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

4
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

10
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

11
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 a) Lack improvement of existing
SunCity received many awards such standards
as Edge Billion Ringgit Club In order to maintain competitive
Corporate Awards Gala Dinner 2011 advantage, SunCity needs to improve
as the most profitable company with and revise the existing standards from
highest return of equity over three the viewpoint of its wide range of
years in the property and REIT stakeholders which includes
sectors; Asia’s Best Attraction Award employees, customers, shareholders,
(2007 to 2010); Golden Pony Award suppliers, and investors.
in 2002 by Games & Parks Industry
in leisure sector internationally; b) Poor diversification
National Tourism Award 2008/2009; Sunway City is more focuson three
Malaysia’s Most Valuable Brand main segments which are Property
Award by Interbrand and the Development, Hospitality and REIT.
Association of Accredited On year 2010, Sunway City incurs a
Advertising Agents Malaysia; Brand loss in Healthcare Segments. Based
Laureate Conglomerate Award by on the Geographical Segments, total
Asia Pacific Brands Foundation and revenue generated in Malaysia and
few more awards. Asia (excluding Malaysia) is decrease
from year 2008 to 2010.
b) Trustable brand Unfortunately, Sunway City just own
Sunway City recognized as one of the 16 hotels and resorts in Malaysia with

13
 top property developers in Malaysia only 3,400 numbers of guestrooms.
for the eight consecutive years due to Sunway City’s Leisure segments are
the Edge’s Top Property Developers only generates RM 21 Million with
Award. These all awards and 100 acres park size only.
accolades reflect the Sunway City’s
strong positioning as a dynamic and c) Poor in offering comprehensive range
integrated Malaysian property. of medical services
Sunway Medical Centre has weakness
c) Opportunity to growth in offering comprehensive range of
SunCity involved joint venture in medical services due to its single
Sino-Singapore Tianjin Eco-City location medical centre. In Malaysia,
project in China with Sino-Singapore ratio of doctors and patients still very
Tianjin Eco-City Investment and low compare to developed country.
Development Co Ltd (“SSTEC”), the Sunway Medical Centre also facing
master developer. Although Sunway shortage of medical personals and
City only develop 102 acres out of the highly experience medical specialists.
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

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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 a) Barrier in new market
Few projects such as Sunway Since SunCity has cooperated
Velocity and Sunway Nexis are with other countries such as the
launch nowadays. Sunway Velocity Sino-Singapore Tianjin Eco-City
located within 3.8km from the project, country risk may arise to
prosperous Kuala Lumpur City the changes in laws and
Centre which growing expertise in regulations. SunCity has to adopt
developments. Sunway Velocity and understand the culture,
fulfills today’s modern lifestyle which political and economic
comprises retail shops, office suites, development of the other
service apartments and over 1 million countries.
square feet lifestyle shopping mall.
Sunway Nexis is another integrated b) Rise of exchange rate
commercial development consists of The exchange rate between
3-storey retail shops, 12-storey office countries will arise due to the
suites and a 20-storey flexi office impact of currency fluctuation
block in 5.83 acres of land. Sunway risk, interest rate risk, and other
Nexis is a complete lifestyle centre risks related to the external
which consists of entertainment, financial market.
leisure, and work facilities. Lost
World Hotel of Tambun is opened c) Lack of professional or specialists
with 127 hotel rooms and 27 service Another threat for Sunway
apartments which provide a truly and Medical Centre is lack of
experience of township for local and qualified doctors and specialists.

15
 international tourists. This situation is getting worse
when many new private hospitals
b) Joint venture and new development from oversea are setting up their
market lead to become best developer branches in Malaysia. For
in the world example, Columbia Asia Medical
SunCity hopes can bring the brand group are setting up another 4
overseas.SunCity expands the good medical centers in the country and
reputation brand to China and India. this will cause the shortage of
These two countries are the two of the human resources in medical
world’s fastest growing economies sector.
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

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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,

18
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)

Weighted
Weight Rating
score
Opportunities

reduction of barriers to entry 0.07 3 0.21

expanding their presence overseas in fast-growing
economies (India, China, Singapore, Cambodia and 0.08 3 0.24
Vietnam)
back up by competent management team which able to
lead the way to strengthen their status in the globalised 0.10 4 0.40
environment
joint venture with oversea companies and a new
developed market add competitive advantage against local 0.07 3 0.21
competitors
expand in developing market ( fount out Penang is a
strategic location and Johor has a huge population and 0.06 2 0.12
high economic growth)
all of the business proposals are designed to meet
expectations of both foreign and local multinational 0.07 3 0.21
companies
develop of a commercial mixed development 0.07 2 0.14
the most profitable company with highest return of equity 0.05 2 0.10
over three years in the property and REIT sectors
good reputation in property development industry 0.06 3 0.18

Threats

in the globalization of markets, there will be a greater 0.10 3 0.30

foreign competition in overall of the business.
high exchange rate lead to higher risk exposure (currency 0.10 4 0.40
fluctuation risk and interest rate risk)
many new private hospitals from oversea are setting up 0.07 2 0.14
their branches in Malaysia
cooperate with oversea companies expose to some risk 0.10 3 0.30
due to unfamiliar with every countries' law and regulation

Total 1.00 2.95

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Internal Factor Evaluation Matrix (IFE)

Weighted
Weight Rating
score
Strengths

Management team focus on the quality of the real estate 0.08 4 0.32
development and invest in the properties
relatively stable economies with market capitalization of
over RM 2.3 billion ( financial position of company is 0.07 4 0.28
relatively good)
have a experienced and competent management team 0.08 4 0.32
significant growth in the hospitality and tourism industry 0.06 3 0.18
in Malaysia
work closely with the government to promote their 0.07 3 0.21
medical service and take opportunity to boost revenue
able to meet quality expectation through development
0.09 4 0.36
process
work in team to produce superior and innovative products 0.08 4 0.32
and services
procurement team builds a good relationship to suppliers 0.11 4 0.44
to ensure business chain model is conduct properly

Weaknesses

facing shortage of medical personals and highly experience 0.07 1 0.07

medical specialists
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 0.07 2 0.14

due to its single location medical centre
poor diversification in each segment 0.06 1 0.06
Lack improvement of existing standards and company
0.07 1 0.07
policies

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

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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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