In our earlier blog, we did an elaborative study on the SWOT analysis of the largest construction company in the world, CSCEC. This time we will go through the SWOT analysis of Sunac, China’s major real estate company in extensive detail.
Sunac China Holdings Limited or Sunac is one of China’s leading property developers, headquartered in Tianjin, China. The company is committed to providing Chinese families with complete solutions to a better life by incorporating high-end residential, cultural, commercial, and tourism-centric, high-quality real estate services.
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In this blog, we will cover the strengths, weaknesses, opportunities, and threats surrounding Sunac. But before we begin, let us start by learning about the company, its history, financial success, and the services provided by the company.
Sunac is a major real estate developer in China, focusing on large-scale, medium to high-end property development. Sunac is headquartered in Tianjin, China with operations in Beijing, Chongqing, Wuxi, and other cities. The company follows its motto, “Passion for Perfection” and consistently strives to build a community of citizens enjoying a better life.
Sunac was founded in 2003 by Sun Hongbin and was listed on the Hong Kong Stock Exchange on 7th October 2010 with an IPO price of HK$3.48 per share. In July 2017, the company acquired 13 tourism projects and hotels from Dalian Wanda forming the 3rd biggest real estate deal in China. As a result of its steady development, Sunac China has been able to establish its competitive advantage in the industry and is widely recognized by customers as an integrated service provider that imparts Chinese families with a better, high-quality living.
Sunac operates through the following 2 segments, Property Development, and Investment – this segment provides revenue from the sale and rental of residential and commercial investment properties and another is Property Management Services – this segment includes businesses engaged in property management.
|No. of Employees||24,105+|
|Market Cap||HK$ 27.68 Billion (2022)|
|Annual Revenue||307.10 Billion (2021)|
|Net Income/ Profit||HKD 40,053 Million (2020)|
Products & Services by Sunac
Sunac has been in the real estate industry for many years and offers:
- Real estate services
- Property development services like townhouses, high-rise residences, villas, retail properties, and offices.
- Property management services
- Family entertainment services such as Hotels and Theme parks
- Public welfare foundation
Competitors of Sunac
The top 5 competitors of Sunac are
- China Vanke
- China Overseas Land and Investment Limited
- Poly Real Estate
- Country Garden Holdings
- Longfor Group Holdings
As now we have a better understanding of Sunac, let’s look into the SWOT Analysis of Sunac.
SWOT Analysis of Sunac
A SWOT analysis identifies a company’s strengths, weaknesses, opportunities, and threats. A proven and true management paradigm that allows Sunac to compare its business and performance with competitors and the industry as a whole.
So let us go ahead and first have a glance at the strengths of Sunac from the SWOT analysis of Sunac.
Strengths of Sunac
Your organisation’s strength is something that makes it stand out from the rest. It can be a competitive advantage that sets it apart from its competitors. Some of the strengths of Sunac are as follows –
- Leading Market Position: Sunac holds a leading market position in China owing to the high quality and diversified real estate products or services. Since its inception, the growth enabled the company to create new revenue streams and diversify its economic cycle.
- Good Capital Expenditure Returns: Sunac has an amazing track record of completing new projects within the deadline and generating good returns on capital expenditure by establishing new revenue sources.
- Customer Satisfaction is Just High: Sunac has been able to achieve high customer satisfaction among current customers by providing high-quality services. The company has also built strong brand equity among potential customers due to its dedicated customer relationship management department.
- Highly Qualified Workforce: The company provides thorough training, skill development, and learning opportunities to all its employees. Human resources are a major factor in the success of Sunac in the construction sector.
- Track Record of Innovation: Sunac China has a successful record of consumer-driven and customer-centric innovation. They always deliver innovative real-estate infrastructure.
- Catering to Different Customer Segments: Sunac China has an extensive set of products accommodating different segments of customers in the construction service department. This has helped the company to diversify its revenue streams.
Weaknesses of Sunac
Strategy is all about choices and weaknesses are areas where companies can improve through SWOT analysis and leverage their competitive advantage and strategic positioning.
- Lack of Digital Presence: In today’s day and age brands need to establish their presence on social media and the web. This way consumers can remain up to date with the upcoming projects.
- Gross Margins: The gross and operating margins, if not improved, could put pressure on the financial statement of the company.
- Declining Market Share: The construction service industry is growing at a fast pace, hence Sunac China needs to keep up with the market trends to drive future growth.
- High Cost of Replacing Existing Experts: Very few experienced employees are responsible for the growth of Sunac China. Replacing them and finding the right fit for the company is a tedious task.
- The Added Cost of New Supply Chain Network & Logistics: Technology and artificial intelligence have drastically altered old business models in the Capital Goods industry. This has led to a decrease in the dealer network of Sunac China. Building a robust supply chain network can be very expensive for the company.
Opportunities for Sunac
Opportunities are potential areas for companies to focus on to improve results, increase sales, and ultimately profit.
- Increasing Government Regulations: Regulations make it difficult for the unorganized players to operate in the property development segment. This can be a huge advantage for Sunac China to increase its customer base.
- Low Inflation Rates: Low inflation rate means more stability in the market. This enables Sunac China customers to get credit at a lower interest rate leading to an increase in the consumption of Sunac China products.
- Hiring Digital Marketers: The pandemic moved all businesses online. Having an online presence can boost the company’s relationship with its customers. Want to know how Sunac can boost its growth with social media? Then you must check out the benefits of social media marketing to answer your query.
- Technological Advancements: Advancements in technology are improving industrial productivity. If utilized wisely then tech can enable the company to maintain existing clients and lure in potential clients by providing them high-class services. Using technology can increase productivity and decrease extra costs.
- Customers Migrating to Higher End Products: Sunac China has strong brand recognition for their premium property development services segment. In the lower segment, customers have experience with excellent customer service. This represents a great opportunity for the company to increase its profitability in the market.
Threats to Sunac
Threats are environmental factors that can harm a company’s development. Here are some of Sunac’s threats:
- Upcoming Competition: Sunac China is a leader in product innovation in property development services, but it is still facing challenges and stiff competition from local as well as international competitors.
- Distrust in Government Institutions: There is always a threat of losing the IPR to the local competitors as the Intellectual Property Rights framework is not very strong in emerging markets, especially in China.
- Changing Demographics: The new generation is tech-savvy and is less brand loyal and more open to experimentation. This can lead to a reduction in margins in the long run.
- Commoditization of Products: There has been an increase in the commodification of the capital goods industry which is a major challenge for Sunac China and other players in the industry.
- Changing Political Environment: With Brexit’s impacts on the European Union, the US-China trade war and the overall instability in the East can give a major blow to Sunac China, both in the rural and international markets.
This ends our elaborative SWOT analysis of Sunac. Let us conclude our learning below.
Sunac is a well-known real estate company with significant global positions. During the SWOT analysis of Sunac, we found that the company is highly dependent and enjoys strong brand awareness and trust from its customers. It has a solid logistic base and covers all markets it serves, but suffers from more active research and development from an increasing number of manufacturers and competitors in the same space.
But being such a huge brand across multiple countries, Sunac should continue to innovate and develop more products and launch them in the market with the best possible marketing strategies.
Especially digital marketing which is vital in today’s growing and expanding world, to get better results and to remain competitive in the market. If you don’t have any idea of what digital marketing is or want to learn more about it and upgrade yourself, here is an Online Digital Marketing Course to know more.
We hope this blog on the SWOT analysis of Sunac has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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