SWOT Analysis of SMRT Corporation With USP

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SMRT established in 1987 provides light rail, subway, bus and taxi services to about 1.3 million commuters a day. Mass rapid transit (MRT) unit is the major revenue contributor for SMRT. It's MRT unit operates on 90 kilometre distance which constitutes 50 stations. MRT unit also rents some of the space in the MRT stations for commercial activities and also earns money through ads placed on taxis, buses and MRT's (Hoover's Inc., 2012a). SMRT provides engineering services and has projects outside Singapore. SMRT's only competitor is ComfortDelGro Corporation Limited (Hoover's Inc., 2012c). Table 1: SMRT Products / Operation Sales(Hoover's Inc., 2012b) PRODUCTS / OPERATIONS PERCENTAGE MRT 54 Buses 26 Taxis 9 Rental 5 Engineering & Other services 3 Advertising 2 LRT 1 Total 100 The public transport market operates in a duopoly market structure dominated by SMRT and SBS and both operating on different independent lines. SMRT and SBS have monopolistic powers over the routes during the contract period. Thus public transport means SBS and SMRT. Any positive effect or negative effect on public transport will affect both (SBS & SMRT). So in this coursework if something is mentioned as public transport , literally it can be taken as SMRT. 2.0. EXTERNAL ENVIRONMENT CONDITIONS To analyze the external environment conditions faced by SMRT, PESTEL analysis and Poter's Fiver Forces analysis are performed. 2.1. PESTEL ANALYSIS In PESTEL analysis political, economic, social, technological, environmental and legal factors affecting the SMRT are analyzed. 2.1.1. Political SMRT's major shareholder (54.3% share) is Temasek Holdings (SMRT Corporation Ltd 2008-2012). Temasek Holdings is owned by the Singapore government (REACH 2012). The government encourages public to take public transport in order reduce traffic congestion. In order to encourage public to take public transport the LTA is now integrating Bus stations and MRT stations with shopping malls thereby giving the public the chance to ride and at the same time do their purchase rather than separately travelling to area from the bus stations or MRT stations to do the purchase (Singapore Budget 2012 2011). Thus the Government's initiative in encouraging public to take public transport and Temasek Holdings having major share in SMRT shows that SMRT has lot of political favour and support. 2.1.2. Economical Singapore's expanding economy demands more workforce that Singapore population is unable to fulfill, so more and more foreigners flock to Singapore to work. Singapore's stable government and many other factors has helped Singapore to be ranked at 14th place in best place for FDI. Expanding economy due various factors like FDI has increased the foreigner population to about 36.4% (Yeoh & Lin 2012) of the total population. Thus expanding Singapore's economy expands the Singapore population which is in great need of public transport as it is the cheapest form of transport. With current economic expansion the daily trips by 2020 is estimated to be 14.3 million. The solution to this the huge number of trips per day for a small country like Singapore is public transport. Thus any increase in ridership due to expanding economy will also benefit SMRT. 2.1.3. Social The average daily ridership ('000 passenger-trips) for MRT is 2295, LRT is 111, Bus is 3385 and taxi is 933 (SINGAPORE LAND TRANSPORTSTATISTICS IN BRIEF 2012). Growing population, exponentially growing CEO prices, growing MRT line coverage area, sophisticated bus services, high reliable MRT system are some of the factors that increase ridership. Thus any increase in the ridership affects positively the SMRT. 2.1.4. Technological SMRT Institute which is a subsidiary of SMRT provides educational programmes to meet and grow the technological advancements in the land transportation. Nitec in Rapid Transit Technology programme jointly developed by the Institute of Tec
  SWOT Analysis of SMRT Corporation with USP, Competition, STP (Segmentation, Targeting, Positioning) - Marketing Analysis SMRT Corporation   Parent Company  Temasek Holdings  Category  Public Transport Sector  Transport Tagline/ Slogan  Moving People, Enhancing Lives USP  Affordable and efficient intra-city transport service STP   Segment  Rapid Mass Transport systems Target Group  All classes of people needing to move from point A to point B in their daily commute Positioning  Hassle free transport service connecting the whole city of Singapore SWOT Analysis   Strengths  1. High Product Diversity  –   Bus, Train and Taxi services 2. High Product Quality 3. Modular transportation growth approach to offer better connectivity for future 4. Safe and secure. Least number of fatalities over the 10 year moving average. 5. Over 7000 people are employed with the organization Weaknesses  1. Centralized only in Singapore for revenues 2. Lower train operating profit due to higher R & M costs and staff related expenses, partially offset by higher revenue. Opportunities  1. Increased Ridership trend 2. Expansion of RTS Network 3. Growth in industry due to tourism boom 4. The company can tie-up with international players for global exposure Threats  1. LTA as central bus network planner  2. There is limited land space for expansion with increasing travel demand. 3. Rise in number of vehicles Competition   Competitors  1. Comfortdelgro 2. Bedok Transport Pte Ltd 3. Prestige  –   Multi model transportation services
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