Free Report On Strategic Alliances In Shipping Industry:

FIVE YEAR STRATEGIC MARKETING PLAN

Introduction of the Marketing Plan
The purpose of the five year strategic marketing is a comprehensive plan developed to evaluate the proposed strategic and marketing alternatives for the M-Connect Shipping. The strategic plan aimed at investigating the surrounding areas of alliances within an industry sector to strengthen the market presence of the M-Connect Shipping within its market and increase its horizontal integration. The Strategic Marketing Plan is a key component of M-Connect Shipping overall Business Plan and serves as a roadmap for improved work plans every year wherein it features the certain strategies intended to research the alliance of the M-Connect industry with other companies. The preponderance of large scale maritime industry in recent year have resulted to numerous discussions and debate in the trade periodicals and articles in regards to the long benefits of the strategic alliances and also the long term impacts it will have on the relevant organisations and the shape of the maritime industry in general. This strategic plan will explore the forming of alliance and the definition of the strategic alliance. The comprehensive plan will explore the internal and external factors that drive the strategic alliance of industry and discuss the maritime containerization.

Forming and Joining in Alliances

Strategic alliance is an agreement between the two firms that are operating on the same horizontal market level, that distribute resources to perform the desired project wherein both of the parties in the agreement shared common values. Numerous arrangements organizations acquire view when the organizations search for creating new competences by establishing a consistent relationship of supply chain. The companies that allow an independent company to share different resources recognised as a form of what we call the ‘strategic alliance’. This type of strategic plan is difficult and complicated to support, develop, and establish. The strategic plan involves a long amount of time as a result of the changes in the position. In addition, both parties benefit on each other, and gain an advantage in market competitiveness. There are five categories that provide insight on how to leverage the strategic alliance. First is to determine the factors that are essential to the objectives of the business. Second, core capability and competitive advantage in which it was followed by trapping the competitive risk. Fourth is the strategic alternative in the future, and lastly mitigating the threat to a fundamental business objectives (Wakeam 2003).

Advantages of Strategic Alliance

Strategic alliance is often associated with a joint venture of the two firms, however an alliance may entail competitions, and strategic alliance between two firms do not last. However, the strategic alliance increases the market share of the firm wherein it is impossible to attain alone. Strategic alliance improves the technology innovation, telecommunications, and the transportation as well. Further, the two companies that have entered an agreement and have made an entry in the foreign markets have a higher chance to gain benefits such as scale of economies and scope of distribution and marketing. The strategic alliance leads to accessibility to international market which may be costly to a single firm (Zamir et al 2014; Isoraite 2009).

The Internal and External Factors of Economic Crisis and Strategic Alliance

The internal and external factors of economic crisis and in response, the state implemented strategic alliances for companies. The internal factors are rate of unemployment, the decision of the government, and the lack of increments in efficiency (Thechatakerng 2003). The unemployment rate of the nation is one of the internal factors that contribute to the economic crisis of the state. A rise of unemployment rate leads to prevalent weakening of human capital, and withdrawal of labour market and discouragement (OECD 2011). The government decisions also contributes to the economic crisis like for instance in Thailand, the macroeconomic management role that carried out by the government agencies where in they failed to notice the warning sign about the weakening of the financial system and the rate of exchange. The issues of governance were found in both private and public domain. It is not all because of the decision of the government but also the role of the private sector. During the Asian Financial Crisis in 1997, the corporate investors were not discipline and there is no intervention of the government of Thailand in the market. The investors borrowed foreign currency and the unproductive spending of the firms which in turn contributes to the struggle of the state in facing enormous foreign debts every time the currency decreases in value (Techatakerng 2003). The lack of increments in efficiency is also one of the internal factors of economic crisis. The United Kingdom infrastructure must be able to respond and adapt to change in terms of economic requirements. The solution is the offshore renewable sector that permits the electricity to be traded across the boundaries. The chance to connect the houses and in turn the consumer towards the grid would lead to the improvement of increment flexibility and the effective supply of energy (Bottini et al n.d). The external factor of the economic crisis is the domestic monetary policy. The economy of the United Kingdom is an ‘open state’ and directly incorporated with the rest of the through trade of services and goods, including the exchange of the financial assets between the UK and the other states. Hence, research findings suggest that the policy makers should give attention and value in understanding the international environment in order for the financial and domestic monetary policy can be place in a manner in which it takes consider the effects that world shocks are anticipated to have (Chowla et al n.d).
I will also discuss the internal and external factors that influence the choice of strategic alliance. The external factors are the external network opportunities, the organisation of the business district, competition in the market sector, and the speed of the technological innovation. The internal factors are financing, the success of the existing model of business, organisational capacity, and technological opportunities (Stefanovic et al 2011). The maritime industries play a significant role in the economy of United Kingdom and already have provided services in naval, commercial, leisure, and offshore renewable energy, including making up almost £3.5 billion of the United Kingdom’s GDP. The naval industry deals with the UK’s military capacity, services, and equipments, the commercial industry focuses on the production of powerboat. The leisure industry is composed of small and medium enterprise and is the ninth place in the top ten largest companies and it makes up 25 percent of the market in the United Kingdom, the offshore renewable industry centres on the maintaining the low carbon energy and the major clients in this sector are the providers of electricity such as Scottish Power Renewable and Scottish and Southern Energy, and the commercial industry centres on physical transportation and shipbuilding trade. The UK maritime industries compose of marine systems, knowledge and skills, and vessels. It’s diverse and provides broad range of abilities in market sector (UK Marine Industries Alliance n.d). The purposes of the UK marine industries alliance are to determine the main concerns for modernisation investments and marine technology by the government and the sector in building a roadmap and enhancing the export trade delivery of the maritime sector which contributes to the sustainability of the growth of the nation’s economy. The UK Marine industries are both beneficial to the society, companies, and the government. The benefit of the maritime industries alliance to the companies and society is high visibility and maintain in government, consistent realistic demand for supply of skilled people, joint venture contributes to the economic growth, and the growth of the larger firms contributes to the supply chain growth opportunities. In the government and society, the benefit of the maritime industries compose of new opportunities for academia in research and training, increase in jobs and business, increase in tax revenues, and create stronger network of industrial supply (Carnie n.d; UK Marine Industries Alliance n.d; Innovate UK n.d). The primary motives of the companies into entering the alliances are Product related intention, the product market relevant motives, market position relevant motives and entry in the market sector, effective utilisation of the resources related motives, development of the skills related motives, reduction of risk and extension of the resources related motives, and structure of the market adaptation related motives. In addition, there are ten factors in establishing a strategic alliance and these factors is depended by the parties that have entered the agreement – search for an suitable partner for strategic alliance in which they shared common interests and goals, have a clear strategic motives, make motivations for cooperation, specialisation, being flexibility, operate with a long term prospects, improve the multiple joint ventures, mutual information, the parties minimise the conflicts between them, and exchange of their staff. The balance between competitiveness and cooperation amongst the same companies, thus that neither one of the two ways in conducting the interaction between parties will damage the other is a strategic dilemma or challenge for several companies. Another strategic dilemma about the strategic alliance is the prevalence of the managerial issues in individual level as a result of various kinds of conflicts of role. The conflicts of the role are outcomes caused by the companies having different roles towards each other (Mowla 2012).

Maritime Industries Sector of the M-Connect Shipping

The United Kingdom is typical island nation. The nation is enjoyed by the shipping companies that are based in the United Kingdom for its effective tonnage tax administration thereby larger companies gathered to the UK from cruise lines to shipping the containers. The United Kingdom has the largest port sector in Europe in which the nation has more than 500m tonnes of cargo and the nation have 22 million plus of international passengers annually. The UK Marine Industries Alliance containerization is recognised by other countries because of their distinct port and its huge private sector which provides flexibility in response to the emerging trends at competitive value. The investment of the foreign companies in which it prepares the nation for the future and it creates an environment where in the United Kingdom is prepared to conduct trade with the world’s largest ships such as carriers of dry bulk and liquid, containers, and other increasing number of maritime services (Maritime UK n.d). Furthermore, the considerable growth of the technological innovation, global trade, and constant geopolitical circumstances, has characterizes the improvement of the globalising maritime shipping sector. The revolution of the containerization and technological advancements in terms of the pace, size, and vessel design, including the operation of the automation in the port have been considered as an essential to the accomplishment of the maritime shipping (Cashili 2012). The container all over the world port has increase by 3.8% to 601.8 million 20 foot equivalent units by 2012. The research analysts suggested that by the year 2020, the developing countries must accumulate an investment amounting $18.8 trillion every year to attain the average level of the economic growth. The ports should be invested because it contributes to an increase of effectiveness in which it could constitute to lower costs of transportation by facilitating the goods to get to and from the market in a more cost efficient and well-timed approach (UNCTAD 2013). The maritime shipping involves 90 percent of overall international trade performed by the sea and 99 percent of international trade are performed by the water and 62 percent performed by air. In addition, the transportation of the goods and trade conducted by the firms is less expensive and more effective than the other form of transportation. In maritime shipping, there are five types of cargo and these are – break bulk, automobile, dry bulk, containerized (finished consumer goods), and the liquid bulk (Petering 2011). The containerisation of the maritime industry may be going a maturity stage where in the prospect for the growth is more limited. In this view, however remains a significant room for the growth, especially if the section of bulk shipping is settled with containerisation (Rodrigue 2010). The shipping technology of bulk has changed a little in these past few years, and the industry of bulk is economically effective and market competitive. The shipping of the containerisation has technology advancement, however the firmness of the economy still remain indescribable. The maritime shipping industry has a past in regards to the national preservation measures and is managed by a patchwork of regulation both in international and national level to make sure the safety and protecting the environment from damaging (Powell 2001). The maritime shipping industry is considered to be an economic force and international business which make it so important in term of economics and also subject to political discussion both in international and national level. Majority of the maritime industry is concerned with the international trade and the higher probability that within the pattern of the arrangement that is complex between the domestic monetary policies implemented by the government and the shipping industries and understanding with the shipping companies. In addition, the economic analysis which it cannot ignore the influence of the political domain on the competition of the free market, costs, and prices (Stopford 2013). The maritime shipping industry should consider the influence of politics in the industry. Security plays a significant role in the supply chain, however these past few years the concept of security has changed. The authorities check the containers that were imported in the country for any smuggling of illegal goods. The government agencies and the international organisation cooperate in prevention of the violation of the international law and law of the specific country where the shipping took place (Button et al 2005).

Conclusion

The maritime industry of the United Kingdom has entered strategic alliances in order to expand their economic growth. There are several political discussion and debate whether or not the strategic alliance would be beneficial and advantageous in the market competitiveness for both the parties involved in the agreement. Furthermore, whether the strategic alliance has long term impacts and would benefit the companies for a long period of time. I have conducted a five year strategic plan to investigate the strategic alliance of the M-Connect Shipping and if this strategy would be beneficial for them. The comprehensive plan discussed the very definition of the strategy and the internal and external factors of the strategy, including the internal and external factors that constitutes to economic crisis. The research findings suggests that strategic alliance would be beneficial for the companies involved in the agreement, particularly when they want to enter the foreign market and conduct an international trade. The M-Connect Shipping Enterprise ships containers and decided to enter the other market sector which is the shipping of the automobiles. Automobiles are in-demand and there are growing numbers of people who are purchasing the automobiles. Thus, in order for the companies to increase their revenues than shipping the automobiles is the solution.

Appendix: Three Strategic Models

Appendix A: Porter’s Diamond of National Advantage
Source: (Strategic Management: Porter’s Diamond of National Advantage n.d)
Diagram of Porter’s Five Forces
Source: (Strategic Management: Porter’s 5 Forces: A Model for Industry Analysis n.d).
PESTLE analysis
Political Factor
The political factors are the regulation of the employment, source of raw materials, and the tax policy. The M-Connect Shipping and its maritime strategic alliance must follow the government’s intervention such as regulation on the employment of the worker and the tax policy that were imposed by the government.
Economic Factor
The economic factors are the currency and levels of tax since M-Connect Shipping is an international shipping corporation and the company has ships products and/or services. Furthermore, the maritime shipping ships five types of cargo and these are – break bulk, automobile, dry bulk, containerized (finished consumer goods), and the liquid bulk.
Social Factor
The social factor is the preferences of the consumers may affect the sales of the M-Connect Shipping prices on products and/or services.
Technological Factor
The technological factor is the technology innovation. The M-Connect Shipping is entering strategic alliance with other shipping industries. Strategic alliance improves technology innovation and benefits both parties in the alliance agreement.
Legal Factor
The legal factor is the tariffs and customs imposed to the companies that ships their products and/or services outside the borders. In addition, the maritime industries must follow the international law such as maritime jurisdictions and borders agreement between countries.
Environmental Factor
The environmental factor is the environmental law and the environmental issues.
Source: (Pestle Analysis n.d)
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