18 11th International Conference on Marine Technology MARTEC 2018 STRATEGIC PLAN 2025 FOR PORT OF TANJUNG PELEPAS IN CONJUNCTION WITH THE DEVELOPEMNT OF ISKANDAR MALAYSIA Mogheshwar Gokul Rajasekaran1*, Muhammad Firdaus Md Amin1, Mohamad Firzuan Raffy1 , Muhammad Ridho Baihaque1, Muhammad Zaki Prawira1, Salaamin Amineen Nur Zakri1, Mohd Zamani Ahmad2 1School of Mechanical Engineering, Department of Naval Architecture and Offshore Engineering, Universiti Technologi Malaysia. 2Associate Professor School of Mechanical Engineering, Department of Naval Architecture and Offshore Engineering, Universiti Technologi Malaysia. ABSTRACT Port of Tanjung Pelepas (PTP) is one of the key ports in Malaysia located at the busiest shipping line, Malacca Straits. The status of the port for five years back as cash cow shows its outstanding behaviour and performance to be one of competitive ports neighbouring Tanjong Pagar Port and Port of Singapore. As PTP share the same location with the development of Iskandar Malaysia, it is predicted that PTP will result in a huge positive impact. Hence, the purpose of this paper is to study the strategic planning for PTP by using SWOT Analysis and BCG (or) Growth-Share) Matrix in order to maintain its ideal position as cash cow for the until the year 2025. Keywords: SWOT, Strategic Planning, BCG Matrix, Port Tanjung Pelepas (PTP). 1.0 Introduction Iskandar Malaysia is a massive project development under the Johor government. The project involves the construction of a huge metropolis that will include a cluster of factories, centres of learning, hospitals and entertainment. It is being promoted as a business hub within the Johor- Singapore-Indonesia triangle and as the southern gateway that connecting the west and east bound lane. Port of Tanjung Pelepas is expected to benefit from this massive development of Iskandar Malaysia. The volume of ships coming to PTP is expected to incline. As a result, maritime and logistics is set to improve GDP growth and adapted to the development. A study carried out based on the accumulate containerized traffic at PTP as 2017 have positioned PTP as a cash cow in the BCG Matrix which indicates that PTP have reached maturity and well established positions with low growth rate and high market share. The SWOT analysis on PTP for the five years back (since 2014 to 2018), shows the strengths of PTP as it has the capability to offer 14 berths in total 5.04 km of linear wharf length and 1.8 million square meter container yard which have over 10,500,000 TEUs capacity of storage area. The terminal is equipped with 57 Super Post Panamax cranes and these cranes also have twin-lift *Corresponding author: [email protected] 19 capability to further enhance productivity. However, as PTP has not handled any other ships than container, it becomes one of the weakness for PTP as this relating to their business prospects. Other than that, the issues of inadequate number of local man power and high rental cost of the facilities are among the weaknesses of PTP. The SWOT analysis also have list down the opportunities offer to PTP. One of the opportunities is definitely the positive impact from the Iskandar Malaysia development as mentioned earlier. The strategic position of Iskandar Malaysia projects has indirectly invite additional number of container ships to PTP. Unfortunately, the competition from Singapore ports, the flop in Malaysia currency compare to foreign exchange and also unstable political and legal systems in foreign markets have constrained the import and export activities of PTP and become threats to PTP. It’s proven that the development of Iskandar Malaysia has brought positive impact to PTP even though the development is yet to reach its maturity. China who has put its interest as important investor in the development also seen PTP potential to become one of the busiest container port in the world. Thus, the purpose of this research is to study the feasibility of PTP related to the development. In the other hand is to determine the strategic plans for PTP in order to stay competitive and to sustain their position as cash cow up to years 2025. 2.0 Literature Review 2.1 Theories on strategic planning related to port. The theories on strategic planning of port the development of strategic planning has played a very important role in guiding the port construction, more frequent economic exchanges between the countries in contemporary, closer relationships of economics, and the economic trend of globalization has been formed, the more important the development strategy plays based on the needs of the port development strategy planning and Entropy Method. Evaluation model of port development level by introducing the driving force theory through the example analysis [5]. The factors of port driving force include three levels, which is economic dimension, the management dimension and strategic dimension. Factors of economic dimension include factors such as, social division of labor, industry globalization, uncertainty of market demand (flexibility) and risk diversification; factors of management dimension include factors such as, scientific development, supply chain management technology and agile manufacturing style; factors of strategic dimension include factors such as, cost control motivation, complementary motivation and resources utilization. The above is the theoretical framework of the driving force of the port changes. However, port development has characteristic of timeliness. So combined with the characteristics of level of development of the port, we can establish the evaluation index system based on the port driving force, which shows in Table 1. Table 1 : Theoretical framework of evaluation of the port driving force [5] Dimension Driving force Evaluation index of level of Definition of Indexes factors port development (quantitative/qualitativ (First layer (Secondary indexes) e) of Indexes) Economic Influencing -Global economic factor -The level of national dimension factors of -State policy factor economic security global -Proportional relationship of the -Positioning of national industry national economy development and -Factors of -Port cargo proportion strategic planning social Relationship -Proportion of secondary 20 division of -Market demand of economic and tertiary industries labor Hinterland accounting -Factors of -Level of integration of port and GDP market City -ports predicated Demand -Competition among nearby throughput of ten years -Factors of Ports later risk diversification Management -New -Level of information -The level of integrated dimension technology information services of coverage rate of AI, tracking rate of GPS ships and capacity of online services Strategic -cost control -Channel maintenance water -The year guarantee rate dimension -common Depth of waterway interests -Wharf construction-Quantity of maintenance of water -resource industry Depth utilization Associations -Proportion of piers factors -Quantity of human resources more than 5000t -Quantity of industry associations -Quantity of labor resources 2.2 Theory on BCG Matrix [6] define the Boston Consulting Group (BCG) Matrix strategy and planning the market share on the other hand comprises of the competition and the product potential in the market consider growth rate and market share together, it automatically gives an overview of the competition and the industry standards as well as an idea of what the future might bring for the product. Once the businesses have been classified, they are placed into four different quadrants of the matrix. The quadrants of the matrix are divided into: Cash cow Cash cows are products which are having a high market share in a low growing market. As the market is not growing, that cash cow gains the maximum advantage by generating maximum revenue due to its high market share. Thus for any company, the cash cows are the ones which require least investment but at the same time give higher returns. These higher returns enhance the overall profitability of the firm because this excess revenue can be used in other businesses which are Stars, Dogs or Question marks. Stars Stars are products which are having High market share and High growth rate (high competition) .Unlike cash cows, Stars cannot be complacent when they are top on because they can 21 immediately be overtaken by another company which capitalizes on the market growth rate. However, if the strategies are successful, a Star can become a cash cow in the long run. Question Marks Question marks are products which are having Low market share and high growth rate (uncertainty). Several times, a company might come up with an innovative product which immediately gains good growth rate. However the market share of such a product is unknown. The product might lose customer interest and might not be bought anymore in which case it will not gain market share, the growth rate will go down and it will ultimately become a Dog. Dogs Dogs are products which are having Low market share and low growth rate (less profitable or may even be negative profitability). Products are classified as dogs when they have low market share and low growth rate. Thus these products neither generate high amount of cash nor require higher investments. However, they are considered as negative profitability products mainly because the money already invested in the product can be used somewhere else. Thus over here businesses have to take a decision whether they should divest these products or they can revamp them and thereby make them saleable again which will subsequently increase the market share of the product. The Success sequence of BCG matrix happens when a question mark becomes a Star and finally it becomes a cash cow. This is the best sequences which really give a boost to the company’s profits and growth. The success sequence unlike the disaster sequence is entirely dependent on the right decision making. Disaster sequence of BCG matrix happens when a product which is a cash cow, due to competitive pressure might be moved to a star. It fails out from the competition and it is moved to a question mark and finally it may have to be divested because of its low market share and low growth rate.