Shipping strategies before, during and after 2008 financial crisis : a critical analysis

• Main Author: Soon, Yoke Ching
• Other Authors: Chew Ah Seng, David
• Format: Final Year Project
• Language: English
• Published: 2016
• Subjects: DRNTU::Engineering::Maritime studies::Maritime management and business
• Online Access: http://hdl.handle.net/10356/68141
• Institution: Nanyang Technological University

Many studies have been conducted to investigate the relationship between the strategy and performance of companies in various industries, such as construction and manufacturing industries. Similarly, shipping companies implement strategies on corporate, business and functional levels and its performance can be influenced by many factors, such as the external environment. Events like 2008 financial crisis have also highlighted the need to examine and evaluate the strategies and performance of shipping companies as the shipping markets were not spared from the effects of the global economic crisis. This report aims to examine and evaluate the strategies and performance of the dry bulk shipping companies before, during and after the financial crisis. The report also aims to identify strategy-related factors that affect performance of dry bulk shipping companies and determine if the relationship between strategy and performance of dry bulk shipping companies is static or dynamic. This research will be conducted through interviews with top and middle management in dry bulk companies, analysis of annual reports and literature reviews. In order to provide a wider perspective, the author’s team members will also conduct the research in the container and tanker shipping sectors. A total of 10 interviewees from the three shipping sectors were interviewed for this research project. Discussion with the three interviewees from the respective dry bulk shipping companies revealed that the common strategic focus of all three companies prior to the crisis was profit maximization and fleet expansion. There was a shift in strategic focus after the crisis where companies focused on minimizing risk exposure and maximizing cost savings through optimization of fleet performance. All three interviewees agreed unanimously that the strategies implemented did allow them to achieve the desired performance level most of the time. Interviewees cite strategy-related factors such as strategy implementation and having the right resources as major challenges faced in the strategy planning process that affect companies’ performance. Lastly, all interviewees agree that the external environment plays a significant role in both the strategy planning process and company’s performance. A cross sector analysis revealed largely similar results in the container and tanker shipping sectors as well. It is concluded from the results that the relationship between strategies and performance is dynamic. However, results of this report are limited by the lack of detailed information on the respective companies’ strategies due to confidentiality reasons cited by the interviewees.