Value-Adding Services as Competitive Strategy: A Multiple Case-Study Analysis of Ports in Developing and Developed Economies

Despite the fact that in a general logistics context, value-adding services (VAS) have been acknowledged in various publications, there is a dearth of available empirical works that have particularly investigated the competitive capacity of these services in the formulation of port strategy. Hence, the development of models that are useful to understanding and assessing the capacity of value-adding services in port strategies is necessary to bridge this knowledge gap.

In the context of this study, value-adding services are defined as customised and additional services which complement the core or main offerings of a firm.

A critical realist approach to research was deployed. Questionnaires were used to survey port users, while in-depth interviews were carried out with port management of the multiple case study ports. The case study ports were Rotterdam (The Netherlands), PD Teesport (United Kingdom), Damietta (Egypt) and Apapa (Nigeria) ports. Ten key value-adding services were identified. The research showed that value-adding services may provide a useful input into the competitive strategy of attracting and retaining port users to a port. The services were found to offer opportunities for the diversification of business for port authorities and port operators.

Original contributions of the study include that it brings to the maritime logistics body of knowledge an understanding of the importance of the different value-adding services, principally based on port users‟ assessment. In sequence, the most important value-adding services were transport service, warehousing, water supplies and technical support, whilst the least important services were canteen/catering and advertising support services. Hitherto, there is no published study that has provided insight into the importance port users attach to various value-adding services.

In port strategy formulation by the deployment of value-adding services, there is a stage in which dynamism sets in and the uniqueness of the services tend to wear-off, requiring concerted rejuvenation to sustain the potential of value-adding services in competitive strategies. The main challenging issues to port management in the deployment of value-adding services in strategy were found to be concerned with legislation, availability of traffic (cargo and vessel), duration of contracts, adequate land and space availability.

The study also developed models, one to stimulate theoretical understanding of port value-adding services, the other to facilitate informed decision-making on the viability of offering value-adding services in ports.