Consolidation Strategies in the Container Shipping Industry: Competitive Analysis of Horizontal Mergers and Acquisitions and Global Strategic Alliances

David Polestyuk & Noemi Olah

Student thesis: Master thesis

Abstract

The aim of the research is to provide a better understanding of the market forces shaping the low-margin container shipping industry highly important for the global trade, and to identify and analyze the resource capabilities of the static and dynamic consolidation strategies (M&A-s and strategic alliances respectively) that could provide sources of sustained competitive advantage (SCA) for container liners. A deductive approach is used whereby the resource-based view (RBV), relational view and complementary theoretical perspectives provide the foundations for the exploratory research. For evaluating strategic resources and capabilities, Barney’s (1995) VRIO model provides the framework of the analysis. This research updates the existing literature on horizontal M&A-s in the industry as a time gap exists, and uses the VRIO tool that has not been applied to industry consolidation methods before. The results show that various strategic subsidiaries owned by the M&A-partners could potentially lead to SCA, such as port operation and/or freight forwarders. The combination of assets (vessels), IT systems, and product offerings do not lead to SCA per se, but might provide economies of scale benefits. Moreover, global strategic alliances are deemed valuable and are currently a prerequisite for large scale operations on the major East-West trade lanes. However, an intra-alliance competition is present and due to the opportunistic behavior of member parties, resources are not shared among the players and therefore are not considered rare and inimitable in the alliance networks. The results imply that in order to exploit SCA, managers should look for ways to integrate with other actors in the container chain or in external industries.

EducationsMSc in Supply Chain Management , (Graduate Programme) Final ThesisMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages78
SupervisorsRené Taudal Poulsen