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IJM Corporation Berhad (IJM), as it struggled to find a way to sustain in the industry has chose to venture and focus abroad specifically India and Middle East. India has a very large population. With this demographic factor India currently lacks the infrastructure which leads the government to introduced private investment. Construction industry plays an important role in the development process where industrialization leads to the need for housing, infrastructure and other basic amenities. The sociocultural factor is important, where the policy conducted by IJM in which they employed Indian workers to work on mega Malaysian projects is indeed an effective way to better understand the Indian culture. Construction of infrastructure always a custom made product. In Malaysia, construction of houses also always comes out with new elegant design and trendy. The process is much more difficult than manufacturing any product where there is repetition. The construction boom experienced had caused the price escalation and the tight supply of materials which leads to large increase in the building costs and may change the actual amount agreed beforehand. It is common in the industry for a project to take years to complete and inflation rates are in excess. In Malaysia, when government announced new economic plan or budget for next year, IJM will be the one involve in construction activity from small house to the mega infrastructure. These are economic factors that will directly affect IJM. Other challenges ranging from political changes and war conflicts are unavoidable and beyond the control of the contractor. The effect of this on the construction business will results in delay and the cost definitely will increase. Some of the global event such Asia Games and Olympic Games normally will be equipped with the infrastructures. IJM will be affected by those events whether as host company or joint venture constructions. Due to technological advancement, IJM innovates constantly innovates and improves on the quality of its products and services in order to remain relevant to evolving technology and consumer preferences. IJM come out with the product which environmentally friendly. IJM also invest in high technology equipment base in order to compete with other players. Although IJM has conducted with market research in their construction areas, the physical factor such flood and tsunamis are still unpredictable. Flood in India has caused massive losses of life and property.
In this case. The networking is very strong and the activity is more to win-win situation. degree of differentiation and switching costs. It is not a prototype product which can be easily imitated. especially at the lower end of the technological scale. IJM has put large investment computing and engineering technology providing a barrier to new entrants in the larger project and high-technology end of the construction sector. In the construction industry. On the other hand.Industry Analysis The degree of rivalry influences the level of profitability. new entrants pose a continuous and considerable threat to existing firms. Internal Analysis Strength: IJM has become one of the largest and most diversified construction groups in Malaysia. Parts of the construction industry. concentration and balance of competitors. buyer will determine the price and IJM need to compete for the lower price. In conclusion. with the high capacity of machinery and advance technology. the buyers refer to clients and suppliers refer to contractors. where the level of technological innovation required is low. Buyers in the construction industry are quite powerful because the cost of construction products is usually significant. Therefore. In this context. It took more than 40 years to attain a competitive level of competence related diversification. It has gained worldwide presence and made a name for itself both locally and . Therefore they normally want the lower price but good quality. Factors influencing rivalry are industry growth rate. the degree of rivalry among existing competitors is low. Buyers and suppliers influence profitability positively or negatively due to their influence on prices and quality of output. IJM’s product always differentiate from its competitor. the threat of substitutes is low as construction product is unique and custom made. Most of the mega projects buyer is government. Being a well known company. where technological innovation is high there is no real threat of new entrants. In general. do have large numbers of similarly-sized competitors with undifferentiated products and services and fixed costs tend to be somewhat low. for supplier the bargaining power is low as IJM has built a good relationship with their supplier or contractor. On the other hand. being a well established company in constructions for many decades has enabled IJM to build a strong barrier from new competitors and by maintaining the relationship and networking that they have now will determine the sustainable of this company in the future.
manufacturing and more. Weaknesses: Even though they made quite a reputation in Malaysia. The ups and downs in economy due to inflations or recession will result to doom in constructions and this will take years to recover. Threat: Construction industry is a complex environment. In terms of technology. unpredictable and full of uncertainties and fragile. Opportunities: IJM maintains a highly optimistic outlook. . IJM also is one of the pioneers in producing green technology pile. In addition. banks and customer) enabled them to sustain in this industry. IJM has failed to acquire local projects and that is why IJM is looking for markets outside home. IJM actively involved in Corporate Social Responsibilities (CSR) for example donations and scholarship programs. IJM is too dependent on the subsidiaries which manufacturing piles. The top level of management came from various backgrounds and these expertises determine the next direction of IJM. it will lead to failure to IJM. IJM supported by their own manufacturing piles company which is the base item in construction. IJM also practice professionalism and good corporate governance to set standards for quality. contractors. This growing and emerging market will guarantee IJM a wide empire. IJM is not owner-driven company but management and board-driven. In terms of sources. Good corporate governance that has been practiced also is one of the strength in IJM. IJM must take opportunities to involve in constructions of new infrastructures for games preparation. They are going to expand in China and Southeast countries such Vietnam and Philippines.internationally in the fields of construction. The top level of management came from various backgrounds and these expertises determine the next direction of IJM. property development. The harsh environment like flood in India is the greatest threat to IJM. The timely payment to subcontractors and suppliers has built a strong relationship and brand name. If anything bad happened to this company. While to interact with public. During global events like Asia Games or Asean Games. IJM can build a unique name in green technology by producing the environmentally friendly building and infrastructure. Other challenges ranging from political changes and war conflicts are unavoidable and beyond the control of the contractor. With strong networking with stakeholders (supplier.
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