South Korea shipbuilding industry development strategy

Abstract

During this market downturn caused by financial crisis in 2008, Korean shipbuilders have to deal with high labor cost, weak domestic shipping industry and infirm ship financial institutions. In addition, they also lose simple ships orders to China which gain advantage from lower labor cost. This study has objectives to determine the supportive and obstructive factors, contributing to the development of shipbuilding industry and analyze the interacting factors which influence Korea shipbuilding development. Moreover, the efficacious strategies for South Korea shipbuilding industry to walk through and gain the advantage from the current situation will be suggested. By using descriptive secondary academic data, conveyed through macro-environmental analysis, product life cycle, Porter’s five forces model, and SWOT matrix, the study found that South Korea still has skilled workforces, high technology based on R&D, and opportunity for high value-added ships. Therefore, South Korea Shipbuilding Industry should take competitive advantage by: taking advantage of new market demand, encouraging related units for high value-added products, and stimulating more inter-organizational R&D activities.