CMA-CGM: A Strategic Analysis of Market Scenario and Alliances

This report provides a strategic analysis of CMA-CGM, a leading French container transportation company. It discusses the current market scenario, highlighting increasing cargo volumes and the growing importance of technology and digitalization. The analysis includes a comparison of previous and future market conditions, emphasizing the shift towards improved container markets and the role of technology in enhancing productivity. The report evaluates CMA-CGM's Ocean Alliance strategy, focusing on its customer-centric approach and its potential to strengthen the company's offerings through expanded Transpacific and Asia-Europe services. Ultimately, the report underscores the significance of strategic alliances and technology adoption for CMA-CGM's long-term success in the dynamic global market.

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Introduction
The global competitive environment has become quite dynamic in nature and with
respect to this, it has become considerably important for the different firms to ensure that they
are successfully able to form strategies which will assist in the long term goal achievement of the
firm (Cma-cgm 2019). The given report aims at providing the strategic analysis of the firm by
discussing its market scenario and strategies as adopted by the firm.
About the company
The CMA CGM is a French Container transportation company which is involved in
shipping operations as well. The business can be considered to be a worldwide leading group
which makes use of 200 shipping routes between 420 ports in around 150 countries (Cma-cgm
2019). The company ranks fourth in order of the major giants as present in the field of container
and shipping behind the brands like Maersk, MSC and Cosco. The headquarters of the firm are
located in France and the current CEO of the company is Rodolphe Saade. The company was
found by Jacques Saade. The Parent organization of the firm is Merit Corporation. When
measured in capacity the company is third in line with a TEU of 2554264.In the year 2018, the
company earned a revenue of $21.1 billion and has around 750+ offices globally. There are
approximately 30000 employees working for the company. The name of the company is an
acronym for Maritime Freighting Company – General Maritime Company.

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Figure 1: Important Statistics
(Source: Cma-cgm 2019)
Current market scenario
The current market has been increasing considerably and at present the cargo volumes are
increasing by 4-4.5% as compared to the container fleet which is growing by 3.9% per annum.
Hence, with respect to the container segment, it can be stated that the balance between the
demand and supply can be stated to be particularly stable. However, trends in the Port Utilization
state that, the vessels are getting bigger in size, and this tends to place additional pressure on the
different ports and the remaining terminals (Pearce, Robinson and Subramanian 2000). In
addition to this, it can be mentioned that, the new markets have been emerging and the
importance of China as a market has evolved considerably. In lieu of this, the company has been
making considerate plans to expand its operations into the field of India in order to ensure
success. The current market scenario appears to be good for the container firms and there will
exist a considerable demand for the containers in the future.

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Previous market scenario
Previously, it can be stated that the market for the containers was not that good and the
market for the cargo was highly attractive and the vessel market was not performing
considerably well. However, at present it can be mentioned that, the market for container has
improved considerably which was not followed earlier (Wheelen et al. 2017). Additionally the
use of technology was not present earlier, but currently the technology has made a great progress
and in lieu of this, the overall business scenario has changed considerably as compared to the
previous year’s scenario.
Future Market scenario
In the future, it has been recommended that technology and the digitalization of the
various ports as well as the terminals will have a great role to play and will go a long way in
ensuring that, the different companies will be successfully able to ensure that, they can
successfully be able to engage in the utilization of the digitalized resources and ensure higher
productivity and better shipping procedures (Wheelen et al. 2017).
Evaluation of chosen the strategy, ocean alliance, customer centric.
The strategy which has been adopted by the firm can be referred to as the strategy of
alliances (David and David 2016). The company ensures that in order to attain success in the
long run, the firm is successfully able to form alliances with similar counterparts in the field. The
Ocean Alliance strategy which is adopted by the firm can be stated to be a strategy which will
further strengthen the overall CMA and CGM group offerings (Cma-cgm 2019). The particular
offer will begin in April and under this offer, the alliance has been with the world`s largest
shipping firms and in this offer CMA and CGM will be deploying around 111 of its ships into

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the particular alliance. This shall be largely relevant for the company as it will assist the firm in
ensuring success in the long run. This will improve the overall image of the firm in the eyes of
the customers.
Moreover, the strategy of CMA and CGM shall be customer centric in the following manner:
 The service will be offering a Transpacific trade with 19 services
 It will strengthen the offer between Asia and Europe as a 7th service will be added (Teece
et al. 1997)
 It will increase the offering between Asia and Mediterranean with around 4 services
 It will allow around 1 Asia red sea services

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Reference
Cma-cgm 2019. CMA-CGM [online]. Available at: https://www.cma-cgm.com/ (Retrieved on:
22 Feb 2019).
Cma-cgm 2019. CMA-CGM [online]. Available at:
https://www.cma-cgm.com/news/2369/ocean-alliance-cma-cgm-unveils-its-new-unmatched-
service-offer-ocean-alliance-day-3-product (Retrieved on: 22 Feb 2019).
David, F.R. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson
Pearce, J.A., Robinson, R.B. and Subramanian, R., 2000. Strategic management: Formulation,
implementation, and control. Columbus, OH: Irwin/McGraw-Hill.
Teece, D.J., Pisano, G. and Shuen, A., 1997. Dynamic capabilities and strategic
management. Strategic management journal, 18(7), pp.509-533.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management
and business policy (p. 55). Boston: pearson.