Documente Academic
Documente Profesional
Documente Cultură
Student ID : 29118149
Decision Making
THE BATTLE OF THE ASSIAN TRANSSHIPMENT HUBS: PSA VERSUS PTP
Port served a role of import/export gateway and transhipment hubs. Both operation is
growing more and more complex gradually because of the growth of the container trade and
increasing competition in port industry, thus high efficiency and high utilization rate are
essential. The operation efficiency and the development require high cost, so the
commercialization is the only way. Ports are not only need strategic location to a major route
but also need a competitive basic price, quality and value-added service. PSA was the
operator of the busiest port in the Southeast Asia and was the model of efficiency and
operation excellence within the industry. Threat emerge from upstart competitor PTP in
neighbouring Malaysia. The Lost of over 3 million TEUs to PTP bring almost 15% revenue
reduced for PSA.
PSA need to find a strategy to cope with PTP rapid growth to prevent more loss in the
future. The loss of Maersk and Evergreen to PTP could be worse if Hanjin Also shift to PTP.
Internal Improvement is necessary for PSA to cope with PTP. There is an option of
Cooperation offering from PTP to help PSA growth. The decision made by PSA is affecting
the progress of PSA main goal to became the World’s Port of Call.
2. List Threats and Opportunities
Threat Opportunity
Operation -The growth of the container trade -By Increasing capacity and effectivity
increasing the complexity thus require the demand can be fulfilled and more
more operation efficiency and capacity profit could be gained.
to fulfil.
Ownership -PSA is Owned by the government, so -Increase revenue and power through
there’ll be some constraint because of government backups
the regulation and bureaucracy
Pricing -PSA Requires high pricing because the -Higher price could be a higher profit
labour and limited area, in opposite of and could be more appealing if provided
PTP that has low labour cost and wider by higher quality and services.
area.
Shipping Industry -The complexities of shipping industry -A gain of a customer means a
make shipping company difficult to continuous profit.
shift its operation to other port, a lost
customer means a high revenue lost for
continuous time.
Competitor -PTP is growing fast and PSA could -PSA has more connectivity and better
lose more customer to PTP for its low service quality than PTP, thus giving a
price and its policy for company to premium price with higher margin is
operate its own terminal. reasonable.
-PSA had bigger competitor when -With its worldwide connectivity and
going worldwide market like P&O. PTP’s cooperation offering, PSA can
focus on its growth to enter global
market for growth, covering it’s
growing loss from PTP with larger
growing profitable opportunity.
3. Separate and Clarify Concern
Concern 1: PSA has limited land for expansion but PSA need increase its capacity to cope
with the rapid growth of container trade.
Concern 2: PSA Considered to have premium service with premium price but the tight
competition of shipping industry makes shippers need to consider not only the network
connectivity and speed but also price.
Concern 3: PTP rapid growth endangering PSA to lose even more of long term with contract
customer.
Concern 2: PSA Declining Freight PSA would lose more Developing Service
Considered to have Rate over the customer if they couldn’t quality and time to
premium service with year because the provide them with more overcome the pricing
premium price but the tight competition benefit, Hanjin lan would problem before hanjin
tight competition of in shipping shift to PTP. (HIGH) contract end. De
shipping industry industry could (HIGH)
makes shippers need to force customer to
consider not only the lower price port
network connectivity (exm : Maersk
and speed but also and evergreen)
price. (MED)
Concern 3: PTP rapid The lost of PTP(2 years of operation) PTP’s Accelerated
growth PSA to lose Maersk and shift PSA(37 years of Expansion plan using
even more of long term evergreen operation) as the busiest soft loan from Malaysian
with contract customer. because of the port if PSA has slower govt would endanger
pricing. (HIGH) growth rate. (HIGH) PSA to continuous loss if
PSA couldn’t catch up
with it. (HIGH)
Concern 4: Accepting Providing PSA to PSA would be PTP & PSA collaboration
PTP’s offering to stabilize its core considerable ports within can overcome the 50%
cooperate for mutual operation global market. growth rate of Asian
benefit. (MED) allowing them to (MED) shipping.
focus on global (MED)
market. (MED)
Concern 3: PTP rapid growth PSA to lose Strategic Business development to cope
even more of long term with contract
with PTP, Finance HR and Operation
customer.
expertise, HR & Operation Div, 1- 5 Year,
Concern 4: Accepting PTP’s offering to Negotiation plan and strategic decision
cooperate for mutual benefit. making, HR expertise, HR div, 1-20 years
plan