SWOT Analysis of KBB Resources Group

SWOT analysis involves the study of strengths, weaknesses, opportunities and threats that affect the strategic management and performance of an organization. Strengths and weaknesses are internal factors while opportunities and threats are external factors (Saloner et al, 2001). Strengths and opportunities are positive factors that contribute to the success of the organization while threats and weaknesses are negative challenges that hinder the success of the organization.

SWOT Analysis of KBB

Strengths

One of the key strengths of the company is international presence. International expansion enables the company to use emerging markets’ growth potential to increase its scale and profitability (Saloner et al, 2001). The management changes involving hiring a manager also leads to new decisions that could reverse the poor financial performance. With a market share of 60% in Malaysia, the company has great potential to compete effectively.

Weaknesses

In terms of weaknesses, the company is facing significant financial problems. Its profit margins are declining and dividends might be cut. This may lead to a negative reaction from shareholders and create a negative image for the company.

Opportunities

There are certain opportunities for the company, especially international expansion opportunities. Coming into 1990s, markets in Asia and Middle East were liberalised. Market liberalization allows the company to expand into international markets and find new customers for its products (Hitt et al, 2009). The rise of middle income consumers in Malaysia and the Middle East has also caused an increasing purchasing power and demand for products in the Middle East. The markets of New Zealand and Australia have also developed a good relationship with Malaysia, forming important destinations for Malaysia’s products and MNCs.

Threats

Several threats also hinder the strategic management of KBB. Economic factors such as competition and high costs of operation in foreign countries cause poor performance of the company. Legal government restrictions in some Asian countries also hinder the company’s growth potential (Hitt et al, 2009). Furthermore, social factors such as crime/piracy and cultural differences across Asia and Middle East cause difficulties for the company’s international expansion strategies. Locally, the company also faces stiff competition from foreign firms entering Malaysia.

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