SWOT Analysis Of DLMI

Part II - Knowledge and an Overall Understanding of Dutch Lady Milk Industries Berhad (DLMI)
(i) SWOT Analysis of DLMI
Strength
A well-structured and experienced Board of Directors and management team are one of the strengths of DLMI as the company grows continuously and expands time by time under the leadership. Experienced management team and Board of Directors team tends to be more knowledgeable and have a better and thorough understanding about the dairy industry, inherent risks associated with the industry can be identified more easily and precautionary actions can be taken as compared to their competitors. It contributes to the efficiency and effectiveness on the company’s operation (Kanishkawee, 2014).
DLMI has been in the market for
DLMI can engage in more research & development activities with the assistance of knowledgeable and experienced experts in dairy industry as an effort of introducing new products to sustain its competitive position in the industry. Introduction of new products would attract new customers and increase customers’ loyalty as they are provided with sufficient product choices that would be sufficient in meeting their needs. (Tran Le, n.d.)

Threat One of the biggest threat facing by the DLMI is the increment in costs of raw materials as the production involves the usage of a varieties of materials, each serves to different production process. Increment in cost of raw materials might due to inflation, governmental policies, weather and some others external factors. Increment in cost would lead the profit of the company to suffer. The international competitors also created threat for DLMI. The competitors, including Nestle Malaysia, Cocoaland Holdings and some other new entrant companies are continually developing the products towards one of the main products of the DLMI, yoghurt. When the competitors are aggressively developing and produce the same type of products, it may affect the profitability and financial performance of the company since the consumers may try on the new products (Kanishkawee,
The financial summary of the most recent 5 years is shown in the Appendix (Refer to Appendix 5). As we notice in the graph, the revenue earned by DLMI in 2011 is about RM810.6 million and has increased RM191.1 million to reach one of the important milestones earning for the company, RM1, 001.7 million. The economic condition in Malaysia is challenging in 2015 as the Goods and Services Tax has been implemented in April, Ringgit depreciated and some political uncertainty condition, this had been weakening the purchasing power and the willingness of consumers to buy products. To cope with these economic challenges, DLMI as a leader and experienced dairy company in Malaysia had set few strategies. DLMI is continuously focused and maintaining on the stronghold as the No. 1 brand of dairy industry and strengthen its market leader position. With some investment in marketing and promotional activities carried out, the revenue of the company has successfully reached more than RM1 billion once again with a marginal sales growth of 0.1% of RM1, 001.7 million compared to revenue in year 2014, RM1, 000.2 million. A net profit amounted RM141 million was reported in the financial statement of DLMI in 2015. It is higher than the net profit of last year of RM109.8 million as there are reduction in the cost of sales of percentage of the company’s sales from 67.15% to 58%.