Riverwood Logistics: Internal and External Analysis

The report analyses the internal and external environments of Riverwood Logistics Solutions, a logistics company based in Singapore, using PESTEL, VUCA, RBV and McKinsey’s 7S models. It also conducts an industry analysis with the help of the Porter’s five forces model. The report discusses the different problems being faced by the organization and states certain recommendations.

Running head: RIVERWOOD LOGISTICS
RIVERWOOD LOGISTICS
Name of the Student
Name of the University
Author Note

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Executive Summary
The aim of the study is to analyse the internal and external environments of an organization,
Riverwood Logistics Solutions with the help of different models of analysis. The
organization operates in Singapore and provides logistics services to different companies.
The first model of external analysis that has been determined in this study is PESTEL which
determines the political, economic, social, technological, environmental and legal aspects of
the organization. The second model is VUCA which determines the volatility, uncertainty,
complexity and ambiguity of the organization. The analysis that has been done with the help
of the VUCA framework shows the three major factors of the PESTEL analysis that holds the
highest importance for the company are the social, economic and technological factors.
The industry analysis is done with the help of the Porter’s five forces model. Finally
the internal analysis have been done with the help of resource based view framework (RBV)
and McKinsey’s 7S framework. The RBV model analyses the important resources of the
organization which are an integral part of the day to day operations of the organization. On
the other hand, the McKinsey’s framework analyses the different strategies that have been
implemented by the organization for the increase of their growth levels. The latter half of the
report discusses the different problems being faced by the organization and states certain
recommendations. Moreover, a conclusion to summarize the report has been provided.

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Table of Contents
1. Introduction............................................................................................................................3
2. External Analysis...................................................................................................................3
2.1 PESTEL Analysis.............................................................................................................3
2.2 VUCA Analysis...............................................................................................................4
3. Industry Analysis...................................................................................................................6
3.1 Porter’s five forces...........................................................................................................6
4. Internal Analysis....................................................................................................................7
4.1. The Resource Based View Model...................................................................................7
VRIO Analysis.....................................................................................................................10
4.2. McKinsey’s 7S Analysis- Riverwood Logistics...........................................................12
5. Problems being faced by the Organization –Riverwood Logistics...................................13
6. Conclusion........................................................................................................................13
7. References.........................................................................................................................15
8. Appendix...........................................................................................................................18

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1. Introduction
Riverwood Logistics Solutions is a logistics company which is based in Singapore.
The mission of the company is to provide integrated logistics solutions to several other
business organizations. The vision of the company is to become the most favoured partner for
logistics services to other organizations all over the world. Riverwood Logistics Solution
operates on the values of reliability, personality, responsibility and responsiveness
(Riverwood 2018). Their aim is to deliver the best possible quality of service to their
customers, and to ensure that their customers are able to rely on their services in the future.
The report will strategically analyse the company Riverwood Logistics and their internal,
external environment using PESTEL, VUCA, RBV and McKinsey’s 7S models. It will also
conduct an industry analysis with the help of the Porter’s five forces model. In the last part
of the report, the problems which are being faced by the organization will be provided.
2. External Analysis
2.1 PESTEL Analysis
The PESTEL analysis have been used to understand the different external environments of
the organization based on certain factors and how they create and impact on the operations of
the organization.
 Political – Singapore is a country which faces very low risk of any political influence.
The Political Economic Risk Consultancy also known as PERC have announced that
Singapore is actually the country which faces the lowest political risk in comparison to
other countries (Düerkop and Huth). The government of Singapore supports all
business activities and growth which benefits the country. This fact is beneficial for
Riverwood Logistics as they will not find any opposition in establishing their business
and expand it according to the consumer demands.

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 Economic – Singapore has a fast growing economy and consists of a population who
produces the highest income per capita according to the Association of Southeast
Asian Nations (Zalengera et al. 2014). The companies operating in the country does
not face much corruption and there is a high availability of educated and talented
professional who contributes in the development of the economy. There is also a boost
in the logistics industry which is why the company will be able to flourish in the
economy and develop at a fast pace.
 Socio-cultural – Singapore is a country who is very protective of their traditions and
values. However, they are also open to the western culture and the younger generation
of the country is able to gather several new ideas and views which makes the country a
profitable place for every organization (Saleem 2007). Riverwood Logistics will have
a good scope to increase their profitability due to the abundance of a knowledgeable
population with high buying power.
 Technological – Internal is an integral part of the world in current times. The country
gives major importance to the innovations in technology and strives to become a fully
advanced country. The operations of Riverwood Logistics are mostly based on
technology and hence they could grow in the Singapore market due to their adaption to
the new technological advancements that come into the market. Moreover, new
technologies such as drones for deliveries have become a major part of the
technological scenario in the organization (Olivares 2015).
 Environmental – The high level of pollution in the country has led it to become an
unfavourable country for businesses to operate in. Both the air and the water quality if
the country has reached high level of being polluted (Middleton 2013). They are also
dependent on Malaysia for their water supply and has also been declared as the country
which has the highest level of harmful emissions from carbon dioxide. The operations

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of Riverwood Logistics is also a contributor to the level of pollution and hence is a
major threat for the country.
 Legal – The government of Singapore is very strict about their rules and regulations.
Their laws have always been in favour of businesses and especially those industries
which are in less numbers in the country (Cureau 2016). Riverwood Logistics will
have to conduct their operations in a legal way and not harm the country or carry out
any illegal operations in the country.
2.2 VUCA Analysis
The challenges faced by an organization due to external factors is analysed with the
help of the VUCA framework. The market situation of Riverwood Logistics shows several
challenges that are being faced by the organization.
 Volatility describe the sudden changes that occur in the market especially in the
pricing of products and services of Riverwood Logistics (Bennett and Lemoine 2014).
 Uncertainty is the unpredictable situation that arises because of the volatile scenario
of the market (Nandram and Bindlish 2017). The uncertainty can put an effect on the
profit of the organization as well.
 Complexity describes the different difficult situations that are faced by the
organization such as issues in transportation, fluctuations in the cost of production and
production inefficiency (Lawrence 2013).
 Ambiguity is the situation that arise in the organization due to the lack of ability to
understand the market and the customers (Szpitter and Sadkowska 2016). The
ambiguous situation arises in Riverwood Logistics when the employees of the
organization becomes incapable in handling the issues of the customers.

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The table below shows the different situation of the VUCA framework in alignment with
the most important factors of PESTEL which are economic, technological and social
factors. The table will also contain certain sub factors of the three PESTEL factors and
determine their importance based on the numbers given to them according to the market
scenario. The numbers 1 to 5 depicts low to high importance of the factors.
PESTLE
factors
PESTLE
Sub-factors
Volatile Uncertain Complex Ambiguous Total Importance
Economic
Vibrancy 5 3 3 4 15 Medium
Importance
Attracting
foreign
investment
firms
4 4 4 5 17 High
Importance
Technological
Internet use 2 3 3 2 8 Medium
Importance
Robots and
Drones
5 4 4 5 14 High
Importance
Social
Employee
productivity
2 1 1 2 5 Medium
Importance
Including
millennials
in the
organization
4 5 5 4 14 High
Importance
 In the economic scenario, medium importance is being given to economic vibrancy as
the services of Riverwood Logistics does provide a medium amount of security during the
transportation of good of the customers. On the other hand, high importance is being
given to foreign investment firms as there is a lot of scope for foreign companies to invest
in the logistic company.

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 In the technological scenario, internet usage is given medium importance as it is a very
common and mandatory part of any business. However, high importance is being given to
the usage of drones and robots as it is a new technology which could help the company to
gain new profits and uplift their position in the market.
 In the social scenario, medium importance is being given to the productivity of employees
as it is a must that employees have to give increased productivity for the better
performance of the organization. However, high importance is being given to the
recruitment of millennials in the organization as hiring young people in the organization
will lead to better idea generation and more productivity as the individuals of this
generations are filled with energy and new ideas to explore new horizons.
3. Industry Analysis
3.1 Porter’s five forces
The Porter’s five forces is used to analyse the industry that Riverwood Logistics is
operating in. The factors or the forces that are used in the framework helps to understand the
position of the company in the market.
 Rivalry among competitors – In the logistics industry the competition is relatively high
as there are various ways that a firm can prove to be a competition for Riverwood
Logistics. To maintain a stable position in the market, the company has to innovate
different ways through which they can gain a competitive edge (Grigore 2014). It could
be adapting to new technologies like drones for deliver or hiring highly skilled labour
who can make huge changes in the company. The operations of the company has to
exceed the operations of their rivals to maintain their position in the industry.
 Threat of new entrants – The threat is moderate in the Singapore logistic industry as
there are a huge numbers of existing logistics firms. The competition of the existing firms

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is so intense that it would be difficult for any new firm to enter their market and establish
themselves (Dobbs 2014). However, global industries might try to evade the barrier and
this might prove to be a threat for Riverwood Logistics for which they should be
prepared.
 Threat of substitutes – This threat is very high in the logistics industry of Singapore as it
has already been discussed that there are several competitors in the market. If the
customers are dissatisfied with the pricing or quality of services then they have several
options to choose from (Utami and Lantu 2014). Therefore, it becomes important for
Riverwood Logistics to keep up their quality of services so that no customer is
dissatisfied and shifts to another company.
 Bargaining power of customers – The power of the customers is quite high in the
logistics industry as due to the huge availability of customers the customers could choose
one company over the other depending on their demand (Sandberg 2013). The customers
could also quote their own price since they realise that they have several options.
 Bargaining power of suppliers – The suppliers have moderate to low power of
bargaining. The number of suppliers are also huge as in the logistics industry the main
supplier needed is that of cars and there are several firms who provide car services
(Menkhoff, Wah and Loh 2016). Therefore, Riverwood will be able to find car services
from another supplier even if one leaves.
4. Internal Analysis
4.1. The Resource Based View Model
The Resource based view model can be primarily defined as a model which helps in
the understanding of the different competitive advantages which are possessed by a business
and how the resources of the firm are utilized by the organization in order to gain a
competitive advantage (Wheelen et al. 2017). The Resource Based View model which is

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primarily also known as the RBV Model concentrates on the internal capabilities of the
company rather than looking out for the different factors in the external environment. Hence,
in order to examine the Resource Based view of the Riverwood logistics, its resources,
capabilities and core competencies shall be analyzed.
Resources
The different resources which are owned by Riverwood Logistics are as follows:
Tangible
These resources can be described as those resources which are easily visible and can
be measured effectively against a particular measure.
 Sound human resource: The human resource aspect of the business of Riverwood
Logistics tend to play a key role in its operations and hence, the firm continuously
undergoes employee training so that they are successfully able to allow them to gain
contracts and provide efficient services (E27. 2018). There are more than 120
employees working for the firm who tend to contribute effectively towards the
success of the organization.
 Infrastructure Capabilities: The organization is into logistic services and for this
reason, it has an access to a large number of infrastructural components (Usme.org.sg.
2018). There are more than 60 vehicles as owned by the company which tends assist
them to make deliveries for giant companies like Amazon and Sephora (SGSME.SG.
2018). The firm has more than 60 vehicles at present.
 Financial resources: The financial resources and capabilities of the organization,
Riverwood are moderate in nature as the firm was found by a single owner with
limited resources. However, the company makes accurate investments and has been
growing considerably.

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 Technological resources: Riverwood has recently adopted technological
advancements in the operations of the firm and this has allowed it to function
effectively with greater flexibility and autonomy (SGSME.SG. 2018). The
communication of the company can now easily be done across borders and the
Digitalized documents allow the firm to implement CRM Activities as well which go
a long way in helping the firm to attain success. In this manner, the company is able
to provide seamless solutions to its customers.
Intangible
1. Relationships with Partners and Suppliers
Recently, the Riverwood organization has been successful in attaining contracts of
various large organizations like Amazon Prime and Sephora. These relationships can come in
useful for the organization and can assist the firm in gaining popularity in the long run.
2. Brand Value
Since its inception, the Riverwood Logistics Company has been performing
considerably well and for this purpose, the brand value of the organization is considerably
very popular (Surbanajurong.com. 2018). The firm uses technology for its operations and this
helps the firm in maintaining successful relationships with the different consumers using the
CRM, and moreover it also makes use of feedback system with the employees which assists
them in becoming popular among the employees as well as the customers.
The structure with respect to heterogeneous believes that the capabilities, skills and
resources tend to differ from one organization to another. The resources of the firm are very
small in number and for this purpose, the firm tends to differ in nature from the other
organizations (Williamson et al. 2013). The immobility approach is often referred to as an

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approach which does not change from one company to another. This comprises of the image,
reputation and other intangible aspects.
Capabilities
The capabilities of the firm can be rightfully described as those factors which help the
company in achieving a competitive advantage in the long run. The different capabilities of
Riverwood Logistics have been given as follows:
1. Specialization in seamless logistic services: The firm functions on an efficient basis
and with respect to this, the organization has been able to provide exceptional services
to the different customers after its ties with different companies like Amazon and
Sephora (Sg.news.yahoo.com. 2018). This has gone a long way in making the firm an
expert in its operations.
2. Global brand name: The brand name of the Riverwood Logistics is known for its
specialized services and safe packages (Riverwood.com.sg. 2018).
3. Excellent Customer service: With the advent of technology, the company has adopted
the Customer Relationship Management technology which has therefore, improved
the different customer services of the organization.
Core Capabilities
Hence, the core capability of the firm can be described as the delicate packaging and
specialized services it provides to the different customers tends to act in its favour.
VRIO Analysis
The VRIO Analysis can be defined as the most successful framework of the RBV
Model which assists the firm in understanding the importance of its capabilities (Tay 2018).
The VRIO Analysis comprises of four different aspects named Valuable, Rare, Imitable and
Organization to capture value.

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Rare: This examines whether the resources are rare in nature or not.
Valuable: This measures whether the different resources are valuable or not.
Imitable: This tends to measure whether the different resources are imitable or not in nature.
Organization to Capture Value: This measures the organizations capability to capture value.
Resource
and
capability
Valuable Rare Imitabl
e or
Non-
substit
utable
Organizat
ion to
capture
Value
Competitive
Understanding
Brand value Yes Yes No Yes Sustainable competitive
advantage
Specialized
services
Yes Yes Yes Yes Competitive advantage
Human
resource
department
Yes No Yes No Needs to be improved.
Customer
presence
No No Yes Yes Temporary competitive
advantage
Technology Yes No No Yes competitive advantage

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4.2. McKinsey’s 7S Analysis- Riverwood Logistics
The McKinsey`s 7S framework goes a long way in helping the company to
understand the different internal capabilities of an organization and also contributes towards
understanding whether the organization will be able to successfully manage the operations of
the organization or not.
Strategy: The strategy of an organization can be described as the overall generic
strategy which is followed by the organization (Sg.news.yahoo.com. 2018). The strategy
which Riverwood Logistics follows is based on the differentiation strategy whereby it offers
the different customers specialized services and engages in seamless logistic solutions which
is quite different in nature to what its competitors provide to the company.
Systems: The systems describe the usage of the employees and technologies in the
organization. Hence, in this aspect it can be stated that the system of the Riverwood logistics
is largely based on their technological capability and their distribution capabilities.
Skill: The skills describe the innovation skills and hence, in this aspect it can be stated
that the organization is able to successfully use its employment and innovation skills to
provide better services to its customers (Hill, Jones and Schilling 2014).
Structure – The Riverwood organization follows a functional structure and it is
owned by the founder Syafiq Yusoff.
Style –The style can be successfully described as the leadership style. The leadership
style as used in the firm is the transitional style whereby the situations vary with respect to
the different scenarios as faced by the organization (Riverwood.com.sg. 2018).
Staff – The staff at Riverwood play a major role in adding a personal aspect to the
organization and moreover, continuous feedback is provided to them in order to ensure that

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the firm is successful in the long run. At present there are more than 120 employees
functioning in the organization.
Shared values – The values which are shared by the organization are loyalty,
efficiency and responsibility (Riverwood.com.sg. 2018).
5. Problems being faced by the Organization –Riverwood Logistics
With the increasing competition in the logistic industry as present in Singapore, even
businesses which have been performing considerably well have been facing problems with
respect to a large number of issues. These issues include issues like cost competitiveness,
maintaining visibility of the organization and maintaining the service quality of the firm
(Ethiraj, Gambardella and Helfat 2018). As Riverwood’s Logistics Company tends to provide
specialized services to its customers, the cost considerations often exceed the budgeted
limited and hence, the company needs to ensure that it improves itself in this domain.
Moreover, as the company has recently started working for large global organizations like the
Amazon Prime and Sephora, it has to ensure that it is successfully able to maintain its service
quality where the company needs to assure that it maintains the quality of the services being
provided by the organization and thereby it ensures that the defined standards are maintained
by the firm (Frynas and Mellahi 2015). Moreover, as the organization is comparatively very
small in size it needs to ensure that it increases the visibility of the firm and engages in
extensive Marketing activities. In this manner, if the organization Riverwood’s Logistics can
insure that it is successfully able to compete with the other competitors. Additionally, if the
firm will engage in successful marketing and promotion strategies, it can increase its
revenues.

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6. Conclusion
Therefore, from the given analysis, it can be stated that the company Riverwood
Logistics is although very small in size, it has a strong positioning in Singapore. The logistics
industry in Singapore is in a state of development and hence, the organization Riverwood
Logistics can ensure that it attains success. The report outlined the different relevant strategic
management analysis like PESTLE, Porters Five Forces Analysis for the external
environmental analysis and the Resource Based View and Mckinsey 7s for the internal
environment. The report also outlined the problems being faced by the company and
suggested the plausible solutions for the same.

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7. References
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Advantage-A Case Study. Webster University.
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analysis templates', Competitiveness Review, vol. 24, no. 1, pp. 32–45.
Düerkop, S. and Huth, M., Transportation under Threat–A PESTLE Analysis for Critical
Logistical Infrastructures. ICTA2017, p.14.
E27. 2018. Homegrown Singaporean firm RIVERWOOD is the logistics provider behind
Amazon Prime Now. [online] Available at: https://e27.co/local-firm-riverwood-logistics-
provider-behind-amazon-prime-now-20170728/ [Accessed 26 Aug. 2018].
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Strategic Knowledge Management in Singapore's Small Business Sector. Internationales
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Surbanajurong.com. 2018. Singapore's logistics industry development experience - Surbana
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347.

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8. Appendix
SWOT Analysis
Figure 1: SWOT Analysis of Riverwood Logistics
(Source: As created by the Author)

20RIVERWOOD LOGISTICS