Oil Tankers Case

In: Business and Management

Submitted By svetlanasimic10
Words 4308
Pages 18
Industry Structure: Fragmented
Product Differentiation: Generic
Technological Change: Slow (Long Product Life Cycle)
Product/ Service Technology: High Switching Costs
Location: Global
Product Life cycle: Maturity stage.
The maturity stage is identifies in the mass distribution of crude oil, less product differentiation, overcapacity, lower labor skills in developed countries, & the increasing stability of manufacturing process.
General information related to Value Chain * A firm is profitable if the value it commands exceeds the costs involved in creating the product. Creating value for buyers that exceeds the cost of doing so is the goal of any generic strategy. * Value activities can be divided into two broad types; primary and support activities. * Primary – activities involved in the physical creation of the product and its sale and transfer to the buyer as well as after sale assistance. In relation to this case the primary value activity would be the vessel. (Inbound logistics, Operations, Outbound logistics, Marketing & Sales, Service) * Support – activities support the primary activities and each other by providing purchased inputs, technology, human resources and various firm-wide functions. (Human Resources Management, Technology development, Procurement)
Porter's 5 Forces Analysis 1. Threat of New Entrants.
Economies of Scale/ Government Policy
The threat of new entrants is high. New Entrants like Brazil, South Korea, Yugoslavia, and Poland were growing two to three times as fast as the rest of the industry due to low labor cost, centralized planning and new capacity. Also the government offered tax incentives for the development of shipbuilding such as tax allowance programs, depreciation tax deferment, rebates and credit assistance. * On a per ton basis building a 200,000 DWT tanker would be…...

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