Indonesia Companies and Industry Market Research
PT. Dataindo Inti Swakarsa

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Glossary of Terms

KLUI Code

Klasifikasi Lapangan Usaha Indonesia (KLUI) has been produced by the Indonesia Bureau of Statistics for use in the collection and publication of statistics in Indonesia. International comparability has been enhanced by aligning the NAICS with the International Standard Industrial Classification (ISIC).

Definition

The Definition screen provides a brief description of the industry as defined by the Indonesia Bureau of Statistics

Referrals

The Referrals are for industries whose activities, which are similar to this industry but are not actually included under this particular KLUI.

Activities

This is a list of the key activities conducted by companies within this Industry. The list of activities was catalogued by the Indonesia Bureau of Statistics but DIS has added activities that are significant to the classification.

N.E.C.

Not Elsewhere Classified. The activities included in this industry do not constitute homogeneous primary activities, but rather diverse activities, which are not sufficiently significant to be classified as a separate industry class. These activities are therefore grouped together within the KLUI Group and have a n.e.c suffix.

Key Statistics

The KEY STATISTICS chapter provides key indicators for the industry for the last five years and include:

  • Industry Turnover
  • Industry Value Added
  • Employment
  • Enterprises
  • Establishments
  • Exports
  • Imports
  • Domestic Demand
  • Total Wages

 

Industry Turnover

Industry Turnover describes the total sales revenue of the industry and includes: Sales (exclusive of excise and sales tax) of goods and services whether produced/provided by the establishment or not; plus transfers out of goods to other establishments of the same business; plus bounties and subsidies on production; plus all other operating income from outside the establishment (such as commission income, repair and service income, and rent, leasing and hiring income); plus capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.

Industry Value Added

Industry Value Added is also called Industry Gross Product. This figure describes; the market value of goods and services produced by an industry minus the cost of goods and services used up by the industry in the productive process, which leaves the gross product of the industry (also called its Value Added).

GDP is obtained by summing the Gross Product of all industries.

This figure is calculated as turnover, plus the increase (or less the decrease) in the value of stocks, less purchases, transfers in and selected expenses.

Employment

The Employment figure represents the number of working proprietors, working partners, permanent, part-time, temporary and casual employees, and managerial and executive employees working for an establishment during the last pay period in the financial year each year. Employees absent on paid or prepaid leave are included. Sole proprietors and partnerships not employing others are excluded

Enterprise

An Enterprise Group is a division which is separately managed and which keeps management accounts. It consists of one or more Establishments

Establishment

The establishment is the smallest type of accounting unit within an Enterprise and controls its productive activity. It consists, in most industries of one or more locations in a state or territory of the country at or from which it operates

Exports

The Export figure represents the total sales and transfers of goods produced by an Establishment (or for it on commission) which are exported (outside this country) by the business or its agent. This figure is calculated as the value of goods and services brought into this country from another.

Imports

The Import figure of goods and services represent the value of goods imported and the amount payable to non-residents for the provision of services to residents. This represents the value of goods and services brought into this country from other countries.

Domestic Demand

Domestic Demand is a measure of total consumption of goods and services within this country. This figure is calculated by summing Imports and Domestic Production, then deducting Exports.

Total Wages

Total Wages represent the gross total wages and salaries of all employees of the establishment. The drawings of working proprietors are excluded.

Current and Constant Prices

The Current Prices Table provide figures which are given in dollar units are given in the dollar figures of the year in which they were calculated.

The Constant Prices Table provide figures which are given in dollar units have been adjusted so that they are all in the dollars of the same year. By putting the figures in the same dollars, one can compare changes in output levels from year to year minus any fluctuations in price caused by inflation. The year of the Constant Price dollars is changed annually to reflect the most recently completed financial year.

Growth Table

The Growth Table provides figures, which reflect the percentage change in each statistic in each year over the previous year. This is based on the constant price table

Ratio Table

The Ratio Table calculates some of the Key Ratios, which are useful for analysis of the industry. The ratios are based on figures in the Key Statistics Table. Ratios are not dependent upon dollar figures and therefore may be calculated from either the Current Price or the Constant Price Tables.

Market Characteristics

The MARKET CHARACTERISTICS chapter provides market information depending on its relevance to the particular industry. Topics discussed include:

  • Market Size
  • Linkages
  • Supply and Demand
  • Demand Determinants
  • Domestic and International Markets
  • Industry Globalisation
  • Basis of Competition
  • Life cycle.

The Demand and Supply Linkages

This section, provide hyperlinks which when selected allow you to directly access the relevant industries that are upstream or downstream to the current industry.

Market Size

The Market Size section will state where possible:

  • Total turnover in latest years
  • The size of this industry in relation to the economy
  • The size of this industry in relation to its division
  • Industry volumetric measures and discussion of trend
  • A statement of total market size (i.e. Industry Turnover + Revenue from this industry's product sold by non-industry participants - non-industry product sold by this industry). For example, the total Toys Market will be: Total Market = Toy Industry Turnover + Department Stores Toys Turnover - Sporting Equipment.

Linkage - Demand

The Linkages Demand section identifies the major Demand or forward (downstream) linkages with the relevant Industry codes.

Linkage - Supply

The Linkages Supply section identifies the major Supply or backward (upstream) linkages with the relevant Industry codes.

Demand Determinants

The Demand Determinants section identifies the various factors, which stimulate (or reduce) demand for products/services for this industry. The type of factors would include: The development of new products, product innovation, the creation/increased interest in some new activity, the level of economic growth, the level of household disposable income and government regulations.

Domestic and International Markets

Domestic and International markets defines the market for the products and services of this industry, both locally and overseas.

The level and trend for import and exports is determined as follows

  • Exports/turnover
  • LOW - 0-5%
  • MEDIUM - 5% - 20%
  • HIGH - over 20%
  • Imports/domestic demand
  • LOW - 0-5%
  • MEDIUM - 5% - 35%
  • HIGH - over 35%

This section also discussed the size of the domestic market (domestic demand) and the proportion of this accounted for by imports, the key countries from which imports are from, the trend for the size of domestic demand (is it increasing, decreasing, not changing?), the trend for imports as a proportion of domestic demand, the size of turnover and the size of exports as a proportion of turnover, the key export destinations, the trend for the size of exports (are they increasing, decreasing, not changing), the trend for the size of exports as a proportion of turnover and any other relevant information

Basis of Competition

The Basis of Competition Chapter provides discussion on internal and external competition.

  • Internal competition - competition within the industry (i.e. between industry participants)
  • Price Competition
  • Service Based Competition
  • Branding/Marketing
  • Product Enhancements
  • Development of New Products
  • External competition - competition by the industry with other industries (i.e. the glass manufacturing industry competes with the tin can manufacturing industry as a type of packaging). Life Cycle

This section identifies the stage of development that the industry is at. Reasons and an analysis of the industry's current Life Cycle are provided. All industries have a lifecycle and go through periods of growth, maturity and decline. Examples of industries in their growth phase might be telecommunications, where rapid changes and new developments are constantly being made. An example of an industry in decline might be black coal mining, where consumption is decreasing in favour of alternative power sources, which are less harmful to the environment. An example of a mature industry might be snack food manufacturing, which has grown quickly in the past, but is now readily accepted by a large proportion of consumers. Very few significant changes are occurring in this industry, with most change being associated with minor cosmetic changes in packaging, in the range of flavours available, etc.

Segmentation

The SEGMENTATION chapter discusses three types of industry segmentation.

  • Product/service segmentation
  • Major market segmentation
  • Geographic spread

Products and Service Segmentation

The Products and Service Segmentation section details the key products and/or services provided by the industry and gives an indication of the size of each segment as a proportion of the total industry.

Major Market Segments

The Major Market Segments section outlines the key markets for the industry in terms of industries, sectors and demographic groups it sells to. The major market segments are given as a percentage of total revenue where available. Chapter: Industry Segmentation

Industry Concentration

The Industry Concentration section discusses the dominance of the top players in an industry as a key indicator for industry concentration. To ensure consistency in the database, DIS bases concentration on the market dominance of the top FOUR players. The concentration of an industry is identified as high, medium or low.

  • High concentration
  • The top four players account for over 70% or more of turnover
  • Medium concentration - The top four players account for between 40%and 70% of turnover
  • Low concentration - The top four players account for less than 40% of turnover

This section also discusses whether the industry concentration is increasing or decreasing.

Geographical Spread

The Geographic Spread section displays how much of production occurs in each defined region. Depending on the nature of the industry one or more of the following measures is used to determine the size of each region.

  • Turnover
  • Production
  • The number of establishments
  • Employment

Industry Conditions

The INDUSTRY CONDITIONS Chapter provides discussion on the following

  • Barriers to Entry
  • Assistance including Tariffs and Protection
  • Taxation
  • Regulation/Deregulation
  • Cost Structure
  • Capital/Labour Intensity
  • Technology and Systems
  • Industry Volatility
  • Globalisation

Barriers to Entry

The Barriers to Entry section outlines factors, which can prevent a new company from entering the industry. This section also gives an indication as to the extent to which this occurs and what constitutes those barriers.

Barriers to entry can be high, medium or low. High means that it is very difficult for a new company to enter this industry. Low means it is very easy for a new company to enter this industry. Medium indicates that the entry level is between high and low. Examples of common barriers to entry include Entry Costs, Government Legislation, Control of scarce input by companies already entrenched in the industry, Absolute Cost Advantage and Exclusive Dealing. Examples of an industry with a low barrier to entry include industries that are typically low profit and low performance - while poor performance of an industry may be a disincentive to a new entrant, it will not stop a new company from entering the industry.

Industry Assistance (Including Protection and Key Tariffs)

The Industry Assistance section outlines the key forms of assistance or protection given to the industry, whether provided by government, industry bodies or by the nature of the products/services provided by the industry itself.

Assistance refers to government and/or other measures in place designed to improve the performance of the industry or sections of the industry i.e. grants, subsidies.

Protection refers to non-tariff forms of protection for the industry i.e. regulations, tax concessions, quotas, quarantine restrictions, packaging/labeling and quality standards.

Natural protection refers to industries, which do not have a high level of imports due to the nature of the products sold by the industry. Generally, these will be industries, which sell high weight, low value products which would not be cost effective to ship overseas.

Tariffs or duties are amounts levied on goods, which are imported.

Level and Trend section identifies the level and trend of assistance. Level will be stated at High, Medium, Low or None. The trend will be described as Increasing, Steady or Decreasing.

Taxation

The Taxation section discusses all kinds of taxation, which are specific to the industry. All applicable taxes are discussed and any significant changes to the taxation laws pertaining to this industry are mentioned.

Regulation / Deregulation

This Regulation/Deregulation section discusses the occurrence of regulation (whether government or self-government) and/or deregulation and its effects. In discussing regulatory or deregulatory issues, details of the particular issues are highlighted and any expected changes to the regulations are stated. Where licenses are required to operate in an industry, they will be noted in this section and where possible, details regarding the degree of difficulty in obtaining a license is also included.

The level of regulation will be stated as High, Medium, Light or None. The trend will be described as Increasing, Steady or Decreasing.

Examples of regulations include:

  • Taxi licenses - are there a limited number of licenses and are they expensive to obtain?
  • Rules regarding the storage of chemicals - are these rules expensive to comply with (does a firm need to spend a lot of money to have the right storage procedures)?
  • Quotas of production - does the government limit the amount of production?
  • Other regulations regarding production, such as those which state that certain materials will be taxed when exported unless further processed
  •  Legislation preventing mergers, monopolies, etc.

The history of regulations for this industry if appropriate will be discussed in the Industry Performance chapter.

In certain industries, operators require a permit or lease. This section discusses where it can be obtained from, the cost, other eligibility requirements and information regarding the scarcity of permits or leases and whether or not they are easy to obtain.

Examples of Deregulation include:

  • The removal of fuel subsidies
  • Removal of regulations which restrict the number of players
  • Relaxation of protection laws (such as quarantine, tariffs)
  • The removal of regulations over the type of chemicals used to spray crops

Cost Structure

The Cost Structure section details the average costs for a company operating in this industry as a percentage of total revenue. The costs items and any identifiable trends over time are explained in the analysis section. The average cost of the following standard items are included where available:

  • Depreciation
  • Purchases
  • Rent
  • Returns
  • Utilities
  • Wages
  • Other

Note: Where data obtained is a combination of these headings, then "n.a." is entered under the standard headings, and a new heading for both items is created.

Capital / Labour Intensity

The Capital/Labour Intensity section identifies and discusses the industry's ratio of capital to labour intensity. This figure is an indicator of how much capital is used in production as opposed to labour. Level and trend of Capital Intensity will be stated as High, Medium or Low. The trend will be described as Increasing, Steady or Decreasing.

Technology and Systems

The Technology section discusses the latest technology and/or systems currently used by the industry. This section also discusses the effect the Internet is having in this industry. It also states the level of change as high, medium or low. The rate of technological change is measured by comparing the rate of change in this industry to the rate of change in other industries. Technology refers to machinery and equipment, such as computerisation, which enables better and more efficient production. Systems refers to intangibles, intellectual property, franchises, plant set out, manufacturing processes, etc. An example is the McDonald's formula driven system for producing a hamburger, which also enables better and more efficient production. Any technology that is needed to conform to world's best practice should be mentioned. The following areas are discussed in this section :

  • The latest technology/system being used by the industry is described
  • Any recent changes in the technology, including any changes currently occurring or likely to occur in the near future
  • The development of technologies or systems developed in other industries which may affect this industry are also mentioned
  • Development of any special technology/systems overseas which have the potential to affect domestic operators are also mentioned if appropriate

Volatility

Industry volatility refers to the level of year on year fluctuations, which occur in industry output. The level of volatility is determined by the percentage change in industry turnover compared to the overall GDP growth over the past five years. The following volatility levels with the relevant percentage changes are provided below

  • VERY HIGH Volatility Greater than ±20%
  • HIGH Volatility Between ±10% and ±20%
  • MODERATE Volatility Between ±3% and ±10%
  • LOW Volatility Less than ±3%

Globalisation

The Globalisation section discusses the extent to which the industry operates on a global scale. It also indicates whether the level of globalisation is high, medium or low and if the trend is increasing, decreasing or not changing. Factors which are discussed in this section include the level of foreign ownership of the major players, imports as a proportion of domestic demand and the level of exports.

Key Factors

The KEY SENSITIVITIES chapter discusses the key sensitivities that have an impact on the industry. Each of the companies operating in the industry is influenced by a range of external factors (Business Environment variables), which are beyond the direct control of the company. These external factors, include exchange rates, commodity prices, consumer attitudes, weather conditions and government policies, which impact on an industry are known as key sensitivities. A description and an analysis of the Key Sensitivity is provided in this section. For each industry up to eight sensitivities may be discussed and are listed in order of significance. Examples of key sensitivities include: Agriculture : Drought, Seasonal conditions, Market prices - particularly world prices for commodities, Government regulations regarding licensing/use of chemicals, Access to appropriate land/water Mining, Market prices - particularly world prices for commodities, Demand by upstream industries, particularly manufacturing and construction, New processes to increase output levels from various mines, Government regulations - especially licensing, Exchange rates for mined commodities which are traded Manufacturing, Demand by downstream industries, Exchange rates for goods which are traded, Propensity to consume certain items over other items, Government regulations governing the manufacturing process and the maintenance of the environment (e.g. effluent controls, controls over chemicals used, storage of toxins, etc), The advent of new machinery which increases production, Competition from imports Services, Increasing propensity for women to work (and hence greater outsourcing of many functions provided by the service industry), The advent of new ways of doing business (e.g. the creation of franchises), Government regulation - may control hours of operation/limit activities in some way, Competition from similar/related services. For instance, movie theatres compete with other industries, which aim at the "entertainment dollar".

Key Success Factors

The Key Success Factors section discusses internal factors that are within the control of the operator and should be observed in order to be successful in this industry. These factors which are under the direct control of the operator and can therefore be influenced or changed by the operator. Often these factors may include behaviour that will help the company minimise the effects of the Key Sensitivities. Key Success Factors are distinct from Key Sensitivities in that they are in control of the operation, whereas key sensitivities occur outside of the industry. For each industry up to five Key Success may be discussed and are listed in order of significance.

Industry Performance

The INDUSTRY PERFORMANCE chapter provides an analysis regarding how an industry has performed over the last five years. It identifies

  • Important trends and events in the industry
  • Key performance indicators for the industry that have impacted the results achieved by the industry
  • Areas of success or failure within the industry

There are two components to performance. The current performance details the recent performance of the industry over the past five years. The historical performance details industry activities prior to that time.

         Historical Performance

The Historical Performance section discusses fundamental changes which have occurred in the industry and the period prior to the most recent five years. Note that the period over which historical performance extends is not fixed. If an event of one hundred years ago has been instrumental in the formation of the industry in its current structure, then it may be mentioned.

Current Performance

The Current Performance section discusses the key industry indicators over the past five years and identifies the influences these indicators have had on the industry

Industry Participants

The INDUSTRY PARTICIPANTS chapter identifies the major players in the industry, and where possible provides their market share.

Major Players

This section identifies the companies that are major players for the particular industry. Major Players are the top companies within an industry as determined by market share. The Market Share is calculated by the company's revenue within the industry as a percentage of the industry turnover. A major player may be a legal entity, and is the ultimate entity in that country. The major player's trading name in that particular industry is also identified. This name is normally a subsidiary, a division, or a brand name.

Major Player - Market Share

Market share is calculated by dividing the turnover earned by the company from the particular industry, by the total turnover of the industry. If available the company industry specific turnover is also provided in this section. Market share is based on the level of activity conducted by the company in this industry only.

Player Performance

This section discusses the performance for each major player in the particular industry. Player performance is a performance analysis of the companies in the industry, examples of how they have performed within the industry, how they exemplify trends or how industry trends have diverged from the companies. Other players of significance are also discussed in this section under the "Other Players" heading. These "Other Players" may be significant players within a product segment, a niche player or a new player who is likely to become a major player quickly. There is normally no corresponding Company report for these Companies

Industry Outlook

The section outlines of expectations for the industry over the next five years including the forecast of key statistics. The section discusses expectations for the key industry indicators over the next five years.

Key influences on those indicators are:

  • Significant trends that are likely to continue and the identification of new trends that are likely to occur
  • Reasons why the industry is likely to be diverted from those trends/ why those trends might be exaggerated
  • Which segments of the industry are likely to be more/less successful than the industry as a whole - which are likely to increase in importance/decrease in importance?
Header
Klui code
Definition
Referrals
Activities
Key Statistics
Industry Turnover
Industry Value Added
Employment
Enterprise
Establishment
Exports
Imports
Domestic Demand
Total Wages
Current and Constant Prices
Growth Table
Ratio Table
Market Characteristics
The Demand and Supply Linkages
Market Size
Linkage - Demand
Linkage - Supply
Demand Determinants
Domestic and International Markets
Basis of Competition
Segmentation
Products and Service Segmentation
Major Market Segments
Industry Concentration
Geographical Spread
Industry Conditions
Barriers to Entry
Industry Assistance (Including Protection and Key Tariffs)
Taxation
Regulation / Deregulation
Cost Structure
Capital / Labour Intensity
Technology and Systems
Volatility
Globalisation
Key Factors
Industry Performance
Historical Performance
Current Performance
Industry Participants
Major Players
Major Player - Market Share
Player Performance
Industry Outlook