The subject of the GFP is an analysis of the feasibility of using the franchising scheme for growing a large local chain of minimarts, i.e. Alfamart. It will analyze whether or not the current growth model is achievable given the current market conditions, if the current franchising scheme is adequate and what adjustments or modification are needed to make the scheme successful. The study was conducted through field data collection by interviewing Alfamart franchisees, traditional market owners; and internet surfing to understand how some overseas franchising systems work.

The first part of the report will describe the Study Objectives and Scope of this Study; Methodology of the research, Industry where Alfamart is operating and Alfamart profile itself. Next, all field findings are presented in simple table to show it in quantitative manner; followed by a SWOT (Strength, Weakness, Opportunity, and Threat) analysis.

With reference to overseas franchising systems, the study concludes that growing Alfamart distribution network is feasible with conditions, among others are the needs to improve its marketing communication, investors selection process, services and support quality, internal readiness, as well as business reputation in retail industry.

Alfamart franchising system itself has been successful in most cases, by achieving 89 franchise stores and 82 Independent Operator stores, both giving a total of 16% of the overall outlet network within the first 3 years since the system was launched (data up to August 2005). The target of 5,000 outlets by year 2012 is seemed achievable, looking at the needs of around 13,000 outlets in Java island only. Franchising system is an effective strategy to expand the business network with minimum capital investment and leveraging Alfamart's strength as a leader in distribution; with relatively low risk to Alfamart itself.

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The study report also proposes a number of recommendations to rectify all concerns raised by the interviewees in all areas mentioned above.



Research Location : PT Sumber Alfaria Trijaya (SAT)

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