Marine Logistics: STEEPLE Analysis of Singapore and Business Growth Rate

This article discusses the STEEPLE analysis of Singapore and its impact on the marine logistics industry. It also includes a BCG matrix, SWOT analysis, Gantt chart, and decision tree for business growth rate.

Running head: MARINE LOGISTICS
Marine Logistics
Name of the Student
Name of the University
Author note

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STEEPLE:
The STEEPLE analysis of Singapore would take into account social, technological,
economic, environment, political, legal and ethical. A STEEPLE analysis of Singapore would
reveal the following findings:
Social:
The first social factor which would come into play in Singapore is the increasing per
capita income. The graph below shows that the country is experiencing rising per capita income
which means that the people in Singapore would have more disposable income.
Figure 1. Per capita income graph of Singapore
(Source: Tradingeconomics.Com)
This rise in per capita income would have positive impact on the industries like logistics
industry in Singapore (XXX is a logistics company). This is because more disposable income
would mean that the people in Singapore would demand more goods as well as services. This

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would that the multinational companies in the country both of Singapore origin as well as foreign
origin would use the services of marine and road logistics. Thus, society plays a very significant
role in boosting the business of the companies based in Singapore.
The second social factor which has led to the growth of industries like logistics industry
is high acceptance of ecommerce in the Singaporean society. The ecommerce industry is growth
very fast and expected to surpass $ 3.74 billion by 2018 (export.gov). This growth in the
ecommerce industry in Singapore can be attributed to the fact that the people in Singapore love
shopping. The increase in income and the increase in the younger population in the country has
pushed the ecommerce industry. Singaporeans prefer buying from national as well as
international ecommerce websites. This placing of large number of orders online would mean
that the ecommerce companies would require to import more goods to cater to the Singaporean
customers. This increase in import would boost the business of logistics companies like XXX
requiring them to acquire more vessels.
Technological:
The market of Singapore is technologically advanced due to presence of information and
communication companies both indigenous as well as foreign. The presence of top ICT
companies have enabled the other industries like marine logistics to gain high level of
advancement. The logistics sector in the country is highly advanced which enables the logistics
companies import goods to cater to the Singaporean market. The technological advancement in
Singapore has also been bolstered by presence of multinational banks which provide the IT
sector continuous capital supply.

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Economic:
The economic factors of Singapore play a dual role in case of every industry including
marine logistics. Industries like marine logistics are involved in cross border operations, thus
strongly coming under the influence of international currency exchange rates.
Figure 2. Graph showing value of SGD againts USD, GBP, EU, JPY and AUD
(Source: Bloomberg.Com)
The graph above compares the value of SGD against five international currencies namely
USD, GBP, EU, JPY and AUD represented by black, orange, blue, red and green respectively.
The comparison between the values of the all the five currency shows are weakening against
SGD with USD as the only exception. GBP once higher than USD with respect to SGD lost its
power around 2016 and is showing weak signs of recovery. AUD shows the weakest signs of
recovery while JPY and EU are also showing signs of recovery however too weak to match up to
the value of USD. This dynamic and volatile international currency exchange rates have

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significant impacts on the business of marine logistics. The marine logistics companies in order
to take advantage of this exchange rate. This shifting and dynamic exchange rate forms the base
of the second economic factor, availability of resources.
Figure 3.Graph showing value of SGD againts USD, JPY, CAD and INR
(Source: Bloomberg.Com)
The above compares between five international currencies namely, USD, JPY, AUD,
CAD and INR. An analysis the graph above shows that USD has the highest value among the
five currencies but shows signs of decline towards end of 2018. The value of INR has fallen but
the currency is showing rising signs. It can also pointed out based on the 5 years trend that INR
ranks second after USD as far recovery is concerned. All the other currencies are showing
downward trends towards end of 2018. It can be pointed out that the marine logistics companies
should prefer to export goods to the US and import goods from the other four countries.
However, if its assumed that the trend of downward or upward movement would continue into

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2019, the value of INR would rise compared to the other four currencies since it is the only
currency showing rise into 2019. The outcome of this shift would require marine logistics
companies prefer exporting goods to India and the US. Japan, Australia and Canada would
continue their roles as sources of importing materials due to their weaker currency positions
compared to USD and INR. Thus, this analysis clearly shows that international currency directly
effects the availability of resources in Singapore. The third economic factor is availability of
financial network which facilitates movement of financial resources including foreign currencies.
Singapore has a rich network of banks which enables smooth flow of financial resources between
markets. This involvement of international banks enables marine logistics convert one currency
into another, thus attaining financial liquidity. This network of banks enable marine logistics
companies to hedge their financial resources to diversify their economic risks (Piecyk and Maria
Björklund). The analysis of the above reveals certain facts about Singapore’s economic
conditions. First, the country is economically strong which is evident from the high per capita
income (figure 1). Secondly, marine logistics companies are directly impacted by international
currency exchange rates and thirdly, the network of banks in Singapore ensure their liquidity.
Environment:
The environmental factors come into play in case of every industry with a more direct
impact on the logistics industry. The marine logistics industry operates using marine vessels and
tankers. These vessels come under direct impact of environmental hazards which are common in
the ocean like tsunamis (McKinnon, Alan, et al). Hsu, Tan, and Suhaiza Hanim Mohamad
Zailani mention that these environmental factors require taking into account future weather
conditions while planning their logistics charts. The environmental factors pose serious risks to

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the operations of the logistics industry and require the latter to maintain immense contingent
funds
The second impact of environment on the operations of the logistics industry is in the
form of laws and policies. The Environment Protection and Management Act(Chapter 94A)
mandates all industries to adopt measures to reduce environmental pollution (Sso.Agc.Gov.Sg).
The National Environment Agency or NAE draws power from the environmental acts and
parliamentary decisions. The body has laid down specific laws for different industrial operations
including marine logistics (Nea.Gov.Sg). Thus, environment is a factor which directly effects the
operations of industries like marine logistics. In fact, it can be pointed that while buying or
making vessels the marine logistics companies have to ensure compliance with the
environmental laws.
Political and legal:
As far as Singapore is concerned, the nation is politically stable and this political stability
boosts industrialisation. Further, the country has bilateral relationships with several other nations
(Salacuse). These bilateral relationships between countries enable companies in Singapore
sources resources from foreign countries. The government of Singapore forms laws pertaining to
various areas like taxation and foreign relationship.
Ethical:
Singapore is ethically very strict and boasts a healthy corporate culture. DesJardins and
John mention mention that upholding ethical standards promote healthy corporate culture. The
Ministry of Foreign Affairs, Denmark mentions that the work culture in Singapore is based on
cultural diversity management. Singapore consists of people from Asian countries like India and
China (Singapore.Um.Dk). The country similarly consists of people from European countries as

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well. This means that the country of Singapore is cosmopolitan in nature which in turn means
that the companies operating in the country have to treat their employees ethically. The
managers working in the companies like marine logistics firms which involve in business with
several countries have to show respect and tolerance towards towards the background of their
subordinates (Martin). The Prevention of Corruption Act, Singapore forbids business
organisations and their business partners from involving in any sort of corruptive action
(Sso.Agc.Gov.Sg). This means that companies operating in the country should maintain ethical
standards while operating in the country.
BCG matrix:
Business Growth rate
Star XXX Ltd(Question mark)
Cash cow Dog
Relative position
Figure 4. BCG matrix of XXX Ltd.
(Source: Author)

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The above figure shows that XXX Ltd belongs to the question mark quadrant of the
Boston Consulting Group Matrix. This is because the marine logistics industry is receiving a
strong boost owing to to capital investment by the Maritime and Port Authority of Singapore
(Businesstimes.Com.Sg). Moreover, as pointed out in the STEEPLE analysis that the ecommerce
industry in Singapore is set to cross $ 3.74 billion by the end of 2018 (export.gov). This means
that the marine logistics industry is growing at a fast pace. However, XXX is incurring losses
which means that the firm is showing slow growth in a fast developing market. This means that
the appropriate for XXX Ltd on the BCG is the question mark quadrant.
SWOT analysis of XXX Ltd:
Strengths:
1. The company is listed and hence can source
funds from the market.
2. The firm earns high revenue.
3. XXX has a strong supply chain of vessels.
Weakness:
1. High expenditure which means low
economies of scale.
2. Incomes from other sources are negative
which is shown in past income statements.
This means that the firm experiences low cash
inflows.
Opportunities:
1. XXX can invest in foreign markets and
hedge in international currencies to raise its
income from other sources.
2. Can seek financial assistance from
government of the Singapore.
Threats:
1. The marine logistics companies come
under impact of environmental pollution.
2. Dynamic rates of international currency
exchange rates would affect its international
operations (STEEPLE).

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3. The company can streamline its operations
to reduce expenditure.
3. The firm also needs to adapt to global
marine logistics market environment.
Gantt chart:
Vessel acquisition and/or
manufacturing in XXX Ltd,
Singapore
The mamagers of all
departments should
hold meeting w ith the
management in
presence of the chief
financial officer and
vessel procurement
manager
Identify the business
requirments in future
Analyse the orders
already received in
advance along w ith
paymenyts
Recognise the
strength of present
fleet of v essels
against the business
requirements
Form budgets of
both vessel
manufacture and
buying
Vessel buying(Short run)
Analayses vessel
buying budget
against its present
sources of revenue
Approach banks for
loan
Recognieses
suppliers of vessels
and sends quotes
Receives feedback
and hold meetings to
finalise on vessel
suppliers
Enters in contracts
w ith selected
suppliers
Acquires vessels
New vessels are
inducted in the fleet
Acquires required
human resources
Analayses vessel making
budget against its present
sources of revenue (long
run)
Approach banks for
loan
Recognieses
manufactuirng
facilities to be
acquired and sends
quotes
Receives feedback
and hold meetings to
finalise on
manufacturing plant
providers
Enters in contracts
w ith manufacturing
plant providers
Manufactures
vessels
Manufactures
vessels are inducted
in the fleet
Acquires required
human resources
Disposes old and
underperforming
vessels

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XXX is incurring
losses
Purchase
of vehicle Manufacturing
of vessel
Does XXX have the
financial resources to
make vessels at present?
N Y
Management of XXX holds
meeting (after 1 year)
Decision tree:

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References:
"Bloomberg.Com". Bloomberg.Com, 2018, https://www.bloomberg.com/quote/USDSGD:CUR.
Accessed 24 Oct 2018.
"Export.Gov". Export.Gov, 2018, https://www.export.gov/article?id=Singapore-eCommerce.
Accessed 24 Oct 2018.
"Nea.Gov.Sg". Nea.Gov.Sg, 2018,
https://www.nea.gov.sg/corporate-functions/resources/legislation. Accessed 24 Oct 2018.
"Singapore.Um.Dk". Singapore.Um.Dk, 2018,
http://singapore.um.dk/en/the-trade-council/menu-4/. Accessed 25 Oct 2018.
"Sso.Agc.Gov.Sg". Sso.Agc.Gov.Sg, 2018, https://sso.agc.gov.sg/Act/EPMA1999. Accessed 24
Oct 2018.
"Sso.Agc.Gov.Sg". Sso.Agc.Gov.Sg, 2018, https://sso.agc.gov.sg/Act/PCA1960. Accessed 25
Oct 2018.
"Tradingeconomics.Com". Tradingeconomics.Com, 2018,
https://tradingeconomics.com/singapore/gdp-per-capita. Accessed 24 Oct 2018.
DesJardins, Joseph R., and John J. McCall. Contemporary issues in business ethics. Cengage
Learning, 2014.
Hsu, Chin-Chun, Keah-Choon Tan, and Suhaiza Hanim Mohamad Zailani. "Strategic
orientations, sustainable supply chain initiatives, and reverse logistics: Empirical evidence from
an emerging market." International Journal of Operations & Production Management 36.1
(2016): 86-110.

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Hwee, Tan. "Businesstimes.Com.Sg". Businesstimes.Com.Sg, 2018,
https://www.businesstimes.com.sg/transport/singapore-budget-2018/singapore-budget-2018-
maritime-industry-gets-s100m-more-to-push-for. Accessed 25 Oct 2018.
Martin, Gillian Coote. "The effects of cultural diversity in the workplace." Journal of Diversity
Management (Online) 9.2 (2014): 89.
McKinnon, Alan, et al., eds. Green logistics: Improving the environmental sustainability of
logistics. Kogan Page Publishers, 2015.
Piecyk, Maja Izabela, and Maria Björklund. "Logistics service providers and corporate social
responsibility: sustainability reporting in the logistics industry." International Journal of
Physical Distribution & Logistics Management 45.5 (2015): 459-485.
Salacuse, Jeswald W. "BIT by BIT: The growth of bilateral investment treaties and their impact
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Routledge, 2017. 25-45.