Australia Post: Strategic Management Research Paper 2022

Student’s Last Name 1
Australia Post: Strategic Management
By (Name)
Course
Professor
Unit
Date

Student’s Last Name 2
Executive Summary
This paper attempts to analyse the strategic management problems experienced by Australia
Post in the contemporary postal and courier service industry. The paper measures the macro
and micro-environmental factors that greatly impact the running and making of strategic
management decisions. In this paper, macro-environmental factors, industry analysis,
company analysis, competitor analysis are examined using business analysis tools such as
PESTLE frameworks, Porter's 5 forces frameworks, industry life cycle frameworks, and the
VRIO frameworks. This report paper also identifies the effectiveness of strategies employed
by Australia Post. Throughout the paper, efficient literature sources have been employed.
Viable recommendations are suggested in the conclusion section of this paper.

Student’s Last Name 3
Table of Contents
Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................4
Macro-environment..............................................................................................................................4
PESTLE Analysis..................................................................................................................................4
Industry Analysis....................................................................................................................................5
Industry Life Cycle..............................................................................................................................5
Porters 5 forces.................................................................................................................................5
Company Analysis..................................................................................................................................6
VRIO Framework................................................................................................................................6
Competitor Analysis..............................................................................................................................7
Strategy Analysis...................................................................................................................................7
Recommendations and Conclusion.......................................................................................................7
Bibliography...........................................................................................................................................8

Student’s Last Name 4
Introduction
Australia Post exists as one of the leading postal and courier service providers in
Australia. The company aims at the provision of affordable and reliable services in its postal,
retail, financial and travel services within and outside the Australian borders. Founded in
1975, the Australian company has headquarters in Victoria, Melbourne, and Sydney. Funded
by the Australian government, Australia Post, also referred to as AusPost, have an operating
income of more than $400 million. Throughout the years, the company has significantly
grown, partly due to its application of efficient strategic management practices and also due
to the growth of the retail sector. Courtesy of its success in the postal service industry,
Australia post has already established more than 4,000 retail branches around the Australian
region. The postal service provider employs more than 35,000 employees. However, the
success story of AusPost will likely be inhibited by the incoming courier services and the
emergence of e-commerce. Insofar, some of the strategic management issues faced by the
government business enterprise include the technology problems, political intervention, and
the rapidly fluctuating postal and courier service industry. This paper conducts a macro-
environment analysis, industry analysis, company analysis, competitive analysis, and
strategic analysis to examine the performance of AusPost's strategic management practices.
Improvements in these practices are located in the recommendations and conclusion section.
Macro-environment
Macro-environment factors are the peripheral factors that can affect a company or the
whole industry in general. Macro-environment factors usually mean the underlying push and
pull external factors that facilitate the success or failure of a company, organization or
industry (Madanoglu 2017, pp. 30). A PESTLE analysis enables strategic management
stakeholders to conduct a macro-environment analysis.
PESTLE Analysis
Political, economic, social, technological, legal and environmental factors that may
determine the decision-making of strategic management stakeholders in different
organizations and industries are subject to the PESTLE analysis.
Political Factors- Political factors regard to issues surrounding the political environment of a
country. Like other industries, the postal service industry is greatly affected by political
decisions within and outside their host countries. Political factors are very fundamental in the
setting of business premises as well as the operational costs. In times of political
inconsistencies, the postal service industry significantly suffers due to low postal
transactions. Considering that Australia Post is a government business enterprise, the political
factors in Australia are likely to play primary roles in the decision making of the company’s
strategic management proponents.
Economic Factors- Issues such as tax rates, interest rates, economic growth of countries,
inflation rates, and other macroeconomic rates are examined as economic factors (Ismaila and
Imoughele 2015, pp. 35). These rates are very important because they influence the aggregate
money demand and supply of the citizens. Favourable rates enhance positive economic
growths, thus improving the economic and living standards of citizens (Mikucka, et al. 2017,
pp. 450). Industries usually flourish when they enjoy favourable economic factors. For the
case of Australia post, favourable economic variables would serve to increase the citizen’s
consumption behaviours and thus, increased spending in postal and delivery services.

Student’s Last Name 5
Social Factors- Social factors comprises of the social, cultural and religious settings of
societies. The social environment comprises of the attitudinal perceptions and beliefs that are
commonly held by societies and communities. Considering that business enterprises do not
exist in isolation, these social factors usually shape and somehow determine the major
decisions in a business enterprise. Australia Post, for instance, must align with the
conventional belief systems of their Australian society. The portrayal of any unorthodox
activities would amount to problems with society.
Technological Factors- In the twenty-first century, technology has emerged as an emerging
issue in many industries, if not all. The use of technology has led to increased efficiency in
many firms and industries. However, technological advancement has greatly jeopardized
some industries such as the postal and carrier industries (Nyaga 2017, pp. 45). The
emergence of emails and social media platforms dwarfed the practices of the postal service.
Moreover, the emergence of e-commerce delivery companies such as Amazon and e-Bay
poses great threats to the postal service industry. However, the Australia Post company looks
forward to embracing new technology that would help the company maneuver through these
difficult times.
Legal Factors- Hanson, et al. (2016, pp. 65) assert that all firms must comply with the
regulations set by their respective legal environments. In the postal service industry legal
factors include the guidelines of how the client’s orders and data should be protected and
managed.
Environmental Factors- Firms and industries must be concerned about protecting and
ensuring an enabling environment. In the postal service industry, firms such as the Australia
Post are recommended to employ environmentally friendly practices such as reduced wastage
of papers, recycling of stationery and appropriate disposal of materials.
Industry Analysis
Industry Life Cycle
An industry life cycle depicts the exact stage of growth in which a certain industry
falls. Industries, just like products follow a theoretical pattern of stages that range from the
start-up, growth, shakeout, maturity, and the decline stages. According to Lehene and Borza
(2016, pp. 21), many organizational life-cycles go hand in hand with their industries' life-
cycles. Unfortunately for Australia Post, its industry is at the shakeout stage. At this stage, the
growth rate of the postal service industry and the Australia Post are decreasing as compared
to the rates before the twenty-first century. Unfortunately, the industry is fated to reach the
maturity rate very soon. In the maturity stage, the growth curve of the industry and the
industry's firms will flatten. Later, the industry will reach the declining stage where the
industry and organizations in the industry will start deteriorating.
Porters 5 forces
Porter's 5 forces theory posits that the growth and development of an organization are
determined by five major forces namely: the competitive rivalry, the supplier power, the
buyer power, the threat to substitution force and the threat of new entry force (Miyamoto
2015, pp. 277). Companies are expected to consider the aforementioned five forces. Porter's 5
forces model examines the ability of a firm to compete with the existing firms in the industry
by analysing the five forces and categorizing their impact as either "high" or "low" (Prasad
and Warrier 2016, pp. 4). Companies prefer venturing into industries where all the
aforementioned forces are classified as low. In industries where rivals, suppliers, and buyers
have “high” power, a company risks undergoing losses due to lowered prices by either its

Student’s Last Name 6
rival, a strong supplier or a strong buyer. For instance, more established postal service and
courier delivery brands such as DHL may decide to lower their prices, thus forcing Australia
Post to lower their prices. Moreover, companies and organizations may lose their market
when in industries where threats of substitution and new entries are "high". The use of this
model is effective in assisting Australia Post understand the attractiveness of the industry in
which it operates, including its competitiveness in the market. Besides, the analysis can be
applied in making strategic decisions which could help the organization improve on its
performance. Considering the threat of new entrants, the threat is low because the industry
requires high resource investment and capital. Nonetheless, the availability of substitute
products as well as services makes the firm less competitive. Rivalry from other companies
such as DHL limits Australia Post’s growth potential. Nonetheless, there is a high bargaining
power among the company’s suppliers. As a result, in the case of Australia Post, most of the
forces in Porter's model are classified as high. The postal service industry, therefore, is not a
favourable industry to venture into.
Company Analysis
Australia Post's main core competencies lie on the company's talented and dedicated
workforce as well as the company's reduced operational costs. Moreover, AusPosts positive
brand has made it possible to remain in business despite tough times in the postal services
industry. Australia Post aims at embracing effective technology to increase its efficiency in
postal services. Embracing technology will likely lead to increased speed delivery, thus
leading to customer satisfaction. Marinelli, et al. (2017, pp. 256) reveal that Australia Post is
considering the use of drones in its future delivery methods. Customer satisfaction is directly
linked with brand loyalty, increased market share, and increased revenues (Mostert, et al.
2016, pp. 25). The company also aims at protecting the environment by reducing its
paperwork and reducing wasted paper products through recycling and reusing. According to
Pipatprapa, et al. (2017, pp. 251), firms should ensure that their activities and practices are in
line with the societal need to save and conserve the environment. Engaging in
environmentally friendly activities contributes to corporate social responsibility.
VRIO Framework
According to Ariyani and Daryanto (2018, pp. 9), “one of the most effective method
to find the competitive advantage of a firm is by conducting internal analysis using the VRIO
framework”. Below is AusPost's VRIO framework:
Value- AusPost’s value of urgency is seen from the company’s speedy and efficient
deliveries. Besides, the company’s financial resources are regarded as highly valuable
because they assist in investing in any external opportunity that arises.
Rarity- No Company can match AusPost’s corporate social responsibility especially in
ensuring a green economy. Also, the company’s financial resources are rare as only few
companies in the industry can boast of having strong financial resources.
Imitability- Although Australia Post’s practices and activities are simple, it is almost
impossible for rivals to imitate Australia Post’s business practices. In addition, the firm’s
financial resources are also imitable. Australia Post has obtained these resources using
prolonged profits for several years. As a result, new companies entering the industry as well
as rival firms would require the same amount of profits over a prolonged time if they are to
accumulate such financial resources.

Student’s Last Name 7
Organization- the Australian government helps the business enterprise to organize efficiently
and tap for incoming opportunities.
Competitor Analysis
AusPost's major competitor is American owned DHL Company. DHL started its
operations in Australia in1969, six years before Australia Post (Soni 2016, pp. 270).
Therefore, DHL has the advantage of establishing itself before AusPost. Although many
Australians prefer using their local Australia Post to DHL when using postal services, many
citizens trust the latter's efficiency in the delivery of courier products. Daneberg (2019, pp.
76) assert that many Australia wineries have complained to have lost their cargo when using
the Australia Post, and thus, would prefer using DHL. This means that DHL poses a great
competitive rivalry to AusPost.
Strategy Analysis
Australia Post focuses on the corporate social responsibility strategy at the corporate
level. In its day to day activities, the postal service attempts to save the environment by
reducing solid paper waste materials. The company targets its customers, moreover, by
ensuring ethical standards among workers and employees are adhered to. However, these
strategies are not very effective. The strategies fail to work due to the company's costly and
delayed deliveries. According to Abbas, et al. (2018, pp. 4243), CSR practices attract
customers as customers develop attachment and brand loyalty to the firm. However, many
customers of postal services do not recognize corporate social responsibility (CSR) services.
To compete healthily with competitors like DHL, AusPost needs to adopt new technologies
and deliver their orders faster and more efficiently. Using new technologies such as self-
service touchscreens in post offices would serve to reduce errors that may occur during
transactions (Baba, et al. 2020, pp. 4). Moreover, the use of high-tech weighing machines
serves to reduce complaints regarding overcharging.
Recommendations and Conclusion
To sum up, to extend its existence in the postal service industry, Australia Post needs
to change most of its strategic management plans. First, the company needs to reduce its
number of employees and channel its resources towards adopting new technological
developments in the postal service industry. The use of new technology would serve to
increase efficiency, which would later translate into increased revenues. Moreover, the postal
service company should consider adopting e-commerce practices and activities to suit the
needs of its overseas customers. Using e-commerce will also function by increasing the
company's customer base. Although CSR activities are recommendable for many business
enterprises, companies in the Australian postal service industry need to use other promotional
services such as advertisements through mainstream media. However, considering that the
postal service industry is at the shakeout stage in its life cycle, AusPost's growth will soon
reach its maturity stage and then start declining. In the future, AusPost, together with other
postal service companies, may have ceased their operations.

Student’s Last Name 8
Bibliography
Abbas, M., Gao, Y. and Shah, S.S.H., 2018. CSR and customer outcomes: The mediating role
of customer engagement. Sustainability, 10(11), p.4243.
Ariyani, W. and Daryanto, A., 2018. Operationalization of Internal Analysis Using the VRIO
Framework: Development of Scale for Resource and Capabilities Organization (Case Study:
XYZ Company Animal Feed Business Unit). Asian Business Research Journal, 3, pp.9-14.
Baba, N., Mohd Shahril, A. and Hanafiah, M.H., 2020. Self-ordering kiosk usage and post-
purchase behaviour in quick service restaurant. Journal of Tourism, Hospitality & Culinary
Arts (JTHCA), 12(1), pp.1-17.
Danenberg, E., 2019. Challenges of wine transport and delivery. Australian and New
Zealand Grapegrower and Winemaker, (667), p.76.
Hanson, D., Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management:
Competitiveness and globalisation. Cengage AU.
Ismaila, M. and Imoughele, L.E., 2015. Macroeconomic determinants of economic growth in
Nigeria: A co-integration approach. International Journal of Academic Research in
Economics and Management Sciences, 4(1), pp.34-46.
Lehene, C.F. and Borza, A., 2016. The influence of organizational life cycle and industry life
cycle on alliance structure choice. Managerial Challenges of the Contemporary Society.
Proceedings, 9(1), p.21.
Madanoglu, M., Alon, I. and Shoham, A., 2017. Push and pull factors in international
franchising. International Marketing Review.
Marinelli, M., Caggiani, L., Ottomanelli, M. and Dell'Orco, M., 2017. En route truck–drone
parcel delivery for optimal vehicle routing strategies. IET Intelligent Transport
Systems, 12(4), pp.253-261.
Mikucka, M., Sarracino, F. and Dubrow, J.K., 2017. When does economic growth improve
life satisfaction? Multilevel analysis of the roles of social trust and income inequality in 46
countries, 1981–2012. World Development, 93, pp.447-459.
Miyamoto, M., 2015. Application of competitive forces in the business intelligence of
Japanese SMEs. International Journal of Management Science and Engineering
Management, 10(4), pp.273-287.
Mostert, P.G., Petzer, D.J. and Weideman, A., 2016. The interrelationships between customer
satisfaction, brand loyalty and relationship intentions of Generation Y consumers towards
smart phone brands. South African Journal of Business Management, 47(3), pp.25-34.
Nyaga, J.W., 2017. FACTORS AFFECTING THE PERFORMANCE OF COURIER
SERVICE INDUSTRY: A SURVEY OF COURIER COMPANIES IN
KENYA. International Journal of Supply Chain and Logistics, 1(1), pp.44-60.
Pipatprapa, A., Huang, H.H. and Huang, C.H., 2017. The role of quality management &
innovativeness on green performance. Corporate Social Responsibility and Environmental
Management, 24(3), pp.249-260.
Prasad, A. and Warrier, L., 2016. Mr. Porter and the new world of increasing returns to
scale. Journal of Management Research, 16(1), pp.3-15.