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1. SCHWARTZ SHIPPING INDUSTRY
MATURITY OF SCHWARTZ SHIPYARDS

2. PORTER’S FIVE FORCES MODEL
• Threat of substitute product
• Germany replaced Great Britain in terms of shipbuilding. Soon they lost to
Japan, and in 2009 China took over.
• Bargaining power of suppliers
• The core business areas of late Schwartz dockyard were container
construction, maintenances, changes/additions, and non-nautical structure
which occupied most of the workforce capacity. The majority of the
containers transported liquid assets i.e. tankers. During the oil crisis in 1970
the dockyard exploited its external actions. Consequently, the yard’s grew
fast and steady, resale price was more than normal, facilitated negotiations
and new contracts and more number of clients. Collision security was the
main marketing strategy of the company. The management maintained
decent payment with their workers, and it was averagely higher than the
normal industry standards. Their higher pay strategy attracted higher
performance.

3. • Bargaining power of customers
• Schwartz gained leadership in their business with double hull tanker business. Schwartz
location was opposite to Main Street which was a hindrance to their growth. Later in
1990, the company faced severe financial challenges. Schwartz had a competitive
advantage for small clients that preferred one to three containers than 20 at a time.
Asian shipping industry faced severe drawbacks that is, their inability to small series at
normal price, because of lack of learning and scaling effects. In 2008, the situation
worsened, prevented customers to hold their unfulfilled orders, and the tightening of
banking lending rules declined their ability to raise cash. In 2007, bank stopped loans and
the firm was insolvent in 2008. The journey of the shipping company came to an end.
• Intensity of competitive rivalry
• The shipbuilding industry faced two modifications that were European based medium
sized dockyards: 1. there was considerable increase in size of the ships due to higher
usage and economies of scale, 2. Competition from South East Asia. The economies of
scale has facilitated the scope of worldwide trade and setting up of huge dockyards.
Global competition influenced changes in laws and restrictions.
• Threat of new entrants
• South East Asia entered the market, where South Korea acquired the largest market
share. In terms of technological knowledge entry barriers were low.

4. • REFERENCES
• Schwartz shipyard, 2012b, Company website, new buildings,
Extracted, 27.04.2012
• Schwartz shipyard, 2012a, Company website, awards, Extracted,
27.04.2012
• Community of European shipyard associations, 2012, Ship building
supply and demand, http://www.cesa-shipbuilding.org/about the
industry. Extracted 05.12.12