Business Strategies and Market Analysis

This project report emphasizes the importance of preparing effective business strategies that incorporate various functions to be performed by skilled workforce. It involves evaluating macro and micro environments to identify factors affecting business strategy effectiveness. The report uses PESTLE, SWOT, Porter's Five Forces, and Porter generic strategies to make relevant changes in existing plans and policies.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
(i): Application of appropriate frameworks to analyse macro-environment...............................1
(ii): Application of appropriate frameworks to analyse internal environment............................3
PART B............................................................................................................................................4
(iii): Application of Porter's Fiver forces model to evaluate the competitive forces in market. .4
(iv): Application of models, theories and concepts along with the interpretation of strategic
directions.....................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8
.........................................................................................................................................................8

INTRODUCTION
Business strategy includes the plans and strategies made by the management with an
objective of achieving organisational goals and objectives within predetermined time period. It is
a long term business plan which will cover the period of about 3 to 5 years. For this, the
management play an important role in formulating an effective business strategy in order to
achieve specific aims and objectives within limited time period. The present assignment report is
based on the case study of TNT company which is engaged in delivering documents, parcels and
freight securely between business, using road or air transport. The project includes the analysis
of macro and micro environmental factors along with the proper evaluation of competitive forces
of the market for TNT express. Along with this, application of a range of theories, concepts and
models along with the interpretation of strategic management plan for TNT are also discussed
under this report.
PART A
(i): Application of appropriate frameworks to analyse macro-environment
TNT is an international courier delivery services company is engaged in delivering
documents, parcels and freight securely between businesses, using road or air transport. It is
operated in more than 60 countries and has achieved a recorded sales of 6.91 billion in the year
2015. Its main competitors are United Parcel Service (UPS) and DHL Express. The company
has a specific aims and objectives due to which the management should analyse macro
environment along with its impact on their business operations. Macro-environment consists of
external factors which includes political, economical, social, technological etc. that can
influences business operations either in negative or positive manner (What is PEST Analysis,
2018). For this, management must required to analyse these all factors through conducting
PESTLE analysis which can be further understood as under:
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Illustration 1: What is PEST Analysis?
Source: What is PEST Analysis?. 2018
Political: It is related with the fluctuations in government of nation which includes
influences in tax policy, employment laws, trade restrictions, tariffs and political stability. EU
has established a close links with immediate neighbours and enables bugger exports, free
movement of services and payment and capital for trade and investment. Full liberalisation in
Europe was completed in the year 2012 which gives TNT and other courier companies to
strengthen their positions, build new networks and gain wider portfolio of customers.
Economical: It is related with factors including economic growth, interest rates, inflation
etc. which can affect buying power of people as well as profitability of an organisation. In UK,
courier and express services companies plays a major role in growth and development of UK
economy. In UK, global trade is increasing on continuous basis which creates the importance of
courier companies such as TNT. It also help in reducing product life cycle, quality awareness
among customers and succeed companies are forced to maintain standard of quality.
Social: It is related with the factors which includes population and educational
perspective of the international and macro-economical society. A high population nation
provides an opportunity to TNT to achieve growth as there are more consumers to deliver to in
terms of their services in all sectors. A literacy level of countries also affects the growth of global
companies such as TNT. Along with this, more businesses requires courier services which are
safe for transporting important official documents therefore it is important for the management
of TNT to exploit such opportunities and make optimum use of it. For example, India and China
are most populated nations attaining large number of businesses requiring courier services at
huge level (Agarwal, Grassl and Pahl, 2012).
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Technological: It is related with the technological advancement which brings
effectiveness in operation of business organisation. TNT currently uses sophisticated technology
in order to facilitate customers to check whether their products are delivered on time. Block
chain is another signifiant merging technology which increases the potential of TNT to enhance
the supply chain solutions across worldwide. Therefore, investment in technologies increases the
capabilities of company to reach their clients products to the preferred locations on time.
Legal: It is related with the legal laws and legislation made by governmental authorities
to restrict organisations to conduct unethical practices. TNT is operated at multiple number of
nations due to which compliance of laws and regulations of several countries increases the
burdens of high operational costs for TNT. Laws related with labour, environment, taxes and
regulation related to trade and aviation also affect the existence of business due to which the
management need to understand laws and policies of each nations where the business has
operated its functions.
Environmental: It includes factors related with environment laws made by government
in order to protect environment and emission standards. The business organisation having an
environment friendly image can easily achieving customer loyalty. For this, to achieve high
sustainability TNT should produce solar energy to reduce the consumption of non renewable
energy in its system as it will help in reducing operational cost as well as gain maximum support
and trust from their loyal customers.
(ii): Application of appropriate frameworks to analyse internal environment
To achieve specific objectives and goals within predetermined time period, the
management of TNT must required to analyse internal environment and capabilities through
conducting SWOT Analysis (SWOT Analysis, 2018). It assist management to make further
decisions regarding any improvement in existing policies and strategies made for the internal
factors such as employees, suppliers, shareholders etc. Here are the SWOT analysis of TNT
express company:
Strengths Weaknesses
 It was established in the year 1946 and
from then to now, it is a multinational
company and serve its services in more
 Limited diversification in services due
to which failed to capture large market
share.
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than 200 countries.
 TNT is European market leader which
provides the fastest and reliable in
delivery services.
 It uses sophisticated technology which
reduces their operation cost.
 Has attained committed and
experienced staff of over 75,000
people,
 Well planed policies, procedures,
missions, visions, strategies etc.
 Due to engaging in courier and parcel
industry, Security and transportation
and punctuality becomes the inherent
weaknesses which can be quickly
affected by the environmental, security
etc. factors.
Opportunities Threats
 Should diversify its products and
services so as to attract maximum
customers.
 Expansion and penetration in newer
regions so as to achieve huge market
share.
 Improvement of transport and
communication technologies assist
company to provide speedy services.
 Large amount of competitors such as
United Parcel Service (UPS) and DHL
Express.
 Decreasing in buying power of
Malaysian market where they are more
preferred.
 Increment in transportation cost due to
changing in political and environmental
factors.
PART B
(iii): Application of Porter's Fiver forces model to evaluate the competitive forces in market
It is important for every organisation irrespective of the fact whether operated at local,
national and international level to understand the competitiveness of business environment and
also required to identify the potential of strategies made by the management towards
achievement of desired goals and objectives. TNT is operated at global level where the
competitions are very high and get largely affected by the influences in business environment
therefore it is important for the management to adopt powerful tool named as Porter's Fiver
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Forces in order to understand the competitive forces to maximise profitability. It is further
understood as under:
Competitive rivalry: The competition in such industry is extremely high due to having
lots of competitors in same industry. TNT is engaged in logistics and supply chain where it has
faced tough competition from their rivals such as GAC, DHL etc. Due to high competition, it
brings more difficulties for TNT Express to increase their market share (Aithal, 2016). Apart
from this, low restrictions on entry increases the competition within the industry. Therefore, it
lowers prices and decreases the profitability of company.
Supplier Power: The power of suppliers are very low in the logistics industry. Such
suppliers are the one who assist companies to deliver customers products and services through
using their auto mobile services which includes light weight vehicles, forklift to trucks and
cranes. As there are large number of suppliers which are chosen by organisation on their basis of
their differentiated prices.
Buyer power: Large number of companies engaged in Logistics industries offers
different prices in exchange of their deliver services which increases the power of buyer. As the
customers expect to receive shipment more faster with more flexibility and transparency at a
lower price therefore the companies who provides the same will switch the buying behaviour of
customers. This will bring more pressure on TNT Express to achieve competitive advantage.
Threat of substitution: The threat of substitutes product is low. Logistics industry is one
of the growing sector which deals in providing different price ranges. Logistics range from
warehousing, supply chain to transportation. The only substitute product for such industry is
transportation but due to charging extra costs it will be more difficult for customers to provide
same services at lower prices (Campling, 2012).
Threat of New entry: The threat of new entrants are very low due to lots of obstacles as it
is more difficult for new entrants into freight market. First of all, the company need to overcome
the difficult of buying aircraft as it requires huge amount of investment that means small and
medium companies cannot able to compete with TNT Express in the market. Apart from this,
influencing suppliers to serve their services towards them brings more challenges due to having
lack of trust and confidence from the suppliers.
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(iv): Application of models, theories and concepts along with the interpretation of strategic
directions
There are different models, theories and concepts such as Porter generic strategies that
will help organisation to determine its profitability and position itself by leveraging its strengths.
It will help TNT Express to identify its actual position in market so that it can be improved by
the plans and strategies formulated by the management in order to achieve competitive
advantage among their rivals. There are three generic strategies which includes cost leadership,
differentiation and focus strategy. It can be briefly explained as under:
Cost Leadership strategy: It implies that an organisation if wants to sustain in market for
longer period of time then they must sell its products either at average industry prices to generate
huge profits than their rivals, or below the average industry prices to capture large market share.
Through this, the company target a broad market. An organisation can achieve cost advantage
through developing process efficiencies, gaining unique access to a large source of lower cost
materials, making vertical integration decisions etc. In case the company unable to lower its cost
than its rivals, the firm may achieve competitive advantage through cost leadership which can be
adopted only when the company has sufficient amount of capital, skilled and expertise
employees, efficient distribution channels (Chang, 2016).
Differentiation strategy: It implies that firm can able to sustain a competitive advantage
if they differentiated its products and services as compared with their rivals. It can be done
through adding extra value to the existing product or service which allow them to charge
premium prices for it. An organisation expect that charging high prices will help in recovering
the extra cost incurred in offering the unique product or service. Furthermore, if suppliers
increases the cost of its products due to having unique attributes then the firm can pass along the
costs to its customers who cannot find easily substitute products.
Focus strategy: It is adopted with an objective of targeting the narrow segment through
either cost advantage or differentiation. TNT Express is engaged in providing delivery services
due to which gained maximum number of customers among which most of them are businesses.
Therefore, TNT Express should focus on their needs and preferences in order to achieve their
loyalty for longer period of time. Due to focusing on limited market share, the firm have lower
sales and also less bargaining power with their suppliers (Drahokoupil, 2014).
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CONCLUSION
It has been concluded from the above project report that it is very important for business
organisation to prepare an effective business strategies comprising of various functions that must
be performed by skilled workforce. It assist organisation to evaluate the macro as well as micro
environment so as to identify the factors which can affect the effectiveness of their business
strategies. For the purpose of evaluation, PESTLE, SWOT, Porter's Five Forces and Porter
generic strategies are required to adopt which enable management to make relevant changes in
their existing plans and policies.
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REFERENCES
Books and Journals
Agarwal, R., Grassl, W. and Pahl, J., 2012. Meta-SWOT: introducing a new strategic planning
tool. Journal of Business Strategy. 33(2). pp.12-21.
Aithal, P. S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. Browser Download This Paper.
Campling, L., 2012. The tuna ‘commodity frontier’: business strategies and environment in the
industrial tuna fisheries of the Western Indian Ocean. Journal of Agrarian Change.
12(2‐3). pp.252-278.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Drahokoupil, J., 2014. Decision-making in multinational corporations: key issues in international
business strategy. Transfer: European Review of Labour and Research. 20(2). pp.199-
215.
Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management Decision. 51(7).
pp.1326-1358.
Jayaram, J., Choon Tan, K. and Laosirihongthong, T., 2014. The contingency role of business
strategy on the relationship between operations practices and performance.
Benchmarking: An International Journal. 21(5). pp.690-712.
Meskendahl, S., 2010. The influence of business strategy on project portfolio management and
its success—a conceptual framework. International Journal of Project
Management.28(8). pp.807-817.
Pretorius, M. and Maritz, R., 2011. Strategy making: the approach matters. Journal of Business
Strategy. 32(4). pp.25-31.
Online
What is PEST Analysis?. 2018. [Online]. Available through:<https://www.visual-
paradigm.com/guide/strategic-analysis/what-is-pest-analysis/>.
SWOT Analysis. 2018. [Online]. Available
through:<https://research-methodology.net/theory/strategy/swot-analysis/>.
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