Embracing STP Marketing Strategies for ComfortDelGro's Success

The assignment analyzes the operating environment of ComfortDelGro, a transportation company in Singapore. A PESTEL analysis reveals that the organization is affected by various political, economic, social, technological, environmental, and legal factors, with most factors favoring the company's operation. Porter's Five Forces analysis shows that ComfortDelGro has bargaining power over suppliers, limited entry barriers for new entrants, moderate competition, and low customer bargaining power. To increase customer satisfaction, it is recommended that the company adopts best marketing strategies, including segmentation, targeting, and positioning of its transport services. The assignment concludes that understanding the business environment is critical to ComfortDelGro's success, and the company should incorporate creativity, innovation, sustainable approaches, risk management, and robust marketing strategies to grow and remain competitive.

Running Head: INTRODUCTION TO MANAGEMENT 1
Introduction to Management
Name
Date

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Executive Summary
One of the most important aspects that affect the operation of the business organizations is their
context. The environment affects the company's profitability, growth, and sustainability. Thus,
an understanding of the context of operation is critical to the success of business organizations.
This paper focuses on one of the land transport players; The ComfortDelGro Company. The
paper employs the PESTEL analysis tool to establish various its environmental factors. Besides,
the report goes ahead to discuss Porter's Five forces that affect the operation of the company.
Further, the paper makes recommendations to the management of the enterprise. Therefore, the
paper is critical in revealing the context of ComfortDelGro.

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Table of Contents
Introduction......................................................................................................................................4
PESTEL Analysis for ComfortDelGro............................................................................................4
Political........................................................................................................................................4
Economic.....................................................................................................................................5
Social...........................................................................................................................................5
Technological..............................................................................................................................5
Environmental..............................................................................................................................6
Legal............................................................................................................................................6
ComfortDelGro Porter's Five Forces...............................................................................................6
The Bargaining Power of Suppliers.............................................................................................6
The Bargaining Power of the Customers.....................................................................................7
Threat of New Entrants................................................................................................................7
The Competitive forces in the Market.........................................................................................7
The Threat of Substitute Products...............................................................................................7
Management Recommendations to ComfortDelGro.......................................................................8
Creativity, Innovation and Entrepreneurial Culture....................................................................8
Adoption of sustainable strategies in business............................................................................8
Risk Management Strategies.......................................................................................................9
Robust marketing strategies.........................................................................................................9
Conclusion.......................................................................................................................................9

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Introduction
ComfortDelGro was formed in 2003 by a merger of two businesses the Comfort Group
and the DelGro Corporation. The two companies had been in operation since the 1970s at the
time they merged. ComfortDelGro is one of the leading land transporter dealers in Singapore,
and even in the entire world. The company has gained a global presence through its provision of
services to many different countries of the world, and now has many workforces distributed
across the globe. When Comfort Group and DelGrop Corporation came together, they formed a
robust country that gave the organization a significant local and global market. Therefore, the
company operates at an international level.
ComfortDelGro deals in the land transport industry and has offered a variety of services
in this sector. The organization runs the business in taxi services, car rental and leasing service
and bus services. Further, the company offers automotive engineering services, insurance
broking, vehicle inspection and testing and outdoor services. The company provides these
services in its seven countries that have branches in many other nations. Currently, it has over
44000 vehicles in its business network. The company competes for other international
organizations in the industry (ComfortDelGro Corporation Limited, n.d.). Some of the
competitors of ComfortDelGro include AZ Logistic, The Prestige Company and DB Schenker
Croatia among many others.
PESTEL Analysis for ComfortDelGro
PESTEL is an abbreviation of Political, Environmental, Social, Technological,
Environmental and Legal factors. PESTEL is a tool used to analyze the environmental factors for
business. The tool is essential in unveiling relevant information to determine the state of the
organization thus helping in management decision-making.
Political
The political factors affect ComfortDelGro Grow in many different ways. Firstly, the
government of Singapore encourages its people to use public transport to reduce congestion on
roads, thus helping ComfortDelGro to its customer base. The monopolization of the transport
sector in Singapore has also had an impact on the operation of this company. Besides, the fact
the government of Singapore does not monopolize the transport sector gives ComfortDelGro an

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advantage (OECD, 2010). Also, the government has made the industry to be open for
competition. There are no restrictions on what can be done by the players for their competitive
advantage (Adam, Wim & Micheline, 2011), thus, influencing the operation of ComfortDelGro
in both positive and negative ways. Therefore, these factors are important and have impacts on
the functioning of this organization.
Economic
The economy of Singapore has grown fast for the past two years. It experienced a 1.9 per
cent growth in the economy, and 2.0 per cent in 2016. This has effects on the operation and state
of ComfortDelGro and the general service industry (Channel News Asia, 2009). The growing
economy of Singapore has increased the human traffic thus, affecting the transport industry,
there is increased people's trips per day and thus, increased ridership (Gilsoo, 2010). The
prevailing peace and stable government of Singapore have attracted many tourists and other
foreigners who increase the need for transport in the country. Therefore, the growth in economies
of various countries has greatly boosted the transport industry thus, affecting the operation of
ComfortDelGro.
Social
The social factors of the market areas of operation have impacts on ComfortDelGro.
Singapore and many countries have experienced a growth in their population. The increase in the
population brings an impact on the operation of ComfortDelGro (Land Transport Authority,
2014). Currently, the society is making attempts to embrace green environment which has made
people to adopt lifestyle practices that have little impact on the environment.
Ethnic Population
Chineese 74.2%
Malay 13.3%
Indian 9.2%
Others 3.3%
Figure 1.0

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The lifestyle practices that contribute to a green environment include reduction of carbon
in the air among others (Osterwalder & Pigneur, 2010). This has made many people choose
public transport as a way to reduce emissions to the environment, thus affecting ComfortDelGro.
Figure 1.1
Figure 1.2
Technological
There are various aspects of technological presence and availability that ComfortDelGro
should consider to gain a competitive edge. The company should embrace the social media
Population Growth of Singapore
Age Distribution of the population in Singapore

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technology which is one key aspects in attaining a competitive advantage. The company should
effectively integrate social media in its business to reach many customers (Grant, Hackney,
Edgar, 2010). The company should also adopt different types of technology platforms in its
business for the convenience of clients interacting with the company. Additionally, there are also
new trending technologies that ComfortDelGro should embrace, such as the use of GPRS among
others. Therefore, these technologies affects ComfortDelGro in many ways and their adoption
will help the organization gain a competitive advantage over others in the industry.
Environmental
The dominant environmental factors with the business market of ComfortDelGro has
effects on its success. Singapore has a considerably large area occupied by the roads.
Additionally, Singapore is among the smallest countries in the world. These factors have caused
an increase in the need for transport. Again, the roads are still expanding (Parmar, 2014). This
affects the transport sector thus, also impacting on the operation of ComfortDelGro. Besides, the
climatic conditions in the areas of operation of ComfortDelGro have affected its business.
Legal
The legal factors are the rules and laws of the market environment. Most the legal factors
within the countries of operation ComfortDelGro has hit it different ways, thus, the company
needs to embrace the right legal factors for its effectiveness. Some of these aspects include it’s
compliance to the county’s regulation to manpower, safety, transport operator requirements
among many others. (UNESCO-UIS, 2010). The organization needs to identify all the key legal
factors in the country and ensure that it works within them. Therefore, the success of
ComfortDelGro is influenced by the legal factors.
ComfortDelGro Porter's Five Forces
The Porter's Five Forces are important is establishing the market environment of
ComfortDelGro. The forces are the bargaining power of the suppliers, the possibility of the new
entrants in the market, the bargaining power of the customers, the possibility of new substitute
products or services and the competition in the market industry (Friday, 2007).

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The Bargaining Power of Suppliers
The threat level of the bargaining power of suppliers to ComfortDelGro is low. Some of
the suppliers of ComfortDelGro include the capture the vehicle manufacturers, the fuel oil
providers and many others. Regarding the vehicle suppliers, ComfortDelGro has a lot of
bargaining power of them. As buyers, many vehicle sellers will always seek them to buy their
cars. ComfortDelGro has the freedom to switch from one supplier to the other, thus, more
bargaining power (Sapuan, 2007). On the other hand, ComfortDelGro has little bargaining power
over other vendors such as those for fuel. This is an essential commodity that denies
ComfortDelGro a competitive power. Therefore, different suppliers have different effects on the
business of ComfortDelGro.
The Bargaining Power of the Customers
The bargaining power of customers of ComfortDelGro offers a low threat level to
ComfortDelGro. The transport sector depicts different unique characteristics, unlike other
industries. In this sector, the customers have little bargaining power on the services offered. This
is because the industry does not give the customers the freedom to a choice from a variety
(Blythe, 2009). People have little freedom on the transport options to use because they are
mostly dictated by the various factors such as speed, time, convenience and many others. Thus, it
is clear that the customers of ComfortDelGro have little bargaining power due to the nature of
the industry.
Threat of New Entrants
There is medium threat level from the possible business entrants. An analysis of the
market area of operation for ComfortDelGro reveals that there are few chances of new entrants
coming into the market. The fact is true because of the nature of the industry in Singapore and
other countries. The infrastructure and the demographic size does not promote many players in
the sector. These scenarios in the transport sector make ComfortDelGro enjoy a bigger market
share and also have an influence on the happenings in the industry.
The intensity of the Competitive Rivalry in the Market
The intensity of the competitive rivalry in the market offers a medium threat level to
ComfortDelGro. The general transport sector in Singapore faces competition just like other

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areas. However, competition in the industry is different. The competition model allows different
players to bid for certain routes of operation in the country. Some of the market competitors to
ComfortDelGro who deal in general public transport include The AZ Logistic, The Prestige
Company and DB Schenker Croatia among many others. Given the nature of the transport
industry, where it operates in a duopoly line, these competitors have little competitive power
forces on the operation of ComfortDelGro.
The Threat of Substitute Products
There are few substitutes for the services offered by ComfortDelGro. Many customers do
not have the freedom to access the replacement services due to factors such as cost and
convenience, thus, the threat is low. For example, some of the substitutes of ComfortDelGro's
services is acquiring one's car. This is not easy for most people due to its price (Perkmann &
Spicer, 2010). Another substitute can be riding a bike, which is not convenient for many people.
Therefore, these factors have significantly reduced the threat level of substitutes in the market.
Management Recommendations to ComfortDelGro
Creativity, Innovation and Entrepreneurial Culture
Currently, the business environment in the transport industry is changing. This means that
the ways that have been used will reduce their effectiveness over time. This necessitates the
coming up of new ways of doing things (Booker, Bontis & Serenko, 2008). Creativity entails
coming up with new ways to do things in the organization. It presents a chance for business to
adopt innovative ideas which are critical for the better functioning of business enterprises
(Boumans & Davis, 2010).
It is recommended that ComfortDelGro takes creativity and innovation in its activities.
The company should always seek for creative and innovative ways and design a good
implementation strategy of these innovative ways. Creativity and innovation are important and is
likely to give the company a competitive advantage over other players in the industry (Cameron,
2014). The best .way for the organization to adopt creativity and innovation is through
integration into the organizational culture. Therefore, ComfortDelGro should integrate the
innovative culture into the corporate culture.

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Adoption of sustainable strategies in business
It is recommended that ComfortDelGro adopts sustainable ways in business. Currently,
one of the world's concern is global warming. This is one of the sustainable ways that
ComfortDelGro should give attention to these issues. People are now making efforts to adopt a
lifestyle that has little effect on the environment (Mankiw & Taylor, 2011). Thus, it is essential
for ComfortDelGro to consider adoption of eco-friendly in business.
Some of the environment-friendly approaches for ComfortDelGro as a player in the
transport industry include the approval of vehicles which are eco-friendly and causes little
pollution. This will increase the sustainability of the business. Therefore, when ComfortDelGro
concentrates on the use of to friendly approaches, the company will increase its profit and
business longevity.
Risk Management Strategies
Managing risk is important for the success of every business organization. Companies
must come up with strategies to reduce risks in business. Implementing the innovative ideas into
ComfortDelGro will call for a robust risk management system that will reduce chances of failure.
Therefore, it is important that ComfortDelGro comes up with robust ways to manage risks in this
business organization.
Strong marketing strategies
The success of business organizations lies in the effectiveness of their marketing
strategies. ComfortDelGro should embrace STP marketing strategies for its success. The
embrace market segmentation, Targeting and positioning of its transport services (John,
Katherine & Jocz, 2012). This is a critical aspect that will increase the customer satisfaction
because it will help the organization to deliver as per the client requirements. Thus, it is
recommended that ComfortDelGro adopts these best marketing strategies in its operation. These
ways are ways will help the company increase its customer base, make more profit and also
increase its business sustainability.
Conclusion

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In conclusion, various factors within the operating environment affects the running of
ComfortDelGro. PESTEL analysis revealed that the organization is affected by some political,
economic, social, technological, environmental and legal factors. Some of these factors affect the
business positively while others negatively. However, ComfortDelGro seems to be favored by
most of these factors in its operation. Also, Porter's Five Forces analysis of ComfortDelGro
unveiled important information. It made it clear that ComfortDelGro has a higher bargaining
power over its suppliers, there are little possibilities for the new entrants to enter the market and
that the customers of ComfortDelGro have little bargaining power. Besides, the analysis revealed
that the competition of ComfortDelGro in the industry is moderate and also that there is little
possibility of entrance of a substitute product in the market due to its nature.
The understanding of the business environment is critical to the success of the
ComfortDelGro. It provides vital information which can be used by the management to take the
important direction that will help the business to grow. ComfortDelGro has potential to grow to
another level with efficient administration and decision-making system. Additionally, it
recommended that the organization incorporates creativity and innovation in its business, or gain
competitive advantage. Besides, the company should employ sustainable approaches in business,
manage the risks and adopt robust marketing strategies. These factors are critical for the success
of ComfortDelGro.

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