Growing SMEs: A SWOT Analysis on Fish Processing Industry

Renny Dwijayanti and Novi Marlena

Universitas Negeri Surabaya

Keywords: SMEs, SWOT Analysis, fish processing industry.

Abstract: Small and medium enterprises have an important role in Indonesian's economy. Based on data from 2010-

2015, the number of SMEs in Indonesia grow from various business sectors. One of the sub-sectors in small

medium enterprises is fisheries sector, this sector has an important role in the nutritional contributor of

Indonesian society. The research object is small industry of fish processing in Sidoarjo. The research is

descriptive qualitative research. Data source used is primary data and secondary data. Data collection

techniques using structured interview techniques. The results of this study indicate that there are still threats

from substitute products. To improve the performance of SMEs fish processing in Sidoarjo then needed

differentiation strategy in terms of product line extension, and product quality control.

1 INTRODUCTION

Indonesia as a country that has a densely population,

at least able to push the Indonesian economy quickly,

coupled with its abundant natural resources and

waters are much stretched. When compared to the

land area and the ocean, the ocean in Indonesia has a

greater dominance that reaches 62 percent of the total

area of Indonesia while the land area is only 38

percent of the total area of Indonesia, with the

condition Indonesia is known as Maritime Country.

The potential of Indonesian's marine and coastal

resources is big. Marine fishery sub-sector that gives

big contribution to fishery sector added value, such as

donated by the role of aquaculture and marine fishery

products are processed well, modern and traditional

by society (BPS Sidoarjo, 2015).

Fish processing activities in Indonesia are still

classified as traditional fish processing and carried

out on the scale of the home industry (Heruwati,

2002). However, the development of small or

medium enterprises is currently a concern, because

the economic crisis that hit Indonesia has raised hopes

on micro-small enterprises to become a motor

economy (Widyaningrum, 2003). Same as Glendoh

(2001) that small businesses are able to absorb labor,

produce products at affordable prices for the needs of

the low-income people.

The condition of SME’s in general in East Java

shows that every year SME’s products in East Java

experience growth and development both on the type,

design and raw materials, created from the creativity

and innovation of business actors in East Java

(http://www.jatimprov.go.id). Fish that is a food

source of this protein turned out to have a weakness

that can not last long. These commodities are rapidly

damaged and thus require further processing, many

fish processing activities can be done in various ways,

such as making fish abon, canned fish manufacturing,

salted fish production, smoke fish making, and so on.

For that existence of fishery industry is needed, so

fish become a product ready to be consumed by

society. One of SMEs from various business that exist

in Sidoarjo is SMEs that move on smoke bandeng

business. Sidoarjo is very famous for its special food

called bandeng asap. The market demand for

processed bandeng is quite high. This can be seen

from the production capacity of processed milkfish

per year in Sidoarjo which reached 2,248.896 tons

(http://travel.kompas.com).

Strategies to achieve high sales results must be

taken by the processors smoke bandeng, in order to

win competitiveness among them. Marketing strategy

is a fundamental tool that is planned to achieve the

company's goals by developing sustainable

competitive advantage through entering markets and

marketing programs used to serve the target market.

This study examines the systematic factors of

strength, weakness, opportunities, and threats on

bandeng processing unit conducted to know and

Dwijayanti, R. and Marlena, N.

Growing SMEs: A SWOT Analysis on Fish Processing Industry.

In Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship (ICEEE 2017), pages 573-576

ISBN: 978-989-758-308-7

573

provide a strategy to develop bandeng processing as

one of the traditional processed marine fishery

products from Sidoarjo to keep developing.

Identification of these external and internal factors

will in the future facilitate for the preparation of

decision-making for the planning of business

development strategy of bandeng processing.

The analysis used to determine fishery product

development strategy in Sidoarjo is a SWOT analysis.

According to Rangkuti (2009), SWOT analysis is a

useful analysis to obtain the right strategy

formulation, and adjusted to the condition and

potential of the region. The SWOT analysis is used to

identify and evaluate internal and external factors,

based on logic to maximize strengths and

opportunities, while simultaneously minimizing

Weaknesses and threats.

SWOT analysis is used to evaluate opportunities

and challenges in the agribusiness environment. To

facilitate in conducting swot analysis SWOT matrix

is required. Swot matrix will make it easier to

formulate strategies that need or should be executed.

By way of grouping each SWOT element problem

into the table (Kuncoro, 2006)

SWOT analysis is conducted to identify various

factors systematically to formulate a business

strategy. Where strategic planning of a business must

analyze the strategic factors (strengths, weaknesses,

opportunities, and threats) conditions that exist at this

time. This research step will explain how the analysis

is done from the raw data that exist until the research

results achieved.

2 METHODS

The research was conducted from December 2016

until February 2017 located in Penatarsewu Village,

Tanggulangin, Sidoarjo.

The study was conducted through 3 stages; 1) data

collection phase, 2) data analysis phase, and 3) the

stage of preparation and decision making business

development strategy. Stages of this study as a whole

refers to the observations made in the bandeng

processing business unit.

The primary data collection on the strength,

weakness, opportunity, and threat factors of smoked

fish processing is done through observation. The

collection of internal and external data contained in

the curing unit was conducted by a semi-structured

interview (depth interview) to the key person guided

by the questionnaire. Furthermore, the data obtained

will be grouped based on the factors of strength,

weakness, opportunities, and threats. Internal data

that can be a strength and weakness of business,

While external data that can be an opportunity and

business threats.

In this research, the steps of data analysis are done

as follows: (1) Conducting data classification, that

factors become strength and weakness as internal

factor of organization, opportunity and threat as

external factor of organization. This classification

will generate a SWOT information table. (2)

Conducting SWOT analysis that is comparing

between external factors of opportunity and threat

with internal factor of organization strength and

weakness. (3) The results of the analysis are then

interpreted and developed into a strategy selection

decision that allows to be implemented. The chosen

strategy is usually the most likely (most positive)

outcome with the least risk and threat.

Decision making for the formulation of fisheries

product development strategy using IFAS and EFAS

matrix, the matrix yield four alternative strategic

possibilities, such as:

 SO Strategy (Strength - Opportunities)

This strategy is a combination of strength and

opportunity, by utilizing all the power to seize

and take advantage of opportunities. This

strategy is also called aggressive strategy.

 ST Strategy (Strength - Threats)

Strategies that optimally use internal strengths

to face challenges or weaknesses. This strategy

is called a diversification strategy.

 WO Strategy (Weakness - Opportunism)

A combined strategy of weaknesses and

opportunities that seek to minimize internal

weaknesses to take advantage of opportunities.

This strategy is called turnaround strategy.

 WT Strategy (Weakness - Threats)

Combine strategies between weaknesses and

unfavorable threats and try to minimize internal

weaknesses and avoid threats. This strategy is

also called defensive strategy. (Hunger &

Thomas, 2013)

ICEEE 2017 - 2nd International Conference on Economic Education and Entrepreneurship

574

Table 1: Diagram matrix SWOT.

Internal

Factor

(IFAS)

Strengths (S)

Internal Strength Factors

Weakness (W)

Internal Strength Factors

External Factor

(EFAS)

Opportunities (O)

External Opportunities Factors

SO Strategy

Creating strategies that use force

to take advantage of opportunities

WO Strategy

Creating strategies that minimize

weaknesses to take advantage of

opportunities

Treaths (T)

External Threat Factors

ST Strategy

Creating strategies that use force

to overcome threats

WT Strategy

Creating strategies that minimize

weaknesses that avoid threats

Source: Hunger & Thomas, 2013

3 RESULTS AND DISCUSSION

The development of fish processing essentially leads

to optimal and rational utilization of fish resources for

the welfare of the community in general and

fishermen in particular, without causing damage to

the fish resources themselves and the environment

(Rosalina, 2011). Fishery potential as the main raw

material provider for fishery product processing

business in Sidoarjo is very big, it is seen in the

selection of strategy for the development of fishery

product processing in Sidoarjo which emphasizes on

the improvement of quality or quality and

diversification of fishery products according to

market demand. Here is an explanation of the

strengths, weaknesses, opportunities, and threats that

arise in the smoke fish processing industry.

Table 2: Diagram matrix SWOT.

Factor

Internal

(IFAS)

Strengths (S)

Internal strength factor

1. Availability of quality raw

materials.

2. Potential fish processing business

scale of house hold

3. Basic knowledge of traditional

fish processing

4. Support from local communities

and government (community

acceptance)

Weakness (W)

Internal weakness factor

1. Have not utilized the entire

coastal potential

2. The level of education and skills

are still relatively low

3. Community capital is still low

4. Lack of fishery processing

facilities,

5. Unprocessed product marketing,

especially in areas far from

market

Factor

External

(EFAS)

1. Opportunities (O)

External opportunity factors

1. The existence of

transportation support

2. Employment

3. Cooperation with other

parties

4. The development of fishery

processing technology.

5. Government's assistance and

support to the development of

fishery products processing.

SO Strategy

1. Utilizing the potential of fisheries

and technological developments,

to produce quality products and

quality.

2. Diversification of processed

products of fishery products

3. Building partnerships and

business networks in the

framework of developing fishery

products processing business

4. Increasing human resources of

business actors

WO Strategy

1. Development of processing

infrastructure and marketing of

fishery products.

2. Increasing the role of regional

governments in product

development and marketing of

fishery products.

3. Building partnerships with

private parties facilitated by local

governments.

1. Treaths (T)

External threat factors

1. Pressure on resources and

environment due to activities

Strategy ST

1. Development of government

institutions (fisheries), such as

building cooperation in promotion.

WT Strategy

Community empowerment through

the improvement of human resources,

Growing SMEs: A SWOT Analysis on Fish Processing Industry

575

that are not environmentally

friendly utilization.

2. Competition in the processing

of fishery products from other

regencies / cities.

3. Competitors substitute

products.

2. Community development for the

protection of fishery product

processing business development

3. Optimizing the utilization of local

resources

diversification of products and the

creation of a healthy and good market

Table 2 shows some alternative strategies that can

be applied in the processing of fishery products in

Sidoarjo regency. The strategy provides an outcome

that will benefit all parties, especially actors of

fisheries processing.

From these results can be concluded the strategy

of SMEs fish processing in Sidoarjo is the SO strategy

(strength-Opportunities) by utilizing the power to

seize opportunities, the description of the SO strategy,

among others:

 Smoked fish as a result of local fisheries

requires partnership and the role of local

government to provide supporting facilities and

infrastructures as well as business capital for

business development.

 Increasing and improving the quality of

traditional processing of smoked fish will create

products that can compete with other processed

products.

 Creating diversification of other processed

milkfish products

4 CONCLUSIONS

Based on the results of SWOT analysis, the first

strategy must be run is to empower the community,

through the improvement of human resources by

providing training, coaching and apprenticeship to

fisheries companies, so as to obtain high value-added

products, and establish healthy marketing institutions

so that the processed products are able to reach all

Destination area.

Conservation of fishery processing is important in

order to maintain local character of the area to remain

and grow.

REFERENCES

Badan Pusat Statistik Sidoarjo. 2015. Data Geografis,

Penduduk, Pertanian, dan Industri. Sidoarjo: Pusat

Data Statistik dan Informasi Kabupaten Sidoarjo.

Glendoh, S.H., 2001. Pembinaan dan Pengembangan Usaha

Kecil. J. Manajemen & Kewirausahaan 3: 1 – 13.

Herawati, E. S., 2002. Pengolahan Ikan Secara Tradisional:

Prospek dan Peluang Pengembangan. Jurnal Litbang

Pertanian 21(3): 92-99

Hunger, D., Thomas. 2003. Manajemen Strategik.

Yogyakarta: Andi

http://www.jatimprov.go.id

http://travel.kompas.com

Rangkuti, F., 2006. Analisis SWOT Teknik Membedah

Kasus Bisnis. Jakarta: PT Gramedia Pustaka Utama

Widyaningrum N. 2003. Eksploitasi terhadap Pengusaha

Kecil Melalui Rantai Hulu Hilir. J. Analisis Sosial 8: 1-

28.

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