the aim of strengthening economic relations through
eliminating tariffs and increasing market access for goods and services from
both parties. During the leadership of Susilo Bambang Yudhoyono on
10 July 2012, it was agreed that cooperation that needed to be improved was
one of the documents, namely Economic Cooperation which included Trade and
Investment. |
The political system in South
Korea is a representative democratic republic with a presidential model. The
president acts as head of state, and the country implements a multi-party
system. Executive power is vested in the government, while legislative power
is under the National Assembly. Indonesia and Korea have signed
the IK-CEPA cooperation in the context of a free trade agreement in 2020,
which has been implemented since 2023. South Korea and Indonesia have
good relations starting from cooperation in terms of tourism, field study
visits, and exchange of educational information. |
China is a socialist republic run by only one party,
namely the Chinese Communist Party as China's supreme leader. China's political system is authoritarian, where
national leaders are not freely elected. ASEAN countries such as Indonesia have a Free Trade
Agreement regulated in ACFTA, namely the Asean China Free Trade Agreement China is one of the countries that has bilateral
relations with Indonesia which is based on mutual need between the two countries. |
|
Table 3
Economic PESTEL Analysis
|
ECONOMIC |
||
|
German |
South Korea |
China |
|
In 2022, Germany will be the second
largest destination for vanilla exports from Indonesia, reaching 8.62%. Germany is the world's 3rd largest
importer of vanilla commodities estimated at $73.7 million USD. The value of Germany's gross domestic
product (GDP) is $4,072 which places Germany as the country with the largest
gross domestic product value 5th in the world Germany's inflation rate in 2023 has
experienced decreased
and started to stabilize, dropping to 2.8%, which in 2022 saw German
inflation reach 6.9%. |
Korea in 2022 will do imported vanilla
commodities worth $3.15 million. This places South Korea as 20th country with
the value of vanilla imports in world. Indonesia is a supplier of vanilla second for South
Korea to achieve export
value of $520 thousand. The value of South Korea's gross domestic
product reaching
$1.665 trillion in 2022 which places South Korea as ranked 13th in terms
of domestic product value highest grosser in the world South
Korea will experience an increase in inflation in 2022 reaching 5.1% |
China will import vanilla in 2022 estimated at $1.02
million which makes China the importer 31st largest in the world. Indonesia is the
second exporting country for China with import value of $376 thousand. China is the second country in the
world with the largest gross domestic product value. The value of China's
gross domestic product is estimated touching $17.939 trillion in 2022. This
ranking has remained consistent since 2010. value in the same year in 2022 it will rise
to touch 2.0%
but in 2023 it will fall to 1.8% |
|
SOCIAL |
|||
|
German |
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 vanilla-flavored 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. |
|
Table 5
Technology PESTEL Analysis
|
TECHNOLOGICAL |
||
|
German |
South Korea |
China |
|
Digitalization and automation have been
carried out in the logistics sector of German companies, namely Siemens and Deutsche
Post (DHL ). This can increase the efficiency of sending vanilla products to
Germany which is supported by the Smart Logistics system. This technology
supports warehouse automation with autonomous vehicles to speed up
deliveries. The Fraunhofer Institute has used the
internet of things (IoT) as technology in the field of logistics. IoT for
logistics is useful for tracking goods deliveries in real time. This allows
temperature and humidity monitoring to be carried out to maintain the quality
of the vanilla during the shipping process. users in Germany reach 68% of the total
population. Estimated in
2024 according to usage in Germany it will reach 68 million users. |
Blockchain technology for supply chains
has utilized
in South Korea in the project carried out by Samsung SDS . Technology this can increase
security and transparency in the vanilla supply chain which can ensure data integrity from
producer to consumer. South Korea also utilizes integrated
logistics system technology created by LG CNS which can connect several modes
of transportation to increase distribution efficiency vanilla. The use of E-Commerce in South Korea
reaches figure
73% of the population. The number of E-Commerce users in South Korea reached
38 million users . |
A logistics company in China called Cainiao Network. This
technology utilizes AI to manage the system transportation improving vanilla
distribution efficiency, AI helps optimize delivery by finding delivery
routes best
with parameters such as conditions traffic, weather and distance. China National Research Institute of Food
and Fermentation
Industries applies technology innovative processing such as supercritical
extraction which
retains the natural taste and aroma of vanilla, improve product
quality and value. China is a country with a population The 2nd largest in
the world has E-Commerce users as much as 60% of the total population in
China which is controlled by Alibaba, JD.com, which will take advantage of
vanilla marketing. |
Table 6
Environmental PESTEL Analysis
|
ENVIRONMENT |
||
|
German |
South Korea |
China |
|
Germany has 4 different seasons, but Germany
does not have a tropical season which is not suitable for cultivating
vanilla. Germany has 4 different seasons, this climate influences vanilla
cultivation but has high potential for the very high value of German vanilla
imports at this time. There is a strong focus on sustainability
and organic products. Vanilla producers and suppliers who can ensure
sustainable farming practices and organic certification have a competitive
advantage. As a member of the European Union, Germany
follows the regulations Regulation (EU) 2018/848 establishes the basic rules
for the production, labeling and control of organic products in the European
Union, including Germany. |
It has a temperate climate with four seasons, with
hot, humid summers and cold winters. Vanilla cultivation is impossible in
South Korea, so the country relies on imports. South Korea has strict standards for food additives.
in the Food Additives Code Vanilla imports must comply with this regulation. Vanilla
products must be tested to ensure they do not contain additional ingredients
that exceed the specified limits. |
China has various climate zones from tropical to
subarctic. Although some southern regions may be suitable for vanilla
cultivation, most vanilla in China is imported. China has strict standards for food safety,
including strict controls on imported ingredients such as vanilla. Vanilla
producers must comply with these standards to enter the Chinese market. |
Table 7 Legal PESTEL Analysis
|
LAW |
||
|
German |
South Korea |
China |
|
Vanilla imported into Germany must
comply European
Union regulations known as Verordnung (EU) Nr. 1169/2011 concerning providing food
information to consumers. It includes strict standards regarding information that
must be included on the label product, such as composition, country of
origin, and organic certification if any. In accordance with Regulation (EC) No
396/2005, vanilla
must comply with maximum pesticide limits. The customs clearance process must
be completed by providing the necessary documentation, including
phytosanitary certificates and laboratory analysis reports, to ensure the
product is free
from pests and diseases. |
Vanilla imports to South Korea are regulated
by Special
Act on Imported Food Safety Management . This regulation
stipulates that all products Imported food must comply with Korean food
safety standards, which include provisions on additives, contamination
limits, and labeling requirements in Korean. Products must have a health
certificate and product analysis to ensure quality and safety. Customs
process involves
inspections to verify compliance to these regulations, including the accuracy
of the information products
on labels and packaging |
Vanilla imports into China are regulated
by GB 2763-2019, which sets maximum pesticide limits in food. Vanilla
must meet these standards and be accompanied by a phytosanitary certificate
and inspection health.
Product labels must be in Chinese and include ingredients and ingredients production date.
Customs processes include: strict inspections, quarantine, and duty payment entry and VAT around
13%. |
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.
From a
political perspective, Germany has advantages with a stable and well-established
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.
Table
8 Company Internal & External SWOT Analysis
|
Strengths |
Weakness |
Opportunities |
Threats |
|
The company
has strength in vanilla products which are sold in grade A and are vanilla
grown directly in Indonesia. Good use of websites and e-commerce for product
sales which can maximize potential buyers from abroad. Have an official business license from the Ministry of Trade. Has
packaging using plastic seals that can last a long time and maintain the
quality of the vanilla sold. |
Limited human resources within the company. Uncertainty in the number of buyers in a certain period. Doesn't have its own plantation yet and still depends on existing farmer
partners. Does not yet have a special organic certificate to export
to the United States. |
Germany is one of the countries with the largest demand for vanilla in
the world. The company once exported vanilla to European countries which had more or
less the same requirements as Germany. Vanilla prices in Europe are high and can be profitable. The government's awareness of the potential of governments in the world
can support trade agreements between countries . Vanilla products sold can be made into various
processed products such as fragrances, food, extracts and drinks. |
The vanilla sold will compete with Madagascar as the largest vanilla
exporter country in the world. The European Union has strong standards and regulations for products
imported from other countries. Germany has a long distance of up to 11 thousand km, this can be a
challenge for shipping to that country, and affects shipping costs Trends in German vanilla demand can change every year which can be seen
from the fluctuating demand for vanilla Product continuity must be maintained for continuous
delivery. |
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.
Table 9 SWOT Analysis of IFAS
Company
|
No |
Strengths (S) |
Weight |
Ratings |
Score Value |
|
||||||||
|
2 |
use of websites
and e-commerce for product sales which can maximize potential buyers from
abroad. |
0.2 |
4 |
0.8 |
|
||||||||
|
3 |
Have an
official business license from the Ministry of Trade. |
0.05 |
2 |
0.1 |
|
||||||||
|
4 |
It has
packaging using sealed plastic which can last a long time and maintain the
quality of the vanilla being sold |
0.08 |
3 |
0.24 |
|
||||||||
|
5 |
Consistency
of product quality and good product control from farmers. |
0.08 |
3 |
0.24 |
|
||||||||
|
Sub-Total |
0.51 |
|
1.68 |
|
|||||||||
|
No |
Weaknesses (W) |
Weight |
Ratings |
Score Value |
|
||||||||
|
1 |
Limited human
resources within the company. |
0.07 |
2 |
0.14 |
|
||||||||
|
2 |
Uncertainty
in the number of buyers in a certain period. |
0.1 |
3 |
0.3 |
|
||||||||
|
3 |
The company is
still just running so it is still in the developing company stage. |
0.08 |
3 |
0.24 |
|
||||||||
|
4 |
Doesn't have
its own plantation yet and still depends on existing farmer partners. |
0.15 |
3 |
0.45 |
|
||||||||
|
5 |
Does not yet
have a special organic certificate to export to the United States |
0.09 |
4 |
0.36 |
|
||||||||
|
Sub-Total |
0.49 |
|
1.49 |
||||||||||
|
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.
Table
10 EFAS Company SWOT Analysis
|
No |
Opportunities |
Weight |
Ratings |
Score Value |
|
||||
|
1 |
Germany is one of the countries
with the largest demand for vanilla in the world. |
0.08 |
3 |
0.24 |
|
||||
|
2 |
The company once exported vanilla
to European countries which had more or less the same requirements as
Germany. |
0.06 |
3 |
0.18 |
|
||||
|
3 |
Vanilla prices in Europe are high
and can be profitable. |
0.2 |
4 |
0.8 |
|
||||
|
4 |
The government's awareness of the
potential of governments in the world can support trade agreements between
countries. |
0.07 |
3 |
0.21 |
|
||||
|
5 |
Vanilla products sold can be made
into various processed products such as fragrances, food, extracts and
drinks. |
0.08 |
3 |
0.24 |
|
||||
|
Sub-Total |
0.49 |
|
1.67 |
|
|||||
|
No |
Threats (T) |
Weight |
Ratings |
Score Value |
|||||
|
1 |
The vanilla
sold will compete with Madagascar as the largest vanilla exporter in the
world. |
0.17 |
4 |
0.68 |
|||||
|
2 |
The European
Union has strong standards and regulations for products imported from other
countries. |
0.12 |
3 |
0.36 |
|||||
|
3 |
Germany has a
long distance of up to 11 thousand km, this can be a challenge for shipping
to that country, and affects shipping costs. |
0.05 |
2 |
0.1 |
|||||
|
4 |
Trends in
German vanilla demand can change every year which can be seen from the
fluctuating demand for vanilla. |
0.09 |
4 |
0.36 |
|||||
|
5 |
Product
continuity must be maintained for continuous delivery. |
0.08 |
4 |
0.32 |
|||||
|
Sub-Total |
0.51 |
|
1.82 |
|
|||||
|
Total (O+T) |
1.00 |
|
3.49 |
|
|||||
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.
Table 11 Internal - External
Matrix
|
Strong |
Average |
Weak |
|
|
|
II |
III |
Height |
|
|
V |
VI |
Medium |
|
VII |
VIII |
IX |
Low |
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.
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.
Table 12 SWOT Matrix
|
Internal External |
Strengths
(strength) 1.
The vanilla sold is grade A, original from Indonesia. 2.
Sales via Website and E-Commerce for international markets. 3.
Has a trade permit from the Ministry of Trade. 4.
Packaging uses durable plastic steel. 5.
Consistent quality with control to the farmers. |
Weakness 1.
HR is limited to internal companies 2.
The number of buyers is uncertain in a certain period 3.
The company is still growing 4.
Depends on farmers, does not have its own plantation 5.
Does not yet have an organic certificate to export to the US |
|
Opportunities
(opportunities) 1.
Vanilla demand is high in Germany 2.
Previously exported to Europe with conditions similar to Germany 3.
The price of German Vanilla is favorable 4.
The government supports international trade agreements 5.
Vanilla is processed into several types |
SO strategy 1.
Increasing competitiveness by highlighting the quality of Indonesian
vanilla 2.
Obtain additional certifications to increase trust and sustainability-conscious
consumers 3.
Promote trade products at international exhibitions to increase
visibility |
WO Strategy 1.
Build partnerships with stable companies and use training techniques to
improve human resources 2.
Developing organic vanilla or derivative products to meet German market
demand 3.
Improve production and marketing efficiency to attract and retain
customers. |
|
Threats 1.
Vanilla competes with Madagascar as the largest exporter 2.
The European Union has strong standardization and import regulations 3.
Germany distance 11,000 KM, delivery and cost challenges 4.
Demand for German vanilla fluctuates. 5.
Product continuity must be maintained for continuous delivery |
ST Strategy 1.
Increase competitiveness by highlighting the superior quality of
Indonesian vanilla 2.
Improve logistics and storage processes to maintain quality during
delivery. 3.
Adapting production to the latest standards and regulations to ensure
product suitability on the German market. |
WT Strategy 1.
Diversification of export markets other than Germany to reduce dependence
and increase sales stability. 2.
Invest in developing your own plantations or strengthen relationships
with farmers. 3.
Manage prices and quality effectively through innovation and pricing
strategies that suit market conditions. |
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 of e-commerce
technology for export, as well as legal support and good packaging. However,
companies still face limited 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.
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