ISSUE TREE
Issue Table
OPTION 1
Invest in replacing their current fleet of ships with liquid natural gas run ships to achieve sustainability goals
Market Attractiveness
- In 2012, U.S. based VC investors in clean technologies totaled $5 bil
- Clean tech investments represented nearly 1/5 of all VC activity in the U.S. (2013)
- Obama signaled a strong commitment to expanding clean energy & efficiency, calling for a doubling renewable power by 2020- increasingly lower prices
The market is attractive
Competitive Position
- Consistent financial performance, robust and diversify portfolio
- Technological advances
- Long Term Investment
- Corporate Social Responsibility
- LNG disables the vessel from traveling faster speeds
CRIME ON THE HIGH SEAS
Industry Information
OPTION 2
Design a software that would track shipments and generate full shiploads
Maersk Segmentation
Number of Employees: About 17,000 and 7,600 Seafarers
Fleet: 612 Total --> 47% owned + 53% charted vessels = 15% of industry operating fleet
Ship Lifespan: 8 yrs. VS. Competitors ships lasts 12-15 years
Market Segmentation
Industry Trends: Capital expenditure increasing whilst returns are declining, price correlation expected fr oil, oil field services
Industry Responses: Capital discipline, portfolio rationalization, canceled or postponed projects, focus on liquid natural gas
Maersk Group
Market Attractiveness
- Potential for $1 bil in savings per year for minimizing holding costs
The market is attractive
Competitive Position
- This would increase efficiency and their competitive position
- Reduce long term costs
- Measurable
- Technological advances
The Maersk Group is made up of five core businesses which include Maersk Line, APM Terminals, Maersk Oil, Maersk Drilling and APM Shipping Services
The Maersk Line is the global container division, and is the largest operating unit
- Parent Company: A.P. Moller-Maersk
- Category: Transportation
- Sector: Transportation and Logistics
- Tagline/ Slogan: Easy for our customers; efficient for us
- USP: The largest container ship operator and supply vessel operator in the world
IMPLEMENTATION PLAN
NPV CALCULATION
OPTION 1
OPTION 2
SCEQ
5 ELEMENTS STRATEGY
S:Overall profits are 9% higher than the industry average
-Has a commanding market lead, almost looks like a monopoly
C: Inefficiencies in operations and adoption of new technology into the core shipping line
E: First carrier company to introduce reliability as their form of success -Part of Maersk Group-Diversification of product lines
Q: Can Maersk maintain its growth facing inefficiencies in their operations as well as a desire to practice sustainably?