Port Marketing, Logistics, Performance and Environment in Port Sydney - Case Study Example

Name: Institution: Tutor: Course: Date: Executive summary Competition analysis is very important if a business has to thrive in a competitive market. In the competition analysis it is very important for a business to do a SWOT analysis or situational analysis and PESTEL analysis in order to evaluate its strengths, opportunities, threats and even weaknesses and other macro and micro-environment factors which may be contributing factors towards attaining a competitive advantage. The rationale of this paper is to offer information to businesses on how to do a business analysis. In this paper, a thorough analysis of the competition, logistics and marketing of Port of Sydney will be done. The sections of the paper are outlined as the competition analysis, marketing in Port Sydney, Logistics functions of Port Sydney, Scope of port performance that port management measure, Opportunities and threats to Port of Sydney and Strategies to improve port management and operation. Table of Contents 1. Competition analysis…………………………………………………………………..3 2. Marketing in Port Sydney……………………………………………………………..4 3. Logistics functions of Port Sydney…………………………………………………….5 4. Scope of port performance that port management measures…………………………..7 5. Strengths and Weaknesses of Sydney port…………………………………………….9 6. Opportunities and threats to Port of Sydney…………………………………………..10 7. Strategies to improve port management and operation……………………………….10 8. Conclusion …………………………………………………………………………….12 Ports of Sydney 1. Competition analysis Intra-port competition is the kind of competition which exists between the providers of the same port services within a port as argued by Wang (171). It can also be defined to as a situation in which two or more terminal operator’s competes for the same market. This means that intra-port competition is the competition that takes place within different ports which seek to provide the same service within the same terminal. Intra-port competition is also the competition for the provision of discrete port services like stevedoring services, terminals and towage services. The intra-port situation surrounding Sydney ports is very minimal and especially because all the ports in New South Wales have specialized in the provision of their services (Verboven et.al 26). For example Sydney ports have specialized in car and container trade, breaking the bulk and liquid bulk as it trade while Newcastle port has highly specialized in the provision of services in the coal trade and Port Kembla has specialized in motor vehicles and bulk breaking trade. There is also a limited intra-competition between the facilities within the ports because of the existence of a strong stevedore duopoly and especially in the handling of containers. All the ports in New South Wales are monopolies and hence there is no prima facie equal bargaining power in the negation of terms (Verboven et.al 26). Having specialized in car and container trade together with breaking bulk, Port Sydney is therefore a monopoly. Monopolies enjoy a benefit of high bargaining power since they are price setters and are usually not faced by any form of competition and especially within the industry. Sydney port experiences very minimal or no intra-port competition and especially because of specialization that has taken place in New South Wales ports. Inter-competition is the kind of competition which takes place between two different industries providing different services (Wang 171). Inter-port competition is the manner in which port companies compete with each other. Port Sydney has a high inter-competition advantage against all other ports in New South Wales because it has a well improved chain of roads and rail transport networks. The company has plans to expand its road network system into the Central-west and west of Metropolitan Sydney with the aim of catering for the demand in the central-west Sydney. With the improvement of its rail system, the company has been able to increase its imports and exports within the metropolitan Sydney. This has offered the company a higher level of efficiency, competitive advantage over all other ports in New South Wales. Sydney Corporation has interacted with both importers and exporters with the objective of making Port Botany and Port of Sydney highly competitive through providing efficient unloading and loading facilities and through the deployment of transportation services to customers (Verboven et.al 26). Sydney port is the second largest port in Australia with the largest being Melbourne pert. Inter-competition between Port Sydney and Melbourne port is very high with each trying to obtain a competitive advantage and a market share. 2. Marketing in Port Sydney According to Hartline et.al (25), marketing is the process of creating customer interest by companies. The port has used different promotional strategies to promote its services. Advertisement is the mostly used method of method of promoting business in Port Sydney. The methods used for advertisement include media release, newsletters and e-commerce. Through daily newsletter, Sydney port is able to advertise its services or its business. The company has also used the e-commerce or the internet to market its services globally. Through this medium, consumers are bale to access the services of the port online. Port Sydney has established a company website though which its consumers can browse and access information concerning the company and its products (http://www.sydneyports.com). Media releases used by Sydney Port have been very important as through this method the consumers are bale to get adequate information concerning the company. There is a high use of marketing strategies in Port of Sydney to promote its products and services which is normally done with the aim of attracting many customers through creating awareness to its customers. Marketing is also highly used so as to win new customers into the company. 3. Logistics functions of Port Sydney Logistics is defined to the management of the flow of goods, resources and information form the origin point to the consumption point with the aim of meeting consumer’s needs. In Sydney ports, logistics is mainly on transportation and material handling (Wang 171). Logistics within the port are performed through logistical strategies and planning. The port has a vision of ensuring sustainable ports and logistics networks. Key elements of the port logistics include rail operations, road operations, intermodal operations and port freight and logistics services. As part of its port operation, Port Sydney Corporation has a large track record which is the market leading and it is for ensuring all port facilities and operations are well managed. Operational activities in the port are aided by specialists from across the business so as to ensure safe and secure facilities, infrastructure and services at a competitive price to community, contractors, visitors and port users. Port operations and procedures are also developed in line with international state and federal port regulations and legislation so as to promote pro-active, positive, safe and secure environment for all stakeholders. The key elements of logistics are highly related to the terms of port operation. Road operations is part of logistics network in Port Sydney plays a very important role in the movement of freight to and from the port handling (Wang 171). The port has over 200 road transport carriers which service different ports and a port security and traffic management service is availed in all ports precincts. This is highly related to the port security terms of port operations where port security and safety is taken seriously. In Port Botany all the facilities are required to have a maritime security plans under the MTOFSA. For sometime, Sydney Ports has worked with the aim of ensuring reliability, consistency and safe movement of passengers and cargo vessels through Port Botany and Port of Sydney while providing appropriate and immediate responses to environmental incidents and safety. Sydney ports have worked closely with the government and industry to encourage a grater role for rail transport which is a very vital component of the logistics network in Port of Sydney which can contribute to a more sustainable movement of freight to and from port and its facilities handling (Wang 171). Security and safety is highly upheld in the rail transport for both the freight and the passengers. The metropolitan rail gives priority to a network of passengers. This element is highly related to the terms of operation of the company since the company is committed to the provision of safe operations. The term of operations caters for the safety of visitors, clients and the environment. Sydney ports also have a detailed about occupational health and safety to employees and stakeholders and this is done through ensuring compliance with the occupational health and safety regulation with the aim of providing an overview of the risk and hazards associated with particular tasks. A Port freight and logistics services is a key element of logistics in Sydney Port and a number of them enhances efficiency in port operation. These services include shipping, pilotage, towage and lines services, stevedores, bulk liquid facilities, container parks and freight forwarders. Security and safety is cherished and highly upheld and especially in the storage and transfer of containers between stevedore and the consumers. All these elements of port logistics are well integrated in Sydney port handling (Wang 171). These operations are well integrated with the aim of meeting the needs of their customers through the transportation of freight form and to the port. For the goods and services to flow from the port to the consumers, there is a need for integration of all the key elements of logistics and especially the rail, port freight and road operations. For example the port uses its road and railway network to transport its freight inland and also to transport goods to the harbor. The main purpose of the road and railway network is to reduce congestion in the port. 4. Scope of port performance that port management measures Sydney port has had a landslide reform which is aimed at improving operations, efficiency, decongesting trucks and reducing freight delays at the port as a way of improving its performance (Cullinane and Brooks 300-407). In June 2009, the port devised a performance management framework which would impose fines and penalties for stevedores and transport operators which fail to meet the given standards. This framework would also drive efficiency, consistency and transparency. As a port management measure, Sydney Ports Corporation assesses stevedore and road transport carrier performance. Port Sydney is well managed. This indicated by the level of corporate governance which governs the port. The Board of Sydney ports is responsible for overall corporate governance of the Corporation and it has adopted corporate governance practices and procedures that are appropriate to manage Sydney Ports in the best interests of the stakeholders. The company has good corporate governance which is a good measure of the port management. The Board is also responsible for r performance reviewing and it is also responsible for evaluating its own performance and that of each director on regular basis. The port management therefore measures performance in terms of output, efficiency, transparency and consistency. The management or the port authorities have been under pressure to improve on the efficiency of the port. The management use Data Envelopment Analysis (DEA) to measure both input and output. For example, the port management uses the total number of loaded or unloaded containers as a measure of output and this is because handling containers is the major aspect of operation in port of Sydney (Cullinane and Brooks 300-407). The port management also measures the performance of each of its employees to determine whether they perform as the aims and objectives of the Port and whether they work towards the achievement of the Ports goals. The management also measures the consistency and transparency of its operations with the aim of ensuring a continued operation in the company. The management of Port Sydney also monitors the performance of Australian ports in relation to logistics operation together with different methods of improving road and railway transport. Triple bottom line approach involves the measurement, management and reporting of environmental, economic and social performance in a single report. It is also an approach used by companies with the aim of reporting and assessing organizational performance in relation to sustainability. Sydney Ports has employed or used triple bottom line approach to port performance measurement. Some of the characteristics of triple bottom line approach include accountability, integrated planning and management, transparency and stakeholder engagement commitment. 5. Strengths and Weaknesses of Sydney port Sydney port has enough resources and capabilities which has enabled it to obtain a competitive advantage against its competitors. Being the second largest port in Australia it is evident that the company has a good reputation among its customers. The port also has a favorable distribution network which enables it to meet the needs of its customers as noted by Bohm (20). This network includes the road network, railway network and the shipping network. The fact that Sydney Port is a monopoly is a strength to the company as the company uses this to obtain a bargaining power and hence a competitive advantage. The port handling facilities are designed in a way that they can handle heavy cargo making work easier and fast to ease congestion at the port. They are also designed in a way that the number of employees is minimized so as to cut costs. Examples of such handling facilities in this port are the conveyor belts, cargo trolleys, hydraulic lifts, mobile car ELV baler and the cable handling equipments and these are strengths to the port. The company does not have a major weakness and especially because it has specialized in car and container trade which means that it has differentiated its services from those of the other ports in New South Wales (Bohm 20). 6. Opportunities and threats to Port of Sydney Competition from other ports in Australia and particularly in New South Wales is a threat to Sydney port. There is no threat resulting form price wars since the ports are monopolies. It is as a result of this threats that Port Sydney has expended its road network system into Central West and West of Metropolitan Sydney so as to cater for the demand in the central west Sydney. Being the second largest port in Australia, Port Sydney has great potential to expend its market network into other parts like Asia (Bohm 20). The port has been for the last two years been able to exploit market opportunities and has devised ways and strategies on how to get into the market at the lowest cost possible and with the highest profit possible. 7. Strategies to improve port management and operation I would advise the management of Sydney port to improvise the use of a performance score card which will enable it to evaluate its performance both in its operations and in its employees as noted by Hartline et.al (25). Through the use of a balanced score card the management will be in a position to determine whether the employees are determined to the achievement of company goals and objectives. The port should also improve on its landslide logistics which relates to operational changes. Changes should be also made on both the technological and administrative aspects of the logistics. Implementing an improved logistics landslide will be very important in ensuring that the logistics operations are well managed. I would also advise the port to recruit well qualified personnel as the qualified the personnel, the greater the output and the higher the level of management in the port. Highly qualified personnel are also able to identify market opportunities and devise strategies of venturing into the market. To improve on port management and operation, the company should introduce strict supervision methods to supervise each of the port operations to ensure that all protocols are followed together with the maintenance of safety and security measures in the logistics elements. To improve on port management and operation, the company should also introduce an up to date technology machines which will be used to track and record all the details of the shipping, road and rail operation (Cullinane and Brooks 300-407). A management system is a good example systems which are up to date with the current technology and can be sued to aid management activities through recording, calculating and storing necessary information which the management may need in future for references. This system will improve management in the sense that it will avoid any data loss and will enable the management to track the logistic operation of the company at a minimal cost hence it is profitable for the company. Improvement of management and operations should be done at a minimal cost so as to ensure that the company does not make huge amounts of loss which may lead to bankruptcy of the company. In this case therefore a management system will work effectively. This system can be sued by the directors and accountants and it is also very important in assisting the auditors of the company in obtaining the relevant information or the relevant audit evidence. 8. Conclusion Port Sydney has a competitive advantage and this is exhibited by the fact that all the ports in NSW are monopolies. There are no price wars and the company also have enough resources and capabilities which has enabled it to obtain a competitive advantage against its competitors. The company has also used effective marketing strategies to advertise its services Hartline et.al (25). For example it uses media release, newsletters and e-commerce. In conclusion therefore, Port of Sydney is in a better market situation with the capacity of improving its services in future considering the fact that there is minimal competition and the company has many opportunities which it can exploit with the use of its evidenced strengths. Work Cited Anja Bohm, (2009). The SWOT Analysis. GRIN Verlag. Pg 20 O.C. Ferrell, Michael D. Hartline, (2008). Marketing Strategy. Cengage Learning. Pg 25. Ron Crittal, Lee Atkinson, Marc Llewellyn, Lee Mylne, (2009). Frommer's Australia 2010. Frommer's. Pg 207. James Jixian Wang, (2007). Ports, cities, and global supply chains. Transport and mobility series. Ashgate Publishing. Pg 171. Mary R. Brooks and Kevin Cullinane, (2007). Devolution, port governance and port performance Elsevier, Pg. 300-407 Kathleen Cleeren, Marnik G. Dekimpe, Frank Verboven, (2005). Intra- and inter-channel competition in local-service sectors. Katholieke Universiteit Leuven, Faculty of Economics and Applied Economics, Department of Applied Economics. Pg 26. http://www.sydneyports.com.au/port_development/port_botany_expansion_project Read More