A CASE STUDY OF INDONESIAN PALM OIL CHALLENGES AND OPPORTUNITIES IN GLOBAL MARKET COMPETITION

Abstract

The Indonesian palm oil industry has experienced a huge development since the past two decades. The global demand of palm oil keeps increasing for many reasons. This research is conducted in order to discover the current and potential challenges and opportunities of Indonesian Palm oil so as to get a clearer view of its condition in the global market competition. The researcher uses the Miles and Huberman model in data analysis and triangulation for the data verification. Michael Porter’s theory of national competitive advantage determinants is the main theoretical foundation in shaping the data comparison analysis. There are 4 main determinants. Based on the result, 2 are negative (Related and supporting industry and Firm strategy, structure, and rivalry) and 2 are positive (Factor and Demand condition). The additional determinant which is government was found currently not optimal in supporting the performances of Indonesia palm oil industry. For instance, the government was inconsistent in the implementation of export tax and faced the policy problem of plantation ownership. The government of Indonesia has been passive in responding bio fuel fever. We are at the intersection as to where to go. Government is the golden key that has a great power in directing this palm oil business. Even though the challenge seems to be tough but with the physical availability and the right treatment coming from government everything is possible for Indonesia palm oil to stay in competition. In contrast, if the government fails to act as a good actor then we are just being consumed by global demand and prove that we are not capable enough to maximize the utilization of what we had.