Maersk Logistics International Strategies Report

Executive summary

Globalization, international trade and improved cooperation among countries have led to an opportunity for companies to diversify their operations in countries different from their country of incorporation. When venturing in other countries, there is need for strategic management policies since different countries need different management approach.

Maersk Line company offers its services to clienteles from different parts of the globe thus it has to make strategic decisions in that effect.

The company is faced with a number of challenges that may hinder its attainment of corporate goals and objectives, however with timely, quality and responsive decisions, the company is bound to prosper. It should have strategically managed human capital, an integrated supply chain management, and well developed marketing strategies.

Introduction

According to Martin, 2005, scientific innovation and inventions have changed the way business is done; they have facilitated globalization and international ventures. With the invention, some companies/individuals saw the niche of operation and engaged in the business of facilitating international trade; they are service providers in transport and communication; such companies include Maersk Line (Martin, 2005).

When operating in the Diasporas, they have to ensure they have to ensure they put on strategies that will facilitate competitiveness and increased business; the strategies must be effective enough to meet the changes in the globe as well as cover the cultural differences in different countries (Nagle and Holden, 2002). This paper analysis the international strategies adopted by Maersk Logistics company to remain competitive in the international market.

Brief history of Maersk Line

The idea to have a logistic company was triggered in 1970 by an increased need in specialized packaging and transportation of good both locally and internationally. These lead to incorporation of Maersk Line in 1977 (Maersk Line official website, 2010). When incorporated it was named as Mercantile.

It is an international logistics company, which had its initial presence in Hong Kong, Taiwan and Singapore. Globalization assisted the company to reach international business where it engaged in cargo-freight business transport (shipping and plane services) and through acquisition of various companies internationally like international freight company; the company is able to command a large position of world logistic industry.

At the start of 21^st century the company changed its name to Maersk Line Company. It has containers made to suit a certain cargo required to be transported and takes contracts to transport the good abroad.

In some countries like USA, Australia, France and Finland, the company entered the markets through brokerage and take over’s. It had to wait until 2001 to enter Customers-Trade Partnership against Terrorism (C-TAP) in United States.

The company does not have physical location in all countries of the world but accepts contracts to be made online for transportation of good. By logging in the company’s website one is able to contract for transportation of goods upon an agreement that is facilitated by user-friendly website.

After the deal has been completed, monitoring of containers is done electronically to assist in return of empties. Other than engaging in packaging, the company has extended its services to shipping. It owns some ships which it transports cargo from one country to another.

With increased trade, the company cannot have the time as well as resources to use traditional marketing strategies and convince its current base of customers of its services (Maersk Line official website, 2011).

Maersk Logistics Company Mission statement

The company has six missions that it aims at attaining they are:

1. Understanding the needs of customers and ensuring that they are met. This is done through intensive research on modern logistics treads.
2. Being the leader in logistic industry; this has been done through numerous acquisition that the company has embarked on
3. Have a constant growth rate and remain competitive in the world of changing business treads. This is attained by approaching different counties and adopting policies that assure that the company remain competitive.
4. Efficiency and cost reduction
5. Personal motivation and development for its staffs
6. Innovation in the era of changing business treads (Maersk Line official website, 2010).

Maersk Logistics Company Vision statement

The mission of the company is “We create opportunities for global commerce”. This is attained by developing a supply chain management that is aimed at giving the best service to their customers (Maersk Line official website, 2011).

International strategies

The following are the international strategies adopted by Maersk:

International marketing strategy

The company is an international one specializing with logistics, to ensure that it has a competitive edge, the company adopts various marketing tools. One of the tools that the company has adopted is customer-company relation creation where it keeps track with companies that it has transported for and ensures that they create a relationship good enough that the company can offer them another contract (Hisrich, 2010).

In so doing the company, ensure that it retains the customers that it gets at one particular time. Customer satisfaction is a marketing tool that the company uses. When contracted to pack and transport ones good whether using its transport machinery or loading it to another companies ship/plane, it ensures that the work is efficiently done (Oster, 1994).

The approach of international marketing of the company is one that ensures that it develops and maintains customer loyalty; after it has been contracted and made the delivery; it is its initiative to call back the customer and seek to know whether the products got to him in the right form and shape.

This approach has seen the company develop and become one of the most liked and respected international company; they ensure they serve their clients in the best method possible. The approach of the company is referred to as personal selling for a good customer—company relation. The company employs a 4p (product, price, promotion, and place) marketing mix strategy (Marketing Teacher Ltd, 2000).

Products

The company has two king of service that it offers: packaging services and transporting services. To serve its customer right, the company ensures that it makes it packages affordable and available to all classes of people.

Those people who are using freight have their special package. Those using water has their package, small and large-scale customers are incorporated. To remain competitive the company aims at improving its service to attain more customer satisfaction and loyalty. Lately it invented computer cargo tracking system that is one such development.

Price

The company’s prices are dictated by the bulkiness and the weight that a customer products has. This ensure that there is equality and those customers who are transporting small portions of goods are charged proportionately to these products. The electronic payment system facilitate for quick payment for service given.

Place

The company has physical station is some countries however in those countries that it does not have offices there are brokers or the website assists customers to get services from the company.

Promotions

To advertise for its service the company uses internet based advertising strategy where it advertises its products over the internet to ensure that potential customers all over the world can have access to information that they can use to buy from the company.

There are major trading companies of the world, which the company has recognized, and it does direct marketing of such companies. They include coca- cola, Dell and HP. it contacts them directly and offers special rates. Other than the companies, there are the clearing agents. Some countries like Kenya and Australia require that for clearing of good to take place, there must be a clearing agent (Maersk Line official website, 2011).

Trade fair marketing

The company participated in trade fairs in different countries. In so doing, it gets a chance to show case its products and get a close customer interactions. As an indirect way of marketing, the company has adopted social corporate responsibility in its countries of incorporation and in other countries. An example of corporate responsibility is transportation of refugee food free of charge. This has assisted the company to get a better reputation than its competitors.

Supply chain management

Maersk integrated supply chain management operated in two folds; it has to ensure that the materials that it requires for its business are available in the best form and it ensures that the logistics business it is offering to its clients is effective.

The company has a well-developed supply chain management where it uses various monitoring tools to ensure that good on transits are controlled. Supply chain management operated by the company ensures that goods reach the destination country in good shape.

Computers are used to assist in management of these. Currently the company has employed a cargo tracking technology: where a computer chip is placed on a container that can offer the company information about the where about of a certain container.

This assists in advising customers who may call in to inquire of where about of their cargo. The chip, through the technology is testing stage, offers information about the place, the longitudinal location of a certain container, the expected time of arrival and the ship that is carrying the commodity. This is in the efforts of ensuring that the company meets its customers’ needs more effective.

More specific in the area of logistics, the company employs four approaches they are:

• Third-Party Logistics Services

This is where the company after the supply of goods it ensures that the containers are returned in good form to them. This is reverse logistics.

• Multiple Countries Consolidation, Collaboration and Integration Model

This is where company has collaboration with different countries that a cargo can be transshipped from one ship to another to facilitate more trade efficiency.

• Vendor Management Inventory, Warehousing and Distribution

This ensure that the company extends its services to the country of destination by offering warehouse services before clearance of good s but this is limited for a certain period of time.

• Pack to Order, Repackaging and Combo Packing

This is an extended service where packaging of goods is done according to customer’s specifications (Kerin and Peterson, 2009).

Global human resources Management

Management of Maersk understands that for a successful business, and then they need to have an effectively managed human capital. In response to this understanding, the company employs from an international labor market, when employing, the company posts its advert in its website and recommends everybody who meets its minimum qualification needs to apply despite the nationality that the person comes from.

In offices, the company has the highest number of employees as the nationals of the particular country and ensures they are managed effectively. To manage an international human capital, the company undertakes numerous cultural intelligence surveys to know the best approach to handle the human capital.

The employees of the company are highly motivated; to motivate them, the human resources department has put in place some motivational policies like adequate payments, holidays, regular appraisals, training, and development.

When making decisions, it is the company’s policy to involve their staffs, delegate power and empower them for continuity in the business. As far as it aims at assisting other companies operate effectively in the international trade, the company ensures that it looks not its human capital welfare (Haberbeg and Rieple, 2001)

Automation, innovation and invention

To remain competitive and continue meeting customers’ needs, Maersk has resulted to aggressive use of technology to improve its business, reduce operating costs and to improve customer feelings with its products.

In the transport and logistics industry, the company has to deal with a number of enquiries from different parts of the world as people inquire for their cargo whereabouts; they ensure that they have close linkage with the transporting cargo so as to advice their customers effectively; in the different time zones, the company has a 24 hours operating approach.

Occasionally, the company keeps developing new products and approaches to the business; this improves the way business is operated in the company and ensures that a number of options to customers. For example, the company invented/innovated the business of container sharing; where it can accept customers who have agreed to use the same container; this makes the products more affordable.

Another innovation that the company has employed is the use of mini-containers; under this innovation, it allows a customer to buy space in a container then if the container is not full; the company introduces another micro container in the main container with the same number like the one of the main container. When charging the containers, it charges at a reduced cost yet maintains efficiency and transparency (Fred, 2008).

Good leadership and efficient internal processes

Maersk Line Company has an effective leadership team; the team is divided into different department each given some tasks to handle from an international angle; however all the leaders are under the leadership of Eivind Kolding, Chief Executive Officer. The following are the other leaders with their departments:

(Maersk Line official website, 2011).

All the leaders above are professional who have wide experience in their areas of operations; they handle the business from an international angle and ensures that they align the business processes with the needs of the global market. When they are making decisions, it is the policy of the company to involve their subordinates (Kerin and Peterson, 2009).

Adoption of E-business approach

One area that Maersk has done recommendable well is the use of e-business applications; it has adopted policies that allow international customer to trade with the business. They include:

• E-money transfer: this is where the company accepts deposits made through electronic money transfer as sales settlements and payments, some of the acceptable money transfers accepted by the company are PayPal, western union, electronic money transfers, and wire transfers
• E-marketing: the company has implemented a number of electronic marketing approach to ensure it can communicate effectively with its customers; some of the tools they use include online marketing, social network marketing and website advertising

Customer relation management, Business intelligence tools and Data mining approach: the company has embarked on massive use of technology to interpolate data and come up with the right approach to satisfy their customers (Rakesh, 2005).

Recommendations to improve the services of Maersk Company

The company can be applauded for adopting an E-marketing strategy but more need to be done to ensure that it remains competitive in the changing logistics industry. Some of the areas that it needs to improve are in online businesses.

The company’s website has limited information that require to contact the customer care desk online; this sometimes is discouraging since one has to wait for a long period of time before he gets a response from the site. The reason for this is that the call centers are only in the head office.

What the company needs to do is to decentralize this service and make it available to its brokers and local offices. This will go a mile ahead in improving customer’s satisfaction and increasing loyalty. There are some countries, which are potential markets for the products, but the company has not entered these markets. It should ensure that robust marketing should be adhered to tap these markets.

Computers are not always reliable and sometimes they have failed the company. This is when servers are down or in a repair process. This has hindered the delivery of services by the company. Upgraded technology should be adopted to ensure that there is a backup when a case of system failure occurs.

Customer case-service method that DHL has adopted need to be adopted by Maersk; this is door-to-door delivery. The company’s service mostly ends up in a warehouse or at the port of destination. To ensure more customer satisfaction, there is need to adopt a door-to-door strategy where it can deliver products right to the consumers. This will assist the company command a more customer base and be the preferred choice of Logistics’ Company (Heaton, 2008).

Although it has adopted a cargo tracking system, the system has taken long to mature. It is faced with an increased technological failure and is efficient to certain countries. The issue of centralization appears again. The system is monitored from the head office thus faces challenges of adequate monitoring; It should be decentralized and customers assured that they would get information about their cargo with precision.

Today’s marketing strategy has taken a different approach, this is where alongside computerized marketing customer company relation are developed to ensure that it benefits from repeat customers. The same customers are opinion leaders to the company. Although the company targets the large importers with this service, more need to be done (Kurtz, MacKenzie and Kim, 2009)

An action plan to implement the above recommendations

Since the company is incorporated and doing fairly well the action plan to be adopted is a business re-engineering plan. This is a plan, which aims to touch all the internal and probably external strategies adopted by the company. It will involve developing strategy that start with the first interaction that a customer makes with a company to the point of delivery.

The process of improving is as follows:

• Internal strategies
• This involves ensuring that the company has the right experienced staffs that it can rely on. This is attained through training and employing quality staffs to pioneer its services. Other than head office employees, the company should ensure that all brokers and local branches have a pool of expertise. This should be continuous process.
• Technology and cargo tracking
• The company should employ a high level of modern technology especially in this era of computerized business strategies. It should ensure that its online marketing, e-advertising and E-commerce strategies adopted are of the right standards such that it can give adequate information to customers.
• This need to be improved almost immediately and keep updated always.
• All internal processes should be computerized to ensure that there is good communication between various departments and sectors of the company. This will facilitate a more understanding and better services.
• External service
• Door to door service
• The company should adopt a door-to-door marketing strategy where it will deliver its goods to customer at the closest point possible. This is likely to increase its delivery customer base.
• Research and development team

With the change in the way businesses are conducted, there is need to adopt have a research and development team that is mandated with the task of advising the company on the route to follow as long as innovation and current business treads are concerned. Though the department is there, it should be more robust and include all view in all countries (Kerin, and Peterson, 2009).

Conclusion

Maersk Company is a logistic company situated in Hong Kong with branches and broker points in over 100 countries; the success of the company can be attributed to its effective international business management strategies.

The company’s management has adopted policies that facilitate its international operations; the international strategies adopted are integrated supply chain management, e-business strategy, international marketing approach, and good leadership and strong internal processes. To keep-up with changes in international market, the company keeps innovating and developing its products and services.

References

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Rakesh, J., 2005. International Marketing. New Delhi: Oxford University Press. Bibliography/further reading

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