1/11/2014

Presented By:
Chng Ya Wen | Mathieu Laforest | Oei Jiao Rong Marvin | Patrick Lowery
1

Presentation Outline
Objective: To show how SingPost is adapting within
the sunset mail industry to survive and prosper

Background
Strategic Capabilities
Case Study Analysis
Competitor Analysis
Strategic Innovations
Strategic Moves

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Background
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Global Postal Industry

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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Key events

2003: IPO
2007: Market for basic mail
services was liberalized

Businesses

Mail
Logistics
Retail

Strategic
Capabilities

Background

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Has this Global Trend affected

Singpost?
7.3%

8.4%
14.4%

Mail
Logistics
Retail

37.2%

77.2%

55.5%

Revenue Breakdown in 2007

Background

Strategic
Capabilities

Case Study
Analysis

Revenue Breakdown in 2014

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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Ownership Structure

Government linked company

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Characteristics of Industry
Singpost appointed as
Public Postal Licensee
Has access to HDB letterbox masterdoor key
Other postal service operators have to pay Singpost for access

High barriers to entry

Letter boxes, post offices
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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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MONOPOLY in basic mail services in Singapore

Basic mail services is a cash cow for Singpost

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Change of CEO

Ng Hin Lee
CEO (postal and corporate services)
Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Wolfgang Baier
CEO (International)
Strategic
Innovations

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Strategic Moves

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Domestic Market

International Market

Slow down the rate of

Expansion into logistics due

decline of mail

to growth rate of e-commerce,

using money from cash cow

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

11

Strategic Moves

Strategic
Capabilities

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Singposts Strategic Capabilities

Leading player and trusted

household name in Singapore
and Southeast Asia

Full suite of ecommerce

logistics solutions

Low cost provider

Background

Strategic
Capabilities

Cash rich company

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

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Strategic Moves

Strategic Capabilities - Full suite of

ecommerce logistics
Speedpost - Parcel transfer to more than 200 destinations across the
globe
Extensive multi-channel network - 60 post offices, about 300 SAM
kiosk as well as a wide variety of payment and financial services
online
vPost - Delivery service that enables Singaporeans to shop from US,
Japan and Europe websites

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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SWOT Analysis
Strengths

Weaknesses

Leading player and trusted

household name in Singapore and
Asia Pacific
Cash rich company
Low cost provider
Full suite of ecommerce logistics
solutions

Productivity issues

Opportunities

Growth rates in E-Commerce

Proportion of disposal income spent
on discretionary items has risen
Technological evolution

Background

Strategic
Capabilities

Case Study
Analysis

Threats

Decline in domestic mail volume

Regional and global competitors
Threat of takeover by larger postal
services

Competitor
Analysis

Strategic
Innovations

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Strategic Moves

Case Study
Analysis

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Case study Australia Post

Internationally recognised as a leading postal business (4th)

State owned enterprise (Australian Government as the sole
shareholder)
3 core areas: 1) letters and associated services
2) retail merchandise and agency services
3) parcels and logistics

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Australia Post
Coping with Declining Mail
What they are doing

Increase basic postage rates

Optimise the letter processing network
Extend their trusted services capability
Digitise traditional postal services (MyPost digital mailbox, mobile
apps)
Transition the business from a postal to a parcels-dominant business

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New Sprintpak facility

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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Australia Post
Enhancing Capabilities in Parcel Delivery
Australia post - Australians first choice for parcel delivery

What they are doing

Working closely with major ecommerce marketplaces to simplify
packaging and postage processes
Developing digital customer channels Mobile site: m.auspost.com.au)
and mobile app
24/7 Parcel Lockers at 181 locations across the country

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Singpost
Coping with Declining Mail
What SingPost is doing
Increase postage rates from October
Schaefers Logimat machine for efficient
pick-and pack
vBOX - a personal digital mailbox
offering bill payment services online
Strategic direction towards ecommerce
logistics

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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Singpost
Enhancing Capabilities in Parcel Delivery
What SingPost is doing

SingPosts online marketplace, Omigo.com

Installed 67 POPStations island-wide
Mobile App to track orders
Develop eCommerce Logistics Hub in Tampines (Invest about S$182
million)

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Competitor
Analysis

22

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The Competitors
Hypercompetitive in Express Mail market and International
Mail/parcel Delivery

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Summary of Competitors
Singpost

DHL

Yamato

Number of Countries

12

220

4 (Singapore, Taiwan,
Hong Kong, Shanghai)

Revenue (SGD)

821,000,000

90,000,000,0000

17,000,000,000

Number of EE

4,700

285,000

193,146

Services

Express
mail
Proxy
shipping

Temperature
controlled
logistics
Industry sector
solutions

Cash on delivery
services
Refrigerated courier
services

No, since
Competitors
are bigger
1. Specialize in emerging markets of south-East Asia and India
2. Have the distribution
channels
already well established in Singapore
Does
it matter?

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

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Strategic Moves

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Threat of Being Overtaken?

Government related
Benefiting from SingPost profits

Just started the Joint Venture

to utilize SingPost as its
distributor for South East Asia
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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Strategic
Innovation

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What are competitors doing?

Innovating and diversifying
NewVideoStampproductthatenables
customerstorecordavideothat
launchesontheirsmartphone

Ecommercesolution including
website,catalogueconfirmation,web
promotion,warehouse,shipmentand
paymentdetails
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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Open innovation &

Late-mover advantages
Continuous innovation in markets of high growth:

Logistics
E-commerce
e-commerce capabilities

Free riding: imitating strategies and products from competitors

but more cheaply

Learning from the mistakes made by first-movers

eg. Alibaba is now the third largest shareholder

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

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Strategic Moves

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Technological and Process

Innovation

Product innovation in Logistics and E-commerce

Process innovation in Mailing Services

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Singposts Mail Sorting

Set of machines that sort automatically and in the most
efficient way for postmens delivery
(Average of 1:45 hours earlier on a delivery)

Culler-Facer-Canceller machine
Off-line Optical Character Reader
Delivery Barcode Sorting machine
Sequence-sorting machine

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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Mobile Apps: Post-a-Card & Singpost Mobile

Aims to brings back a more personal touch
Create personalized postcards from their
smartphones and delivering to friends and
family through the mail
Online tracking capability of parcels

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

New POPstations
Auto-lobby facilities to post, collect or return parcels
Choose any POPstation as your delivery address and
receive a notification once delivered
Adapt to changing lifestyles: you can collect your parcel
anytime you want 24/7 (no holliday or after hours)

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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vPOST
Low cost global delivery network
First mover advantage for global shipping services to Singapore
Shop at websites that do not accept international orders
Less packaging = lower cost
Tax-free when shopping in the USA

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

.com
Online shopping website that offers a wide range of products
including:

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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Acquisition
Strategy

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Dual Focus of Acquisitions

Logistics

EcommerceCapabilities
Famous Holdings
General Storage

Our focus is on building end-to-end e-Commerce logistics

solutions in the region freight, warehousing & fulfillment, last
mile delivery & returns and front-end web solutions We see
good growth potential in this space and we are ready to tap the
opportunities. - Wolfgang Baier
Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

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Strategic Moves

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Quantium Solutions
Why?
Impact
Synergies
Background

Strategic
Capabilities

Quantium Solutions has of offices in 10

Asian countries and provides a range of
value-added services in e-fulfilment and
logistics
1 year after the acquisition, SingPosts
international revenues jumped from .3% of
total to 11.2%

Reduced Operating Expenses

Use of Airmail Transit Center
Shared Data Analytics

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

37

Strategic Moves

General Storage
Why?

Impact

Diversification

Background

Strategic
Capabilities

This acquisition should strengthen its

capability to provide expanded service
solutions to more individuals and SME
businesses
Expands Warehouse network to Hong Kong
and Malaysia, and offers a subsidiary to
use for further expansion

Increases real-estate portfolio

Non-mail or logistics business
expansion
Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

38

Strategic Moves

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Famous Holdings
Complements SingPost's e-commerce
logistics capabilities in regional fulfillment,
warehousing, and its postal & parcel
delivery networks.

Why?

Expands SingPosts delivery network in

countries such as Singapore, Japan,
Australia, China, Malaysia and USA.

Impact

Reduced Operating Expenses

Use of Airmail Transit Center
Improved logistics services

Synergies
Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

39

Strategic Moves

Now and the Future

Financial Impact
Revenues
2013 growth with
acquisitions: 30.2%
2013 growth discounting
acquisitions: 9.3%
Expenses
Increased 34.4% in 2013
Net Profits
Stayed flat at $39.4m
Background

Strategic
Capabilities

Case Study
Analysis

New Acquisition
Strategy
Famous Holdings
Japanese Customs Office
Purchased Warehouses in
Malaysia
Quantium Solutions
Started joint ventures in
Indonesia and India
Expanded services to Mainland
China

Competitor
Analysis

Strategic
Innovations

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Strategic Moves

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Alibaba
Joint
Venture

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Alibaba SingPost Joint Venture

Timing
Announced 2 days after an agreement to have Australia Post distribute Alipay
shopping cards locally and open an online storefront for Australian products on
Tmall Global

Ownership Structure
Alibaba will become the second largest shareholder of SingPost with 10.35%,
purchased for $249m
Alibaba will gain a seat on the Board

South East Asia Presence

Last year Rocket Internet launched Lazada, the Amazon equivalent of
Malaysia, following the success of its online fashion retailer Zalora, while
Japan's Rakuten Rakuten set up a regional headquarters in Singapore.

Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

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Strategic Moves

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Benefits to Alibaba
Previous troubles with Aliexpress in
Russia
Has experienced troubles with
international logistics when using a
third-party company
Better expected control over supply
chain and lower costs

Will gain customs exemption for goods

sold to Singapore
Will benefit from the growth of SingPost
in increased equity value
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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

Benefits to SingPost

Parcel Volume

As Alibabas sales in South East

Asia grows, so will the volume of
parcels SingPost will have to
deliver

The joint Venture gives SingPost a

large amount, $249m, of capital
for further expansion

Capital

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

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SingPost is Positioned to Succeed

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Background

Strategic
Capabilities

Case Study
Analysis

Competitor
Analysis

Strategic
Innovations

Strategic Moves

References
http://postandparcel.info/59959/news/companies/singpost-benefitingacquisitions-as-business-shifts-towards-e-commerce/
http://postandparcel.info/61214/news/companies/singpost-acquisitions-led-to25-turnover-increase-last-year/
http://sbr.com.sg/transport-logistics/news/singposts-8-acquisitions-feared-befutile
http://www.supplychainasia.org/news/company/item/5021singpost%E2%80%99s-$60million-acquisition
http://www.fool.sg/2013/06/14/singpost-acquiring-new-non-mail-companies-forgrowth/
http://www.postaltechnologyinternational.com/news.php?NewsID=56187
http://web.a.ebscohost.com.libproxy.lib.unc.edu/bsi/detail/detail?vid=6&sid=8a
391404-fa64-4318-bc78d6c988dc5483%40sessionmgr4005&hid=4206&bdata=JnNpdGU9YnNpLWxpd
mU%3d#db=bth&AN=96274281
https://www.singpost.com/download/AboutSingPost/Annual%20Report/SingPo
st_AR0910.pdf
http://sbr.com.sg/telecom-internet/exclusive/singpost-acquires-store-house-inhong-kong-122m

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References
http://www.singpost.com/corporate-information/how-your-mail-getsdelivered.html
http://th.vpost.com/our-services/why-vpost
http://www.post-a-card.com/
http://mypopstation.com/
https://about.usps.com/future-postal-service/gcg-narrative.pdf
http://www.accenture.com/SiteCollectionDocuments/PDF/AccentureAchieving-High-Performance-Postal-Industry-2014.pdf
https://www.ida.gov.sg/~/media/Files/PCDG/Licensees/Licensing/Framework%
20and%20Guidelines/ListServicesOperators/SingPostPPL.pdf
http://www.ida.gov.sg/Policies-and-Regulations/Industry-andLicensees/Postal/List-of-Postal-Services-Operators
http://www.ida.gov.sg/~/media/Files/PCDG/Consultations/20060818_FurtherLi
bPostalSvc/PostLib5Feb07.pdf
http://www.singpost.com/download/ar1314.pdf
http://www.singpost.com/download/AboutSingPost/Annual%20Report/AR0708.
pdf
http://www.singpost.com/corporate-information/history.html

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References
http://www.channelnewsasia.com/news/business/singapore/singpost-todevelop/1414726.html
http://auspost.com.au/about-us/fast-facts-about-australia-post.html
http://www.omigo.com.sg/
http://auspost.com.au/annualreport2014/

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