Professional Documents
Culture Documents
External Analysis
Company Overview
DHL is a wholly owned subsidiary of Deutsche Post
World Net . The company offers expertise in
express , air and ocean freight , overland
transport , contract logistics solutions as well
as international mail services .
DHL links 120 , 000 destinations in more than 220
countries and territories . The company provides
services from a network of about 6 , 500 offices ,
and it employs a fleet of nearly 76 , 200
vehicles and about 420 aircraft .
The company operates through four business
divisions : DHL Express , DHL Freight and DHL
Global Forwarding , DHL ExelSupply Chain and DHL
Global Mail .
1. Apply the five forces
model to the industry in
which your company is
based. What does this model
tell you about the nature of
competition in the industry?
Porter’s Five Forces
Model
Risk of Entry by Potential Competitors
Threat of Substitutes
Risk of Entry by
Potential Competitors
Low due to:
• Government Regulations
•
Rivalry among
established companies
High due to:
Lesser substitutes
Bargaining Power of Buyers
Refers to the ability of buyers to bargain
(Positive)
Changes:
Increase trend
of online
shopping
Effect:
Creates
business
opportunities
for logistic
companies
Changes in
the Macro-
Environme
nt
• Political
and
Legal
Forces
Source:
DHL website.
http://www.dhl-
usa.com/resources/Prohibit
ed_Restricted_Commoditie
s.pdf
Changes in the Macro-
Environment
• Global Forces (economic)
• Changes: Rise in fuel prices
• Effect: High operating cost
Market Follower
- Skynet
- Kangaroo
-Gdex
Re lia b ilit y
Strategic Groups
Difference in intensity of competition across these
groups
4. In what stage of its life
cycle is the industry in which
your company is based?
What are the implications of
this for the intensity of
competition both now and in
the future.
Life Cycle
Mature Life Cycle
• Market totally saturated with
low to no growth:
• Industry consolidation based
on market share, driving
down price.
DHL is in t h e lo g is t ic In d u s t ry wh e re
t h is in d u s t ry h a d m a t u re d d e lib e ra t e ly
b e c a u s e e n t ry in t o t h e m a rke t is
d iffic u lt , ye t in it ia l c o m p e t it o rs a re
s lo wly g ro win g .
• Now
Life Cycle
• DHL is an established brand hence they fall
under the mature stage. DHL should
prevent from falling into the declining
stage by securing and increasing their
brand loyalty.
• This promotes higher entry barrier and less
new entrants will enter the market. Then,
competition is lower.
• Solution:
• Maintain as a market leader by
providing the same high quality
services to keep consumers coming
back.
• Build close long term relationship with
the suppliers.
Life Cycle
• Future
• Keep being innovative by coming up with
more competitive advantage like
developing new technology, service etc.
• Focus more on CSR as consumers are
more concerned with global warming
and climate change.
• Ensure competitiveness by keeping track
of competitors’ actions and strategies
and also, consumers changing needs
and trends.
• Consider joint ventures project
(e.g.: currently with UPSP)
Conclusion
By a n a lyzin g a n d u n d e rs t a n d in g t h e d yn a m ic
m a c ro - e n viro n m e n t , DHL is a b le t o id e n t ify
wh ic h o f t h e fo rc e s h a s t h e g re a t e s t im p a c t t o
t h e c o m p a n y a n d it s in d u s t ry.
By h a vin g a c le a r u n d e rs t a n d in g o f t h e
e xt e rn a l a n a lys is , DHL will kn o w wh e re it s
c o m p e t it ive p o s it io n lie in t h e in d u s t ry, t h e
c u rre n t m a rke t t re n d s a n d it s c o m p e t it o rs ’
s t ra t e g y in o rd e r t o g e n e ra t e a s u c c e s s fu l
s t ra t e g y t o s a t is fy t h e e xp e c t a t io n o f
c o n s u m e rs in o rd e r t o c o m p e t e .