GROUP 6

SIME DARBY
Erich Julian Erix Nur Hidayat Muhammad Ludfi Sruny Masyanie S Suharjono Tadila Putra H Tyson Adhy

Overview
Sime Darby is a Malaysia-based diversified multinational involved in key growth sectors, namely, plantations, property, motors, industrial equipment, energy & utilities and healthcare. Alexander Guthrie founded Guthrie & Co. in 1821 as one of the first British trading enterprises in South East Asia. Daniel and Smith Harrison and their friend Joseph Crosfield, on the other hand, formed a tea and coffee trading partnership called Harrisons & Crosfield in England in 1844. Sime Darby came to be when European businessmen William Sime, Henry dEsterre Darby and Herbert Mitford Darby established Sime, Darby & Co. in 1910, its business divisions seek to create positive benefits in the economy, environment and society where it has a presence. By the closes of 1960s, demand for rubber decreased, so the company is diversifying to cocoa and palm oil, also acquiring Singapores company ewart&Co, now better known as Sime Singapore. By 1970, 80% of sales were generated in Malaysia and made Sime Darby as the largest foreign company, British-owned and main office located in Singapore. So under the NEP, the Malaysian Government decided to take over the company. They do so by purchasing the majority of the stocks in the London Stock Exchange. In 1978 the British lost control of the company and in 1979 the main office is relocated to Malaysia and the company stock was listed in KLSE in 1979. In the late 1970s, Sime Darby is continuing to diversify to keep up with Malaysian economic activities by branching out regionally. Acquisition of BF Goodrich Philippines in 1981, now known as Sime Darby Philippines, enabled them to make acquisition of a large number of companies in the Philippines, mainly financed from internal resources.

In 1981, the ownership of Sime Darby was transferred from Pernas to Permodalan Nasional Berhad (PNB) which is government owned. By 1995 PNB owned 20.7% shares and Malaysia Mining Corporation 7% while the rest is publicly owned, Some of the subsidiaries are wholly owned, others are owned by in majority. With a workforce of over 100,000 employees in over 20 countries, Sime Darby is committed to building a sustainable future for all its stakeholders. It is one of the largest companies on Bursa Malaysia with a market capitalisation of RM54.02bn (USD17.07bn) as of 20 December 2011.

Problems
Are Sime Darby can create value of diversification move into the financial service industry?

Does the conglomerate model really work? There are conglomerates that work, like General Electric Co (GE) and the UK-based Virgin group. But there are more that have failed. Indeed, the trend at the end of the 20th century was for conglomerates to move from being large, unfocused behemoths to firms that created organisations focused on core capabilities.

Cause The Problem

in banking provided advance access to information about trends in the economy because of the ubiquity of the need for financing Banking required a greater degree of attentiveness to the customer than simes traditional business, and that given the rapid flow of information in financial service

Corporate Level Strategy

Company in 1929. In 1965, Sime acquired the Singapore based company Ewart & Co, better known today as Sime Singapore. With the acquisition of BF Goodrich Philipines in1981, Sime Darby expanded its presence into Philipines. In April 1981, Pernas transferred the share of ownership of Sime Darby to Permodalan Nasional Berhad, some of Sime Darbys subsidiaries were wholly owned, some joint ventures and other listed companies in which Sime owned a majority share. In regional expansion, Sime Derby had aggresively initiated several company in recent years including acquisition of an oil refinery in Egypt, Sime Property in Vietnam and a joint venture company in mainland China, Wuxi Par Resources.

Strategy Tools

BCG MATRIX

BCG Matrix

6 Elements of Corporate Strategy

Corporate Strategic Priorities

Vision To be a leading multinational corporation delivering sustainable value to all stakeholders Mission Sime Darby is committed to developing a winning portfolio of sustainable businesses We subscribe to good corporate governance and high ethical values We continuously strive to deliver superior financial returns through operational excellence and high performance standards We provide an environment for our people to realize their full potential

Unfocused Business Corporate Advantage: 1. Strong Diversification Strategy 2. Also using M &A, Alliances 3. Strong Financing & Asset 4. Good Corporate Governance

How well do markets function?

Sime Darby uses all the market intermediaries position: agent, distributor, wholesaler, retailer, even producer and developer. Those operate depends on the business unit and very wellgoverned.

Does the firm have an effective strategy to add value to the each business unit

As the Conglomerate Firm, Sime Darby have tight control and good corporate governance, include theyre supply chain & operation system. Corporate Structure

Strategies for Unrelated Diversification in Sime Darby

Alternative Solutions
Companies began to avoid acquisitions that clashed with their business mix and focused

on acquiring companies with related synergies. Key to their success is a cohesive culture and brand name that is present throughout the group. Everyone in the group knows the vision and mission and this is inculcated very strongly and across every single segment of the group. Groups also adhere to very strict corporate governance standards and have impeccable internal audit functions.

Thank You