Modelling opportunity capture: a framework for port growth

Abstract

A major problem facing regional ports which are adjacent or ‘in the shadow’ of capital city ports is how to define effective strategies for growth in the face of significant economic and competitive penalty from their metropolitan neighbours. This paper uses a market opportunity capture perspective to define effective growth strategies for regional ports. This view argues that a regional port which has developed in the shadow of a metropolitan port can grow if it has the ability to capture valuable opportunities over time. The paper offers a conceptual framework for understanding opportunity capture and identifies empirically the determinants of opportunity capture in regional ports using discrete choice modelling. Discrete choice modelling is an approach that departs significantly from more traditional methods and offers the most effective framework for modelling executive judgement at the strategic level. The results of the modelling indicate that market access, perceived benefits (economic and non-economic), availability of resources, business and political risks are the key determinants of opportunity capture. The findings suggest that a regional port that is adjacent to a metropolitan port can capture growth opportunities if it can offer superior access to markets to the shippers relative to the adjacent metropolitan port; and if it can mobilize essential resources in the short term while at the same time minimizing the business and political risks associated with the opportunity sought.