Enhancing Adaro’s Transformation Strategy for Business Diversification: The Aluminium Smelter Project



Abstract Views
402

Downloads
464

Citations

Share

##plugins.themes.bootstrap3.article.sidebar##

Submitted Jul 28, 2023
Published Sep 7, 2023
10.24018/ejbmr.2023.8.5.2127

Abstract viewed = 402 times

Table of Contents

##plugins.themes.bootstrap3.article.main##

Climate change has become a global concern, and at the 21st Conference of Parties (COP 21) held in Paris in 2015, participating countries agreed to phase out fossil fuels and replace them with renewable energy to achieve Net Zero Carbon Emissions by 2060. Adaro Energy Indonesia (AEI) is a coal (Fossil Fuel) producing company, and the company has prepared a business diversification to a non-coal business. The first step is business diversification for the Aluminium Smelter project. This paper focuses on enhancing Adaro’s transformation strategy for its ongoing business diversification efforts, specifically the Aluminium Smelter Project (Adaro, 2023). It explores the current state of Adaro's transformation, identifies areas for improvement, and provides strategic recommendations to strengthen the transformation strategy. The assessment uses Michael Porter’s Five Forces theory for market analysis, the PESTLE theory for external scanning analysis, and the Organizational Change Management theory for organisation analysis. These theories together are used to capture Adaro’s ideal transformation strategy conditions. SWOT and Resource-Based View (RBV) theories are applied to evaluate existing AEI’s organisational strengths. By comparing the ideal transformation strategy conditions with the current situation of AEI, areas that require enhancement are identified. By refining this strategy, the author is confident that Adaro will successfully navigate the business diversification process and capitalize on the opportunities presented by the Aluminium Smelter Project.

Keywords: Aluminium Smelter project areas that require enhancement business diversification existing AEI’s organizational strength ideal transformation strategy

Downloads

Download data is not yet available.

References

  1. Adaro. (2023). Adaro 2022 annual report: Transforming into a bigger and greener Adaro: Energy, minerals, and green (Report) https://www.adaro.com/files/news/berkas_eng/2198/AR%20BOOK%20ADARO%20ENERGY%202022%20Final.pdf.
     Google Scholar
  2. Alanzi, S. (2018). PESTLE analysis: Introduction. https://www.researchgate.net/publication/327871826_Pestle_AnalysisIntroduction.
     Google Scholar
  3. Arif, I. (2022). Era baru batubara Indonesia [The new era of Indonesian coal]. Percetakan PT Gramedia.
     Google Scholar
  4. David, F. R. & David, F. (2016). Strategic management: A competitive advantage approach, concepts, and cases (16th ed.). Pearson.
     Google Scholar
  5. Gurel, E. & Tat, M. (2017). SWOT analysis: A theoretical review. The Journal of International Social Research, 10(51), 994-1006.
     Google Scholar
  6. Jurevicius, O. (2021, November 11). Resource-based view. Strategic Management Insight. https://strategicmanagementinsight.com/tools/resource-based-view/.
     Google Scholar
  7. Kapanowsk, G. (2020). The five forces that shape industry competition. Cost Management, 34(6), 43-47.
     Google Scholar
  8. Kim, W. C. & Mauborgne, R. (2015). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Harvard Business Review Press.
     Google Scholar
  9. Magretta, J. (2012). Understanding Michael Porter: The essential guide to competition and strategy. Harvard Business Review Press.
     Google Scholar
  10. Miller, K. (2020, March 19). 5 critical steps in the change management process. Harvard Business School.
     Google Scholar
  11. https://online.hbs.edu/blog/post/change-management-process.
     Google Scholar
  12. Ndjebayi, J. N. (2017). Aluminium production costs: A comparative case study of production strategy [Unpublished doctoral dissertation]. Walden University.
     Google Scholar
  13. Porter, M. E. (1980). Competitive strategy: Techniques for analysing industries and competitors. Free Press.
     Google Scholar
  14. Porter, M. E. (1987). From competitive advantage to corporate strategy. Harvard Business Review, 5.
     Google Scholar
  15. Williams, E. (2002). The Mozal Smelter project: "River of Aluminium". PM Network, 16(1), 20–26.
     Google Scholar