Pacific International Lines
1. Introduction
Pacific International Lines or PIL as it is commonly known in the market is a container shipping company started by Mr.Y C Chang in 1967. What he started as a 1 ship company is today the 19th biggest container shipping company in terms of TEU capacity & the 8th largest container ship owner.
Ambition: Integrated shipping group with a meaningful market share by setting own pace of growth based on the group’s financial strength and human resource capabilities.
2. External Analysis:
In order to formulate a strategic direction for PIL we need to do an analysis of the external factors affecting PIL’s business.
2.1 External Analysis - PFF Analysis
By doing a Porter’s Five Factor analysis (PFF) we come up with the following –
a) Competition: There are a number of players in the industry offering almost similar services which makes the competition fierce as switching costs are not high. Freight rates are more or less fixed throughout the industry & containers being standardized offers the customers the ease of switching between different carriers without incurring much costs.
On the positive side, there is tremendous potential for growth within the industry. PIL started off by offering services to China, which at that time was a new market. In later years when their competitors started offering similar routes to China, PIL extended their service network to Africa, a market which was till then unexploited. This is a good example for the growth potential within the industry.
b) Customers bargaining power: The presence of a number of companies in the market along with the similarity in the product offered by them makes it easy for the customer to flex their bargaining muscle.
On the upside, PIL’s in-depth knowledge of their niche markets gives them an advantage over the competition. This along with the fact that PIL is a company which has been around for more than 4 decades now, thereby invoking loyalty, helps them tilt the balance of power
Pacific International Lines or PIL as it is commonly known in the market is a container shipping company started by Mr.Y C Chang in 1967. What he started as a 1 ship company is today the 19th biggest container shipping company in terms of TEU capacity & the 8th largest container ship owner.
Ambition: Integrated shipping group with a meaningful market share by setting own pace of growth based on the group’s financial strength and human resource capabilities.
2. External Analysis:
In order to formulate a strategic direction for PIL we need to do an analysis of the external factors affecting PIL’s business.
2.1 External Analysis - PFF Analysis
By doing a Porter’s Five Factor analysis (PFF) we come up with the following –
a) Competition: There are a number of players in the industry offering almost similar services which makes the competition fierce as switching costs are not high. Freight rates are more or less fixed throughout the industry & containers being standardized offers the customers the ease of switching between different carriers without incurring much costs.
On the positive side, there is tremendous potential for growth within the industry. PIL started off by offering services to China, which at that time was a new market. In later years when their competitors started offering similar routes to China, PIL extended their service network to Africa, a market which was till then unexploited. This is a good example for the growth potential within the industry.
b) Customers bargaining power: The presence of a number of companies in the market along with the similarity in the product offered by them makes it easy for the customer to flex their bargaining muscle.
On the upside, PIL’s in-depth knowledge of their niche markets gives them an advantage over the competition. This along with the fact that PIL is a company which has been around for more than 4 decades now, thereby invoking loyalty, helps them tilt the balance of power