The Strategic Principles of the Maersk Line - Case Study Example

The Strategic Management Principles of the Maersk Line The significant complexities discovered from the international strategic platform for Maersk is in the usage of collecting primary and secondary data for marketing services. The complexity of the shipping industry is the main component that challenges international strategy marketing to adapt the characteristics and demographics of the services (Saunders 2007). The Maersk strategic organizational approaches outline the usage of specific in addressing the targeted needs within integration into the global market (Maersk 2010). The international marketing is normally considered to relate to the multinational process of planning and the execution of conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. The Maersk strategy line presents an approach that highlights the needed activities in shipping contents with no budgetary levels for the targeted audience. The strategy line reinforces the domestic marketing approaches for a business focused agenda of their particular country. In this retrospect formulates a very complex agenda due to several subdivisions of concerns from the main complexity of shipping industry culture. The strategy line demonstrates the implementation of social and the sociological dimensions within each port provides a hurdle for the international marketing researcher. The culture complexity is a dominant leading factor that creates these particular areas of focuses within the global markets (Pelsmacker 2006). The Maersk implementation the social culture awareness in the different regions of operations provides for an enforced protocol to streamline operations according to the goals. The power of culture transcends the values, morals, and at times laws compared to other land that presents a means to effectively consider when developing a marketing strategy. 1. Identification and analysis of key factors in external environment of Maersk to determine key issues driving the shipping industry. The Maersk innovation in driving the shipping industry that benefits from using demographic segmentation for targeting a business audience. The approach provides for the share of the customer in the market, high customer equity, and brand equity - that provides continued growth for business operations. The Maersk strategic innovation for the target markets and building profitable relationships with them presents the foundation of marketing management for the (Saunders 2007). The Maersk strategic line formula for the innovation contributes to the marketing management agenda is the philosophy for a design plan for a concise effort to synergize the driven marketing strategy. The following outlines the measure to targeting the delivering and communicating superior organizational structure: Maersk Line covers ports in almost every country in the world and offers multiple weekly sailings on all our major trade routes. Our local offices coordinating requirements across our modern fleet of vessels, containers, trucks, and trains. Our vessels are amongst the most modern, secure, and environmentally friendly to sail the oceans - we make sure cargo gets a smooth and safe voyage. Our containers cover the straightforward dry boxes to state-of-the-art controlled atmosphere reefers - in any size and type to suit customer needs. Maersk’s pursuit to successfully use concept outlined in the insight to identify the demographic segmentation, in which, the strategic management team will provide the organization correct protocols to implement. Some of the designed protocols that Maersk strategies applied is the methodology for achieving identifies and managing the current shipping trends. The targeted demographic is to divide the market into segments of customers and serving them directly with specific needs (Johnson and Zawawi 2000). In doing so, the innovations for structuring the organization will provide a stronger foundation towards reaching success the shipping industry. The benefits provide the customer base the superior product or service due to a more defined innovation of Maersk’s organizational structure. Over 100,000 customers globally More than 325 offices in 125 countries 22,000 employees world-wide Maersk container shipping and related activities generated a total revenue of over USD 28 billion and a total net profit of USD 205 million in 2008. More than 470 operated vessels A container fleet of more than 1.9 million container units An important element of our strategy is to keep up with technology To stay ahead of competition and to secure flexible, reliable and yet cost-effective operations For example we have used electronic email systems globally for more than 25 years Today, more than four out of five of our bookings are done electronically 2. Evaluation of strategic capabilities of Maersk and how it competes in shipping industry The streamline strategy was announced in December 2007, in which the application of improving competencies proved beneficial (Maersk 20100. The following is an analysis that highlights the core strategic conclusions: Crucial to deliver on the parameters that are decisive factors for our customers Reduce complexity and make processes more simple for the customers and ourselves Positive effects of separating Maersk Line, Maersk Logistics, and other container business activities in order for each company to focus on its core competencies Ensure satisfactory financial results these changes had to be carried out with immediate effect Fill our ships with profitable cargo   Provide the most reliable product to our customers       Provide a faster and more responsive customer service   Reduce complexity and cost The Maersk ability is to increase reliability and focus on delivering what we promise. This includes on-time delivery, improved billing and documentation, and quality customer service. Maersk will reduce the complexity of our procedures and ensure that customers have a fast and direct access to empowered front line staff, which holds the authority to make decisions closer to the customer. The following outlines how the areas of importance to improving the shipping processing operations to market changes and input from customers: We know from our customers what truly matters – they have told us: Customer Service Local authority Reliability Empowering the local organisations Building competencies within the frontline Doing away with complexity and ensuring a faster decision making process Freeing up time which can be spent on our customers Reliability is not just vessels arriving on schedule: A simple and reliable documentation process Containers that are delivered as we have agreed Consistent service from our front line Relevant, timely, and sufficient customer communication The pursuit for Maersk organizations is to acquire a profound structure that delivers results to meet objectives in a timely and within budget. Therefore, the Maersk insight in innovation in the form of creative shipping processing in a timely many provides an increase of the targeted audience. The strategy for identifying the platform in formulating an effort that provides the winning strategy to reach the company’s goals. The strategic management team plays a pivotal role in accessing the criteria’s for demonstrating a method to utilizing the projection in steering the company appropriately (Chitty, Barker, and Shimp 2005). The Maersk organization can proactively hone on the benefits for community such attributes required to delivering detailed-results for senior management. The strategy for defining the critical aspects provides for a desired outcome for all management personnel in leading the change management effectively. The strategy line concept for the Maersk organizations in creating non-destructive environment provides for fundamental basis to succeeding in projections in the long term profit margin. The following review of the concepts will foster on the streamline of criterion that allows a steady formation to synergize the core attributes of the organization management team: To deliver reliability we need the support from you to: Give realistic forecasts Deliver volumes in line with commitments Provide cargo with a revenue that generates satisfactory contribution In return Maersk Line will favour this cargo by providing: Prioritisation of cargo in general Space commitments during peak seasons Future contract commitments based on past performance The discovered forecast for global container demand in 2009 is at levels similar to seen during the last recession with high risks of a further downward revision. In addition, the recession in 2001 was inventory driven and therefore container demand rebounded within a year (Maersk 2010). However, the pace of recovery in container demand is likely to be slower based on a slower recovery of the US economy. Furthermore, the proejction provided for a widespread global impact of the credit crunch and slowing emerging economies. 3. Explanation and justification of key strategic issues affecting Maersk over 5 years. The key strategic issues affecting the Maersk over 5 years rleates to the the supply and demand differential in 2009 that is greater primarily due to the large orders due for delivery. In doing so, the next future years will be coupled with low demand the supply/demand gap is expected to remain wide for a longer period. The comparison assessment presents the previous cycles in the supply/demand balance is expected to gradually improve from 2010 up to 2016 (Maersk 2010). The shipping orders provides for the the balance improving sooner than expected – it would depend on a cost analysis of keeping a ship idle vis a vis penalties for getting out of contracts. Nominal Capacity Growth Global Supply/Demand Balance The identified supply demand index expected to decline very sharply in 2009 based on sharp contraction in demand and the huge overhang of capacity. More importantly, the index continues its downward trajectory up into 2010 although the index does not fall as sharply as it does from 2008 to 2009 (Maersk 2010). The identified data projectsion in 2011 but even then is expected to remain way below the 2001 levels which was the trough of the last cycle. Furthermore, the current level of freight rate increases unacceptable especially on the Asia-Europe trades for the Individual carriers (Maersk 2010). The projections of rate increases, however, the collective action made harder by abolition of conferences. The Maersk approach for the usage of network rationalisation to adjusting capacity to the low demand level that is done within a cost benefit framework. Current economic crisis means increased focus on reducing costs for both manufacturers and retailers on both raw material and finished goods inventory. The proejction Maersk towards just-in-delivery of raw materials as well as lesser stocks on finished goods to demosntrate a lower demand balanced. The global sourcing lead times provides for the consolidation of suppliers both from a cost optmisation perspective (Maersk 2010). The overall projection presents the Maersk approach to focus on a risk management of smaller suppliers due to the downturn. The Maersk managed inventories, additionally, prpovdes for a very financially healthy, stable and reliable carrier. The identified capacity growth rates has been dropping from the peak growth of +16% seen in 2006 and is expected to drop to 7-10% in 2009 and 2010 (Maersk 2010). Therefore, the present startegy line accounts for a non-concellations and slippage in a negative manner that halts the progression of the company’s goals. The strategic management fundalmentally contraction in demand and marginal growth in 2010 creates the streamline of producing a trouble free Maersk Line. In doing so, the stable carrier in these financially risky times provides the Maersk as the most reliable carrier in the shipping industry. References Chitty, W. & Barker, N. & Shimp, T.A. (2005). Integrated Marketing Communications. Melbourne: Nelson. Johnston, J. & Zawawi, C. (2000). Public Relations Theory and Practice (2nd ed). Sydney: Allen & Unwin Maersk Incorporated (2010) Official Website of Maersk, retrieved from http://www.maersk.com Pelsmacker, Patrick (2006) Marketing Communications: A European Perspective. Financial Times/ Prentice Hall; 3 edition Saunders, Mark (2007) Research Methods for Business Students. Financial Times/ Prentice Hall; 4 edition Read More