Abstract

Navigating between changing market conditions and rigid resources: Dutch shipbuilding companies’ strategies during the rise of Japanese competition, 1950-1983

The paper studies the impact of postwar international competition on Dutch shipbuilding companies’ strategies. In the 1950s and 1960s, Japanese shipbuilding experienced a remarkable growth, especially regarding large, standardized vessels. Two major Dutch shipyards, Van der Giessen and Rotterdamse Droogdok Maatschappij (RDM), were both highly affected by increased competition. However, the companies targeted different segments within the market for ocean-going vessels and partly controlled different resource bases as a result. RDM had a diversified product portfolio and, combined with repair activities, produced ships ranging from very large and standardized commercial ships to more complex naval vessels. Van der Giessen on the other hand mainly concentrated on the construction of medium-sized and large commercial ships. The effect of Japanese competition offers the opportunity to study how different initial resource bases and market positions shaped the range of strategic options for both shipyards, contributing to debates on the drivers of firm strategy. To address this impact, the paper employs the following question: how and to what extent did the upsurge of Japanese competition impact the company strategies at the Van der Giessen and RDM shipbuilding companies between the 1950s and 1983? Based on company archives, the paper argues that firm strategy in general followed a preference for penetrating new, profitable markets, but that specific strategic choices were dependent on existing investment patterns and market positions. Instead of investing in superior resources to combat competition, both firms diversified their product portfolios by targeting related market segments. However, the companies’ deviating starting positions meant that RDM targeted different market segments than Van der Giessen. It thereby supports the market-based view in explaining firm strategy, but points to a more configurational approach and an important role for resource rigidity.