Business strategy and IT strategy of COSCO
As the president of COSCO once said, “container shipping industry is traditionally low-margin, highly competitive and risky market.” Actually, this is the case. At the dawn of COSCO, with only a small fleet, it is destined that the only way to survive is to grow as large as possible to avoid being acquired by its peers. And now we have to admit that COSCO basically did a really good job when it comes to its way of growing. This is resulted from its state-owned business background, the external economic environment and the business strategies it employed. The first two factors allows COSCO to gain more competitive advantages domestically by acquiring some privileges before China’s joining WTO, such as financial support from the government and entry to some industries which were not accessible by the foreign capitals. All these help COSCO to grow rapidly under the shelter of the government. But basically, COSCO’s success lies more in its business strategy, especially after China’s entering WTO. Without those privileges, COSCO had to compete based on its own competency. Actually, we tried to find out the stages according to the times dimension and finally we get the point of year 2002 when COSCO established COSCO LOGISTICS, which indicated a critical change in COSCO’s business strategy. At the meantime, the top management also gave out the vision stating that “COSCO hoped to be known as a shipping-based logistics company by 2010”. COSCO managed to transfer its original image of a shipping enterprise to a brand new one as a global logistics company. This strategic-level change established the basis for COSCO’s near future engagement in the global competition with major shipping enterprises like Maersk-Sealand.
Actually, this is the mega-trend for almost all the major shipping companies throughout the world. Focusing on shipping business only will absolutely lead to the limited growth-rate of an enterprise, just because...
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