IOI Case 
IOI Case: Team 2 Analysis
The IOI Group, or the Industrial Oxygen International, has demonstrated its dominance in the palm oil industry since 1995, as it has continuously been expanding and profiting through its vertical integration strategy by controlling the production and distribution line from the upstream to downstream. However, through the process of expanding, IOI has encountered several obstacles that have slowed their progress down. It has faced problems such as lack of land and resources, management style and maintaining the high level competition of other competitors. Through our recommendations and analysis, we believe it will facilitate IOI’s path into becoming the world’s largest palm oil manufacturer and supplier.
The IOI Group is one of the biggest, global, and vertically integrated palm oil company based in Malaysia, founded in 1969, and controlled by the Lee’s family since
1982, when it joined the property investment and development business. Then, in 1985, it entered the palm oil plantation business and throughout the years had several acquisitions in the downstream manufacturing sector. Dato’ Lee, son of the founder and executive director, was pleased of the results accomplished over the last decade, and the company switched from producing a key commodity such as crude palm oil to oleochemicals (with the advantage of being biodegradable), or food ingredients manufacturing. Despite of the results achieved by the company, Dato’ knew there were still some issues that needed to be addressed. The first problem was integrating and optimizing the supply chain, in order to obtain the synergies from the different activities. Two third of the plantation output needed for downstream consumption were sourced outside and since palm oil is a commodity, and that commodities are notoriously known for their volatility of price and demand, to manage this kind of risk represented a challenging point. Another problem was how to create and adapt a segregated
The IOI Group, or the Industrial Oxygen International, has demonstrated its dominance in the palm oil industry since 1995, as it has continuously been expanding and profiting through its vertical integration strategy by controlling the production and distribution line from the upstream to downstream. However, through the process of expanding, IOI has encountered several obstacles that have slowed their progress down. It has faced problems such as lack of land and resources, management style and maintaining the high level competition of other competitors. Through our recommendations and analysis, we believe it will facilitate IOI’s path into becoming the world’s largest palm oil manufacturer and supplier.
The IOI Group is one of the biggest, global, and vertically integrated palm oil company based in Malaysia, founded in 1969, and controlled by the Lee’s family since
1982, when it joined the property investment and development business. Then, in 1985, it entered the palm oil plantation business and throughout the years had several acquisitions in the downstream manufacturing sector. Dato’ Lee, son of the founder and executive director, was pleased of the results accomplished over the last decade, and the company switched from producing a key commodity such as crude palm oil to oleochemicals (with the advantage of being biodegradable), or food ingredients manufacturing. Despite of the results achieved by the company, Dato’ knew there were still some issues that needed to be addressed. The first problem was integrating and optimizing the supply chain, in order to obtain the synergies from the different activities. Two third of the plantation output needed for downstream consumption were sourced outside and since palm oil is a commodity, and that commodities are notoriously known for their volatility of price and demand, to manage this kind of risk represented a challenging point. Another problem was how to create and adapt a segregated
References: • IOI Corporation Berhad, 2015, Corporate Governance • US EPA, 2011, Biofuels and the Environment: the First Triennial Report to • IOI Corporation Berhad, 2015, Sustainable Agricultural Practices Market Smartly, 2014, Strategic Planning Tools: STEEPLE. Retrieved from http://www.marketsmartly.com/general/strategic-planning-tools-steeple/