Company analysis and investment recommendation framework

Company analysis and recommendation for buying or not Company Analysis and Recommendation on Purchasing Sammon VG, Subsidiary of the Sammon Group

The Sammon Group is an internationally recognized corporation, conducting diversified operations in five fields of expertise -- contracting, joinery manufacturing, project development and project management. Due to the recent straits upon the international economy, the parent company is looking to sell its Sammon VG, the subsidiary in Dubai, the United Arab Emirates. The aim of this report is to assess this subsidiary and formulate a recommendation of purchase or not purchase. The analysis will be conducted in terms of SWOT, BSC and the McKinsey 7-S model.

SWOT Analysis

Internal Strengths

Sammon VG is part of a large, diversified and successful group and has benefited from its wide resources and the valuable expertise of its managerial team

Sammon VG employs a series of highly skilled employees; the people are joint by the company's mission and vision and support it in reaching its overall goals; Sammon VG represents a good place to work in and as such attracts HR and community support

Internal Weaknesses

Public communications are generally poor; proof of this stands the fact that the subsidiary's web page does not function, disrupting as such relations with the stakeholders

Due to the risks associated with the operations conducted, large sums of money are invested into working safety

External Opportunities

Sammon VG supports the development of social infrastructure in Dubai and is as such prone to receive support from the local authorities

Dubai is highly populated, ensuring as such the company with a great market to address, increasing also its chances for achieving the desired financial results

External Threats

The legislation is fairly complicated in Dubai, as it reveals both commonalities with other emirates, as well as individual features (Long and Reich, 1980); the legal actions to an acquisition could as such take longer than expected

The internationalized economic crisis has made its presence felt in Dubai, where western investors have begun to leave (Clark, 2009); this means that demand for infrastructure improvement products and services offered by Sammon VG would suffer reductions

3. Balanced Scorecard

Due to the poor level of Sammon VG's communication with the stakeholders, the gathering of information vital to conducting a balanced scorecard analysis is an extremely difficult task. Nevertheless, it can be argued that Sammon VG is very well integrated in the overall view and operations of parent company Sammon Group. The "commitment to quality and project delivery is part of a two-pronged philosophy on which the company was founded. The other central pillar of our business - gleaned though many years learning the trade in my own family's business - is, very simply, that the client comes first" (Sammon Group Website, 2009).

Additionally, not only that it operates in the same direction, it also operates in such a manner that supports the Group in reaching their overall objectives. Sammon VG is in itself a testimony of the great levels of diversification in terms of all products and services offered, as well as working locations.

4. McKinsey 7-S Model

Shared value -- a combination of high skills, commitment to customer satisfaction and the usage of the latest technologies to support the development of social infrastructure

Strategy -- the simple strategy of ensuring customer satisfaction through the offering of high quality products and services; this quality is ensured by the staff members and intense focus is being placed on strong HR strategies

Structure -- Sammon VG is one of the two territorial components of the Sammon Group: Sammon Contracting and Sammon Woodcraft operates in Ireland, United Kingdom, Europea and Africa, whereas Sammon VG operates in Iraq, Iran, Yemen and G.C.C. (Sammon Group Website)

System -- the system is formed from the general organizational departments found in any other economic entity -- manufacturing, sales and marketing, financial, it, managerial or human resource

Staff -- intense focus is being placed on the skills and abilities of the staff members to support the company in reaching its goals