Probing into E-Commerce Logistics: A Strategic Growth Option of Serbada Company

E-commerce marketplace is prominent in today’s society era of buying and selling products without having to leave the doorsteps. One important stakeholder group involved in the process of e-commerce is logistics. Logistic companies facilitate the delivery from one destination to another with punctuality and security of the products keys in establishing trust between the buyer, seller, and the e-commerce hubs. Hence by means of participant observation, this case study research investigates the key success factors of how an e-commerce firm manages its collaborations with logistic partners, as well as how the firm utilizes its strengths and opportunities take advantage of the market, while minimizing its weaknesses and threats. The researchers used Business Model Canvas and TOWS in their analytical process.


Introduction
Logistics is vital for the economic performance of any economy in this world.That is why for Indonesia, there are particular reasons why logistics is a high priority issue and why the challenges of designing and implementing reform programs are more challenging.Indonesia has undergone various major periods of structural reform over the last two decades and these have brought considerable benefits and a generally strong economic growth trajectory.There are also reasons why transport infrastructure and transport services play a major role in the outcomes for logistics (Herliana & Parson, 2015).The below table will presence about area hubs for it.
As displayed on table 1, Indonesia has 25 strategic ports and 27 airports with international status, domestic and international transport hubs are focused on Jakarta, in Java, creating major challenges for inter-island connectivity and development.Many of the inter-island con-nections are conducted through small commercial and non-commercial ports and hundreds of small domestic airports (Kadin, 2015).
As the data displayed in figure 1, discussing about the overall transportation cost for container in 20'feet from Surabaya to Sorong, Makassar to Sorong, Surabaya to Manado, Surabaya to Medan, Surabaya to Makassar and Surabaya to Banjarmasin portrayed with very varieties figures from and to destinations.It means this country needs appropriate good management more efficient costs in the concerning of delivering logistic for the country.
Concerning to that development programme of the central government of Indonesia the support of ICT is very urgent, because the technology plays a big and important role in our daily lives.The presence of high end technology becomes the importance and need to maximize the use of the information and communication technology in running their businesses (Purba & Rorim 2015 Innovation).
In this era, there is no need for people to rent a place or to have an offline store to sell our products -they can easily sell things through marketplace, social media, and blogs.Due the presence of technology innovation which collaborated with many application that can provide services to the customers (Purba, 2014, Panday & Purba. 2015).Even if they have an offline store, the traffic can be boost by the online selling.This is statement is supported by Librianty (2016).It is said that "Since selling in Lazada, there is 10 to 15 percent of increase in the sales.Now our business is growing, not just selling coffee but also other equipment related to coffee (Librianty, 2016).It means the information technology can boost the growth of the company sales that is impact to establish and stability of the company itself (Purba, 2015).It is well known that understand that logistics is one of the biggest issues every e-commerce player is experiencing, especially in Indonesia.This is because Indonesia is a huge archipelago state where the road infrastructure is still poor.

Logistic and E-Commerce
Simatupang (2001) stated that information sharing among chain members provides mutual competitive advantages both in increasing customer values and taking out costs from the supply chain.Those chain members with timely products and higher quality will be able to charge higher prices and increase sales.Several examples from industrial practices show the positive impact of in-formation sharing on supply chain performance.
In managing the information accurately the usage of ICT is very recommended (Purba, 2014).(Kamaludin & Purba, 2014) With the advancement of technology, especially information technology is developing rapidly, since it has been found computer and internet development.Development of hardware and software related to information systems is also growing rapidly.Then, Simatupang also suggested that Information sharing facilitates data collection, documentation, and the storing, retrieving, and transferring of private information.It depends on the level of decision structure that requires specific data.The decision structure consists of decisions that need to be taken at the levels of operations, planning, and strategy (Simatupang, 2001).
The logistic activities and supply chain coordination is a way to redesign rights to decide, decision workflow, and resources among members in a supply chain to achieve higher profit margins, customer service performance improvement, and faster response time.A supply chain that implements coordination is characterized by effective communication, information exchange, partnering, and performance monitoring (Lee, 2000, Stank, 1999, Simatupang, 2013) Logistics activities in e-commerce are very important because it is part the operational nucleus of the company.According to Purba (2015Purba ( , 2016) ) The Company's performance has to be fully supported by its activities to guarantee the delivery of products punctually in order to increase the profit of the company with an efficient operational cost.Therefore, this study will evaluate the key success factors of SERBADA Company's logistic operations and analyse the ability of SERBADA Company's logistic operations utilizing its strategic options to maximize profits.The researchers will examine two research questions which are: 1. What are the key success factors of SERBADA Company's logistics operations?
2. How can SERBADA Company utilize its strategic options in logistics to maximize profit?
For the first research question, it is answered by analysing SERBADA Company using the business model canvas (BMC) of SERBADA Company and also the key success factors of the company.For the second research, it is answered by analysing using the TOWS.

Literature Review
Any people as well as organization in the world need food, materials, and goods, and then there are a number of companies and organizations in those lines of business have to serve the needs of demands.In line to this statement Kersten, Blecker, Ringle (2015) those companies or organization have to move materials in order to deliver those demands.
Logistics is the function responsible for all aspects of the movement and storage of materials on their journey from original suppliers through to final customers.As a start-up company, SERBADA has been spending a sum of money from the establishment to the operation of the company.The management of SERBADA thinks that it is time for them to start gaining profit.The researchers believe that analysing a company's key success factors and also its internal and external factors are crucial in order to create good strategic option to maximize its profit.
As a business, it is very important to know the strengths, weaknesses, opportunities, and threats of the business.However, it is more important to know how to (1) use internal strengths to capitalize opportunities opportunity, (2) improve internal weakness by using external opportunities, (3) use internal strengths to avoid external threats, (4) create a strategy to avoid threats and minimize weaknesses Therefore in this paper, the researchers use TOWS analysis to be able to evaluate SERBADA Company in a deeper scope and come up with strategic options to maximize its profit.

Electronic Commerce and ICT
Information Communication Technology (ICT) can give services in all areas: business, universities, and will support the services and all other organizational structures and groupings (Purba, 2014(Purba, . 2015(Purba, , 2016)).All of these require are clear, well defined, agreed IT management and governance structures in order to deliver the aims and objectives of this IT Strategy.Implementation of the IT Strategy will be managed through a set of inter-related programs and projects.Phillips (2008in Purba, 2014) .Electronic commerce or e-commerce refers to range of online business activities for products and services, both business-to-business and business-to-consumer, through the internet (Rosen in Pires & Aisbett, 2003).E-commerce can be seen from four different perspectives (Turban & King, 2002): (1) From communication perspective, e-commerce is the provision of products, service, information / payment through computer network or other electronic devices.(2) From business perspective, e-commerce is the application of technology with a purpose to automate business transactions and workflow in doing something.(3) From service perspective, e-commerce is a tool that can fulfil the needs of a company, customers, and also management with a purpose of minimalizing service costs, while improving the quality of service to customers and also increase the speed of customer service.(4) From online perspective, e-commerce allows the process of selling, buying, and getting the product information via internet and other online services.Whereas according to Efraim Turban and David King ( 2003), there are two other perspectives that can be used to describe e-commerce.From collaboration perspectives, e-commerce is a facilitator that can be used to allow the process of collaboration in an organization, be it inter-organization or between organization.From community perspectives, e-commerce is a place where a community gather to learn, interact, and collaborate.
E-commerce can be classified into few different aspects such as Business-to-Business (B2B), Business-to-Consumer (B2C), Business-to-Business-to-Consumer(B2B2C), Consumer-to-Business (C2B), Consumer-to-Consumer (C2C), and etc. (Turban & King, 2002) SERBADA Company itself is considered to be the mediator in C2C and also B2C e-commerce transactions.SERBADA Company was first only acting as a bridge, an accommodator, or a mediator, where consumers (vendors) sells their products they owned directly to other consumers.

Logistics Services
Logistics is the efficient transfer of goods from the source of supply through the place of manufacture to the point of consumption in a cost-effective way while providing an acceptable service to the customer (Christoper, 2012).The process of fulfilling consumer's order and distribution is one of the processes in a logistic business process.Logistics activities in an organization have a very important role because it is the operational center of the company (Stock, Greis & Kasarda, 2000).Company performance has to be fully supported from logistic side to guarantee the availability of a product, the right quality, the right cost, and also the right time in order to increase the profit of a company with an efficient operational cost.
While according to Dima, Grabara & Modrak (2010), logistics is more than just delivering goods to consumers.The term logistics covers a much broader aspect such as warehousing, inventory management, billing, packaging, labeling, shipping, cash on delivery, payment, and much more.Challenges in the logistics side vary from (1) how to ensure products are delivered accordingly and in timely manner, (2) minimize the possibility of product defects, (3) and provide reverse logistics.Reverse logistics is required when consumers request product returns for damages or if they want to redeem types, sizes, product colors, and other things.

Innovation Service Delivery
Innovation management in logistics is triggered by increasing competition.Although megatrends like globalization and outsourcing offer growing demands in logistics (Anderson, et al., 2011, p. 97;Ellinger, et al., 2008, p.353) only low profit margins exists, because new LSPs are constantly entering the market.In this context, innovations provide LSPs a way to positively distinguish themselves from competitors to increase their market share.Customer value constitutes an important element in the innovation process.Due to dynamic changes, integration of customers is essential in order to determine their perceptions and concerns.It can be said that the recently playing of the paradigm of competition which is currently emerging in this region especially Indonesia.The usage of information technology network and appropriate applications provide the tools for competitive advantage in delivering services to the customers and it will become very valuable and more efficiency in the globalized market.This idea of combination IT innovations and in the context of any similar or other business (Purba, 2014, Purba & Rorim 2015, Purba, 2015Insyma, Radnan & Purba, 2016).It will be played as a breakthrough solution in order to serve the customers with the low cost carrier will happen due to the consequences of the presence of high technology in many areas such as information and communication technology, in various on hardware and devices (Banuara & Purba, 2017).
According to Balconi & Fontana in Sitepu (2015), innovation as a successful economic comes from the introduction of new ways or new combinations of old ways in transforming input into output (technology) that produces huge or drastic change in comparison between the perceived value used by consumers and the benefits of a product (goods and / or services) and a price set by the manufacturer.Then innovation in the wider context is that meaningful innovation does not only mean economic success but also social success.Successful innovation is innovation that creates great value for consumers, for the community, and the environment at the same time.SERBADA Company is obviously a successful innovation because it creates shopping experiences never easier than before.
According to a survey of online shoppers by Bahar (2017), more and more people are getting used to purchase online rather than in stores.In 2013, online sales estimated to be 1.8 billion USD.Surprisingly, in 2016, online sales estimated to be 4,5 billion USD (there is an increase of more or less 150% compared to 2013).It also further shown by comparing the percentage of online sales with the retail sales -each year, there is an increase of minimum 10%.This shows that people are getting more and more convenience in shopping online.The shift in shopping habit is of course supported by the evolving and continuous improvement of the online e-commerce.In this modern era, technology plays a big and important role in our daily lives.The importance and need to maximize the use of technology in businesses must be considered.In this era, there is no need for people to rent a place or to have an offline store to sell our products -they can easily sell things through marketplace, social media, and blogs.Hence, SERBADA Company serves as one of the online selling company that bridge buyer and seller.
One of the most important parts in SERBADA Company as an e-commerce business is the logistic management.One of the value-adding components in a supply chain process is indeed logistics management (Stank, Keller & Daugherty, 2011).Now SERBADA Company has eleven different third party logisitics to fully support our logistics processes.They are JNE, TIKI, Pos Indonesia, First Logistics, Wahana, SICEPAT, J&T Express, Go-Send, Grab Parcel, Ninja Xpress, and REX.Hence SERBADA Company logistic management is able to effectively and efficiently.To be able to do that, (1) SER-BADA Company needs to consider the factors that can contribute positively in the success of logistic management and ways to manage it.(2) SERBADA Company needs to combine the internal and external factors to create good strategic options.

Analysis and Discussion
SERBADA Company has 4 key partners who are there for optimization and economy of scale, reduction of risk and uncertainty, and also acquisition of particular resources and activities.Key activities are mainly logistics, fintech, and also marketing.SERBADA Company's value proposition is a platform where people can shop never easier than before.SERBADA Company also wants to be a one stop application, where people can get anything they want in just one application.To build a strong customer relationship, SERBADA Company touches both wordings via email marketing and also direct communication via customer service.SERBADA Company believes that wordings and personal services to the customers are equally important.The company also has its own platform and logistic partners that serve as its powerful channels.It trusts in its employees and invests a lot of its resources training and rewarding the employees.

Partner Performance
Partner performance plays a very important role in the growth of SERBADA Company as SERBADA Company is dependent with partner in delivering the goods.It is not seldom when SERBADA Company's partners are not performing well or unable to fulfill the standard level of agreement (SLA).One of the important SLAs is of course the delivery time.
Late delivery has always been a major problem in SERBADA Company, especially when shipping with on demand service such as Go-Send or GrabParcel same day service.Same day service is a service guarantee that the items will be received within eight hours from request.This often happens because of the poor performance by the drivers.Same day service allows driver to pick up several items first, before actually distributing them to the buyers.I noticed one driver was having a nice afternoon nap when there are still eight items to be delivered.According to my supervisor, he said that more than fifty percent of same day service exceeds eight hours.
When a partner is underperforming, it will directly affect SERBADA Company image and the trust of the buyer.Most people will blame and make complaint to SERBADA Company, not the logistics itself.They will more probably say, "SERBADA Company is always late in delivering the goods", rather than "Logistic companies are always late in delivering the goods."Therefore, partner performances are indeed one of the most important key success factors in SERBADA Company.

Customer Relationship
SERBADA Company has two types of customers, buyer and seller.Buyer's low level of satisfaction normally happened because of the lack of customer service that SERBADA Company has.When there is a problem happening in the transaction, sellers look for customer service to solve their problem.When we talk about "lack of customer service", we are actually talking about five hundred customer service that SERBADA Company has.I honestly do not know how many more customer service SERBADA Company has to hire to be able to match up with the huge amount of traffic.Based on my analysis, even two hundred more would not be enough to coop with the high traffic.That is the why SERBADA Company disabled its phone line.
Every problem that occurs has to be tackled via resolution center.SERBADA Company hopes that this resolution center will help to minimize the number of customer care because one person can handle several problems at once, unlike when they have to pick up a call one by one.With resolution center too, SERBADA Company will be able to track the message history.This is important because sometimes a problem is not solved with just one call.The next time the complainer calls again, most likely the person picking up is going to be different with the first call.In this case, they have to go through all over again about the problem.
A good logistics must measure not only the speed, the accuracy, the technology, and also the system, but also the service given when there is a question and problem.A good customer service thus is really needed to improve SERBADA Company's logistics because problem regarding logistics is always the most.In this customer relationship as well, the researchers wants to analyze how SERBADA Company is attracting its customers which are done via email marketing and also copywriting.In a day, SERBADA Company sends more than five thousand email marketing to its customers.Each of the email

Customer Databases
When starting a business, business people often feel confused about where to distribute their products or promotion.This is because of their unpreparedness in mapping the targeted area or market.Another possibility is that business actors already have a large data base but not processed optimally.They just focus on finding new customers and forgetting old customers.
SERBADA Company has an accurate and complete customer database which serves as a powerful weapon to surpass from the competitors.This customer databases provides SERBADA Company with the followings: • Setting direction It can be used as a sales direction guide to get a product into the right market.Sales activity will run quickly and efficiently if the sales force has been equipped with a prospect database that is the right target market.
• As an illustration of market potential A complete and accurate database will greatly assist the company in determining market potential by area or age group.Hence it can analyze the right product for the right buyer.If the potential sales in the target area is still low, then the company can immediately determine a promotional strategy that can boost sales.

• Record customer blacklist
With the database SERBADA Company has, the company knows which customers are problematic in buying and selling transactions.A customer is included in a blacklist category for some reasons, such as a fake customer or a troubled customer in terms of payment.

• Analyze sales
A good database will assist the company in offering new products to new and old customers.In addition, SERBADA Company can also analyze the cause of the decrease or increase in sales.That way SERBADA Company can quickly determine the strategies needed when sales are down.

• The means to communicate with customers
The company makes full use of the customer databases to communicate with customers personally, resulting in closeness between customers and SERBADA Company.This is the key to being loyal to SERBADA Company.

Innovation, Information and Technology
As a technology based company, information and technology serves as a foundation or support system in SERBADA Company.Almost every part in the logistics flows are done automatically or by system, not manually.SERBADA Company is fully connected with partners via API (Application Programming Interface).If there is an order, SERBADA Company does not need to manually call the partner to request for a driver, but it is done automatically.The status of the shipping is also displayed in SERBADA Company interface automatically.However, there are some bugs and errors in the system.It is not seldom where the product is already received by the buyer, but the status displayed is still 'shipping.'Furthermore, in SERBADA Company interface, buyer is able to see the location of the driver.However, it is often where the location displayed is not reliable.
To provide a great customer experience while shopping in SERBADA Company, SERBADA Company has to be paying extra effort in maintaining and enhancing the information and technology system.The world of technology as well as the trends are changing fast and hence SERBADA Company has to be able to keep up with the changes.

Shipping Insurance Provider
Just like any other e-commerce, SERBADA Company offers paid shipping insurance in every transaction.Some partners like Go-Send and Grab apply that insurance is automatically included in the amount a buyer pays, but other partners such as JNE and Wahana allows buyer to choose whether they want to paid extra money for the insurance.What makes shipping insurance in SERBADA Company is complicated and confusing is because each partner has different insurance company provider.This unable SERBADA Company to make a universal rule about the pricing, coverage, and also terms and condition.To make even worse, each insurance company provider has different way of making a claim, be it the documents or evidence required, the length of investigation period, and also the maximum coverage.
The employees are also confused about this insurance terms without looking at the letter of agreement.Buyers are most of the time confused about the shipping insurance terms, pricing, coverage, and also how to claim.SERBADA Company could not ask buyer to go to our help page and read the article stated.When they face confusion, they simply ended up not using shipping insurance.This is exactly why the rate of buyer using shipping insurance is very low, despite that the commission SERBADA Company earns from this shipping insurance is considerably high.
To tackle the problem above, the team and the researchers have been working very hard to establish SER-BADA Company's insurance services.The company will partner up with an insurance company provider.Under one insurance company provider, SERBADA Company hopes that there will be only one terms and conditions, one price, one coverage, and also one rule.Claim and investigations should be much easier as well because SERBADA Company are dealing only with one company, unlike now eleven companies In the SO (Strengths-Opportunities) section, SER-BADA Company is using internal strengths to capitalize opportunities.The first opportunity is expanding internationally.To seize this opportunity, SERBADA Company is already handled or partnered with professional and experienced logistics company who are able to support the delivery of the products.Hence, SERBADA Company does not need to worry the troublesome of delivering the products internationally.The second opportunity is to provide better customer experience by providing better server, system, user experience, and also user interface.Unlike some other e-commerce where they deliver the products themselves, SERBADA Company does have low operating cost in the logistics division as a result of partnering with experienced logistics companies to do all the shipment.Hence, the cost of establishing a logistics company can be used for other purposes such as getting better equipment, technology, and infrastructure.
In the WO (Weaknesses-Opportunities) section, (1) SERBADA Company is improving internal weaknesses by using external opportunities.SERBADA Company is fully aware that they are fully dependence, have no control, as well as no direct communication with customers.SERBADA Company can grant all of these by owning its own logistic company.By owning its own logistic company, SERBADA Company can increase the number of customer by providing lower delivery cost, better packaging, and also better customer relationship.Furthermore, SERBADA Company will just be fine in case all the partners chose to end the partnership.(2) SERBADA Company is eliminating the problem of lack of customer service by having a virtual assistant chat.This virtual assistant chat will enable SERBADA Company to answer or reply to large customers at one time.For instance, if a customer is about to complaint or ask something, he or she can just chat with the virtual assistant chat to get the solution or the answer he or she is looking for.
In the ST (Strengths-Threats) section, SERBA-DA Company is using internal strengths to avoid external threats.One of the biggest threats every e-commerce player in Indonesia is facing is indeed the bad infrastructure (bad roads, congestion, limited railway services, etc) in Indonesia.To make it worse, Indonesian is also wellknown for its theft.These two threats are the factors that e-commerce is unable to produce high quality and trusted delivery.However, SERBADA Company has partnered up with eleven professional and experienced logistics companies to deal with the problems.Hence SERBADA Company is a successful e-commerce that is trusted and chosen by the customers.
In the WT (Weaknesses-Threats) section, SERBA-DA Company is creating a strategy to avoid threats and minimize weaknesses.To be able to do that, SERBADA Company has been building strong relationship with its partners.As I mentioned before, SERBADA Company has no control and is dependence with its logistics partners.However, with a strong partner retention, SERBA-DA Company is able to voice out its voices, and these voices are able to put SERBADA Company in a better position.Furthermore, SERBADA Company often has brainstorming sessions with its partners to cope with the challenge both of them are facing.

Conclusion
The main role of logistics is to provide timely and efficient delivery of products so that the customer is satisfied and becomes a company's repeat customer, and also earns a company more customers.Today, the online shoppers have the powerful tool of social media in their hands to share their purchasing and selling experiences.In today's competitive market conditions, retailers have to put in the best efforts to exceed customer satisfaction.Some of the largest e-retailers have implemented sameday delivery to woo customers who can't or won't wait for even next-day service.Some retailers offer free or low cost shipping for many products (after a particular price range).An online consumer is looking for attractive pricing and hassle-free delivery of products.An exceptional product delivery experience is critical in not just winning but retaining clients.So, it is in the best interest of the e--commerce players to entail professional logistics services which would result in faster growth, success and dynamism for the companies.

Figure 2 .
Figure 2. Business Model Canvas Analysis

Table 1 .
Strategic environment and challenges of Indonesia Source: Logistics in Indonesia

Table 2 .
Key Success Factors in SERBADA Company Logistic Department contains attractive words and also banner to get them to shop in SERBADA Company.According to my manager during a meeting on 10th September 2017, honest and direct communication is the best approach as it helps to build a stronger and more harmonious relation which in the end leads to healthy, trusting relationships, and stronger collaboration.

Table 3 .
TOWS analysis on SERBADA Company Logistic Department