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Analysing a business: DHL

Keywords: dhl, strategy, objective, market

The aim of this tactical planning record is to extensively analyze a firm and based on the analysis find the appropriate strategy that meets the business's business goal and mission. The right strategy, depending at what's directed, should help the company bolster its position on the market; increase profits; help with further development. If a company implements an incorrect strategy, it can cause bad harm or it can have huge financial impact on the company that could even finish up in personal bankruptcy, which wipes the business off the marketplace.

The company chosen because of this newspaper is DHL Express with give attention to European region. DHL is area of the Deutsche Post DHL (further "DP DHL) brand/group. The key reason why I've chosen DHL for the Strategic Planning Document is that I have been working for DP DHL group for four years. I work specifically for IT Services which is the service collection that internally facilitates the complete IT technology of the complete DP DHL group.

ABOUT THE COMPANY

DHL was founded in SAN FRANCISCO BAY AREA exactly 40 years back by 3 budding business people - Adrian Dalsey, Larry Hillblom and Robert Lynn. It went from small enterprise shipping paperwork by airplane from San Francisco to Honolulu1 to global company transport EVERYTHING about the world.

DHL provides time-critical shipments as well as goods and merchandise by street, rail, air or sea. DHL transports courier and communicate shipments via one of the world's most comprehensive systems to over 220 countries and territories. The business employs more than 300, 000 employees all over the world.

DHL Express provides wide range of easily accessible services and alternatives for their customers; from transfer of characters, information to transport of parcels and goods. It works in more than 220 countries round the world and uses more than 100, 000 employees. DHL Express is number 1 in Europe with 25% of market show.

Brief history 2

  • 1969 DHL founded by Adrian Dalsey, Larry Hillblom and Robert Lynn in San Francisco;
  • 1974 The first UK office exposed in London. Globally, DHL acquired more than 3, 000 customers;
  • 1979 DHL expands its services to providing packages. Only doc services have been available as yet.
  • 1983 DHL is the first air express forwarder to serve Eastern European countries. An international circulation centre was opened in Cincinnati, USA;
  • 1985 A state of the fine art hub was exposed in Brussels. More than 165, 000 shipments are managed per night
  • 1998 Deutsche Post became a shareholder in DHL;
  • 2002 Deutsche Post World Net became the major shareholder in DHL and 100% shareholding was completed by the end of the entire year.
  1. DHL: Our Company Family portrait [online]. Offered by www:
  2. DHL: Steps to success [online]. Offered by www:
  • 2005 DP DHL acquires Exel, the British isles logistics firm. Exel generally offers transport and logistics alternatives for key customers;
  • 2008 DHL starts new point out of art Western european air hub at Leipzig/Halle Airport in Germany.

DHL legally operates under Group's name thought as Deutsche Post AG and uses its brand name DHL. As previously mentioned DHL is part of DP DHL group and it is formed by 3 divisions: Exhibit, Global Forwarding, Freight and offer Chain reinforced by internal services Global Business Services. Email is a standalone department that is part of Deutsche Post brand. All four divisions mutually create Deutsche Post DHL as the picture below describes.

  1. DP DHL: Corporate and business Presentation, October 2009, p. 3 [online] Available at www.

DHL has a divisional form of framework. The DP DHL group is planned into four operating divisions, each of which works under the control of its own divisional headquarters. The Group management functions are performed by the organization Center.

Management obligations are structured in accordance with decision-making, responsibility and reporting lines:

  • Board departments
  • Corporate departments
  • Business departments
  • Service departments
  • Regions
  • Departments

DHL Exhibit provides standardized products and services - courier, exhibit and parcel (CEP) - both locally and globally with regards to the country. Whether it's report or parcel, highway or air, DHL Express provides several different types of services that are divided to four basic communities:

1. Same Day

An immediate pick-up of a shipment by way of a dedicated courier, with a crisis delivery within the same day via a dedicated network.

2. Time Definite

Express door-to-door delivery by way of a certain time with an over night or next possible working day basis.

3. Day Definite

Reliable door-to-door delivery within a certain volume of days

4. Optional Services

Shipping convenience with a range of optional services to aid your express transportation

  1. DP DHL: Total annual Article 2008, p. 22 [online] Offered by www.
  2. DHL: Exhibit Services Good day [online]. Offered by www:

External Analysis

Courier Express and Parcel (CEP) services are present in every solo country throughout the world. It really is neither country specific nor region specific industry. You will discover thousands of logistics companies operating locally or internationally across the world and European countries is no exception.

PESTLE

PESTLE evaluation is a view on exterior environment companies functions in. You will find five external factors that effect life of organizations: Politics environment, Economical environment, Socio-cultural environment, Legal environment and Environmental factor.

The below PESTLE evaluation targets CEP companies in Western market.

Political Environment

Western region is secure environment that's not afflicted by any significant politics crisis in countries no major changes in politics structure are anticipated in near future. More than half of European says are built-into European community, EU and create one of the biggest single marketplaces for trade and investment on the planet. EU enlargement has removed border lines and has made trade and business more accessible because of its members. It has taken greater opportunities for businesses, wider selection of companies and benefits because of their customers.

EU has created closer links back to you with immediate neighbours and enables bigger exports, free movements of services, payments and capital for trade and investment. Prior liberalization in 90's there were many nationwide postal operators behaving as monopolies. EU decided to begin postal reform that firstly completely liberalized CEP market. Liberalization has allowed both nationwide postal providers (Post Offices) and private postal companies to expand their business portfolio into parcel and express market.

This happens through acquisitions of well-established companies and smaller countrywide companies. Exactly, as it just happened to DHL through acquisition by Deutsche Post in 2002. Full liberalization in Europe will be completed by 2012 which gives current companies the perfect time to improve their positions, build new sites and gain wider collection of customers.

EU has also built up confidence in European politics and inexpensive future of each member which allows companies to make long run decisions, strategies and investment programs. Currently the CEP market is highly competitive and companies have to have capital to establish strong and powerful position in this environment and also have to have developed networks reinforced by the modernist technologies.

Summary:

Europe is secure environment where no major politics changes are expected. Full liberalization of Western postal market which will be completed by 2012 provides more competition especially on local level. However, there is a potential to merge or acquire those companies working in the local marketplaces and increase market talk about. Big companies operating on international level come with an benefit of built global sites and modern tools behind them.

Economical Environment

CEP is highly potential market and its growth is immediately related to the level of GDP. Global trade is on the growing level and together with industrialization has made CEP services more important for majority of business. On top of that, product life cycles have been reduced, quality recognition among customer keeps growing and to be able to achieve success companies are obligated to maintain high quality benchmarks.

The global economic crises caused decrease in economy and it offers affected the complete logistics sector. Volume of shipments decreased and the tough economy slowed down the complete market. Even the big businesses have to fight with decreased earnings and change their investment ideas and business strategies.

Governments around Europe support investment strategies by structural reforms and programs that encourage buyers to invest. During the big economic turmoil in 30's this did not happen and governments tended to act separately without multinational or even global co-operation. Today's economies learnt from those errors which help to lessen the implications, increase customer demand and support start of progress. Because of the crisis companies improved their investment strategies but did not stop them. Merges with smaller companies, contracts and tactical acquisitions signify one way of increasing the competitive advantages.

Emerging markets represent big opportunity in long-term point of view. There is potential for investment and development in rising markets which is expected that industrialization will bring opportunities, the current economic climate will growth and market for services will accelerate. The crisis adversely affects profits of every company on one hand but on the other palm big companies with strong brand and position in the market have to exploit this opportunity. Smaller companies do not have potential to grow because they are in bigger threat of losing profits or even personal bankruptcy if they fail. Big corporations have the ability to absorb that risk easier.

Companies have started to reduce cost and folks have started losing their jobs. Restructuring of company composition is one of just how how to go forward. It really is core element of every company that operates in logistics industry. Companies have to invest huge amount of money to development and maintenance of their IT infrastructure. Recent craze leaves development in European countries and transfers hosting and maintenance of the infrastructure to Asia.

Summary:

Conclusion from the Economical environment analysis is the fact that companies should not stop their investment plans because of monetary crisis. It's important in current situation to bolster position in the market and expand when possible. Emerging markets symbolize a potential of rapid economy growth. The chance of loss is the same for those companies but also for big organizations is more acceptable. Reduction of cost is evitable for each and every company and restructuring or outsourcing are the ways of interacting with it.

Socio-Cultural Environment

The third aspect of PESTLE analysis focuses on forces within society. Social and ethnic forces impact customers' attitudes, passions and thoughts. Companies must be able to offer products and services that aim to complement and gain customers' needs and wishes. If indeed they do not quickly react to changes in population they'll lose market show and demand for his or her product or service will decrease.

Removing of boundary lines makes trade and business in Europe more accessible. Appearing marketplaces are place that is continually developing and quickly growing. However the infrastructure is much less developed as with Western countries, there will be improvement with monetary growth. It's important for the business to establish its brand and achieve good and reliable image and service quality among its customers. The profile of services that is offered in expanding countries is not usually complete and targets the biggest needs and wants of the business.

Companies don't have the only real affect and responsibility to their customers. There will vary parts of contemporary society they are in contact with. There are needs of employees, traders and the world all together. Research & Development team play an important role in this area. Customer satisfaction research, employee satisfaction surveys, market studies help the company to develop its brand and image, increase employees commitment and form public understanding.

CEP market and logistics industry play one of the key tasks in the monetary growth internationally not only within Western market. Improves in amounts of goods carry has lead to raised CO2 emissions which corresponding to climate researchers have direct have an impact on on global warming. It really is social cost for the modern culture and governments discourage those communal costs with fines, taxes and legislation. Companies' responsibility is to diminish these cost and use better and environmentally friendly means of transfer. Communal cost have negative have an impact on on customers' spending but could be balanced by larger offer of environmental friendly driven products.

Summary:

Social forces influence customers' needs and wishes which is important for the company to know it and reap the benefits of it. Therefore the role of Research & Development is vital. Company must react to changes in contemporary society quickly not to loose market show and demand for services. Customer satisfaction surveys, market studies, employee surveys play important role in building company's brand and image in the market.

Border lines have been removed within EU and services tend to be accessible in the complete Europe. Emerging marketplaces represent an opportunity for companies to enter and establish their brand and image.

Additionally, there's also social costs for the world that companies have responsibility for. The affect on environment is significant and companies' role is to diminish those costs by dealing with more efficient and green technology which is then well balanced by larger profile of environmental friendly driven customers.

Technological Environment

Technology environment is essential part of every business that rapidly moves it frontward. Technological innovations have changed the planet and manner in which every business works. Technology has generated society expecting immediate results. Information exchange between customers, companies, people or any stakeholders is faster. That provides gain to businesses as they can react quickly to any changes in the operating environment. However, the capability to quickly behave also brings extra pressure on companies because they are likely to deliver promptly and without the delays.

Customers in service industry have to constantly face new challenges in planning, handling and monitoring their business procedures. Companies in CEP market (and not just there) started out offering custom-made logistics solutions to meet issues: for example safety transport of delicate products such as pharmaceuticals and vaccines to the health care industry done inside a temperature-controlled environment. Operations in logistics industry is not only about automobiles, vans and aeroplanes there are other areas of infrastructure that requires scientific development and improvement: publishing, collection, sorting, carry, warehousing, delivery and lastly Information Technologies. IT is core. Speed and reliability are fundamental success factors to have the ability to meet expectations and quality and gain edge among competition.

It's important to pay special focus on IT area because service industry is completely reliant on it. Companies invest large amount of money to development and maintenance of their IT infrastructure. As mentioned above It really is one of the main element elements for logistics and businesses operations. Systems must be accessible and available at all times; security is evitable - unauthorized access to data and data manipulation must be averted, to ensure that software is not supplied with problems or too late. Companies have to fight with decreased income and reduce their cost in times of economical crisis but need for IT technology is so significant that they can not stop buying it. Otherwise there's a threat that they will show up behind and loose their market talk about.

Outsourcing or quite simply subcontracting is a means of lowering cost in IT area. Development of new systems, software or applications goes to another organization. Usually, the company is customized in software development. Or hosting and maintenance of applications or services are transferred to another company. The decision whether to do in-house or outsource is often predicated on achieving lower development cost and consumption of available resources in better way and target energy on the primary competencies of the business.

Summary:

Modern technology and environment is key to success of the company that helps to maintain or gain competitive advantage. IT is the most crucial technology factor for logistics business because quickness and consistency are equal to success. However, there can be an indisputable constant threat of falling behind. Investment funds to the modernist technology are evitable and in times of monetary crisis are a lot more important then anytime before. Company has to make a decision if it runs internal IT group or if it outsources the majority of the services and reduce cost.

Legal Environment

Legal rules play a role in nearly every aspect of company's operation from state regulations through contracts to treatment of employees. Legal factor is vital because companies work within legislative platform where legislation can either place numerous obligations or can create market conditions beneficial for business.

CEP market is governed by Postal directive applicable in all EU expresses. Full liberalization process will be completed by 2012 which gives current companies period to reinforce their position, build new sites and have more customers before new competition arrive. CEP market was fully liberalized during 90's and no special permit or authorization is required in most of the EU countries. Ten says of EU require companies to receive explicit decision of National regulatory authority that is named "general authorization that enables them to get started on working in those countries but it generally does not represent a barrier. General authorization document includes several conditions that are related to e. g. confidentiality of correspondence, limitations on transfer of dangerous goods, data cover standards, etc.

As I said previously there are sociable cost for the society that must be balanced by companies' obligations in conditions of fines, taxes and extra legislations related to legislation of aircraft sound, regulations regarding emission standards, responsibilities to lessen greenhouse gas that pushes companies to get into more environmentally friendly means of transport.

Summary:

Legal factor is very important to operations of each company. Companies have responsibilities like directives, fees and guidelines that they must be aligned with to be able to operate on the market. Legal factor can either place numerous obligations on the business or can create market conditions good for business. Liberalization is an example of the power. Removal of boundary lines together with liberalization allowed building and conditioning of positions in the logistics market. You will discover no special and expensive authorizations necessary in CEP industry which is another gain for companies. On the other hand there are obligations that balance the above mentioned benefits in conditions of fines, taxes and directives that are mainly related to environment. Companies are required to get into green operations.

Environmental Analysis

Transportation industry causes major effect on the green house gases in the atmosphere. Range of motion has increased and brought many indisputable advantages that must be weighed resistant to the social, monetary and environment costs it causes. Countries concern legislation that pushes companies to reduce emissions.

Companies have started out implementing projects that help them to learn ways how to lessen pollutions and also to be compliant with granted legislation. Transport companies are dependent on fossil fuels also to reduce their dependency they need to look for commercial vehicles and aircraft powered in different ways or non-conventionally. Change of vehicle is not the only option that could reduce air pollution there are different ways that companies could take: to make their business more efficient and effective, to lessen shipping time, to consider uniform approach, to provide climate-neutral products or teach employees.

Research & Development office plays important role in those projects because it helps to produce new ideas, systems, procedures and techniques.

Summary:

Transportation industry has great effect on air pollution globally. It is undisputable reality and companies are obligated to fulfill the requirements of governments to reduce their contribution on pollution of the global environment. Companies have started implementing jobs that help them match those requirements. Research & Development section is paramount to the success of it.

PESTLE Summary

Based on the PESTLE analysis I have discovered opportunities and risks that will be taken into account during the SWOT evaluation.

  • Opportunity: Full liberalization of Western european postal market which will be done by 2012 brings new opportunities to increase market share by acquisitions or merges with other logistics companies or recently liberalized companies. Established companies wit big market share, global network and technology have competitive benefits.
  • Opportunity: Boundary lines have been removed within EU and services will be more accessible in the complete Europe. Emerging market segments represent a potential of rapid current economic climate growth it is therefore a chance for companies to enter in and build their brand and image and gain bigger market show.
  • Threat: Role of Research & Development section in the business is vital. Company has to react to changes in contemporary society quickly never to loose market share and demand for services. Client satisfaction surveys, market research, employee studies play important role in building company's brand and image in the market.
  • Threat: In times of monetary crisis economy slowed up and revenue lowered. Reduction of cost is evitable for every company and restructuring or outsourcing are the ways of dealing with it.
  • Threat: Social costs signify a responsibility of companies towards population. The influence of travelling and logistics companies on environment is significant and companies' role is to decrease those costs by working with more efficient and green technology which is then well balanced by larger collection of environmental friendly focused customers. Companies are compelled to invest into green businesses by fines, fees and directives placed by government authorities. Therefore, companies have began implementing tasks that help them match those requirements.
  • Threat: Modern tools and environment is paramount to success of the business that really helps to maintain or gain competitive edge. IT is the main technology factor for logistics business because rate and consistency are equal to success. However, there is an indisputable constant risk of falling behind. Assets to the modernist technology are evitable and in times of financial crisis are much more important then anytime before. The role of Research & Development is evitable here.

Porter's Five Forces

Courier Exhibit Market is highly competitive market and its growth is straight related to development of GDP. Customers of logistics companies are requiring. Technology advancements reduce product life cycles, quality awareness among customer keeps growing and to be able to succeed companies are required to keep high quality criteria.

DHL Express has three biggest rivals in CEP market. They can be UPS, TNT and FedEx. As you can see in the Picture 2 below DHL Exhibit has the highest market share of 25% as an individual company in European countries. All major competition operate internationally and have global network with good and modern technology in it. The picture below also shows us that third of the Western market is dismantled among small and medium sized companies that performs independently.

European market portrait

Customers of logistics companies change from individuals to big industrial or developing companies. All of them expect that the delivery service will be simple and convenient and that the delivery will be promptly without any hold off and in a good quality. Customers are more and more demanding because selection of suppliers is broadening and they are looking for personalized and innovative alternatives for delivery of the goods.

  1. DP DHL: Total annual Record 2008, p. 58 [online] Available at www.

The selection of offered products is wide but could be introduced in three basic categories:

  • Courier services are fast, door-to-door pick up and delivery services of high-value goods or urgently required documents.
  • Express services are time-sensitive, usually guaranteed services and also have delivery time a specific day (generally the very next day) and/or specific time.
  • Parcel services are the transport of mainly standardized deals with usually non-guaranteed delivery time of 2-3 times (Time-definite and Day-definite)

Porter's Five Makes mode will help me to investigate five pushes that influence the logistics industry and better understand the environment where DHL Exhibit operates in and competitive gain the business has or could gain.

Threat of New Entrants HIGH

CEP market is large and incredibly appealing to business. Everyone must deliver package deal or parcel. Everyone must use courier. Logistics industry is important and dominates to the service sector. It's very easy to entry. A couple of no special legal barriers, patents or licenses essential to run the business enterprise. A couple of exceptions as described in PESTLE analysis but those exceptions do not symbolize "impossible to attain requirements. The marketplace is still growing and there can be an assumption that will grow further.

You can find no boundary lines among users of European union which would threaten new companies to get into the CEP market. Company that desires to achieve such a competitive environment really needs a good network that allows it to operate on local and international level. Good network requires time and financial investment. High technology standard is must.

Companies have to safeguard themselves from the threats of new entrants therefore it is important for those to find ways to carefully turn cons in their favor. They need to capitalize off their historical experience and look for improved ways to provide their service. Current big players in CEP market are more developed leaders which have significant cost benefit that is unavailable for the new entrants. Large companies have buying ability that allows them to provide discounts with their customers. Simply, bigger the business enterprise is lower average device cost they are able to produce.

Customers' commitment is another essential aspect that increases obstacles to entry for other opponents. Dedicated and satisfied customer will be unlikely tempted to go to competition or new entrants. Established companies usually conduct business set on long-term partnerships and contracts. The basic guideline says that customers get everything they need or want. There are many advantages that economies of level gives to big businesses but there's also limitations that must be taken into account. Those limitations give competitive gain to smaller and mid-sized companies. Large companies are incredibly complex and with higher complexness the product range is widening. This helps it be difficult to achieve success and become the best. Field of expertise and impressive ideas are crucial. Large companies are also known for his or her high level of bureaucracy gives smaller companies big gain because they can gratify customer faster and it is what matters in logistics industry. Also large companies have thousands of employees with different labor relationships in every country which in turn causes additional legal cost. In case of powerful employees union it can reduce power of the company and make their operation more challenging especially in time of restructuring.

As I have mentioned modern technology is an important factor that significantly helps to increase market share and creates more barriers for new entrants. Freelancing or off shoring are alternatives for companies to use good thing about other economies of range and use their buying electric power and specialization in favor of further development.

Summary:

In summary, logistics market is large and is of interest to business because when GDP increases the demand for services grows up. There is no special barrier to entry. In fact, it is very easy to entry. The market is still growing and there can be an assumption that will increase further. Successful companies have built sites that permit them to operate on local and international level. Good network requires time and financial investment. High technology standard is must. Historical experience and appearance in the market is an gain for companies like DHL.

Big companies and businesses use economies of scale in their favour. Bigger company provides higher discount and has lower revenue. Customers' commitment is another essential aspect that increases obstacles to entry for other rivals because of long-term partnerships and agreements.

On the other hand there are also drawbacks for big companies that must be taken into account. Large companies are very complex and with higher difficulty the merchandise range is widening. Field of expertise is an response to it. Large companies are also known because of their higher level of bureaucracy gives smaller companies big benefits. Bureaucracy decreases the whole process. Strong workers unions decrease ability of the company and make its operation more challenging especially with time of restructuring.

Modern tools helps to gain competitive advantage and be before new entrants. Companies should take good thing about outsourcing or off shoring companies and use their buying power in favor of expertise and development.

Threat of Replacement Products or Services HIGH

Every customer has a selection when and what things to buy. Substitute products create a roof on the purchase price. Any need or want of the client could be satisfied in several ways and it is up to the customer recognise the business to choose. Threat of alternative products is very high in CEP market because range and price of offered products is comparable. Customer can very easily turn and goes to the competitor.

Research & Development office plays spectacular role because of this aspect. It's important to really know what customer wishes and needs therefore client satisfaction studies must be kept. Surveys help to identify the challenge of replacement products and help answer what swap products customer considers. They help companies to raised position themselves on the market and among customers, uncover customers perceptions, improve customers devotion, or help to make technology and product improvements.

For a firm to be able to flourish in such a competitive environment it is important to learn who the competition are and what service they provide that could substitute the service they provide. Additionally it is important to consider their benefits, price, weaknesses, constraints, restrictions, reason for transitioning between products and obstacles to switch. Predicated on that information, company can defend the threat easier and entice customer from another alternative service by invention for example. It's important to speak and educate customers about services the offer. Customers must be lured to get and if they are loyal it could stop them from moving over to another company. Marketing and Advertising is therefore highly important because of this factor. Companies have to purchase building their brand and image to gain competitive edge.

Summary:

The range of offered products and prices in logistics industry is similar. Therefore risk of alternative products is high. Role of Research & Development office is important and really helps to identify what customer would like and needs, the condition of substitute products or answers what replacement product customer considers. Its role is also to get understanding of competition and their offer. Based on that information, company can defend the menace easier and appeal to customer by the added value (technology for example). Investment in Advertising cannot be forgotten. These departments connect and instruct customers about brand and image of the business, about products that are in the offer. They help to gain competitive benefit.

Bargaining Power of Customers HIGH

Logistics industry is highly competitive and there are many companies offering similar products. Customer gets the power to determine if to pay high or low price, to choose between cheaper or even more expensive company. And also customer gets the power to leave and make a deal with competitor. Devotion boosts when customers progress value or benefits for the same price. Therefore it is important to create customer satisfaction, build partnerships or offer discounts. Basically, any reduction of the purchase price that customer "negotiates means lower income for the business.

Customers are very sensitive to price and are prepared to move to the competition quickly if the service, company offers, will not differentiate from another service that may be purchased in the market. Price is the magic word that counts. It is therefore important for the company to differentiate and provide something more. If it cannot be price then for example it can be company's frame of mind towards environment and using climate-neutral travelling or products.

There always must be value added for the client.

Suppliers always outnumber customers. That is a market guideline. Therefore, customer has the advantage and is also allowed to choose from a range of companies who offer the logistics service. The logistics industry offers similar products and customer is able to compare prices and types of services from different companies.

Company needs to be differentiable for the client and unique in some way. As I indicated above price is not the sole factor that influences the customer, though it is a strong influencer. It is important to create a tight and faithful relationship with the customer and offer range of services once and for all price and quality. There are numerous tools company may use to fasten the customer: special offer, advantageous financial arrangements, long-term deals, etc. Customer's turning costs are reliant on the strength of the co-operation and linked jobs. Therefore companies operating delivery have to invest in modern solutions. Internet could serve for example. They have completely changed the world of logistics and e-commerce has brought new financial opportunities not limited to customers but also for suppliers as well.

Summary:

Logistics industry is highly competitive and the number of products and prices is comparable. Logistics companies always outnumber customers and customers very easily move to competition. It is therefore important to get customers loyalty and provide benefits that would tight those to the company. It is also important to distinguish from competition and provide offer with added value for example climate-neutral products. There are numerous tools company can use to fasten the client: special offer, favorable financial agreements, long-term agreements, etc. Customer's switching costs are reliant on the strength of the co-operation and linked tasks. Modern technologies are able to tight customer to the company and increase turning costs.

Bargaining Vitality of Suppliers HIGH

In such a section I'd only give attention to bargaining power of suppliers in It area which is the main factor for the logistics industry. Every company must invest huge amount of money into IT to be able to stick to top.

You will discover two types of technology used in CEP market "front-office and back-office. Front-office technology presents computers, telephones, scanners, handhelds etc. and back-office technology is the more important one. It is mostly used for functional purposes of the service, it creates the network. For instance: systems that help companies to boost their functional efficiency like Gps navigation or track & trace system that help identify the parcel for the client anytime.

Investments to modern IT technology are big and every company must decide if it runs internal IT company or if it outsources almost all of the services. Within the latter case, decision of using expensive but highly skilled company or cheaper and terribly skilled company is essential because it may potentially lead to raised cost in future. IT knowledge and skills will be the core for success of the company in logistics industry. What's modern yesterday is out of day today. The risk of falling behind exists.

Usually, company contracts with few companies for longer period of time. Global companies tend to supply from already existing suppliers. It really is good for both factors. Both distributor and the company may use buying power and only field of expertise and development in their industries.

Summary:

Suppliers in IT produce an benefit of skills and importance. Every company in logistics industry is dependent on its network and IT systems. Therefore companies and specifically the top companies spent big amount of money for development of Information Solutions to have the ability to stay on top. Company can either use internal IT organization or outsources the services. IT knowledge and skills is the main for success of the company in logistics industry. There is a constant threat of falling in back of.

Rivalry Among Current Rivals HIGH

Rivalry one of the big players is high and is very intense especially on international level. There are lots of middle or small companies that symbolize risk and increase rivalry on local or international level. As mentioned several times it is vital for the business in order to achieve success to differentiate from its competition. One of the ways, they can do, to come up with ground breaking ideas. The role of Research & Development office is then inevitable. It is therefore important to employ skilled and determined people with new ideas that help the company to increase its competitive edge.

Porter's Five Makes summary:

Based on the Porter's Five Pushes analysis I have determined opportunities and dangers that will be taken into account through the SWOT research.

Threat of new entrants is very high in CEP market but existing big players have built national and international networks that provide competitive benefits against new entrants. Historical experience and appearance in the market is an advantage for companies like DHL and customers' devotion increases obstacles to entry for other competition because of long-term partnerships and agreements. Big companies and firms use economies of range in their favor. Bigger company provides higher discount and also have lower revenue. However, bureaucracy that exists in large companies provides smaller organizations competitive benefits. Bureaucracy decreases the complete operating process. Freelancing or off shoring are used to reduce cost and suppliers' buying ability is used and only specialization and development.

Threat of replacement products is very high because the range of offered products and prices in logistics industry is comparable. Role of Research & Development team is vital and really helps to identify what customer wishes and needs and solve the challenge of substitute products. Investment in Marketing and Advertising is important because these departments converse and instruct customers about brand and image.

Bargaining electric power of customers is high because range of products and prices is comparable and customers very easily move to competition. It is therefore important to gain customer loyalty and provide benefits and differentiate from competition. Customer has to experience the added value. Customer won't turn to competition if there is a linked marriage and dependency that would increase the moving over cost.

Bargaining electric power of Suppliers in IT is high. Logistics companies are dependent on network and IT systems. IT knowledge and skills is the center for success of the business in logistics industry. There is a constant risk of falling behind. Therefore it is important to choose right supplier.

Rivalry among current competitors is high because all biggest opponents are successfully set up on international level and also have experience with competition. Local or international opponents represent third of the Western market and must be studied into account as well. Therefore differentiation and invention are important for the business. The role of Research & Development office is indisputable here.

Internal Analysis

Internal Research serves as an instrument that informs me if company is capable to use opportunities and protect from threats that were found through the analysis of external environment.

In the analysis of external environment I understand that CEP market is highly competitive. Customers are challenging and request efficiency, efficiency, acceleration and quality. Company that desires to achieve this environment will need to have good operational network and modern tools that could support it on local and international level. Successful companies focus on development of their competencies to be main competencies to get bigger competitive advantages.

Competences

DHL Express has been in logistics business for 40 years now and it has generated its brand and business on custom. It provides vast range of easy to get at services and solutions for his or her customers; from transportation of letters, information to move of parcels and goods. It runs in more than 220 countries surrounding the world and uses more than 100, 000 employees. DHL Express is number 1 in Europe with 25% of market share. It wants to become a Logistics company of the world.

The good thing about operating globally, using of preset routes and standardized workflows for delivery is tremendous. DHL Express performs in tight assistance with other divisions (Mail, Global Forwarding & Freight and offer Chain) which helps to better address customers' needs. Modern Information Technology stands behind the success without the conversation. Customer and service support functions 24 hours per day and 7 days weekly.

DHL Express has built its success on determined employees and experts. DP DHL group belongs one of the five most respected companies on earth in logistics industry. It really is on fourth place just behind FedEx, UPS and TNT based on the Fortune newspaper. It invests huge amount of money onto research and development area and has come up with several interesting projects targeted on employees, shareholders and customers, environment and improvements. DHL pays special focus on Marketing & Sales area and presentation with their brand and image. DHL knows that informed customer and company will bring future gain.

Core Competences

Core competences signify competitive advantage of a firm. They help to differentiate, be more profitable, be more successful and gain more market talk about. DHL works on its competences very difficult to get the competitive gain and be the best in the Express market. They say that size is not enough and they are not the best just as a result of biggest market share but also because they're able to supply the best service, innovative alternatives and achieve customers' satisfaction.

DHL Express' core competency is guaranty of the speediest delivery in a good quality everywhere. As I said in past text the trick behind this is the network in which DHL Express runs comprising more than 220 countries, standard routes, modern solutions, standardized methods and techniques and finally more than 100, 000 devoted employees. Further more DHL's aim is to keep in bettering its primary competencies and continue in technology, quality and production and provide profession development opportunities for his or her employees. And in once be seen as socially responsible organization.

DP DHL group and subsequently DHL Exhibit have rolled out strategic programs and initiatives that they consider drive the business forward to the future and derive from core competencies:

  • First Choice program is targeted on improvement of business operations predicated on customers' needs. The rationale behind is to enhance customers' loyalty and intensify and broaden business with current customers. DHL also needs to change the organization culture of DP DHL group and improve cooperation among employees across divisions and areas to provide better value with their customers.
  • Roadmap to Value program is targeted on transparency, profitability, cost reduction, performance, organic development, sustained increase in the company value, etc. The program is directed to make DHL first choice for customers and employees and also for shareholders.
  • As mentioned many times in this paper environment and communal costs are meticulously linked therefore DHL has rolled out a program focused on environment protection and devastation relief. It really is called Go Green. The company itself set an objective to attain 30% improvement in CO efficiency by 2020. So that it has implemented procedures such as fleet optimization (both aircraft and floor vehicles) and develop range of climate-neutral and climate-friendly products. Also, the company can be an official partner of United Nations organization and logistical support during natural disasters.

The main travelling push behind the programs and initiatives are people, the recruiting, the business itself. People are the great advantage that DHL Express has. Educated, skilled and smart people will be the primary competence that really helps to move the business towards future. DHL rolled out an effort called Discover logistics to provide logistics as a thrilling industry that looks into the future and introduces DHL as attractive company. DHL uses a web based career site that is used as an enough and appropriate recruiting tool in age internet.

Position Audit

Position Audit will tell me if DHL Express is able to take benefit of opportunities and can mitigate threats which were identified previously.

The evaluation of Exterior environment revealed an opportunity for DHL to increase market talk about by merging with other logistics companies or recently liberalized companies. Based on the Picture 2 third of European market is dismantled among small or medium logistics companies. Through mergers and acquisitions DHL could enlarge its network and consequence of having better and useful facilities with dedicated customers. DHL has property that permit the company to look doing this.

Another opportunity that made an appearance was entry into Emerging markets. You can find potential of immediate economy progress and revenue. DHL has already entered in these countries and through Marketing is focusing on establishing of its brand and image there.

Modern day has taken changes and regular development of technology and demand. This presents a danger for the company that will not have the ability to quickly respond to those changes and the company may loose market show. As indicated in PESTLE analysis role of Research & Marketing is evitable and represents must for the company. DHL invests into this area and mitigate this threat quite effectively.

Economy problems has brought slow down of economy and decrease of revenue. Every company has to deal start threat and mitigate it. DHL is aware of that threat and it is persuaded that strong brand makes them safe and well-equipped for difficult times. Therefore, they plan less opportunities and have started working on reducing of indirect costs by cost-cutting. Therefore, they have got began with restructuring and initiatives that improves cross-divisional assistance.

Social cost and responsibility of companies represents another risk for companies in terms of fines, fees and customers' perceptions. Logistics industry has significant negative influence on environment and companies' responsibility is decrease the communal cost by working with more efficient and green technology to balance it. DHL has come up with their goal Living responsibility and initiated several innovations and programs to cope with this menace (e. g. LIVE GREEN program). Research & Development has played out an important role in it.

21st hundred years is age modern technology and specifically Information Technologies. Logistics is based on technology because velocity and trustworthiness are essentials for success and fall back of is relatively easy. DHL Express mitigates this threat by strong interior IT group that supports the whole DHL network. On top of that, DHL uses understanding of IT companies like Hewlett Packard and IBM to use the modernist IT tools and technology. On top of that, DHL also outsources highly skilled specialists to cooperate on improvements and progressive ideas. Roadmap to Value program really helps to mitigate that risk.

Threat of new entrants is high in CEP market and DHL has to mitigate the chance and will it perfectly. It has generated strong countrywide and international network offering high competitive edge. Experience and strong brand increase devotion and create obstacles for new companies to entry. DHL has 25% of Western european market share which brings an good thing about economies of scale. Chance for more advantageous prices offer, higher special discounts bring clients and help to build long-term partnerships and agreements. DHL is aware of the advantage and focus on it with help of Sales and Marketing and Research & Development office programs First choice and Roadmap to value help to mitigate that danger.

On the other hand the advantage of DHL as a huge corporation has also helped bring more bureaucracy and slow down of processes. That is a fact and I could only confirm it as a DHL worker. Program like Roadmap to value really helps to mitigate it and brings more transparency and performance. DHL has started out with restructuring of the company firm that also brings cost decrease. First choice program brings more collaboration between employees and consequently brings innovations.

The range of offered products in logistics industry is similar. Therefore the threat of substitute products is very high. DHL works on mitigating it through Research & Development and through First Choice program. The result of the initiatives has taken id of customers' needs and needs and help solve the condition of substitute products. DHL continues on improvement of the merchandise and services that are in the offer. Top quality together with velocity and reliability are fundamental success factors. Standardized systems, functions and workflows permit the DHL sales team to increase productivity. Again the programs Roadmap to value and First Choice can be an response to the threat of alternative products.

Bargaining electric power of customers is very high in logistics and threat of dropping customers is significant. DHL recognizes that therefore spend money on Marketing & Sales and in constant communication and education of customers. It has built well-established and well-managed brand that is one of the most valuable investments of any company on national or international level. First Choice program helps to align operations with customer needs and eventually bring cost efficiency.

Suppliers play an important role in logistics business, their vitality is high especially in IT. Information technology is an integral success factor. All systems must be accessible and offered by all times; unauthorized access to data or data manipulation must be prevented, and it is important to ensure that software is not developed with defects. The success of IT depends critically on employees and suppliers. DHL uses its inside IT firm and as stated above DHL also uses understanding of IT companies like Hewlett Packard and IBM and outsources very skilled specialists to cooperate on inventions and innovative ideas. Investment for the reason that area is high but it will probably be worth it. DHL uses knowledge and key competencies of others in its favour.

Rivalry in CEP market is high and DHL is aware of it. DHL Exhibit has started working on tighter co-operation with other divisions; uses cross-divisional synergies and works on improvement of products and services through differentiation and technology and invests in research and development. On top of that, DHL has competed to get highly qualified specialists and managers and through First Choice program "fight efficiently with competition. Surveys, improvements, innovations, transparency, cooperation and restructuring is a means for DHL to mitigate the chance of high rivalry and sustainable work on preserving and extension of its market show.

SWOT Matrix

OPPORTUNITIES

  • Mergers and acquisitions
  • Investment in Rising markets to fortify market position and gain new market share
  • Investment into strategic programs
  • Active Sales and Marketing department
  • Improvement of products and services through innovation
  • Specialization of products
  • Improvement of cooperation cross-divisionally
  • Deepen romantic relationship with suppliers to have the ability to use their buying power
  • Differentiation from competition (e. g. expand offer of climate-neutral and climate-friendly products)
  • Intensify and broaden business with current customers to increase their dependency
  • Customized solutions for every customer
  • Increase output by strengthening of standardized systems, functions and workflows key factors quality, consistency and speed
  • Education of customers
  • Communication to customers
  • Build more transparent company by restructuring and cost-cutting initiatives
  • Outsourcing or off shoring
  • Be seen as socially in charge organization
  • Become First Choice for employees
  • Become First Choice for customers

THREATS

  • Slow down of overall economy due to economical turmoil and lower profit
  • Social cost and impact on environment
  • Threat of slipping behind in IT due to technology development and swift changes
  • High dependency on network and IT
  • High risk of new entrants (conducting business in highly requiring and attractive environment)
  • High threat of substitute products
  • High bargaining vitality of customers
  • High rivalry among existing competitors

STRENGHTS

  • History and experience
  • Strong brand and image
  • Strong financial position
  • High market share
  • Cost advantage
  • Global network and standardized workflows
  • Cross-divisional experience and cooperation
  • Standardized product portfolio
  • Portfolio of faithful customers
  • Broad stock portfolio of quality IT suppliers
  • Very good customer support
  • Established and strong Research & Development department
  • Strong Marketing & Sales
  • High degree of technology
  • Skilled and determined employees
  • Very potential employer
  • Committed employees and highly skilled specialists
  • Official partner of United Nations

WEAKNESSES

  • Third of Western market is dismantled among small and medium companies which weakens the power of DHL Express
  • Bureaucratic environment (threat of slower functions and potential loss of customers)
  • Wide range of customers' profile (from individuals to big companies)
  • Wide range of product stock portfolio (worse id of targeted customer)
  • Customers easily transition to competition
  • No major differentiation among the major opponents (network, history, experience, customer portfolio, product collection)

SWOT Analysis

SWOT research is procedure for minimizing or mitigating risks by turning them into opportunities, turning weaknesses into talents, and coordinating of talents with opportunities.

Threats

Economic crisis has brought slow down of market, lower number of shipments and consequently lower income and revenue to the business. DHL Express is strong group with strong brand and good finances that make it safe for the time-being. It really is an opportunity for DHL Express to work on making the business more translucent, less bureaucratic and restructure its group. These initiatives would bring cost-cutting and help financial health of the company for future years. Additionally it is an opportunity to outsource or off shore some of IT services from suppliers and use their buying electricity in terms of competitive benefits.

There is a huge threat of falling behind scheduled to accelerate of technology development and high dependency on IT and network for DHL Express. It is not possible to avoid that threat but it is important for the business to minimize it. DHL Exhibit uses broad profile of quality suppliers like Horsepower and IBM that help minimize the risk of falling behind. Luckily, the dependency is two-sided. It is not only for DHL Express also for the suppliers. It's important to deepen the assistance and create more robust dependencies. This may be done through ground breaking projects presented through Research & Development department.

As previously indicated the threat of new entrants is very high in CEP market, however, DHL Express mitigates this risk perfectly. It has generated strong global network. It includes experience, record, strong brand and very good image in the market. As a large company it includes financial advantages and will offer more favorable prices and special discounts to the customers. Sales & Marketing and Research & Development departments help to minimize that hazard. Strategic programs that work on improvement, invention, education and communication cross-divisionally, among employees and customers are the success factors.

The threat of alternative products is very high in logistics which is important to combat with this menace and differentiate for the customer. Customer is enthusiastic about quality, dependability and speed; therefore it is important for DHL Exhibit to work on specialization and offer customized solutions for customers. Good and recognizable brand brings image of quality which is strengthen through Marketing & Sales activities - communication channels, advertisements, commercials and additional initiatives.

Customers have strong bargaining position in logistics industry because all logistics companies provide similar collection of products. There are plenty of competitors on local and international level that aren't easily recognizable for customers and for that reason it is relatively easy to allow them to transition to competition. Customers frequently count on image of the business and its own historical experience which is a huge gain for DHL Exhibit. Which means investment into Marketing & Sales is important and work on further development in

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