A framework of growth options through diversification among shipping agencies in South Africa

Abstract

This thesis was aimed at developing a model of growth through diversification, for shipping agencies in South Africa, under recessionary conditions. The study adopted a mixed methods approach, in seeking to develop a methodology to meet the aims of the research project; to develop a framework of diversification strategies for the shipping industry. The mixing of quantitative data and qualitative data not only enriched the findings but assisted with validation thereof, while achieving the research aims through the methodology adopted. The theoretical foundation of the study was on the theories of diversification, the theory of human behaviour and other economic principle theories, all of which were sampled among South African corporate executives in the shipping supply chain. Surveys were carried out using two structured research instruments in the form of questionnaires to collect quantitative data, with qualitative data collected through interviews, focus groups and observation. The data were analysed using triangulation to combine the results of the investigation. Statistical analysis was employed for the quantitative research and results illustrated in tables, combined with thematic analysis through qualitative research, to draw conclusions and recommendations on the study. The findings confirmed that there are opportunities for diversification into husbandry services, freight transportation, charterers’ services and other markets along the supply chain. Reasons for diversification among shipping firms include similar resource utilisation to service many functions, diversification to gain market leadership and poor performance in existing markets. The theory is not conclusive about whether related or unrelated diversification affects firm performance. The development of operation Phakisa, to focus on unlocking the economic potential of South Africa’s oceans, has not been addressed and needs more research into its feasibility and likely impact on the South African container shipping industry. There is need for management to mobilise resources, such that they can serve many functions and activities, and to build competences through human resources management. The study is relevant for the shipping supply chain executive, as it contributes to managerial decision-making, in terms of analysing their capability to create and apply knowledge in their competitive strategies.