International Journal of Business Marketing and Management (IJBMM) Volume 8 Issue 1 Jan-Feb 2023, P.P. 09-23 ISSN: 2456-4559 www.ijbmm.com International Journal of Business Marketing and Management (IJBMM) Page 9 The Innovation Model Of Palm Sugar Value Chain To Improve Sustainable Added Value Sudirman Zaid, Hayat Yusuf, Wahyuniati Hamid, Nursaban Rommy Suleman, Sarini Yusuf Abadi Faculty of Economics and Business, Halo Oleo University, Indonesia Abstract: This study aims to innovate the value chain model of palm sugar creative products for supporting the tourism sector in East Kolaka Regency. In detail, this study aims to identify the regional distribution of palm sugar products in East Kolaka Regency, develop an existing palm sugar product value chain model, develop a palm sugar product value chain innovation model, and formulate a strategy formulation for strengthening the palm sugar product value chain in East Kolaka Regency. This study uses a mix method approach which is carried out in all sub-districts in East Kolaka Regency within 4 months by adopting data from 15 informants and 100 respondents. The analysis used in this research is qualitative analysis, value chain analysis, activity based costing (ABC) analysis, and SWOT. The results obtained information that palm sugar products are spread throughout the sub-districts in East Kolaka Regency with different potentials. The results of the study also provide information that there are several components that need attention in the innovation model of the palm sugar product value chain, namely; development of production equipment, stages of quality control in the production process, development of production center areas, business institutions, improvement of workforce skills, development of trading houses and holding companies, as well as the provision of packaging houses for palm sugar creative products in East Kolaka Regency. The formulation of strategies for strengthening the value chain of creative palm sugar products in East Kolaka Regency formulates 5 (five) strategies, namely; (1) Production Capacity Improvement Strategy; (2) Strategy to Improve the Quality of Human Resources; (3) Market Access Improvement Strategy; (4) Strategy for Institutional Development, Empowerment, and Partnership; and (5) Strategy to Increase Availability of Basic Infrastructure. Keywords: Innovation Model; Value Chains; Activity Based Costing; Palm sugar; Strengthening strategies. I. Introduction The development of creative industries in East Kolaka Regency is based on the condition that the availability of the main raw materials for this industry is very much available in East Kolaka. The palm sugar creative product industry in East Kolaka Regency is generally home-based. East Kolaka palm sugar is currently entering the stage of expanding its marketing area in the region. However, in its development, the palm sugar creative product of East Kolaka faces several significant obstacles, including the high cost of the industry, starting from the cost of obtaining raw materials, production costs to marketing costs. This triggers the high setting of the Lowest Retail Price at the consumer level. In addition, the high distribution costs also add to the complex problems faced by the palm sugar creative industry in East Kolaka Regency. However, at the level of the final consumer, it is relatively high, but the margin received by industry players is very low. This is due to the high margins set by each distribution channel, so based on these conditions, it is very necessary to have a study that aims to increase efficiency at every stage of the industry from upstream to downstream. One of the concrete steps that must be taken in anticipating these problems is to engineer the value chain system for palm sugar creative products in East Kolaka Regency. This engineering is directed to modify activities at each stage of the industry in order to obtain margin efficiency. The value chain engineering can be done by innovating activities at the industrial stage at every level, starting from the raw material chain, production chain, to marketing chain, so that the results of this engineering will produce a value chain model that leads to efficiency and increased industrial value added. . This step is taken to increase efficiency and added value which is expected to have an impact on increasing regional productivity in East Kolaka Regency.