INTEGRATED CASE STUDY
FROM SAGAT TO EXORA
LECTURER : Prof. Dr. Shamsul Nahar
Abdul Kudus bin Abdul Muthalib (0930395)
Yazlin Mohamed Yusof (0920890)
Nurfazlina bt Mohd Jaffar Sadique (1029088)
From a financial analyst perspective, has the proton management done a good job?
Based on the financial performance of PROTON from 2005 till 2009, our observation from a financial analysis perspective showed that Proton management has not done a good job as far as financial performance is concern. The Key Financial Indicators (KFIs) covers measurements such as basic earnings per share, net assets per share; dividend paid ...view middle of the document...
In conclusion, we hold the believe that Proton management had performed badly as portrayed by its deteriorating overall performance graph between the period in low basic earnings per share, low net assets per share, lower dividend paid to shareholders, low retained earnings carried forward, low total assets and high inventories count for the year 2009.
What characteristics should a foreign partner have that will enable maximum synergies?
Synergy by definition means the interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects. To enable synergy, the foreign partner should be able to tackle Proton’s existing weakness. For instance, PROTON's major problem would be quality control. The public usually complaint about the overall poor quality vehicles by PROTON over the years which indirectly affecting the financial result of the company, when its sales dwindled tremendously and continuously losing market share and which subsequently eroded the profit margin of the company. Therefore, a foreign partner that is known for its excellent quality of products would be a leap to induce a positive perception of Proton among the consumers which can help boost its revenues.
Next, a foreign partnership with expertise and economies of scale is necessary which can encourage the sustainability of Proton. Since it has registered net loss for 2007 and 2009 indicating high cost that could not be covered with sufficient revenue generation, it’s very much clear that Proton lacks the efficiency in managing the cost, which leads to overall loss. To overcome this problem PROTON will need a partner that can help shoulder the exorbitant costs. Also, a foreign partner well known for its good reputation would be critical in order to elevate the already weak reputation of Proton among consumers.
PROTON lacks an engine or platform to expand into the SUV and MPV markets, or the 2.0-litre and above segments. PROTON may need to collaborate with a foreign partner much in the way BMW and PSA Peugeot-Citroen are working together to develop new engines and technologies. Hence, the foreign partner should have the technological advances which Proton lacks. Furthermore, many of the green engine technologies that are emerging as a result of rising fuel prices and global warming would dictate the direction of automotive development, and these are beyond PROTON capabilities.
On its own, PROTON has limited funds for research and development. Therefore collaborating with bigger automotive players lend research and development (R&D) capabilities would be very beneficial, particularly in production of hybrid and electrical vehicles.
What broad consideration should determine the part of proton that are worth keeping and developing and matter of operation needs to be relocated or closed down?
Proton needs to reconstruct its business structure...