Shipbuilding Industry

Topics: Shipbuilding, South Korea, Hyundai Heavy Industries Pages: 6 (1563 words) Published: May 12, 2013
Natalia Gabirondo
La Salle University
Strategy Management


For the ship and boat building industry I’m going to analyze it globally so I can compare the most important companies that are from different countries. I should also say that there are two different groups of this kind of industry: one that is more focused to B2B or those that are going to be sold to transportation companies, and a second group that is basically B2C, for personal use in leisure time. This second group involves companies most known by people that has a boat or just like them.

B2B group| B2C group|
Hyundai heavy industries competitors: * Aker Solutions * General Dynamics * Samsung Heavy Industries * Daewoo Shipbuilding & Marine Engineering (DSME) * STX Shipbuilding * Hanjin Heavy Industries * Emarhavil Heavy Industries * ABB * Caterpillar Inc| Most popular shipbuilding companies: * Bénéteau (Fance) * Jeanneau (France) * Quicksilver (Belgium) * Bavaria Yatchs (Germany) * Rio (Spain) * Rodman (Spain) * Sea Ray (USA) * Sunseeker (UK) * Astondoa (Spain) * Bayliner (USA) * Cranchi (Italy) * Faeton (Spain) * Sessa (Italy) * Glastron (USA) * Lema (Spain) * Zodiac (France)|

Porter’s 5 forces analysis:

* Threat of New Entrants

1. Do you have a unique process that has been protected?
NO. There is not a patent on any of the processes that involve shipbuilding. Anyone with specific knowledge is able to build ships and boats if having the necessary materials and workforce.

2. Are customers loyal to your brand?
NO. There are a lot of brands competing in this industry, so customers take the brand that offers them a ship with the features they are looking for. 3. Are there high start-up costs for your business?

YES. To start a business in the shipbuilding industry it is necessary massive capital investment to set up a fully equipped shipyard. 4. Are the assets needed to run your business unique?
NO. The assets needed could be converted to construct other kind of machinery. 5. Is there a process or procedure critical to your business? YES. It is necessary a workforce with specific knowledge, like naval engineers, to develop the shipbuilding process. 6. Will a new competitor have difficulty acquiring/obtaining needed inputs? YES. The most important input is the massive initial capital investment. Then there is also the contact with suppliers and government agencies. 7. Will a new competitor have any difficulty acquiring/obtaining customers? YES. The market is in a grown phase, and even it can grow more, it would be very difficult for a new company to acquire customers because of the high number of existing shipbuilders with high reputation. 8. Would it be difficult for a new entrant to have enough resources to compete efficiently? YES. Because of the cost-efficient level of production in this industry, a new entrant would need a lot of time to be competitive compared to the existing ones.

The threat of new entrants is LOW. The entry barriers for this industry are very high due to the huge initial investment, the amount of already existing companies and the difficulty in the distribution channel.

* Rivalry Among Competitors

1. Is there a small number of competitors?
NO. There are a lot of companies that have been for years in the industry, and their experience and benefits make them even more powerful. 2. Is there a clear leader in your market?
NO. Even the Chinese companies are on the top; the other companies are still very competitive in the industry. 3. Is your market growing?
YES. It is growing but not with new entrants. It is growing because the existing companies are working hard to improve the features in the ships, actualizing them to be more efficient and environment respectful. We can also find that in the last years some of them have increased their revenues. 4. Do you have...

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