University of Essex: BE113 Management Accounting Essay - SBS Transit

This essay provides a comprehensive analysis of SBS Transit, a leading transport corporation in Singapore. It examines the company's strengths, including its market leadership, extensive bus network, use of advanced technology, and commitment to passenger safety. The essay also identifies key threats faced by SBS Transit, such as rising fuel costs, challenges in recruiting skilled bus captains, stringent regulations, and government policy shifts. Furthermore, the essay offers practical recommendations to address these threats and enhance the company's performance, including optimizing bus capacity, providing attractive compensation for bus captains, and adapting to changing government policies. The essay concludes by emphasizing the importance of leveraging strengths and mitigating threats to ensure SBS Transit's continued success in the transport sector.

Running head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING
Name of the University
Name of the student
Author notes

1
MANAGEMENT ACCOUNTING
Executive summary
The aim of the report is to analyse the strength and threats of the SBS transit. The report
contains a detail explanation of the strengths of the company and the threats that it is going to
face from the external factors. The report is concluded by providing a recommendation that
the management can follow to manage the threats and achieve sustainable growth in the
future.

2
MANAGEMENT ACCOUNTING
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Strength......................................................................................................................................4
Threats........................................................................................................................................5
Recommendation........................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

3
MANAGEMENT ACCOUNTING
Introduction
SBS transit is one of the leading transport corporation in Singapore the mission of the
organization is to provide comfortable and safe journey to the passengers. The organisation is
a transport operator in Singapore which used to operate various types of transport vehicles
like bus, rail and taxi services. The SBS transit is listed company in the Singapore stock
exchange and the maximum part of the shares of the company is owned by the comfort del
Gro corporation, the SBS transit is previously known as Singapore bus service and later on
2001 after rebranding the company is named as SBS transit.
Discussion
The SBS transit is known for its high quality of services and giving more importance
to the safety of the passengers. To ensure that the passengers does not have to face any hassle
in getting the buses or taxies or rail service the organisation expand its network in various
routes and depots. The organisation uses high quality of infrastructural facilities which they
used to provide comfort to the passengers while they use the vehicles of SBS transit for
moving from one place to another (Lim and Mack 2017).
Though the company is doing well and their revenue generating capacity has
increased significantly during the last few financial years, but while operating such a big
organisation specially running buses and rails in various routes is a difficult task and the
company has to face several threats in operating its services smoothly on regular basis. The
strengths of SBS transit and the threat that the organisation faces are explained in details in
the following points:

4
MANAGEMENT ACCOUNTING
Strength
The company is a leader in this sector as it owns most of the bus transport business in
the country and have more than 3000 buses which are used in all the major routes in
Singapore. The amount of riders has increased over the years for which the government of
Singapore has taken initiatives to introduce new routes and to increase the number of buses
so that passengers does not have to wait more for getting buses and the ratio of buses to
passengers increases which will ensure the comfort of travelling. To maintain this the
government of Singapore has taken a bus service enhancement scheme, and this program of
the government has increased the strength of SBS as they get the approval from government
to make the scheme effective (Raval and Raval 2019).
Another strength of the company is that it uses world class technology in their buses
which helps them to attract more passengers. The buses of SBS are well equipped with
modern equipment which can satisfy all the basis requirements of the passengers that they
require while travelling. The buses have air-conditioned coaches, comfortable seats,
televisions, music system and all kind of equipment that will entertain the passengers during
the journey (Mo et al 2020).
The buses also have some basic medical equipment which can be used in case of any
emergency situation occurs. The buses are also safety equipment like fire extinguisher and
emergency exit system from which the passengers can be evacuated if any major accident
happen. The organization takes all kind of initiatives to ensure the safe journey of the
passengers. Being one of the most reputed organisations in the transport sector they company
does not make any compromise in providing high quality service to the passengers (Wang
2019).

5
MANAGEMENT ACCOUNTING
Well trained bus captains are hired by SBS transit as the bus captains will operate the
bus so it is very essential that the bus captain should be highly skilful and highly experienced
as operating bus or any other vehicle is a very skilful job and the safety of the passengers is
largely dependent on the skills of the bus captains. So before hiring the bus captains the
organisation checks all the documents of the individual and also proper training is provided to
them so that they can operate the buses properly and does not make any mistake that can
cause serious damage to the life of the passengers. The bus captains play the main role in the
smoot running of the business operations of SBS transit (Ang et al 2017).
These are the main strengths of the business beside that another strength that make it a
market leader is that it maintains all the compliances that are prescribed by the Singapore
government to operate transport business in Singapore. As the company is in the transport
business since 2001, SBS transit has exceeded all the severe functioning and quality of
service standards that are fixed by the governing authorities (Adnan et al 2017).
Threats
The major threats that the SBS transit has to face in the recent years are the rising fuel
cost and simultaneously due to the decision of the public transport council to reduce the fare
price of the bus services the profit margin of the company fall rapidly which effects the
financial strength. The significant increase in the fuel price by 27% and increase in the
electricity cost make things more difficult for the organisation (Ma Rahman and Idris 2017).
These threats are uncontrollable for the management as these are directly related with
the government policy. Another major threat for the organisation is the recruitment of the bus
captains. Finding skill full and well experienced bus captains has become a major problem
for the company. with the increase in demand of the bus captains the salary of the bus

6
MANAGEMENT ACCOUNTING
captains also increases. Beside that as the work of bus captains is very stramineous and
difficult to mange people are not showing their interest to do this kind of work. the
unavailability of bus captains at cheap rate has become one of the major threats for SBS
transit (Leong et al 2016).
In addition to that the strong regulations in the public transport industry has create a
barrier for the SBS transit to carry on their business operations. The stringent regulations
imposed by the governing authorities restrict SBS to operate buses in some remote areas
where there is demand for their bus services. Beside that the new regulations also requires
some additional quality of service standards the implementation of which requires additional
outflow of cash which adversely effects the liquidity position of the company (Belcher and
Chisholm 2018).
The violation o f these standards also attracts penalty which the organisation has to
pay in the recent years which values up to $40000. This amount is paid by SBS transit in the
form of fine imposed by LTA as charge for the disruption of the NEL standards.
The company also faces threat from the government in the recent days as the
government shifts its focus on expansion of the ERP charges and higher ERP gantries. In the
future it can be observed that the focus can be shifted from ERP gantries to GPS road charges
this fluctuation in the government policy can affect the operations of the company and can
adversely affect the profit earning capacity of SBS transit.
Recommendation
It is recommended to SBS transit is that it should follow all the guidelines that are
prescribed by the government of Singapore I order to avoid the payment of unnecessary fine
or any other monetary penalty. In order to tackle the challenge of the increase of fuel price

7
MANAGEMENT ACCOUNTING
which is uncontrollable for the management, the organisation can increase the seating
capacity of the buses from which they can earn extra income and by doing that they can
mitigate the loss of lower profit margin.
The threat that is occurred from the non availability of the efficient bus captains can
be solved by providing lucrative offers to the bus captains. The company should arrange
some compensation schemes for the bus captains so that they can get motivation to work for
this organisation. The bus captains can be given more monetary benefits so that they can
realise that this profession is laborious but at the same time it can be possible to earn more
from this job. To make the bus captains more efficient a separate training programmes can be
arranged by the company so that the bus captains do not find it difficult to operate the buses.
To reduce the strain of long route journeys its is recommended to keep more than one
bus captains in a bus so that if any bus captain feel tired the other one can take his place and
drive the bus. This can be very effective to reduce the pressure from one particular bus
captain and can encourage them to join this profession.
Conclusion
From the above discussion it can be concluded that even SBS transit is the market
leader in the transport sector there are several threats that the company will face which can
create hindrance in the operations of the organisation. SBS being the leading company in this
sector have several strengths that can increase their efficiency and help them to generate more
revenue and increase its profitability. The strengths like long time existence in the market,
complying all the government regulations and creating world class infrastructure and
ensuring the safety of passengers are utilised by the organisation to achieve their financial
goals or objective. On the other hand, the threats like, government policy, unavailability of

8
MANAGEMENT ACCOUNTING
bus captains, hike in the fuel prices, create obstacles for the growth of the company in the
future.
References
Adnan, M., Pereira, F.C., Azevedo, C.L., Basak, K., Koh, K., Loganathan, H., Peng, Z.H. and
Ben-Akiva, M., 2017. Evaluating disruption management strategies in rail transit using
SimMobility mid-term simulator: a study of Singapore MRT North-East line.
In Transportation Research Board 96th annual meeting.
Ang, C.W., Ramnath, V., Ihi, H.J. and Saito, H., 2017, October. Longitudinal evaluation of
the system performance of a junction safety system with public buses. In 2017 IEEE 20th
International Conference on Intelligent Transportation Systems (ITSC) (pp. 1-8). IEEE.
Belcher, R.N. and Chisholm, R.A., 2018. Tropical vegetation and residential property value:
A hedonic pricing analysis in Singapore. Ecological Economics, 149, pp.149-159.
Leong, W., Goh, K., Hess, S. and Murphy, P., 2016. Improving bus service reliability: The
Singapore experience. Research in Transportation Economics, 59, pp.40-49.
Li, K., See, K.Y., Narampanawe, N.B., Weerasinghe, A. and Tong, V.H.Y., 2018, December.
Condition Monitoring of Power Feeder with Multiple Parallel Cables Based on Inductive
Coupling Method. In 2018 International Conference on Intelligent Rail Transportation
(ICIRT) (pp. 1-4). IEEE.
Lim, C. and Mack, V., 2017. Science, Technology and Human Security-Getting Singapore
Smart City-ready: MRT Disruptions as a Spur?.

9
MANAGEMENT ACCOUNTING
Ma, Z.E., Rahman, M.N. and Idris, A.O., 2017. SETTING A FAIR-FARE STRUCTURE
FOR IMPROVED TRANSIT PASSENGERS'ACCESSIBILITY. In Canadian
Transportation Research Forum 52nd Annual Conference-Canadian Transportation: 150
Years of Progress//Les transports au Canada: 150 ans de progrès-Winnipeg, Manitoba, May
28-31, 2017.
Mo, B., Cao, Z., Zhang, H., Shen, Y. and Zhao, J., 2020. Dynamic Interaction between
Shared Autonomous Vehicles and Public Transit: A Competitive Perspective. arXiv preprint
arXiv:2001.03197.
Narampanawe, N.B., See, K.Y., Li, K. and Tong, V.H.Y., 2018, December. Condition
Monitoring of High Voltage Power Delivery Path to Train using Non-Invasive Impedance
Measurement Method. In 2018 International Conference on Intelligent Rail Transportation
(ICIRT) (pp. 1-5). IEEE.
Raval, V. and Raval, V., 2019. Singapore Mass Rapid Transit (SMRT): Operations and
Revenue Cycle. AIS Educator Journal, 14(1), pp.1-14.
Wang, X., 2019, October. The Enlightenment of Singapore Public Transport to China. In 2nd
International Conference on Contemporary Education, Social Sciences and Ecological
Studies (CESSES 2019). Atlantis Press.
Weithmann, S. and Klug, S., 2017. Integrative Sustainable Concepts for Individual Mobility
in Asia-A Qualitative Analysis of Carsharing and Taxi Services in Singapore.