Business model of the Singapore Bus Services Essay


The construct of concern theoretical account is a utile tool with many aspects used to analyze and pass on the kernel of a concern. It is believed that a concern might win or neglect depending on its concern theoretical account ( Tikkanen, Lamberg, Parvinen, & A ; Kallunki, 2005 ) . In add-on the thought of the importance in construct determines the concern theoretical account elements and its architecture where it was born out of the demand to understand and explicate the new ways of making concern. If the concern theoretical account is termed to hold long-run public-service corporation, there must be consensus on what a concern theoretical account really is and how it should be represented.

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In this essay, we will look at the concern theoretical account of the Singapore Bus Services ( SBS Transit ) and interrogate its concern theoretical account to understand how the company do money through the interaction between its service market and capital market. The BCG matrix will be used to analyze and measure the services provided by SBS theodolite and how it can farther better to maximum its net income. The internal construction of the company will be touch on to let us to understand how the company works to run into commuter’s outlooks.

Background of SBS

SBS Transit is a taking coach and rail operator in Singapore, with a day-to-day norm of more than three million riders on the extended coach and rail web. They believe in supplying a better going experience to its client and invested extensively in engineering and preparation, invariably upgrading its operations and people ( SBS Transit ) . SBS were formed in 1973 through the amalgamation of three private coach companies ; they grew rapidly and were listed on the Singapore Stock Exchange as Singapore Bus Service by 1978. The Company was renamed as DelGro Corporation Limited with a subordinate, Singapore Bus Services Limited where they were listed individually on the SGX in November 1997. In November 2001, Singapore Bus Services Limited had changed its name to SBS Transit Ltd to reflect the new bi-modal position as a coach and rail operator when they won the license to run the North East MRT Line. SBS Transit became a portion of the ComfortDelGro Group when Comfort Group and DelGro Corp merged to organize ComfortDelGro Corporation in 2003, one of the universe ‘s largest land conveyance companies. As portion of an international, multi-modal conveyance company, they have been able to leverage on the Group ‘s extended resources, expertness and cognition to convey about higher degrees of service and comfort for the Singapore commuters.

SBS Transit aims to supply a first public conveyance which is safe, comfy, low-cost, dependable and friendly to all Singapore commuters. Today, they operate about 250 coach services with a fleet of more than 3,200 coachs. The coachs serve 17 interchanges and more than 3,500 bus Michigans island-wide. The North East MRT Line which is the universe ‘s first to the full automated, belowground heavy rail system that connects Punggol to HarbourFront, every bit good as the Light Rail System in the Punggol and Sengkang new towns. SBS Transit besides operates the Downtown Line. When to the full completed, this 42km line with 34 Stationss will be the longest belowground line in Singapore. The first phase of the Downtown Line commenced rider service on 22 December 2013. The 2nd and 3rd phases will be ready in 2016 and 2017 severally.

Service Market

Necessities such as nutrient, vesture, and shelter are classs that falls under the “bought” services. These necessities have expanded over clip which includes cyberspace, cell phone, transit and computing machines. Bought points have to go portion of how we live in our day-to-day lives ( Fannin ) . With a little state like Singapore, the public conveyance was intended to function Singaporeans who do non have private autos and affordability was a cardinal factor to the commuters ( Bin & A ; Ching, 2013 ) .

The three chief services that SBS Transit provides are viz. the coach service, the rail service and the out-of-door advertisement and rental service. The coach service is Singapore’s largest scheduled coach service operator with 75 % of the market portion. In order to provide to different commuter demands, 255 coach services were operate that comprises of 201 basic services, 31 premium services and 23 niche coach services. For the twelvemonth of 2013, the fleet of coachs operated about 31,000 trips and ferried a sum of 973.5 million riders on a day-to-day norm. Operating hours for selected coach services were extended during gay season such as Christmas and New Year. For events like the F1 Grand Prix dark races, four particular tardily dark paths were put into service to complement the drawn-out train hours.

The demand for rail services remains strong in 2013 with more than 204.8 million rider trips made with an addition in day-to-day ridership on the North East Line ( NEL ) grew by 6.1. The first stage of Downtown Line which opened for service on 22 December 2013 had a ridership record of about 670,000 rider trips in its first 10 yearss of service. The addition in rider demands were approximately 2,500 extra hebdomadal trips added to the agendas of the LRT systems. Train operating hours were besides extended during major events and public vacations. The advanced usage of advertisement and rental infinite has become an extra beginning of auxiliary income. Ad is undertaken by the sister company, Moove Media Pte Ltd where they faced a ambitious twelvemonth in 2013 as advertizers scaled back on their budgets due to the decelerating economic system.

BCG matrix

The BCG matrix by the Boston Consulting Group allows us to sort and measure the services provided by SBS. This determination doing tool balance the activities of a company among those which make net incomes, those that guarantee growing, those which constitute the hereafter of the house or those who are its heritage ( Jurevicius, 2013 ) . With this tool, development policies of the company are able to be identified.

The coach services would be classify under the hard currency cattles where it has a high market portion among the three services provided by SBS with a slow growth industry. Small investing is required for the coach service as it has established its repute to provide to the different groups of consumers. Hence, excess hard currency generated can be used to put in other concern units.

As for the rail services, it would be classified under the stars with high market portion in a fast growth industry. With increasing rider demand hebdomadally, rail service has to make something to maintain up with its demand such as holding more frequent train services. The rail services may bring forth hard currency but because it is a turning market, more investing is required to keep their lead by coming up with new Stationss to run into the demand of the commuters.

Last, the out-of-door advertisement and rental services would be classified under the Canis familiaris with low market portion in a mature industry. SBS Transit had made a loss in 2013 due to the decelerating economic system. This service generates low or negative hard currency returns which might seems as it is non deserving puting. However, run and charities events are ever put up to make out to people. This might be profitable in the long tally when companies and single being to be cognizant of such service.

Image exacted from: ( QuickMBA, 2010 )

Capital Market

The gross of SBS Transit had shown a changeless addition of gross over the past 5 old ages and in 2013, there is an addition of 6.9 % from $ 792.3 million to $ 847.3 million. Gross from coach operations grew by 7.3 % which is fuelled by ridership growing of 3.1 % despite of lower norm menus charged. Gross from rail operations increased by 6.9 % which is attributable to the ridership growing of 5.8 % on the NEL and 11.2 % on the Sengkang/Punggol LRT systems every bit good as the beginning of rider service on the Downtown line. Gross from the advertizement concern fell by 5.3 % due to a bead in bus advertisement gross revenues while on the other manus, gross from the rental concern addition 22.1 % . The addition in gross of $ 55.0 million at the Group degree was less than the addition in operating disbursals of $ 64.9 million chiefly due to higher pay costs, higher fixs and care costs, higher depreciation and higher premises costs.

As a consequence, operating net income fell by 38.9 % to $ 15.5 million. Finance costs due to increased adoptions to fund the purchase of new coachs besides increased by 51.5 % or $ 1.5 million to $ 4.3 million.

For the first clip since 2007, the rail concern incurred an operating loss of $ 5.8 million due chiefly to higher staff costs mostly from the readying for the start-up of the DTL 1 and higher fixs and care costs, offset by higher rail menu gross and lower electricity cost. If non for the DTL 1 start-up costs, the operating net income for the rail concern would hold increased by 22.4 % or $ 2.5 million to $ 13.6 million.

Net incomes per portion were 3.62 cents which is 39.8 % lower than the old twelvemonth, while net plus value per portion increased by 0.9 % to 112 cents. At 31 December 2013, the entire equity for the Group increased by 0.7 % to $ 344.3 million due to net incomes generated chiefly from non-bus and train operations, which were partly offset by the payment of dividends.

Internal architectural

The transposing public expected good quality in public conveyance services and operators at the same clip had to maintain their net incomes healthy. Regulating the conveyance menus was important and of import in equilibrating between affordability, profitableness and quality. With authorities engagements and subsidies being the key instruments to keep the right balance, SBS Transit is able to run into commuter’s outlook. Since 1987, the tripartite tensenesss of guaranting profitableness and acceptable quality had been the undertaking of the Public Transport Council ( PTC ) , which regulates the conveyance menus for both coachs and tracks.

Image extracted from: ( Bin & A ; Ching, 2013 )

Three-legged Stool

Safety and security are cardinal elements of the coach and train operations, with this importance SBS Transit places strongly in their policies, processs, developing and community battle programmes. The Driving Skills Enhancement Programme ( DSEP ) was developed to concentrate on our Bus Captains’ safety driving accomplishments, it uses gesture detectors, cameras and mapping package to step and analyse drive wonts where Bus Captains will be given an nonsubjective study of their impulsive public presentation. The programme was reviewed and customised for two distinguishable groups of coach captains ; one with less than six months of service, and the other for those with more than six months of bus driving experience. The first group focuses more on supplying developing on nucleus safety accomplishments with common driving mistakes highlighted while the more experient group focused more on defensive drive. To complement the preparation in safety drive, safety messages were put up on electronic shows at the issues of interchanges to remind coach captains of the demand to be safe as they head out on their paths. Safety cheques conducted by safety officers have besides been stepped up at junctions and prosaic crossings to guarantee SBS Transit coach captain put into pattern the accomplishments learnt in preparation.

Continuous investing was topographic point on preparation and developing its people. To guarantee new coach captains are able to run all three types of coach theoretical accounts in SBS’s fleet. Besides proficient accomplishments, coach captains besides attended the Continual Operations Training to review their cognition and accomplishments in managing on board client issues and incidents such as differences, dislocations, and fire safety. In 2013, more than 1,692 coach captains attended this class with a sum of 1,072 new coach captains successfully certified under the Workforce Skills Qualifications ( WSQ ) programme in bus operations while other 1,359 bing coach captains were certified under the “Recognition of Prior Learning Scheme” . This means that all bing BCs have achieved this enfranchisement which is designed to professionalize and raise competence criterions of public conveyance workers. In client service preparation, the CARES programme tallies on two analogue paths, with CARES 1 anchored in eight service criterions to present quality service to commuters and CARES 2 which focuses on clients with particular demands and service sweetening techniques.

The staff committedness to excellence has been recognised in the awards received. For the twelvemonth of 2013, a sum of 1,205 staff received the national Excellent Service Awards ( EXSA ) while another 120 staff received the Transport Gold Award for service bringing. Five coach captains were besides spotted showing courtesy on the route by the Traffic Police and awarded the “Courteous Motorist Award 2013” . Another 369 staff received internal acknowledgment during the Annual CARES Award Ceremony for systematically pleasing the commuters.

Corporate Social Responsibility

SBS have reach out to the community by funding legion charitable undertakings and offering free conveyance services to the aged occupants of Kwong Wai Shiu Hospital. Cash contributions were besides contributed to several community outreach programmes. Free use of infinite at the coach and rail Stationss every bit good as advertisement infinite on the coachs and trains were offered to back up charities and community attempts. On an single degree, SBS’s staff are encourage to actively participated in the Community Chest’s SHARE programme where a fixed sum of parts is deducted from their monthly wages and contributed to the charity on a monthly footing. In order to protect the environment, older coachs were replaced with environmentally friendly 1s. In 2013, a entire figure of 2,269 environmentally friendly coachs which include Euro 4, Euro 5/Euro 5EEV and Compressed Natural Gas theoretical accounts were ain by SBS to guarantee that they play their function in being environmental responsible.


In decision, it is clearly stated that SBS theodolite is a bought service that is necessary for most citizens to devour. The BCG Matrix let us to measure and understand the classs that each person services falls in and do better hereafter determination to convey profitableness in long term. Understanding the capital market of the concern besides give us exact fiscal figure to cognize precisely how good the concern is making and it future sustainability. Last, the internal construction is the most of import factor to be considered in a concern as it forms the skeleton of the concern such as how it operated and how it trains it staff to supply quality service bringing. Without the internal construction, the concern might loss it way to accomplish its concern end.


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