Corporate and business Strategy – Meli Sea case study
Giovanni Costa Company Strategy -- Individual Assignment 7th Foreign MBA Part-time
Corporate Strategy - Meli Sea case study
Giovanni Costa Corporate and business Strategy -- Individual Job 7th Foreign MBA Part Time
1) Container delivery industry provides consolidated over last years from above 100 providers to just 15
global players accounting today for roughly 80% of amount, mostly centered in Asia-Europe
and Asia-North America shipping lane (see demonstrate 1 to get details about volume level growth over
Entering trans-oceanic container shipping and delivery market to get a regional established company fairly
little compared to its main competitors (e. g. Meli Marine with respect to competition, see
exhibit a couple of for details) is a strategic decision that needs to take into account a large number of factors. In
particular, aspects affecting attractiveness of container delivery industry will probably be explored trough
pursuing Porter's five forces examination:
New traders: - Probably the most significant barriers to enter the trans-oceanic box shipping
market (e. g Asia-North America and Asia-Europe) is made for sure the large initial
investment required to acquire big-size vessels fleet. The average size of container
shipping boat had reached 10, 500 TEUi by 2007 and is also continuously developing
powered by best players race to improve their very own per-container revenue figure. The shipping
industry can be heavily asset-intensive and its set costs (e. g. navy ownership,
maintenance and insurance costs, port charge and overhead) take into account roughly
half of total costs composition.
Super-sized vessels navy implies, naturally , large first investment and also lager
fixed costs that need to be paid out by optimum utilization of improved capacity.
- In fact , only top rated players currently well established in major plug-ins of Asia, Europe and
United states can of course profitably leverage about economies of scale and mitigate
imbalanced packing factor more than trans-continental tracks, due to current trend of
american companies continuously relocating all their production in Asia. By contrary, a
organization based in Asia, with no existence in other parts of the world, will be
initially strongly punished of asymmetrical capacity usage on most popular trans-
oceanic shipping lanes.
Customers: - Customer's base of the industry is simply composed by freight forwarders and
retailers. Since 2007 practically 60% of volume transport over transoceanic routes was
driven by freight forwarder and major stores (e. g. Wal-Mart, Target). Such a
Giovanni Costa Company Strategy -- Individual Task 7th Foreign MBA In your free time
concentration of the demand and high competition amongst many employees offering
undifferentiated cargo service set big suppliers and shipment forwarder in a strong
position once negotiating with vessels providers.
-- Switching cost from one agent to the various other is very low, contributing obviously to
further boost the bargaining power of major buyers in front of vessels operators
when discussing contracts circumstances and prices.
Suppliers: - Negotiating power of boat operators vs . suppliers would instead increase in case
of broadening to the transoceanic shipping industry because of improved size of the
business. Better legal agreements conditions and prices could be discussed in case with
fuel suppliers, maintenance companies or terminal operators.
- By simply contrary, a side effect of expanding alternative could be the lowering of negotiating
electrical power versus key container providers reluctant to supply 'feeder' assistance for their extra
tonnage capacity to regional companies perceived as competitors in some of their
served transoceanic routes.
Alternatives: - As of today container shipping and delivery industry for global trade service relies almost entirely