Business Strategy: Analyzing Macro and Internal Environment, Porter's Five Forces Model

This report analyzes the macro and internal environment of DHL, a courier service company, using frameworks like PESTLE analysis and SWOT analysis. It also applies Porter's Five Forces Model to evaluate the competitive forces in the market sector.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION......................................................................................................................................3
LO1.............................................................................................................................................................3
P1 Apply a framework to analyse macro- environment for a given organisation.........................3
LO2.............................................................................................................................................................6
P2 Analyse internal environment and capabilities of a given organisation...................................6
LO3.............................................................................................................................................................8
P3 Apply porter’s five forces model and evaluate competitive forces of given market sector....8
LO4...........................................................................................................................................................10
P4 Apply a range of theories, concepts and models interpret and devise strategic planning for
an organisation....................................................................................................................................10
CONCLUSION........................................................................................................................................14
REFERENCES..........................................................................................................................................16

INTRODUCTION
Business strategy is an strategic tool that is helpful in taking the decisions and
showing the actions to reach a desired goal in the competitive industry. It shows the
planning that needs the organisation to accomplish the goals and targets and helps in
hiring the essential resources and allocate in an effective way. This report is based on
the DHL that is an American founded German company that helps the people to courier,
parcel or mail service and it is founded in 1969. This organisation delivers 1.3 parcels in
the whole year with having 380000 working employees worldwide. It includes the
analyses of macro and micro environment so that firm will take decisions to increase
their profits and enhances their growth. In this it also involves the porter’s five forces
model that helps in gaining the competitive advantage in the rival marketplace and also
helps in earning high profits. at last it shows the strategic plan that is based on the
porter’s generic model and Bowmen’s strategies that helps in earning high profits and
longer sustainability of the firm(Akter and et. al., 2016).
LO1
P1 Apply a framework to analyse macro- environment for a given organisation
DHL is one of the largest courier service company that is founded in 1969 that deals in
courier, parcel the goods and services from one to another place and use the express
mail service that is a division of a German logistics company Deutsche post DHL. it
deals in over 220 countries and territories worldwide mainly deals in sea and air
mails(Peng, 2017).
VISION
The vision of the DHL is one of the best global companies in giving the postal
service in the Germany and logistics organisation in the world, where customers first
choice is the DHL Company for transfer their goods and services from one place to
another.
MISSION

The mission of the DHL Company is to make our customers, employers and
investors more successful and they always get respects from their associates and
perform their task in an effective way. The main aim of facilitate the customers to
simpler their way of living and contribute to the world better place.
OBJECTIVE
The main objective of the DHL is to connect the people of the world by
transporting their goods and services with the help of logistics. In this they deliver
everything that is need to be delivered to energies development and brings the joy.
Macro environment
It refers to that factor that was exist in the economy including various trends like
gross domestic products, inflation rate, fiscal policies, technologies, cultures, spending
monetary values by the customers, employment laws etc. In context of DHL Company,
manager needs to analyze the macro environment by using the PESTLE analysis
because it is very effective tool that can be explained below(Leonidou and et. al., 2015).
PESTLE analysis
It includes the various aspects that helps the DHL to understand the external
environment which may affect the operations of the organizations in the
marketplace(Soltanizadeh and et. al., 2016).
 Political factor – This factor includes the stability of the political condition, fiscal
policy, tax rate, imposed duty etc. In context of DHL Company they expanded
their business in all over the world for this they need to examine the government
stability of the country. Political condition of the Europe is stable and trade is
easier to capture the large market it also includes the restrict tion on the export
and import, tariffs and trade policies may affect the operations cost due to this
they charge the high price to their customers.
 Economical factor – It consist the GDP, inflation rate, spending power of the
peoples in the UK or worldwide. in this the people in UK spend more because of
high growth rate due to this people are capable of spending on transferring their

parcels and goods to one place to another i.e. make comfortable to buy the
services this will increases the profits but the high inflation rate because of
recession period operations of the DHL may impact in a negative way.
 Social factor – This factor display the actions, attitudes, beliefs, values and
opinion of the people in the society. In this people are now very open minded as
they prefer new and advanced products and services. In this DHL play an
effective role as they offer the effective service of transfer the goods of any type
from place to another region to gain the more market share(Uggla, 2015).
 Technological factor – This is an important t factor for the logistics type of
business and it also shows the current trends of the people that show their
consciousness of using advanced technology. It helps in maintaining the brand
image of the company because they provide the high quality services to the
customers as they are very conveniently transfer their products by using latest
technology and it also helps in gaining the competitive advantage.
 Legal factor – It includes the legal requirements of the company that is
essentially follow by an organisation for earning high amount of profits and
maintains their sustainability in the market place. in this DHL can follow the legal
laws relating to the employees welfare so that they work very effectively and
efficiently. This will maintain the brand image of the company on a global level.
 Environmental factor – In every logistics firm there is use of transportation and
it contributes to polluting the air that can harm the environment and the
organization’s image. Because of this DHL can cover this losses by using CSR
and recently they involve in reducing the waste and recycle the resources and
executing all these solutions to the supply chains. it helps in gaining the
consumers trust and due to this enterprise may earn high profits(Amran and et.
al., 2016).
By using the above analysis it is to be evaluated that use of PESTLE analysis helps in
gaining the more knowledge about the market this helps in enhancing the market and
expanding it on the global nature. It also helps in attracting the large base of customers
by helps in finding the major challenges and opportunities that was present in the
external environment.

LO2
P2 Analyse internal environment and capabilities of a given organisation
Internal environment
It refers to the employees, events, culture and various other factors that is done
within the organisation and has the ability to influence the decision for the success of
the business firm. In case of DHL manager can focus on analyzing the internal
environment that is helpful in gaining the profits and market share of the organisation in
this they could adopts the SWOT analysis and VRIO analysis to know the abilities and
capabilities of the resources to gain the competitive advantage and enhance the
revenues(Eaton and Kilby, 2015).
SWOT analysis
Strength Weaknesses
 The main strength of the DHL is the
robust presence in the market of the
Germany where they are the key
leaders in this logistics and postal
services.
 In this company can gain the
customers support because of their
quality services and it helps in
visible their brand in an excellent
way over the world.
 The major weakness of the DHL
company is that they cannot invest
in the research and development
sector because of this they cannot
understand the market easily and
accurately and due to this their
sales may affect.
 Another weakness for the
organisation is that KFC the big
brand cannot satisfied with the
services of the DHL this will reduce
the profits of the firm and its image
in the marketplace.
Opportunities Threats
 The main opportunity for the DHL is
to trending nature of the people as
due to this the demands of the
 One of the major threats of the DHL
is the Amazon that was enter into
the logistic service it may affect the

express service may touch the new
heights.
 Technology advancement is the
major opportunity for the logistic
firm because DHL is totally based
on the technology this helps in
earning more growth and market
share(Uggla, 2015).
DHL sales and profits and its brand
image.
 Another weakness of DHL is the
trade disputes between the nations
and increasing the amount of the
fuel in the world affect the business.
VRIO analysis
It refers to the framework that is used as an analytical technique to evaluate the
firm’s resources and helps in gaining the competitive advantage. It is integrated with
four aspects that are value, rareness, imitability and organisation. In case of DHL
manager use this analysis to know their resources abilities to earn a high amount of
profits that can be shown underneath(Yuliansyah, Rammal and Rose, 2016).
 Valuable – It is very significant for the DHL organisation to utilize their valuable
resources in an effective way so that they will earn high amounts of profits and
customers satisfaction. This also helps in beating the competition in the
marketplace and achieving the high revenues. the valuable resource of the DHL
is their supply chain and distribution management, financial resource and their
employees.
 Rare – It refers to that term in which a company can understand and analyze
their resources as they are rare or not. Because rare products helps in gaining
the customer’s loyalty and their attraction towards the company that helps in
earning more profits and sustainability in the market. In these rare products of
the DHL are the techniques they used to gives the services to their
consumers(Hart, Sharma and Halme, 2016).
 Imitate – In this DHL can offers those services and goods to their customers who
are not copied by the other organizations so that they can earn high amounts of
profits and market share. In this financial resources are the imitable resources
that are not copied by other firms and due to this they can spend more adopting

new techniques in an effective way. This helps in attracting the large base of the
customers and in an effective way.
 Organized – It is very essential to organized all their resources in an effective
way and used those resources in a very optimal way. In case of DHL if the
products are not used in a systematic way then they cannot perform their task
effectively and in a timely manner. These also deduct the profits and due to this
rival firms take advantage of this. In company they need to organize all their
suppliers, customers, investors, and other many stakeholders so that ythey can
gain the market.
It is very essential to evaluate the internal environment because it helps in gaining the
market share and examine the capabilities of the resources so that firm will enjoy the
large amount of profits and revenues. In this SWOT analysis helps in giving the various
knowledge about5 the strength and weakness that helps in gaining and capturing the
opportunities to enhance the market share of the business enterprise.
LO3
P3 Apply porter’s five forces model and evaluate competitive forces of given market
sector
Porter’s five forces model
It refers to the strategic framework that is useful to analyzing the competitive
environment that was present in the industry. It includes the five aspects i.e. company
competitive rivals, bargaining power of suppliers and customers, new entrant threats,
substitute products etc. that helps in gaining the organization more and more profits. In
case of the DHL Company manager can use this tool to analyse the completion in the
market that helps in making the appropriate strategies to gain the rival business and
enhance their profits and market share for a longer period of time(Torrent-Sellens,
2015).
 Threats of a substitute – It refers to that aspects in which competitors firm can
sale the substitute products and services in a lower price so that they can attract

the large customers’ and reduce the sale of the other company to place their
positions in the market. In case of DHL services there is a low fear of the
substitute products and services as they provide the courier and logistics
services to their customers. In this customers can relay on this company to get
the products when they purchased it online or some other place or a country. In
this DHL enjoys the hiogh amount of profits and revenues and sustain the market
for a long time period.
 Bargaining power of customers – In context of DHL Company there is high
amount of power of the customers on the company as they have a large number
of customers who use the services and due to this the brand image of the
company can be maintained. In this it is the effective company as they offers the
delivery and logistics services in a very effective way that customers cannot
regret to use the services of the company. But due to the competitors present in
the marketplace they focus on the pricing strategy as they offers discounts and
sales in their bulk shipping so that customers get attracted towards the
company(Mellat-Parast and et. al., 2015).
 Bargaining power of suppliers- for the company like DHL, sometimes
customers are the suppliers of the products as they provide the courier services
and are responsible for shipping the goods and services to other organisation
and they are responsible for deciding the price of the goods of the customers
because of doing extra packaging and transportation cost. Due to this there
power of suppliers are sometimes high as they switch the company according to
the rates they offered to process the services.
 Threats of a new entry- in context of DHL Company they deals in postal and
logistics services and have a well established name in the market. due to this
entry of a new entrants in this market is low because there are already more
competitors firms are present that are also a large organisation. it is established
on the global level for the new firm it is very difficult to beat the market of the DHL
and compete with their resources. in this there is another factor that restrict the
new entrant is the restrictions imposed by the government as they first deal with

the Federal Aviations Administrations for transferring the goods on air routes. it
includes large amount of money that not every firm can invest in it.
 Rivalry of a firm – The rivalry among the firms are high for the DHL Company as
it includes the major competitors like FedEx, UPS etc. Due to this there pricing
affects and customers attracts towards those firms who can charge the low price
for placing the deliveries in one place to another region. In this company can
regularly improve their technology and service quality. This helps in enhancing
the profits and retaining the customers from the longer period of time.
By using the above model of porter’s five forces tool it is to be critically evaluated
that the use of this application is very effective as it helps in earning the high profits and
revenues so that employees will retain within the company and give their best to
maintain the trust of the customers. This analysis also helps in gaining the competitive
advantage in the marketplace where they operates there business. As there is low
substitute of the products and services they can enjoy the high amount of profits and
enhance their market share on a global environment. This will attracts the large base of
customers for long life. As they also reduce their prices of the so that they can beat the
competitors and gain more market share(Malerba and et. al., 2015).
LO4
P4 Apply a range of theories, concepts and models interpret and devise strategic
planning for an organisation
Porter’s generic model
This model helps in giving the various ways to sustain in the market and gain the
competitive advantage in the marketplace. It includes the three frameworks that is cost
leadership, differentiation and the focus. In reference of the DHL these applications can
be mentioned below(Linder and Williander, 2017).
 Cost leadership – In this strategy the price sensitive people get easily attracted
towards the business firm. In this strategic tool DHL can sale their products and
services on the low price to their customers. By giving them discounts and sales

on the bulk shipping of products and services so that they can get the loyal
customers and they also suggest the company to their friends and family
members this helps in brand recognition in the marketplace. This helps in
enhancing the sales and increasing the profits and market share.
 Differentiation – In this strategy DHL can offer the new and innovative products
and services to their customers that are not offering by other competitors firms
this helps in earning more and more profits and also helps in sustain in the
market place for long time. In this they need latest technology that helps in
generating the new services to attract the large customers. On the same time it
includes huge amount of cost to invest in innovating new products.
 Focus – It includes two types of focus i.e. cost focus or the differentiation focus.
In this DHL may use of the cost focus in this they can lower the price of the
services related to shipping and logistics to attract the large base of customers.
on this differentiation focus can suggest that organisation mainly focus on
innovative the goods so that they cannot focus on the competitive price to attract
the large base of customers.
Bowmen’s strategic clock
This model helps the DHL to explore the appropriate strategic positions in the
market so that they can take advantage of competitors firms and achieved the more and
more profits in an efficient way. It includes the various aspects that can be explai8ned
below(Evans and et. al., 2017).
 Low price and low value added – In the context of DHL competitive position is
less as they cannot offers the services and products that is differentiate form the
rival firms due to this customers perceive less value for the services even when
the prices are low.
 Low price- In these aspects DHL can choose the cost leadership strategy where
they lowering the price of their products due to this they earn low profits but
increase its sales and because of increasing in the amount of sales overall profits
will be enhanced.

 Hybrid- In this strategy DHL can offers the innovative services with in the low
price this helps in attracting the large customer base but at the same time it can
reduces the brand image because of selling the innovative products on the low
cost due to this customers have a doubt on this.
 Differentiation – In these aspects DHL can focus on the new products and
services to gain the customers and enhances their profits to sustain in the
market.
 Focused differentiation – This strategy shows the high perceived value of the
products that a company DHL; can offers to their products as they are different
from the competitors due to this customers get attracted(González-Rodríguez,
and et. al., 2018).
 High risk margin – It refers to that in which an organisation face high price that
will results to the failure and in this DHL can offers the price without getting any
offers due to this they face the risk of customers switching towards the other
company.
 Monopoly pricing- Using this strategy is only possible when the DHL can offer
the innovative products that no one in the market can sale so that they can
create the monopoly in the firm. Due to this they can enhance their market share.
 Loss of market share – It shows the disaster strategy in the company like DHL
where organization set the price in the middle of the product life cycle this will
reduce the market share and firm may face loss.
After analyzing the tow strategic model in context of DHL organisation may adopts the
cost leadership strategy where they lowering the price of their services which they offers
to the customers so that they can retain the customers for a longer period of time. This
helps in increasing the brand image of the business venture. With the helps in using the
low pricing strategy company can position themselves in a top because of large
customer base. It also helps in increasing the profits and sustainability of the firm due to
this market share also incremented.
Strategic plan

This plan helps the manager of the DHL to set the activities according to the
needs and priorities so that operations can be done very effectively. In this they need to
ensure that the employees are working to achieve the common goals. The plan for the
concerned company can be explained below.
Mission
The mission of the company is to make the world better where people live their
life very conveniently and effectively by using the postal and logistics services. They
work for earning high profits and revenues and to sustain in the marketplace for a long
period of time(Hamilton, Cruz and Jack, 2017).
Vision
To become the largest postal company in the Germany and the logistics firm in
the world. To become powerful organisation in shipping and transferring the goods and
services of any kinds.
Strategies
The strategy is followed by the DHL is the cost leadership strategy as top
increase their customers base in the market to earns a high amount of profits. This
strategy is very effective to attracts the large number of people and they get the proper
support from the government that they use the CSR policies to retain the customers and
the employees so that firm will stay in the market for long time.
Objectives
The main objective of the DHL is to earn a profit by 20% and sales by 25%
within the 12 months.
Tactics
It is a short term efforts that is made by the company in this DHL can offers the
varieties of offers to their customers when they shipped the products and services in a
bulk nature. They also provide discount when they pay the amount in advance. This will

retain the customers for a long period og time and also attracts the new people who can
enjoy the DHL courier services to transport their goods from one country to another. in
this they mainly focus on the pricing strategy to attracts the consumers as they adopts
the cost leadership style(Ghemawat, 2016).
Implementation
It is very significant to implement the strategy to allocate the resource because
without implementing firm cannot earns a high amount of profits and cannot attracts the
large base of customers. In this they can make a proper strategy as per their financial
resource. To control and organize the various performance some measures can be
taken to gain the market share and improve the performance in the market.
Evaluation
It includes the term in which information is collected by the company from the
customers about the services they offers in the form of feedback so that if there is a
need to change anything manager of the firm can take an initiative to change and offers
as per the customer requirements that satisfy them to retain with the organisation.
CONCLUSION
From the above explained project report it is o be concluded that the business
strategy is an essential tool top examine the internal and external environment that
helps in expanding and exploring the business for earning more profits and longer
sustainability of the firms. It analyse the macro environment using Pestle analysis that
helps in giving the knowledge related to all fields like political, social, technological etc.
that is very important for the firm to attracts the large base of customers. it helps in
understanding the demands and preferences of the customers. It also includes the
analysis of internal environment by using SWOT and VRIO analysis that helps in
knowing the strength and weaknesses and the capabilities to stay in the marketplace.
Further it inculcates the porter’s five forces that help in attracting the large base
customers with offering attractive price and services that are differ from the competitors
that help in gaining the competitive advantage. At last it uses the porter’s generic model

and bowmen’s clock to making effective strategies for gaining the market share and
growth in the worldwide(Uggla, 2015).

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