| Summary: | As shipping is conducted at a global level, the tanker market is characterized by uncertainty and volatility stemming from external events in the environment. It is crucial for tanker shipping companies to implement effective strategies to mitigate the negative effects of uncertainty events and market volatilities, and at the same time, take advantage of them to stay competitive and survive in the industry. To that end, shipping companies need to develop high levels of flexibility, reliability and resilience to be able to adapt quickly to events occurring in the external environment. Therefore, an analytical model is needed to evaluate and establish effective strategies for tanker shipping companies to employ against uncertainty events and market volatilities.
This research paper seeks to bridge the gap in the lack of studies on the effectiveness of strategies used by tanker shipping companies against the relevant uncertainty events and market volatilities that plague the tanker market. To do so, an original House of Quality (HOQ) approach is developed to find the correlation score between each strategy and each uncertainty event, and followed by finding the correlation score between each strategy and each type of market volatility. Collating all the correlation scores of a strategy helps determine its relative score which in turn indicates its level of effectiveness and ranking among all the strategies to establish the most ideal strategies.
The uncertainty events, market volatilities and strategies used in this report are sourced from previous literature studies and verified through online surveys and interviews with people working in the tanker industry. The online surveys and interviews also helped gather the necessary data and information to complete the HOQ model.
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