The Effect Of Customer Demand And Supplier Performance In Competitive Strategy And Business Performance (Case Of Fixed Broadband In Indonesia)

Broadband telecommunication is significantly important to support and improve country’s competitiveness level. However, Indonesia performance, especially in Fixed Broadband is poor as the penetration rate is very low and far behind from other ASEAN countries. The industry is served by multi operators with one dominant operator. This dominant operator will be studied representing the industry in this study. A qualitative study (Pasaribu et al., 2015), related to this paper, has found that poor fulfillment of Customer Demand and poor Supplier Performance are two dominant external factors that cause the low performance. A model is proposed to frame the work, it consists of four variables: Customer Demand, Supplier Performance, Competitive Strategy and Business Performance. This study aims is use that Pasaribu et al. model directly to business units level to identify and analyze the relationships within the model and significance level of each relationship accordingly. By understanding the priority levels, the improvement program could be more effectively planned and implemented. This study is expected to contribute on Fixed Broadband research wich is still very rare especially in Indonesia The research methodology is quantitative methods using survey technique. The respondents are management and customers of the dominant operator business units. Clustering by province regions gave 32 samples from the population of 58 business units. Partial Least Square modelling was used to analise the datas. The main result of this study is that the most significant relationship in the model is Supplier Performance to Competitive Strategy. Furthermore, from indicators of Supplier Performance, it was found that Quality Relationship has a very high effect among other indicators. By prioritizing these significant constructs, it could be expected the related improvement program could be more effective.