SWOT Analysis-External Analysis

OPPORTUNITIES
 Free float could rise when LTAT pares down its stake to 50%, and there is the possibility
of entry of new strategic shareholders
 Permanent increase in FFB yields in the plantation division with the use of clonal
material for replanting
 May sell low yielding Indonesian plantation
 Opening of new hotels will provide new revenue stream
 Affin Bank’s purchase of a controlling stake in Bank Ina, gives the group an entry
foothold into Indonesia
 Low cost of Palm Oil production brings a wide opportunity as the consumption of palm
oil has increased rapidly in the past years, owing to its multiple uses in both food industry
as well as non-food sectors.
 The global desire to substitute at least a small portion of fossil fuel use with renewable
fuels has given rise to increased demand for vegetable oils, one of the feedstock for
biofuels.
 In addition to the concern for the environment, relatively high fossil fuel prices have
created a demand for alternative cost-effective and clean fuels.
 A major share of the total palm oil production in the world comes from Indonesia and
Malaysia, thereby making both the countries the largest exporters of palm oil.

THREAT
 Plantation division earnings are subject to fluctuations in CPO price
 Lack of manpower resources
 Incurable oil palm disease. Through extensive research and development (R&D) over the
years, Malaysia has built a successful national brand in palm oil and will soon emerge as
a leader in the production of bio-fuel. However, not enough R&D is done to address a
deadly disease, which is affecting many oil palm plantations in Malaysia. This disease is
called Ganoderma Basal Stem Rot (BSR).
 Serious concern that not all palm oil production is sustainable, with issues relating to
biodiversity, soil degradation, local people, land rights and many other matters.
Development of new plantations has resulted in the conversion of large areas of forests
with high conservation value and has threatened the rich biodiversity in these ecosystems
 Competitors technology and pricing
 BOUSTEAD SIME DARBY FELDA

Critical Success Factors Weight Rating Weighted Rating Weighted Rating Weighted
Score Score Score
Brand Name 0.08 3 0.24 4 0.32 3 0.24

Product Quality 0.10 3 0.30 4 0.40 3 0.30

Public Image 0.07 4 0.28 4 0.28 3 0.21

Innovation 0.10 4 0.40 4 0.40 3 0.30

Advertising 0.04 2 0.08 3 0.12 3 0.12

Market Expansion 0.08 3 0.24 4 0.32 4 0.32

Customer Service 0.06 3 0.18 3 0.18 3 0.18

Geographical Coverage 0.08 2 0.16 4 0.32 3 0.24

Corporate Social 0.05 4 0.20 3 0.15 4 0.20

Responsibility
Financial Position 0.10 3 0.30 4 0.40 3 0.30

Strategic 0.07 4 0.28 4 0.28 3 0.21

Partnership&Alliances
Price Competitive 0.03 3 0.09 3 0.09 4 0.12

Market Share 0.08 3 0.24 4 0.32 3 0.24

Sale Distribution 0.06 2 0.12 3 0.18 4 0.24

TOTAL 1.00 3.11 3.76 3.22

Competitive of Profile Matrix

Strategic Group Map

High

SIME
DARBY
FELDA
KULIM
FELCRA
Trade

BOUSTE
AD

Low

Low Breadth of Product Line High

From the diagram above we can see that FELCRA has the largest size of the
bubble. This is because FELCRA has very breadth product line from Bio Organic Fertilizer,
Pallets, Chemical Bottles, Rice Straw, and Advisory Services to Engineering Services, while
Boustead has more narrow breadth of product line.

Sime Darby Plantation is in the highest position based on Trade. As it exports it’s
product to many different countries in South East Asia, Europe and Africa.