COMPANY PROFILE -Maersk
Business Sector :Shipping, Integrated Transport and Logistics
Operating Geography :Europe, Denmark, Global
About Maersk :The Maersk Group is an integrated transport & logistics company with multiple brands and is a global leader in container shipping and ports. Including a stand-alone Energy division, the Maersk Group employs roughly 88.000 employees across operations in 130 countries. The two main industries in which they operate in are Transportation & Logistics and Energy.
Maersk Revenue :USD 35.46 million (FY16)
Competitive Analysis of Maersk
|1. Global network of businesses|
2. Strong brand with skilled workforce
3. Investment in innovation strengthening competitive advantage
4. Emphasis on sustainability
|1. Loss reported due to impairments
2. Fluctuating margin and rising costs
|1. Strategic partnerships and acquisitions|
2. Expansion to other related business segments and switching to alternative options
3. More inroads in sustainability
|1. Increased trade protectionism policies
2. Major accidents or oil spills
3. Downturn in transportation and logistics market
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Detailed SWOT Analysis of Maersk
1. Global network of businesses: Maersk has operations in 130 countries with Maersk Line, the group’s primary transportation & logistics business having 15.8% global market share. Its two main industries are transportation & logistics and energy. Transport & Logistics consists of Maersk Line, APM Terminals, Damco, Svitzer and Maersk Container Industry. The mission of these businesses is to enable and facilitate global supply chains and provide opportunities for customers to trade globally. Energy consists of Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers. After the Hamburg Sud acquisition gets completed by FY17, Maersk will further increase its network and market share in East Coast South America trade.
2. Strong brand with skilled workforce: A strong brand presence is essential to the success of any firm. Maersk has the reputation of being a top player in the industry globally. It ranks first in terms of revenue when compared to its competitors. Maersk undertakes some of the most technically complex techniques to unlock new sources of energy. In order to enhance the performance of the employees, frequent competence building exercises takes place for technical, operational and support functions. For e.g. Maersk Drilling hired all crew in 2014 and 2015 well in advance, up to six months prior to operation start, in order to participate in top class training and performance enhancement, establish good teamwork and ensure a safe and efficient operation of the new fleet.
3. Investment in innovation strengthening competitive advantage: Maersk Line invested in data analytics and digital capabilities to optimize and modernize its processes. It has programs in place for improving fuel efficiency, voyage planning and operational efficiency. Maersk Oil has partnered with Danish Underground Consortium and invested in major technology programs like enhanced reservoir modelling, enhanced oil recovery mechanisms and cost effective well completions. Maersk Drilling is planning a test of Big Data analytic tools for two applications: drilling productivity in order to increase drilling efficiency as well as maintenance improvement in order to reduce cost and to increase reliability
4. Emphasis on sustainability: Maersk has integrated sustainability in internal training programs, it has adopted a Human Rights Framework, Sustainability Index in Employee Engagement Survey and it also has sustainability integrated in enterprise risk management. It has strategic interests and has adopted various programs aimed at the safety of employees, climate & environment, waste management, biodiversity, human rights, anti-corruption and whistleblowing, responsible procurement and taxation.
1. Loss reported due to impairments: Even in difficult times, the Maersk Group delivered a profit of USD 5.2bn and an underlying profit of USD 4.5bn in 2015. The Group delivered a strong cash flow from operating activities of USD 8.8bn in 2015 despite a significant decline in container freight rates and oil prices. However the results were unsatisfactory in 2016 majorly impacted by post-tax impairments of USD 2.8bn which resulted in an overall loss of USD 1.9bn. These impairments were to primarily relating to Maersk Drilling and Maersk Supply Service.
2. Fluctuating margin and rising costs: Maersk has often missed earnings forecast and lost market share due to uncertainty in the industry and fluctuating demand. But in spite all this, it has managed to the most profitable operator amongst other players in the industry. Also, due to the global economic conditions. Logistics cost has increased manifold for the company. But steps are being taken to bring down the cost and safeguard the profitability of the company even in these challenging times.
The unpublished sections of the entire Maersk SWOT analysis is available in the 'Complete Report' on purchase.
1. Maersk Annual Report 2016: http://files.shareholder.com/downloads/ABEA-3GG91Y/4700791164x0x926927/1313EF10-D845-4BDE-A0B6-BFEC276D0EE5/Maersk_Annual_Report_2016.pdf
2. Maersk Q1 2017 report: http://investor.maersk.com/common/download/download.cfm?companyid=ABEA-3GG91Y&fileid=942439&filekey=74BCF21F-9B4B-4FAC-82E6-7F1B08AC02D1&filename=Maersk_Q1_2017_Presentation.pdf
3. Maersk Annual Magazine 2016: http://investor.maersk.com/common/download/download.cfm?companyid=ABEA-3GG91Y&fileid=926934&filekey=CD22EA2A-BD16-4836-9060-F23597E51CE1&filename=Maersk_Annual_Magazine_2016.pdf
4. Maersk Sustainability: http://www.maersk.com/en/the-maersk-group/sustainability/the-environment
5. CMA CGM acquisition clears path for Maersk-Hamburg Sud deal: http://www.joc.com/maritime-news/container-lines/cma-cgm/cma-cgm-acquisition-clears-path-maersk-hamburg-sud-deal_20170613.html
6. Qatar Begins Shipping Cargo through Oman to Bypass Gulf Rift: https://www.usnews.com/news/business/articles/2017-06-12/qatar-begins-shipping-cargo-through-oman-to-bypass-gulf-rift
7. World’s Biggest Shipping Company Voices Alarm at Trump Trade War: https://www.bloomberg.com/news/articles/2017-02-08/world-s-biggest-shipping-company-voices-alarm-at-trump-trade-war
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Maersk SWOT and PESTLE analysis is reviewed by senior analysts from Barakaat Consulting.