Suzuki Indonesia… A Not So Champion Of Rational Thinkers

Okay, so I wrote back then about how Suzuki is the champion of rational thinkers. Now people might expect that I’m changing my mind about the matter because I don’t… However, I have this irk to settle about Suzuki Indonesia and why they kill a perfect little car called the Swift.

Suzuki products are widely known for its class leading equipments. For example here in Indonesia, the Swift WAS a product of choice for cars under US$16K with airbag+ABS+EBD+onboard computer+audio controller on steering wheel. Other cars barely reach Suzuki Swift’s equipments even as an option. The trend continues with SX-4 here in Indonesia, at just roughly US$17K, you get all of the above but with a bigger chassis and everything. But recently, Suzuki chopped off the options on Swift to the bare minimum. The car now has nothing but priced at mind boggling US$14K, down around US$3K with the negation of the options.

Now it is understandable to make the Swift as bare as it is to reduce price. But Suzuki Indonesia does not offer Swift with the extra options anymore, just the bare minimum… Now what the hell with that? From what I heard and read at many automotive forums and mailing list, Suzuki does this to push sales because the car is not selling well compared to Honda Jazz and Toyota Yaris. D’oh! Off course it is, Swift is a small car compared to those two. It is not a family car per se, it is more of a coupe with extra doors at the back. Rather than just pushing for bigger sales, Suzuki can use the Swift as a stepping stones for people who wants to buy bigger Suzuki cars in the future. After all, what sellers wants from their customer is their retainership and loyalty.

Instead, Suzuki Indonesia degrade the class of Swift into that of a cheap entry level car and those who wants to buy the full optioned Suzuki cars must buy Grand Vitara or SX-4. Now where’s the logic on that? The exclusion of models with full factory options are caused by Suzuki decision to localized the production of Swift, because before the Swift was exclusively imported from Japan. Now with the localization of the Swift, Suzuki deletes the option altogether. Suzuki can still import Swift with full options, even for just a handfull because there will always be a market for high end products. Is Suzuki worried that Swift will overlap SX-4 sales? I don’t think so, because the SX-4 is already a bigger car, even though it is derived from Swift chassis.

One thing I can notice about Suzuki Indonesia decision is just because they want to save as much money as possible. By making all Swift as one standard model, they can achieve economy of scale far easier and they don’t have to incur inventory cost by keeping a separate line of cars. The thing is importing a car are full of hassle, first there’s the administration fiasco between Suzuki Indonesia and Suzuki Japan, that’s for sure. Then there’s the hazard of importing a car from far away land physically (well, you won’t know what happened to the car on its way here), not to mention the time and cost it took to ship cars from overseas.

I wholeheartedly understand why Suzuki want to “degrade” the caste of Swift. After all by doing this Suzuki now has a complete line of products ranging from the affordable entry level Karimun Estillo, to the not so expensive neutered Swift, to the rightly priced all terrain SX-4, the coming soon SX-4 sedan, and to the top of the line Grand Vitara. All products ranging from US$10K to US$25K.

Now my decision of buying a Swift has been decimated to the lot… I do feel sad because the car was the best choice for a full optioned car under the price of US$15K. It seems the curse of Honda rears its head again, probably I will buy the all new Honda Fit/Jazz, a not so bad model. I wanted to buy SX-4 though but kind of afraid Suzuki Indonesia is going to pull the same trick with neutering the SX-4 as it did with the Swift. If I bought the fully optioned Swift back then, probably I will feel alienated by Suzuki Indonesia decision to neuter all existing Swift. Because after all, how can I brag and persuade people to use the Swift if the existing Swift is not exactly the same product I used? Don’t start about the exclusion of Airbag and ABS doesn’t bring about different driving experience, it does, wait until you gotten into a situation when those things safe your life… I had.

Weekend Roulade: Franchising Fiasco

So I’ve start a topic about franchising using Krispy Kreme as its example. Well, in Indonesia currently Krispy Kreme is facing a tough challenge in the form of a local branded donuts chain store, akin to KK. As a franchise, KK chain stores must sell products that is defined by the main headquarter somewhere in America. However, this strong point of franchising becomes KK main disadvantage in Indonesia.

KK looses to J.Co (the local branded donuts chain store) simply because J.Co modifies the recipe which at first tasted similar to KK donuts. J.Co listens to the customers complains about how its donuts are too sweet and changed the recipe to become less sweet… And what do you know, it works. Now KK chain stores in Indonesia couldn’t follow suit isn’t it? How’s that for franchising becoming the easy money people would hope?

I’ve mentioned also about the difficulties of setting up a franchise, especially about location. I ate at Burger King this afternoon, and really wonders about why oh why Burger King closed down so many years ago… Apparently there are lots of people eating there, and I don’t see a reason why they left, considering this must be a franchise, thus taste will not differ that drastically in just a short time. So this short minded brain of mine started to theorize a bit.

Burger King chain stores in Jakarta are available in the best, most glamour shopping place around, the Senayan City and Grand Indonesia. How about back then? Well, back then Burger King was available at Kelapa Gading Mall… Not the most glamorous place then or even now as a matter of fact. So does desirability location affect Burger King so bad it just went out so many years ago? Perhaps, but I need to delve in further with the many resource I have.

Oh about marketers go to hell thing… I really mean it.

Next week! Super Salesman, is there such a thing? Actually it has to do with my recent visit to a Suzuki dealership. With such a keen intention writing about how good Suzuki products nowadays, I was really surprised when I visited one of its dealership… Well, you can guess I’m going to rant.

Suzuki, The Champion Of Rational Thinkers

Let’s make things straight here first okay… I love Honda, my passion is Honda, I dream of working for Honda, but I couldn’t help to fall to the tease of Suzuki and their offerings lately, especially the four wheel vehicles they are selling.

Growing up with Honda really makes it stick in my head for sooooooo many years, even though it does not erode until now, the thought of owning cars other than Honda just recently grew up on me. Suzuki never had a brand recognition as strong as Honda or Toyota here in Indonesia. What Suzuki is well known for here is the Suzuki Carry that is being used as a public transportation around “puncak” area. The Carry are well known because the fact that it is a 1 (one) liter/1000cc engine but carries a maximum of 7 passengers with relative ease on mountainous area (puncak means mountain in english). The reliability and the die hardness of the car puts Suzuki quite high in brand recognition… But alas, as a commuter/business vehicle.

On the other side of the spectrum, on its passenger cars, Suzuki is not known for reliability or advance technology, unlike Toyota with its very well known reliability and Honda’s advance VTEC frugality. Subjectivity aside, the last generation small sedan from Suzuki (Baleno Next-G) even got beaten for its design and technological aspect by Toyota Vios and Honda City. All seemed pretty clear where Suzuki was heading, but suddenly Suzuki came up with a new slogan and Swift, the first of a slew changes that will define Suzuki in the near future.

Suzuki now has a new slogan, “Way of Life”, and with it came a complete revolution of how things are made by Suzuki. The Swift was Suzuki first try on completely change its approach on designing a car. Gone are the pudgy looks that haunts Suzuki products, in are the European go-kart look of a car, hinting at everybody who are looking it that a car can be attractive yet convey a sense of passion along the way. The Swift is by no means utilitarian like Honda Fit/Jazz, it has small boot at the back, and the second row seats are cramped for anybody taller than 160cm, but from the outside… It’s whole lot different story. While Honda design the Fit to look cute deliberately, Suzuki designs the Swift to look macho and very boy racer-ish. Then there is the new X-factor, or rather called the SX-4, another unique and category buster car from Suzuki. While the SX-4 took the same Swift chassis and making it a bit longer and giving second row seating a better leg room, it also bust the segment of city car by introducing crossover concept, combining SUV stance and city car altogether. The result? A strange city car that is smaller than the medium class cars but have stance like SUV… This actually makes the car looks like a half size MPV… Or something, it bust the segment and defines a new one anyway.

So what makes me wanting a Suzuki after all this year being a Honda fan boy? Well, the first thing is now I am more of a rational guy. The Suzuki SX-4 is priced at around Rp 165 Million (around US$16500), it has on board computer to calculate fuel consumption, steer mounted audio control, ABS+EBD, and a dual airbag. Its smaller brethren, the Swift came in at Rp 145 Million (around US$14500) with the same stuff available on the SX-4. Now let’s take an example of Honda Fit/Jazz; For a similarly equipped car, the Fit/Jazz came in at Rp 170 Million (around US$17000) minus on board computer to calculate fuel consumption and steer mounted audio control.

If I wanted to replace my Jazz, I might go for the Swift because I don’t need the extra boot space anyway and I don’t have a lot to spend… I think the latter is the appropriate reason. Yes Honda or Toyota products have better resale value, but down the line,the difference only hovers around 5-10% of 5 years depreciation, and by that time I will have enough money to upgrade to something more roomy (might be another Honda though).

For now, Suzuki trump card is just that, value for money. How they achieve that is just a no brainer… Everything that is inside the Swift and SX-4 is basically the same technology available since 5 years ago on the original Aerio/Aerio Sedan/Baleno. The M15A engine which features a cam changing VVT mechanism is just refined and the automatic transmission is still the same 4matic technology featured on the cars I mention earlier. Using the same technology is not incapability of Suzuki to offer a new one, but if you can refine an existing technology, making it more bulletproof, why use something new that is unproven? Most of all, by using tried and true technology, Suzuki does not have to incur investment cost to bottomline price of its products. This rational thinking of Suzuki really goes with my current disposition towards the world after all.

Anywho… If I do replace my car with a Suzuki, rest assured, you will know me for I will definitely place “do you have a Honda” sticker at the rear glass. Honda will always stay, for the better or for worse… Even if it’s just a sticker. Until I have enough money, the Power of Dreams will be my driving force, to be united again with the one (brand) I desire most. Why is there tears coming down from my eyes… Shoot… Sometimes I get sentimental too fast, but letting go of a dream is quite hard… I’ve always wanted a used 04′ Civic or even an 01′ CR-V, heck! A Honda City would be fine, but I have my priorities now, and my personal dreams are met with conditional real world demands.

Franchise or not to Franchise… That is the question

Franchising, do you really need it? It’s a tale as old as time, as taking franchise promises the easiness of plunging straight into the hard boiled business world with little preparation. To open up a franchise, you only need a big start up capital and the rest will fall in order because buying a franchise means you buy everything from the know how (the recipe if it’s a restaurant), and the how to (the management process), is it not? Well, that’s just wrong.

Opening up a franchise involves a lot more work than people might expect. First of all, there is the human resource aspect that is not made available by the franchiser; we have to search for the employee to work for us by ourselves. Remember, weak under performing employee will never get you nowhere even if you buy the best franchise around. Then there is the geography problem, a place where you want to open up the business. We have to think about the ease of access, the surrounding locale, and the desirability of the location. Lastly there is the problem of who is in charge of it all? Certainly we need to know at least what is the nature of the business if we did not want to be bamboozled by the operating manager because our lack of knowledge operating the business.

You guys can look up for the pros and cons of franchising on the net. But I want to press about the cons of franchising using a unique example of franchising in Indonesia.

Krispy Kreme, and McDonald are two of the biggest franchise name in the world. However only one of those franchiser that thrives in Indonesia, and it is not Krispy Kreme. McDonald has the first mover advantage, being the first burger joints available anywhere in Indonesia, since late 1980s… Or something (forgot). However, Krispy Kreme is not so bad after all, being the third donuts chain store in Indonesia after Dunkin Donuts and Indonesia’s very own J.Co, even though KK came on a very late time (just two years ago).

When J.Co was introduced around three-four years ago, it became an instant hit overnight as people flock and queue long lines to buy just half a dozen of donuts. Hot on the tails of J.Co success is America’s leading donuts chain store, KK. Please pardon my lack of knowledge about who owns KK in Indonesia, but suffice to say it is still a franchised chain store therefore franchise traits are still applicable. So today marks the two years J.Co and KK has waged war to garner donuts lover into their shop, and wanna bet who wins? Well, it’s J.Co, the new startup Indonesian company.

The unique advantage of franchising sometimes is also its downfall in the case of KK in Indonesia. J.Co was rumored to use KK recipe to make its donuts before KK open up its store in Indonesia. However, once KK arrived, shortly after J.Co came up with a new recipe that is less sweet than the “competing brand”, and we know who that is. As a franchise company, KK cannot change its recipe, because that was franchising is all about, bringing the unique taste of the franchiser to anywhere in the world. This limited creativity is noted as one of the cons of franchising[1].

My family and friends love the less sweet taste of J.Co compared to KK, and the effects are as clear as a sunshiny day. KK customers dwindles, and in places where there are both KK and J.Co, like in Senayan City, you can see the void of visitors on KK but the same cannot be said to J.Co. KK even go as far as buying one dozen of donuts, you will get two dozens more… That is downright crazy. Well, you can say it is a promotional event, but I think it has going on for more than half a year.

So franchising in the case of J.Co and KK is not really a good thing isn’t it? Well, I am impartial in this issue, but if I have to take side, I’m going to say that franchising is not an option in the case of J.Co Vs KK. J.Co without the ties of franchise has the unlimited creativity to cater with the constant change of market demand. So why McDonald thrives? It is after all a franchise company too… Yes, it is a franchise company, but the franchiser (McDonald of America) has policies to let the franchisee expand its product portfolio. That is why McDonald has/had “local specialties” such as pork burger in Thailand, and Rendang beef burger in Indonesia.

As such, franchising is a prospect that needs to be taken carefully. One must weigh the pros and cons carefully and most important thing is the franchiser’s willingness to adapt to future situation. If you adapt (like McDonald), you will survive, if you just stick to your brand identity… Well, people don’t eat intangible things.


[1] http://www.quintcareers.com/franchising_pros_cons.html

How do you solve a problem? More corny terms!

So how do you approach a problem? Problem approach is a unique phenomenon, we face it everyday, we will face problems in our lifetime, and if I might guess, you have a problem right now. But how do we approach that particular problem…? Well, none of my business really, but let me share a basic approach to solve a problem.

First there’s the shotgun approach

Yes, this corny termed approach define a problem approach just like how as shotgun buck shot explodes out of the barrel and onto the target. A shotgun buck shot spreads uncontrolled and wherever you aim, you can only target a general area where you expect at least one round of that shot hits the center of the target. There’s also the heavy recoil of the shotgun so your second shot might not be at the same position you took the first shot. Using the analogy of the shotgun, a shotgun approach is just like that, you approach a problem with little consideration and with many trial and errors. Using this approach means that at least when you try to approach a problem hard enough you’ll eventually lead to a conclusion but at the cost of time and effort if you didn’t get it right the first time

Then the sniping approach

Another corny term with similar corny definition. A sniper is the most patient people on earth, as when they want to kill a target, they have to wait for the right time and calculates everything from distance, angle of attack, range, wind speed, even he have to calculate the rhythm of his breath. More often than not, 90% of a sniper hit will be a bull’s-eye, straight to the intended target. So what does it have in common with the sniping approach? D’oh! The sniping approach is altogether different with the shotgun approach whereas using the latter you try to approach and solve a problem with a barrage of ideas, but using the former you take only one or two ideas and solve it with a timely manner.

These approaches differ on a very basic level but are trying to achieve the same goal. When you use a shotgun approach, most of the time you don’t think carefully of what specific problem you are dealing with. But with a barrage of ideas you will eventually solve a problem, and hey, if you are lucky you will solve it as soon as the problem arises. But there it is… There is luck involve on using shotgun approach, so if you are unlucky you will even get nowhere with the problem.

The sniping approach generally takes longer to execute and deals with a problem. Using this approach people will think carefully about which way they are going to take to solve the problem. People don’t just blurbs out ideas, but they take calculated risk, figuring out the pros and cons of each idea carefully. So this is why that “silent” type of people generally talks very little but always comes up with the best of ideas.

But let’s get into the real world shall we? What do you think people will appreciate more, those who solve problem using the shotgun approach or using the sniping approach? Well, off course people will always ask for the swiftest of response, and this is the part where the world is a crazy place to live in. Taken straight from my experience, people appreciates if you answer a problem fast and wrong rather than answering it later but right. It’s not about the result nowadays, but your effort that counts… Is that even right at all? Well, according to me, NO, but it’s how the world turns nowadays.

I may be a bitter man, but how in hell can somebody that answers a wrong answer be appreciated more? Well, it’s a result oriented world, therefore people will always have to answer fast to be taken seriously. So don’t wonder at all if your colleague got promoted because he’s a loud mouth with stupid ideas whereas you think you can do better. The best course of action is to practice expressing your thought using small exercises… Just like what I’m doing now. This blog is a place to train my brain by exploiting small ideas and making it bigger. The goal is to answer a problem fast, but not actually solving it… Confused? It’s a preemptive claim actually, here’s a fine example: When you are in a team and the team is given a question, you blurbs first using a partial idea you have and finish it later. The goal here is to get you recognized first, and by mentioning an unfinished idea, you can polish it to a complete and final one.

A quick unfinished idea will always be better than a finished stupid idea. Just train your brain so you can achieve that state where you can respond fast with a directed problem approach. Don’t let that loud mouth pass over you to that General Manager’s chair.

Phew, a complete article without using weekend rollade…

Performance appraisal… Part deux

Looking at my blog stats, it seems that performance appraisal is the most searched term on the internet. In that sense, I’m going to explain more in a simpler term on how to appraise people without causing jealousy to other employees.

As I have stated in my previous post down there, replying to Adi on how to appraise people without causing jealousy to others, it is quite difficult to do so. To acknwledge different culture in different individuals will cause massive human resource headache, as they cannot follow each and every individuals working in the company. Therefore, we only have to follow suit management by objective as has been stated by Peter Drucker. Using MBO, the employer and employee, or to the operational level, each managerial and employee personnel understands what are the cause and effect of increased or decreased productivity.

MBO in a simpler term defines that each personnel understands and signed a contractual agreements that underlines performance appraisal. By doing that, one could not be jealous to their comrades if promoted because they mutually understand and agreed what defines a good performance appraisal. With this in mind, you won’t have to fuss about the workers are easterners or westerners when doing a performance appraisal… You only need to show them the rules that they agreed upon.

If one still jealous to whomever being promoted/rewarded for good performance, then that individual is not a team player and did not have the capability to understands a contractual agreement… Will you still keep him? I won’t.