Michael Porter's Five Forces Model Analysis

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Michael Porter’s Five Forces Model Analysis

1. Rivalry Among Existing Competitors

The role of PSA as a port has changed a lot over the years. They not only handle the shipping of goods, but they are also providing logistic management solutions to their clients. It is no longer enough just to handle the shipment of goods. PSA has a whole range of services to help their customers keep track of their consignments and to ensure timely delivery. The details of the different types of services provided are discussed in the previous sections.

One of the main reasons for PSA success is the strategic location of Singapore as a world leading port to handle the global import and export of goods. There are few neighbouring ports that have the same advantage in geographical location that are close rivals to PSA. They are namely:

  • Port of Tanjung Pelepas (PTP)
  • Port Klang
  • Jurong Port

Similarly, in order to keep competitive with PSA, all the other rival ports are also providing logistic management services to their clients. IT plays a critical role in helping the different ports to differentiate the services that they provide. All the major players mentioned above have online services and solutions for their customers. In order for PSA to stay ahead of its competitors, constant innovation to bring value-added services to its customers is an important part of its marketing strategies.

The implementation of Portnet gives PSA such competitive edge. For example, PSA customers only have to go through a single web portal to make arrangements to have their goods shipped into Singapore. With the necessary supporting documents, the linkage with Tradenet provides different government agencies, such as Ministry of Trade, MPA etc. to receive the application quickly and reliably. Application can be approved in matter of days, as compared to competitors, which usually take weeks. Furthermore, Portnet also provides other value-added services, such as forming of a virtual e-community of parties in shipping and port-industry, including freight-forwarders, hauliers, shippers etc. that will relieve customers’ hassle of looking for one.

Analysis of the major players in the industry

Port of Tanjung Pelepas (PTP)

Similar to PSA, its port has a very strategic location that enables it to capitalize on the rapid development in Malaysia and South East Asia. It is easily accessible via an excellent network of highway and rail links to Peninsular Malaysia, Singapore and Thailand. Also, it is accessible by navigation wholly within Malaysian waters. It is adjacent to the same confluence of major shipping routes that sustain Singapore as the World’s leading port. Located at the doorstep of Johor’s dynamic development, it is equipped with the ample space advantage over PSA for continuous development well into the next century.

In terms of the facilities PTP provides, it does poses as a very strong competitor to PSA. PTP currently offers 6 berths of 360 metres each, offering a total of 2.16 km of linear wharf length. Directly behind the berths is the port's container yard. With approximately 110,000 TEUs storage capacity, it is one of the largest storage facilities in the region. The container yard also has over 1,400 reefer points and provision for further expansion, thereby enhancing the port's attractiveness towards reefer trade. There is also a segregated area for dangerous goods.

In order to stay competitive, PTP has invested heavily in Information Technology. PTP's state-of-the-art IT solution encompasses virtually every aspect of port operations including container management, marine safety Freezone Information Processing System and the Vessel Clearance System. The system guarantees easy access to all port users via leased lines, dial-up or web-based access for submission of data, declaration and general enquiries.

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The Container Management System forms the core system in PTP and is utilised for yard planning, vessel planning and for facilitating container movement. Input of data is possible via dial-up, web access or through usage of EDI transmission. For marine safety, PTP has implemented its own Vessel Tracking System called RAPADS (Radar Information Processing and Display). RAPADS provides vital information to the Marine Department in handling marine activities. Utilising the vessel tracking system, the Marine Department enables smooth traffic flow in the channel ensuring greater safety.

PTP has also initiated a system with the Customs Department called GCAMS (Gate Control ...

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