The geographical development strategy must be in line with the marketing strategy that has been planned since the beginning, namely the customer intimacy strategy. This is also why developments of the Company’s Branch Offices Network are not focused on the big cities, but on the smaller cities, which are generally located relatively far from the capital of each province (first-level regions). These have lately turned out to be the base regions for regional autonomy, a requirement that began to be implemented in Indonesia.
There are four reasons as to why the development of PT Armada Finance is carried out with a geographic development strategy, namely by expanding the marketing network (extensification), and not by a market deepening strategy (intensification).
- Geographical development will provide better opportunities for PT Armada Finance in serving customers and business partners;
- Geographical development will overcome the possibility of softening or easing prudent financing standards. This is because of the pressure on the need to pursue targeted business volumes;
- Geographical development will enlarge the company’s customer base, and reduce the risk of portfolio financing;
- Geographical development will also optimize the implementation of price discrimination strategy, so that it will increase the company’s profitability.
Implementation of the geographical development strategy has begun since the first-year operation of PT Armada Finance. In 1996, PT Armada Finance began with opening and maintaining a branch office in Semarang. This geographical development then continued to be planned and carried out periodically, after completing analysis on the Company’s current performance and feasibility studies on potential cities. Other than the above four reasons, geographical development serves as a motivator for employees, by providing continuous possibilities and chances to achieve higher levels of professions to those who have high performances in their current positions.
After focusing itself on the markets in Central Java Region in its first five-year period, PT Armada Finance began to expand its business in its second five-year period, by opening and maintaining Branch Offices Network in the provinces (first-level regions) of West Java, East Java, Bali, Kalimantan, Sulawesi and Sumatra. The developments of these Branch Offices Network are ongoing. Currently, PT Armada Finance has Branch Offices Network in West Nusa Tenggara and East Nusa Tenggara. Considering the macro economic conditions, the opening of Branch Offices Network will still currently need to be carried out in areas with economic potentials to grow and develop, which may become a potential market for finance companies.
In its third five-year period, PT Armada Finance started to develop a system of representative offices (which was later referred to as ‘an office other than a branch office’ by the Financial Services Authority/Otoritas Jasa Keuangan). A representative office is a service office that is a subsidiary of a branch office. By the end of 2018, PT Armada Finance has 37 branch offices and 48 representative offices. In line with the fast-growing number of offices owned by the Company, two regional offices were established to oversee branch offices and representative offices, so the Company can be managed in a more effective way.