Swot of New World Devlopment Company
3.1 SWOT Analysis
Strength
NWD itself is a construction company, so the construction cost of the company can be reduced.
Its business involves a variety of fields, containing property and hotel, infrastructure and service, department store and other businesses. Such diversified sources of income disperse the operating risk as it does not depend on a single item.
NWD has a considerably large scale and market share, making it to be one of the largest companies in the property industry. The business of the company, such as promotion, marketing and pricing of building can be easily controlled and implemented by significant influencing power of the company.
The members of board of directors hold a majority of equity in terms of shares. It is unlikely that the company will be taken over by external investors.
NWD has sufficient land reserves. At 1 March 2011, NWD holds 8.7 million foot of land reserve of total property area. Any profitable operating plan will not be restrained.
Weakness
According to the annual report of NWD, there are 4 executive directors out of 6 in the Board of Directors, are coming from the same family (CHENGs family) (Appendix 2). This would mainly affect the corporate governance in decision making for the company itself. That would give outsider a poor image that this company is controlled by the Chengs family. The shareholder would not have say for any decision making and decrease the attractiveness of investing the Company.
The happening of the event of Mr. Leung Chin Man in one of the subsidiaries of New World Development, the New World China Land has mainly affected New World Development. Investors may doubt about the governance of the Company.
The companys cash are too less. According