SUBJECT : COMPETITIVE STRATEGIC MANAGEMENT

LECTURER : IR EMRAN ISMAIL

STUDENT NAME : MOHD RIZAM BIN SULAIMAN

MATRIX NO : M19711006

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CONTENTS

1. Description of Pos Malaysia Berhad

(Background, Vision, Mission, Goals, Product and Services,

Market Share, Employee Size)

2. Identification and elaboration of company problems

3. Internal Analysis

4. External Analysis

5. Competitor Matrix Table and Summary

6. Recommendation

7. Conslusion

8. Referencing
 POS MALAYSIA BERHAD

POS Malaysia Berhad begin to establish the postal service in 19th century. Initially the postal

service was used for distribution of letters, documentation, papers, newsletter and various legal purposes.

After that Pos Malaysia embarked into numerous business platform such as delivery of packaging,

assurance services, postal order and funds for investing (Bank Nasional Berhad). POS Malaysia Berhad

once in the past known as Postal Service Department or "Jabatan Perkhidmatan Pos".

As government valuable asset, Pos Malaysia start to provide a public service such as collection of

utilities payment, dog license purchase, purchase of television permit, pensions withdrawal and etc. After

Malaysia got their independence, it begins to joining in various multinational environemnet to stay relevant

in socioeconomic progression. On 17 Jan 1958, Malaysia joined Universal Postal Union as a member. The

Universal Postal Union has made Pos Malaysia to remain versatile. Pos Malaysia has restructured in 1992

and no longer own by a government. This decision is made in order to make Pos Malaysia can diversify the

business wider by become incorporated identity.

Pos Malaysia was listed in BSKL on Sept 2001 with RM1.43b of capital. Pos Malaysia is the main

national courier provider with around 4,000 touchpoints, 300 self-help station, Pos Malaysia provides a

very wide business network experience. Pos Malaysia core businesses segments are Logistic, Aviation,

Courier and Postal Services.

The technology evolution especially in digital mail and eCommerce has changing the behavior of

the consumer. With the evolution of technology, the emergence of digital media and the internet, and with

it, changing consumer behavior’s, Pos Malaysia, in its role as the national postal provider, has evolved and

progressed from being a mere mail and postal services provider towards becoming a dynamic supply chain

solutions provider, communications conglomerate, financial services and supply, transforming and

innovating itself in order to maintain its relevance and competitive edge as well as continue to connect the

nation with the rest of the world.

 Later Khazanah Nasional Berhad, the investment holding arm of Malaysian government holds 32

per cent of Pos Malaysia & Services Holdings Berhad ownership. For sustainability, POS Malaysia

introduces three core Business Units which are known as PosMel, PosLaju and PosNiaga in 2009. The

delivery operation of the three core services is supported by the logistic arms.

1.1. VISION

1.1.1 As A Medium of Unity

Make a connection to the community and business, online and offline and also form home and work. Pos

Malaysia is looking to be a Malaysian corporate that bind and open up new businesses opportunity for

future.

1.1.2 Beyond

To connect all Malaysians worldwide by providing the best postal services.

1.1.3 For Today and Tomorrow

To be vigilant and alert in technology development and evolvement.

1.2. MISSION

Build and Deliver The Network Of Choice

1.3. BRAND VALUES

1.3.1 Empathy

We need to understand our customers and do more than just hear them. Our business then delivers what

they need, and when they need it.

1.3.2 Decorum

We, ourselves, treat others the way we would want to be treated – with decency, dignity and respect.

1.3.3 Integrity

In everything that we do, we act in an open and honest manner, beyond reproach and with utmost

sincerity.

1.3.4 Accountability

We hold ourselves accountable, and expect to be held accountable individually and as a team, at all levels

of the organisation, for our actions and decisions.

1.3.5 Innovation

We constantly search for new and better ways to meet our customers' requirements, willing to question

and unafraid to try.

1.4 BOARD OF DIRECTORS

Datuk Yasmin binti Mahmood

Independent Non-Executive Chairman

Dato’ Abdul Hamid bin Sh Mohamed

Independent Non-Executive Director

Dato’ Ibrahim Mahaludin bin Puteh

Senior Independent Non-Executive Director

Datuk Idris bin Abdullah @ Das Murthy

Independent Non-Executive Director

Dato’ Sri Syed Faisal Albar bin Syed A.R Albar

Non-Independent Non-Executive Director

Sharifah Sofia binti Syed Mokhtar Shah

Non-Independent Non-Executive Director

Datuk Puteh Rukiah binti Abd Majid

Independent Non-Executive Director

Ahmad Suhaimi bin Endut

Non-Independent Non-Executive Director

1.5 PRODUCT AND SERVICES

A postal service provider that delivers

postalrelated products and services, such as

mail delivery, postage stamps and postal Revenue Group

POSTAL SERVICE financial services. Our postal services also RM698 mil Revenue

cover customised retail solutions, such as 30%

bill payments and insurance, which meet

the daily needs of our customer base.

A leading courier service provider that

offers express parcel delivery services that Revenue Group

COURIER primarily involve receiving and delivering RM824 mil Revenue

parcel items. 35%

A multi-modal logistics service provider

that provides total logistics and inventory

solutions, such as container haulage Revenue Group

LOGISTICS services, freight forwarding, shipping RM301 mil Revenue

agency, chartering, warehousing and 13%

distribution

A licensed independent ground handler

that offers a comprehensive range of flight- Revenue Group

AVIATION related services, such as air cargo handling, RM288 mil Revenue

in-flight catering, aircraft maintenance and 12%

engineering, and facilities equipment

 Our International business consists

primarily of cross-border solutions in which Revenue Group

INTERNATIONAL customers ship eCommerce items from RM147 mil Revenue

mainly China to various destinations around 6%

the world via the global postal network

Pos ArRahnu – A one-stop gold centre that

offers customers the flexibility of Islamic

microfinancing services as well as the

transaction, retailing and safekeeping of

physical gold.

Pos DigiCert – A licensed certificate Revenue Group

OTHER authority that is responsible for the creation RM97 mil Revenue

of digital identities through the use of 4%

digital certificates.

Data Pos – A dynamic mailing solutions

unit that provides a range of services

including data processing (formatting,

sorting & printing), enveloping, bulk mail

services, delivery and a suite of other

services.
1.6 GROUP CORPORATE STRUCTURE
1.7 WORKFORCES
2. INDENTIFICATION AND ELABORATION OF COMPANY PROBLEMS

“Looking Ahead Going Beyond” is the theme slogan of POS Malaysia Berhad. The Looking Ahead

is a way of maintaining edge to POS Malaysia Berhad by seeking mixture of transformation ideas with

broad objective. While Going Beyond is about expanding the income stream at the same time enhancing

the profit margin by transforming the traditional mail offered.

During year 2013, the global economic prospects showed an improvement though the path towards

recovery seems to be confined by fiscal and structural vacillation. Notably the promising economies

including Malaysia remained resilient and continued to show encouraging performance. The Gross

Domestic Product in 2012 has increased to 5.6 per cent compared to 5.3 per cent in 2011.

The domestic economic trends reflect the progressive reformation of the economy over the past

few decades. This structural reformation had given a greater supple policy in Malaysia which proved the

raise of macro landscape. While global macro landscape was moving slowly, the postal industry was faced

with the extensive use of digital technologies. Due to the digital wave, the demand of traditional postal

service is declining.

In 2013, Pos Malaysia recorded that the revenue of Ringgit Malaysia 1.27 billion was primarily

driven by courier and retail business. The courier and retail business, recorded the double growth supported

from strong demand, contract businesses and in addition from rapid expansion of parcel from online

businesses.

POS Malaysia Berhad courier service is handled by one of the business units known as PosLaju. In

order to improve time consume, PosLaju integrated seamlessly with service innovation. This study is to
examine the effectiveness of service innovation such as Prepaid Box and Envelope that widely used in

PosLaju courier system. It also to investigate whether the innovation in PosLaju courier system is able to

lower operation cost and enhances customer engagement especially for online businesses.

The problems indentification in PosLaju service innovation model will provide deeper analyses in

the issues of service innovation and recommendation to improve the issue to enhance consumer engagement

resulting in sustainable competitive advantage in the competitive courier industry. A good service

innovation can directly influence the communication (customers), experience (finding, using and disposing

the product), capabilities (organisation to create value stakeholders); and bringing better selfservice,

removing waiting time and granting 24 hours and 7 days access using technology devices such as web

browsers, mobile phones and kiosks (IfM and IBM, 2008).

3. INTERNAL ANALYSIS

Pos Malaysia, with a legacy built over 200 years, is on a transformation journey parallel to the

country’s rapid shift towards a digital economy. In 2018, the company reported losses. Pos Malaysia

recognize that business-as-usual is not an option. There is an impending need to not only enhance their

digital capabilities, but to transform the organisation across the board. The business model is evolving

alongside the highly competitive market conditions and disruptive technologies. Pos Malaysia

revolutionizing out strategy by monitoring market segments, reviewing people capabilities, and stitching

together the assets. This strategic transition will change the very essence of Pos Malaysia towards the new

era while at the same time meeting the Universal Service Obligation of the postal mail services.

Pos Malaysia transformation journey is spearheaded by digitalization. By tapping into the digital

potential, Pos Malaysia will continue to meet the evolving needs of the consumers while creating new

opportunities to build business.

Pos Malaysia is planning invest heavily in digitalization to improve customer experience, enhance

efficiencies and productivity. Pos Malaysia also focused on efforts on strengthening fundamentals, and

clearly identifying growth opportunities in the eCommerce sector and expanding our portfolio to include

more unique selling propositions. In other words, by innovating Pos Malaysia services, they will not only

able to compete with other players in terms of speed and response, but also reduce the operational costs.

Post Malaysia’s vast operational footprint has been established over many decades. They currently

have an unparalleled reach and access to the rural population, with opportunities to enable micro-businesses

and financially empower communities through direct employment, partnership models and incentive

mechanisms.

Through the Postal Transformation Plan for Sabah & Sarawak (PTPSS), Pos Malaysia have created

over 800 jobs for local communities while increasing their postal coverage in Sabah from 48% to 67% and

from 59% to 91% for Sarawak between 2010 and 2019. Under PTPSS, Pos Malaysia implemented the

Address-for-All (AFA) initiative to provide houses in rural areas with proper addresses, thus giving them
better access to essential services such as healthcare and banking. As of this reporting period, AFA has

equipped an additional 158,400 households from 1,791 villages with an official address. Additionally, their

Posmen Komuniti and Wakil Posmen Komuniti programmes provide rural communities with income

opportunities by appointing locals for delivery services.

Since the programmes’ establishment, Pos Malaysia have appointed 490 Posmen Komuniti and

252 Wakil Posmen Komuniti from over 240,000 villages, while expanding their postal coverage area.

Similarly, a key customer group that contributes to our overall revenue is SMEs, which they, in turn, feel

privileged to help empower and grow.

Pos Malaysia is aware of economic value that SMEs bring to the country, and have formulated

strategies to strengthen Pos Malaysia’s presence within the SME space. Through this, Pos Malaysia offer

an integrated SME solution through corporate partnership.

3.1 MILESTONE

Pos Malaysia Establishment

3.1.1 Pos Malaysia Berhad Nationwide Presence
3.1.2 LOGISTICS ASSETS

Freighter Aircraft 3

Bulk Carrier Vessels 2

Prime Movers 352

Lorries 344

Delivery Vehicles 3020

Motorcycles 6606
3.1 FINANCIAL & NON FINANCIAL HIGHLIGHT
3.2 FINANCIAL ANALYSIS AND PERFORMANCE
3.3 SHARE PRICE PERFORMANCE
3.4 FINANCIAL PERFORMANCE IS AFFECTED BY HIGHER COSTS

According to AllianceDBS Research Sdn Bhd, POS MALAYSIA BERHAD is affected by a higher

operation cost especially in manpower and transportation charges. This includes higher cross border charges

and rise on air freight charges.

Mail segment’s EBIT plunged 59% to RM13.6m in spite to stronger revenur of RM175m. This was

largely dragged by lower contributions from prepaid and franking segments which represents about 2/3 of

Mail segment’s volume.

However, the above were partially cushioned by Courier segment which recorded 3% growth to

RM18.5m. This was buoyed by higher revenue from walk-in customers and higher prepaid products

volume.

Retail segment recorded EBIT of RM9.9m but this was largely due to recognition of expired postal

orders of 25.5m. Excluding this, the segment would have recorded RM15.6m operating loss in 2QFY15.

Costs remain major near-term risk

Staff and transportation costs are POSM’s top two cost items (c.61% and 13% of FY14’s

expenses), and there could be further increases in both in the near future.
Outlook

Costs remain major near-term risk

Staff and transportation costs are POSM’s top two cost items (c.61% and 13% of FY14’s expenses), and

we think there could be further increases in both in the near future. This could be due to various factors

such as rising fuel costs (reduction in subsidies) and additional staff needed, in tandem with POSM’s

expansion plans in various areas.

Valuation

HOLD, RM4.30 TP. We have a HOLD rating on POSM and our RM4.30 TP is based on sum-of-parts

valuation comprising 13x Price-to-Earnings for its postal business and market valuation of its landbank.

Risks

Volume risks

POSM could continue to face declining mail volumes due to increased usage of the internet. However,

parcels and courier remain a growing trend in Malaysia.

Higher operating costs

Staff costs remains the biggest cost item, followed by transportation. Any future increase in wages and/or

fuel prices could soften margins.

3.5 OPERATING ENVIRONMENT

The postal industry, and Pos Malaysia in particular, continue to face challenges. The mail business

has been on an accelerated decline, largely due to the substitution from mail to digital. Total mail volume

dropped by 11% to 655 million in FY2019. The rapid conversion to digital and the need to serve increasing

number of postal addresses will continue to adversely impact the mail business in years to come.

Although disruptive and emerging technology is causing the mail volume decline, it also provides new

business opportunities. The booming eCommerce sector in Malaysia is projected to grow at 15% per annum.

Thus, competition for last-mile delivery is intense with over 100 courier companies sharing the market.

3.6 STRATEGIC DRIVER

3.6.1 Manpower

a) Digitally enabling our workforce to enhance their productivity

b) Strengthen areas relating to human capital management and development

c) Provide opportunities to improve livelihood of

d) our postmen via entrepreneurship programmes

3.6.2 Drive Digital Transformation

a) Invest in our core systems and digital platforms in line with the expanding digital economy

b) Provide best-in-class service rivalling new and existing competitors in terms of speed and quality

3.6.3 Efficient, Reliable & Fast Operations

a) Re-engineer operations to maximise utilization of existing assets

b) Leverage on crowdsourcing platform to meet the surge in last-mile delivery requirements

c) Competitive pricing to the market

3.6.4 Transform Touchpoints

a) Enhance customer experience in existing touchpoints via digitalisation

b) Rationalise retail touchpoints to become fulfilment centres for eCommerce

c) Bring touchpoints even closer to our customers via our new network of partner operators
3.7 SWOT ANALYSIS

Strength Weakness
i. Large user populations i. High staff and operating cost.

ii. Dedicated workers ii. Dependent on authorities to approve

postage rate.
iii. More contact points than most
businesses iii. Digital mail innovation
iv. Has the largest postal network in
Malaysia
v. Posses 38% market share: leading
domestic courier company in
Malaysia

vi. Provide variety of services including

transport logistic, printing &
insertion, counter collection, payment
agency services- bill payment,
insurance, unit trust

vii. Pos laju offered multiple services:

same day delivery, next day delivery,
time certain service, pos parcel, pos
express, pos laju tack on demand
pickup- more choice to customers

viii. Listed in KLSE

Opportunities
SWOT
i. Increasing demand in online sales. Threats
ii. Changing in technology: make i. Fluctuation of jet fuel cost.
transactions simpler and possible.
Robotics process automation ii. Competition from other rivals:
nationwide, skynet, Gdex, DHL.
iii. Revamp mobile apps Latest Airpak

iv. Delivery by drone iii. Irrelevant counter services

v. New web portal for parcel delivery iv. Higher cost of operation
quotation
4. EXTERNAL ANALYSIS

Pos Malaysia is committed to creating positive economic, Environmental and social impact, while

delivering value for their multiple stakeholders. Pos Malaysia embed sustainability principles into their

business model and integrate responsible practices into their own code of conduct. During the year, Pos

Malaysia efforts were channeled towards improving sustainability performance while fulfilling

transformation objectives. These included areas such as upskilling the workforce, expanding network of

postmen community, elevating customer experience, innovating product solutions and managing the

environmental footprint.

4.1 POS MALAYSIA SUSTAINABILITY FRAMEWORK

4.2 PESTLE ANALYSIS

4.2.1 Political

i. Government backed

ii. Greater investment in certification and security solutions

4.2.2 Environment

Pos Malaysia have implemented key carbon-reducing initiatives on their vehicle fleet to help reduce the

carbon footprint:

i. All commercial and private vehicles (excluding motorcycles) are subjected to mandatory

inspection. The inspection includes a smoke emission (for diesel engine) and gas analyzer (for

petrol engine) tests being carried out by PUSPAKOM once every 6 months.

ii. Pos Malaysia conducted On-the-Job-Training on Pre-Audit Profiling and Master Card Compliance

module to have better control on fleet card usage and fuel consumption. Best practices such as the

optimum loading, minimize engine idling and avoiding speeding were also enforced and reiterated

to all fleet drivers.

iii. Pos Aviation and Pos Logistics implemented Routine Preventive Maintenance Programs, which is

being overseen by their respective Facilities, Equipment and Maintenance (FEM) and Operation

Departments.

iv. Pos Aviation complied with FEM and Safety Standard Operational Procedures on spillage and

incident reporting guidelines.

v. Pos Logistics undertook approaches like Global Positioning System (GPS) monitoring and fuel

sensor system.
4.2.3 Social

Pos Malaysia has set to contribute to social and society by drive in promoting the importance of health and

safety at the workplace, establish training programs that strengthen and improve the skills of our talent for

their personal and professional development and engage with outreach projects that help with community

job creation and educational support.

Employees

i. frequent engagement programmes with employees across all levels of the organisation, which

enabled us to capture their feedback and cultivate strategies aimed at their general happiness.

ii. Conducted townhall sessions to help bridge the information gap between management and

employees, as well as align the goals and values of the organisation across all levels and keep

their teams up-to-date on key information, while the team can directly ask questions and

provide feedback.

iii. Conduct a regular occupational safety and health training regularly to ensure the incident rates

of accident is decrease.

Community

School adoption program and organized camps, motivational talks and academic trips to

educational places around Kuala Lumpur and Selangor. For the past two years, more than 200

students participated in the programmes. The schools that participated in the programme

demonstrated positive improvements in their students, with 88% of students passing their UPSR

exams (compared to 68% in the previous year).

4.2.4 Technology

Drive Digital Transformation

i. Launched eBusiness Service Platform (eBSP), which enables quicker customs declaration and

is integrated to DFTZ eServices platform for cross-border eCommerce business

ii. Deploy new core network with additional functions that support the growing courier business

requirements

iii. Revamp Mobile App with enhanced features such as intuitive UI/UX, delivery rescheduling,

marketing push notification and bill payment

iv. Introduction a new web portal for parcel delivery quotation and prepaid purchase, complete

with customer dashboard for easier management

Transform Touchpoints

i. Deployed 6,000 parcel lockers at 139 EziBox parcel locker locations

ii. Delivered over 460,000 parcels via 100 EziDrop drop-off machines

iii. Deploy parcel lockers at a total of 240 EziBox parcel lockers locations

iv. Launch self-service counters

v. Deploy eConnote system (printed consignment notes) in all Post Offices and Pusat Pos Laju

vi. Rationalise touchpoints whilst increasing number of partner-operated Post Offices

vii. Introduce new shuttling model to improve utilisation of IPC1 and IPC2 and reduce congestion

viii. Build a semi-autonomous mini-hub in Northern region to improve parcel processing efficiency

ix. Crowdsource last-mile delivery riders to meet surge demand

4.2.5 Legal

i. Post Act

ii. Restriction for pricing

iii. Challenge in pricing of software automation and high license fees

iv. Market liberalization policy for domestic asean and international

4.2.6 Economic

i. Digital transformation ensures our operational efficiency and optimum services to customers

ii. Innovative products and services support customer experience

iii. Efforts to promote entrepreneurship and create income opportunities through network expansion

and optimization

iv. Support to supply chain partners to grow and be responsible citizens introduced digital and mobile

apps that allow users to monitor and track their deliveries and conduct other services digitally

v. Improve Pos Malaysia cybersecurity network are part of our promise to safeguard the privacy and

personal rights of our stakeholders, which is fundamental to maintaining their trust.

vi. Socio-economic empowerment through network optimization

a. Address-for-All (AFA) initiative has reduced the number of houses in rural areas without

proper addresses. This initiative has provided official addresses to 158,499 premises,

increasing access to essential services such as banking and postal.

b. Pusat Internet is a postal agent programme - The main objective is to extend the postal

services to the rural areas at a minimal cost and at the same time contribute to the econom

of the local community. Through Pusat Internet, we are able to support online businesses

for the local communities in rural areas.

c. Posmen Komuniti and Wakil Posmen Komuniti programme is to facilitate deliveries

in rural areas and boost the socio-economic development of rural communities in Sabah

and Sarawak. Posmen Komuniti are locals appointed to deliver postal items, while Wakil

Posmen Komuniti are paid to have their premises used as a collection point for delivery

items. With the appointment of Wakil Posmen Komuniti and Posmen Komuniti, Pos

Malaysia provides additional income to the local community, while expanding our postal

coverage area.

d. Posmen Kejiranan initiative which was introduced in 2010, Pos Malaysia appointed local

residents as agents to provide the last-mile delivery to their community. Through this

initiative, we were able to improve the social economy of various rural communities. We

pay our agents a monthly allowance, depending on the frequency of delivery and

geographical factors.
4.3 PORTER’S 5 FORCES

Threat of new entrants