Academic journal article Academy of Strategic Management Journal

Implementing Innovation Management on Market Attractiveness and Unique Resources to Enhance Business Performance on Organic Fertilizer Industries in Indonesia

Academic journal article Academy of Strategic Management Journal

Implementing Innovation Management on Market Attractiveness and Unique Resources to Enhance Business Performance on Organic Fertilizer Industries in Indonesia

Article excerpt

BACKGROUND

Indonesia is an agricultural country where most of the people are working in the agricultural business or as a farmer. Indonesia is endowed with natural supported conditions, large area of lands and abundance of biodiversity and also located in the tropical area which are sufficient to support the growing of plant and agriculture throughout the year.

Agriculture is the process of using biological resources by human being to produce food, industrial raw materials or energy resources, as well as to manage the environment. The event of utilizing biological resources is included in the agricultural cultivation or farming. Indonesia has along historical story since the colonial time until this decade which is inseparable from agricultural and plantation sectors, as these sectors contributed a great significance in determining the formation of various economic and social realities in different regions of Indonesia.

Fertilizer, basically is also part of the history effect of agriculture and is estimated to be utilized since the beginning of human being starting to know farming, which is approximately 5,000 (five thousand) years ago. Fertilizer is utilized as the growing media for plants to provide the necessary plant nutrients so that they can produce accordingly. The resources of fertilizer can be either organic or non-organic (synthetic). Fertilizers are different from food supplements normally given to plants, fertilizers contain raw materials that are needed for plant growing and developing, while food supplements such as plant hormones only help to smooth the process of metabolism.

There are two types of fertilizers circulated and traded around the agriculture sector as we know which are namely chemical fertilizer and organic fertilizer. Chemical fertilizer is widely spreaded and traded because of the advantage of the usage that can be measured precisely according to the requirement for plants and the usage are more appropriate and provide prompt effect compare to organic fertilizer. The disadvantages are that Chemical fertilizers do not contain micro nutrients; therefore the usage of chemical fertilizer must also include organic fertilizer because it contains micro nutrients. The other disadvantage of chemical fertilizer is when the chemical fertilizer is excessively used, it may harm the soil nutrients and also deficient the growth of plants.

Organic fertilizer is normally made up of natural materials such as: weathering of plants, animal waste, industrial waste, rubbish and so forth. The advantage of organic fertilizer is proven to improve the structure of soil and nutrients, because it contains macro and micro elements to form the process of organism. Organic fertilizer contains both macro and micro nutrients, but the level of nutrients are not as high as chemical fertilizers and the growing process of organic fertilizers for plants is also considered to be slow compare to chemical fertilizers. But in order to maintain the soil with fertility and contain nutrients, chemical fertilizer must be properly controlled and organic fertilizer must be properly utilized to balance the nutrients of the soil.

Indonesia Government has started to persuade agriculture department to implement using organic fertilizer as one of the media crop for organic farming. This has triggered a huge business opportunities that is widely opened in Indonesia, this may also incur a huge demand of organic fertilizer throughout the Indonesia territory along with the community awareness of demanding healthy food. This statement is supported by the Table 1 shown below based on the projections demand of organic fertilizer from Data Media Research done in 2011 (Figure 1).

Looking at the projection organic fertilizer market opportunities from Media Data Research done in 2011, it shows that the demand of organic fertilizer is increasing significantly from year to year, starting from year 2011 which almost reached 8. …

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