Strategy during stormy conditions - A case study of Stena Line

Abstract

Background & problem description: It is general accepted that a condition for companies to achieve profitability is to have a well-defined strategy. A further condition for companies to succeed and be profitable is having a strategy which is up-to-date. If the strategy is outmoded, the risk for the company to lose its competitive advantages arises. The last decades the environment surrounding organizations have become more complex and dynamic. This requires a greater focus on adapting the strategy to the changes in the surroundings. Having an up-to-date strategy is especially important for companies operating in the shipping industry, since this industry, with its global and investment-demanding nature tends to be very turbulent and cyclical. Purpose: The purpose of the thesis is to identify the strategic changes a company is forced to implement due to external changes. The thesis also aims to analyze how a company could sustain its competitive advantages on a dynamic market. Delimitations: The thesis is delimited to the Danish route, which is a division within Stena Line. A further delimitation is the focus on travellers, not on freight. Method: The authors have used the Danish route as the case company, in order to achieve the thesis purpose and research question. The thesis is descriptive with a retrospective nature, since it is describes events that have already occurred. The qualitative method has been used as survey method. The authors have used both primary and secondary data. The secondary data was collected to build up the framework, while the primary data was gathered to build up the empirical findings. Conclusion: Stena Line, the Danish route included, is a good example of how external changes forces a company to change its strategy. Before the external changes took place, the Danish route’s strategy was in connection to Porter’s ground view of strategy. Due to the external changes, the Danish route lost its advantage, selling items free of tax, and it became obvious that they needed to change its strategy to remain competitive. Stena Line was forced to reorganize, reposition and create new competitive advantages in order to meet threats from different substitutes. Offering tax-free items was replaced by offering a maritime experience and visiting Denmark. Further, the Danish route has kept many of its valuable resources that they had before the external changes occurred, such as the maritime experience. The Danish route was in possession of this resource before, but due o the new conditions, they adapted its strategy, which made them to exploit this resource in a more effective and commercialized way.