Essay on meli marine

760 Words4 Pages
Strategy - Individual Assignment With regard to the Meli Marine case (which has been illustrated in class) 1. What are the most significant factors affecting the attractiveness of the container shipping industry? Overview Macro trends affecting attractiveness of shipping industry regards 1. Overcapacity. In the next few years freight rates and margins will be challenged due to overcapacity and required investment to operate with larger ships might not be repaid. 2. Oil prices fluctuations. Government politics can affect oil prices have major impact on cost structure. In the future latest vessel with low oil consumption technology might became industry standard and could require lot of capex leading to further competitor consolidation. 3.…show more content…
Not relevant Governmental and legal barriers. Regulatory scrutiny had lowered cooperation among player Retaliation (actual or threatened). Threat of dumping in niche market by larger competitors POWER OF BUYERS – HIGH The importance of the product in the buyer’s cost structure. Not relevant Product differentiation. Not relevant The level of competition among buyers. Not relevant Size and concentration of buyers relative to suppliers. Freight forwarders and major retailers are very large customer with high level of bargaining power. In 2007 they accounted for 60% of total volume of Asia to North America trade routes. Switching cost. Very low Buyers’ information. High, not relevant Ability to integrate vertically (backward). Very low POWER OF SUPPLIERS – HIGH Ships outsourcer – limited power since they provide undifferentiated service Ships provider – High Oil supplier – High THREAT OF SUBSTITUTES – LOW Container shipping account about 90% of exported goods total volumes. Airplanes can be used but they have lower capacity and higher costs COMPETITION – HIGH Cooperation (“conferences”) had diminished putting downward pressure on prices Shipping service is undifferentiated. However Meli Marine seems to be able to offer some kind of unique customer relation service. This allows them to retain customer and prices Largest player are tempted to 2.What strategy does Meli Marine have for competing in this industry? Overview Meli Marine is the
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