Gaining Competitive Advantage at Sea: An Overview of Shipping Lines’ Strategic Decisions
International Journal of Transportation Engineering and Technology
Volume 5, Issue 4, December 2019, Pages: 74-81
Received: Oct. 4, 2019; Accepted: Oct. 24, 2019; Published: Oct. 31, 2019
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Enrico D’agostini, Department of International Logistics, Tongmyong University, Busan, Korea
Hyung-Sik Nam, Department of Shipping Management, Korea Maritime and Ocean University, Busan, Korea
Seog-Hwan Kang, Department of Shipping Management, Korea Maritime and Ocean University, Busan, Korea
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The liner shipping sector has significantly changed in recent years. Largest shipping lines have expanded their business scope becoming global carriers and a recent wave of industry consolidation has profoundly modified the market structure and, consequently, the business models followed by liners. This, coupled with weak market fundamentals, generally poor balance sheets, and ordering of increasingly larger container vessels, has led each shipping line to follow a specific dominant strategy aimed at increasing market shares, margins and creating value for costumers. This article proposes an overview of the main market strategies pursued by the largest shipping lines. Through an analysis of major container lines strategies, the study aims at identifying what are the preferred strategies to gain competitive advantage. Particularly, the concept of diversification (product and geographical diversification), modes of diversification (internal and external), differentiation and concentration are comprehensively discussed and applied to the liner shipping industry. Furthermore, it tries explaining what are the most significant similarities and differences in market strategies in relation to the size of each shipping line. The review of our analysis suggests that 1) all shipping lines follow a hybrid strategic model with more than one individual strategy pursued 2) larger shipping lines prefer to diversify or differentiate 2) mid-sized shipping and smaller lines tend to pursue market concentration.
Shipping Lines, Strategy, Diversification, Differentiation, Concentration
To cite this article
Enrico D’agostini, Hyung-Sik Nam, Seog-Hwan Kang, Gaining Competitive Advantage at Sea: An Overview of Shipping Lines’ Strategic Decisions, International Journal of Transportation Engineering and Technology. Vol. 5, No. 4, 2019, pp. 74-81. doi: 10.11648/j.ijtet.20190504.12
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