Business Analysis: Financial and Strategic Analysis of Eco World Development

This report provides a financial and strategic analysis of Eco World Development, a private equity investment firm in Malaysia. It includes an overview of the company, financial analysis, strategic analysis, and key issues. The report also discusses industry-specific KPIs, Porter's Five Forces, and the PEST framework.

BUSINESS ANALYSIS

Contents
INTRODUCTION...........................................................................................................................3
Financial Analysis............................................................................................................................4
Strategic analysis.............................................................................................................................5
LIMITATION OF THE ANALYSIS............................................................................................10
CONCLUSION AND RECOMENDATON..................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business analysis is a key methodology in which market requirements are established and
business issues solved. It includes alternatives frequently which have a technology aspect in
operating applications, but can also comprise in operational management, systemic reform or
strategic strategy and policy creation (Aithal, P. S., 2017). In this report, ECO WORD
DEVELOPMENT BERHAD Company is selected and various crucial business aspects are
analysed.
1.1 Purpose of report
In this report, brief introduction of company is discussed; financial analysis is being
performed with comparison of other companies dealing in same industry, strategic analysis is
executed to define the strength and strong point as well as weak areas of business. In addition,
Competitive Advantage for company is also elaborated.
1.2 Company report
Eco World Investment Group Berhad is a private equity investment firm headquartered in
Malaysia. The Business acquired around 8,000 hectares of land bank and works in three urban
areas with a total of around 20 construction ventures including new towns and cities, mixed
industrial buildings, luxurious high-rise residences as well as green office buildings. The
Company is led by a few of Malaysia's well-known as well as admired members in the real estate
industry. The Eco World company, propelled by its goal of making Tomorrow & far beyond
fuelled by an accomplished and diverse team, is poised to fly ever further in the coming years
(About Eco world development Group Brd, 2020).
1.3 Rational
The Company's Eco Forest is really an ecosystem of around 510 acres, a natural wonderland
surrounded by a Central Park with calming reservoirs. The main reason for selecting the
company is discussed in table below:
Basis ECO-WORLD
DEVELOPMENT
SP SETIA
Product Broad product varies
significantly for residential,
commercial and industrial use.
New ventures are based
Company have standard
residential high-rises, towns
and cities, mixed
neighbourhoods, shopping

primarily in the Klang Valley,
Iskandar and Penang State.
malls in the Klang Valley.
Price All product are premium
starting from RM 2500000 to
RM5000000 approx
Range start from, RM500000
up to RM3000001
Promotion Bukit Bintang City Centre,
Eco Sky, Discover bliss at Eco
Sanctuary
Heleena, Legasi 2, Satori
Villa, EcoHill Walk
Place Semenyih-Kajang corridor,
Iskandar Malaysia, East India
Docks etc.
In All over Malasiya,
Singapore, Australia, Vietnam
as well as Australia etc.
1.4 Key issue
In the recent time, the overall financial status of company is lowering is continuously
fluctuating such as in 2017 the revenue was 2.9k which reduced to 2.2k in 2018 and in the next
year it slightly increase to 2.5k in 2019. However there is still declining figures from the current
year due to various external market factors and unpredictable events such as COVID-19 due to
which revenue in 2019 is 1.9k (till update).
Financial Analysis
2.1) Financially Specific KPI’s
Recently, the revenue of organization is constantly fluctuating, because in 2017 the turnover was
2.9k, 2.2k in 2018 and in 2019 it rose marginally to 2.5k.In addition 1.9k revenue in 2019 owing
to numerous global business conditions and volatile incidents like COVID-19. The total sales for
the company in recent year was 297 MYR in Million which was lower than S P Setia Bhd total
sales for 2019 (404 MYR in Million) (About Sp Setia Bhd, 2020).
2.2) Revenue growth
The revenue growth of Eco world in recent year as compared to last year was 11.08 %
which shows that company is performing well than competitor firm as Sp Setia total growth of
revenue is 8.09 %.
2.3 Return on Assets
In the context of Eco World Development the return on assets for the year 2019 was 0.71
which was lower than previous year that shows somehow the expenses are higher than revenue

generation rate. On the other side, Sp Setia ROA increase from last year (1.93 % in 2019 which
was 1.63% in 2018) due to which brand position is also increasing year by year.
2.4 Profit
The total earning of company after paying all its taxes, interest and expenses are the profit
figure from which reserve are maintain and share of specific shareholder are distributed for Eco
world Development. In the current financial year, the total net income of company is 344 (MYR
in million) which reduced by a large scale due to increase in operating expenses. In addition,
EBITDA for the period also decreases to 855 because of higher tax payment and interest rate.
2.5 Market share
In the recent time the total market share of company have also reduced due to a major
impact of different financial crisis and external environment instability. It is determined that
Market Cap MYR Mil in 2018 was 2,665 which lowered to 2194 in 2019. On the other side,
different elements of negative business environment also impact business of Sp Setia because the
Market Cap MYR Mil in year 2018 was 9,223 which reduced to 6468 in 2019.
2.6 Benchmarking Financially Specific KPI’s
The Risk Management System for the Eco Environment Growth Community is focused on
ISO31000:2018, Risk Management-Guidance which is structured to incorporate ERM into the
Group's core operations, programs which processes. The Eco Business Park I, Cradleton at Eco
Majestic & The Verandah at Eco Botanic are really the best performing property prizes during
the year 2018 which aim to raise the standard for management of properties in Malaysia
(Financial performance of Eco world development Group Brd, 2020).
2.7 Key issue
There have been number of key issues due to which the overall market share is
decreasing and the total revenues are also lowering for Eco world Development. Some of these
are as follows:
(i) Reducing of Profit margin due to rise of operating expenses.
(ii) Declining of sales performances which have lowered the customer base.
(iii) Location of Land Bank on which huge interest and outstanding amount are repaid to
bank.
Strategic analysis
3.1 Industry Specific KPIs

The entire industry of real estate is strolling in the recent time due to dynamic nature of
operation and continuous changes in the external factors. As if now the locations of building or
houses are not really getting the actual amount of their values due to which the debt or loss
figures are raising which slow down the entire economic development of world. The sales Target
of company are not getting meet due to changes in consumer behaviour as they think investing in
property is not a good option in current era as there are many other sources to raise income or to
better live in existing place. For example, the sales figure of Eco world Development are
reducing year by higher due to increase in operating expenses and low demand of residential and
office property in present time. The guiding force behind consumer loyalty is staff in property
industry. The relationships between the workers set the stage for a good or unpleasant customer
experience. When workers aren't comfortable at work, their consumer relationships will, and
does, fail almost always. This may have significant consequences for a company over time. A
major part of workplace happiness needs to do with knowing what workers need and expect and
getting input into their desires for work in Eco World Development (Antero, 2015). Through
knowing about staff needs employers would be encouraged to create required organizational
improvements. It is not to suggest that it needs to be about the expectations of the workers, but
there are also areas where reform can be introduced with reduced expense and commitment.
Brand credibility refers to the credibility of the product data held in Eco World
Development, that also makes images to interpret that perhaps the product does have the capacity
(i.e., expertise) and eagerness (i.e., reliability) to produce what's been actually been pledged,
even though if and when manager of real estate don't really deliver what their brand equity is
pledged, brands can operate as transmitters. As the usage of corporate responsibility spreading,
creating a socially responsible identity is becoming extremely relevant. In selecting a brand or
product, customers, staff and partners consider CSR and keep companies responsible for their
corporate values, policies and income for impacting social change within the business of Eco
world development.
3.2 Porter’s Five Forces
Buyers Power: The willingness of consumers which can push down costs depending
on their power level. The total number of clients or consumers a product has, how valuable each
client is, including what it will cost a business to reach new clients or buyers for some of its
production is influenced by this factor. In context of, Eco world development the buyer power is

very strong due to which prices varies from property to property depending upon the purchase of
house of building.
Supplier Power: It is influenced by the amount of suppliers of a product or service’s main
inputs, how special such components are as well as how much it will cost a firm to turn to some
other supplier. The fewer vendors to an enterprise, the more reliance a sector will have on a
supplier (Daft, J. and Albers, S., 2015). As a consequence, the supplier has far more authority
and will be able to drive up labour costs and squeeze for other commercial benefits. It is low in
the context of respective firm as demand of large estate company are very high which are not
meet by small firms.
New Entrants: The control of a corporation is often changed by the influence of potential
industry entrants. The less time and resources it takes for a rival to reach the business of a
corporation and to be a proper means, the more dramatically the role of an existing company will
be undermined. A market with clear penetration barriers is perfect for established companies
inside the sector, because the enterprise may demand higher rates and secure better conditions.
The degree of impact for this factor over the business of Eco world development is very strong
as number of contractor are ready to acquire the best property and build building as per the
customer demand (Sroka and Szántó, 2018).
Degree of Rivalry: The greater the total of rivals, together with the quantity of equivalent
products as well as services that are provided, the less a firm's strength. Suppliers and consumers
expect rivalry from a supplier because they can deliver a great product or cheaper costs.
Alternatively, when competition is low, a business has more right to pay greater prices and set
the terms including its offers for higher profitability. In the context of selected company the
impact is moderate which means the competitive company are dealing with the very same
business practices.
Internet Information Influence: The impact of internet information over business of Eco
world development is very strong due to following reasons such as ethical advertising and sales
practices, accepted of investment group peer pressure, attitude towards misleading information
and ethical recruiting practices and engagement of influencer/endorser.
Demographic Power: The impact on Eco development of demographic factor is moderate
as company have already working to fulfil the desire of customer as per the requirement at will
price. Some factor being considered by respective company are population growth rate,

migration of Generation Y, age distribution and life expectancy rates, average disposable income
level, social class’s segregation, family size and structure and new Development at outskirt
mushrooming to develop new population (Jenkins and Williamson, 2015).
3.3 PEST Framework
Political factors: Factors that may affect the organisation may be socially or personally
driven. For examples governmental policy, political peace or uncertainty, administration,
corruption, control of markets, international exchange policies, tax policy, export controls,
employment / climate / licensing / consumer security regulations, financing grants & programs,
etc. In the context of Eco world development the impact of political factor is very strong as price
of the different location needed to be fixed by recognizing various kinds of governmental
policies.
Economic factors: Actual economic factors that could affect Eco World development
performance are: Demographic patterns, development levels, market expansion, seasonal
influences, foreign exchange rates, global trade, labour cost, and discretionary income for
households, unemployment rates, taxes, inflation, interest rates, access to credit, financial
measures, raw material expenses etc. In the context of selected firm the variable of economic
have a strong influence over the location market value and also impact the sales targets.
Social factors: Social perceptions, habits, and patterns that influence the company and
target audience. For examples behaviours and common attitudes regarding a variety of factors
like income, consumer care, imports, culture, cultural abuses, fitness, job, lifestyle, ecosystem;
population increase and demographic trends. The overall impact of such factors over sales
revenue of eco world development is moderate as everyone need a kind of house either of
residential or office purpose to meet its basic needs and requirement.
Technology factors: Technology which may influence the way the goods and services are
made delivered and commercialized (Sroka and Lőrinczy, 2015). Application of telecom
systems, software regulation, and customer exposure to information, growth of rivals, new
innovations, automation and advancements are some example of this factor. The impact of these
factors over respective company is moderate which means that changes in technology not
quickly hampered to sales figures (King and Brooks, 2016).
3.4 SMART evaluation

Mission statement: EcoWorld invests in research and growth programs to create potential leaders
to achieve the dream of "Creating Tomorrow and Beyond," while skill creation makes the charts
of its individuals priorities. Despite 60% of the staff becoming Gen-Y, the talent acquisition
department has actively mapped out structured and casual learning experiences across multiple
touch points despite senior members like the chair and Chief. Eco World customizes the systems
of learning and growth to grow significant return Gen-Y abilities into the members in the next
decade.
Vision statement: The Company has developed the dream, purpose and principles to represent
the way the team wanted to meet the objectives of the organization. Buy-in begins as the
business was launched right from the very beginning. The boss understands the value of a
dedicated team but not many have discovered the best recipe to create or maintain it. Eco
World's commitment level is enviable and can be linked to many variables.
3.5 VIRO Model
Project Name location ,price
valuation
sales target
performance
product &
promotion
ECO WORLD
Eco Majestic
Rare
Imitability Restriction
Valuable Rare
Imitability
Restriction
Organized to
Capture
Value
SP SETIA
Setia Ecohillc2
Rare
Imitability Restriction
Valuable Rare
Imitability
Restriction
MAH SING
GROUP
SouthVille City
Rare
Imitability Restriction
Rare
Organized to
Capture Value
Valuable
Leading company EQUAL ECO WORLD
MAH SING
GROUP
ECO WORLD
SP SETIA
3.6 Competitive Advantage
Directions Growth plan aims at Protecting and Growing the current demand and commodity
in Malaysia and UK BPS initiative to recover unbilled revenue II (Schaltegger, Lüdeke-Freund
and Hansen, 2016). Consideration of organizational strategies on Value Creation and
Organizational Parenting in supporting the organization's general vision leadership position and
objectives on strategic purpose for Eco world development in future year. This involves
Emphasis on building interest, Transparency to external stakeholders and Clarification to
business groups on the basis from which strategic decision to establish consistent goals and III

standards. Business strategy examines the cooperation with many other owners of land banks
like government. Across both Malaysia as well as UK enterprises, as well as other joint ventures
with private developers to expand purchasing leverage by targeting regional business segments
and consumers.
LIMITATION OF THE ANALYSIS
Limitation of the Financial Analysis:
 The financial report does not envisage shifts in production quality rates
 The financial statement may be unclear without understanding the adjustments in the
accounting process practiced by a business
 Financial study is an assessment of company reports
 Monetary evidence is envisaged in financial analyses alone, although non-monetary
considerations are ignored
 The financial reports are highlighted on accounting basis, as such, they do not reflect the
current viewpoint
Limitation of the Strategic Analysis:
A Strategic Analysis review may be daunting if members are unsure on whether they should
focus. It is not handled automatically by the device itself, and it may be hard to determine what
to answer first. It is structured to tackle related problems, so members may feel obligated to deal
with all at once. A SWOT of Strategic Analysis is as practical as the data found within. This
should represent the person generating the prejudices and experiences. This makes it difficult to
obtain unbiased data regarding the analysis of strategic, so members may doubt whether the
information is valuable.
CONCLUSION AND RECOMENDATON
From the above discussion, it has been recommended that The Quantitative Strategic
Planning Model (QSPM) is an overall strategic strategy framework for evaluating potential
approaches that offers an empirical tool for analysing realistic alternative measures for Eco
world development in upcoming time. Often imagination and ingenuity that can render life
interesting and exciting in a business are necessary as it can determine the financial performance
of respective company in upcoming financial year.

In the end of report it has been explored and understood that in Malaysia, Eco world
development is a firm mentioned as a big, massive, and popular land. Six types of segment are
operating: real estate development, expenditure in property, entertainment, hospitality,
healthcare and financial and emotional support in real estate (REIT). The general environmental
analysis notes that the creation of Eco world is necessary for growth and expansion in the future,
particularly in the hotel and tourism industry.

REFERENCES
Books and Journals
Aithal, P. S., 2017. An Effective Method of Developing Business Case Studies based on
Company Analysis. International Journal of Engineering Research and Modern
Education (IJERME), ISSN (Online), pp.2455-4200.
Antero, M. C., 2015. A Multi-case Analysis of the Development of Enterprise Resource Planning
Systems (ERP) Business Practices. Frederiksberg: Copenhagen Business School (CBS).
Daft, J. and Albers, S., 2015. An empirical analysis of airline business model
convergence. Journal of Air Transport Management, 46, pp.3-11.
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis. Routledge.
King, N. and Brooks, J. M., 2016. Template analysis for business and management students.
Sage.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and
transformation. Organization & Environment. 29(3), pp.264-289.
Sroka, W. and Lőrinczy, M., 2015. The perception of ethics in business: analysis of research
results. Procedia Economics and Finance. 34. pp.156-163.
Sroka, W. and Szántó, R., 2018. Corporate social responsibility and business ethics in
controversial sectors: Analysis of research results. Journal of Entrepreneurship,
Management and Innovation. 14(3). pp.111-126.
Online
About Eco world development Group Brd. 2020. [Online] Available Through:
<https://www.reuters.com/companies/ECOW.KL/profile>
Financial performance of Eco world development Group Brd. 2020. [Online] Available Through:
<http://performance.morningstar.com/stock/performance-return.action?
t=8206&region=mys&culture=en-US>
About Sp Setia Bhd. 2020. [Online] Available Through:
<http://financials.morningstar.com/income-statement/is.html?
t=8664&region=mys&culture=en-US>.