DSV’s udfordring i et presset marked med intens konkurrence og kapacitets udfordringer

Frederik Olesen Schjærff

Student thesis: Diploma thesis

Abstract

This thesis is a case study of the Danish transport giant DSV A/S and how they should gain future growth. Their recent acquisition of PANALPINA, entails a new business foundation that will be further elaborated on in this assignment. DSV PANALPINA A/S operates in a heavily pressured market, which also is affected by different capacity challenges. In order to assess which approach and strategy DSV PANALPINA must have, in order to achieve future growth, we examine the demand conditions and supply conditions in more detail. This is also to assess the market's attractiveness for DSV PANALPINA. The Freight Forwarder market is quite fragile and exposed to many risks and challenges. The demand is highly dependent on global trade and GDP and follows the same growth pattern. Therefore, macro conditions that affect the economy are very important for the future growth of DSV PANALPINA. Especially the rise of protectionism from the US and Donald Trump's trade war with China, causing rising tariffs and a big risk to the market growth. Conditions such as rising oil prices and the BREXIT situation will also change the demand and dynamics of the market. In addition to these macroeconomic conditions, there is also a tendency for a larger regionalization where production is closer to the end users. The industry is highly fragmented and characterized by an incredible number of providers, where the 20 largest Freight Forwarders only make up 30% of the market. The products and services are generally very standardized, and it’s difficult for the Freight Forwarders to differentiate from their competition. This means that customers often consider the services as a "commodity". Customers are very price sensitive and their bargaining power is a threat to the Freight Forwarders’ earnings. The customers can relatively easily change their current supplier / Freight Forwarder, which puts even more pressure on the pricing. Besides the customers' pressure on prices, there is a great rivalry in the industry and an intense competition. The biggest competitive advantage is to produce at low cost, which pushes the earnings and sets high demands for Freight Forwarders production efficiency. 5 The harsh conditions, challenge the strategic agenda for DSV PANALPINA and the other companies in the industry. Despite this, this thesis shows that DSV PANALPINA can continue to secure future growth. From a successful integration of PANALPINA, market penetration and winning market shares by selling more of the current products to current markets. The synergy of the PANALPINA acquisition and DSV expertise in operating an efficient machine means that DSV can be competitive on price and act as cost leader in a number of geographical areas. The industry is characterized by a big amount of M&A and this must continue to be part of DSV PANALPINA's growth strategy, in order to maintain and increase economies of scale

EducationsGraduate Diploma in International Business, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2019
Number of pages82