An Exploration of Entrepreneurial Strategy in A Resource-Constrained Region: A Case Study of Cocoa Bean-To-Bar Business Venture in Aceh

Abstract

Indonesia is the fourth-largest cocoa-producing country after Ivory Coast, Ghana, and Ecuador. Nevertheless, most of Indonesia’s cocoa production is exported to various countries in the world. Aceh Province is one of the cocoa-producing regions in western Indonesia. The government of Aceh includes a development plant for the cocoa plantation sector as one of the priorities. However, the resource-constrained condition of Aceh plays a role in inhibiting the emergence of entrepreneurship in Aceh. Located in depleted and penurious environments, one of the cocoa farmers urged to create a cocoa processing venture which still continuously growing and impacts the society and economy in Aceh positively. Socolatte is the only cocoa bean-to-bar business which established and actively operates in Aceh. This venture was initiated in 2003. The research aimed to explore the experiences and strategies taken by the entrepreneur in developing industry which located in a remote area with limited access for resources. The research applied qualitative research methodology, which used case study as the method. The data was collected using literature review, in-depth interview and semi-structured interview method. The results of the interview and literature study was then transcribed, analyzed and interpreted. The data was used to assist the situational analysis of the business venture which using PEST and porter 5’s forces as the frameworks. The PEST analysis shows that the political aspect support for the development of the business. The policies which encourage the existence of cocoa manufacturing plant is one of the examples of the support shown by the government. Nevertheless, most of the aspects in the PEST analysis, namely the economic, social and technological, show the hostility of the environment towards the development of the business. Regarding the competitive advantages, Socolatte acquires advantages in the threat of new entrants and rivalry of existing competitor. However, bargaining power of buyers, bargaining power of suppliers and threat of substitute can be assumed as the obstacle for the sustainability of the venture. In terms of resources, the entrepreneur mentioned that the physical resources, human resources and intangible resources in form of social network and knowledge play significant role as the important factors in the creation process and management of the venture. This research also found out that the owner of Socolatte has accidentally applied the bricolage and improvisation strategy during the creation and business management process. The application by the entrepreneur can be a reference for prospective entrepreneurs from regions such as Aceh.