DIVERSIFICATION STRATEGY AND BUSINESS PORTFOLIO DEVELOPMENT IN STATE-OWNED COMPANIES PT. HUTAMA KARYA

This research aims to analyse the business diversification strategy of PT Hutama Karya (Persero) and its subsidiaries, explain their business operations, and explore growth potential. This research tries to identify the company's internal and external environmental factors after business diversification, conduct an analysis of the corporate position and portfolio of business units and subsidiaries, and formulate a new business diversification strategy concept. This research method is descriptive qualitative with the data used in the research including primary data collected through interviews and questionnaires, as well as secondary data such as company financial reports, industry performance reports, and industry attractiveness. The main supporting factors for this diversification are the continued economic growth and government support in infrastructure development. The company's internal strengths are the application of technology and adaptation to changes in the construction industry, they also face challenges such as cashflow issues, global economic uncertainty, and changes in political direction. The SWOT analysis shows that the company is in the "Grow and Build" quadrant and needs to pursue aggressive business diversification. The results of the GE Nine Cell Matrix analysis show a diverse position for the company's business units, with some as "Leaders" and others needing to be managed carefully or even divested. The managerial implications of this study are the need for business ecosystem development and business portfolio diversification, technology development across businesses to support competitive advantage, and the creation of new opportunities after the completion of the Trans-Sumatra Toll Road project.


INTRODUCTION
PT. Hutama Karya is a state-owned enterprise engaged in construction that was assigned by the central government to carry out the construction of the Trans Sumatra Toll Road.The JTTS development assignment is based on Presidential Regulation No. 100 of 2014 concerning the Acceleration of Toll Road Development in Sumatra and Presidential Regulation No. 117 of 2015 concerning Amendments to Presidential Regulation No. 100 of 2014.Based on these regulations, PT.Hutama Karya was appointed for the development of JTTS phase 1 to build 13 toll roads.The construction of JTTS by Hutama Karya uses the PPP scheme.In this context, PT.Hutama Karya uses a supported toll toad scheme that allows companies to build, operate, and maintain toll roads for a certain period of time (Satria, Wati, & Oktavia, 2022).
The development of the Trans Sumatra Toll Road (JTTS) by PT Hutama Karya (Persero) opened a new chapter in the company's business diversification.Prior to the assignment, the company had core competencies in road and bridge construction.The JTTS assignment brought significant changes to PT Hutama Karya (Persero) by adding to the company's core competence in the field of toll road business.In response, Hutama Karya opened a business division and subsidiaries related to toll road business such as the establishment of a toll road business division (BUJT) responsible for toll road operation, maintenance, construction, and planning and a subsidiary of HAMAWAS, HAKAAston which has manufacturing competence shifted to become a toll road operator.
After the business diversification, Hutama Karya has various business lines such as trans Sumatra toll road developers, building construction services, buildings, bridges and roads, property rental, manufacturing, to EPC (Engineering, Procurement, and construction) (Ardiyanto, Sutikno, & Chasanah, 2017).The business diversification carried out by Hutama Karya then experienced problems in the company's performance.

Figure 1 Financial Performance Before and After Entering the Toll Road Business
After entering the toll road business, the company's financial performance showed an imbalance between high asset growth and the company's profit level which continued to lose money from 2020 to 2022 (Sofindra, 2022).
Large increase in assets but on the other hand creates losses for PT.Hutama Karya is a warning on the implementation of corporate strategy.The diversification of business carried out by Hutama Karya has led to the expansion of the company's competencies which creates an increasingly diverse business portfolio.Therefore, in-depth research is needed to formulate a consistent and effective business strategy, especially for companies with diverse business units such as Hutama Karya in facing challenges and achieving business goals with a balanced and sustainable strategy.
Previous research examining diversification strategies and business portfolio management simultaneously with the object of state-owned companies whose share ownership is 100% owned by the government has not been widely discussed.Research conducted by Wardhana, Kartawinata, & Syahputra, (2016) uses SWOT Analysis to identify the company's position based on its internal and external environment to identify the company's leading business lines and core competencies.Iskandar, Baga, & Saptono, (2018) analyzed the business portfolio of PT Kawasan Berikat Nusantara (Persero) through the Grand Strategy Matrix and GE Nine Cell Matrix to formulate a consistent strategy in the context of large companies with diverse business units.The results of the study formulate the most effective strategy for the corporation and the most effective management of business units and subsidiaries.Research by NUGROHO, (2019) examines the business diversification of PT Wijaya Karya (Persero), Tbk.through a matrix of business strength and industry attractiveness to identify the company's line portfolio This study seeks to fill the gap in literature on business diversification strategies and business portfolios for state-owned companies that are influenced by the corporate environment while formulating business portfolio management strategies for PT.Hutama Karya to be able to maximize the performance of its business portfolio management, for this reason, the objectives of this study are (1) identifying internal and external strategic factors of the corporation, (2) analyzing the position of the company's business portfolio, (3) formulating concepts or policies, new business diversification strategies for PT Hutama Karya.

RESEARCH METHOD
This research method is descriptive qualitative (Sugiyono, 2013).Descriptive qualitative research is an approach used to understand and describe in detail a phenomenon or event that occurs in its natural context.Data sources are grouped into two, namely primary data sources and secondary data sources.Primary data sources refer to data obtained directly by researchers through direct interaction and observation with research subjects including in-depth interviews with the President Director and Vice President Director.Secondary data sources refer to preexisting data that are not obtained through direct interaction with the research subject.Secondary data includes internal company documents, such as financial statements, performance reports, company plans, as well as various documents and literature studies that include various research studies related to the formulation of the company's business strategy and portfolio, construction industry conditions and government development plans.
Data analysis includes analysis of the company's internal and external environment through the formation of IFE (internal factor evaluation) and EFE (external factor evaluation) matrices to identify internal and external factors that affect PT.Hutama Karya which resulted in the position of the company IE Matrics (Gunawan & Boonastria, 2022).Furthermore, the data analysis uses the GE Nine-Cell Matrix to assess the position of the company's business portfolio in the industry.The results of this data analysis will help formulate alternative business diversification strategies that are in accordance with business strength and industry attractiveness (Aaker & Moorman, 2023).The next stage of data from focus group discussions with business development and investment divisions and corporate planning is used to formulate business diversification strategies that will be submitted to company management.

Hutama Karya Business Diversification
Hutama Karya has implemented a business diversification strategy that includes related diversification and unrelated diversification in an effort to expand its business portfolio.Diversification carried out by PT.Hutama Karya includes related diversification because the company has utilized its core competencies in construction and infrastructure to expand its business in the toll road sector.Hutama Karya utilizes knowledge, experience, and expertise in construction services to build and develop toll roads.Although the toll road business has different characteristics from the construction business, such as toll road operation and operation, the technical basis and technology used still have a significant linkage.
Diversification is related mainly with respect to subsidiaries such as PT.HAKAAston, PT.Hutama Karya Infrastruktur, PT.Hutama Marga Waskita, and EPC Energy Singapore Ltd.Each subsidiary takes advantage of the core competencies of PT.Hutama Karya in the field of construction and infrastructure to expand their business either in terms of toll road construction, manufacturing, EPC management, or property development.In addition, diversification is not related by PT.HK Realtindo in its real estate sector differs in its business characteristics.Hutama Karya's diversification reflects the company's efforts to develop its business portfolio and reduce risk through various types of investments (HERAWATI, 2019).

Internal Environmental Analysis
Analysis of the internal environment of PT Hutama Karya (Persero) there are a number of strengths and weaknesses in Hutama Karya's business diversification strategy.The company's key strengths which include good reputation in completing major projects (0.21), government support (0.21), quality human resources (0.22), infrastructure business integration (0.21), and success in national strategic projects (0.21) provide a solid foundation to continue and expand its various businesses.A total strength of 1.98 indicates the company's solid ability to achieve its diversification goals.The weaknesses of Hutama Karya are responsiveness to

External Environment Analysis
Hutama Karya has a number of opportunities that can support its business diversification strategy such as the potential for vertical and horizontal integration in forming a multi-business infrastructure ecosystem (0.22), followed by the use of technology to improve work efficiency (0.22) and strong support from government policies in infrastructure development (0.22).Other significant opportunities include sustainable economic growth (0.22), the use of new technologies in business processes (0.20), and opportunities for business expansion into other regions (0.19).Competent human resources (0.19) provide potential for improved service quality, while changes in social behavior such as urbanization (0.17) also create opportunities for companies.In addition, business development opportunities in the renewable energy sector (0.16) and the possibility of strategic cooperation with other companies (0.19) add to the diversity of the company's growth options.This total opportunity is 1.98% reflecting the company's growth and development potential by utilizing strong external strategic factorsThe main threat with the highest is the high debt burden and financial risks associated with large projects (0.22%), which can affect the company's financial stability.Other significant threats include changes in fiscal or monetary policy impacting production and project costs (0.16), as well as global economic uncertainty (0.16).Dependence on government policies and assignments (0.10), political instability that can affect project completion and changes in national development priorities (0.10), and changes in industry policies or regulations that can affect the company's business direction (0.10) are also significant threats.Other threats include delays in technology adaptation or innovation (0.10), as well as changes in consumer preferences such as work from anywhere policies (0.09) and the hard-to-sell nature of business (0.08).This total threat is 1.22, indicating the need for companies to design strong strategies and mitigate risks to address these challenges.The results of the analysis using the Internal Factor Evaluation Matrix (IFE) showed a score of 2.63, indicating a balance between strengths and weaknesses in Hutama Karya.The External Factor Evaluation (EFE) matrix gives a score of 3.20, indicating greater responsiveness to opportunities than threats with these results, the company is in quadrant II on the IE matrix diagram, indicating strong internal strength and the ability to respond to external opportunities.However, a high EFE score indicates challenges from the external environment.Strategies in companies that are in quadrant II positions include intensification such as market penetration, market development, and product development such as backward, forward, and horizontal (Elvitriadi, 2020).Thus the results of the IE Matrix analysis can be used as a basis for determining SWOT-based strategies.Based on the determination of alternative strategies based on the TOWS matrix, strategy priority selection is then carried out.The determination of the quadrant is determined by the difference between (strength-deficiency) and (opportunity -threat).The resulting value of internal factors is used as the coordinate point on the X axis while, the external factor consisting of opportunities and threats is used as the coordinate point on the Y axis.The results of the company's SWOT coordinate analysis are at (1.32, 0.76) indicating the superiority of internal forces and the potential for high external opportunities.Showing the most effective strategy taken by the company is the quadrant I strategy which emphasizes the SO (Strength -Opportunity) strategy, which is utilizing internal strengths to support the utilization of external opportunities.Suitable alternative strategies are: 1) Utilization of technology to improve efficiency and company branding, 2) Integration of multibusiness and quality human resources to be broader, 3) Development in the renewable energy sector by utilizing Hutama Karya's capabilities in infrastructure development for manufacturing (Usall, Torres, & Teixido, 2016).

Portfolio Analysis of Business Lines and Subsidiaries
Hutama Karya has various business units engaged in various fields.Toll Road Business Entities (BUJT) manage and operate toll roads, while Non-Toll Road Business Entities (Non-BUJT) can be involved in building, road and bridge construction services as well as EPC.Hutama Karya Infrastruktur (HKI) focuses on road and bridge construction, HAMAWAS which is engaged as a developer of several toll road sections and HAKAAston which operates in toll road operators (David & David, 2017) For the past three years the company has not managed to achieve the financial targets that have been set.The realization of assets, income and net income is always below the plan that has been drawn up, as seen in the following data: In 2020 the planned assets were 121.841 billion, but the realized amounted to only 114.111 billion.Likewise, the planned revenue of 40,709 billion but realized only 23,401 billion, with profit/loss far below the target of 7 billion.In 2021, there was a similar gap, with planned assets of $183,550 billion, but only $132,918 realized.Revenue was also below plan, at 59,409 compared to the target of 8,783 billion, and profit/loss only reached 760 billion.Although 2022 showed improvement, the company was still unable to achieve the goals set in the financial plan.The planned assets amounted to 245.252 billion, while the realized ones were only 156.316 billion.Revenue was also under plan with $68.396 billion compared to the target of $10.311 billion, and profit/loss came in at $2.331 billion.Hutama Karya's financial performance analysis which shows the company's difficulty in achieving financial plans reinforces the importance of managing business portfolios based on business strengths and industry attractiveness to prioritize strategies that need to be taken by the company due to limited company resources (Arifin, 2021).The results of the business portfolio analysis show that Hutama Karya Infrastruktur (HKI) and Toll Road Business Entities (BUJT) are in a profitable position (leader) with strong business and are in attractive industries.companies may consider maintaining focus on core business on road and bridge construction business for IPR and toll road developer for BUJT.Non-Toll Road Business Entities, HAMAWAS, and HAKAAston (Proceed With Care) have strong business strength but are in industries that may not be as strong as industries operated by HKI and BUJT.In managing business portfolios, companies need to be more careful and aware of the risks that exist in their industry (van der Velten & Ansoff, 1998).HK Realtindo (Phased Withdrawal) is in a business position no longer attractive or profitable.In managing HK Realtindo's business portfolio, it needs exposure in the industry by reducing the scale of their operations in areas of unprofitable real estate, EPC Energy Singapore is in a business situation that is no longer attractive or profitable where companies may consider the process of divesting or selling their business in a bid to reduce the burden on the company

CONCLUSION
The results of this study conclude that external factors that support Hutama Karya's business diversification include sustainable economic growth, government support, and technological adaptability.But companies also face threats from global economic uncertainty, policy changes and high debt burdens.On the other hand, internal factors that support diversification include adaptability, a strong reputation, quality human resources, and a careful financial strategy.However, there are disadvantages such as less responsiveness to change and less efficient project management.Looking at the company's SWOT quadrant which is at 1, alternative strategies that can be taken include utilizing internal strengths and external opportunities.The company focuses on developing the business ecosystem by strengthening its business portfolio, creating new opportunities in the renewable energy sector by utilizing Hutama Karya's capabilities and human resources, as well as optimizing efficiency and corporate branding through the application of technology in all business units and subsidiaries.

Figure 1
Figure 1 Business Portfolio DiversificationStrategy and Business Portfolio Development in State-OwnedCompanies PT.Hutama Karya market changes (0.10), funding constraints affecting project development (0.04), potential negative impacts on profitability due to aggressive business diversification (0.04), inefficient EPC business management (0.05), and funding challenges in the development of the Trans-Sumatra Toll Road (0.05) can be obstacles in implementing the diversification strategy.Cashflow problems in the assignment of large projects such as the Trans-Sumatra Toll Road (0.04), risks due to economies of scale in the development of long Trans-The impact of the assignment of large projects such as the Trans-Sumatra Toll Road faces internal challenges in the form of unhealthy cash flow

Table 3 Strategy Determination Based on SWOT Matrix Strategi SO (Strength-Opportunity) Strategi WO (Weakness -Opportunity)
. HK Realtindo is engaged in real estate with https://injurity.pusatpublikasi.id/index.php/in983 property development projects.Meanwhile, EPC Energy Singapore focuses on engineering, procurement and construction