Business Strategy for TNT Express: Analysis and Evaluation

This report analyzes the business strategy of TNT Express, a courier delivery service company, using PESTEL and SWOT analysis. It evaluates the effectiveness of current and future strategies and suggests strategic options for TNT Express.

Business
Strategy

INTRODUCTION...............................................................................................................................3
MAIN BODY.......................................................................................................................................3
TASK 1.............................................................................................................................................3
TASK 2.............................................................................................................................................7
CONCLUSION..................................................................................................................................10
REFERENCES..................................................................................................................................11

INTRODUCTION
Business strategy is combination of all the decision taken as well as actions which are
performed through business for accomplishing business goals and for securing competitive
position within market. In simple term it can be said that, business strategy is backbone of
organisation generally it is roadmap that leads for accomplishing desired goals. Whereas, any
mistake or fault within roadmap may result in business lost within crowd of overwhelming
competitors (Akter and et.al ., 2016). Along with this, it is essential for an organisation to form
business strategy because without this it will be difficult to accomplish predetermined goals
and objectives. In other words it can be said that, for an business firm it is essential to design
strategy within proper manner as it will provide assistance in gaining competitive advantages
and long term sustainability in business environment.
This report is based on TNT Express which is international courier delivery service
company founded in 2011. It is subsidiary of FedEx, with headquartered in Hoofdorp,
Netherlands. Moreover, they are offering variety of services such as express as well as freight
delivery services. Respective courier delivery service company have fast extensive road
network across Europe as well as it connect Europe with more than 55,000 trips through road
every week. There are some competitors of TNT Express i.e., DHL and United Parcel Service
are two main competitors. Respective report is divided within two task, out of which 1st task
discuss strategy analysis approaches for realising strategic vision of TNT courier company.
Whereas, 2nd task will critically evaluate current and future strategies in relation of their likely
effectiveness. Moreover, strategic options to account for range of possible contexts for TNT
Express.
MAIN BODY
TASK 1
Strategic analysis approach
Strategy analysis is the procedure of conducting research on business firm as well as
its operating environment for formulation of strategy (Evans and et.al ., 2017). In addition to
this, strategic analysis is different from academic as well as business perspective but this
procedure includes various common factors such as identifying and evaluating data relevant
to the company strategy, defining internal and external environment their analysis and last in
implementing several analytic methods. There are several strategic analysis approaches

which TNT Express can use for analysing there company vision within effective manner.
Strategies which respective courier express company will going to use are PESTEL analysis
as well as SWOT. Explanation are as follows :-
PESTEL analysis – It is an tool which utilise for identifying macro or external forces
facing by an business firm. Here, PESTEL stands for Political, Economic, Social,
Technological, environmental and legal. Before implementing any type of tactical plan it is
important to conduct fundamental analysis in which PESTEL play important role. By
analysing factors within effective manner business firm will able to analysing current market
trends and will able to implement strategy in effective manner (Grayson and Hodges, 2017).
TNT Express which is international courier delivery service company founded in 2011. There
are some competitors of TNT Express i.e., DHL and United Parcel Service are two main
competitors. For gaining competitive advantages respective company is coming with robust
business strategy for accomplishing sustainable competitive advantages within courier
service delivery industry. In relation of this strategy PESTEL analysis are as follows :-
 Political – It includes government rules, regulations as well as policies which have
impact on organisation or particular industry. As TNT Express coming up with
something innovative in market area that is robust services which help them in
delivering products on time as well as on fast services also. Along with this,
government is also promoting such practices because it will help in development of
economy within more effective manner.
 Economic – It include several factors such as interest rate, employment or
unemployment rate, raw material cost, foreign exchange rates and many more (Higgins,
Omer and Phillips, 2015). Robust technology will have wide impact on working of
TNT express in positive manner along with this it will result in enhancing
employment opportunities and rising profitability of company.
 Social – This factor of pestle focus om social environment as well as identify
emerging trends. Along with this, it also provide assistance in understanding
customers needs and wants. Social factor involve changing family demographics,
cultural trends, education levels, attitude changes as well as changes within lifestyle.
Now a days customers want fast delivery of their product in which robust technology
will provide assistance to TNT in making their customers need satisfy in more
effective manner.

 Technological – Latest technology result in advancement within the services of TNT
company and it become easy for respective courier company to serve their customers
in effective manner and make need satisfied. Implementing of latest technology
related to robust will help TNT in fast delivery of courier and make customers more
satisfied in comparison of their past services (Johnson, 2016).
 Environmental – These factors relate to the influence of the surrounding
environment and the impact of ecological aspects. With the rise in importance of CSR
(Corporate Sustainability Responsibility), this element is becoming more important.
Factors include climate, recycling procedures, carbon footprint, waste disposal and
sustainability. Working of TNT will not result in negative impact on environment and
it will provide assistance in generating high profitability of business.
 Legal - Factors include employment legislation, consumer law, healthy and safety,
international as well as trade regulation and restrictions. It is important for TNT
company to conduct their operations in legal manner by implementing each and every
regulation in effective manner.
Thus, by implementing Pestel analysis TNT will be able to analyse their macro factors in
effective manner without facing any difficulities and will able to conduct their operations in
such manner which help in gaining competitive advantages and generating high profitability.
SWOT analysis – It is an tool use for analysing internal as well as external factors of
organisation (Linder and Williander, 2017). SWOT stands for strength, weakness, opportunity
and threats out of which strength as well as weakness are internal part. On the other hand,
opportunity and threats are external part of an organisation. This SWOT will going to
conduct for TNT which is courier industry organisation founded in 2011 (SWOT analysis of
TNT, 2018). Explanation are as follows :-
Strength
 TNT network – Respective courier company is providing wide range of delivery
services by their fast and extensive road network across Europe. TNT company is
providing their services for meeting commitment of customers and also for expanding
their reach. Most important is that Respective courier company connects Europe with
approx. 55,000 road trips per week. Along with this, they are also offering
international and door to door network across 200 nations.

 Quality in services – TNT Express make sure that customer relationship quality will
meet and it is essential for company as shipment delivery (Matt, Hess and Benlian,
2015). Respective company is well known for there customer relationship which is
most important strength for getting brand visibility.
 Strong workforce – TNT Express have excellent workforce of around 75,000 people
who are serving in approx. 200 countries.
Weakness
 Limited modification in service – Over several years TNT was providing same
services and there was no modification in their offerings. This become great weakness
as it is important for TNT to come up with something new within courier industry.
 Low market growth – In business environment courier companies play important
role as well as it is competitive segment (Thompson, Strickland and Gamble, 2015). For
TNT express market share growth is less as well as it could be major weak point as it
hit business in negative manner.
Opportunity
 Huge products and services – TNT Express have huge range of products as well as
services which have great business opportunity for business firm.
 New regions – Respective company can expand their horizon to newer regions as
well as it provide wide opportunity for TNT Express and result in increasing its brand
value.
 Expansion in Malaysia – TNT Express can expand their business operations within
Malaysia where it can be good for future within Malaysian economy (Bell, Bryman and
Harley, 2018). In addition to this, it will provide huge opportunity by expanding their
operations.
 Innovation – TNT express have opportunity to bring something innovative within
market area which will provide assistance to them in attracting large number of
customers and also in serving them within effective manner.
 Growing market – Couriers sector is growing market which exists lot of changes for
business firm to growth within business environment.
Threats

 Increased competitors – In couriers industry there are numerous small organisations
who provide low cost services. This become big threat for business firm as it will
result in losing business within several manner.
 Economic slowdown – Recession result in slight fallback within the performance of
company.
 Demanding clientele – For TNT several demand from client side may become huge
threat because company would having pre-defined set of business operations. In this
any different requirement of customer will have to be address in different manner by
serving them.
With the assistance of SWOT analysis TNT Express will able to analyse their internal as well
as external factors in effective manner (Brewster, 2017). Along with this, it help in identifying
opportunities available for TNT within market area for expanding their business in more
effective manner.
TASK 2
Critically evaluate current and future strategies with regard to their likely effectiveness.
It is important for an business firm to implement strategies within effective manner
because it provide assistance in accomplishing goals and objectives of business in better
manner. At present TNT Express is implementing SWOT and PESTLE analysis which help
corporation in analysing their internal as well as external factors in effective manner. It is
important for TNT Express to implement these framework on timely basis within their work
so that positive outcomes will gain in effective manner. Along with this, it also provide
assistance in analysing current trends available in market area so that company will able to
fulfil need and wants of their customers in effective manner.
Along with this, in future TNT Express will implement porter’s five force analysis
because it will provide assistance to business firm in analysing competition available within
market area (Cavusgil and et. al., 2014). In addition to this, business firm also analysing
Ansoff matrix within their working because it help in analysing which growth strategy is
suitable for company and will provide assistance in generating high profitability and long
term sustainability.
Generate and evaluate strategic options to account for a range of possible contexts for TNT
Express

Porter’s five force analysis – It is a framework which utilise for analysing
competition level within industry on the basis of five parameters. Porter’s five force model
was established by Michael E. Porter from Harvard University as well as draws on industrial
organisation economics for driving set of 5 different forces which determine the intensity of
competition within industry. There are five parameters i.e., threats of new entrants, threats of
substitutes products or services, determinants of buyer power, determinants of suppliers
power and intensity of competitive rivalry. TNT Express which is international courier
delivery service company founded in 2011. It is subsidiary of FedEx, with headquartered in
Hoofdorp, Netherlands. Moreover, they are offering variety of services such as express as
well as freight delivery services. Respective courier delivery service company have fast
extensive road network across Europe as well as it connect Europe with more than 55,000
trips through road every week. There are some competitors of TNT Express i.e., DHL and
United Parcel Service are two main competitors. Explanation of these five forces are
mention below :-
• Threats of new entrants – TNT Express have their well-established name within global
courier as well as logistic management services. Thus, threat of new entrants for
respective business is low because of such factors like capital requirement as well as
barriers to entry. In addition to this, respective company is coming with robust delivery
system and for new companies competing with such innovation will not easy. Moreover,
another reason for low threat of new entrants is that TNT Express is barriers to entry in
term of regulations given by local government.
• Threats of substitutes – Threat of substitute product is high for TNT express as there
competitors are FedEx and DHL. Because customers have several different options to
switch as competitors are offering services in distinct manner.
• Determinants of Buyer Power – For TNT power of buyers is high because there are
numerous companies available within market area. Customers can switch brand in easy
manner which offering products at low price.
• Determinants of supplier power – In Courier industry there are large number of suppliers
which directly result in low determinants suppliers power because company can switch
to other suppliers easily who are offering services at low price.
• Intensity of competitive rivalry – There is high level of competition within DHL and
united parcel Service company as well as UPS is very high. In addition to this, price of

both services and cost of switching services to either business firm is very low. There is
requirement of continuous improvement in service quality, price as well as innovation.
Ansoff matrix – It is also known as product/market expansion Grid, Ansoff Matrix is
the tool which utilise by business firm for analysing and planning growth strategy of
company. In simple term t can be said that Ansoff Matrix is strategic tool utilise for guiding
or directing management team of corporation for adopting suitable strategy related to growth
and development. In relation of TNT express for identifying appropriate strategy of growth
manager of respective currier company using Ansoff matrix. It include four strategies i.e.,
market penetration, product development, market development and diversification.
Explanation of these in relation of TNT express are mention below :-
 Market penetration – It is an strategy in which business firm utilise their products
within existing market area. Aim of firm by implementing market penetration is to
enhance their market share as well as it can be done in several manner such as
decreasing process for attracting existing or new customers, enhancing promotion and
distribution efforts as well as acquiring competitors within same market area.
 Product development – With product development strategy an business firm develop
new or innovative product to cater the existing market area. In addition to this, move
typically include extensive research & development as well as expansion of product
range. An business organisation design product development strategy when they have
good knowledge as well as understanding related to the current market. Along with
this, if they will be able to provide innovative solution for meeting need, requirement
and want of existing market. Product development strategy can be done in numerous
manner such as investing within R&D for developing new products to cater present
market, acquiring competitors products as well as merging resources for creating new
products which help in meeting needs of existing market in effective manner. Along
with strategic partnership with other corporation to gain access to each partners
distribution channel. TNT Express using product development approach as they are
coming up with robust business strategy for accomplishing sustainable competitive
advantages within courier service delivery industry.
 Market development – It is an growth strategy in which corporation enter within
new market along their existing products. Moreover, expanding within new markets
simply means expanding within new geographies, regions, customer segments and
many more. Market development strategy become more successful only when an

organisation owns proprietary technology which can leverage within new markets,
consumers within new market are profitable as well as behaviour of consumer within
new markets don’t deviate too far from present markets.
 Diversification – It is growth strategy in which business firm enters within new
market with some innovative or new products. Diversification strategy is risky
because company may get fail sometimes while coming with something innovative in
market area. Because it may be don’t like by customers or not satisfy their needs as
well as wants in effective manner.
For gaining competitive advantages TNT Express developing and maintaining robust
business strategy for accomplishing sustainable competitive advantages within courier
service delivery industry. Thus, respective company is using product development as growth
approach because they are coming up with some thing innovative offering in existing market
area.
CONCLUSION
After going through above discussion it has been summarised that, business strategy
is important for an organisation because it provide assistance in accomplishing predetermined
goals and objectives of company. In other words it can be said that, for an business firm it is
essential to design strategy within proper manner as it will provide assistance in gaining
competitive advantages and long term sustainability in business environment. In addition to
this, there are numerous strategy analysis approaches which an business firm can use such as
PESTEL analysis, SWOT and Porter’s five force model. As it has been already mention that
TNT Express is developing new product for their existing market which will provide them
opportunities for gaining competitive advantages.
Apart from this, it has been recommended to TNT Express that they have to analyse
market in effective manner before bringing new product in market area. For analysing market
in effective manner both PESTEL and SWOT are effective tool as it provides assistance in
analysing internal as well as external factors in effective manner. With the assistance of this,
company will be able to conduct their operations in appropriate manner.

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