"Global Market Expansion Strategy Interview"
A.P. Moller-Maersk
Submitted by Umama Khan
Introduction
Founded in 1904 by Arnold Peter
Moller, A.P. Moller-Maersk,
commonly known as Maersk,
stands as a Danish multinational
corporation with a profound impact
on the shipping, logistics, and
energy sectors. Its roots in shipping
have flourished into a position of
global dominance, operating one of
the world's largest container
shipping fleets. Maersk's influence
extends beyond maritime transport,
offering integrated logistics
services that include terminal
operations, customs clearance,
warehousing, and domestic transportation. The company's diversified portfolio has included ventures into
the energy sector, with involvement in oil and gas exploration and production. However, strategic
changes have seen a focus on separating energy-related businesses. With a presence in over 130 countries,
Maersk has crafted a truly global network, facilitating unified trade across continents. Committed to
sustainability, the company has embraced environmental responsibility, investing in energy-efficient
vessels and exploring alternative fuels. Maersk has also undertaken a digital transformation, leveraging
technology to enhance efficiency, provide real-time shipment tracking, and deliver data-driven insights.
Beyond business, Maersk places importance on corporate social responsibility, engaging in community
development and supporting sustainable practices within the industry. As a key player in global trade and
logistics, Maersk continues to adapt to industry dynamics, technological advancements, and evolving
customer needs, shaping the future of maritime and shipping.
Interview
What factors does Maersk consider when evaluating potential markets for entry?
Closeness to major trade routes and shipping lanes is crucial for Maersk, given its dominance in the
shipping industry. Access to strategic ports and waterways influences market entry decisions. Maersk
evaluates the economic stability of potential markets. Factors such as GDP growth, trade volume, and
overall economic health play a role in determining the attractiveness of a market. Trade policies, customs
procedures, and regulations affecting the shipping and logistics industry are always the top priority as
well as the quality and development of transportation infrastructure, including ports, roads, and railways,
are important considerations for Maersk when entering a new market.
How does Maersk ensure that its global market entry strategy aligns with its overall corporate
objectives and mission?
The company prioritizes ethical business practices, sustainability, and social responsibility, and these
principles are embedded in its market entry decisions. DE carbonization of the shipping industry is a
strategic imperative embedded across Maersk. They are intensifying their work to achieve net zero
emissions by 2040 and have set intermediate targets aligned with the Science-Based Targets initiative
(SBTi) 1.5°C pathway. They are building a strong regulatory structure with instruments to rapidly and
effectively reduce greenhouse gas (GHG) emissions.
Maersk has developed its own Responsible Ship Recycling Standard (RSRS) setting keen standards on
Health & Safety, Environment, Anti-corruption, Subcontractors and Labor and Human Rights.
Furthermore, responsible ship recycling can contribute to the creation of a viable ecosystem and circular
economy around “Green Steel” (re-used steel). Steel is the second largest GHG polluting industry
accounting for 7 % GHG release of all emissions.
What role does market research play in the selection of a global market entry strategy?
The target audience of Maersk who need shipping services mainly includes key clients, local forwarders
and direct sales, customers. It also has the largest set of customers that includes PUMA, Disney,
Microsoft, Amazon, H&M and more. Insights from market research contribute to strategic positioning.
Understanding the needs and preferences of customers, along with the competitive landscape, allows
Maersk to position itself effectively in the market, ensuring a coherent and competitive entry strategy.
In what situations would Maersk opt for a joint venture as a market entry strategy?
IBM X MAERSK; Together with Maersk, the largest container ship and supply vessel operator in the
world since 1996, the parties will use block chain technology to power the new platform. In addition they
will employ other cloud-based open source technologies including artificial intelligence (AI), Internet of
Things (IoT) and analytics, delivered via IBM Services, in order to help companies move and track goods
digitally across international borders. It provide greater more transparency and simplicity in the
movement of goods across borders and trading zones.
How does the level of political risk influence the choice of global market entry strategy?
Maersk continues to drive personal engagement from leaders to ensure sufficient prioritization of people
safety and security. The company continues to embed a unified safety and resilience framework in the
business operation systems, including for M&As and its integration. There was a global energy crisis and
shocks to the world’s food supply chains as a direct result of Russia’s war in Ukraine in 2022 and Israel’s
war in Palestine 2023, Maersk is helping customers through this transition, so that supply chains across
air, land and sea can be sustainably operated with fewer intermediate products being traded over long
distances.
How do economic factors, such as currency exchange rates, impact the success of different market
entry strategies?
Fluctuations in currency exchange rates can affect the costs associated with market entry, such as
transportation, and operational expenses. This, in turn, influences pricing strategies. Maersk continues to
adjust pricing to remain competitive and maintain profit margins by incorporating risk mitigation
strategies, such as hedging, to manage the potential impact of currency fluctuations on budgets and
financial forecasts.
What challenges might a company face when implementing a global market entry strategy and how
can these challenges be mitigated?
Decarbonisation has become business critical and a license to operate. It is critical for Maersk to
decarbonise its end-to-end supply chain at a speed that meets customers’ and investors’ expectations.
Maersk has a dedicated decarbonisation function to drive the decarbonisation agenda. The company’s
new accelerated 2040 decarbonisation vision is in line with the ambition of its customers. The first 13
methanol-powered vessels have been ordered, and the supply of green fuels for the first feeder vessel has
been secured. Work on a roadmap for landside decarbonisation (and air) is in progress.
Maersk becomes increasingly digitalized, more devices and control systems are connected online
resulting in a wider technology surface which is increasing external threat capabilities, puts more pressure
on systems to be cyber threat resilient. A cyber-attack could lead to severe operational disruption or data
breaches. - Maersk aims to avoid a material cyber-attack through increased threat intelligence and
response capabilities, and builds digital resilience with business segments, third parties and wider supply
chains.
How can cultural intelligence and adaptability be integrated into global market entry strategies for
improved success?
Maersk provides cross-cultural training to employees involved in the market entry process. This training
should focus on understanding cultural nuances, communication styles, business etiquette, and local
customs. . Each risk is evaluated through a dedicated Compliance team of 50+ specialized experts and
65+ dedicated Business Compliance Ambassadors that monitor and manage cultural risks across
Maersk’s compliance programme.
Conclusion
In conclusion, Maersk's prominence in the global shipping and oil industries is attributed to its adeptness
in navigating market dynamics, maintaining financial stability, and making strategic decisions. The
company's success and resilience underscore its ability to evolve in response to industry challenges,
positioning itself as a key player with a strategic approach to sustain growth and adaptability. The
company's strategic decisions, coupled with a commitment to innovation and operational excellence, have
contributed to its long-standing success in two highly competitive industries.
