Business development strategy of coffee processing in MSMEs scale using BMC approach and SWOT-AHP integration

. The coffee agro-industry is a sector that is currently growing rapidly in Indonesia. MSMEs Loca Nusa is one of the coffee producers in Malang City which has the potential to be developed. They sell robusta coffee at low prices and delivered from Dampit, Malang which is known to have the best quality. However, Loca Nusa still experience problems in managing their business. The purpose of this study is to identify internal and external factors, formulate and sequence strategies, and form a new development BMC. This study used SWOT (Strength, Weakness, Opportunity, Threat), the AHP (Analytical Hierarchy Process) and BMC (Business Model Canvas) approach. The results showed that the position of MSMEs Loca Nusa was in quadrant V (hold and maintain) with product development and market penetration strategies. The result of the AHP ranking showed market as the highest criteria (0.510), the highest goal is that MSMEs can expand the market to increase production figures (0,566), and the highest alternative is expanding the market to coffee shops in Malang by selling roasted bean products with various variations (0,612). The addition of strategy to the upgraded BMC is on key partner elements, value propositions, and channels.


Introduction
Coffee agro-industry is a sector that continues to increase every year in Indonesia today.The tropical climate in Indonesia makes coffee plants grow abundantly.Data from the Central Statistics Agency (BPS) states that coffee production in Indonesia reached 794.8 thousand tons in 2022, an increase from 2021 which previously reached 786.2 thousand tons.Even though the volume of coffee exports between 2011 and-2020 tended to fluctuate, Indonesia was still able to achieve a total coffee export of up to 379.035 thousand tons in 2020.This value increased in 2019 and reached a value of 359.05 thousand tons [1].With this amount, the International Coffee Organization (ICO) notes that Indonesia is in the fourth position as the world's largest coffee exporter after Brazil, Vietnam, and Colombia [2].
Loca Nusa MSMEs is a coffee processing business in Malang that was founded in 2018.The products are roast beans and robusta coffee powder.Loca Nusa coffee products has the potential to be developed.However, there are still several problems that arise at Loca Nusa MSMEs including the market scope that is not yet wide, lack of business management, and uncertain raw materials for coffee.Several management and operational problems caused sales and profits from the business to decline [3,4].Therefore, a business development strategy analysis for Loca Nusa Coffee is needed.
In previous research, many studies on business development have been carried out.However, there are differences in the results shown by previous research.Research results from [5] stated that the obstacle in business development is adjusting to market conditions and demand which are influenced by geopolitical and social changes.Based on [6] business development consists of market research, searching for new business opportunities, maintaining company relationships, etc.In the research of Arabica coffee company, the development strategies consist of increasing the production of the coffee, built a coffee center, built a management system and maximizing the capabilities of land and human resources [7].More in-depth research is needed regarding internal and external factors in the coffee business.
Making a business model is one of the efforts that can be chosen in developing a business.In business modeling, the business model canvas (BMC) can be used.BMC can describe business models in a simple and easy-to-understand way so that businesses can better evaluate company performance [8][9][10].The result of the business model canvas business model is an overview of the company's condition which will then determine its business development strategy.The method that can be used in analyzing strategy determination is SWOT (Strength, Weakness, Opportunity, Threat) [11].The SWOT method uses aspects of the strengths and weaknesses of the internal and external environment so that appropriate goals and strategies are formed [12].After the results of alternative strategies from the SWOT analysis are obtained in the form of strengths, weaknesses, opportunities, and threats, then prioritization will be carried out.In this study, the AHP method was used because of its advantages, which are easy in the process of making decisions, alternatives and criteria that are not related can still be used and are able to solve complex problems [13].Based on the explanation that has been done, this research will develop a business model with BMC and the result of the research is an alternative strategy that is formed from the results of SWOT and AHP that can be used by business actors in developing their business [14]

Research methods
The research was conducted at Loca Nusa MSMEs which is located on Jl.Raya Candi 3 No. 24, Sukun, Malang City, East Java.The limitations of the problem in this study are limited to providing alternative strategic proposals and not extending to the implementation of business development strategies at Loca Nusa MSMEs.

BMC mapping
The Business Model Canvas (BMC) is a business model in the form of a general framework which contains a logical description of how an organization captures, delivers and creates value [15].BMC is structured from a business with 9 elements in the form of key resources (resources the company needs to run the business), key activities (main activities carried out by the company), key partnerships (company relationships with key partners who have a role in optimizing operational processes), value propositions (services and products that a company offers to create value for specific customer segments), customer segments (segmentation of the people the company wants to reach and serve), customer relationships (the relationship a company builds with a particular customer segment), channels (an overview of how the company communicates and reaches its customer segments), revenue streams (the method used by the company to gain profits from the running business) and cost structures (costs or expenses required by a company to do business and operate) [16].
In the BMC canvas model, it is divided into two, namely the logical side (left component) and the creative side (right component) [17].

SWOT analysis
Based on [18] the steps taken to evaluate the business model using SWOT analysis are: 1. Evaluate internal factors (IFE), which is a matrix that contains evaluations of a company's internal factors 2. Evaluation of external factors (EFE) is carried out which is a matrix that contains evaluations of external factors of a company 3. Matching stage with the IE (Internal External) matrix to obtain a business strategy that is more detailed and in accordance with the position and conditions of the company.4. Develop a business development strategy using the SWOT matrix.Making a SWOT matrix is based on the results of an analysis of internal factors, namely strengths and weaknesses, and external factors, which consist of opportunities and threats.The strategies arranged in the SWOT matrix are SO (Strengths-Opportunities), ST (Strengths-Treaths), WT (Weakness-Treaths), and WO (Weakness-Opportunities) The results of the SWOT analysis can later be used as material for comparing ideas from various perspectives, both in terms of strengths and weaknesses, as well as opportunities for threats that may occur in the future [19] SWOT analysis is used to achieve an organized approach that helps in decision making [20]

AHP method
Analytical Hierarchy Process (AHP) is a multi-factor or multi-criteria decision-making technique that is used to solve and analyze complex problems into a hierarchy that contains goals or objectives, criteria, and alternatives [21][22][23].Alternative strategies will be sorted based on their priority level of importance [24].Priority sequences can be used by companies to develop business development strategies.The strategy that has been prepared will be added to the latest BMC elements as an improvement to the existing business model.In this research data processing is carried out using the Expert Choice 11 software.The steps for processing data using the AHP method are as follows: 1. Define the existing problem and determine the expected solution 2. Develop a hierarchy consisting of the first level of objectives, the second level of criteria, and the third level of alternatives 3. Create AHP questionnaires and distribute questionnaires to respondents 4. Looking at the consistency of the questionnaire results, where a CR that is less than or equal to 0.1 is declared consistent 5. Sort the priority of alternative strategies based on their total weight 6. Develop business BMC by incorporating alternative strategies that have been prepared

Mapping the company's initial condition using BMC
The first step in the research is to map the initial conditions of Loca Nusa MSMEs on the BMC model.The BMC model describes in a structured way the business conditions running using 9 elements [25].BMC mapping at Loca Nusa MSMEs and an explanation of each element can be seen in Fig. 1.

BMC evaluation with SWOT analysis
The results of the business model that has been created using BMC will be followed up with developing an alternative strategy using SWOT to develop Loca Nusa Coffee business.In the business model, weaknesses and strengths enter the internal environment, while opportunities and threats enter the external environment [26].

Internal environment analysis
Based on [27,28] the IFE (Internal Factor Evaluation) matrix will produce an average weight and rating on the strengths and weaknesses variables.The results of the IFE matrix calculation can be seen in Table 1.

324
In Table 1. the highest strength is Robusta coffee beans come from the Dampit plantation which is Indonesia's superior commodity with a score of 0.388.This means that the location of the raw material for coffee beans is a force that has a high influence on the development of the Loca Nusa MSME business.On the weakness factor, product sales promotion has not been maximized because it is not continuous get a score of 0.083, indicating that product sales promotion is not running smoothly at Loca Nusa MSMEs which has a big influence on business development.The total IFE matrix score is 2.324 which means the company has a weak internal position.Based on [29] the total average IFE score below 2.5 describes a weak internal organization, while the total average above 2.5 describes a strong position.

External environment analysis
The weight and rating of each external variable will be calculated to see the external factors that have the most influence on the company [27][28].The results of the EFE (External Factor Evaluation) matrix for Loca Nusa MSMEs can be seen in Table 2.In Table 2. the highest results on the opportunity factor are MSMEs that have had a cooperative relationship with Dampit coffee farmers for a long time with a score of 0.567.A high score on opportunity indicates that cooperation with coffee farmers in Dampit has the greatest impact on business development.On the threat factor, distributor partners who also sell similar products belonging to competitors have the greatest influence on business development.The total EFE score obtained is 2.083, which means that the company is relatively weak and has not been able to take advantage of opportunities to deal with threats that come from outside.The highest weighted score of the EFE matrix is 4.0, the lowest is 1.0, and the average is 2.5 [29].

Internal External matrix (IE)
The internal external matrix is a matrix to identify and analyze the company's internal and external factors to determine the current business position.The total weight scores of the IFE and EFE matrices that have been calculated will be brought together at one point to find out the value of the IE matrix [30].Table 1 and Table 2 shows the total weight of the IFE and EFE matrices.The position of the company can be seen in Fig. 2 where Loca Nusa MSMEs is in position V (hold and maintain).Loca Nusa MSMEs is positioned to survive so the strategy that can be implemented is to maintain the existing business conditions, market penetration and product development.Strategies that can be applied to hold and maintain business positions are product development and market penetration [31].Next is to compile a SWOT matrix to produce a strategy based on the company's current conditions.

SWOT matrix
The strategy analysis compiled in the SWOT matrix will be adjusted to the company's position because of the IE matrix, namely hold and maintain.There are four alternative strategies in the SWOT matrix such as Strength-Opportunity (SO), Weakness-Opportunity (WO), StrengthThreat (ST) and Weakness-Threat (WT).SO is a strategy designed to use existing strengths to maximize opportunities.Based on SWOT factor analysis, two SO strategies were; 1) Maintenance of social media and e-commerce and 2) Expanding the market to Malang coffee shop by selling various roast bean products.The WO strategy is designed to minimize existing weaknesses to take advantage of opportunities.Two WO strategies were; 1) Updating the packaging design and registering the product with P-IRT and 2) Participate in MSMEs community and government training programs.ST strategy is designed to maximize strength to avoid threat.Two of ST strategies were; 1) Adding a variety of coffee types (arabica coffee beans, house blend) and 2) Create additional social media accounts such as Facebook, TikTok, website.The WT strategy is formed to minimize weaknesses to avoid threats.Two of WT strategies were; 1) Looking for additional farmer partners to cooperate in supplying coffee and 2) Make a product sales strategy by cooperating with resellers.Alternative strategies for Loca Nusa MSMEs can be seen in Fig. 3.

BMC evaluation with SWOT analysis
The process of determining the priority of alternative strategies will be carried out using the AHP method.Alternative strategies are taken from the SWOT matrix that has been made.The hierarchy of business development strategy can be seen in Fig. 4.
Based on the results of the AHP analysis in Fig. 4 shows that the priority criterion is the market with a weight of 0.510.The priority on the goal is that MSMEs can expand the market to increase the amount of production with a weight of 0.565.The priority alternative strategy is to expand the market to Malang coffee shops by selling various roast bean products with a weight of 0.512.The numbers that appear describe the weight of alternative strategies.The highest weight represents the strategy with the top priority business development, the lowest weight represents the lowest priority [11].

BMC model development
BMC development is carried out by adding strategic alternatives from the SWOT matrix to the business model canvas.The addition of strategies to Loca Nusa BMC is carried out on key partnership elements (WT1), value propositions (SO2, ST1, WO1 and WO2), and distribution channels (SO1, ST2, WT2).The results of the Loca Nusa BMC that have been developed can be seen in Fig. 5.The internal factors identified from the Loca Nusa business in term of strengths are; Robusta coffee beans come from Dampit with superior quality, sell many types of coffee variations, products are sold on various e-commerce sites, and products are sold at affordable prices.In terms of weakness, the product has not been registered with P-IRT, the packaging is less attractive, human resources are lacking, product promotion is less than optimal and offline marketing is hampered.The external factors that can be identified in opportunities are; the large number of coffee shops in Malang, cooperative relationships with coffee farmers in Dampit, the use of e-commerce, and diversification of coffee varieties and packaging.the threat factors are; weather uncertainty, rising coffee prices and competitor competition.The internal factor The IFE weighting results for Loca Nusa MSMEs is 2.324, while the total EFE matrix weight is 2.083.Based on the IFE and EFE scores, the position of Loca Nusa MSMEs on the IE Matrix was in position V (hold and maintain).From the results of AHP, the priority on the criteria is the market with a weight of 0.510.The priority on the goal is that MSMEs can expand the market to increase the amount of production with a weight of 0.565.The priority alternative strategy is to expand the market to Malang coffee shops by selling various roast bean products with a weight of 0.512.The highest alternative weight indicates the priority that must be applied to Loca Nusa business development.The addition of strategies to the BMC of Loca Nusa is carried out on key partnership elements (WT1), value propositions (SO2, ST1, WO1 and WO2), and distribution channels (SO1, ST2, WT2).Therefore, further research using the BMC-SWOT-AHP method with a fuzzy combination is needed to find out in more detail the crucial needs to develop a coffee business in Malang City

Table 1 .
Calculation results of Loca Nusa's IFE matrix.