A Corporate strategy paper for Herma Shipyard, Incorporated (HSI)

The shipbuilding and ship repair industry is Php 7.0 billion peso market, equivalent to about 0.75 percent of the manufacturing output of GDP. The greater part of the business is in ship repair given the prevailing trend of second-hand foreign vessel acquisition of local ship owners. There are 423 registered shipbuilding and ship repair firms nationwide, but only the nine large shipyards are considered as the industrys major players and it includes HERMA Shipyard, Incorporated. HERMA Shipyard, Incorporated (HSI), was established at the former BASECO shipyard in Mariveles, Bataan and was incorporated in 200 as a wholly-owned subsidiary of the HERMA Group of Companies. After undergoing a modest modernization and rehabilitation program, HSI commenced full operations in 2003. It was successful in grabbing a foothold on the ship repair market with a low-cost leadership strategy. However, HSI would only realize its potential to succeed against its perceived competition, if it can resolve various strategic and operational issues that significantly affect its overall efficiency and productivity. HSI needs to have better strategic direction, clear cut objectives, focused strategies and further modernization. From 2005 to 2007, HSI must reorganize, exploit its partnership in the maritime industry, build stronger alliances with suppliers and equip its labor force with the skills and equipment needed to grow and distinguish itself from the rest of the competition, particularly as viable and leading maritime service provider