Friday, April 5, 2019
Overview Of Mitsui OSK Lines Commerce Essay
Overview Of Mitsui OSK Lines Commerce EssayIntroduction to Mitsui OSK linesMitsui OSK lines ( gram molecule) atomic number 18 a Japanese fascinate company which has unspecific range of business. OSK lines were a gondolago ships company which was formed in 1884 and Mitsui was formed in 1942. During the major consolidation in Japanese shipping markets Mitsui OSK lines was formed in 1964, following the jointures of two companies OSK lines and Mitsui. (Mitsui OSK lines, 2010). after(prenominal) the formation in 1964 they launched specialised car mailman in 1965 and then full container ships in 1968. later on on they besides entered the LNG market and too launched the double hull VLCC in 1995. As a outline to expand their container services coering North America, Asia and Europe jetty joined a world(a) merger know as The New beingness altogetheriance (TNWA) with Ameri target president lines and Hyundai Merchant Marine. (Panama Canal authority, 2009). In one of the biggest mergers in Japan Mitsui OSK lines (2nd gargantuanst in Japan) merged with Navix lines (4th rotundst in Japan) in 1999. After the merger with Navix lines, jetty became one of the biggest maritime carriers in the world (Japanese Times, 1998). The groups headquarters atomic number 18 in Tokyo, Japan. The company has in wide 533 subsidiaries and affiliated companies in 66 countries with a consolidated work force of 39,864 employees (Annual report, 2009). Its main beas of operations argon shipping and shipping related activities.Source Mitsui OSK lines, 2010.As seen from the above chart bulwark has a wide range of ships such as containers, pure car carriers, Bulk carriers, Tankers, LNG carriers, and separates. bulwarks core business segments atomic number 18 its majority ships, container ships. (Mitsui OSK lines, 2010). In addition to ships they atomic number 18 in logistics services such as distribution and inventory control, impart cargo transport, construction and engineer ing, real estate, job and R D. (Mitsui OSK lines, 2010). gram molecule has 861 ships as of 31st March 2009 with a carrying capacity of 59,643 thousand tons. In terms of number of ships and deadweight jetty ranks the worlds largest shipping company in the world ahead of NYK and COSCO (Mitsui OSK lines, 2010).Source Mitsui OSK lines, 2010.It has the largest Dry bulk breathe in the world with fall out coat of 356 ships with a combined deadweight of 31026 million tons (Mitsui OSK lines, 2010). counterspy is ranked first in terms of operation of LNG ships. correct after the financial crisis, the bunker prices at sky advanced rates and a strong languish in FY 2008 MOL posted their second highest annual income till date. This was more collect to the strong doing in first half of 2008. Their revenue for FY 2008 was 18,994,218 thousand dollars with net income of 1292752 thousand dollars.Source Mitsui OSK lines, 2010.Source Mitsui OSK lines, 2010.Innovations and oppositewise act ivitiesIn 2001 MOL launched its corporate principles to promote and protect our environment by maintaining strict, safe operation and sailing standards (Mitsui OSK lines, 2010, p.1). As per their principles they launched the 24hour manned (SOSC) Safety Operation Supporting Centre in the Head Office which monitors all MOL vessels position all around the world. MOL is alike heavily involved in look and development. In December 2009 it displayed its concept of impudently generation vessels. The car carrier which is environment friendly they strain it a HBRID car carrier, i.e. it uses renew fitted energy for ships electricity supply. The current president of MOL is Akimitsu says he trust to create an excellent and resilient MOL group that contributes to sustainable worldwide ripening (Ashida, 2009, p.1)HYBRID cable car CARRIERSource Mitsui OSK lines, 2010.Theory of SWOT analysisW = WEAKNESSS = STRENGTHT = THREATSO = OPPORTUNITIYSource Author generatedThe central purpose of SWOT analysis is to identify strategies that align, fit or match a companys resources and capabilities to the withdraws of the environment in which the company operates (Hill Jones, 2001).The true sense of SWOT analysis lies in its efficient use of rendering the company with its true picture of internal and external threats to the organisation. The predominant system of SWOT is by bifurcating it into external and internal factors.Internal factor comprises of strengths and failing of an organisation and the people who stigmatize the organisation standards. External factors argon its opportunity and threats that are from its competitors and fellow companies. (Wang, 2008).True analysis helps the company company its agenda and helps excel to sustain in the competitive market. It is the model that helps it restructure the organisation to be able to sustain the competition. SWOT matrix scum bag be apply by managers to create various kinds of product strategies. In the matrix there ar e four personate of combinations which can be used. (Wang, 2008).SWOT hyaloplasmOpportunitiesEXTERNAL FACTORSWOSOSTWTThreatsStrengths flunkINTERNAL FACTORSSOURCE Wang, 2008SO It is a combination of using strength of an organisation to grab the opportunities.ST Using the strength of a company and company members to fight threats. Threats can be internal or externalWO This combination helps fight weakness to open up new opportunities.WT Weakness and threats these strategies are defensive in nature and helps to act in the positive direction to accomplish the set targets of the organisation.SWOT AnalysisStrengthsStrong revenue growth Its core shipping business is its bulk shipping. These are primary responsible for the growth of the company. It contributed to 86% of the revenue for the group. This increase in its major divisions provide enkindle the companys growth and leave also help it in expanding its market share (Mitsui OSK lines, 2009).Diversified business portfolio MOL has a change occur ranging from ship operations to logistics. The logistics division of the fleet supports its shipping division. Due to its diversified fleet it can cope up with short term market fluctuations and also it can enamour them. It also helps the group to enter into a market with wider customer base. (Mitsui OSK lines, 2009).Large fleet size With heed to number of ships MOL has one of the largest fleet sizes. The group has the largest fleet of ships for Bulk and LNG. With this large fleet size it can service its customers better and also it improves the bargaining power in the market (Mitsui OSK lines, 2009).WeaknessesGeographic stringency MOLs main cope area is near the Japan coast and it is mainly catering to the Japanese market. For the FY 2007-2008 95% of its revenue was earned from the Japanese market. Over dependence on Japanese market makes its business forged as it is completely depend upon the economy of that country. It faces a competitive disadvantage every place other companies due to its absence from the appear markets in Asia. (Mitsui OSK lines, 2009).Economic downturn pass on prompt the company as it is only when dependent upon Japanese markets.Slow growth and minimum profit margins in container market allow for affect the companys net income, due to the presence of container market drivers such as Maersk and MSC.High debt burden MOL suffers from secure Debt for the year ending 31st March 2009. As MOL has such a high debt it will affect on the groups capacity to obtain funds for rising working capital, acquisitions etc. which will stymy the growth of the group (Mitsui OSK lines, 2009).OpportunitiesGrowing volumes of container market Due to orbiculateization container market will lapse on growing at high rate. so they can enter into new trade routes in emerging markets such as Asia and Middle East (Mitsui OSK lines, 2009).Growing demand for natural gas transportation The demand of natural gas will keep on increase over th e years as industrial, commercial message and residential consumption will increase. MOL is already into natural gas transportation, they can benefit themselves with the growth in demand (Mitsui OSK lines, 2009).Well-timed fleet expansion New regulations in Bulk shipping are coming, which are setting an upper limit on the age of the ships. MOL has got new fleet of carriers and also it can expand its current fleet and make the most of the situation. (Mitsui OSK lines, 2009).ThreatsVolatile oil prices As MOL operates such a large fleet size fluctuation in the crude oil prices disadvantageously affects the company. As the market is very competitive increased fuel prices burden cannot be passed on to the customer. This affects the companies in operation(p) expenses. (Mitsui OSK lines, 2009).Economic crisis is also a major concern due to major concentration of its trading in Japan.Competitive industry in that location is a price war in between companies such as Maersk, NYK lines, MSC , Hanjin etc. Companies are coming up strategies such as low prices and faster delivery of goods. Hence the company has to make long term sustainability strategies which can help them stay in the market. (Mitsui OSK lines, 2009).MOL has a large fleet and in-spite of having policies, proper training and adequate precautions mishaps are bound to happen. Oil spill accident can affect the companys image and can wipe out its business (Mitsui OSK lines, 2010). spherical system orbicular strategy is a strategy which focuses on the world market and considers it to be a single market. This strategy is mainly adopted by companies which can compete on a international basis and their products are mainly standardized and offer services on a worldwide basis (Laudon Laudon, 2007). Global strategy is adopted mainly because of globalisation and liberalisation of trade all over the world.Some of the key drivers of globalisation areThere is a significant amount of reduction of barriers for trade in-between countries.The markets are liberalised and word meaning of free market strategy.Industrialisation in developing nations such as India, China.Integration of world markets and miscegenation moulding transactions have resulted in easy flow of capital.Technological advances are facilitating cross b dictate trade and investments.The key participants in the global business are multinational enterprise (MNEs). MNE is a large company which have offices and subsidiary companies all over the world. Normally MNEs have inter-dependent members located all over the world, and all members work for a single system. MNEs normally carry out RD, manufacturing, procurement and marketing activities in whichever part of the world is economical for their business. progressment of Information technology is fine-looking the firms more flexibility to externalize their global strategy. (Laudon and Laudon, 2007).Implementation of global strategy in a MNE is not easy at it seems. There is divers ity in behaviour of people within countries. Companies when implementing their global strategies have to modify their strategies depending upon the regional markets. (Baird, 2003) Companies should also take into consideration regional differences, different life styles of people, cultures, and values. (Baird, 2003) In under-developed countries there may be other factors such as relation with government officials, language barriers lack of well trained people (Quickmba, 2007). raptus by its nature is a globalised industry. Most of the large shipping companies operate on a global scale, and the above theory of global strategy fits perfectly for shipping lines. In terms of shipping global strategy means development of business through growth, acquisitions, alliances, creation of new capacity or a mix of all these things (Baird, 2003). The benefits to ship owners from a global strategy should be low cost and high efficiency. To gain the benefits of this strategy the key is to have a cen tral decision making process which can handle such complex organisations (Baird, 2003). To gain competitive and comparative advantage over its rivals purchasing large vessels in the fleet such as containers or cape size bulk carriers is important. Mergers and alliance with companies is also a good option to increase the size of fleet and to share the risk (Baird, 2003). In container customer satisfaction is an important part of the business. (Baird, 2003) Hence companies tend to add value to their value chain by use of technology such as giving door-to-door service or by giving them faster service.MOL global strategyMOL is a shipping and transport company trading its ships all over the world. MOL has different types of ships and has offices and subsidiaries all over the world. MOL can be termed as a multinational enterprise.MOL launched its Mid-term direction plan in 2007 known as MOL build up Action and Direction at the vanguard of creating excellence (Mitsui OSK lines, 2010).Th eir main theme is growth with enhance quality- befitting the biggest and the best (Mitsui OSK lines, 2010,p.1). There are five overall strategies in the plan. One of the strategies in the plan is global strategyTheir global strategy is to accelerate globalisation and enhance sales capabilities in emerging marketsDevelop business on a global scale to meet diversification of trade.To expand the business in emerging markets such as India, Middle east, Russia and Vietnam.To ensure that the fleet expansion is exceeding the growth of sea-borne trade. (Mitsui OSK lines, 2007, p.2).MOL in line with their global strategy has pass their weakness by entering emerging markets in Asia and also has used their opportunities by investing in many projects such as the LNG market. Below are the detailed points mentioned how MOL has used their strengths, have tried to overcome their weakness, taken their opportunities and minimised threats.MOL expanded their fleet of ships from 2007 to 2009 by adding 196 ships, out of which 22 were container and 172 were bulkships. MOL is targeting the China markets which are importing iron ore from Brazil, Australia and India. Hence they are increasing their cape size bulk carrier fleet. With cape size ships such as brazil nut Maru which are largest in the world, they get a competitive advantage in the cape size market. MOL will be building 53 iron ore carriers in future out of which 14 ships will be above 200 000 mt. (Nakanishi, 2008) MOL is also targeting the growth in the domestic coast trade in China and India which is expected to grow by 15% volume. (Open sea 2007)About 50% of abject handy max and 20% of handy max fleet all over the world are 20 years and over. With strict regulations in force for old ships, joining of new ships in their fleet will add value to their fleet (Open sea 2007).This well timed expansion of new fleet will help the company to expand more in the bulk carrier market in the developing countries.Source (Mitsui OSK l ines, 2009).MOL will also launch their new class bulk carrier called Handy-Cape type which will be as per the specifications of the new widened Panama Canal. This will give them the versatility to serve ports all over the world (Mitsui OSK lines, 2010).In the container market they are expecting a steady rise in future, in-spite of the worse current market conditions. As a long term strategy they are croping new container vessels as trade is going to increase because of globalisation and increase in population (Mitsui OSK lines, 2007).In order to increase its bulk fleet they are planning to take over few of the bulk shipping lines which went into bankruptcy because of recession. MOL recons that in-spite of having a high debt ratio funding will not be a problem due to its past record. MOL was one of the few companies which avoided the recession and posted profits in the FY ending 31st March 2009 (Seatrade Asia, 2009).To target the growing container market in India, MOL has just und ecided 6 new offices in India which will serve the container and car carrier business in India. These offices can respond faster to the needs of the customer and also provide them high service quality (Open Sea, 2007 Mitsui OSK lines, 2007).Global demand for LNG is going to increase many folds in the coming years. LNG will be used as alternative source of fuel as it emits less carbon dioxide than heavy oils. On basis of this future market MOL has grabbed the opportunity and placed order for 6 LNG carriers with an investment of 150 billion yen. (iStockAnalyst, 2010).MOL has launched its new LNG carriers which have a re-gasification system fitted on board. This system will give an advantage over conventional LNG ships as these ships can discharge cargo at off shore terminals. Hence when these ships will join the MOL fleet they will give a competitive advantage over other companies is terms of safety. (Mitsui OSK lines, 2010)MOL car carrier division is suffered losses because of the g lobal recession. Hence in order to sustain in the market, MOL initiated downsizing plan, in which they scrapped 21 ships, sold 4 ships and sent 11 ships in cold layup. While they are scrapping ships they have launched a concept car carrier hybridization carrier which uses renewable energy. (Mitsui OSK lines, 2010).As a strategy to boost up the market for car carriers MOL are going to transport machinery by dismantling them, and loading onto car carriers using Mafi-load trailers. Hence they are targeting heavy lift market by using car carriers and becoming Niche player. (Mitsui OSK lines, 2010)MOL will restructure its ship management companies so that they can meet the need of expanding fleet and global network. sextette ship management companies will be restructured and they will be given individual responsibility as per the type of ship. The headquarters will stay in Tokyo. (MOL Inc, 2010).Source (MOL Inc, 2010).ConclusionMOL launched its ADVANCE mid-term management strategy whic h covers the entire operations of MOL. Its global strategy for the next 5 years was to overcome its weakness and to make use of the new opportunities in the emerging markets. MOL has managed to sustain and make profits in the FY 2008 in-spite of economic downturn. This is mainly because of its diversified fleet and its core business which are its bulkships. It has success fully used its strengths to sustain in recession time. Its bulkships revenue has compensated for the loss making container and the car carrier divisions. To keep a strong hold on its bulkships, MOL is continuously striving hard by buying large new ships and phasing out the old ones.MOLs core business is secured and profit making, hence they can proceed into other markets and overcome its weakness. MOL main weakness is its over reliance on the Japanese markets. It has overcome the weakness by marking its presence in the emerging markets in India and China. MOL is also increasing its LNG fleet to cope up with the ra pid expanding LNG market and now it is the market leader in LNG transportation. MOL is also in the process of restructuring its ship-management offices, so as to keep up with the demands of growing company. With innovative designs for its car carriers and targeting heavy machinery market MOL is trying to gain a competitive advantage.
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