The Roadmap For Global Expansion Of Evergreen Marine Corp
| Date | 21 May 2009 |
| Pages | 78-79 |
| Published date | 21 May 2009 |
| DOI | https://doi.org/10.1108/15587890980000413 |
| Author | Sandra S. Liu |
| Subject Matter | Strategy |
Journal of Asia Business Studies SPRING 2009
78
Evergreen Marine Corp (EMC) started as a privately-owned single-
vessel company and became a global ocean carrier giant with 240
service locations; its shipping network now covers 80 countries. The
success of the company’s global expansion has been well recognized.
This article will explore the journey of Evergreen’s globalization
through an interview with one of the senior managers who has been
involved in every stage of the company’s globalization process.
baCKgROUND
EMC was founded on September 1, 1968 in Taiwan by Dr. Yung-
Fa Chang, with a starting capital of NT$ 2 million (Taiwan currency).
Initially EMC only occupied a single second-handed general cargo
vessel and provided “goes anywhere” service. However, within one
year after its inception, EMC possessed the business strength to set
up its first liner service, established on the Far East-Middle East trade
route from the Far East to the Arabian-Persian Gulf, which was at
that time fairly ‘ignored’ by most companies. Three years later, EMC
launched another regular liner service -- from the Far East to the Ca-
ribbean Sea. In 1975, while the detriment of the global energy crisis
impeded the shipping industry’s growth gravely, EMC ventured into
its first full containership project from the Far East to the US East
Coast with a newly-built containership that was the first such fleet in
Taiwan. Riding on this significant milestone, EMC initiated a Two-
Way Around-the-World container service in 1984 and became the
only provider for container service throughout Asia, Europe, and the
Americas. By 2002, EMC replaced the Two-Way Around-the-World
container service with full Way Around-the-World container service,
the US West Coast/Asia/Europe and the North Asia/US East Coast/
Europe service.
EMC was listed on the Taiwan Stock Exchange in 1987 with a
capital of NT $10 billion. Henceforth, EMC’s capital accumulated an-
nually to NT $18.6 billion by 1999 with 240 service locations across
Asia, Europe, America, the Middle East, Africa, and Oceania; and
four container terminals located in Taichung, Kaohsiung, Colon, and
Taranto. Its shipping network, throughout 80 countries, owns 170
ships that have a capacity totaling approximately 580,000 TEU (1
TEU=20-ft container). Today, EMC has grown into a shipping giant
standing as the fourth largest provider in the global market.
THe ImpeTUs fOR emC gOINg gLObaL
After the World War II, it is recognized that there was a boom in
the world economy. Especially during the 1990s, globalization has
been one of the most remarkable phenomenons. Accompanied with
globalization, there are lower barriers to the free flow of products,
services, and capitals. An accelerated development has taken place
in communications, information, and transportation technologies.
In such an economic environment, the ocean carrier industry has
changed completely. Carrier companies had to satisfy their custom-
ers on a global scope. Due to the fact that Taiwan is an island and its
domestic market is ver y limited, as a Taiwanese company, EMC has
to become globally-oriented by exploiting international markets in
order to succeed in the competitive market.
THe pROCess fOR gLObaLIZaTION
EMC’s globalization can be divided into three phases: internation-
alization globalization anchoring local.
When EMC began to exploit the global market, it first targeted the
American market. There are several reasons for this. First, since EMC
was familiar with the American market and American culture, its
costs for acquiring knowledge about the American market were not
very high. Secondly, the American market at that time was the largest
market in the world. The ocean carrier was its most important trans-
portation mode for its foreign trade. Because the American market
was huge and less saturated, EMC did not need to put their focus on
finding market opportunity. The only concern for EMC was to obtain
orders and further establish its reputation in the American market.
EMC’s marketing strategy was finally proven to be correct. So far,
about 60% to 70% EMC’s income comes from the American market.
The next phase of EMC’s globalization was to approach the Euro-
pean market and to broaden its scope. After the establishment of the
European Union (EU), the economy of Europe took off. Companies
now view the entire European community as a whole market rather
than individual country-based markets. Human resources, products,
services and capitals could move freely across national boundaries.
With this information in mind, EMC realized that the European mar-
ket would be a potential market in the near future. So EMC located
four service locations in England, Holland, Belgium, and Italy. Short-
ly thereafter, EMC noticed that Germany would be a very convenient
station from which EMC could manage the entire Europe market. In
consequence, EMC founded its European operation center in Ger-
many. To further meet the growing demands of the European mar-
ket, EMC then decided to set up a subsidiar y company in Europe.
England was chosen as its primary location.
Compared with the American and European markets, China’s mar-
ket is an emerging market. The economic reform in China promoted
a rapid expansion of exports in labor-intensive and low-technological
sectors. Therefore, Mainland China has become an attractive market
for Taiwan’s industry, though there are still some political barriers
for the “Three Directs”—direct transportation, shipping, and trade
links between Mainland China and Taiwan. In order to provide more
convenient and high quality international container transportation
services, EMC merged the Italian shipping company- Lloyd Triestino
di Navigazione S.P.A. in 1998, which was renamed as Italia Marit-
tima S.P.A. in 2006. Then, EMC entered the mainland market with
this international brand. Today, EMC’s global business is supported
by four international operation centers, which are located in Taiwan,
England, the US East Coast, and the US West Coast.
The Roadmap For Global Expansion Of Evergreen Marine Corp
Sandra S. Liu
Purdue University
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