The world is constantly changing, particularly in booming industries such as logistics. Globalisation, increased outsourcing, customers’ demand for global coverage and integrated services are just a few examples of how the external environment affects logistics companies. Based on an external audit for logistics companies with focus on competitive forces, the thesis answers three main questions, which step-by-step answer the main question of how logistics companies should react to the changes in the external environment.
Firstly, based on market estimates about future growth rates of the industry it is assessed whether a growth strategy is a feasible grand strategy for logistics companies. The outcome is that the logistics industry is booming and therefore a growth strategy is feasible.
Secondly, it is assessed whether mergers and acquisitions (M&A) are a feasible growth option by conducting an event study of logistics M&A transactions for the past decade. The results show that it can not be proven that logistics M&A destroy value for the acquirer and in some cases it can even be proven that they enhance the value of the acquirer. Therefore, it can be concluded that M&A are a feasible growth option for logistics companies.
Thirdly, the main challenges for logistics companies from the external environment and the implications for their M&A strategy are discussed. The largest challenges within the industry include the rise of BRIC countries and the integration of freight forwarding and contract logistics. An expansion to China for example is mainly done organically due to the lack of suitable takeover targets, while the combination of freight forwarding and contract logistics is often done through M&A. Capital markets react positively to an integration of the two industries and strategic reasons support this combination too. Shipping lines and railway companies are expanding into logistics competing with logistics companies for the business as well as in M&A tenders. A key in the logistics industry is to get direct access to customers. Shipping lines and railways expanding into logistics and freight forwarders expanding into contract logistics are examples of securing access to customers to realise cross-selling potentials.
Table of Contents
- 1 Introduction
- 1.1 Problem description and aims
- 1.2 Structure and methodology
- 2 Theoretical background
- 2.1 Strategic planning
- 2.1.1 Strategic management process
- 2.1.2 External vs. internal factors
- 2.2 External audit
- 2.2.1 External forces
- 2.2.2 Competitive analysis
- 2.3 Growth strategies
- 2.3.1 Organic growth
- 2.3.2 Mergers & Acquisitions
- 2.3.2.1 Forces for M&A
- 2.3.2.2 Motives for M&A
- 2.3.3 Organic growth vs. M&A
- 3 Logistics market
- 3.1 Market overview
- 3.1.1 Sub-industries
- 3.1.2 Modal split
- 3.2 Shipping lines
- 3.3 Ports and port operators
- 3.4 Air carriers and air ports
- 3.5 Intra-European transport
- 3.5.1 Road transportation
- 3.5.2 Rail transportation
- 3.5.3 Inland shipping
- 3.6 Freight forwarding
- 3.7 Contract logistics
- 3.8 Historical M&A activity
- 4 External audit for logistics companies
- 4.1 Economic forces
- 4.2 Social, cultural, demographic and environmental forces
- 4.3 Political, legal and governmental forces
- 4.4 Technological forces
- 4.5 Competitive forces
- 4.5.1 Shipping lines
- 4.5.2 Ports and port operators
- 4.5.3 Air carriers and air ports
- 4.5.4 Intra-European transport
- 4.5.4.1 Road transportation
- 4.5.4.2 Rail transportation
- 4.5.4.3 Inland shipping
- 4.5.5 Freight forwarding
- 4.5.6 Contract logistics
- 5 Implications for the M&A strategy of logistics companies
- 5.1 Is a growth strategy feasible?
- 5.2 Are logistics M&A value enhancing?
- 5.2.1 Event study for logistics M&A
- 5.2.1.1 Methodology
- 5.2.1.2 Results
- 5.2.2 Long-term effects of logistics M&A
- 5.3 Main external forces for logistics companies
- 5.4 Implications on M&A strategy from developments in related industries
- 5.4.1 Shipping lines
- 5.4.2 Ports and port operators
- 5.4.3 Air carriers and air ports
- 5.4.4 Intra-European transport
- 5.4.4.1 Road transportation
- 5.4.4.2 Rail transportation
- 5.4.4.3 Inland shipping
- 5.5 Implications on M&A strategy from developments within the logistics industry
- 5.5.1 Rise of BRIC countries
- 5.5.2 Integration of freight forwarding (FF) and contract logistics (CL)
- 5.5.2.1 Positioning of logistics companies
- 5.5.2.2 Profitability of different segments
- 5.5.2.3 The rationale of integrating FF and CL
- 5.5.2.4 Attractiveness of the combined industry
- 5.5.2.5 Empirical research on the combination of FF and CL
- 5.6 Summary
Objectives and Key Themes
This thesis examines the key challenges facing European logistics companies and their implications for mergers and acquisitions (M&A) strategies. The aim is to analyze the external forces impacting the logistics industry and assess the value-enhancing potential of M&A activity within this sector. The study will also explore the feasibility of different growth strategies for logistics companies.
- Analysis of external forces impacting European logistics companies
- Evaluation of the effectiveness of M&A as a growth strategy for logistics firms
- Assessment of the value-enhancing potential of logistics M&A
- Examination of the interplay between organic growth and M&A strategies
- Investigation of industry-specific trends and their influence on M&A decisions
Chapter Summaries
1 Introduction: This introductory chapter sets the stage for the thesis by outlining the research problem and objectives. It establishes the context for studying the challenges faced by European logistics companies and their impact on M&A strategies. The chapter details the structure and methodology that will guide the research, providing a roadmap for the subsequent analysis. The focus is on establishing a clear understanding of the scope and aims of the study, preparing the reader for the in-depth analysis in the chapters that follow.
2 Theoretical background: This chapter provides the theoretical foundation for the thesis, exploring core concepts in strategic planning and management. It delves into strategic management processes, differentiating between internal and external factors influencing business decisions. A significant portion is devoted to external audits and competitive analyses, providing frameworks for understanding the competitive landscape of the logistics industry. The chapter then explores different growth strategies, focusing on organic growth and M&A, examining the forces driving M&A activity and the motivations behind such decisions. The distinctions between organic growth and M&A are carefully detailed, setting the theoretical context for the empirical analysis conducted later in the thesis.
3 Logistics market: This chapter offers a comprehensive overview of the European logistics market, encompassing various sub-industries, modal splits, and key players like shipping lines, port operators, air carriers, and freight forwarders. It provides an in-depth analysis of intra-European transport modes – road, rail, and inland shipping – and details the business models of freight forwarding and contract logistics. The chapter concludes with a discussion of historical M&A activity within the sector, laying the groundwork for understanding current market dynamics and potential future trends. The detailed market analysis provides the necessary context for evaluating the opportunities and challenges presented to logistics companies considering M&A strategies.
4 External audit for logistics companies: This chapter performs a detailed external audit, identifying and analyzing key forces influencing the logistics industry. It examines economic, socio-cultural, demographic, environmental, political, legal, governmental, and technological forces. A significant portion analyzes competitive forces within each sub-sector (shipping lines, ports, air carriers, intra-European transport modes, freight forwarding, and contract logistics) to create a detailed competitive landscape. This granular level of analysis is crucial for understanding the specific challenges and opportunities facing logistics companies and provides a valuable basis for formulating effective M&A strategies.
5 Implications for the M&A strategy of logistics companies: This chapter integrates the findings from previous chapters to assess the implications for M&A strategies in the logistics industry. It examines the feasibility of various growth strategies, evaluating the value-enhancing potential of M&A through an event study methodology. The chapter also analyses long-term effects, considering developments in related industries (shipping, ports, air transport) and within the logistics industry itself (the rise of BRIC countries, and the integration of freight forwarding and contract logistics). This crucial chapter connects the theoretical frameworks with the empirical analysis, drawing conclusions on the strategic implications of the identified trends and challenges.
Keywords
European logistics, mergers and acquisitions (M&A), growth strategies, competitive analysis, external forces, strategic management, organic growth, value enhancement, freight forwarding, contract logistics, shipping lines, ports, air transport, road transportation, rail transportation, inland shipping, BRIC countries.
Frequently Asked Questions: A Comprehensive Language Preview of Mergers and Acquisitions in the European Logistics Industry
What is the main topic of this document?
This document provides a comprehensive preview of a thesis examining the challenges facing European logistics companies and their implications for mergers and acquisitions (M&A) strategies. It analyzes external forces impacting the industry, assesses the value-enhancing potential of M&A activity, and explores the feasibility of different growth strategies.
What are the key themes explored in the thesis?
Key themes include the analysis of external forces affecting European logistics companies, the evaluation of M&A effectiveness as a growth strategy, the assessment of value enhancement potential from M&A, the examination of the interplay between organic growth and M&A, and the investigation of industry trends influencing M&A decisions.
What is the structure of the thesis?
The thesis is structured into five chapters: 1. Introduction; 2. Theoretical Background; 3. Logistics Market; 4. External Audit for Logistics Companies; and 5. Implications for the M&A Strategy of Logistics Companies. Each chapter has specific objectives and contributes to the overall research aims.
What theoretical concepts are discussed?
The theoretical background covers strategic planning and management, including the strategic management process, external and internal factors, external audits, competitive analysis, organic growth, mergers and acquisitions (M&A), and the forces and motives driving M&A activity.
Which aspects of the European logistics market are analyzed?
The analysis of the European logistics market encompasses various sub-industries (shipping lines, ports, air carriers, road, rail, and inland shipping), freight forwarding, contract logistics, and historical M&A activity within the sector.
What external forces are considered in the external audit?
The external audit examines economic, social, cultural, demographic, environmental, political, legal, governmental, and technological forces impacting the logistics industry. It also performs a competitive analysis across all sub-sectors of the logistics market.
How is the value-enhancing potential of M&A assessed?
The value-enhancing potential of M&A is assessed using an event study methodology. The study examines both short-term (event study) and long-term effects of M&A activity within the logistics sector.
What are the implications for M&A strategies discussed?
The implications for M&A strategies cover the feasibility of growth strategies, the value-enhancing potential of M&A, the influence of developments in related industries (shipping, ports, air transport), and developments within the logistics industry itself (rise of BRIC countries, integration of freight forwarding and contract logistics).
What specific industry trends are examined?
The thesis examines the rise of BRIC countries and the integration of freight forwarding and contract logistics, including the positioning of logistics companies, profitability of different segments, and rationale behind integration.
What are the keywords associated with this research?
Keywords include European logistics, mergers and acquisitions (M&A), growth strategies, competitive analysis, external forces, strategic management, organic growth, value enhancement, freight forwarding, contract logistics, shipping lines, ports, air transport, road transportation, rail transportation, inland shipping, and BRIC countries.
- Quote paper
- Hannes Mungenast (Author), 2008, Key challenges for European logistics companies and implications for their M&A strategy, Munich, GRIN Verlag, https://www.grin.com/document/229999
