Detailed SWOT Analysis of Maersk – The Largest Container Shipping Line

Products By Maersk

• Container shipping and terminals
• Logistics and freight forwarding
• Ferry and tanker transport
• Semi-submersible drilling rigs and FPSOs
• Oil and gas exploration and production
• Shipyards
• Store retail

Competitors of Maersk 

Here a Maersk competitors analysis 

• Mediterranean Shipping Company
• COSCO International 
• Hapag-Lloyd
• DB Schenker

Now that we know everything we need to know about Maersk, let’s start with the SWOT analysis of Maersk.

SWOT Analysis Of Maersk

SWOT analysis is like a formula for identifying Strengths, Weaknesses, Opportunities, and Threats (SWOT) that a market possesses for a company. The main objective of this analysis is to help us, as investors and the company, to make business decisions wisely.

By using this method, we analyze where the company is falling short, where it is excelling, and what needs to be worked upon.

To better understand the SWOT analysis of Maersk, refer to the infographic below:

So let us first start by looking at the strengths of Maersk from the SWOT analysis of Maersk.

Strengths of Maersk

The strengths of a firm can be positive qualities that help the company to maintain goodwill in the market or give it a competitive advantage. Mentioned below are some of Maersk’s strengths:

• Global Network: Maersk is one of the world’s largest container ship and supply vessel operators. It employs approximately 80,000 people worldwide and operates in more than 120 countries.
• Vast Business: Other than shipping and logistics, the company engages in oil and gas exploration, store retail and production since its inception. Vast business in the market gives Maersk a complete edge over its competitors and open broad revenue streams.
• Strong Legacy: The company has a strong global brand and reputation as a major leader in the market. Maersk has a strong legacy dating back to 1928. The company’s trade routes between Eurasia, the Atlantic, South America, and Africa are strong.
• Customer Satisfaction: Maersk is very strong in terms of engagement levels with its clients and a dedicated customer care team 24/7 to ensure a high level of customer satisfaction. The customer relationship management team has successfully established goodwill in the market by attending to the needs of existing and potential customers with developing innovative solutions.

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• Social Responsibility: Maersk is working on making a greener environment and sustainable development with its bold moves. Maintaining the right environment for the right people comes under the core values of Maersk.
• Exploring New Markets: Maersk has a record of exploring and conquering new markets while having the advantage of consumer satisfaction. The worldwide expansion of the company has helped build a new revenue stream. Therefore, Maersk can be considered an experienced player when it comes to entering new markets.

Weaknesses of Maersk

Weaknesses are the areas where the company is lacking behind and needs improvement. Let’s have a look at the weaknesses of Maersk:

• Visibility in Other Sectors: Although Maersk is known well in the global market for its supply and logistics services, somehow Maersk lacks in its visibility in road and air transportation which are said to be important sources to generate more revenue. 
• High Costs of Operations: With a growing network the costs of operations of the company pose a critical challenge to the business. It can also cause fluctuating profit margins for Maersk.
• Distinct Work Cultures: Integration of companies with distinct work cultures has not been very successful. As previously said, while Maersk is adept at integrating small businesses, it has had some failures when it comes to merging businesses with distinct work cultures.
• Strong Government Regulations and Policies: There are strong government rules and regulations that make operational efficiency low and create a hindrance in the working of a company.
• Need for Investment: Compared to the other firms already present in the industry, Maersk spends less than average on R&D. The company has created a mature image in the market which means that it will not be able to compete with other players in the market in terms of innovation until the investment budget is increased by the central government which also means that it is missing out on new opportunities.

Opportunities for Maersk

Opportunities are uncontrollable external events a person can potentially leverage. These are favourable external factors that could give an organisation a competitive advantage. 

• Geographical Expansion: Expanding its consumer base geographically by offering additional services can help the company grow. Maersk can also expand through strategic partnerships, alliances and joint ventures.
• Technological Advancements: Technological advancements and improved equipment and tools can aid the company’s growth and long-term sustainability. The world has started to prefer brands that support environmental health. Maersk’s current mission and vision clearly state that it is working its way towards greener renewable energies and emerging sustainable technologies which, if pursued correctly can give the firm a huge advantage.
• Increase in Fuel Demand Because of Industrialization: Economic growth policies designed to increase revenue and industry will increase energy consumption. As most of the energy needs of developing countries meet mineral burning, economic growth and industrial development policies will clash with sustainable development.
• Economic Development: Economic development and rising consumer spending, after years of economic decline and slow growth rate in the industry, is Maersk’s opportunity to capture new customers and expand its market share.

Threats to Maersk

Threats are the external factors that may cause loss to the firm over time or all at once. Some of these are stated below keeping Maersk in mind:

• Criticism: Maersk has been criticized several times such as trade unions and labour rights organizations have criticized Maersk’s labour practices in different parts of the world and the US government overcharging allegations in Iraq & Afghanistan.
• Economic Unseen Events: Economic slowdown and fluctuations in global currencies might have an influence on margins. Changes in regulation in various nations may have an impact on Maersk’s commercial operations.
• Political Volatility: Electricity and gas have been a very important subject of discussion between many countries for the last century. Energy demands and production are always surrounded by politics. Maersk has the disadvantage of becoming a victim of political development in the future.
• Intense Competition: Increased competitors’ technologies and profit stability have increased the competition in the industry over the last two years which has put downward pressure on not only profit but also sales.
• The Rising Cost of Production: No company can completely avoid the rising costs of production. Maersk, sustainably producing electricity and gas will have to face these costs at a higher and larger scale.

This ends our detailed SWOT analysis of Maersk. Let us conclude our learning below.