Analysis Of The CMA CGM Company

Analysis Of The CMA CGM CompanyCMA CGM (2010a) is the worlds third largest container raptus partner dis home base and is ranked number oneness in France who offers a complete order of activities including raptus, handling facilities in port as well as logistics on supply. Its main objective is to offer customers every(prenominal)(prenominal) over the world a proactive, innovative service which reconciles quality and high performance with protection of the environment.The laminitis and CEO of CMA CGM Mr. Jacques R Saade is guiding the group from the begining to till date confidently and wish to develop and run in future of container deportation. CMA CGM has always co-ordinated security, safety and environmental concerns in their emergence strategies and used the latest engineering to minimize the pollution.Figure (Diagram) 1. Greenhouse gas emmission by canaliseation (River birdie Containers, 2010)The River shuttle containers (2010) of CMA CGM calculated the benefit of w aterways carries for protecting the environment comparing with the land transportation. Enhance to reduce the pollution they introducesd the river shuttle container barge in hack on teritory and atomic number 63.Figure (Diagram)2. History of CMA CGM create by author ( CMA CGM, 2010b)CMA CGM is operating by its own brand transit line CMA CGM and other subsidiaries for integrating the constitution and adding value for customization in container merchant vessels market.CMA CGM worldwide subsidiaries for corroborateing group activities in transportation atomic number 18a which ar as follows-Container transit LineDelmas. proficient in Afri john regionOTAL Africa Line. Maximum coverage in westerly AfricaCNC Line-Specialist for Intra -Asia lineANL- Leader in OceaniaMac Andrews Dedicated in Intra European tradeCOMANOV. Specialist for MoroccoUS Lines. Specialist for transpacific and Australasia trade.MultimodalRiver Shuttle ContainersLTI FranceProgecoCMA RailLogistics serve1) C MA CGM Logistics2) TCX Multimodal LogisticsInternational TourismCompagnie du ponantTapis rouge InternationalPartir en freightThe Travellers clubThe CMA CGMs (CMA CGM, 2009) e-commerce serve offer a full range of online c argon which argon comparatively favourable, safe and efficient to the customer and planned to discriminate the paper and making the flow of faster information around the clock. They be highly integrated in transport sector of the world by connecting the regional leader in transportation bid ANL in Australia. beingness expatriation council (2009) repoted that CMA CGM has become an global operator serving maritime shipping routes around the world with door-to-door services combining maritime shipping with caterpillar track, river and highway transport. They expanded their contrast by a growth system and sustained smashing spending which is powered by the joint military unit of jiant shipping leaders from USA ( US Lines ) to Africa ( OTAL line of Africa) . The Group has strengthened its success on the strong values of quality, innovation, imagination and anticipation.The CMA CGM (Marinelog, 2009) group inaugurated the French Asia Line or FAL service ( Asia to Europe) in partnership with MAERSK line ( No 1 in container shipping) by their latest vessel CMA CGM CHRISTOPHE COLOMB, one of the worlds largest container ship having 13344 TEU aptitude. This vessel is integrated by latest environmental technologies that actively contri barelye battle against global warming and CO2 emission.In ( The Journal of craft ,2010) this global economical downturn, CMA CGM affected and had $5 billion in debts pursual the worst downturn in container shipping history also a series of steep losses from hedging deals on oil prices. The political party (The Financial Times, 2010) is unable to complete the payment for spick-and-span ships also pickings the delivery from shipyards where the Greek ship-owner brought the ordered ship. They are try to ma nage the capital from outside of the country because Frances FSI strategic postment bloodline is normally to invest alongside other, conventional investors. The State-owned fund of Qatar is offereing $ 1 billion for recovering the losses and faces the unwanted situation of the CMA CGM group.Advance exaltation, Environment Minded is the motto of CMA CGM roughly environment protection in this climate permute and frequent change of world weather condition. They are awarded about the environment and know-how its ability to initiate and prepared to protect the environment. They are committed to sustainable development and honour for nature relies on numerous environmental initiatives to minimize the impact of transporting activities and trying to develop alternative transportation modes. pounder ANALYSISThe simplest( Rugman and Collinson,2006 ) form of taste the paticular competitive environment or investment contexts for firms at the national or international level is PEST analys is which examines the political,economical , socio-cultural and technological condotions of a organisation.In improver legal and environmental factors performd the full form of PESTLE analysis by which it is easy to assess new investment environment as an stimulant drug into global refinement and market entry strategies.The enivironment is very important for doing vexation in this uncertain world also in globalized economy. After rationality the internal factors of the organistion (Strength and Weakness), need to assess the other factors for competing with others or adding value to create such an environment for sustainity.Figure (Diagram)3. PESTLE Analysis (Developed by Author)In a study of calling environment, Johnson et al (2007) identified three layers which are as follows-The most general layer of the environment is macro-environment as inclose the PESTLE which strategies are affected by influences and some of the ways for seeking to handle the outer aspects of the orga nisation.The broad general layer is the manufacturing or sector as framed five forces which strategies are concentrated the cycles of emulation among the organisations.The most immediate layer is markets and antagonists which strategies are concentrated to identify institutionalise and indirect competitors.Overall, PESTLE analysis is tool identify the major external factors for running the organisation within a limited arena where opportunities are unlimited but threat may be influenced to s masking the activities.PESTLE ANALYSIS OF CMA CGMPoliticalAs a European shipping fraternity also to be a french line, CMA CGM has a stable political adventages in own region and over the world. They are getting scoop shovel cooperation from French government and European Union for extending the business globally. Due to their subsidiries presency in Africa, USA and others, they are able to manage any political issues by their partner and directly.EconomicalCMA CGM is passing a very tough economic time because of the downturn. They are in crisis from the begining of 2009 where 2008 shows ahuge profit. The Financial time reported that the club is trying to solve the problem by procuring the fund fron government or outside of the country.SocioculturalCMA CGM (2010C) plays a significant role in humaintarean development of the world and commited to promote the well-being of the children, particularly children with disabilities or length illnesses. impede International and the International Red Cross is the social partner for backup the childrens mental and physical development. CMA CGM incarnate foundation also support different artistic activities includingg the socaial and cultural activities in port and shipping sector. The foundation contributed in humanitarean and cultural program by running(a) in Franch and Lebanon. Over 60 projects are running by reneoed humanitarean and cultural organisation funded by CMA CGM foundation. scientificE-business is the main sy stems of container shipping and CMA CGM is serving throgh e-business. Every information related to shipping operations and unified are available on their website and customer can know any information regarding their cargo or others business bring from the incarnate website also from the subsidiary website. All vessels are manoeuvring by victimization latest technilogy which are safest and envirionment gracious.EnvironmentalThe Group (CMA CGM,2009) has a plan to cut CO2 emissions by 15 % per container and per kilometre. They leave alone preserve the budget for marine environment also develop the portfolio which will be environment friendly services and shipping solutions. Fighting against the negative impact of climate or climate change is the key component of Groups environmental policy. The equipment or container of the union is going to convert into eco container for reducing the use carbon as novel material.Most of the vessel of the association is equipped with a combina tion of innivative environmental features likw fast oil recovery system, multichamber waste compactor to recycle garbage on board , proper water ballast systems and etc. CMA CGM is awraded by longsighted Beach Harbour in their Green Flag Program . profoundCMA CGM expanded their business through merger and acquisition recently. They owned various lines as per international legal policy and financial tranjection and paying all kinds of tax and duties to the respective government.All vessel of the company are manoeuvering as international standard rules and regulations imposed by IMO (International Maritime Organisation) or other shipping authority.CORPORATE STRATEGYGrant (2005) defines corporate dodge as the reach of the firm in terms of the industries and markets in which it competes and decides the investment procedures through diversification, integration, merger, contradictory direct investment, acquisition etc. In a mult-business ( Lasserre,2007) corporation , the corporate s tragy features the long term objectives, selecting business portfolio, allocating resources across businesses and designing its structure, systems and processes. Corporate (Koveos, 1997)history has feature lots of ways or approached foe restrucering the company both internally and externally. External restructuring has taken nates through a variety of mechanisms including fusions and Acquisitions. He added that changed world business system augmented by the transition of so many previously planned economies to a new market base framework. Synergy (Koveos, 1997) from mergers or other restructuring activity has been characteristically portrayed as 2+2=5. For getting the compettitive advantages or extra benefit from the synergy and entrancing the market or decreasing the barriers, the restructuring process is doing through corporate dodging like mergers and acquisitions.05. MERGER ACQUSITIONThe main theme of corporate business strategy is integration of the company. Integrating p rocess may be diversification, Merger and Acquisition, FDI, CSR or any other strategic application. Galpan Herndon (2007) found that well managed integration in an organisation can achieve significant directs in working and positive outcomes in a disciplined, acclerreated and resealt-oriented approaches of the employee.Figure (Diagram)5. Merger and acquisition developed by authorIn a study of strategic counselling ,Thompson Strickland (2003p-177) denotative that no company can afford to ignore the strategic and competitive benefits of acquiring or merging with another company to strengthen its market position and open up avenues of new opportunity. That is why MA is one of the best option for penetrating the own product into new market or kill the rivalry for decreasing the disputation at present market.06. MOTIVES FOR MERGERS AND ACQUISITIONSIn a study Panayides Gong (2002) stated both major motives of MA in shipping industry and these are Value- maximisation and Strategic marketing motives.Value -maximization motives divided into three parts which are as follows-01. Market Power. It impacted to the present market and may be all-encompassing the business with the help of merged or acquired company. Panayides Gong (2002) brought an example of a shipping company. The case of CP ships and its 1994 acquisition of CAST (Shipping Company) a major competitor of CP ships in the port of Montreal- provide anecdotal evidence completely changed and controlled 85% of the container business in a relatively short period.02. Efficiency Increase.03. run and Financial synergies. Operating synergies may arise as a result of revenue enhancements and/or cost reductions that are effected from the mergerThe major strategic objectives of shipping companies may include the acquisition of market share, the expansion or entry into new markets (geographical or new services), acquisition of watchfulness skills to argument firm capabilities in relation to new growth areas an d the transportation system of management capabilities to acquired firms to assists rebuilding.07. MERGER ACQUISITION IN SHIPPINGMaritime industries are prone to uncertainties and risks for their global activities where competitive pressure releted to larger but fewer players. Due to globalization of the world trade especially in shipping, shipping companies are trying to make a global chain for providing the services from door to door as well as adding value by covering the all places of the world. This is the main logistic aims of container shipping to diversify the business by offering wide range of benefits and economic facilities from the origin to the final destination. Minimizing the barriers which are blocked to serve in the chain, they are integrating their compnany by global strategies viz Diversification, MA and etc.YearCoverage198226%199242%200860%Figure (Table) 6. World slot coverage by top 20 carriers (Notteboom Rodrigue ,nd)In 1982, the world slot is coverd by to p 20 carriers was 26% and it tremendously incresed in 2008 and the highest 60%. The world container or slot is increasing but the business is going to the limited operators. Merger and acuisition strategy is playing the main role fordeceasing numbof operators.Internationalization and globalization both are created the competitive enivironment in container shipping industry. Preliminary, it transform to the liner service and victorious slot from other operators for reducing cost or customization by sire connection with the feeder or quick service. After that the alliances of some opertors like OOCL MISC, former PO and NYK made Global alliance (OOCL, 2010) in 1998 and to a greater extent allinaces by leading operator driven exclusive business kinetics in this trade. After (Heaver et all, 1993) huge loss in north Atlantic container trade in 1993, all operators tried in several quantify to develop cartel agreements like Transatlantic Agreement (TAA) by ascertain rates, capacity, su pply of the vessel for gaining and minimizing the lost .Acquisition of Australian National Line ANL by CMA CGM or takeover of APL by NOL were the big dealing in oceanic conatiner shipping. Surprizingly, MAERSK line (PO Nedlloyd, 2005) merged its core competotr company PO Neddlloyd in 2005 and expressed as the largest shipping company of the world. Not only horigental integration but also vertical integration of shipping company created more competition in the container shipping market. Furthermore, merger and acquisition is extended to port storage management, intermodal systems, tourism industry, and shipbuilding for getting more advantages and fullfill the main motto of container shippiing servces (Stopford, 1997) that heart and soul door to door service.08. INTEGRATION OF CMA CGM GROUPShipping LineShipping LineABCDEShipping Agents or General Sales Agents at Various Port and surface areaCargo Handling Company or Stevedores or Terminal factorFreight Forwarder Or NVOCC ( Non V essel Operating Common Carrier)Inland transit Operator or Intermodal or multimodal operatorFigure (Diagram)7. Transport image Integration based on shipping line examplefreewoman (2009) argued that containerisation prepares the basis ground of integration in both vertically and horizentally. It is the pack to create the chain or making a system for transpoting the cuff or container smothly. The main components are Main Line opeations, terminal operations, Intermodal and logistics. The containers are mainly owned by the operator and repositioning from one place to another frequently. So, the responsibilty of the carriers is not finishing by giving only the one service.CORPORATE SHIPPING CONTRACT perpendicular Integration of CMA CGM GroupLOGISTICSFigure(Diagram) 8. Vertical Integration of CMA CGM Group developed by author.The company integrated vertically by creating the business of logistics, terminal business and intermodal in various countries (Road and rail facilities). Land Tr ansport International and Transit International are both transport channel of trucking and forwarding company for caring the cargo from/to the consignee premises to/from the port or internal transfer from one place to another. The River shuttle containers ( 2010) is the cheaper and more ecological transportation of containers by barge or rail services which are operated in all over the Europe as door to door intermodal services. In addition they have corporate shipping contract with the industry players and international organisation CMA CGM logistics . CMA rail has cardinal subsidiries where 100 % in europe rail link and 55% in Algeria rail link ( Northern Africa). Moreover, they are expanding their rail network in USA and India.TCX multimodal and Progeco covered the area of multimodal carriage which are help to add value in their main business.CMA CGM ( The Hindu Business Line,2006)has two subsidiries in terminal and port operations Terminal Link and Portsynergy which are oper ated in Malta, France, Morocco, North Eastern Europe, USA and Togo. However, they eastablished the supply chain network from the bonded storage warehouse to ocean tranportation facilities by their subsidiries and independent network of transport.Horigental Integration of CMA CGM GroupContainer shipping transpotation is the main business of CMA CGM group. They owned the seven container lines of the world ANL, DELMAS OTAL and others to cover the all port and places of the world. As per their strategies, they merged or acquired these lines for getting the compettitive advantages in a specific region and connecting with the main line of CMA CGM.09. CONCLUSIONThe Shipping industry (Casson, 1986) has an important role in contemporary restructuring of world trade. Containerisation made the easy transportation of commodity especially for manufaturing goods ant its raw materials. Integration (Freemont, 2009) of the transport chain come up against the financial, technical and human resource capacity of the different actors involved in this trade. Merger and Acquisition of a company is the fruits of research to cover the area for adding value in the shipping services. opposite factors like culture, attitude of key employee and environment also key factors to set or sustain after merger and acquisition. CMA CGM is the great example of MA for their group activities from the very begining to till date but recent quoin affected the group and trying to survive. However, they are trying to manage the fund from outside of the Group (The Financial Times,2010). Corporate business strategy will help them to do better work for upcoming business trends. As shipping is the big business where risk is high and low return, the strategy may be considered carefully and economically.