Mediterranean Shipping Company - Case Study Example

SWOT Analysis of Mediterranean Shipping Company Strengths Mediterranean Shipping Company has resource manpower. The primary strength of the company is its people. The workforce of the company are technically and managerially qualified and trained. The workforce of the company has exhibited flexible approach, and in certain cases has compromised upon their personal affairs for the sake of companys prosperity and progress. 2. The Mediterranean Shipping Company has relatively good access of the market of European Union. The company has its head office in Switzerland; therefore it has comfortable access with the vendors and market of European Union. The Europe is the focus of international trade; the overall trade of the EU countries is marginally above the Chinese and North American trade market. The company has access to funding of EU, and "improved access to training for itself and its many related beneficiaries through several initiatives and projects undertaken by the EU". 3. The strategic location of the companys head office has resulted in the development of business terms with several multinational companies based in Geneva particularly. The strategic location of Europe is another benefit for the company. The North American countries and China are at extreme ends of the world, and Europe provides an ideal route for the exchange of goods between these trade partners. The Mediterranean Shipping Company is therefore exposed to many business deals worth millions. 4. The company has established departments to deal exclusively the concerns and requirements of the customers. The policy of the company is customer centric, and all the routes and insurance plans offered by the company are designed as to benefit the customers. Such an approach has created several opportunities for the company. Weakness 1. The human resource related issues are common in very professional and developing company. The company develops a resource for itself, and sooner realises that the resource has resigned. The professional dynamics has although created opportunities for the employees, but as company Mediterranean Shipping Company has suffered several setbacks. The company needs to focus upon its retention policy, and has to take some concrete measures to reduce the number of drop-outs. 2. The manpower hired by the company has diversified professional exposure, but is also diversified in terms of cultural and ethnic background. The diversity within the manpower to greater extent is cause behind disciplinary action by the company against its employees. 3. The security arrangement and the tracking system of the ships is grey area. It is essential for the company need further improvement. 4. This European company has so far not established its regional offices in Asian market particularly India and China. The establishment of regional offices in these countries is essential to develop business relationships with the business companies especially involved in manufacturing of export goods. Opportunities 1. The company has numerous opportunities in the Chinese market. It is important for the company to establish its units in Chinese and Indian markets. Such an initiative will translate into business contracts between the business units and Mediterranean Shipping Company. 2. The going interest of China in the African region is an opportunity for the shipping company to explore. The Chinese has inked several trade agreements with the African countries. The shipping company should establish its units in African regions, and offer its services to the Chinese traders. 3. The ongoing war on terrorism offers another opportunity to the company. The government of United Kingdom and United States have recently announced their plans to increase the number of their armed forces. This will create another business opportunity for cargo, and the company should essentially avail this scheme at nascent stage. 4. The company needs to take lead role in the exploration of business opportunities for its vendor and partners. Threats 1. The ongoing economic recession has severely affected the purchasing capacity of the North American market, therefore the trade between North American and Asian counterparts is suspected to decline significantly in coming months. The transportation contracts shall therefore be revised, and all the future transportation plans are suspected to be curtailed. 2. The recent cases of attacks on the ships by the pirates especially across African region are challenge and threat for the company. The company has to devised security arrangement for its own ships, as in many cases the foreign countries have expressed their incapability to release the ships and offer protection to company’ employees. 3. The expansion projects undertaken by the company have to be curtailed. The collapse of the financial markets has drained the entire finances from the private sector. The private lending agencies are reluctant to invest in opportunities which are limited and trade driven. It is suspected that the world economy will take minimum 02years to re-emerge and initiate its journey towards economic progression. This minimum period of 02years is challenge for the shipping company. 4. The major challenge for the shipping company is to maintain its existing contract with the customers. 5. The Chinese shipping companies are potential challenge for the Mediterranean Shipping Company. The Chinese companies are severely curtailed business opportunities of many European and North American companies only because of its cheap labour and devaluation of Chinese currency. The same is now challenging for the European shipping companies. 6. The American economy will unlikely to ascend in coming years, therefore all the business opportunities with the American contractors are suspected to be declared void. This will be major financial setback for the company. 7. The ports and shipping departments of African region are sluggish, and therefore it will emerge as major challenge for the company to extract business opportunities under detrimental conditions. PEST Analysis of Mediterranean Shipping Company Political 1. The political challenges for the shipping company are insignificant. The company has established its network at places where the law and order situation is positive, and political situation is stable. The company is vulnerable to the political turmoil in the African countries. The sea voyage includes certain African regions, which are exposed to lawlessness and civil disorder. The company therefore finds a mammoth challenge for itself in securing protection of its property and employees. 2. The shipping business includes services from people of diversified background. Such diversification is responsible for internal split among the employees, and in specific cases can be responsible for treason or ambush. The possibility of such occurrence is low, but if occurs it will cause significant business loss. 3. The EU embargo on certain African and Asian countries will affect the number of shipment contracts. The shipping company in some cases has to undo its contract only because of the EU trade legislation. The EU has therefore certainly restricted the opportunities for the shipping company in some locations. Economic 1. The economic challenges have intensified; the ongoing economic turmoil has narrowed the business opportunities for industrialist nations. The cuts in the business plans have dampened the trade volume which subsequently affects the business plans for the shipping company. 2. It is important for the company to undertake expansion plans, and the units of properties shall be increased to offer effective coverage and support to the business customers. Unfortunately, the ongoing economic recession has barred support from the financial institutions. 3. The valuation of Yuan in the international market is challenge for the European and American shipping companies. The Mediterranean Shipping Company has to suffer due to its higher cost of service and employee’s remuneration only because the Chinese companies are able to support their employees at extremely low rates; and the industrial units within China offer cheap products which have strengthened the capacity of the Chinese shipping company. Social 1. The company has no social restraint. Technological 1. The company has to promote research and development unit. The shipping technology is magnanimous, and any damage to the shipping parts shall affect the shipment plans for months. The company has to therefore adopt stringent maintenance plans and has to focus upon the procurement of minimum inventory to support the ships on voyage. 2. The shipping company has to invest in the monitoring system for the machines. This shall be heavy investment, but will forecast any mechanical damage to the ship. Any mechanical issue will prompt the shipping crew at early stage, and will assist the employees in the identification of the issue much before it reaches advance level. The failure of the parts can be protected, and this will ensure the integrity of the parts. 3. The shipping company has to invest heavily to make the cargo loading and unloading process foul-proof. This will require technological improvisation. The company should necessarily focus on this area. References 1. Chua, W. F. Radical Developments in Accounting Thought. The Accounting Review. 2003. 2. Zahirul Hoque. Methodological Issues in Accounting Research: Theories and Methods. 2006. Spiramus Press Ltd. 3. 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