1.0 Introduction

As we know, Sunway Group Berhad is one of the famous listed companies in Bursa Malaysia

and which is having a lot businesses in different sectors such as education, hospitality,

engineering and construction, property development and etc. Except operate in Malaysia,

Sunway Group Berhad is also setting up their businesses in Singapore, Indonesia, Australia, and

others countries. Sunway Group Berhad has become one of the formidable property-construction

groups in Malaysia.Thus, we have decided to focus on Sunway City Berhad (SunCity) which

their main activity is based on property and developments.A strategic analysis and formulation

will be conducted in order to have a better understanding regards the strategic management of

SunCity. There are some barriers and limitations which we are faced such as the details of the

company’s business operation is not much, the information regards their actual practices is

limited, and we are also not familiar with the property sector of business.

To complete this report, there are 3 types of analysis that we are going to carry out which

are general environment analysis, Porter’s Five Forces Analysis and SWOT analysis. The first

analysis we are going to carry out is General environment analysis and it consists of internal and

external factors. Normally, this analysis is used by the marketers to analyze the internal and

external factors or outside forces and trends that which might be affect the company’s business

operation or affect the progress of organizations’ business plan. Next, Porter’s Five Forces

Analysis will be conducted to identify the competitive power of the business in the industry by

knowing the companies’ strengths and improve the threats of the company. Porter’s Five Forces

Analysis consists of 5 competitive forces such as threats of new entrants and substitute products,

bargaining power of suppliers, bargaining power of consumers, and rivalry among competing

firms. Furthermore, SWOT Analysis will be conducted to identify the strengths, weaknesses,

opportunities and threats of the company so that the company can have a better understanding

about their company’s strengths and weaknesses, and make improvement for the weak parts.

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2.0 Background of Sunway City Berhad

Sunway City Berhad or called as SunCity was listed as a private listed company in Malaysia on

13th July 1982 as Sri JasaSdnBhd and after that changed the name to Sri Jasa Development

Corporation SdnBhd on 1st December 1986 and Bandar Sunway SdnBhd on 25th July 1987.

However, on 24th July 1995, this company is listed as public listed company and named it as

Sunway City Berhad on 2nd April 1996. SunCity was successfully been listed in Bursa Malaysia

on 8th July 1996.

SunCity has divide into two division which are property development division and

property investment division. SunCity is a dynamic and integrated Malaysian property

organization. Sunway Berhadhas assigned SunCityto manage all the properties and real estate

investments. SunCityis operating in 6 segments which including property development

(residential and commercial properties), property investment (management and operations of the

shopping malls and letting properties), leisure (entertainment, theme parks, agency for travel),

hospitality (operations and management of hotels), health care (operation and management of

medical center), and REIT (management of investment fund for the real estate).

SunCityhave the vision of being a company who more focus on the quality of the real

estate development and invest in the properties with attractive yield which can bring excellent

returns to the shareholders of company. SunCity shall achieve the vision by achieve the goals

such as providing customers superior and innovative products and services tofulfill the needs of

the customers; develop and build an environment and a culture that can promote excellence and

dedication to the shareholders, and fully utilized the latest technology to enhance the competitive

advantage of the company.

Moreover, the mission of SunCity is to create a conductive environment for living,

leisure and working by transforming the older landscape or environment into a fresh, new and

well-designed structure to increase and enhance the value.SunCity is committed to satisfying the

expectation of its stakeholders such as loyalty to customers, trust the employees, maintain good

relationship with suppliers, protect shareholders’ investment and strive for nation and

community.

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3.0 Situation Analysis

3.1 General Environment Analysis

Organizations are affected by the conditions in the environment. From time to time,

manager need to aware of these conditions in the environment to take advantages of the

opportunities that can help company to increases their profit and reduce or avoid the impact of

possible threats that can harm our company. In here, we are looking the general environment in

five segment which are economic, demographics, socialcutural, legal, technology, global and

physical environment segments.

Economic Segment

Economic segment refers to the nature and direction of the economy in which a firm

competes or may compete. Economic factors can have a direct impact on the potential

attractiveness of various strategies. In general, a firm seeks to compete in relatively stable

economies with strong growth potential. This is because nations are interconnected as results of

global economy; firm must scan, monitor, forecast and assess the health of their host nation and

the health of the economies outside their host nation. In 1982, Sunway City was in corporate as a

private limited company in Malaysia. It also converts to a public listed company in 1995 and

currently has a market capitalization of over RM 2.3 billion. It has made its mark in industry by

become the first integrated real estate conglomerate when it successfully listed Sunway REIT on

the Bursa Malaysia. Sunway City performs all the economic functions in the most efficient and

productive manner, and employing optimal use of current technology. They protect their

shareholder’s investments, and provide them a sustainable return, and give them confidence in

corporate governance through accountability.

In order to achieve that, gains support from a healthy economy trend is necessary. There

are several factors to the economy must take into account to find out the economy trend of a

country in term of inflation effect, unemployment rate, saving rate and spending rate. If the

inflation rate is high, the price of the property will raise and sales value of the company will

increase. Usually inflation rate is measured by Consumer Price Index (CPI) which is updated

price to the constant base price consumed by consumers from period to period of time.

Unemployment rate is determined by total unemployment labour workforce divided by total

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labour workforce. High unemployment rate indicates a country economy went into recession

status and company sales of property will be affected as well. Spending rate usually determined

by GDP. According to the Malaysian Economy data figures in 2012 provided by Economist

Planning Unit, Malaysia GDP has increased from RM 709.3 billion in year 2011 to RM 740.9

billion in year 2012. The increase in the GDP means the greater the spending power of the

Malaysian compare to last year. Because of the spending power increased, people may seek to

spend on long term investment including property. This trend may drive the company sales to

higher level. Other than the spending rate, saving rate may also affect the property sale. The

lower the saving rate means the less attractive for the people to deposit their money in bank and

encourage them on spending or investing. More than that, growth forecast for Malaysia economy

may further increase 5.4 percent in year 2013 according to data provided by Malaysia Institute of

Economic Research unit. So that, overall of Malaysia economic have growth confidently from

year to year. It is a good opportunities for further business expansion in Malaysia.

Demographic Segment

As we know that demographic segment is concerned with a population’s size, age

structure, geographic distribution, ethnic mix, and income distribution. Sunway City is belongs

to property development and investment as well as investment holding organization. It remain

single-mindedly focused on one pursuit which to be a premier property developer in Malaysia

and overseas. Sunway City has completed many projects and development schemes in over 20

localities in Malaysia and overseas.

It operates in five segments such as property development, property investment, leisure,

hospitality, and healthcare. For property development, it included in the development of

residential and commercial properties. Sunway City constantly takes steps to deliver products

and services of unrivalled quality and value for its customers. For property investment, it holds a

portfolio of quality retail and commercial, hospitality, leisure and entertainment, and healthcare

properties which is act as an international-class investment and commercial property player in

the region. Sunway City currently owns and manages total net let table areas of 4.86 million

square feet of commercial properties which include Sunway Pyramid, Sunway Carnival

Shopping Mall, Menara Sunway, Sunway Tower 2, Sunway Giza Specialty Centre, Monash

University Sunway Campus and Sunway University College. For leisure, it owns and manages in

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the operation of theme parks, rendering recreational club facilities, travel agent and time sharing

businesses. For example, Sunway City manages two award-winning theme parks, such as

Sunway Lagoon and Lost World of Tambun in Ipoh as well as other businesses like Sunway

Healthy Lifestyle, Sunway International Vacation Club and Sunway Travel. For hospitality, it

involved in the management and operations of hotels, For example, Sunway City manages a

collection of 16 hotels and resorts that encompassing 3 hotel brand names such as Sunway

Hotels & Resorts, Allson Hotels & Resorts and the Banjaran Hot springs Retreat. For healthcare,

it involved in the management and operation of a medical centre. For example, SunMed is the

one of the most foremost private medical care centers in the nation with a total of 335 beds, more

than 100 consultation suites, 12 operation theatres and a multi-storey car park with 750 parking

bays.

According to the Central Intelligence Agency department of US, it provides that

population in the world is increasing by year to year and the total population in year 2012 is

increased 1 billion by compare to population which amount to 6 billion in year 1999. In

Malaysia, the population has increase from 28.6 million in 2011 to 28.9 million in 2012. This

increased three hundred thousand population is an opportunity to the property business

organization because it needs more place to fit more people. The increased population may

indicate the increase of household. Household is always a targeted market for residences

development project especially the LOHAS consumers. LOHAS is an acronym for Lifestyles of

Health and Sustainability and LOHAS consumers refer to those who are passionate about the

environment, sustainability, social issues, and health. Beyond just homes, SunCity Berhad also

target branded retail store for the shopping complex, target business organization for the

premium office buildings and so on.

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Political/ Legal Segment

Political segment is the area in which organizations and interest groups compete for

attention, resources, and a voice in overseeing the body of laws and regulations guiding

interactions among nations as well as between firms and various local governmental agencies. It

is represents how organizations try to influence governments and how they try to understand the

influences of those governments on their strategic actions. If the government subsidizes the cost

of medical services, it will affect the hospital since their service will be made cheaper. Besides, it

also will affect the productivity of the hospital because of the cost sharing policy by the

government. Therefore, Sunway Hospital should work closely with the government to make sure

that enter to a sort of partnership with them to promote Malaysia as an attraction for medical

services. It also will increase turnover in the business. So that, the entrance of these private

institutions provide a challenge to Sunway Hospital as a private hospital as well as they tend to

have similar practices and competition for the customers will be high.

In Malaysia, the developers of private entity, statutory bodies and co-operative societies

which involved in housing development are governed by the Housing Development (Control and

Licensing) Act 1966 (HAD). Moreover, the institutions related to the buildings of quality houses,

namely the Ministry of Housing and Local Government (MHLG) and the Construction Industry

Development Board (CIDB), to ensure the houses constructed by developers will meet the

quality that house-buyers expect. In addition, government could help in funding and provides the

contract opportunities for company to go broadly. In order to work closely with the government,

it is necessary to registered as Federal Contractor to earn the contract from government for

public construction work. For the sake of win the contract from the government, meet with the

decision makers for the federal contracts to explain the business proposal that is advantages to

the government and convince the government with the reason of which the company is eligible

to the contract. Company may matching its strengths to what is needed on the project and

mitigate the risk by not over obligating itself in the weakest areas.

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Sociocultural Segment

Sociocultural segment is concerned with a society’s attitude and cultural values. This is

because attitudes and values form the cornerstone of a society; they often drive demographic,

economic, political and technological conditions and changes. Sunway City views the

community-based projects as a good avenue to have direct interaction with local community to

generate economic and social vibrancy. Moreover, SunCity Berhad had considered the fact the

Malaysians uphold strong family values and practice filial piety across culture. Thus, the homes

had been built to comprise this culture, incorporate sufficient space for families to host their

extended family. Besides, Malaysian is seeking for higher standard of living and quality lifestyle.

Therefore, SunCity Berhad instills the LOHAS philosophy into its property development to

satisfy the consumers and increase the value of the property. According to the managing director

of the SunCity Berhad, families want a home that facilities positive growth and nurtures from all

aspects in term of health and fitness, sustainable living, environment, personal development and

social justice, thus integrating the LOHAS philosophy will enables that growth. For example, for

the personal development and health and fitness pillar, there are the development features

walkway, cycling paths, wide linear parks, playgrounds for children, and even a football field

which allow families to indulge themselves in physical and leisure activities together. Most of

the consumers expect their houses to be safe, modern and with technological infrastructure.

Thus, the development has concealed drains, pre-installed security alarm systems and auto gate

point for the residents’ security and convenience.

Technological Segment

Technological segment includes the institutions and activities involved with creating new

knowledge and translating that knowledge into new output, products, processes, and materials.

As long as the technology is becoming part of human’s lifestyle, therefore, Sunway City Hotel

need to be equipped with these for security or being connected to others via broadband. If

Sunway can come out a unique security system, they should get it patented so that it is only

company with that special technology. Technology also improves Sunway Hotel with the

opportunities of development either in the physical building of itself to build with technology of

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convenience products and services to the customers through innovations. For example, a 5D

theatre will be introduced at the Amusement Park at Sunway Lagoon which to bring the

cinematic experience to a surreal level with emphasis placed on the sense of touch and smell, in

addition to state-of-the art audio and 3D visual technology.

Global Segment

Global segment includes relevant new global markets, existing markets that are changing,

important international political events, and critical cultural and institutional characteristics of

global markets. The global housing market trend in year 2012 shows that most of the Asia-

Pacific region countries results the decline in housing price and not many of the western

countries results the increase in housing price result according to the data analysis on Global

Real Estate Trends provided by Scotiabank. The related Asia-Pacific countries mentioned above

are Australia (-2%), Japan (-2.5%), Indonesia (-0.1%), India (-5%) and so on. The related

western countries are Columbia (+11%), United State (+8%), Switzerland (+7.5%) and so on.

There are global real estate forecast trends for 2013 such as the real estate prices will

increase, sales of property will go up, homebuilding will grow and sellers’ inventory of property

will rise. Economists at California State University, Fullerton (CSUF) say prices will rise from 5

percent to 7 percent and Economists at Chapman University say prices will rise from 5.8 percent

to 6.8 percent in year 2013. This is because the new construction of homes and apartments need

to keep up with population growth. Therefore, the homebuilding will grow in the market in order

to fit the demand and the property sellers are needed to increase their inventory. The amount of

new constructions can be average of more than 1.25 million in this year which predicted by

economist of National Association of REIT. Because of the effects incurred by increase in prices

of the real estate, it raises the sales of the real estate as well. Some investors would like to buy

more housing property since it provides better return in value. In addition, some industry

predicted that more young people will move out from their parents’ homes and that will trigger

the demand of the homes and thus raises the sales. As the forecasts mentioned above, it shows a

good sign of opportunity for Suncity to increase their property development in this year.

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Besides, the Sunway City establishes itself to become a global and leading integrated

property player. They formed effective strategic alliance with various overseas business partners

to provide greater product offerings and services. They currently have expanding their presence

overseas in fast-growing economies, including India, China, Singapore, Cambodia and Vietnam.

One of the most significant corporate initiatives was the Sunway City had been selected by Sino-

Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC) to participate in the

project in China with a gross development value of RM5 billion to be developed over a period of

five years. They were the only Malaysian developer amongst other leading international property

players from Japan, Taiwan, Hong Kong, Singapore, China and Philippines to be part of the

project. The Sunway City believes their experienced and competent international management

team will be able to lead the way to strengthen their status in the globalised environment.

Physical Environment Segment

Physical environment segment refers to potential and actual changes in the physical

environment and business practices that are intended to positively respond to and deal with those

changes. Regardless of the business has multiple locations such as big office, a small office or

simply a space, it has physical environment that influence it in many ways. There was around

70% of property project located in Malaysia while the balance of 30% was located overseas.

Despite there is so many development project has already launched by Sunway City, the

company always held Go Green concept in developing the property. For Sunway City, building

green homes is not part of the marketing strategy. They considered this as a responsible for

corporate citizen, they execute on green concept to not only save the environment but also

because of the customer request for it. Sunway City has two developments which of being

awarded the Building and Construction Authority of Singapore’s Green Mark certification, they

are Sunway Palazzio and Sunway Challis Damansara. The green features in the Sunway Palazzio

have deep balconies for sun shading, large window to promote natural light and self-cool

strategies such as insulated roof, ventilated roof space and cavity wall. With these green features,

there are more two million kWh of electricity can be saved in a year which translate to RM

625,990 and 1250 tonnes of carbon dioxide saved or an equivalent of 57,000 trees, according to

the Managing Director of Sunway City.

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3.2 Industry Conditions (Porter’s Five Forces Analysis)

Porter’s five forces model helps in accessing where the power lies in a business situation. And

help company in analyzing the attractiveness in an industry structure. It let you access current

strength of your competitive position and the strength of the position that you are planning to

attain. This model is considered an important part of planning tool set and used widely across

industries. After the analysis company can know where they are and take advantages of their

strength and improve their current weaknesses. There are five competitive forces that identify the

competitive power in a business situation. These five competitive forces are:

Rivalry among competitors

This is usually the most powerful among the five competitive forces. The intensity of rivalry

among competitors tends to increases as there are numerous or equally balanced competitors,

High fixed costs, lack of differentiation or switching costs, high strategic stakes, high exit

barriers.

The intensity of rivalry among competitors is considered as average for Sunway City Berhad.

The main reason of it is the growth rate of the industry is high and as shown in the annual report,

Sunway City Berhad is also experimenting a high growth in property development. Besides that,

Sunway City also having a few competitors which almost same size which compete for the same

customers and resources such as IJM Land, SP Setia Berhad, IGB Corporation Berhad and YTL

Land & Development Berhad. These property developer have also develop a lots of property and

gain a lots of market share in property development. YTL Land & Development Berhad was one

of the largest companies listed in Kuala Lumpur Stock Exchange (KLSE) which has a strong

financial power. While IJM geographically diversified landbank allows for unique product mixes

and project launches based on market demand. Besides, S P Setia is an award-winning public

listed company and a market leader in property development. Their products range from landed

properties to high-rise condominiums as well as commercial centres. IGB Corporation Berhad

prides itself on its continued local community support and involvement. There are the

competitors offer almost the same types of property to compete with Sunway City Berhad, thus,

it becomes a threat of substitute products to Sunway City Berhad. Although there are companies

which almost same size with Sunway City Berhad, but this is also a good sign to it as it will

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cause a healthy rivalry among competitors and will let the buyer to compare the property with

the different developers.

Threat of new entrants

When there are new firms enter the industry the intensiveness among firms increases. The

barriers to entry prevent the threat of new entrants. The barriers to entry for this industry are:

-The economics of scales is not easily archived by new firm, company wish to achieve this have

to having a high advance of technology and quality workers which not easily to train and get in a

short period of time.

- Capital requirement to enter is very high. To build a property development company is very

hard as it required lots of financial requirement and also human capital.

- The access to the distribution channels is hard. In order to become a top property development

company, the access to the distribution is very importance to minimize the cost.

- Government policy. In Malaysia, there are many rules that guide the property development

likes National Land Code (1965), Land Acquisition Act (1960) and Environmental Quality Act

1974. That is not easy to obey all the rules and it becomes a barrier to the new entrants.

For the Sunway City Berhad, we found that the threat of new entrants is low as it is a company

which has being incorporated for at least 20 years in Malaysia. Besides that, Sunway City

Berhad is not only doing property development in Malaysia but it also involves in property

investment. Besides that, we saw in the annual report of Sunway City Berhad stated that it

having a high growth property in property development and also a high yielding in the property

investment.

Bargaining power of suppliers

The bargaining power of suppliers will be high when there is large number of suppliers, few

good substitute raw materials and switching raw materials is especially costly. The bargaining

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power of suppliers of Sunway City Berhad is low as the Sunway Group having its own building

materials division. This meaning that the supplier of Sunway City Berhad is actually from

company which under the same group. The building material division contains concrete, clay

pipe, concrete pipes and also piles which is the main materials which need to be used in property

development. As what we found in the Sunway group website, in Malaysia, the concrete which

from the building material division having almost 70% of the market share and it has been

growing in China too.

Bargaining power of buyers

The bargaining power of buyers is average for Sunway City Berhad as it is not the only property

developer in the market. The buyers always required a good quality property at a lower price as

they can compare the property of Sunway City Berhad to others property from the competitor of

Sunway City Berhad. Besides that, the prices for the property of Sunway City Berhad are always

at the high side, thus, the buyers will bargain or expect for a higher quality of the property and

also more specialties on its property. However, Sunway City Berhad always offers a product

differentiation with quality property and high return of investment and the good reputation brand

image has caught the heart of investors.

Threat of substitute products

Substitutes mean products in other industry. In many industries, firms are in close competition

with producers of substitute products in other industries. For example producers of sugar face the

pressures from artificial sweeteners. However, unlike sugar, the threat of substitute products for

Sunway City Berhad is low as there are not many substitute product for property out there. There

are just a few big developers out there such as IJM Land Berhad and SP Setia Berhad that are

same industry with Sunway City Berhad. These property developer have also develop a lots of

property and gain a lots of market share in property development.

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3.3 SWOT Analysis

The SWOT analysis or called as SWOT matrix is an important and effective tool for

organizations to identify internal and external factors which can affect the decision making and

the planning process of the organization. It helps to evaluate the current position of the

organization and to achieve the objectives of the organization. SWOT analysis used to evaluate

strengths, weaknesses, opportunities, and threats. Internal factors viewed as strengths and

weaknesses while opportunities and threats are the external factors.

Strengths Weaknesses

a) Good Reputation

SunCity received many awards such

as Edge Billion Ringgit Club

Corporate Awards Gala Dinner 2011

as the most profitable company with

highest return of equity over three

years in the property and REIT

sectors; Asia’s Best Attraction Award

(2007 to 2010); Golden Pony Award

in 2002 by Games & Parks Industry

in leisure sector internationally;

National Tourism Award 2008/2009;

Malaysia’s Most Valuable Brand

Award by Interbrand and the

Association of Accredited

Advertising Agents Malaysia; Brand

Laureate Conglomerate Award by

Asia Pacific Brands Foundation and

few more awards.

b) Trustable brand

Sunway City recognized as one of the

a) Lack improvement of existing

standards

In order to maintain competitive

advantage, SunCity needs to improve

and revise the existing standards from

the viewpoint of its wide range of

stakeholders which includes

employees, customers, shareholders,

suppliers, and investors.

b) Poor diversification

Sunway City is more focuson three

main segments which are Property

Development, Hospitality and REIT.

On year 2010, Sunway City incurs a

loss in Healthcare Segments. Based

on the Geographical Segments, total

revenue generated in Malaysia and

Asia (excluding Malaysia) is decrease

from year 2008 to 2010.

Unfortunately, Sunway City just own

16 hotels and resorts in Malaysia with

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top property developers in Malaysia

for the eight consecutive years due to

the Edge’s Top Property Developers

Award. These all awards and

accolades reflect the Sunway City’s

strong positioning as a dynamic and

integrated Malaysian property.

c) Opportunity to growth

SunCity involved joint venture in

Sino-Singapore Tianjin Eco-City

project in China with Sino-Singapore

Tianjin Eco-City Investment and

Development Co Ltd (“SSTEC”), the

master developer. Although Sunway

City only develop 102 acres out of the

7,400 acres, but it can leads to a

chance of work together with the

master developer.

d) Good relationship with suppliers

This can ensure business chain model

is conduct properly from the

beginning to end. Under the

procurement policy, the procurement

team plays an important role in

building long lasting relationship that

benefits both parties.

e) Good relationship with customer

SunCityprovides training to

only 3,400 numbers of guestrooms.

Sunway City’s Leisure segments are

only generates RM 21 Million with

100 acres park size only.

c) Poor in offering comprehensive range

of medical services

Sunway Medical Centre has weakness

in offering comprehensive range of

medical services due to its single

location medical centre. In Malaysia,

ratio of doctors and patients still very

low compare to developed country.

Sunway Medical Centre also facing

shortage of medical personals and

highly experience medical specialists.

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employees to fulfil the needs and

expectations of the customers to build

a high level of trust. It will help in the

long run. Customer satisfaction is the

forms of foundation of any

organization’s success.

Opportunities Threats

a) Opportunities to launch new project

Few projects such as Sunway

Velocity and Sunway Nexis are

launch nowadays. Sunway Velocity

located within 3.8km from the

prosperous Kuala Lumpur City

Centre which growing expertise in

developments. Sunway Velocity

fulfills today’s modern lifestyle which

comprises retail shops, office suites,

service apartments and over 1 million

square feet lifestyle shopping mall.

Sunway Nexis is another integrated

commercial development consists of

3-storey retail shops, 12-storey office

suites and a 20-storey flexi office

block in 5.83 acres of land. Sunway

Nexis is a complete lifestyle centre

which consists of entertainment,

leisure, and work facilities. Lost

World Hotel of Tambun is opened

with 127 hotel rooms and 27 service

apartments which provide a truly and

experience of township for local and

a) Barrier in new market

Since SunCity has cooperated

with other countries such as the

Sino-Singapore Tianjin Eco-City

project, country risk may arise to

the changes in laws and

regulations. SunCity has to adopt

and understand the culture,

political and economic

development of the other

countries.

b) Rise of exchange rate

The exchange rate between

countries will arise due to the

impact of currency fluctuation

risk, interest rate risk, and other

risks related to the external

financial market.

c) Lack of professional or specialists

Another threat for Sunway

Medical Centre is lack of

qualified doctors and specialists.

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international tourists.

b) Joint venture and new development

market lead to become best developer

in the world

SunCity hopes can bring the brand

overseas.SunCity expands the good

reputation brand to China and India.

These two countries are the two of the

world’s fastest growing economies

country. So, SunCity have the

potential to success in the world by

expanding the investment in China

and India.

c) Expand in a developing market

SunCity has found out Penang and

Johor which have a greater

opportunity and potential to develop.

Penang is a strategic location and

Johor has a huge population and high

economic growth. Thus, SunCity

aims to develop about 65 acres

freehold land can be developing into a

residential and commercial property.

d) Develop a commercial mixed

development

Sunway City is planning to develop a

commercial mixed development with

240,000 nett square feet of floor area

This situation is getting worse

when many new private hospitals

from oversea are setting up their

branches in Malaysia. For

example, Columbia Asia Medical

group are setting up another 4

medical centers in the country and

this will cause the shortage of

human resources in medical

sector.

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and 900 car park bays adjoining

Sunway Pyramid. A 5D theatre will

introduced at the Amusement Park at

Sunway Lagoon which brings the

senses of touch and smell. This will

attract many tourists since that it was

the first 5D theatre in Malaysia.

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4.0 Strategic Options for the Organisation

As Johnson and Scholes states that strategy is the direction and scope of an organisation

over the long-term, which can achieves advantage for the organisation through its configuration

of resources within a challenging environment to meet the needs of markets and to

fulfill stakeholder expectations. The strategic options that we proposed are based on the SWOT

analysis method for the Sunway City Berhad.

As we know that Sunway City is the well knownorganisation in the market. The

reputation of Sunway City is extremely good as we state in SWOT part. Sunway City is also

recognized as one of the top property developers in Malaysia for the eight consecutive years due

to the Edge’s Top Property Developers Award. Therefore, Sunway City should take the

opportunities to expand their blueprint to the Asia country. As we know that, most of the Asia

countries are the developing countries. For example, China and Singapore are the world fastest

growing economic countries that will attract many foreign country investors. In the joint venture

project in China that is not about an earning project but it also helps Sunway City gain more

experience by exchanging the knowledge of the technology and exchange design idea with

talented designer that comes from different countries. So, we believe that putting more resource

and effect on expanding the Asia market, especially in China that will be able to earn a better

financial position of the company, exchanging the experience and technology with the foreign

company and even improving the good reputation of Sunway City to the oversee market. We

believe that Sunway City will be the world wide Property Development Organisation by

achieving the goals steps by step.

On year 2010, Sunway City incurs a loss in Healthcare Segments because Sunway City

having a shortage of medical personal. Sunway City is not the only one of facing the shortage of

the medical personal, most of the medical centre of Malaysia also facing this problem. According

to the Star newspaper public in year 2010, Malaysia continues to face a shortage of doctors, with

the ratio falling short of the 1:600 standard set by the World Health Organisation (WHO).

According to the Deputy Health Minister DatukRosnah Abdul Rashid Shirlin, the Malaysian

ratio in year 2009 was 1:940 which are having a quite serious shortage of the doctors. Because of

shortage of medical personal in Malaysia, Sunway City hard to hiring enough of the medical

personal to provide medical service in the healthcare segment. In the social perspective,

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Malaysia’s population is expected to grows from current about 26 million to 32

million by 2020, the healthcare sector is expected continue to grow. On top of this, a large

portion of older age of 65 years and above population will increase the demand for healthcare

services. Thus, we would like to suggest that Sunway City have to consider that invest in the

education segments. Sunway City can invest a university to provide the education information in

medical. By this way, Sunway City can attract many graduated medical personal to work in their

organisation and solve the shortage problem. Besides that, organisation will be more

diversification by having an education as another segment of the organisation. Diversification

can reduce the business risk and maximize the organisation’s revenue. Sunway City might

reduce their risk, for example, while some of its business segment may not performing as per the

expectation, the revenue generated from others segment can be used to support activities of other

business activities. This will reduce the income fluctuations from one period to another period.

Thus, Sunway City may have an additional business opportunity with enter to different segment.

This opportunity can help the company target new customer and explore another new market.

One of threats facing by the Sunway City is the most common happen to all the

organisations, which are challenge from the competitors. Due to the development and medical

having a high return of profit margin, thus, many companies are trying to enter to this industry.

As what we state, Sunway City having a very good reputation in the development industry, thus

Sunway City has the leverage to perform the strategic alliances. As what we learn from the class,

we know that strategic alliance is when two or more entity join together for a period of time to

pursue a set of agreed upon goals or to meet a critical business need while remaining

independent organizations. As our research, we find that there are 3 types of strategic alliance,

which are joint ventures, direct cooperation and also minority interest. We feel that a very open

minded joint ventures strategies may helping the organization winning the competitive

advantages in this competitive market. Most of the time a development project is involving such

a huge amount, having a joint ventures policy may reduce the risk of the project. Sometime,

Sunway City is not enough funds to undertake a project. So the joint ventures will able to save

their capital, and solve the inadequate of resource to undertake the project. Besides that, joint

venture may able to cover any insufficient knowledge and technology of Sunway City. For

example, Shell offer a project to Sunway City which are develop a big storage for oil tank, but

Sunway City are not capable in build the oil tank, thus they having a joint venture agreement

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with the Rotary Engineering Limited to fulfill each other inadequate. Moreover, Joint venture

wills able give more confident to the owner. For examples, if an owner having a development

site, the owner invites all the developer to bid with the project. Normally, joint venture will give

more confidence to the project, because the owner wishes to distribute the risk to more

organisations. As a conclusion, open-minded joint ventures are able to increase the competitive

advantages to the Sunway City.

Besides that, we found that Sunway City not performing well in healthcare segments is

because of the organisation putting not enough resources on the medical part. As the SWOT part

states that Sunway Medical Centre only offering comprehensive range of medical services at a

single location medical centre. While other competitor such as Columbia Asia Medical group

already set up 10 medical centres in Malaysia. Due to the increasing of the intensity of rivalry

among competitors, Sunway City shall put more resources to build up the medical facilities. We

know that Sunway City’s main segment is development, so using too much resource in other

segment will affect the company facing the high risk transforming. Thus, we suggest that

Sunway City shall have differentiation in their development segment, which are built the medical

centre in their development project. In other words, competitors develop a housing development

or shop house development, but Sunway City able to differentiation their development with build

up a City. For examples, Bandar Sunway, which are project develop in year 1986. In this Bandar

Sunway, the organisation not only develops a housing area, and the shop house, but organisation

also develops hotel, shopping centre, theme park, education centre and even the health care

centre. As we know, this project not only help organisation to win a lot of profit in the financial

term, and also improve the well know of the organisation. Besides the improving in the financial

position and reputation of the organisation, the organisation also able to improving in different

segment, for examples, they also able to improve the health care segment. We believe that

Sunway City shall continue this strategy to differentiate their development with other competitor.

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APPENDICES

External Factor Evaluation Matrix (EFE)

 Weigh

tRating

Weighted score

Opportunities reduction of barriers to entry 0.07 3 0.21expanding their presence overseas in fast-growing economies (India, China, Singapore, Cambodia and Vietnam)

0.08 3 0.24

back up by competent management team which able to lead the way to strengthen their status in the globalised environment

0.10 4 0.40

joint venture with oversea companies and a new developed market add competitive advantage against local competitors

0.07 3 0.21

expand in developing market ( fount out Penang is a strategic location and Johor has a huge population and high economic growth)

0.06 2 0.12

all of the business proposals are designed to meet expectations of both foreign and local multinational companies

0.07 3 0.21

develop of a commercial mixed development 0.07 2 0.14

the most profitable company with highest return of equity over three years in the property and REIT sectors

0.05 2 0.10

good reputation in property development industry 0.06 3 0.18 Threats 

in the globalization of markets, there will be a greater foreign competition in overall of the business.

0.10 3 0.30

high exchange rate lead to higher risk exposure (currency fluctuation risk and interest rate risk)

0.10 4 0.40

many new private hospitals from oversea are setting up their branches in Malaysia

0.07 2 0.14

cooperate with oversea companies expose to some risk due to unfamiliar with every countries' law and regulation

0.10 3 0.30

 Total 1.00 2.95

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Internal Factor Evaluation Matrix (IFE)

 Weigh

tRating

Weighted score

Strengths 

Management team focus on the quality of the real estate development and invest in the properties

0.08 4 0.32

relatively stable economies with market capitalization of over RM 2.3 billion ( financial position of company is relatively good)

0.07 4 0.28

have a experienced and competent management team 0.08 4 0.32

significant growth in the hospitality and tourism industry in Malaysia

0.06 3 0.18

work closely with the government to promote their medical service and take opportunity to boost revenue

0.07 3 0.21

able to meet quality expectation through development process

0.09 4 0.36

work in team to produce superior and innovative products and services

0.08 4 0.32

procurement team builds a good relationship to suppliers to ensure business chain model is conduct properly

0.11 4 0.44

 Weaknesses 

facing shortage of medical personals and highly experience medical specialists

0.07 1 0.07

put more concentration on three main segment only (property development, hospitality and REIT) 0.09 2 0.18

poor in offering comprehensive range of medical services due to its single location medical centre

0.07 2 0.14

poor diversification in each segment 0.06 1 0.06Lack improvement of existing standards and company policies

0.07 1 0.07

 Total 1.00 2.95

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5.0 Recommendations

From our discussion, we had identified some of the strategic options that suitable for

Sunway City Berhad, so I would like to recommend which one of the strategic is the best to use

for Sunway City management to improving their business. Basically we are strongly emphasized

on strategic with expanding the business to the Asia as well as to the world. Sunway City can

provide the education to their staffs and specialists for improve knowledge, this can enhance

their employee competitiveness. They can strengthen their company to compete with their

competitors by strategic alliances with the fraternity party, and the other strategy is

differentiated.

Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management

approach for evaluating possible strategies and provides an analytical method for comparing

feasible alternative actions. Therefore, I would like to use the quantitative strategic planning

matrix method to compare 4 strategy which I mention just now and select the best strategy

among them. This technique is designed to determine the relative attractiveness of feasible

alternative actions. First of all, we have to develop a stage 1 (IFE.EFE) which make a list of the

firm’s key external opportunities/threats and internal strengths/weaknesses in the left column.

After that, the next step is assign weights to each key external and internal factor. The third step

is examine the stage 2 (matching matrix) which we use SWOT matrix and identify alternative

strategies that the organization should consider implementing. Then, we had determined the

attractiveness score and follow by the step compute the total attractiveness scores. Lastly, we

computed the sum total attractiveness score.

We can came to a conclusion that differentiated is the best option and be more effective

strategy among 4 strategy after doing some calculation in the QSPM. The results actually take

from the Sum Total Attractiveness Score Figure. As we can see, differentiation has the highest

score compare the others which is 5.19. Differentiation strategy means the company tries to be

different from others in terms of their products, services, ideas and etc.

Sometimes, creativity and innovation that can make life challenging and meaningful are

important in a business because it can decide the future of the company. For example, Sunway

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City Berhad has the existing strategy to develop an area become alike their empire. They have

their facilities and building under Sunway brand name such as Sunway Lagoon for Water Park,

Sunway Pyramid shopping centre, Sunway University and hospital. As I know, there is no other

developer are using their own brand name for their construction. This idea is creative and

special. I would like to recommend Sunway City Berhad to develop in more places and have

more facilities, although this strategy had been implemented by them.

In our opinion, they can build a city with better organized and more advance. They can

try to divide their city into 4 sections which are industrial zone, medium residential, light

commercial and farming area. They can improve the park systems and transportation. For

example, bus stops and connections to neighboring cities. By putting all these effort, Sunway

City can try to get a bunch of high wealth residents in their city. They will continue supporting

Sunway City and the company can become stronger in sustainability and well growth.

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6.0 Conclusion

From the research through the Sunway City Berhad, we can determine the strategy is

played an important role to affect an organization development and change. Normally, the

strategy formulation includes developing organization’s vision and mission, conduct situation

analysis which is determining organization’s internal strengths and weaknesses and identifying

an organization’s external opportunities and threats, generating strategies option and choosing

the particular strategies to implement. A good strategy formulation allows the organization to

allocate well in limited resources and make effective decision to expand their business.

From the analysis, we explored and understand that Sunway City Berhad is a strong, huge

and famous property listed company in Malaysia. There are operate business in six type of

segment: property development, property investment, leisure, hospitality, healthcare and real

estate investment trust (REIT). The overall analysis from the general environment state that

Sunway City Berhad is significant to growth and expand well in future, especially perform in

tourism and hospitality industry. Due to improve and expand in the tourism, Sunway City Berhad

is planning to build up a 5D theatre in Amusement Park at Sunway Lagoon. Moreover, the threat

of new entrance and the bargaining power of supplier for the Sunway City Berhad are consisted

as low range, while bargaining power of consumers, threats of substitute products and intensity

of rivalry among competitors are consisted as average rate.

Apart from that, the key finding from analysis is the weakness in development and

management of the healthcare segment which consist the shortage of medical personals, lack of

medical resources and only providing medical centre in specific location compared with their

direct competitors. With implement to gain competitive advantage, Sunway City Berhad should

differentiate in their development segment. Prior to this, Sunway City Berhad might clearly

understand their vision, mission and objective that what the organization consistent point of view

and goals want to achieve and how to achieve with efficiency, effectiveness and economic.

Therefore, Sunway City Berhad is recommend to focus in healthcare develop, they should

expand their medical centre in their entire development city to supply more healthcare services to

their residents. Lastly , Sunway City Berhad should try to operate with the government to gain

the competitive advantage for government subsidizes medical facilities and resources.

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