Managing global competitive dynamics of shipping liners: Competitive embeddedness perspective

The business environment in the container shipping liner industry has become much more dynamic, and inter-firm competition between shipping companies is very intense. In order to win this competitive war, shipping liners are engaged in a constant business battle with one another. Therefore, the companies must know their competitors’ behavior and strategy and have knowledge of the drivers of competitive rivalry in order to successfully compete with their rivals and improve their competitive advantages. In this sense, competitor analysis has become a central strategic consideration for container shipping liners. Scholars in shipping management have investigated various ways to effectively compete and improve the competitive advantages of shipping companies. However, despite its significance, there have been few attempts to systematically analyze these competitive dynamics, including competitors’ behaviors and inter-firm rivalry analyses in the shipping liner industry. This study aims to develop a competitive dynamics model of container shipping liners, one which examines how inter-firm network embeddedness would affect inter-firm rivalry such as the likelihood of a competitive action of a focal firm and the likelihood of its rivals’ response. Structural and relational network embeddedness between a focal firm and its competitors would be investigated as drivers of the likelihood of the competitive action and response. The theoretical framework on the relationship between network embeddedness and inter-firm rivalry in the liner shipping industry will be developed, and relevant propositions are then suggested in relation to the model. This attempt may provide a meaningful insight into systematically understanding what key factors of inter-firm competitive relationship affect the inter-firm rivalry between shipping liners, and furthermore how this inter-firm rivalry may influence the focal firm’s competitiveness. This research would therefore contribute to the development of the competitive strategy of container shipping companies so as to help them strategically manage their rivals’ competitive behaviors and enhance their performance.