FEBRUARY 2015 / NO. 2
TAGS: PORT OF ROTTERDAM, EUROPE, PIRAEUS, GREECE, CHINA, HP, HUAWEI, DELL, IKEA, LENOVO, SAMSUNG, HAIER, CANON, INFORMATION SYSTEMS

Competing in arenas needs new information systems

“It always seems impossible, until it is done”, Nelson Mandela
In the previous post “COMPANIES COMPETE IN ARENAS, NOT IN SECTORS OF INDUSTRY” we explained how crucial it is to go beyond an industry analysis towards analyses of arenas. This means it is no longer enough to look at the industry sector in which your company competes. A further step Is required, namely conducting an analysis of the ‘competitive arena’.

Case example: The Port of Rotterdam

The Port of Rotterdam is Europe’s largest harbor. Its traditional competitors are the harbors of Hamburg, Antwerp, Le Havre and Barcelona. However, Rotterdam is facing a very strong new competitor: Piraeus in Greece. In 2015, Piraeus was expected to have container capacity of 4.7 million TEU (in comparison, Rotterdam has a capacity of 12.0 million TEU). TEU – twenty-foot equivalent unit – is an exact measure of the capacity of container ships and container terminals. It is not the Greeks themselves, nor the EU, but the Chinese who have built this new state-of-art harbor at Piraeus. HP and Huawei are the first companies to have built terminals in Piraeus and other multinationals like Dell, IKEA, Lenovo, Samsung, and Haier are expected to follow suit. The shipping distance from Shanghai to Piraeus is 16,500 km.
The reaction of the Port of Rotterdam? Yes, we may have lost some of HP’s business, but on the other hand, others will come to Rotterdam (Canon). So what? It’s just a small change within one sector of the industry.
But looking at the competitive arena we see something quite different outside this sector of industry: transport by train from China to Europe and vice versa via what is being called the ‘new silk route’. Transport by train means a distance of 11,000 km with an average travel time of 22 days (versus 35 days by ship). So what? Every day BMW ships containers full of spare parts by train into China. This confirms our message again that industry sector analysis is not in itself enough, and that we need analyses of competitive arenas! This is the world of strategic intelligence: to foresee change before your counterparts do so.
“We choose to go to the moon … and do the other things, not because they are easy, but because they are hard”, John F. Kennedy in 1961
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