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FINAL PAPER Economics for Business Case Study: Oligopoly in Indonesian Cement Industry By: Group II Ahmad Syakbani Ari Susilo Nugroho Primus Waskito Jati Widodo Nurul Baiti Indra Lesmana BRIEF CONTENTS CHAPTER I: PREFACE..…………………………………………………………………..….. 2 1.1. Background ...………………………………………………………………………….. 2 1.2 Identification Problem……………………………………………………....................... 3 CHAPTER II: BASIC CONCEPT AND CHARACTERISTIC …………….............................. 4 2.1 Basic Concept of Oligopoly ………………
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  FINAL PAPER Economics for Business Case Study:Oligopoly in Indonesian Cement Industry By:roup IIA!mad Sya #aniAri Susilo Nugro!oPrimus $as ito %ati $idodoNurul BaitiIndra Lesmana BRIEF CON&EN&S CHAPTER I: PREFACE..…………………………………………………………………..…..21.1. Background ...…………………………………………………………………………..21.2 Identification Proble…………………………………………………….......................!CHAPTER II: BA IC C#$CEPT A$% CHARACTERI TIC ……………..............................&2.1 Ba'ic Conce(t of #ligo(ol) ………………………………………..................................&2.2 *odel' of #ligo(ol) Co(etition ......……………………………..................................&2.2 T+e Ad,antage' and %i'ad,antage' of #ligo(ol) Co(etition .......................................-CHAPTER III: A$A/ I .......................................................……………..............................0!.1 #ligo(ol) of Indone'ian Ceent Indu'tr) …....................................................................0  !.2 Co(etition in Indone'ian Ceent Indu'tr) …................................................................!.! Pricing trateg) in #ligo(ol) .........................................................................................1!.& 3o,ernent Polic) ..........................................................................................................11CHAPTER I4: C#$C5 I#$ A$% REC#**E$%ATI#$ .…………..............................1!&.1 Conclu'ion …..................................................................................................................1!&.2 Recoendation …........................................................................................................1!REFERE$CE …………..........................................................................................................1& Economic for Business: Oligopoly in Indonesian Cement IndustryPage 2  C'AP&ER IPREFACE ()( Bac ground Ceent i' a 'trategic indu'tr) in Indone'ia a' t+i' indu'tr) i' a feeder for con'truction6+ou'ing6 and infra'tructure 'ector'6 7+ic+ kee( gro7ing in Indone'ia. For t+i' rea'on6 Indone'iango,ernent 'et u( t+e fir't ceent (lant in 1-8 kno7n a' een 3re'ik and t+e ne9tin'tallation 7a' een Tona'a in 10. Totall)6 in 18 Indone'ia +ad t+ree ceent (lant'located in e't uatra6 Ea't ;a,a6 and out+ ula7e'i. A' t+e ra(id gro7t+ of t+i' countr) att+at tie6 t+e ne7 ceent (lant' 7ere 'et u( bet7een 18<1= b) (ri,ate co(anie' 'uc+ a' een $u'antara6 een Cibinong >no7 Holci Indone'ia?6 Indoceent6 and een Bo'o7a.T+e ceent (roduction i' di,ided (er region6 'uc+ a' een Tona'a6 een Bo'o7a6 and een@u(ang for Ea't Indone'ia een 3re'ik for ;a,a i'land and een Padang for uatra i'land.In 211<2126 Indone'ia ceent indu'tr) (o'ted double<digit gro7t+6 e,en it gre7'lig+tl) belo7 national econoic gro7t+ in 21!. But o,erall6 t+ere i' e9ce'' bet7een t+e totalca(acit) of A EA$ ceent indu'tr) and t+e ceent con'u(tion. %uring 21!6 t+e totalin'talled ca(acit) 7a' 2-06!- illion ton 7+ile t+e con'u(tion 7a' 16&- illion ton6re'ulting 0-6 illion ton e9ce''. T+ailand and 4ietna are t+e countrie' 7it+ t+e big (roductione9ce''6 2860 illion ton and 26- illion ton re'(ecti,el). Con'euentl)6 t+e'e countrie' 7ill beore aggre''i,e in 'eeking e9(ort arket'. oe countrie' 'uc+ a' *)anar6 ao'6 Cabodia6 inga(ore6 and *ala)'ia6 7+ic+ are geogra(+icall) located near T+ailand and 4ietna6 totall)need 6& illion ton e9tra of ceent 'u((l). 5( to t+i' (oint6 t+e total unab'orbed e9ce'' of T+ailand and 4ietna ceent (roduction i' -068 illion ton. %ue to t+e di'tance bet7een4ietna and Indone'ia6 4ietna aggre''i,el) 'end' it' ceent e9ce'' to Indone'ia. In 21!6 Indone'ia e9(lored -8-6 ton' of ceent and clinker >'ource: Indone'ianCeent A''ociation? 7+ic+ 'trengt+ened t+e 'u((l) of ceent in doe'tic arket to be oret+an enoug+. Ho7e,er6 in order to 'u((ort t+e future gro7t+ of ceent in,e'tent and tofacilitate t+e bu'ine'' co(etition cliate6 Indone'ian go,ernent allo7' t+i' indu'tr) to i(ortclinker for ceent illing in Indone'ia. Indone'ian Ceent A''ociation data al'o infor' t+at in2126 total ceent con'u(tion in Indone'ia reac+ed -&60 illion ton.T+e current Indone'ia ceent indu'tr) i' con'idered a' an oligo(ol) 'ince t+i' arket i' Economic for Business: Oligopoly in Indonesian Cement IndustryPage !  doinated b) onl) fe7 (roducer' 7+ereb) eac+ +a' control o,er t+e arket in indu'trie' 7it++ig+ le,el of arket concentration. T+e big t+ree Indone'ian ceent anufacturer' are PT een Indone'ia >forerl) een 3re'ik? >&!.=?6 Indoceent >!.0?6 and Holci Indone'ia>10?. B) +a,ing ! doinant (roducer' to control  arket6 it i' ob,iou' t+at ceent arketin Indone'ia i' an oligo(oli'tic arket 'tructure 'o t+ere i' be+a,ioral tendenc)6 7+ic+ adDu't' toeac+ ot+er bet7een ceent (roducer'.T+i' (a(er i' aied at 'tud)ing t+e oligo(oli'tic arket in Indone'ia ceent indu'tr) a'7ell a' it' co(etition (attern and it' effect'. ()* Pro#lems Identification T+i' (a(er di'cu''e' 'oe i''ue' in Indone'ia ceent indu'tr) a' follo7':a.T+e oligo(oli'tic arket 'tructure of Indone'ia ceent indu'tr) and it' co(etition (attern. b.T+e effect' of oligo(oli'tic arket in t+e Indone'ia ceent indu'tr) co(etition.c.T+e rea'on' 7+) 'oe ceent (roducer' fail to enter t+e oligo(oli'tic arket co(etitiond.T+e (ricing 'trateg) in oligo(ol) arket of ceent indu'tr).e.T+e di'ad,antage' of oligo(ol) for ceent con'uer'. C'AP&ER II Economic for Business: Oligopoly in Indonesian Cement IndustryPage &
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