DHL International UK: Evaluating Market Forces & Stakeholder Theory

This report provides a comprehensive analysis of DHL International UK, a private limited company, focusing on its market position and strategic considerations. The report begins with an introduction to DHL's legal form, purpose, corporate history, vision, mission, and objectives. It then delves into an analysis of the international market in which DHL operates, considering political, economic, social, technological, legal, and environmental factors. Task 1 utilizes Porter's Five Forces model to assess the competitive intensity within the industry, examining the rivalry among existing players, the threat of new entrants, the threat of substitute products, the bargaining power of customers, and the bargaining power of suppliers. Task 2 explores stakeholder theory, emphasizing the importance of considering the interests of all stakeholders, including customers, employees, suppliers, distributors, companies, bankers, and shareholders, in addition to shareholders. This analysis provides a thorough understanding of DHL's strategic environment and the factors influencing its success. Desklib provides access to this and many other solved assignments for students.

Contents
Introduction 2
a) 2
b) 3
Task 1 5
Task 2 8
Task 3 10
a) 10
b) 11
References 14
Introduction
a)
Legal form
D.H.L. International UK is a private limited company.
Purpose
According to Oflac (2015) DHL's priorities are to develop employee capabilities, increase
service quality and broaden the company's service spectrum. Each department of the company
organizes training courses for its employees in order to maintain and raise the professional level and
qualification, as well as to get acquainted with the latest innovations of the DHL network. (Oflac, et.
al, 2015)

Corporate history
DHL is an international courier company founded in 1969, the name of the company coming
from the initials of the three founders of Adrian Dalsey, Larry Hillblom and Robert Lynn. The DHL
International Network connects more than 220 countries and territories worldwide, the main
competitor being TNT. (Oflac, et. Al, 2015)
DHL offers international express deliveries of goods worldwide by air, sea, land or train, storage
solutions starting with packaging, repairs and other customized logistics services. (Oflac, et. Al, 2015)
Vision
DHL has always revolutionized, shaped and simplified the world of logistics. From the
invention of the international air express delivery sector to the transformation into the world's
leading logistics company; they are thinkers, builders and pioneers who constantly question the
possible. And now the company is approaching the last frontier: delivery to the moon. (Tran, et al.,
2019)
Mission and objectives
Being a number one logistic company, DHL has the mission to connect people by improving
their lives. There is a special responsibility due to the high dimension of the company and the
significant role DHL plays in the international market. (DHL, 2020)
b)
The international market is the place where goods and services made in various national economies
are sold and where other economic activities are carried out in the most varied forms with the help
of a wide range of specific means and techniques. It is also the starting point to produce any goods
and services designed to encounter the requirements of buyers and customers outside international
markets. The formation and evolution of international markets are determined by the degree of
development of national economies and the international division of labour that decisively

influences the characteristics, the continuity, and the forms of international exchange. (Morrison,
2016)
The international market represents the whole of the supply and demand of goods, the conditions of
their confrontation and realization and the economic relations that give rise on this occasion
between partners belonging to different states. (Morrison, 2016)
Political
According to Reuters, DHL is recruiting new employees mainly in centres in Belgium, the Netherlands
and Germany. (DHL, 2020)
The operator wants to ensure that shipments to the UK, which will eventually be in line with the new
rules, will follow a rapid flow in terms of customs procedures.
The new team will mainly be responsible for dealing with the new customs procedures, which will be
implemented after 29 March, if the United Kingdom leaves the European Community without an
agreement between the British Government and Brussels.
For example, closing borders will might not affect DHL as will still operate delivering goods and in the
logistic sector.
The CEO of DHL Express did not specify how Brexit would affect the company's operations but said
that if there is no agreement, the company would be better prepared than any other company on
the market.
Economic
For example, the depreciation of the national currency or the increase in the price for utilities or fuel
will negatively influence customers, who are reluctant to accept tariff increases on this basis.
If the activity of certain companies with which the company collaborates will decrease, many of
them will choose to send fewer envelopes and packages to collaborators, customers and partners,
thus seeking to reduce costs.
Social
As one of the global leaders in transportation and logistics services, DHL takes social responsibility
very seriously as an area in which it can make an important contribution to the society.
Deutsche Post DHL Group is closely monitoring the evolution of the situation in China, in order to
keep the potential impact of the coronavirus epidemic as low as possible and to adapt its effective
operations as well as possible. Due to transportation, customs clearance and delivery problems, DHL
had to temporarily stop the delivery of packages. (DHL, 2020)
Technological
DHL is constantly researching trends that may affect the future of the logistics industry. DHL has
tested data in risk management so that they could proactively advise customers and suppliers for
potential failed shipments. (DHL, 2020)
About 80 percent of warehouses worldwide are manually managed. DHL is currently testing robots
that work as warehouse operators. For example, collecting products with an automatic stroller. It
can accompany the operator and when it is loaded, it can return to the packing station and send
another empty collection trolley to collect the necessary products. (DHL, 2020)

Legal
The politico-legal environment considers the protection of the company and its employees, the
regulation of the relationship with the competition and the customers. In this sense, DHL contracts,
both with suppliers and customers, are generated in accordance with European legislation and civil
agreements. in Warsaw and Vienna, on postal services. (Tran, et. Al., 2019)
Because of Brexit, DHL UK might be affected by any law changes made by United Kingdom
Government.
Environmental
As one of the global leaders in transportation and logistics services, DHL takes social responsibility
very seriously and recognizes environmental protection as an area in which it can make an important
contribution. (DHL, 2020)
The company's management has also implemented an investment program on energy efficiency
aimed at reducing energy consumption and pollutant emissions.
Task 1
In this task will be analysed the industry were DHL operates using Porter Five Forces diagram as
below.
Figure 1. Porter’s Five Forces Model from Porter (1998)
Porter (1998) contemplates that a business operates in a competitive environment if this is shaped
by the collaboration of 5 different Forces which perform on the business itself. (Chul, 2004)
Rivalry between players low
Faced with the same difficulties and generally unprotected by the same jeopardies, players in a
sector compete against each other to gain beneficial positions, and their competitiveness can take
many methods: price competition, advertising battles, the introduction of new products, improved
services or customer guarantees.
A strong rivalry is for the advantage of customers and obviously in the profitability detriment of
existing competitors.

DHL is the global market leader on all continents except North America (in this area the market
leader is UPS), therefore for DHL this force is ranked as a low power.
The main global competitors are: UPS, TNT and FEDEX.
In 2016, TNT and FEDEX have started a merger process to cover the European market where TNT is
the second player.
Threat of new players (or intensity of entry barriers)
This force acts horizontally, falling into the category called Indirect Competition. New entrants are a
force to be reckoned with when analysing the market: the easier it is for a newcomer to enter a
market, the more unprofitable that market is. (Baxter, 2019)
Therefore, the best way to "defend" a company has from newcomers is to choose markets that are
difficult for others to penetrate, creating new niches.
Being (among) the first, DHL has the chance and time to add so much value to their products, by
creating original mixes, that some start-ups will find it difficult or impossible to do it at the same
level, therefore this force can be ranked as medium power. (DHL, 2020)
DHL is the largest international company (present in over 220 countries), with the largest air fleet
(165 aircraft).
Door to door transport in all corners of the world but DHL could face tariff competition with local
companies.
Threat of substitute products
Replacement products are those that fulfil a function identical to that of the analysed product. Those
that are manufactured by high-profit sectors and where the margin for price decline becomes
important.
Porter advises to reduce this competitive force by offering an increased value to products, but also
by ensuring their accessibility, through distribution and price. (Baxter, 2019)
In DHL case this force can be to a medium level of power.
Green optimization: DHL works with customers to identify areas for improvement and ways to
reduce greenhouse gas emissions. Analyses the entire logistics chain of customers and works with
them to improve trade routes and methods of transport. In addition, it shows them ways to progress
their overall environmental performance. (DHL, 2020)
Customers bargaining power
Customers try to get price reductions by negotiating wider and better-quality services and stirring up
rivalry between existing competitors. Their actions can have a substantial effect on the profitability
of the sector, and their intensity depends on the strength of each group. (Baxter, 2019)
According to Porter (1998), a group of buyers can be considered strong if the following conditions
are met:
- is a concentrated group or purchases a large quantity of the seller's products;
- the purchased product requires significant supply costs or has a significant weight in total
purchases made

- the products purchased in the sector of activity are standard or undifferentiated.
This force, for DHL this force could have a high-power influence.
The DHL network also serves most of the international transportation for people.
Supplier bargaining power
In this case, the company is the customer, who must increase the force it exerts on the supplier.
Porter advises to do this by standardizing the technical specifications of the products purchased.
Another practise used is the exclusivity argument, which puts heaviness on the supplier so that he is
driven to give advantageous conditions in exchange for the exclusive marketing of his products.
(Baxter, 2019)
The largest suppliers of DHL are Boeing, Airbus, Volkswagen, Skoda, Mercedes and Ford.
Locally, DHL Romania has several service providers such as: Dacris, Iron Mountain, IBM, BlackBerry
and HP.
In 2015, DHL Express became the main logistics sponsor of the World Rugby Championship in Great
Britain together with Heineken and HTC. The company provided logistical support at the highest
level to all nations present at this sports show. (DHL, 2020)
DHL Express develops an important marketing position in several social environments; therefore,
this force can be ranked at a medium power level. The company is multi-present in the market from
the brand point of view and the impact of this fact leads to a tie versus competition, to the increase
of the turnover and to the increase of the image. (DHL, 2020)
Task 2
Stakeholder theory is the theory that a company should be run after the interests of all Stakeholders
(customers, employees, suppliers, distributors, companies, bankers and shareholders) instead of
shareholders (Shareholders). top management was maximizing shareholder value. (Jones, et al.,
2018)
The trustees' theory has no legal validity. At one level it is trivial (why can a rational leadership afford
to override the interests of customers or suppliers?). At another level, it is practically useless,
because management cannot be told how to change the interests of one group with the interests of
another when there is a conflict of interest: management must take precedence over the trustee,
each interest groups. (Jones, et al., 2018)
For a certain company, at a certain moment, some of the trustees will have a greater importance
than the decadal and will have to be cultivated. (Jones, et al., 2018)

To the extent that the trustees' theory causes such reasoning, it may have some uses. It is generally
accepted that companies must be close to their customers, even obsessed with them, and that
customer satisfaction is crucial; but no company gives up its goods for a long time or totally neglects
its commercial interests. (Jones, et al., 2018)
The specialized literature defines the stakeholders as any persons with interest in a society, as any
entity like, people, groups or organizations, which may affect or may be affected by the
accomplishment of the objectives of the company.
In order to draw up a strategy for the future, any company/organisation must consider the interests
of these stakeholders.
Moreover, the companies establish a hierarchy of them in the order of their importance and
influence, because the position of a majority shareholder cannot be compared with the interests of a
member of a local community affected by the traffic produced by the neighbourhood with the
factory headquarters. (Jones, et al., 2018)
Mendelow has drawn up a matrix that ranks the interested persons according to 2 criteria, the
power held and degree of interest.
The relationship and how treating these group of people is defined according to these factors and to
what degree, the company wants to maintain it, or in what way solving the issues raised by them.
Having a multi-stage management process, ensures a systematic expectation received from
stakeholders about social and environmental issues. This leads to maintain the goal of unceasingly
improving DHL Corporate Responsibility performance. (DHL, 2020)
Receiving the visions are made through dialogue with DHL stakeholders as well as detailed surveys
from stakeholders.
In addition, DHL every 2 years, in order to recognise material issues and to outline specific
arrangements, key performance indicators and objectives, conducts a materiality analysis.
In order to demonstrate the commitment of the Deutsche Post DHL Group to the community in
which it operates, DHL participates every year in the Global Volunteer Day (GVD) program. Global
Volunteer Day is a global initiative designed to make a positive influence in the local communities in
which DHL operates and, simultaneously, encourages DHL employees to become involved in
volunteering. (DHL, 2020)
In 2015, more than 110,000 employees took part in more than 2,700 GVD actions globally.
During Global Volunteer Day 2016, companies in the Deutsche Post DHL group took part in an
extensive range of social projects that were addressed to various local needs. GVD's activities focus
on the group's main areas of social responsibility: GoGreen (environmental protection), GoHelp
(helping others in the event of natural disasters) and GoTeach (improving learning opportunities and
job conversion rates). (DHL, 2020)
Below it is structured DHL stakeholder’s matrix by degree of power and power of interest.

Task 3
a)
Since 1970 until now, the Romanian economy has undergone many changes, its structure changing
significantly in the last 40 years. Thus, during the communist period, industry was by far the most
important economic sector, being followed at a great distance by agriculture and services.
(Stanculescu, 2019)
The market economy is defined as that modern form of organization and functioning of the
exchange economy in which entrepreneurs carry out their economic activity freely, autonomously
and rationally, corresponding to market requirements in order to meet increasing needs, with
limited economic resources. (Stanculescu, 2019)
After 1989, the Romanian society experienced, from an economic and social point of view, an
unprecedented collapse, in terms of duration and depth. For over a decade Romania has gone
through a prolonged crisis, expressed both by the accentuation of macroeconomic and sectoral
structural imbalances, and by the persistence of gaps between supply and demand, existing in
significant proportions and in the 9th decade of the last century, against the background of waste.
national wealth, diminishing natural and human resources, falling production, labour productivity
and economic efficiency. (Stanculescu, 2019)
The transition to a market economy began at the end of 1989, without a previously developed
strategy. Relatively quickly, it was concluded that two landmarks are essential in transition: the
political landmark, marked by the project of multiparty, democracy and the rule of law, and the
economic landmark, which involved a reform process to reach a market-based economy, of the
capitalist type. These two landmarks have shaped the meaning of transformational processes from
the very beginning.
Regarding legality, the first phase aims at eliminating arbitrary state controls; the political section
aims at the beginning of the democratization of social life, the support of the freedom of the mass
media, the abolition of the totalitarian party, the establishment of broad coalitions favourable to
change; in the economy section, the liberalization of prices, the limitation of subsidies, the de-
collectivization of business, the spontaneous privatization are triggered, and regarding the external
aid, the support for the stabilization of the currency, the granting in emergency regime of some aids
or credits. (Stanculescu, 2019)
Thus, the economy evolved sinuously, with moments of advance followed by collapses, with large
fluctuations in production and inflation high persistence.
Capitalism mechanically produces unjustified inequalities that call into question the meritocratic
values on which democratic society is based. In democratic societies there are two major groups of
citizens:
For some, inequalities are growing, and the world is becoming unfair, for others, fewer, nothing
needs to be done to disrupt this happy current balance.

The need to solve economic and social problems a systematic, methodical and scientific research
approach. Democratic debates should be well documented and based on issues concrete, real
Without real accounting and financial transparency, without exchange of information there can be
no economic democracy. It is difficult to organize common life in a world where everyone claims to
set its own tax rate. Information must feed fiscal and democratic institutions; it is not an end.
From a behavioural point of view, the poorly structured economy is characterized by an accentuated
atrophy of the demarcation between its official part registered (accounted economy) and its
accompaniment not included in national accounts. The relativization of this demarcation makes it an
extremely difficult macroeconomic management.
Capital is a fundamental macroeconomic notion through size and role. Capital are factories,
equipment, buildings, stocks of materials and semi-finished products used in the production of other
goods and services. The capital stock is influenced by two flows of basis: investments and
depreciation.
The investments materialize in the acquisition of new capital goods by companies.
The fact that the poorly structured economy is characterized by stability low expectations makes the
level of transaction costs excessively high. The reverse of this phenomenon is the drastic
depreciation of fixed capital and maintaining high interest rates. The prevalence, for the same
reason, of the short time horizon in allocation decisions further limits investment, blocking medium
and long-term dynamics.
b) Any macroeconomic problem has both a positive, complementary lateral and an adverse,
unbalancing lateral. Inflation is a negative side of the monetary economy, because is affecting all the
contemporary economy negative sides: recessionary crises, unemployment, budgetary shortages,
outside deficits (trade and payments). (Stanculescu, 2019)
Modern macroeconomic experience has revealed five targets of economic policy, which aim at the
dynamic, increasing balance of the economy. These are:
- sustainable economic growth;
- employment;
- price stability;
- budget deficit;
- balance of payments balance and current account deficit.
The macroeconomic environment is an integrated system of economic and social activities and can
be characterized by a series of indicators such as: growth rate of the economy (gross domestic
product), interest rate, inflation rate, currency exchange rates, etc. The phenomena reflected by
these indicators indirectly influence the situation of companies and the strategies that their
managers must design. Thus, a high rate of economic growth leads to the expansion of consumption
and, thus, to the decrease of competition, or, a low interest rate can determine the increase of the
solvent demand for certain products, especially when they are purchased with loan funds. The
macroeconomic environment has a strong impact on the management of companies, whether they
hold public or private capital.

For example, a budget deficit may be accepted to encourage growth towards the level of potential
GDP, or the objective of price stability may impose a temporary deviation from the objective of
economic growth.
Under the pressure of the electoral set, compromises related to economic growth, budget deficit are
often accepted or external balance, in order to stimulate employment or to stabilize prices, so that
the image of the political factor is as positive as possible.
During inflation, the company must pay more for its resources and must cover higher costs,
increasing product prices.
When interest rates are high, customers are less willing to borrow money, and the company itself
must pay more when it borrows.
When unemployment is high, the company can be very selective about contracts, but the purchasing
power of consumers is low because there are fewer people working.
In the case of employment, for example, DHL continues to improve employability for disadvantaged
youth worldwide through the GoTeach program and integrated the refugee initiative into the
program. For example, in 2018, there were 4,000 employment contracts signed by DHL with
refugees. (DHL, 2020)
However, for DHL, the main challenge is related to the labour force, especially for Bucharest, where
they faced an extremely competitive environment, especially for courier positions.
Due to the worldwide coverage and existence in almost every country, DHL is in a unique situation to
help the requirements of society.
DHL continues to keep abreast of legislative changes or social and political challenges, and what
needs to be emphasized is that they have not affected the company's commitment.
The courier market is very dynamic, registering an increase in volumes, especially as a result of the
growth of existing customers and the expansion of current investments, more than the emergence
of new ones. Also, the customers of this market are more and more demanding when it comes to
the quality of the services offered, and DHL continues to invest in quality, in order to preserve its
leading position on this market and to meet the increasingly demanding requirements from
customers. (DHL, 2020)
The growth of this market is also due to the spectacular evolution of the ecommerce segment, and
the investments that DHL makes permanently in its network, place the company in an ideal position
in terms of capacity to meet the demand on this market, both in Romania and internationally.

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