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Research On The Competitive Advantage Formation Of International Freight Forwarding Company

Posted on:2015-12-16Degree:DoctorType:Dissertation
Country:ChinaCandidate:B H RenFull Text:PDF
GTID:1109330467475100Subject:Business management
Abstract/Summary:PDF Full Text Request
Along with the rapid development of international logistics services, the importance of Freight Forwarders has become increasingly prominent. Their competitive advantages are not only related to their own development ability, but also influent or even determine their customers. They also affect the efficiency and effectiveness of supply chain. Freight Forwarders have become important parts in the global supply chain and value chain. This makes it has an outstanding practical significance to research the competitive advantage of freight forwarders. Of course, as an independent industry, freight forwarders have their own characteristics and its services, business scope and profit mode have changed greatly, therefore, the research on the formation of competitive advantage, in addition to the general research questions of competitive advantage and the unique or proprietary theoretical issues of freight forwarders’competitive advantage, also has theoretical significance.The international freight forwarding industry has developed hundreds of years. So far from1840, China’s freight forwarding industry has nearly200years of history. This history has experienced loss of function, weak enterprises, state-owned monopolies and other abnormal stages of development. In the near half a century China began to gradually rebuild the "market-oriented" international freight forwarding industry. Especially in the near30years when global economic developed, both domestic and foreign freight forwarding company’s business have gradually penetrated and transformed from the "traditional customs agents" to the "international multimodal transport" and "international3PL services" but the transformations of foreign enterprises are deeper than China’s freight forwarding business.The international researches on competitive advantage of international freight forwarders are kinds of "scarcity" relatively. A great number of relative researches in China give priority to the qualitative analysis; most of the researches are trying to give some general advices to the industry. Therefore, researches on this issue need to be based on the study of the general company’s competitive advantage, and then point out the suitable research framework according to the particularity of the enterprises in the industry. Among the researches on topic of source of competitive advantage, industry-based view and the method of Value chain analysis which are represented by Porter are very popular in a long period. The new angle and conclusion of resource and capability theory have played an important roles of complementary and contribution:Firstly, the perspective of resource and capability is from the internal to the outside (in-outside), it makes a complementary to the path of the industry-based theory which is from the outside of the industry, namely outside the enterprise (out-inside); Secondly, the results of the research on resource and capability concept make the tool and method of "value chain analysis" that attempts to do an Internal analysis have a more concise and intuitive application possibility. That is to say, in the implementation of analysis of strategic business on value chain, we can compare different companies in two dimensions of resources and capabilities so as to judge whether a company has competitive advantage or not and why it has. However, theory of resources and capabilities in practical application is facing the argument of bounds and constitute of resources and capabilities. Therefore, during the analysis of the source and evolution of enterprise competitive advantage, it is hard to definite the influence and the role. It affects the application of the theory in analyzing and interpreting the formation of competitive advantage in the reality.This paper attempts to explain and apply the concept of resources and capabilities and the theory of value chain by using the substance-consciousness principle:to definite what is included in resources and what belongs to the capabilities. In the real world, the resources are kinds of substance which include human resources, finances, materials, information and customers. The capabilities are kinds of consciousness which can be reflected by recognition and using resources. Resources and capabilities distribute and combine in the value chain based on the organizational structure or business unit. It creates customer value in the progress. On this basis, this paper constructs the theoretical framework to analyze the competitive advantage of international freight forwarding enterprises:according to the nature of practice of international freight forwarding enterprises (the general agent or3PL), the human resources and financial resources are more important to the general agent, the materials and information are more important to the3PL. Both in the two natures, the importance of customer-resources depends on the specific business; capacity is reflected in related key resources. The capacity to identify and use human resources and financial resources are particularly important to the general agent, while the capacity to identify and use materials and information must be matched to the3PL. After doing this analysis on the general business process of international business activities, the paper points out how do the freight forwarders earn profits, and further, the paper points out the value chain model of international freight forwarding companies as general agents and3PL service providers. According to the comparison results, we can see which enterprises have more competitive advantages and how they earn the competitive advantages.Of course, when comparing the competitive advantage, the first thing is to definite the "competitive advantage" and point out how to measure it. This paper is based on the existing researches and definite the "competitive advantage" as:enterprise’s competitive advantage is to create more customer values than competitors by using and integrating resources and capabilities. International freight forwarding company’s competitive advantage is that the companies within the industry through the cultivation and use of the resources and capabilities to create and achieve customer value which is more than other competitors’in the same industry. However, for businesses, regardless of the connotation of customer value and how well, only when it transform into a corporate income, it can be considered as real competitive advantage. Therefore, this paper uses operating profit as the standards to measure the enterprise competitive advantage.The paper chose four international freight forwarding companies in the city of DL as the subjects of case studies:ZJ, ZC, JT and AD. They have the similar nature, business and size. But after four years of development from2009to2012, the four companies are showing different Market Performance. Some of them still take the role of market leader and realize stable growth trend; some of them achieve a breakthrough of development; but also some of them lost the role of industry leader and even facing a very hard and unsustainable situation now. Why? Seeking the answer is to analyze and explain the formation of the four forwarders’competitive advantage.This paper uses the international freight forwarding enterprise competitive advantage analysis framework to analyze the case. In the case analysis process, according to the actual situation of the four subjects, comparing the within group and between groups companies’different natures, different advantages and disadvantages, choices of important resources, control to the unit contribution rate and the marginal contribution rate, the paper infer and compare the capabilities of the four enterprises. The paper also explains the relationships between resources and capabilities in the formation of competitive advantage. On the problem of sustained competitive advantage, case study concludes that the agent-based freight forwarding companies can maintain advantage by achieving intensive services through customer choice in short term. But in a long time, in order to get competitive advantage, forwarders need to transform from traditional freight forwarding to3PL. That is an inevitable trend. The paper makes further exploration about the leap relationship of resources and capabilities. With researching on the functions and characteristics of international freight forwarders, the paper concludes that the important resources play the general roles on building up competitive advantage of the international freight forwarders.Because most of the businesses of international freight forwarding enterprises are concern with international trades, the formation and nurturing of competitive advantages can not complete only depending on themselves. The institutional support is equally important, especially from the public policies. Therefore, this paper provides some recommendations to the government based on the analysis of the current policy environment and combined with the conclusion of case analysis. Thus it completes a practicality "tasks". The government should create a good environment for the freight forwarding business survival and development; it should be the primary policy goal. It needs to legislate to clarify the nature and responsibilities of international freight forwarding companies, to standardize customs operations and management, to establish efficient "customs clearance" system and to promote the industry associations. In addition, it also needs to train more professional employees, to diverse financing channels, to construct logistics infrastructures and to sustain financial supports.In the parts of extended analysis to the cases, the paper researches on the theories of ’organizational study’and’organizational memory’. The paper also makes further studies on the’general capability’in the enterprise’practices and points out some new understandings to the’organizational knowledge’based on the angle of resources and capabilities. The paper draws some conclusions that the scale, structure and culture of organizations have important impacts on the corporate consciousness.There are three contributions of this paper. First one is to use the substance consciousness principle and the theory of the sources of competitive advantage to build the general theory foundation to analyze the formation of enterprise competitive advantages. Second one is to construct analysis framework of freight forwarding enterprises’competitive advantages. Third one is to use case analysis method to analyze and explain the basic elements and process of forming competitive advantage of freight forwarding.Author of the paper admires Locke, a British philosopher who wrote the book of "An Essay Concerning Human Understanding", and the author also dreams to have the same ambition with Locke. Author hopes she can "be an ordinary laborer on the road to knowledge". So during the process of research, author sorts out the theories of competitive advantage, review the history of freight forwarding, and records all their development. Author also chooses the samples carefully, contacts with their leaders and finds out their "theme stories". Author has tried her best to all of these but there are still several problems worth of further researching in the future.There are also some shorts in the paper:Firstly, the discussion to the practical problem is not very deep, and equivalent the human body practicality in the enterprise and the enterprises’practicality is still lack of systematic analysis and enough theoretical support. Secondly, it is not very meticulous in the study of how the resources and capabilities composed; the analysis to the structure of the resources is rough; as a result, the research on the relationship between capabilities and different level resources is missing. Thirdly, the perspective of internal research ignores the analysis to the external factors that impact the competitive advantages. This affects the persuasion of the conclusion. Finally, to the research on freight forwarding enterprises’competitive advantages, the paper uses the method of case analysis, although the choice of the objects is satisfied with the requirements of the case study, but because of the limited samples, the explanatory of research conclusion is affected. Whether the research conclusion can be used to explain other freight forwarding enterprises is not clear. Although the shorts of the research make the paper not perfect enough, they still can be possible directions in the future research.
Keywords/Search Tags:International freight forwarders, competitive advantage, resource, capability, substance, consciousness
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