The Future Singaporean Sembcorp Company Case Study

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Case Study: Singaporean Sembcorp Company

According to the case study by Chong & Lee Gilbert (2017), the Singaporean Sembcorp Company is a partially-owned government company with interests in the utilities, marine, and urban sectors. Utilities has recently surpassed marine-based interests as the company’s greatest profit generator. The company is currently focusing on offering sustainable solutions to the developing nations of the region, as an alternative to nonrenewable fossil fuels. Its current challenge is to address the needs of the various countries into which it is expanding with the correct investment vehicles. For example, working with China has been relatively straightforward, due to government ownership of much of the land which is the source of the company’s water treatment and power facilities. In contrast, India’s land is privately-owned and has generated numerous obstacles due to legal red tape.

Summary of Situation

Strengths

The government ownership of the company is a source of sustained competitive advantage because of the stability of funding, versus a company solely dependent upon private revenue. There are many nations seeking sustainable power in the region willing to back up the company with similar resources. The company is diversified not only between the nations into which it is expanding but also having a financial interest in several industries.

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It specializes in financing and acquiring as well as generating new power plants which is a source of diversification.

Weaknesses

Singapore is a nation of very limited natural resources. The government-owned company is highly dependent upon foreign expansion for its future. Significant capital is needed to build the power facilities which are the source of the company’s primary areas of growth.

Opportunities

The limited natural resources of its home base has forced the company to engage in substantial ingenuity, generating sustainable solutions which could be very valuable in the emergent green economy.

Threats

Coal use has shifted to Asia, and despite Sembcorp’s emphasis on sustainability, cheaper and nonrenewable fuels are still attractive. Additionally there has been a weakening of interest in environmental solutions, thanks to a weakened commitment by the United States and other key players.

Strategic Alternatives and Recommendations

One of the greatest dilemmas facing Sembcorp at present is the question of into which nations it should expand. While India is power-starved and should be an attractive market for green power, given the multiple environmental challenges afflicting….....

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Reference

Chong, Y. & Lee Gilbert, A. (2017). Sembcorp Corporation: Powering sustainable growth in
emerging markets. AsiaCase.com.

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"The Future Singaporean Sembcorp Company", 02 July 2018, Accessed.18 April. 2024,
https://www.aceyourpaper.com/essays/future-singaporean-sembcorp-company-case-study