Factors Affecting Business Functions and Performance of DHL Logistics

The provided report is an in-depth analysis of the factors that affect the business functions and performance of DHL Logistics. The report utilizes various theories and analyses such as PESTLE analysis, SWOT analysis, internal analysis, and Porter's five forces to identify both internal and external factors affecting the business operations of DHL. The report concludes by highlighting the importance of considering these factors in order to improve business performance and competitiveness.

INTRODUCTION TO BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
1 Analysis and comment of the wider macro UK environment within which DHL operates
that impact on its performance...............................................................................................1
2 Analysis and Comment of the micro environment within DHL.........................................2
3 Analysis of internal environment of DHL...........................................................................3
4 SWOT Analysis...................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Introduction to the business bring she idea before taking various decision and set the
objective as per the mission and vision of the organisations. The report will help to understand
about DHL, the leading courier service organisation in the UK performance and its impact due to
various factors. The industry analysis will determine the different force and SWOT analysis to
improve the internal environment within company.
1 Analysis and comment of the wider macro UK environment within which DHL operates that
impact on its performance
For the analysis of the large macro United Kingdom environment, various factors will
help to determine .
 Political factor: This are the external factor in which can be impact on the DHL
organisation performance. The European region has specific environment which is not
affected any important political issues in nation but due to the various changes after the
Brexit organisation such as DHL face major impact on their firm’s performance (Cai and
Yang, 2014). But the government had taken the important decisions regarding payment
and capital for trade and investment benefits for domestic business. The prior
liberalization in 90s there were many nation postal operators acting as monopolies. At
present, the Courier Express Parcel market is highly competitive and organisations
required to invest more capital to establish strong brand and position in this environment
without any impact of political factor. It can be evaluated that UK need to support the
organisation such as DHL by providing various expectation in the taxation and other
benefits.
 Economic Factors: This can be another factor in which is impact on performance of
DHL. The UK economy is affected due to downward of global economic. The
organisation needs to analysis this factor before investing due to economic crisis which
brings loss. Increasing in the cost of various goods and services are affected on the DHL
overall cost and the burden of this can be seen on the customers. It is can be evaluated
that it is important analysis the economic position of the nation to take any decision
related with the investment or which is associated with the financial risk.
 Social Factor: The change in the lifestyle of the customer has huge impact on the postal
services in which the DHL performance major affected due to social factor. The
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partnership in between various e-commerce company with the DHL for delivering goods
to customer. This can be the major key drives for the organisation which turns into a
large profits enterprises as compared to the other player. It can be evaluated that social
factor is the key drive for the DHL to improve the performance of the organisations
(Chavis, Klapper and Love, 2013).
 Technological Factor: The changes in the technology can be the another factor which
will affected to the business performance of the DHL but on the other hand evolution of
new technologies in connection and billing has left postal services minimal surplus for
big organisations which is used for all the customers. The MyPost digital mailbox have
been introduced by the company for easy billing and communication which can be also
assists to secure store for taxation purposes.
 Legal Factors: This is the factor which may affect the organisation in a large extent. The
rules and regulation makes the firm more effective and efficiently which gives the
positive impact as well benefits to gain customer trust. But there are ten state in the
European Union which they required organisation to take explicit decision of nation
regulatory authority.
 Environment Factors: Transportation industry causes huge impact on the greenhouse
gases in the environment. The nation has major issues to reduce carbon emission due to
high pollution from vehicle. The DHL had implemented the various project which may
assist to search out ways in decreasing the pollution and to be complaint with the issues'
legislation (Iskanius, Page and Anbuudayasankar, 2013).
2 Analysis and Comment of the micro environment within DHL.
For the industry analysis it can be easily determine with the help of potters five force
which can be explained below:
 Threat of new entrants: The DHL as well other key player of the industry such as
FedEx and UPS are the well established brand in the global courier and logistics
management services. But the threat of new entrants in these enterprises is very low due
to large capital requirement and obstacle to easy entry. As the DHL have huge network of
ships and aircraft carries as well conveyance vehicle.
 Threat of substitute products or services: This is another factor which will cause to the
company but in this industry threat of substitute products or services is low. The advent
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of electronic document and email but still various document which required to deliver in
hard copy to its recipient (Kim, Suresh and Kocabasoglu, 2013).
 Determinate of buyer power: This can be the high in the industry and the buyer power
makes the DHL and other organisation more effective across the globe. The availability
of other player in the industry which allows the power to the customer.
 Determinates of supplier power: In this industry is not possible to analysis the supplier
power because the customer can be the supplier in the courier services. The organisation
is responsible for shipping goods of other firms which can be also determining the final
price of goods. So, the supplier power is low for DHL till they have shift supplier if the
competitor give effective option.
 Intensity of competitive rivalry: This can be the major impact on the performance of
DHL in which the other player gives high competition to the organisations. So, the cost
of services is low and price of shifting services to other firm is also moderate. But it
required for the company to improve service quality and its price. Hence, the intensity of
competitive rivalry also impact on the revenue of DHL which tuns the negative impact on
the financial performance. For that firm need to focus on innovation and other
improvement.
3 Analysis of internal environment of DHL
The DHL is a successful logistic company having various internal factor that affects the
business functions and performance of the organization. The various internal factors of DHL
affecting the business are as described below -
 Competences – The DHL is a part of the logistic industry since 40 years, the company
has built an impressive and famous brand name and business in the market. DHl provides
a wide range of effective services to the customers from transporting letters or
information ton transportation of goods and parcels. The organisation operates its
business in around 220 nations across the whole world and have more than 1, 00,000
employees. DHL logistics is the leading transportation company in the Europe with
around 25% market-share (Teece, 2015). The company needs to achieve the number one
logistic firm in the world. The benefits of operating in the international market, The DHL
logistics operates an effective and strong cooperation with other units such as Global
forwarding, mail supply chain and freight which assist them to address the needs of
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customers in a better way. The company follows and implement modern information
technology to achieve the success and goals. It provides support and services to its
customers 24 hours a day and 7 days a week. DHL is one of the five most admired
organisations in the world within the logistic industry. It spends a huge amount of capital
for research and development of the employees that help the company to plan effective
strategies or plans for improving the business performance (Welford, 2013).
 Core- Competences – Core-competences defines the competitive advantages of an
organisation or company. This core-competences helps to be more profitable,
differentiate, be more successful and obtain more market-share. The DHL works hard on
its competences in order to achieve the competitive advantages and be the leading logistic
company ion the world. The company states that the reason behind their success is not
just a big size or largest market share but also the effective services, attainment of
customer satisfaction and innovative solutions. There are many core-competencies based
on future goals and objectives of DHL which are as described below -
1. First choice program is focused for improving the business operations with respect to the
needs of the customers. The objective behind this is to achieve a strong customers' loyalty
and expand the business with existing customers. DHL also needs to change the corporate
culture within the organisation and improve the cooperation among the employees
working in the company as well as areas to offer effective and high value services to their
customers (Wetherly and Otter, 2014).
2. Road-map to value program – It is focused on the transparency, performance, cost
reduction, profitability, rise in the company value and organic growth. The objective of
this program is to make DHL the first choice for the customers, investors as well as the
employees.
3. The company also developed a program for the protection of the environment, climate
and disaster relief known as the Go Green. The DHL became an official partner of United
Nations organisation providing logistical support at the time of natural disasters.
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4 SWOT Analysis
In order to determine the various factors affecting the overall functioning and
performance of the DHL logistic company the application of SWOT analysis can be very useful
and beneficial. The SWOT analysis of DHL is as discussed below -
Strengths
 Large network – The major strength of DHL is its large network, the company operates in
more than 220 countries making it an international freight career. This provided them an
advantage over the various other global competitors(Communication barriers. 2016).
 Innovation – The cited company invest a large amount of capital in the research and
development, it helps DHL to invent new techniques and innovative methods to perform
various business functions more effectively.
 Growing in developing countries – The company is also investing heavily in setting up
business within the developing countries to develop a huge footprint within the emerging
marketplace (Popescu, 2013).
Weaknesses
 Requires heavy investment –DHL Company is an investment driven company and in
order to expand or set up new firms the company needs a lot of investment.
 Limited market-share growth – The market-share growth becomes difficult due to a
highly competitive market.
 Poor marketing –DHL does not invest on its advertising or marketing which is a major
weakness affecting the popularity of the company.
Opportunities
 Emerging markets – The company has set up its businesses in almost every emerging
market but in order to use the potential in such markets it needs to expand.
 E-commerce – The electronic shopping is increasing day by day which provides an
opportunity to achieve high success in the e-commerce industry (Virglerová, Dobes and
Vojtovic, 2016).
Threats
 Competition – UPS and Fedex are the main competitors for DHL and these competitors
are giving tough competition to the company(Business culture in US and UK. 2016.)
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 Economic slowdown – The logistics is one of the major industry which gets negatively
affected by the economic slowdown.
CONCLUSION
The above report concluded that there are various internal and external factors that affect
the business functions and performance of DHL Logistics Company. These factors are identified
by various theories and analysis such as PESTLE analysis, SWOT analysis, internal analysis etc.
The report also included Porter's five forces analysis in order to identify and determine the
external factors affecting the business operation of DHL.
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REFERENCES
Books and Journals:
Cai, S. and Yang, Z., 2014. On the relationship between business environment and competitive
priorities: The role of performance frontiers. International Journal of Production
Economics, 151, pp.131-145.
Chavis, L. W., Klapper, L. F. and Love, I., 2013. The impact of the business environment on
young firm financing. The world bank economic review, 25(3), pp.486-507.
Iskanius, P., Page, T. and Anbuudayasankar, S. P., 2013. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product
industry. International Journal of Electronic Customer Relationship Management, 4(4),
pp.395-414.
Kim, M., Suresh, N.C. and Kocabasoglu-Hillmer, C., 2013. An impact of manufacturing
flexibility and technological dimensions of manufacturing strategy on improving supply
chain responsiveness: Business environment perspective.International Journal of
Production Research, 51(18), pp.5597-5611.
Popescu, G.H., 2013. Macroeconomics, effective leadership, and the global business
environment. Contemporary Readings in Law and Social Justice, 5(2), p.170.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Teece, D. J., 2015. Business models, business strategy and innovation. Long range
planning, 43(2), pp.172-194.
Virglerová, Z., Dobes, K. and Vojtovic, S., 2016. The perception of the state's influence on its
business environment in the SMEs from Czech Republic. Administratie si Management
Public, (26), p.78.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Wetherly, P. and Otter, D. eds., 2014. The business environment: themes and issues in a
globalizing world. Oxford University Press.
Online
Business culture in US and UK. 2016. [Online]. Available through:
<https://www.slideshare.net/blurbpoint/internet-marketing-will-help-you-to-grow-your-
business-money-vs-business>.
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Communication barriers. 2016. [Online]. Available through: <http://www.free-management-
ebooks.com/faqcm/effective-08.htm>.
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