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SWOT Analysis of JHM Consolidation Berhad

Strength
JHM Consolidation Berhad has a strong financial performance over the years
especially in maintaining their revenue. This is because, from the 2015
Annual report, it reported that the Group achieved highest revenue among
these five years by representing an increase of RM59.51 million or 82%
improvement against revenue of RM71.83 million in previous financial year.
The increase in revenue was principally because of higher volume loadings
from existing customers followed by expanded operation capacity in
designing and manufacturing of electronic printed circuit boards assembly
through surface mount technology. Another reason for the good financial
performance is they able success in giving confidence to their customer
which enables them attracts and secured new customer for their product.
The second strength is they have good control over subsidiaries. With the
minimum number subsidiaries, JHM able control their operations widely and
taking good care of their business compared to other companies with wide
subsidiaries which might eventually lead hard to control or monitor. Besides
that, JHMs proper controlling over their subsidiaries avoids their subsidiaries
from committing any violations towards law and regulation and its eventually
enables them to implement continuous improvement towards the internal
control and efficiency through lean manufacturing programs to ensure their
business will have sufficient resources for product innovation and market
expansion.
The third strength is they maintain good reputation. A good reputation
helps companies to gain trust from consumers and give confidence to the
loyal customer. JHM have been actively working on maintaining their
reputation through sustainability where they are committed to conduct their
businesses in a way that is environmentally safe and sound. JHM ensures
strictly on ongoing compliance with the environmental laws governing plant

operations, maintenance in areas relating to environmental standards and


noise level management. Together with this, JHM have been certified as an
ISO 14001 organization holder by an international body.

Therefore, by

contributing their effort in environment field, JHM can easily get a good
reputation from public and enjoy the positive consequences for the good
reputation. By remaining good reputation, it helps JHM to retain and new
customers an well as gaining a highly competitive market.
The fourth strength is good in human resource and corporate governance.
JHM have a well balance board which consists with wide range of business
and technical background as well as assigned with stewardship of the
companys resources for the best interest of its shareholders which direct the
JHM Group towards achieving the maximum economic value. The members
of the Board, who have wide-ranging experience and expertise in related and
unrelated industries, have been selected based on their skills, knowledge
and their ability to add strength to the leadership. Employees are key assets
for a company, without people to work in a company, it can never be
functional. In order to retain the best talents of their employees, JHM has
been continuously providing their employees with education and training.
This employees Training and Development program is to ensure their
employees are well equipped with skills and knowledge relate to projects and
tasks handled by them so that these may be executed to meet customers
needs and expectation.
Weakness
The first weakness is CEO duality. Although JHM Consolidation have good
corporate governance but the Executive and Managing Director is currently
being held by same person. This CEO duality is not in compliance with the
best practices of MCCG 2012. This is because this CEO duality may raise the
question of conflict of interest among other board of directors. This duality
status may interrupt the long-term performance of a company due to lack of

transparency and duty segregation. Therefore, it maybe affects JHMs profit


and reputation if the CEO does not properly execute their duty.
Second weakness is high cost of Research and Development (R&D) for
product quality is possible. Every single research done is costing huge
amount which can be burden for JHM Consolidation. Moreover, the money
invested sometimes does not give the result as their anticipation. To cover
the cost of R&D, need to borrow from the banks that might have high loan
interest rate. Therefore, this cause JHM to seek for a solution to minimize the
losses and trouble that sometimes might be time consuming for them.
Strengths

Weakness

S1: Strong financial position

W1: CEO Duality

S2: Good control over subsidiaries

W2: High cost of R&D for product

S3: Maintain good reputation

quality improvement

S4: Maintain good human resource


and corporate governance
Opportunities

Threats