Abstract

"Independence and Interaction of Segments within an Industry: The Dynamism in Shipping Industry 1990 - 2020"

Sungshin Cho, Kyoto University (cho.sungshin.815@gmail.com)

A company's strategy depends on which segment of an industry it chooses to enter. There have been many studies on cost advantage and differentiation advantage. Nevertheless, few studies have analyzed the relationship between each segment within the industry on a cross-sectional basis. Classifying the shipping industry into six segments, this study analyzes the factors that establish the segments within the industry and their relationship to each other. In the shipping industry, segments are also divided according to cargo but due to the "product" nature of transportation, there is overlap between segments, making the industry suitable for analyzing segment relationships within the industry. The research will cover the period from the 1990s, when the long-term recession in the shipping industry ended and the market competition began anew with the arrival of the shipping boom, to the present. This study shows the industry's dynamism across countries and regions as a unit of analysis for segments within the industry, by using the database published by an international shipping broker. Through these analyses, this study clarified the following contents. First, even in the shipping industry, which shares a common "product" of transportation, the top companies in each segment clearly differ, and the reason for this is that the specificity of each product forms an industrial barrier. Second, the locational advantages of firms vary by segment, and high specialization tends to lead to geographic concentration. Third, the shipping industry has become so fragmented that independent companies have begun to emerge and take on outsourcing, concentrating only on skills common to each segment and gaining global status. This study brings a new perspective to market and strategy selection by focusing on the interrelationships among industry segments, rather than viewing them only as independent of each other.