The phenomenon of Industrial Business financing

1. The phenomenon of Industrial Business financing

Finance industry (finance) is now nimble boost sales figures. When the purchasing power drops, they are more incentive to channel financing. Finance company known as a business entity outside the bank and non- bank financial institutions specially set up to carry out the activities included in the business of financial institutions. Financing institutions perform activities including the following business areas: leasing, factoring, business credit cards and consumer finance. Moving consumer financing in the automotive sector ranks first with 60%. There are several types of financing cooperation that can be done finance companies and banks, such as the joint financing and channeling. What is meant by joint financing is when the source of funds for financing is derived from the company's own financing or other banks. While channeling is if funds intended for financing entirely from the banks and the risks arising from this activity are the owners of the funds.

Table 1: DEVELOPMENT FINANCE COMPANY December 2010 - 2015 (USD million) Information

Years Total

Profit/loss Company Assets

Total

liability

Cash in

capitali

Amount 2010

financing

flow

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11,61 6,82 Source: based on the published financial statements of the finance company incorporated in APPI (Indonesian Financial Services Association) in 2016.

During 2015, the financing company's performance is indeed impressive growth. A total of 141 finance companies in Indonesia (from a total of 237 companies listed in Bank Indonesia), total financing reached Rp

61 trillion, up 27.65 from 2014 is Rp 47 trillion. Although net income rose, growth tends to decline. Likewise, total assets, from 2014 to 2015 experienced a sharp decline. On the macro economic front, there are two things that cause a decrease in consumption financing, namely: first, the rise in prices of fuel oil (BBM), which automatically impact on the finance industry. So that makes the weaker purchasing power to the motor vehicle. Second, the decline in consumer finance triggered by the increase in lending rates. The increase in the interest rate of Bank Indonesia Certificates (SBI) causes the lending rates charged finance companies participated soaring. Each 1% increase in interest rates will lead to increase in lending rates to 2% financing. Companies finally raise of 3% - 4% of the increase in the interest rate. 70% credit financing sources in Indonesia came from the bank. The remaining 25% is derived from the capital market and 5% came from own capital. The grouping of finance companies by the amount of total assets (Criterion Bank Indonesia), namely: finance large with total assets above Rp 1 trillion, finance medium with total assets of Rp 100 billion to Rp 1 trillion and small finance companies with total assets below Rp 100 billion. Finance industry has a macro impact on the Indonesian economy, namely, contributing to economic growth, provide development funds, contributing to tax non-oil sector, helped control inflation and reduce unemployment. While the impact of micro is improving corporate profits, an increase in the company's assets, the company's capital increase and improve the performance of financial ratios, capital ratios, efficiency ratios and profitability ratios (ROA or ROI and ROE). Based on an exploratory study of several journals, can put forward some research gap (gap study) were used as a justification for doing this dissertation research: There is controversy controversial opinions or theories about the failure of the partnership. In connection with the growing realization of the potential performance benefits that can be achieved through a collaborative partnership, it is surprising that the study to specifically examine the performance outcomes of the partnership is rarely done (Buvik and John, 2000). Such studies are also motivated by the weight of evidence indicates that the majority of real partnership failed to reach the high expectations (Cross, 2000; Gulati et al. 1994). Meanwhile, Sin et al. (2005, p. 50) found in his research that a marketing partnership orientation positively and significantly affect business performance. In addition, there is still little understanding of the application of the company's marketing of the relationship of market orientation, especially orientation towards performance marketing partnership in the future transition economies (Sin et al., 2005). There is a contradiction opinions or contradictory theories about the failure of the partnership in meeting the expectations of good performance. Partnerships may be conceived as both are making progress towards collaboration on a number of technical and organizational fronts (Holti and Standing, 1996; Barlow et al., 1997; Thompson and Sanders, 1998). Several studies have shown the benefits of a survey on the performance of the partnership (Cowan et al. 1992; Weston and Gibson, 1993; Knott, 1996; Larson, 1997). Even Sin et al. (2002, p. 668) found in his research that the orientation of a marketing partnership has a positive and significant effect on the performance of businesses that include increased sales, customer retention, ROI, market share and the whole performance is there. But there is also evidence of the case about the failure of the partnership to meet the performance expectations as found by Racham et al. (1996) and Angelo (1998). In addition, an exciting discovery and can not be alleged that the trust (confidence) has no effect in improving business performance (Sin et al., 2002, hal.671). The invention can

be special when compared with the results of several studies which emphasize that trust is a key and central constructs in partnership exchange (Ford, 1990; Morgan and Hunt, 1994). This is inconsistent but makes an interesting phenomenon that is rarely exploited. There is a contradiction contradiction theory or opinion regarding the failure of supply chain collaboration in improving corporate performance. The success of collaborative customer partnerships - suppliers confirmed has the advantage of significantly better quality,

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improved service, reduce costs, accelerate the cycle of product-to-market (product - to - market), increase flexibility, improve responsiveness to the market demand and customer service and increase the share of the market (Anderson and Lee, 1999; Corbett et al. 1999; Mentzer et al. 2000; McLaren et al. 2002). However Vereecke and Muylle, (2006, p. 1193), argued about the empirical findings that the collaboration will improve in line with improved performance, but the improvement is very small and not always significant. It can be concluded that supply chain collaboration is not suitable for improvement in the operation and collaboration is not a guarantee for the company's success. That the lack of research on the partnership strategy in distribution channels as part of business performance improvement. Therefore, it is possible addition of a variable (eg: innovation and customer satisfaction or otherwise) to examine the success of the partnership strategy in an effort to achieve improved business performance (Ahmad Sofyan, 2006). Confidence in the perception of the supplier in the dynamic analysis of supply chain partnerships to achieve the company's performance is still not. It can be argued that the perception of partnerships such as the study Fynes et al. (2006) whether the presence of the supplier side represents the views of one party and denied a view of the customer. This limitation is implicitly suggesting a different research significance based on the partnership of two parties (suppliers and customers). Still a little application of measurement based on cooperation and adaptation. So for the service industry requires procedural and adaptation techniques, which allow still less prominent (Woo and Ennew, 2004, p. 1266). The study focuses solely the quality of the buyer- seller partnerships can lead to silting understanding of marketing. Therefore, future studies could focus on transactional exchange (transactional quality) and partnership exchange (quality of the partnership) and its influence on quality of service, customer satisfaction and behavior (Woo and Ennew, 2004, p. 1267). Therefore, the formulation of the problem posed in this study is: How is the process of marketing orientation in developing partnerships in an effort to improve company performance? The study will be conducted in a more comprehensive manner elaborating research problem above, into some of the questions posed in the research for empirical research as follows: What is the rationality of finance companies in implementing a marketing partnership orientation? How the finance company to exploit the marketing orientation partnerships to achieve better performance? The quality of the partnership which is how the company expected to achieve better performance? and What are the forms of adaptation and collaboration that will be built by a finance company in an effort to improve its performance?