BUS489_GBA05_No.7 (Jan 2020).pdf - BUS489 Strategy for Business-Group-based Assignment 5 Case study Sea Group Due Date 14 April 2020 Tuesday This is a

BUS489_GBA05_No.7 (Jan 2020).pdf - BUS489 Strategy for...

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This is a sample only. © 2020, Singapore University of Social Sciences. All rights reserved. No part of this material may be reproduced in any form or by any means without permission in writing from School of Business, Singapore University of Social Sciences. BUS489 Strategy for Business --------------------------------------------------------------------------------------------------------------------- Group-based Assignment 5 Case study: Sea Group Due Date: 14 April 2020, Tuesday
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BUS489 Strategy for Business GBA05 SEA Group Business Case 2 Contents Page Executive Summary 3 Introduction 5 Company Background 5 Organisational Structure 6 Mission & Values 8 Key Businesses 8 Current Strategies 10 Financial Information 12 Internal Analysis 13 Financial Performance Analysis 13 Capabilities Analysis 15 Operational Performance Analysis 20 External Analysis 23 Market Analysis 23 Consumer Analysis 26 Competitor Analysis 30 PESTEL (Environmental) Analysis 33 Political 33 Economic 34 Social 35 Technological 36 Environmental 37 Legal 37 SWOT Analysis 38 Strategic Issues 39 Recommendations 46 Conclusion 49 References 51 Appendix 57
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BUS489 Strategy for Business GBA05 SEA Group Business Case 3 Executive Summary Initially founded in 2009 as Garena, Singapore-based Sea Limited is one of the leading internet companies in Greater Southeast Asia. Though best known for its Garena digital entertainment business, it has branched out into e-commerce with its Shopee service and payments with its digital financial services (e.g. AirPay) business in recent years. The company has accumulated a significant user base and market share in the digital entertainment industry, attributed due to its ability to keep users engaged with at least three new game launches yearly. This is only possible because of the value propositions the company provides to game developers through its reliable one-stop game operating services. While revenue has generally increased across the three business segments, Garena is identified as the only profitable segment and generated USD$529.5 million net income in FY19. However, pertinent issues have been found in its e-commerce and digital financial services businesses that reduced the organisation’s overall profitability. For its e-commerce business, high cost of revenue coupled with operating expenses, especially in sales and marketing to increase publicity to capture greater market shares for Sea’s e-commerce, makes it the most unprofitable amongst other business segments. Sea’s digital financial services only account for 0.42% of the company’s total revenue in FY19. This is due to the small user base size as compared to Garena’s and the low number of transactions carried out. Collectively, these issues contributed to Sea’s net loss of US$1,462.8 million in FY19 - highest so far in its history. A central theme across Sea’s three businesses is that they function online. Based on our market analysis, research reflected positive market outlook and high growth potential in all three industries that Sea operates in as the South East Asian digital economy is pegged to reach US$300 billion by 2025. Furthermore, the online gaming, e-commerce and e-
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