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Maersk Group: Sailing in a Market Downturn  
Product Ref: 17/600C Company: Maersk Group

Product Type: Case Industry: Energy

Related Product(s): Teaching Note
Authors: Zhigang Tao   Penny Lau
Shipping conglomerate and industry leader Maersk Group has to figure out a strategy to remain competitive in the struggling shipping industry. In the face of sluggish global trade, overcapacity in the shipping industry and falling freight rates, the company has managed to stay afloat by conducting cost cuts and operational improvements. But the strategic direction ahead is not clear. And to further complicate the issue, its other major revenue stream in the oil and gas business isníŽt doing well either. Falling oil prices has severely affected the profitability of its upstream oil and gas division. Soren Skou, recently appointed CEO of the company, now has to forge a new strategic direction for Maersk. Should he look into M&As, alliances, or even dispose of the oil business? How can he further differentiate Maersk and create a competitive strategy for sustainable growth?

This case explores the strategic options of a market leader in a competitive dilemma. It touches upon concepts of alliance, M&A, differentiation, horizontal diversification, vertical integration, and technology adoption. It also looks into the issues of companies operating in China, where state-owned firms are incentivized to adopt cross-subsidization.
Functional Area : Strategy & General Management

Learning Objective: 1. To evaluate the strategic options for a market leader in a shrinking and fragmented market.
2. To understand how companies utilize scope and scale economies in competition.
3. To understand the basis for diversification, and how to evaluate the fit between resources and market in its decision.
4. To explore the issues pertaining to competing with powerful Chinese state-owned entities.
Length: 18 pages Country: China (People's Rep. of)

Pub. Year: 2018 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
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