Strategic Planning

Economic Development and Business Diversification

Client(s)

Ministry of Communication and Transport

Key Issues

With a declining business in petroleum refining, the government of Aruba was facing over 25% unemployment and an erosion of the economic base. The government wished to identify new economic development and diversification opportunities using the country’s ports, airports and sound communication infrastructure as the catalysts for growth.

Cornell Group’s Principal’s Role

The Cornell Group’s Principal assisted the government of Aruba in identifying new business diversification opportunities, which included transshipment, Free Trade Zones, and light manufacturing and assembly operations. Key analyses included:

Evaluating Aruba’s competitive position as an air and marine cargo distribution hub.

Analysis of trade barriers and special trade agreements with the US and Europe.

Productivity

Political Stability

The exhibit shows a competitive evaluation of Aruba across two dimensions important to potential investors.

Identification of natural competitive advantages compared to other Caribbean and Latin American countries.

Identification of light manufacturing and assembly opportunities.

Recommended an implementation plan for economic revitalization.

Status

The government implemented selected light assembly and tourism-based recommendations.

Strategic Business Diversification
Confidential Client - A Transportation Company

Client(s)

Confidential

Key Issues

With the potential to be significantly affected by the North American Free Trade Agreement, an international, diversified transportation and storage services company wished to explore the pros and cons of forming strategic alliances with other companies.

Cornell Group Principal’s Role

The Cornell Group’s Principal assisted the senior management of the company in:

First, assessing the strategic value of each of its Business Units,

Next, evaluating potential strategic business alliances,

And finally, developing strategies for business growth and diversification.

A unique methodology was developed to assess the strategic value and positioning of the Business Units with respect to prevailing market conditions, and the results are shown in the exhibit presented here. Recommendations were made to either invest in and grow the business, maintain the status quo or downsize and divest the business activity.

Business Portfolio Evaluation

Status

The management used elements of the strategic plan to form strategic alliances in certain businesses, while some others were reduced in size or divested.

Strategic Business Diversification
Confidential Client - A Transportation Company

Client(s)

Confidential - An Ocean Carrier

Key Issues

Affected by the North American Free Trade Agreement, a major ocean carrier company wished to grow through diversification into other transportation-related businesses. In addition, the company wanted to develop and institutionalize a robust and flexible Strategic Planning Process.

Cornell Group’s Principal’s Role

The Cornell Group’s Principal, as project manager, worked closely with the executive management of the company to develop and assist in implementing a Strategic Planning Process for the company. A Strategic Planning Manual was developed, and the exhibit shows one of the strategic planning processes that were evaluated for the company.

The Planning Process

This flow chart shows both iterative nature of the analyses conducted to develop the strategic plan, as well as how the plan is used as an input for developing the annual business planning and budgeting process for the corporation.

Status

The Board of Directors approved the Strategic Planning Process manual and recommended implementation.

Facilities and Operations Planning for New Port Facility

Client(s)

Maine Department of Transportation

Key Issues

The Maine Department of Transportation has identified the need to develop a new and modern cargo handling facility at Searsport, to meet the needs of industry in mid-Maine, provide a competitive transportation cost alternative to ports in Canada and to revitalize the economy in the region. The MDOT’s investment and operations proposal for this facility is currently in the Environmental Impact Statement process.

Cornell Group’s Role

The Cornell Group’s Principal has been involved for over five years in assisting the MDOT with the operational and facilities planning aspects of developing the new port facility at Searsport. In particular, several of the following analyses were conducted and recommendations on best operating practices provided:

Surveyed current and potential port users, conducted competitive market analysis, evaluated demand for export and imports from Maine and developed 45-year traffic projections by type of cargo.

Determined current and future space requirements for berths, cargo handling and storage, and planned a layout for a new port facility on Greenfield site.

Conducted and compared operating and investment costs for two alternative port sites, and recommended preferred site.

Evaluated the economic impact and operational implications of handling various types of bulk and breakbulk cargo at the port.

Assisted the MDOT in reviewing and evaluating over twenty-five conceptual layout plans for the new port facility.

Assisted the MDOT in negotiations with the Corps of Engineers, Environmental Protection Agency, and other federal and state agencies reviewing the new port proposal.

Status

The MDOT has submitted a Supplemental EIS to the agencies for approval. The Cornell Group is expected top continue to support the MDOT through the implementation phase.

Strategic Plan
Port of Corpus Christi, Texas

Client(s)

Port of Corpus Christi

Key Issues

With a changing business environment resulting from the opening up of new markets in Latin America, Asia and Europe, the port of Corpus Christi determined a need to reassess its strategic direction and business focus.

Handling primarily bulk liquid petroleum products and some dry bulk, the port wished to examine if diversification into related transportation businesses made strategic and economic sense.

Cornell Group Principal’s Role

The Cornell Group’s Principal assisted the port in evaluating its core and new businesses:

Reviewed the strengths, weaknesses and growth potential of the port’s existing and core businesses.

Evaluated new business opportunities in traditional and non-traditional areas.

Geographic Areas Where The Port of Corpus Christi Has the Potential to Be Competitive for Containerized Cargo

Conducted a competitive transportation cost evaluation.

Developed a strategic direction for the port, including investment requirements, management options, business focus and implementation plan.

Provided a business diversification strategy.

The exhibit shows the geographic markets where Corpus Christi may have a competitive transportation cost advantage over other ports.

Status

The strategic and business diversification plan was presented to the port management for implementation.

Feasibility of Cargo Handling Facility Improvements
The International Port of Coos Bay, Oregon

Client(s)

The International Port of Coos Bay

Key Issues

The International Port of Coos Bay and selected forest product exporters launched a joint initiative to revitalize the economic and business environment in Western Oregon through increased foreign trade at the port of Coos Bay. This coalition commissioned a marketing and business strategy study for the port, with three primary objectives:

Determine the need for and economic feasibility of cargo handling facility improvements.

Define the type and size of port infrastructure improvements needed.

Determine the role of the public and private sector in financing and operating existing and new facilities.

Cornell Group’s Principal’s Role

As manager for this study, The Cornell Group’s Principal conducted extensive interviews with exporters, shippers, lumber buyers overseas, users of port facilities, competitive ports, road, rail and maritime transportation companies, and developed business strategies and marketing initiatives for the port.

Several business development strategies were tested for operations feasibility, and each was evaluated with respect to its ability to generate employment, and the net benefit to the economy and business in the region. Public and private funding alternatives were also evaluated. Five strategies were presented to the port and their private sector partners, and our Principal assisted them in evaluating these alternatives through brainstorming sessions.

Economic Evaluation of Alternative Strategies

Status

The Port Steering Committee and The Technical Advisory Committee decided to implement a combination of the strategies requiring limited capital investments.

Economic Benefits of Port Infrastructure Improvements
Port of Houston, Texas

Client(s)

The Port of Houston Authority

Key Issues

In support of a public Bond Referendum to raise funds for deepening and widening the Houston Ship Channel, the Port of Houston Authority commissioned a study to define and quantify the economic benefits of improving the port infrastructure and deepening the channel.

Cornell Group’s Principal’s Role

The Cornell Group’s Principal was the lead analyst for conducting the 30-year cargo and vessel projections, as well as the market, competitive, economic and benefits analysis for this assignment. The focus of the study was to:

Define the future trends in average vessel size and the need for deeper access channels.

Evaluate what competitive ports are doing to improve channel access, and their rationale.

Estimated Benefits Of HSC Improvement Project Long Term Annual Benefits (Millions Of Dollars)

BENEFIT SECTOR	TRANSPORTATION & OPERATING COST SAVINGS	DIRECT LOCAL ECONOMIC IMPACT	TOTAL ECONOMIC IMPACT
Crude Petroleum	16	0	16
Petrochemicals	1	0	1
Grain	42	41	83
Containers	1	169	170
Reduced Vessel Delays and Casualties	5	0	5
Total	65	210	275

A summary of the long-term economic benefits of the project is shown in the exhibit.

Develop cargo and vessel projections for a 30-year period.

Estimate the near and longer term economic benefits and job benefits to the region of deepening the channel.

Status

The economic benefit analysis results were successfully used by the Port of Houston Authority, to obtain funding for the project through a Bond Referendum.

Strategic Business Plan
Port of Philadelphia, Pennsylvania

Client(s)

Philadelphia Port Corporation

Key Issues

With limited growth in maritime commerce for twenty years and increased competition from other ports, the port of Philadelphia commissioned several studies to develop a strategic vision, identify a strategic direction for future growth, and develop a business plan. A major issue was the allocation of resources for infrastructure and operations improvements at the port.

Cornell Group’s Principal’s Role

The Cornell Group’s Principal participated in several aspects of the strategic and business planning process of this assignment. The project required the consultants to:

Review the historic cargo activity, competitive situation, financial performance, and facility inventory at the port.

Conduct a competitive transportation and operating cost analysis.

Define growth opportunities for each business area, evaluate the economic and financial benefits, and estimate funding requirements.

Define an overall business and investment strategy.

Investment Implication of the Recommended Strategy

A summary evaluation of the various strategies by market segment, as well as the level of funding required is presented in the exhibit.

Status

Elements of the strategy are under implementation.