Strategic management in the business of agricultural equipment and machinery services in Bandung, West Java

Abstract

The interest of young people to be a farmer is low. It could become a threat to the sustainability of agriculture in Indonesia. As an effort to prevent that conditions, The Ministry of the Agriculture Republic of Indonesia issued a policy on grant equipment and machinery for farmers. As a requirement, they must be incorporated in Agricultural Equipment and Machinery Services. It shows that Agricultural Equipment And Machinery Services is the spearhead in the successes of those programs. This study aims to measure the performance as a base to determine the strategies management on Agricultural Equipment And Machinery Services. The research analysis uses Structural Equation Modeling (SEM) to build mathematical models that show the relationship between variable research: economic (EKO), organizational (ORG), and technical (TKS). Mathematical model analysis on this research are TKS = 0.99∗ORG (t-test: 4.96) and EKO = 0.61∗TKS (t-test : 2.79). The goodness of fit test index shows that the model criteria are classified into moderate until a good fit. Therefore, the model can be used to rank each indicator's influence. SWOT analysis results show that Agricultural Equipment and Machinery Services performance on quadrant three. The main strategies take advantage of the opportunity by optimizing strength. It can be concluded that the strategies are developing human capital, building a knowledge management system, and developing a website or android to expand disseminating business information.