SWOT Analysis

STRENGTHS

Strong brand recognition – Solid brand presence in multiple countries with various
residential projects (Sentul Depot in MY, 3 Orchard-by-the-Park in SG) and telecoms
industry (Yes 4G in MY).
Wide geographic presence – Has projects in MY, also in SG, Thailand (Ritz-Carlton Koh
Samui), regionally in JP (Higashiyama Niseko Village), internationally such as FR and UK.

Diversified portfolio – Not only residential and commercial projects, but also railway,
infrastructure, telecommunications, hotels and resorts, water-related projects.

High growth rate – Parent company listed on Main Market of Bursa Malaysia, higher
potential to attract international investors.
WEAKNESSES
Increase in operating costs – Building materials all faced price hike year-on-year, steel
bar prices increased 20% and cement increased 12.2% y-o-y (New Straits Times, 2022),
YTL Construction incur higher operating costs

Increase in supply chain costs – China not been able to export construction inputs such
as cement, steel, sand, ready-mixed concrete out of country due to lockdown
(PropertyGuru, 2018), Company needs to find alternative suppliers for materials and
arrange logistics which means incurring more costs

Reliant on human labour – In MY, low pay offered has caused workers to leave for oil
palm industry (FMT, 2022), dilemma to suffer delayed projects due to labour shortage
or suffer financial impact of increasing salary and retain workers
OPPORTUNITIES
Reopening of global economy & tourism – Reopening of
economy in post COVID-19 world, potential for YTL
Construction to develop more hotels and resorts at tourist
attractions
Advanced technology innovation – Use of Augmented
Reality (AR), 5G network, and robotics in construction
industry to increase productivity (Elrefaey et al., 2022),
partner with technology companies to develop future-
looking infrastructure to increase project efficiency
Need for development in rural economies – Explore
regional markets such as Indonesia and Vietnam and
partner with local tourism companies to develop tourist
attractions, small accommodation businesses (SABs) are
vital component of rural tourism (Ye et al., 2019)
THREATS
Exchange rate fluctuations – HQ in MY, susceptible to
negative changes of MYR against other currencies;
exchange rate of US$ to MYR increased from 4.21 to 4.47
from March 2022 to 2023, 6.18% increase y-o-y
Decreasing land supply – The more projects and buildings
being constructed, the less overall landmass available for
future development, lower number of projects for YTL and
decreased profitability, sustainability for the Company
Competitors – Saturated construction industry with China
competitors’ cost-leadership, YTL Construction lose out on
projects such as SG’s US$180 million project of Johor Bahru
– Singapore Rapid Transit System (RTS) Link to China
Communications Construction Company despite
experience in MY Express Rail Link (ERL) system; Johor’s
US$110 billion Forest City Project lost to Country Garden
Holdings Ltd (CGPV)
Suggested Leadership Style
Moral leadership – promoting other
parties to act morally or ethically when
they are representing the business
(Harvard Law School, 2020).
All family members have common
engineering skillset, think strategically
based on strengths when making
business decisions, nepotism not
tolerated and allow nonfamily leaders
to operate under stewardship culture to
train next generation of family leaders
(Tan, 2016).
Moral leadership emphasizes following a
set of ethics/values that others are
Tan Sri Francis Yeoh stated that the
encouraged to follow, for example TSFY
Company’s market capitalization grew
stated in 2009 that family members
from US$10 million in 1968 to US$9
must have minimum honours degree in
billion in 2020 due to their moral way of
engineering or related industries to
thinking and acting.
work in the Corporation (Paris, 2009;
Tan, 2016).
Family leaders are thinking ahead next
10 years and making investment
decisions for the next 100 (Ng & Foo, Moral leadership continue to be
2020), YTL Corporation negotiated 60- practiced for continued success and
year contract to operate ERL service, sustainability of the Corporation and
shows strategic long-term thinking in Company.
ensuring sustainability and profitability
of the Corporation.
Business Strategy Action
Plan
• Diversification strategy (part of Growth strategy), defined as developing
new markets to sell brand new products or services (Ansoff, 1957).

• YTL Construction focus on related diversification: concentric diversification

which involves existing product lines but cater to different set of customers
(Le, 2019).

• Company to diversify from only premium hotels into homestay industry,

cater to budget-conscious travellers in post COVID-19 economy.

• Homestays encourage creation of jobs in local community via local

homestay operators, provide new source of revenue to the community,
offer culturally rich experience to guests.

• Homestay would not cannibalize existing hotel customers; customers will

still choose premium hotels if they can afford it but homestays provide new
customer segment for YTL Construction to capture, homestay tourists
usually in large numbers (7-8 pax) such as during university convocation
ceremony.
Business Strategy
Action Plan
• Homestay operations still remain in YTL Construction’s engineering
background and expertise; existing employees can use their global
knowledge to develop sustainable and safe homestay options for the
customers.
• YTL Construction certified ISO 9001:2015, ISO 14001:2015, ISO 18001:2007
by UKAS.
• ISO 9001 implementation found to increase customer satisfaction, project
quality and performance, time and cost effectiveness, and motivation of
employees in construction industry (Khatatbeh, 2022).
• Certification allow YTL Construction to better market their products to
customers compared to regional peers, quality and safety assured.
• Combined with YTL’s global brand presence, international customers more
willing to trust YTL accommodations, thus maximizing potential of
Company’s globally-competent staff and their knowledge, skill, leadership
abilities.
• In line with Company’s leadership style and corporate strategy, skilled
employees are trusted by top management to lead the company forward.
 Corporate Strategy
• Sharing activities corporate strategy, important activity carried out within value chain to
increase competitive advantage by decreasing overall costs/enhancing differentiation
(Porter, 1987), long-term will help achieve economies-of-scale.
• YTL Construction Sdn Bhd should utilize employees’ global experience, knowledge, and
technical skills from various global projects to train next generation of globally-
competent employees via knowledge and skills sharing.
• Instead of poaching future leaders from rival companies, YTL Construction can delegate
leadership role to skilled employees and task them to guide the next wave of leaders
within the Company.
• Example: YTL Learning Academy. Employees interested in training can participate in
“Train a Trainer” program that prepares them to be professional mentors that can guide
other employees via shared passion of knowledge, ability, and skill.
 Corporate Strategy
• YTL Construction Annual Conference. All participants from fresh graduates to Directors
will gather to share and learn from other departments in the Company, ensure everyone
is aligned with the strategic goals and objectives of the Company (YTL Construction,
2021).
• As YTL is involved in several related portfolios, sharing activities should be encouraged
even more. Countries slowly reopen, global tourism activities forecasted to have annual
average growth rate of 5.8% from 2022 to 2032 (Morales, 2022), huge potential for
development projects such as hotels for YTL.
• Thus, skilled employees of YTL can be tasked to lead these projects and share expertise
with team members, higher knowledge creation among employees in the long-term.
Management Systems
• ISO 9001:2015 for Quality Management Systems, business can
reliably provide goods & services that satisfy customers and local
regulatory requirements; business committed to ensure customer
satisfaction by always improving operational system process and
complying with customer and local government demands.

• ISO 14001:2015 for Environmental Management Systems,

commitment of business to fulfil environmental obligations in a
methodical method that contributes to sustainability pillars such as
UNSDG and ESG, certified for development of projects without
negatively impacting the surrounding environments such as air,
water, land.

• ISO 18001:2007/ISO 45001:2018 for Occupational Health and Safety

(OH&S) Management Systems, certified to have safe and healthy
work environment by proactively improve their OH&S performance
to minimize and avoid work-related incidents or risks.