Value Chain Analysis in Related Business Development to Achieve Economies of Scope for the Advertising Business in Bandar Lampung, Indonesia

Abstract

Abstract - This study aims to analysis the value chain in related business development by expanding PT. Guyub Media Abadi's advertising business into a related customized furniture business in Bandar Lampung, Indonesia. Using a qualitative descriptive method, the research explores the strategic alignment between the two business lines by analyzing both economic and non-economic feasibility. Primary data were collected through interviews and observations, while secondary data—including financial reports—were used to assess project viability through Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP) methods. The findings reveal a strong strategic fit across six key value chain activities: supply chain, technology, operations, sales and promotion, distribution, and customer service. These synergies led to significant cost savings, or economies of scope, amounting to Rp. 147,380,500 in the advertising business and Rp. 565,000,000 in the furniture business. Financial analysis indicates that the business development is feasible, with a positive NPV of Rp. 781,534,630, an IRR of 136%, and a payback period of just over one month when leveraging existing assets. Moreover, the development positively impacts employee welfare by increasing the average wages of daily workers. The study concludes that internal business development through value chain integration is a strategic and financially viable approach for achieving competitive advantage and sustainable growth.

Keywords – Business development, value chain, economics of scope, advertising and furniture business