Swot analysis

Strength
Sime Darby is a successful business in Malaysia and it is a company which involved
different types of nature of business in its operations. In the way to become such successful
company, there are some strengths that have been performed by Sime Darby.
One of the strength is Sime Darby provided a wide and comprehensive range of goods
and services in over 300 companies which located in more than 20 countries especially in the
Asia Pacific. These business operations and activities of Sime Darby have been performed by
more than 30,000 employees (Sime Darby, n.d.). In fact, this has directly increases the marketing
position of Sime Darby in the competitive market. Sime Darby owned the strong presences with
the huge number of existing businesses and companies all over the world.
Besides that, Sime Darby has the strength of lower risks in its operations due to the
diversification of the business. Sime Darby is diversified into few categories which named as
Sime Darby Plantation, Sime Darby Motors, Sime Darby Industrial, Sime Darby Property and
Sime Darby Energy and Utilities (The Sime Darby Group, n.d.). This diversification actually
leads to the reduction of risks in the company. When there is uncertainty in one sector and losses
might be happened, the diversification is able to decreases the amount of losses in the company
since it is not only focused in one sector.
Moreover, other strength of Sime Darby is the strong financial performances. In the
recent year, Sime Darby obtained a strong and all round financial performance which it has
records a pre-tax profit of RM 3.1 billion and a net profit of RM 2.2 billion (Sime Darby, n.d.). It
showed that Sime Darby increase the profit by almost 40 percent and this indicated that Sime
Darby has an efficient and effective financial management in its operations.
Furthermore, Sime Darby has a strong governance structure which considered as one of
the strength to improve their growth. The governance framework of Sime Darby is two-tier
board structure which is headed by the main board and followed by the Flagship Subsidiary
Boards (FSBs) (Corporate Governance Report, n.d.).Its a strong governance framework for
SimeDarby as it is sufficiently flexible and modular. Thus, this governance framework is able to
maximize the wealth of shareholders.
Weaknesses
One of the weakness of Sime Darby is Sime Darby has experienced few cases of law
claims which eventually affect the brand image. For example, the former senior general manager
of Sime Darby Engneering SdnBhd has involved in a legal claim and finally has been jailed for
27 years due to the corruption. Indeed, this legal claim considered as a bad news to the Sime
Darby and thus this will definitely reduce the confidences of the investors and the consumers as
well as the share prices of the Sime Darby will be decreased (The Star online, 2013).
Besides that, other weakness of Sime Darby is poor road infrastructure which might
reduce the quality of the products and increase the costs of the production. In fact, the poor
condition of the estate road of Sime Darby Plantations caused the inconveniences to the workers
as there are a lot of transport problems and it should be improved immediately (Sime Darby
Plantations, n.d.).

Opportunities
Sime Darby has many opportunities to improve their business growth. For instance, the
Sime Darby has joint ventures with the Ramsay Health Care to establish the Ramsay Sme Darby
Health Care (Business News, 2013). Nowadays, health issue is one of the most important and
focused issue among the community as most of the people extremely emphasized on their health
condition. Thus, Sime Darby created a new opportunity to attract more customers and investors
in order to expand their business in a new sector.
Besides that, the increasing demand of the crude palm oil increases the opportunities for
the growth of Sime Darby Plantation. Sime Darby Plantaton is one of the largest suppliers of the
palm oil and produce mostly 5% of the worlds crude palm oil annually. The downstream
business of Sime Darby has covered in 14 countries and involved in the manufacturing of value
adding the oil and fat products into biodiesels and nutraceuticals (Sime Darby Plantations, n.d.).
The demand of the crude palm oil increase gradually as it has been found that it is well balanced
healthy edible oil which is healthier for the food sector. In addition, it is an important resource
for the nonfood sector such as the soap production and cleaning agents. Hence, this trend will
definitely increase the growth of Sime Darby Plantations.
Moreover, Sime Darby Energy and Utlities implemented the new strategy to improve the
environmental concerns by proposed the renewable resources in the market. For example, Sime
Darby established the House Green Idea which emphasized on the photovoltaic cell technology
to obtain the sunlight as a renewable energy resource (Sime Darby Property, n.d.).Besides that,
Sime Darby Plantation has cooperated with the team of Tenaga National Bhd (TNB) and Mitsui
& Co Ltd to involve in a study of biogas projects with the aim of developing the renewable
energy resources (Sime, TNB and Mitsui to study biogas potential at eight palm oil mills, 2011).
In short, this created an opportunity for Sime Darby to improve their popularity as well as the
brand image
Threats.
One of the threats of Sime Darby is the strong competitors in the related sectors and
market. There are a lot of competitors which are providing the similar goods and services and
some of them even with the approximate quality and prices. This has caused Sime Darby faced
the chances to loses its customers as well as the profits of its business. For example, one of the
competitors of Sime Darby is Wilmar International Limited Company. It is the largest Asia
agribusiness groups with the production of palm, soy and other edible oils and grains.
Furthermore, the international currency exchange risk d one of the threats for Sime Darby
as well. Sime Darby is a multinational diversified company that operated the business activities
at over 20 countries. Hence, Sime Darby has to use different currency to operate their business.
Each country has the different currency and its exchange rate. When the currency exchange rate
is fluctuated and unstable, this might cause the losses to the Sime Darby.
In addition, Sime Darby faced the threats of unfavorable government policies which
might affect their business operations. Sime Darby is a multinational companies, thus it has to
follow the different rule and regulations that set by different country. However, some of the
policies is not favorable for the expansion of Sime Darby. For instance, operation of Sime Darby
in Hong Kong is affected by the tightening of credits by banks (Sime Darby, n.d.). This is
because the new policy implemented is imposing a higher tax on the profit of house sellers.
Indeed, this has directly decreased the demand of the house and construction of Sime Darby over
there.

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%20biogas%20potential%20at%20eight%20palm%20oil%20mills%205th%20April%202011.pd
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