The Effect of Corporate Strategy to Company Performance

PT. Telekomunikasi Indonesia, Tbk (Telkom) is a state-owned enterprise that serves telecommunication services and network across Indonesia. Telecommunication business is a “legacy” platform of this company; whereas another portfolio business that called “new wave” has, motivate the company to keep making innovation related to digital based product. This confirms Telkom's commitment to increase revenue amid competitive business environment. In 2015, Telkom’s management has targeted a growth of 8%, which is slightly above the market growth. It has “first thing first strategy” to make a sustainable competitive growth in all business units in Telkom. Based on above description, it is thought that it would be beneficial to analyze how the company’s cooperates strategy affects the performance of Telkom’s business unit. Unit analysis used in this research is 30 business units of Telkom that spread across Indonesia. From the hypothesis test using Partial Least Square (PLS) approach, it was revealed that corporate strategy has a significant effect to improve company performance. The most dominant aspect that reflects corporate strategy is portfolio strategy followed by directional strategy and parenting strategy. As for the company performance variable, profitability dimension is the most reflecting the company performance, followed by sales and market share dimension