ABSTRACT
This chapter discusses business strategies by understanding the external environment of the business. Environmental factors, over which businesses have little control, profoundly influence the performance of the businesses and determine the success or failure of a particular business strategy. Before 1978, foreign trade only accounted for a small portion of national trade, because national policies deterred the entry of foreign capital. Foreign trade is the primary driver of shipping demand, and thus demand for cargo handling at terminals. The reform of the port industry was carried out to increase the competitiveness of the industry, in terms of efficiency and capacity. The regulations opened up the possibility of sourcing funds from local government, foreign investors and directly through commercial bank loans, in addition to the central government. Port governance reform accelerated the addition of port infrastructure and terminal capacity. The institutional change brought about greater efficiency than direct physical investment in ports.
