Meli Marine Case Study

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Meli Marine Case Study Strategy Analysis

Significant Factors For Attractiveness of The Industry
• Global commerce trade is primarly dependent on trans-ocean shipping; roughly 90% of general cargo is shipped via container Based on the container shipping value chain, there are several segments to expand and integrate the business and enter the market. This would provide benefit of business diversification hence decreasing risks According to the volume of growth of shipping lanes (Exhibit 6), every lane has steadily increased during the last years and is expected to grow further in the future





Meli Marine’s Strategy to Compete in The Industry

1) Greater flexibility in the cost structure by selling older vessels, adding smaller more efficient vessels and reducing the total fleet owned (consolidation) 2) Shifting the focus from feeder to line services (intra-Asia). This brought the advantage to also cover spoke-to-spoke lanes and not only hub-to-spoke 3) Priorization: a narrower set of costumers and shipping products (commodities and perishable products). Hence, investment in specialized containers such as insulated, refrigereted, etc… to back-up the business (core competence) 4) Meli Marine built out its own freight forwarder arm: seamless door-to-door service using an integrated chain service with other transportation systems, achieving a more complete service to the costumers 5) The previous strategies, in particular from 2 to 4, allowed Meli Marine to create its own industry standard that became an added value. In fact, costumers did not switch eventhough the competitors offered the same services to a cheaper price

Meli Marine Performance Compared to Key Competitors
• Meli Marine is the smallest player in the market in terms of revenues and capital, mainly due to concentration on the intra-Asia lanes. Indeed, constant revenue growth (67%) indicates that there is less opportunities for expansion and growth in Revenues the intra-Asia market. constantly increased. It exhibits that the company constantly grew and that it is healthy and has a good sales strategy. The Meli Marine’s Operating margin was often the highest one, so its proportion of revenue left over after paying for variable costs of production was often better and stable. Considering the margin as the ability of the company to pay for its fixed costs, such as interest on debt, Meli Marine can be considered the less risky from a financial point of view.



Meli Marine Performance Compared to Key Competitors



The Meli Marine’s ROA index shows that Meli Marine perfomance was the best and the most stable during the years. It indicates that Meli Marine is more profitable than the competitors compared to invested assets. Good ROA also indicates that management is more efficient in using the assets to generate earnings It must be notes that Evergreen Marine, and Wan Hai Lines are already competing on the transatlantic container shipping scene



Recommendation: External Analysis - Porter’s Five Force Model • For the container shipping industry, which is a low-concentrated industry, capital requirements is the major entry barrier; new entrants need to have (or have access to) a comprehensive fleet and containers as minimum for entry Building an effective network with authorities, such as port managers, and buyers is also a barrier for entry for Meli Marine • Buyer’s bargaining power is a function of how important the buyer is to Meli Marine (most are major retailers) Despite being a low-concentration industry, Meli Marine was able to provide a differentiated product based on customer-centricity, hence less price sensitive Buyer loyalty to Meli Marine results in higher switching costs Buyers have greater bargaining power especially on the backhaul voyages (from Europe or America in this case), when the container need to be filled up in order to cover costs



New Entrants


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Existing Competitors

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