Globalization and its importance

Globalization and Adapting to Markets According to Anastasia and Corina (2013), globalization is one of the redefining factors of the port and maritime industry (p.35). These industries are under constant pressure to adapt and and renew their functional role in the chain of values in order to survive within the business environment (Anastasia & Corina, 2013, p.35). Due to this constant demand for adaptation and change, ports and transport companies are unstable (Anastasia & Corina, 2013, p.35). As Anastasia and Corina further explained, one of the main components of the maritime market is the fact that the majority of the market is only controlled by a few transport and terminal operators (p.35). As a result of this market concentration, the larger firms are able to invest a lot of money to maintain their large market share
(Anastasia & Corina, 2013, p.35). The forming of alliances or mergers are the most efficient methods of maintaining a strong position within the maritime market and allow for companies to compete with the dominant firms (Anastasia & Corina, 2013, p.35). For example, Maersk alone controls 14.3 percent of the market shares for shipping capacity in the world. Cosco, “K” Line, Yang Ming, Hanjin, and Evergreen control 4.3, 2.0, 2.1, 3.5, and 4.9 percent of the market shares, respectively (Wei Yim,
2014, p.500). Individually, their competitiveness does not match the dominance of
Maersk. However, under the CKYHE Alliance, their total market share equals 11.9%, allowing them more of a competitive advantage (Wei Yim, 2014, p. 501). The main reasons why forming alliances is beneficial, aside from gaining a competitive edge within the market, is because it grants access to low costs and sharing of risks for firms as well as enabling