Challenges Faced by Australia Post: Assessment and Recommendations

This assessment analyzes the challenges faced by Australia Post, including investment in technology, loss in market share, customer service improvement, and supply chain logistics. Recommendations are provided for improvement.

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MANAGEMENT

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Executive Summary
The primary purpose of conducting the assessment was to understand and assess the problems
and challenges being faced by the Australia Post in the contemporary business era which are
basically related to investment in the ever changing technology, increasing loss in market share,
improvement in customer service, and meeting the demands of the customers and supply chain
logistics. The assessment is significant because it would help in understanding how Australia
Post can improve itself within the current market and retain its market share for long by attaining
sustainability and growth. The assessment describes the macro environment, industry,
competitors and the strategies of the organization. Necessary recommendations and conclusions
have been provided as well.

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Table of Contents
Introduction......................................................................................................................................4
Macro environmental analysis.........................................................................................................4
Political........................................................................................................................................4
Economic.....................................................................................................................................4
Socio-cultural...............................................................................................................................4
Technological..............................................................................................................................4
Legal............................................................................................................................................5
Environmental..............................................................................................................................5
Industry analysis..............................................................................................................................5
Bargaining power of buyers.........................................................................................................5
Bargaining power of suppliers.....................................................................................................5
Threat of rivalry...........................................................................................................................5
Threat of substitutes.....................................................................................................................5
Threat of new entrants.................................................................................................................5
Company analysis............................................................................................................................6
Competitor analysis.........................................................................................................................6
Strategy analysis..............................................................................................................................6
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................7
Reference List..................................................................................................................................8

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Introduction
The Australian post is a company that offers various postal services within Australia as well as
external countries. The company operates the business in the name of the Postal Corporation of
Australia. It is headquartered in Melbourne, Australia and was founded back in April, 1809. The
companies controlled as well as managed by the government of Australia and is ranked 23rd in
the list of the top hundred financial companies of Australia. Usually, the company deals in
various services like mail and parcels (including parcel delivery and collection, stamps,
packaging, etc.), insurance and money (including Insurance and financial services and prepaid
cards) and business solutions (including payment and finance, e-Commerce solutions and parcel
shipping as well as counters) (Australian Postal Corporation, 2017). There are more than 11.4
million delivery centres and 4400 post offices of the Australian post managed at various
Australian locations. The case analysis has been conducted to assess the primary challenges
which Australia Post has been facing. These are, investment in the ever changing technology,
increasing loss in market share, improvement in customer service, and meeting the demands of
the customers and supply chain logistics.
Macro environmental analysis
The factors which are not changeable or controllable are known as macro environmental factors
of any organisation. They have the potential of impacting and organisation's environment as well
as its business' decision making. The Macro environmental factors include the analysis of Pestle
which is basically a tool used for the evaluation of the external factors which helps companies in
taking effective business decisions and controlling its functions of management. Pestle analysis
includes six factors like, political, socio-cultural, technological, environmental and legal factors
(Whitehead, 2012).
Political
The working of any company is affected by the political factors of the country within which it
operates. Political surroundings of Australia are well stable and the country is industrialized.
Australia post has many opportunities available for improving its business and increasing its
market share by the means of providing better services as well as innovation in comparison to its
competitors. Hence, it can be said that the political factors of Australia are in favour of the
company (Metzger, 2014).
Economic
The factors of economy of Australia are considered to be sound and the growth of the economy
is firm. The interest and tax rates are visible enough for Global and multinational companies.
These factors are in favour of the company (Zhou, 2011).
Socio-cultural
Australian people usually follow the western culture highly impacted by the latest style and
Trends. The people of Australia mostly use internet websites for ordering their daily needed
products. Therefore, the company has use opportunities for delivering the postal packages.
Technological

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The people of Australia and known for being tech savvy and country is well advanced in the
same field. The company Australia post very well coordinates with the latest lifestyle and
technology trends. Various Technologies like packet sorting machine, barcode machine, and
video coding machine are used for the enhancement of the productivity and profitability of the
company (Australia Post, 2017).
Legal
Australia is known for having strict and sound regulations and rules however these are well in
favour of the domestic companies. The company utilizes such benefits from its nation.
Environmental
The environmental factors include weather, climate and geographical location. Australia is
known for being very rich in its natural resources and is a prosperous nation. The environmental
laws and regulations of the country are much emphasized towards protection and conservation of
the environment. Hence, the company would need to use such type of packaging which would
not how the environment and would be recyclable (Miller et. al., 2011).
Industry analysis
Bargaining power of buyers
In Australia, there are many courier companies available due to which the competition within the
providers of postal service is quite high. As such, the bargaining power of the customers is very
high because of the less switching cost (Rothaermel, 2015).
Bargaining power of suppliers
There is large number of suppliers within the market of Australia post. Due to such presence of
large suppliers, their bargaining power is quite low.
Threat of rivalry
There is a big threat of rivalry to Australia post due to presence of competitors such as DHL,
FedEz, DTDC, TNT, etc. who provide postal services within Australia (Maiden, 2015).
Threat of substitutes
The threat of substitutes is very high for the company because there are many competitors
present within the same industry and the price which is charged for the services is the only factor
which differentiates one competitive from another. Which provide the same services at a lower
rate have greater benefits because the customers are well aware of the prices (Castle, 2014).
Threat of new entrants
The level of degree of difficulty for new organisation in entering an industry is known as the
threat of new entrant. In this case, the threat of new entrants for Australian post is very low
because of the high cost of investment which is needed for starting a new organisation.

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The Australian Post, although is a very old company, established back in 1809, is still at its
maturity stage, or can also be said to be somewhere in the middle of the stage of growth and
maturity. This is because; the company still has a competitive edge in the market and is
competent enough for earning profit and a market share. However, this might be coming to an
end as the competitors are now growing and taking over the market.
Company analysis
The primary resources of the company are Australia Post car insurance, Australia Post travel
insurance, Australia Post home insurance, International post guide, moving services, currency
converter, postage calculator, Visa prepaid card, online shopping and package tracking
(Australian Government, 2019).
The capabilities of the business are Parcels & logistics; Retail merchandise and agency services;
and, Letters and associated services (AusPost, 2009).
The essence of core competencies of the company is Distributed logistics, with having an
availability of 12,400 vehicles, 15,805 street post boxes and 4,417 post offices
(EvolutionPartners, 2015). This provides the company with a competitive advantage in the
market.
Competitor analysis
The Australia post is one of the giant companies of Australia that has been successful in
capturing 60% of the whole market share in the parcel delivery business. The primary
competitors of the company are TNT, DHL, FedEx, etc. which are known for being the most
competent companies for Australia Post. In the business of postal services, TNT holds 10%
whereas DHL holds 5% of the market share. The competitors of the company raise the share in
the market by margining and acquiring with other companies (Korporaal, 2015).
The competitors of Australia post like United parcel service and FedEx establishing their grasp
in the global market by taking over other companies. The Australia post is somehow doing the
same however, has to widen its scope in different nations. Hence, it can be said that the company
has started to lose its share in the market however, due to development & research, and
continuous innovation, market share of the company can still be sustained (D&B Hoovers,
2017).
Strategy analysis
The Australia post emphasizes upon offering appropriate and essential postal services. The
business of the company is dependent upon the satisfaction of the customers and the primary
emphasis should be upon the fulfilment of the modern requirements of the customers. The
business strategy of the company has been renewed in the recent years. The company has known
to have collaborated with eBay, Armex and Amazon for improvement in its logistics (Cummins,
2016). The alterations in technology have helped in enhancing courier services. Customers have
been assisted by digitization for tracking their couriers from any place at any time. As such, the
customers are satisfied and are retained by the company. Various strategies have been made by
the organisation for entering into digital services and electronic commerce in order to serve their

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customers in a better way. This would help in improving accuracy of the services of the company
and increase the effectiveness and efficiency of its operations. A new drone technology known as
Remotely Piloted Aircraft, has been launched by the organisation for small parcels which are to
be delivered in the remote locations (Swan, 2016). The most evident business strategy being used
by the firm is Diversification, which is a strategy of business where an organisation launches its
new services and products within a new market (Campbell, et. al., 2011).
Recommendations
The company would need to monitor cost management closely. Distribution and technology
networks should be used by the company including private carriers, in order to make higher
profits. Australia post should use collaborated techniques of supply chain which would help in
the management as well as transportation of the delivery procedures for the commercial
customers. As such, the switching costs would become prohibitive for the company due to it
being entwined into goods delivery. The company can generate warehousing revenue from its
strategic partners from China. In various regional areas, retail outlet and agency services offer
huge growth potentials. The company offer banking services in the remote and rural areas for
taking over the traditional banking firms.
Conclusion
On the basis of the above assessment, it can be concluded that the Australia post still has a firm
position within the market. The power of the suppliers as well as the buyers is quite low due to
presence of high competition within the market. The threat of new entry is quite low because of
the use cost of investment which is required for setting up such a business. The analysis of the
competitors’ position of the Australia post reveals that the organisation still enjoys a big market
share in comparison to its market competitors. Although the firm has started to lose its share in
the market however, due to development & research, and continuous innovation, market share
and sustainability can still be sustained.

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Reference List
AusPost, 2009. Australia Post Annual Report 2009. [online] Available at:
https://auspost.com.au/content/dam/auspost_corp/media/documents/auspost-anntpt-2009.pdf
[Accessed on: 29 April 2019]
Australia Post, 2017. Technology and the future. [online]. Available at:
https://auspost.com.au/education/ourpost/students/our-post/future.html [Accessed on: 29 April
2019]
Australian Government, 2019. Australian Postal Corporation - Resources. [online] Available at:
https://www.australia.gov.au/directories/australia/australia-post/resources-list [Accessed on: 29
April 2019]
Australian Postal Corporation, 2017. Make a lasting impression this Easter. Available at:
https://auspost.com.au/ [Accessed on: 29 April 2019]
Castle, J., 2014. Posting Parcels Overseas. Available at:
https://www.choice.com.au/shopping/shopping-for-services/services/articles/best-international-
postal-service [Accessed on: 29 April 2019]
Cummins, C., 2016. Australia post will reach out to help Amazon. Available at:
https://www.smh.com.au/business/property/aussie-post-will-reach-out-to-help-amazon-
20170406-gvetce.html [Accessed on: 29 April 2019]
D&BHoovers, 2017. Australian Postal Corporation Competition. Available at:
https://www.hoovers.com/companyinformation/cs/competition.australian_postal_corporation.baf
e3e1ed63c98f4.html [Accessed on: 29 April 2019]
EvolutionPartners, 2015. How is Australia post in a growth market and losing money. [online]
Available at: https://www.evolutionpartners.com.au/how-is-australia-post-in-a-growth-market-
and-losing-money.html [Accessed on: 29 April 2019]
Korporaal, G., 2015. Australia Post Rivals Picking up the Parcel Business, The Australian
Business Review, [Online]. Available at: https://www.theaustralian.com.au/business/the-deal-
magazine/australia-post-rivals-picking-up-the-parcel-business/news-story/
34c841e719d65d9a75939c65578fbec3 [Accessed on: 29 April 2019]
Maiden, M., 2015. Australia Post eyes price rise. Available at:
https://www.smh.com.au/business/australia-post-eyes-price-rise-20140129-31n5w.html
[Accessed on: 29 April 2019]
Metzger, K., 2014. Business Analysis of UK Supermarket Industry. Munich, Germany: Grin
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Miller, F. P., Vandome, A.F. and McBrewster, J., 2011. Pest Analysis. Saarbrucken, Germany:
VDM Publishing.
Rothaermel, F. T., 2015. Strategic management: Concepts and cases. NY, USA: McGraw-Hill.

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Swan, D., 2016. Australia Post launches new drone technology. Available at:
https://www.theaustralian.com.au/news/nation/australia-post-launches-new-drone-technology/
news-story/94fb1d20e88e54571462546a88b7cfad [Accessed on: 29 April 2019]
Whitehead, J., 2012. What You Need to Know about Strategy. New Jersey, USA: John Wiley &
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Zhou, Q., 2011. Advances in Applied Economics, Business and Development: International
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