DHL Business System Analysis Assignment Help
Brief Company Overview:
DHL is a wholly owned subsidiary of Deutsche Post World Net (DPWN). The company is one of the leading players providing major freight forwarding, logistics, and supply chain management services. It primarily operates in Europe, the US, and Asia. The company is head quartered in Bonn, Germany and employs about 285,000 people. The Express division is the core operation of DHL that provides courier and express services, through a network that covers more than 200 countries across the globe. The company’s Global Forwarding and Freight division is the largest air and ocean freight forwarder in the world (Data Monitor, 2009).
DHL Australia’s Current Strategy for Competitive Advantage
Competitive advantage can be traced back to resources as explained in Appendix A according to the resource based view. In the past decade, 3PL’s have been engaged in a number of activities including organic expansion, merger and acquisitions and building alliances. Through these activities, firms in this sector gain access to tangible and intangible resources including land, logistic hubs, aircrafts, skilled work forces, technological systems, expertise and competencies in order to achieve growth and competitive advantage (Das and Teng, 2000).
DHL Australia’s competitive advantage can be attributed to network presence in all regions of Aistralia and ensuring resulting in high level of customer service. DHL has been present in Australia since 1969 offering full product suite of express, logistics and mail services. DHL Australia has a relational intangible resource of highest level customer satisfaction that allows DHL to charge a premium for its service. Second competitive advantage is the strength of DHL brand that has been created through strong marketing and corporate social responsibility campaigns. (DHL, 2013)
Internal (SWOT) Analysis of DHL
SWOT analysis allows a firm to identify and critically examine its internal resources through which it can remain competitive. SWOT stands for internal Strengths and Weaknesses along with external Opportunities and Threats (Datamonitor, 2010).
Strengths (Datamonitor, 2009, 2010):
- Leading logistics player in the global market
- Diversified business model catering to different market segments
- High level of brand recognition and awareness in relation to competitors
- Strength of parent company i.e. Deutsche Post World Net
- Strong supply chain services specialized across many industries
Weaknesses (Datamonitor, 2009, 2010):
- Weak operating margin as compared to direct competitors
- Limited service offering in few economies as compared to competitors
Opportunities (Datamonitor, 2009, 2010):
- Generate business opportunities in the domain of online shopping and e-tailing
- Growth through acquiring direct and indirect businesses such as marketing execution company called Tag which DHL has already acquired
- Growing express marketing in Asia Pacific and European countries
- New contracts and agreements with signing up of global mandates
Threats (Datamonitor, 2009, 2010):
- Volatile oil prices that expose DHL to the substantial risk of increased material expense as petroleum products account for more than 60% of the material expenses of the company.
- Intense competition among the rivals in all dimensions including marketing, product offering, customer reach etc
- E-Substitute for regular mail in the form of emails, electronic forms etc
- Economic slowdown in Europe and Americas
Key Strategic Issues and Strategies by DHL Australia
Key strategic issues that DHL is facing as a 3PL include from Datamonitors report (2009, 2010) and DHL Australia (2013);
- Sustainability requirements as there are growing concern of ethical practices in relation to environment. DHL Australia has taken a number of strategic initiatives to address this concern including free waste recycling in Queensland and other states (DHL 2013).
- Maintenance of the strength of the brand is an increased challenge. DHL Australia sponsored Australian Rugby team for World Cup 2011 (DHL, 2013).
- Volatile fuel prices exposes company to increased material expenses and an increase of overall cost of operation
- Innovation to compete and offer highest level of customer service to remain competitive
Evaluation and Recommendations to Sustain Competitive Advantage
Customer Focused Innovation:
DHL should realize that the requirements and expectations of the customers have changed over time. A short term approach to offer simple transport and warehousing services is no longer sufficient to meet these expectations. Consequently, DHL would end up losing market share and would not be able to maintain growth.
A firm in 3PL’s industry can only be competitive and perform if it possesses the ability to adopt innovations that can add value to the customer’s bottom line. DHL did realize this and opened an Innovation Center in 2006 defining it as “space for new ideas”. The objective behind this activity was to develop solutions from inception to market launch that can create value for customers. DHL should further engage into such activities that can bridge the gap between firm and customers with optimized value chain offering. Support activities such as technological development and human resource development should be effectively linked to create value for the end customers through enhanced relationships.
