Strategic Analysis of Royal Mail Group: BUS3001 Report, 2017

This report presents a strategic analysis of the Royal Mail Group, examining its internal and external environments. It utilizes frameworks such as PESTLE analysis, Porter's Five Forces, and value chain analysis to assess the company's strengths, weaknesses, opportunities, and threats. The report identifies key strategic issues facing Royal Mail, analyzes its resources and competitive advantages, and evaluates its current competitive strategy, recommending improvements. The analysis covers various aspects, including political, economic, social, technological, legal, and ecological factors, as well as competitive forces and the value chain's primary and support activities. The report also highlights the company's resources and unique capabilities, relating them to its competitive advantages. Furthermore, it explores generic strategies like cost leadership and differentiation, suggesting a differentiation strategy for Royal Mail. The report concludes with recommendations for improvements, emphasizing technological advancements and market research.

STRATEGIC ANALYSIS

INTRODUCTION
Strategic analysis plays a crucial role in effective functioning of an
organisation. It helps in identifying the strengths and weaknesses held
by the entity (Song, and Tsai, 2017). In addition to this, it renders
assistance in examining the external micro and macro factors that can
impact upon the business. With this understanding firms can gain
competitive advantage. In the present report, the significance of
strategic management will be evaluated. Besides this, various factors
that can have impact on the effective business functions will be
analysed. For this examination some tools that will be used are
PESTLE, Porter's five force analysis and value chain analysis.
For the present undertaking, the entity selected for the analysis of
strategies is Royal Mail Group. All the internal and external factors that
can impact upon the entity will be analysed in this report. Further, some
major issues of firm will be identified and strategies will be prepared
for their evacuation.

PESTLE Analysis
 Political Factors:The impact of political factors on the effectiveness
of a business is the biggest.
 Economical Factors: These factors involves the broader economic
factors that can impact upon the effective functioning of a business.
It involves the current interest rate, growth rate, GDP, etc.
 Social Factors: These are the societal influences that may or may
not support a business. In context to the present case, they are not
favourable for the growth of Royal Mail.

 Technological Factors: The impact of terotechnological factors is
major in terms of the selected firm. The chosen entity deals on
mailing and parcel shipping which is nearly replaced due to the
advancements in the technology.
 Legal Factors: The legal factor were always in support of the Royal
Mail. It should be noted that even after the privatisation, the entity
keeps various legal obligations that are not present to the other
competitors (Schutte, and Barkhuizen, 2016)
 Ecological Factors: The losses to the environment due to this
company are minimum. The only source affecting the environment
is associated with the transportation services.

Porter's Five Force Analysis
 Rivalry among competitors : This force direct influence over the
profitability of the company.
 Bargaining power of buyers: Bargaining power of buyers should be
low for achieving the desired busies objectives.
 Bargaining power of suppliers :This is the power of the suppliers
that renders the raw material to the organisation. In context to the
present company, the it is very low.

 Threat of new entrants :It is the readiness of people to come in the
same or relevant business operations. The selected organisation
belongs to transportation, shipping sector which requires high
investments,
 Threat of substitutes: It is the fear of new business which can
replace the present one. This substitution is very dangerous for an
organisation.

Value chain Analysis
 Primary Activities:
 Inbound Logistics: In Royal Mail, there are so many such
activities that are played such as collecting letters/parcels from
various stops, assembling and sorting, etc.
 Outbound Logistics: In context to the selected firm, it has been
observed that there are also some outbound operations which are
performed. It involves the collection of parcels/letters etc. at a
place according to their delivery location.
 Marketing and Sales:In context to the Royal Mail, there are less
promotional methods used. It is because of the strong brand image
which is highly recognised by the people of country.
 Service: Royal Mail superior after services to it's buyers.

 Support Services:
 Infrastructure: The entity has recently installed an account
management systems to eliminate the manual errors on the
finances. This will help both he consumers and the entity.
 Technology Development: The selected entity, Royal Mail lacks in
the technological development due to which the business value is
getting hampered. Hence, company should pay focus on the digital
development.
 Human Resource Management: The practices and policies of the
selected origination are observed to be effective.
 Procurement: It is the acquisition of goods, services or works from
external sources to expands the business size.

Critical success factors of the industry
 Critical success factors or CSF are essential for an entity to
achieve its organisational goals and objectives. In context to the
present organisation, these success factors involves the effectiveness
of the services. The companies belonging to this industry should
perform their assigned tasks within an stipulated time period.
Delivery of he letters, parcels should be on time. Also, customers
are required to be provided with the quality services (Fan, and et. al.,
2017)
 Also, they should follow all the legal obligations associated with
the transportation, shipments, etc. In addition to this, the industry
can ensure success if it develops its market on the basis of needs
and demands of the people. These are those action phrases that
should be performed well to achieve the mission, objectives and
goals of the business.

Resources and unique capabilities
of selected organisation
 Parcels: The entity has taken some initiative to simplify the
procedure in which customers can take their parcels. Further, the
selected firm aims on existing its market within the existing
consumers. This will help in increasing the quality of services to gain
the trust and loyalty of people.
 Letters: In context to the services of the letters, the company ensures
the effective delivery on time. They further aims on maintaining high
quality services that can boost the satisfaction of customers. The
marketing mail revenue is highly focused by the Royal Mail.
 Customers: The chosen firm understand their customers as their key
assets. Their loyalty is the major goal to be gained. For this, the
development of the services depends upon the needs and demands of
customer.

Relation between the capabilities of
Royal Mail Group and advantages
 The quality services of the Royal Mail will help in assuring the
attainment of satisfaction of customers. This trust will then help in
increasing sales of the firm. In addition to this, the capability of the
firm, to handle large sized parcel will be utilised by various people
and other entities. There are many things which are transported.
 The investments made by the entity for the enquiry offices will
help in improving the experiences of the customers. This will later
increase their trust for the Royal Mail. Consequent to this, the
organisation will observe rise in the profitability. In addition to this,
the expansion of local collect network is also a great initiative that
the company is taking. This will improve the reach of customers to
the enquiry offices of the Royal Mail.

Porter Generic Strategy
Cost Leadership: It is the most effective method that Royal Mail Group can use
to gain the advantages over the key competitors. There are two methods of
achieving this. The first is to increase profits by reducing the cost associated
with the resources. This is to be done while charging industry average prices.
The other way that Royal Mail can use to attain cost leadership is to increase
it's market share through charging low prices of the services
Differentiation: According to this theory, Royal Mail is suggested to produce
such services which are different from other and looks more attractive than
those of the competitors.
Focus: Entities which selects focus strategy as their tool are concentrated on the
niche markets. They are of two types namely cost and differentiation
depending upon the situations of the organisation.

 The selected organisation is highly recommended to followThe selected organisation is highly recommended to follow
differentiation strategy. It bas been observed that there is lowdifferentiation strategy. It bas been observed that there is low
completion in rte market and consequent to this, the buying power iscompletion in rte market and consequent to this, the buying power is
already low. However, to increase the market sales Royal Mail isalready low. However, to increase the market sales Royal Mail is
suggested to develop some innovative services to gain competitivesuggested to develop some innovative services to gain competitive
advantage. The suggested strategy for differentiation is the addition ofadvantage. The suggested strategy for differentiation is the addition of
digital and highly advanced systems that can simplify the consumerdigital and highly advanced systems that can simplify the consumer
and organisational procedure. Also, it will help in reducing the manualand organisational procedure. Also, it will help in reducing the manual
errors.errors.

Evaluation of the effectiveness of
strategies using SAFe tests.
 Suitability: The rationale behind this goal is to gain competitive
advantage. As the sector is already have low influence of the
buying power. Thus variations in the cost will not be good option
to develop strategies upon (Groves, and Cape, 2016). Also, the
selected plan is will attract the consumers by rendering them with
innovative services.
 Feasibility: There are three tools that can be used by Royal Mail to
evaluate the effectivenesses of the selected strategy. These are as
follows: Cash flow analysis, break-even analysis and resource
deployment analysis.
 Acceptability: Development of the services as per the needs and
demands of the customers will not only bring financial profit to the
firm but also it will help in gaining the consumer satisfaction.

Recommendations for
improvement
 There are numerous tools that Royal Mail can make use of for
reducing the business challenges that are being faced by it. It has
bee identified that the technical lacking factors can be filled with the
development in this sector only. For this, the entity is suggested to
introduce new digital equipments that can increase its profitability.
In addition to this, to ensure appropriate development of the
services, the Royal Mail is recommended to perform effective
market research and development techniques.