Case Study

Capitaland: Facing the challenges ahead

16 pages
December 2013
Reference: IMD-3-2435

CapitaLand was Singapore’s leading property developer. It was formed in 2000 though a merger between DBS Land (the property unit of Singapore’s leading bank, DBS) and Pidemco Land, a Singapore government linked company. The Singapore government through Temasek Holdings (one of its sovereign wealth funds) held an equity stake of 40% at end-2011. Liew Mun Leong was the firm’s first CEO from 2000 to 2012. CapitaLand decided to expand internationally because it felt that the Singapore market was saturated with limited growth opportunities. CapitaLand’s initial focus was on a number of gateway cities, where it aimed to achieve critical mass. This strategy changed quickly with the new focus being on three core markets – Singapore, China and Australia. In expanding into new markets, CapitaLand began by sending out a high quality executive, who understood the firm and the way it operated, from headquarters to start the new unit up. The firm’s objective was to transfer operational responsibility to local executives when this was possible. While it had made some progress in this regard, most senior executives – corporate officers and senior executives of business units – were still Singapore nationals.

Learning Objective

The case helps explore the following: 1) Planning for increasing globalization. This case highlights the fact that globalization is an increasing factor in most industries, and firms need to take this into account when developing strategies. 2) The importance of clear strategic objectives. The case shows that business conditions change constantly, making it important to change course when needed. CapitaLand’s three strategic watchwords of focus, balance and scale helped to keep it on course under challenging conditions. 3) Evaluating competitive advantage on a market by market basis. The case shows that firms need to evaluate their competitive advantage on a market-by-market basis against local competitors and set strategies accordingly. 4) The stages of globalization. The case can be used to explore the five stages of globalization, including the requirements in terms of products and leadership for each stage. It can also be used to explore the question of which globalization stage each firm should target given the sector it operates in and the constraints it faces.

Keywords
Globalization, International Expansion, Property Development
Settings
Global, Singapore
Capitaland
2000-2012
Type
Generalized Experience
Copyright
© 2013
Available Languages
English
Related material
Teaching note
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