BSM 3114
Management of Strategy
(GDex Express)
1141328140 NURSAKINAH MUSTAFA
1141328674 FARAH DAYANA ZAINAL
1142700081 CHU JING FANG
1142702373 DHANIYAA BASIL
1142701305 VIMAL SUBRAMANIAM
ORGANISATIONAL BACKGROUND
- The company was established in 1997 to provide express delivery service for both domestic and international markets. It is based in Petaling Jaya.
- GDEX operates a network of 223 stations: comprising 75 branches, 1 affiliate, 55 agents, 24 lodge-in centres and 67 reseller agencies throughout Peninsular and East Malaysia.
- As of 30 June 2017, GDEX has a fleet of 831 trucks and vans and staff strength of 3513.
- GDex is listed on the Mesdaq market of Bursa Malaysia through its holding company GD Express Carrier Bhd in May 2005.
SERVICES & PRODUCTS
- DOMESTIC EXPRESS CARRIER
- INTERNATIONAL EXPRESS CARRIER
- CUSTOMISED LOGISTIC SOLUTIONS
- LOGISTIC SERVICES
- ENHANCED LIABILITY COVERAGE
- GDEX PREPAID
GENERAL ENVIRONMENT ANALYSIS
1) DEMOGRAPHIC -
- Appointed by Federal Express (FedEx) in February 2002
- Serves more than 20,000 corporate customers
2) ECONOMIC -
- An economic situation of a countries may affected by consumer spending.
- All service-related taxes shall be paid by the customer.
3) TECHNOLOGICAL -
- Made some investments in the adoption of IT to enable the system
-communicate with international partners
-relay information on the delivery status of their shipment
4) GLOBAL -
- Tie-up with Japan’s largest door-to-door delivery service company
- Established working relationship with Indonesia
- Others country related was Jakarta, Malaysia and Singapore
PORTER'S FIVE FORCES ANALYSIS
PORTER'S FIVE FORCES ANALYSIS
1) Competitive rivalry within a company ( High )
- A big number of competitors make competition fiercer
- Compete with prices and quality of services due to low differentiation
- Competition is HIGH due to presence of internationally renowned players
-FedEx, GAC, ARAMEX and DHL.
2) Bargaining power of supplier ( Strong )
- Highlight service differentiate & brand strategy to improve their bargaining power.
-Owners of trailers and package delivery vehicles when rented
3) Bargaining power of buyer ( Strong )
- Buyers have the power to switch anytime because of the availability of large number of providers and low costs
-Pos Laju, City Link, Skynet and etc
4) Threat of new market ( High )
- The barriers to entry have an important effect on profit
- Entry barriers are LOW, giving the new comers a wide place to play in the field
5) Threat of subtitutes products ( High )
- Their substitute service may be the transporters who give services at a more cheaper rate
- The products or services can be replaced by competitors
-Pos Laju, City Link, Fdex and etc
INTERNAL ENVIRONMENTAL ANALYSIS
NETWORK RESOURCES
- Extensive network of stations that can spread across the country to provide service to their customers
- Example: Conveyor Belt System, Online Tracking System, Fleet GPS Tracking and Handheld Scanner
TECHNOLOGICAL RESOURCES
- Stock of technology that builds by their own to protect their copyright.
- They have In-House IT team that works closely with the operations and office staff
- Have installed a proof of delivery (POD) system
REPUTATIONAL RESOURCES
- Has proposed to transfer the listing of its entire issued and paid-up share capital
- Will signified the growth of GDEX group in the form of its scale of operations
DISTRIBUTION
- Provide four types of facilities and services which are warehousing and distribution, temperature control rooms, packing and custom clearance
VALUE CHAIN ANALYSIS
1) Inbound logistics
- New packaging that receive from the supplier will be stored or transport to warehouse
- The packages will be moved to temperature control rooms
2) Operation
- Serve packing services to give protection to a customer’s shipments
- Make sure fragile shipments are carefully packed before distribute to the customer
3) Outbound Logistics
- Deliver the packages to customer
- Four ways to deliver the packages which are land freight, fleet, air freight or ocean freight
4) Marketing and Sales
- Introduce GDex Prepaid which is promotion for deliver the packages to someone special
5) Services
- Keep up in their operation and delivery services
- Have set a duration time in delivering the packages to the customer
SWOT ANALYSIS
STRENGTH
-Introduced Mobile Applications and cloud-based Call Center.
-Fine-tuned the customised logistics solutions and warehousing services.
-Recruited more employees who are new and experienced.
-Promoting workers who showed good potential.
-Has subscribe of RM10.4 million in 5-year convertible bonds in PT Satria Antaran Prima (PTSAP).
-Fast growing express carrier in Indonesia with 56 branches and more than 1,500 employees.
-40.0% stake in the company, as well as a stronger foothold
WEAKNESESS
-Has no potential successor being groomed.
-Not expand their business to other country.
-Execution risk is high because has no other Asian player has regionalised successfully re last-mile delivery.
-Excess cash will weigh on Return on Equity (ROE).
OPPORTUNITIES
- Collaboration With Third Parties
-International co-loaders.
-Yamato, Singapore post.
-Pos Indonesia.
-Pro-active investor relations programme.
-Share the latest market and corporate developments.
-Voice out the rationale for the various activities.
- Government Adoption Of E-commerce
-Introduction of the Digital Free Trade Zone (DFTZ).
-Good opportunity to them as they have introduced the mobile application.
THREATS
-Posted as a weaker set of results for the first quarter of financial year 2018
-Many new comers and existing business that rapidly growth
-Pos Malaysia Bhd., City-Link Express, and Nationwide Express Courier Services Bhd.
-Declining in GDP and Malaysia Ringgit.
-Cost of fuel rising and the continued weakening of the Ringgit.
-Higher wage and fuel costs may be difficult to pass through if competition is stiff.
SO1 : Collaboration with third parties increa...
SO1 : Collaboration with third parties increase workforce
- Makes it more stable and fulfil their exacting requirements in last mile express delivery services.
- Gdex has a choice of sharing their work in sense of capital , flexibility and responsibility
ST1 : Strategic investment will reduce cost pressure
ST1 : Strategic investment will reduce cost pressure
- Start with strategy
- Align costs to strategy
- Aim high
- Set direction and show leadership
- Create a culture of cost optimisation
WO1: INVESTOR RELATIONS TOWAR...
WO1: INVESTOR RELATIONS TOWARDS SUCCESSION
- Consider pre-announcing your quarterly results.
- Announce the transition in conjunction with the quarterly financial disclosure.
- Announce the transition before it happens.
- Include positive comments from the CEO and a polite quote from the outgoing CFO.
SO1: COMPETITIVE ADVANTAGE WILL HELP ...
SO1: COMPETITIVE ADVANTAGE WILL HELP TO EXPAND THE BUSINESS IN REGION
- Cost Leadership Strategy.
- Differentiation Strategy.
- Innovative Strategy.
- Operational Effectiveness Strategy.
- Technology Based Competitive Strategy.
- Adaptability Competitive Advantage.
- The Information Advantage.
RECOMMENDATIONS
- GDex need to implement the strategy of collaborating with Third Party Logictics (3PLs) to gain competitive advantage.
- Low risk and high cost but very reasonable.
- To Save Time: Outsourcing the Logistics function to a third party logistics provider will free up resources to focus on core competencies.
- Because Someone Else Can do it Better: Even if GDex have resources available, another organization within the supply chain may be able to do it better, simply because its relative position in the supply chain, supply chain expertise and economies of scale.
- To Share Responsibility: 3PL companies can share responsibility for managing global supply chains, keeping customers and stores properly stocked, and delivering the perfect order every time.
- To Re-Engineer Distribution Networks: Logistics outsourcing to a third party logistics provider can be a quick way to re-engineer distribution networks to meet global market demands and gain a competitive edge.
THE IMPLEMENTATION
1) Outsourcing Strategy
2) Document the processes
3) Analyse the SWOT
4) Create robust selection process
5) Document the expectations
6) Making site visit
7) Create legal documentations
8) measure and review performance
CONCLUSION
- It has been proven time and time again why manufacturers, distribution companies, and those with supply chains need to outsource to third party logistics providers.
- This prominent environmental scanning analysis report also support the rising using of 3PLs as a way for GDex to take a competitive advantage.
- GDex will be able to generate new fresh ideas in order to obtain the competitive advantages in the future.