Business Strategy Assignment : TNT company

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1:Applying appropriate frameworks to analyse the macro environment TNT company........3
TASK 2............................................................................................................................................5
P2: Using appropriate frameworks analyse the internal environment and capabilities of a
given organisation.......................................................................................................................5
TASK 3............................................................................................................................................6
P3:Applying Porter’s Five Forces model to evaluate the competitive forces of a given market
sector for TNT.............................................................................................................................6
TASK 4............................................................................................................................................7
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation...............................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
.........................................................................................................................................................1

INTRODUCTION
Business strategies can be defined as set of actions that are taken by an organisation in
order to attract more customers, be competitive, and achieve the companies objectives.
Additionally, it helps in providing certain guidelines which should be followed by the employees
and management in order to attain desired outcomes. This file will discuss about the impact of
macro environmental factors on the organisation through PESTLE analysis. Also, this
assignment will help in having a better understanding on the internal environmental factors
which can be controlled by the organisation in order to enhance its growth and productivity
(Bharadwaj and et. al., 2013). However, there are certain elements which helps in deciding the
attractiveness of the company. Hence, Porter's five forces studies such elements on the basis of
various factors and their influences on TNT company like competitors, new entries, etc. TNT is
a company which deals in business to business express delivery services. It offers services to
deliver documents, freight and parcels between business companies through air and road
transport means.
TASK 1
P1:Applying appropriate frameworks to analyse the macro environment TNT company.
The macro environmental factors of TNT can be describes as factors which are beyond
the control of an organisation and has a great influence on decision making, performance and
strategies of the respective organisation. It is consist of competitors, government regulations,
culture and many other aspects. Hence, these factors can be analysed through PESTLE analysis.
PESTLE analyse is a methodology which helps in measuring the impact of external or
macro environment of the company. It is consist of six factors which are Political, Economical,
Social, Technological, Legal and Environmental. These are discussed below:
Political- This factor of PESTLE analysis studies the impact of regulations framed by the
government on TNT. Some of the regulations that the respective company needs to follow are
tax, political stability, etc. (Blackburn, Hart and Wainwright, 2013) Hence, in order to assure
smooth running of company's operations, it is important to follow all the regulations by
Government.
 Positive- By following these regulations, company are favoured by the governing bodies
in the form of subsidiaries which act as a benefit for TNT.

 Negative- With companies operating in different areas, it becomes different to follow all
the regulations. Additionally, some regulations restrict the growth of company.
Economical- This element helps in measuring the impact of organisation on the
economic growth of the respective country.
 Positive- As TNT is one of the leading organisation which operates in Asia, North and
South America, Europe, etc., it shares a major contribution in economy of UK.
Additionally, it also produces many job opportunities which helps in increasing the
employment rate of respective country.
 Negative- Due to Brexit, the businesses are not operating well due to low spending
power or customers and other factors. This has created a concern of decrease in business
for TNT.
Social- These are the factors which influence the strategies of company. The social factor
is consist of demographics, lifestyle and customer opinions (Verbeke, 2013.).
 Positive- With changing trends in customers demands and lifestyle, TNT is adapting
various strategies to provide innovative services in order to retain its customers.
 Negative- The demands of customers are ever changing. Hence, it become impossible of
TNT to satisfy every customers needs.
Technological- The advancement of technology in respect of production, marketing
modes and modification in the distribution method is studied under the respective factor.
 Positive- With the help of advanced tools such as parcel tracking, etc. TNT can attract
more customers and earn more revenue.
 Negative- As technology is an element which keeps introducing updation in the market.
Hence, it is tough for TNT to keep itself updated with every advancement in technology.
Legal- These are the legislations which are introduced for the betterment of employees as
well as company. Hence, it includes employment law, health and safety law, and industry
regulations.
 Positive- By following these laws, TNT can assure the safety of its employees. Also, it
will provide certain guidelines which will help in keeping a clarity between the
employees and company.
 Negative- There are certain industry regulations which bounds TNT to operate in certain
framework. Also, it is a time taking affair.

Environment- This factors focuses on the impact of company on the surrounding
environment. Additionally, it helps in measuring the carbon emission caused by company.
 Positive- TNT is focusing on minimising the affects on environment caused by
respective company by adapting certain methods to attain sustainable business such as
SAFED which is a technique of safe and fuel-efficient driving (Galbraith, 2014).
 Negative- Though TNT is trying to lower down its carbon emission, there are certain
level of carbon emission caused by company which cannot be controlled.
TASK 2
P2: Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation.
The internal environment and capabilities of TNT can be measured through SWOT
analysis. SWOT analysis is a tool of measuring the strength, weaknesses, opportunities and
threats of the respective company. Hence, these are discussed below:
Strength
 TNT is one of the leading company providing business to business delivery services in
carious countries.
 TNT is well known for its speedy deliveries, reliability and provision of services of the
highest standards.
 It has more than 75000 employees working in the company which reflects the size of
operations and high revenue (Rothaermel, 2015).
Weaknesses
 There is a very limited variability in the services provided by TNT.
 Being a part of the competitive segment, growth of market share is constricted.
Opportunities
 TNT has a huge scope of earning high revenue through expanding its business in new
market areas.
 TNT can offer new products and services which will help in attracting more customers.
Threats
 There are certain companies in the market who are offering similar services in less price.
It creates a threat for TNT to loose certain customers.

 Due to the economy slow down, profit levels of TNT has decreased which is a concern
for respective company.
 Existing rivals are also one of the threats to profit sharing of the companies. These are
DHL, FedEx, etc.
TASK 3
P3:Applying Porter’s Five Forces model to evaluate the competitive forces of a given market
sector for TNT.
Porter's five forces is a tool which helps in measuring the impact of elements like rivals,
bargaining power or buyers, bargaining power of supplier, threat of substitutes and new entries.
These are discussed below:
Industry Rivalries- This is one of the factors of Porter's five force model which studies
the impact of competitors on quality and demand of the products. The competitors of TNT are
DHL, FedEx, and many more (Schrader, Freimann and Seuring, 2012). Hence, these competitors
play a major role on decision making such as pricing, marketing strategies, etc. of respective
organisation.
Illustration 1: Porter's Five Forces
Sources: Porter's, Five Forces, 2018

Bargaining power of buyers- This factor studies the power of buyers to impact the price
of companies products and services. As there are very limited companies that provide equal
qualities, customers don't have much of bargaining power on products and services of TNT.
Additionally, few shifts of customers to other companies does not have any significant impact on
TNT.
Bargaining power of suppliers- This factor studies the impact of suppliers bargaining
power on the respective organisation. Hence, the suppliers of TNT can be considered as various
air and road transport carriers. Also, the envelops and other packaging materials suppliers are
important for company (Woodard and et. al., 2012). As TNT is a big company with conducting
its operations across various countries. It has various options of suppliers. Due to this, the
suppliers don't have much of the bargaining power over TNT.
Threat of Substitutes- The threat of customers switching to other variables is considered
in this element. As there are various technical advancements which had lead to minimising the
work of sending messages. However, there are still certain things which needs to be parcelled
physically. Thus, TNT does not have much threat from substitutes.
Threat of New Entrants- This factors studies the impact of new entries or start ups on
the company. As TNT is one of the leading parcel companies which is operating internationally
in various countries. It does not have much of threat from the new entries in the market.
However, there is a little threat from new companies which are providing similar services at low
rates.
TASK 4
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation.
Strategic planning can be defined as a process of company which deals in defining
strategy, direction and making final decision regarding allocation of resources which are required
to pursue the respective strategy. Some of the well known models of strategic planning are
Conventional Strategic Planning, Issue based strategic planning, Organic Strategic planning and
many more (Spende, 2014).
Objective of TNT- The respective organisation aims on providing the most reliable and
efficient services for customers. Hence, in order to do it, TNT will improvise on answering 85%

of calls from the customers in first 10 seconds. Additionally, one of the long term objectives of
TNT is to improve the carbon efficiency by 45% till 2020.
Hence, in order to attain these objectives, TNT can practice Conventional Strategy
planning. It is consist of 4 stages. These are vision, goals, approach and actions.
Vision- This factor is consist of the statement basic purpose. Additionally, the vision of
the company can evolve through years (Reich, and Benbasat, 2013). The vision of TNT is to
transfer goods and documents by achieving customers satisfaction and behaving responsibly.
Goals- The goal of TNT is to lower down the carbon emission of the respective company
till 2020. Additionally, TNT is focusing ion improving its customer services.
Approach – In an organisation manager and leader play a most important role in order to
managing strategic planning practices in effective manner. In TNT, they having a strategic
objective to maximising customers relationship by implementing new ideas and business
strategies. On the basis of these approaches they can easily attain desired goals and objectives for
desired business growth and success.
Action – After creating business strategies manager needs to implement them effectively
by making appropriate action plan approach. On the basis of these business practices, they can
analyse positive and negative impacts of different business objectives that can aid to sustain in
market for a long run duration.
Hence, in order to achieve it, Bowman strategy theory can be applied.
Bowman's Strategic Clock is a model which studies variety of options which are available for
competitive positioning of the products and services offered by company. The key purpose of
Bowman strategy theory is to exemplify that there are various option available to position the
product based on two dimensions. These are price and perceived value.

Low Price and Low Value Added (Position 1)- In this case, the customers receives very
little value despite of the low prices of product. Hence, This is the lowest competitive position
for the company. So, the only method to stay enough competitive in this position is to maintain
its low prices.
Low Price (Position 2)- it is consist of a position where companies prefer to position
themselves to reflect being low cost leaders in market. Hence, companies adapt strategy of cost
minimisation which is often associated with economies of scale. The profit margin on each
product of these companies are usually less. However, the outputs are usually high in volume
which results in high profit margin for the organisations.
Hybrid (Position 3)- Similar to its name, the respective position is a mixture of low price
and product differentiation (Smith, 2013). Th main aim is to convince the customers about
enough value added along with reasonable pricing and product differentiation.
Differentiation (Position 4)- The aim of the companies is to provide the highest quality
of services. Hence, branding is an important component in the respective positioning.
Additionally, high quality is also emphasised.
Focused Differentiation ( Position 5)- This is the type of strategy where the companies
focus on positioning the products at the highest price levels. This is because the customers buy
certain products due to high perceived value. Such strategy is adapted by luxury companies or
Illustration 2: Bowman Strategic Clock
Sources: Bowman Strategic clock, 2018

premium brands. Also, this strategy helps in achieving high profit margins keeping in mind to
maintain the premium quality of products.
Risky High Margins (Position 6)- This is the most risky strategy among all which leads
to failure to many companies. This is because it offers high price of the products with no extra or
premium services. Hence, it is tough for such companies to survive in the competitive
environment with such high prices and moderate products and services.
Monopoly Pricing ( Position 7)- This position is consist of monopoly marketing and its
pricing. Hence, this strategy is best suitable for companies that do not have any competitors in
the market. Hence, such companies does not have to worry about any competitors market share
as there are no other alternatives available in the market. Therefore, such organisations are free
to set prices are per their choices. However, such organisations are tightly regulated in many
countries to avoid any inconvenience to the customers.
Loss of Market Share (Position 8)- This strategy does not have much of success rate in
case of many companies. It is comprises of setting moderate prices for products with low quality.
Hence, companies risk from other competitors in the market which are providing better quality
of services for similar price range (Smith, 2013).
Hence, from the above theory of Bowman strategy theory, TNT can position its products
and services on position 4 and position 5 which are differentiation and price differentiation. As it
is one of the leading company in parcel industry, this strategy will help in increased profit levels
from the customers. Additionally, by promoting the products and services offered by TNT, the
respective organisation can attain more customer's attention.
CONCLUSION
From the above discussion, it can be concluded that in order to achieve the goals of the
company, business strategies plays a very crucial role. The external environment factors such as
political, economical, legal, etc. have a huge impact on company. Additionally, these factors
can't be controlled by organisations. However, internal environmental factors such as production,
employee management, etc. can be controlled by the firm in order to achieve goals of the
company. Porter's five force model states that the attractiveness of company is strong among the
market. Additionally, there are various strategic planing models which helps in facilitating the
companies to work on areas that needs to be aligned in order to achieve the desired results.

Hence, Bowman strategy theory and conventional strategic planning which can help in focusing
the issues that respective organisation is facing.

REFERENCES
Books and Journals
Bharadwaj, A., and et. al., 2013. Digital business strategy: toward a next generation of insights.
Blackburn, R.A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Galbraith, J.R., 2014. Designing organizations. Jossey-Bass & Pfeiffer Imprints, Wiley,.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education,.'
Schrader, C., Freimann, J. and Seuring, S., 2012. Business strategy at the base of the pyramid
Business Strategy and the environment. 21(5). pp.281-298.
Woodard, C., and et. al., 2012. Design capital and design moves: The logic of digital business
strategy.
Spender, J.C., 2014. Business strategy: Managing uncertainty, opportunity, and enterprise.
Oxford University Press.
Reich, B.H. and Benbasat, I., 2013. 10 Measuring the Information Systems–Business Strategy
Relationship. Strategic Information Management, p.265.
Smith, D.J., 2013. Power-by-the-hour: the role of technology in reshaping business strategy at
Rolls-Royce. Technology analysis & strategic management. 25(8). pp.987-1007.
Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management Decision. 51(7).
pp.1326-1358.
Online
Porter's Five Forces. 2018. [Online]. Available
through:<https://www.strategicmanagementinsight.com/tools/porters-five-forces.html>.

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