ANALYSIS OF STRATEGIC POSITION

Deutsche Post World Net has a unique spectrum of international services including brands DHL, Deutsche Post and Postbank with different types of services !hus, we have decided to focus on DHL in this analysis in order to better understand to strategic position within logistic services

PESTEL ANALYSIS:
Legal: Deregulation and liberalisation of the airline industry "nvironmental regulations and protection Political: Liberalisation of international trade #nternational trade regulations and restrictions "$ e%pansion&needs for infrastructure and information technologies' Economic factor "conomic integration (lobalisation "conomic growth )tage of the business cycle *onsumer confidence Sociocultural factors Lifestyle *hanges + global consumer (rowing world population &increased urbani,ation and created more megatropolises' Technological: Developing of communication "-commerce "shipping Development of infrastructure "nergy use and costs *hanges in #! *hanges in #nternet *hanges in .obile !echnology En ironmental: #ncreasing pollution /il consumption

Su!!liers: """"""

Competitors:
.a0or competitors are global logistic groups, which operates on global markets, include 1ed"%, $P), !N!, 2uehne3Nagel However in "urope, due to the dominance of the national postal operators within their own markets, the ma0ority of the leading players are subsidiaries of these key postal operators

#a$or com!etitors Turno er%milion &' *+L 45 564 Fe*e, ;< 957 -PS 46 <77 TNT 5 <7= .uehne/Nagel 8 57=

Countries 477 447 477 477 <77

Em!lo(ees 489 777 469 777 :76 777 :8 777 49 576

)ehicles 65 777 :4 777 =< 677 <= 777 n>a

Aircraft :47 56: 458 :; n>a

Customers:

Com!etiti e a0 antage +OL.Y #ar1et segmentation

1ocus of ma0or players

)ource? http?>>group tnt com>investorrelations>sectorstatistics>marketstatistics>inde% asp

DHL offers same day, e%press, parcel and freight services that are complemented by an #nternet track and trace service !he company offers following international services? o "%press services o @ir and ocean freight o #ndustry solutions o Logistics solutions DHL speciali,e in cross-border e%press deliveries and provide #nternet tracking and order fulfilment services *+L on Euro!ean mar1et DHLAs main market is according revenue "urope which DHL cover together with Deutsche Post in (ermany !hus, further segmentation is focused on "uropean market
Market segm entation: revenue in region 2005

9% 19%

2% 41%

Germany Euroupe(excluding Germany) Americas Asia Pacific Ot er !egions

29%

*ompiled from @nnual Beport 4779 DPWN

Ne%t day delivery services are the most lucrative within the "uropean e%press logistics market, accounting for :: <C of its revenues

Europe Express Logistic Market Segmentation: %Share by value

1'"'% 1%"&% 44"1% (ext )ay *tandard Parcel (ext )ay + ,ime )efinite *ame )ay 2#"$%

)ources? Data .onitor *+L on Asia mar1et $ntil 477= *hinaAs average annual growth rate in international e%press business will be between ;: a :9 per cent !here is obviously huge potential and every (lobal logistic group wanted to catch the chance to obtain this market *hina becomes the top market of DHL last year and they invested to this market about D=77 million *+L on -S mar1et $s market accounts nearly half the worldwide total e%press traffic &DHLAs @merican @dventure' #n 477; DHL buy @irborne "%press and become the third largest e%press service provider in the $)@ @s a result of comple% air and hub consolidation, in which DHL invested millions of dollars, DHL lost many of its customers and this market will be not profitable until 477= Nowadays 6 per cent market share is supposed to increase in <7 or <4 per cent

#ar1et !ositioning
Commodity Differentiated

# a r 1 e t s c o ! e

B r o a d

N a r r o w

.arket position of DHL as well as its ma0or competitor is in broad market with differentiated services

)ource? http?>>group tnt com>investorrelations>sectorstatistics>marketstatistics>inde% asp

!he biggest part of DHLAs businesses run in intracontinental and intra-"urope DHL gain good position also in Pacific @sia, where has around :7 per cent of logistic market DHL has only 6 per cent in $) and where face to competition with ma0or competitors 1ed"%, $P) and on this market also $) Postal )ervice DHL lost their customers during the comple% air and hub consolidation investing millions of dollar in this market and this market will be not profitable until 477=

2usiness mo0el

)alue !ro!ortion

SCOPE Package centres>warehouses>hub Wide range of logistic solutions Web shipping>e-booking Beliability Jusiness customers &parcel in bulk, indurtry solution etc' Households

!echnology

Beliable and convenient delivery

Drop-off centres #nternet booking

*IFFERENTIATION

Organisation

Becommendation
!o be on @sia market - has the biggest growth potential

References:
&4775', .arket )egmentation, !argeting, and positioningEonlineF, @valiable at? Gwww utdallas edu>Htskim>LectureC47NoteC475 pdfI, I, E@ccessed 49th November 4775F Joyd, K D &4775', DHL parent DPWN Bestructures, !raffic World <7>4>4775, Lol 467 #ssue :7, p;5 Logistic !oday &4775', DHL, 1ed"%, $P) "%pansion of )ervice !o and #n *hina EonlineF, @vailable at? Ghttp?>>www logisticstoday com>sN/>685=>L!>display)tory aspI, E@ccessed 49th November 4775F 34456 *+L7s American A0 enture8online96 A aili:le at: Ghttp?>>www businessweek com>maga,ine>content>7:M:8>b;=<7<<9Mm,7<6 htmI, E@ccessed 49th November 4775F

Porter;s < forces Com!etiti e ri alr(: #n Deutsche Post World Net annual report 4779 is written N(lobally, Deutsche Post World Net has a comprehensive range of services for mail, goods and information logistics that is unrivalled by any other company in its sector O !his is truth only for the whole organisation, but DHL &with revenue P4: ; billion' has intense competition with other firms, which has similar products and services, for e%ample 1ed"% &with revenue D4= : billion', $P) &with revenue D:4 5 billion', !N! &with revenue D<< = billion' Deutsche Post World Net wants to acquire the competitive advantage from focusing on customer !heir new program is called N1irst *hoiceO &1ed"% annual report 4779, !N! annual report 4779, $P) annual report 4779, http?>>www bankofengland co uk 4; << 4775 -I <DQ7 664<P' The threat of ne= entr(: !hreat of new entry is low 1irstly because of high need of distribution channels, this includes very high cost for establish new distribution channel for new entrant )econdly the capital requirement of entry is very high, not only high cost for establishing new distribution channel, but also there is huge demand for amount of labour forces and technical equipment &vehicles, telecommunications, storages etc ' 1inally there is also problem with economies of scale, if firm wants to be profitable, it canRt operate in small scale

The threat of su:stitutes: #n these times the threat of substitutes isnRt very high !his is because email or similar services are established yet and nowadays with higher cost of energy &fuel, electricity etc ' it is cheaper to let send packages with e%ternal firm, which has less costs because of economies of scale, than send it themselves The !o=er of :u(ers: !he buyer power is very high, because of very similar products and services in the branch *ustomers can easily change their supplier #t is because of their emphasis on price, quality and new products or services The su!!lier !o=er: !he supplier power can be quiet high because DHL has huge outsourcing with tight relationships with suppliers, but on other hand, big company like Deutsche Post World Net has force to partially control supplier requirements

Strategic grou! anal(sis:

DPWN 1ed"% $P) !N! Si>e of re enues

Boyal .ail *,ech Post Local courier services

Regional !here are ; strategic groups

National

International

1irst are local courier services, which for e%ample operate only in one city &for e%ample London or Prague' !he differentiations of these firms are focus on specific area and low revenues )econdly is national group which can have high or low revenues, but it operates only in national levels &for e%ample national post services like Boyal .ail' 1inally there are international firms, which are using advantages of globalisation !hey have huge revenues but also high costs for maintenance global distribution channel

.e( Success Factors

General !rere?uisites for success Tuality and cheap services with intense customer focus Low costs by using for e%ample economies of scale Tuality and large distribution channel with low costs for maintain Prosper from advantages of globali,ation Harmoni,e between international and domestic business

Customers an0 0eman0 *ustomers are consisted of household and industrial buyers *ustomers want quality, fast and cheap delivery their consignment *ustomers prefer personal approach with read0ustment to their need

Com!etition DHL has very intense competition from other international courier firms, but? - DHL has advantage in using economies of scale - DHL has also advantage in support from other organisations units &Postbank, Deutsche Post' - DHL will try to obtain superior position from new program N1irst choiceO

.e( success factor #ntensive distribution S a global network *ustomer focus S DPWN wants to be the number one for quality and customer satisfaction, focus on the needs of their customers Product innovation S DPWN focuses on widening their range of services "conomies of scale S it influences cost efficiency