Factors that Influencing the Profit of Furniture Industry

Tia Farida Sayidati

and Ikaputera Waspada

Universitas Pendidikan Indonesia, Setiabudhi 229 street, Bandung, Indonesia

tiafarida9234@gmail.com

Keywords: Competition, Managerial Competence, Profit.

Abstract: This research is motivated by the decline in profit growth in the wood furniture industry in Bandung. As this

study is intended to determine the factors that influence it, including the variables of competition and

managerial competencies. Subjects in this research were businessmen in the furniture industry Malabar and

Cicaheum in Bandung. The method used in this research is explanatory survey. The population at the same

time a sample is whole furniture producers in Malabar and Cicaheum Bandung, which amounted to 33

people. Data collected by distributing questionnaires to the respondents. Data were analyzed using multiple

linear regression. The results showed that competition and managerial competencies positive effect on

earnings. This means that if competition and managerial competencies furniture producer’s increases,

predicted profit will rise. Simultaneously, competition and managerial competence significant effect on

profit of 80.33%.

1 INTRODUCTION

The economy is an essential field in a country's life.

Small businesses have characteristics that imply

potential weaknesses to the occurrence of problems.

The weakness of small businesses according to

Anoraga's banner is that initial investment may

suffer losses. Some risks beyond the control of the

entrepreneur, such as changes in fashion,

government regulations, competition and labor

issues can hamper business. Some businesses or

businesses also tend to generate irregular income so

the owner may not make a profit. Initial investments

may suffer losses, this is because small businesses

have limited capital making it difficult to reduce

costs to efficient points, and if entrepreneurs are

unaware of changes in existing modes they can lead

to potential future problems such as loss of

customers, entrepreneurs are required to know The

development of fashion that occurs in the

community so as not to be abandoned by the

consumers, as well as the competition which

inevitably must be faced by entrepreneurs so that

their business can survive among rival entrepreneurs

and to overcome the competition in addition to

having a competitive strategy entrepreneurs must

also have the ability to manage the company called

competence Managerial is the way a businessman

who doubles as well as managers in achieving the

goals set. Based on the explanation of researchers

doing research on furniture entrepreneurs in the city

of Bandung, which experienced a significant decline

in profit of the entrepreneurs Malabar and Caheum

furniture in the city of Bandung.

Furniture is a home supply that includes all items

such as chairs, tables and cabinets. Furniture is

derived from the word movable which means to

move, furniture usually made of wood, board, rattan,

iron and plastic. Based on the data obtained, it can

be seen that the problems faced in the furniture

industry center of Bandung is the decrease of

production and the number of sales which then

affects the decrease in profit earned by the

entrepreneur. Profit is one of the goals of a company

that can be a benchmark for business development.

Then all the activities of the company will lead to

the achievement of the company's goals. Managerial

competence is manifested in the ability of

entrepreneurs in making decisions, both in

determining the amount of working capital to be

used, labor to be used, the amount of output of

production and in pricing.

In addition to managerial skills, one factor that

can affect the high low earnings is competition. As

Porter discloses in Anoraga banner (2009: 340) that

competition is central to the success and failure of

736

Sayidati, T. and Waspada, I.

Factors that Inﬂuencing the Proﬁt of Furniture Industry .

In Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship (ICEEE 2017), pages 736-739

ISBN: 978-989-758-308-7

the company. This affects the company's ability to

earn profits, so that in increasing the profit, the

entrepreneur certainly will not be separated from the

competition that will ultimately determine whether

his business will succeed in increasing profits or

even decreased in the face of competition and

increasingly stringent industry challenges.

According to Porter in Anorga Pandji (2009: 341)

argued that keen competition is the result of a

number of interacting structural factors, namely:

Number of competitors that are large or balanced,

sluggish industry growth, cost & Fixed or high

storage costs, lack of differentiation or switching

costs, large capacity increases, multiple competitors,

large strategic bets, and high resignation barriers. So

in the face of competition, companies need the right

competitive strategy in order to maintain the

sustainability of their business, increase profits and

gain competitive advantage. Then it can be

concluded that the competition has a two-way

influence on profit means that competition can give

a positive influence and negative influence.

2 LITERATURE REVIEW

According to Adam Smith in pressman (2000: 34)

explained To generate more profits earned by

employers depends on the circumstances of the

market where the company is located. The market

structure in the furniture industry under study is a

monopolistic market, as explained by Edward E.

Chamberlin and Joan Robinson in Tati Suhartati

(2012: 193) in which the characteristics are: 1).

There are many sellers, 2). The goods are different

in style, 3). Companies have little power to influence

prices, 4), entry in industry is relatively easy, 5).

Competition promotes very active sales.

Statement proposed by Chamberlin is supported

by Case & Fair (2002: 59) who argued that, "the

behavior of companies that want to achieve

maximum profit depends on the characteristics of

the market where the company is competing" and

that every company that wants to maximize profit

depends on its management internally in relation to

companies Competitors.

According to Case and Fair (2002: 372), in

monopolistic competition market, competition can

be done through: 1) Price, because the price set by

the company will affect the amount of sales and the

amount of profit to be received by the company. 2)

The product, if the entrepreneur can differentiate his

product from all other competitors, the entrepreneur

may be able to raise the price without losing all his

requests. 3) Promotion. With the holding of a

vigorous promotion, it is expected that consumers

will be interested to become customers.

3 METHODS

The object of this research is competition and

managerial competence as independent variable and

profit as dependent variable or (Y), while subject in

this research is furniture industry entrepreneur

Malabar and Cicaheum in Bandung city. The

method used in this research is explanatory survey.

Population in this penelitin is all furniture

entrepreneurs who are in Kosambi Jl. Malabar and

Caheum Jl. A. H. Nasution Bandung, which

amounted to 33 entrepreneurs. Related to the sample

of this study, it is known that the furniture industry

business is located. In Bandung there are in two

points namely Kosambi and Cicaheum. Samples of

research all furniture industry entrepreneurs who are

in two points in Bandung city based on the results of

the study amounted to 33 entrepreneurs. In this study

data collection is done by using the instrument in the

form of questionnaire or questionnaire, therefore

tested the validity and reliability of the instrument of

this study so that the results of research is not biased

and doubtfulness. With multiple regression analysis.

According to Yana Rohmana (2013, pp. 59), the

model of multiple linear regression equations, as

follows:

Where:

Y : Profit

βο : Regression Constant

β1 : Regression Coefficient X1

β2 : Regression Coefficient X2

X1 : Competition

X2 : Managerial Competence

e : Anxiety Factor

4 RESULTS AND DISCUSSION

The data analyzed is data collected from the research

results, then will be tested through Eviews 6. Data

processing is done by statistical method by using

multiple linear regression model because the

independent variable in this research more than one.

Data obtained on an ordinal scale should be

converted into an interval scale using MSI (Methode

Succesive Interval) as it is a requirement of the use

of regression analysis. In this study the authors take

Factors that Inﬂuencing the Proﬁt of Furniture Industry

737

the research model with the population as well as 33

respondents. From the results of data processing, it

can be concluded that the model of multiple linear

regression equation in this study are:

Y = -5.307046034568 + 0.597619485386*LNX1 +

0.553829435575*LNX2

Se = (2.543991) (0.122909) (0.053578)

Tcount = (-2.086110)(4.862275) (10.33696)

From the equation above can be known the

meaning of each regression coefficient as follows:

The regression equation constant is -

5.307046034568, meaning that if there is no

independent variable (X), then the success of

business obtained by furniture industry

entrepreneurs in the city of Bandung will be loss of -

5.307046 million rupiah. The amount of regression

coefficient for competition is 597619485386,

meaning that when the competition increases by one

unit of competition, the profit of furniture industry

entrepreneurs will increase by 0.597619 million

rupiah. The amount of regression coefficient for

managerial competence is 0.553829435575,

meaning that when managerial competence increases

on average by one unit of managerial ability, then

the furniture industry profession will increase by

0.553829 million rupiah.

T test is used to determine the influence of each

independent variable (ie Competition and

managerial competency to dependent variable

(profit) (Y). The criterion for t test is if t arithmetic

& lt; T table then Ho accepted and Ha rejected,

otherwise if t arithmetic & gt; T table then Ho is

rejected and Ha accepted.

Table 1: Result T Test.

Vari

able

count

table

Decision Conclusion

X1 4.86 1.697 H

acce

t Si

nificant

X2 10.37 1.697 H

accept Significant

Hypothesis testing through this test, the error rate

used by the writer is 5% or 0.05 at 95% significance

level with df = nk-1 (33-3-1) = 96. The t test results

in with Using Eviews 6 of each independent variable

is as follows: Variable competition obtained t

count

equal to 4.862275 while t

table

equal to 1.697, in other

words Ha accepted and H0 rejected, this means that

the competition variable influence influence the

positive direction of profit. Variable managerial

competence obtained tcount equal to 10.33699 while

ttable equal to 1.697, in other words Ha accepted

and H0 rejected, this means that the variables of

managerial competence influence the positive

direction of profit.

4.1 The Effect of Managerial

Competence on Profit

Result of data analysis of research and hypothesis

test known that managerial competence variable

significantly influence to profit of furniture industry

entrepreneurs in Bandung and have positive relation

to earnings of entrepreneur. This means that the

higher the managerial competence of industrial

entrepreneurs mebeul in Bandung, the profits will be

greater and vice versa, if the managerial competence

of the entrepreneur is low, then the profits earned by

employers will decline. This is evidenced by a larger

thitung compared to ttable. The acceptance of the

hypothesis stating that the variables of managerial

ability significantly influence the positive direction

to profit entrepreneurs mebeul in Bandung shows the

suitability between the theoretical basis with the

results of research.

Anoraga banner (2009: 125) suggests that

managerial competence is the ability to use

knowledge, behavior and talents to complete a task.

Skills are learned and developed through experience,

training and practice. This value in management is

crucial because the value is so related to all the

principal activities of leading from an organization

concerned. Pandji Anoraga's statement reveals that

the managerial competence of a corporate leader will

realize the success that is the goal of the company

itself. Good managerial skills will increase profits.

The statement was supported by Sadono Sukirno

(2004: 113) who argued that the success of

management depends on managerial competence.

In general, a business owner who is also a

manager must have three basic skills, including:

Conseptual Skill, which is the mental ability of

entrepreneurs to think in giving understanding,

views, opinions in dealing with the organization's

activities thoroughly both about policy possibilities

in the face of change and how Overcome them.

Human Skill, which is the ability to work in other

groups organically and individually in improving

motivation, communicating, leading and directing

people to do something in achieving the desired

goals. Techical Skill is the ability to handle or

handle a problem or use of equipment, procedures,

methods, and techniques in the operational process,

especially concerning working people related to the

tools that must be used in completing the work.

From the results of research that has been done,

entrepreneurs who have high managerial

competence can make employers earn high profits.

This is because the chances are greater when

compared to entrepreneurs who do not have

managerial competence. From the exposure above

the managerial competence of furniture industry

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

738

entrepreneurs in Bandung should continue to be

improved both in Technical skills, Human Skills,

and Conceptual skills. This is because the

managerial ability has a big influence on the profit

of furniture industry entrepreneurs in the city of

Bandung.

5 CONCLUSIONS

Based on the results of research and analysis can be

concluded competition and managerial competence

significantly influence the profit of furniture

industry entrepreneurs in the city of Bandung.

Competition effect significantly with positive

direction to profit of furniture industry entrepreneurs

in Bandung. This means that the higher competition

of furniture entrepreneurs in the city of Bandung, the

profit or gain obtained will be greater and achieve

maximum profit. Managerial competence has

significant effect in the positive direction to profit of

furniture industry entrepreneurs in Bandung. This

means that the higher the managerial competence of

the furniture entrepreneurs in the city of Bandung,

the profits obtained by furniture entrepreneurs will

be greater and achieve maximum profit.

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www.depkop.go.id

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