Case Study on DHL

DHL was formed in 1969 by three friends, Adrian Dalsey, Larry Hillblom, and Robert Lynn, in San Francisco. Originally, the company was in business to take ships documentation by air from San Francisco to Honolulu (carried by the founders themselves) so that cargoes could clear customs before the ships arrived, thus saving days of waiting in the harbour while customs officials processed paperwork. By 1974, the company had 3,000 customers and 314 staff. In that year DHL opened its first overseas office in London. At this stage, all the company carried was important paperwork and documents, sending these with an individual courier by air so as to be absolutely certain of delivery, rather than entrusting them to the mail services. It was not until 1979 that the company branched out into moving parcels as well. Nowadays, DHL is known as one of the most reliable delivery services in the world. In 2002, the company was bought out entirely by Deutsche Post, the German postal service, leading to considerable rationalisation between the two businesses: the former Parcels division of Deutsche Post is now part of DHL, for example. The company is now organised into five divisions: DHL Express, which deals with urgent parcels: DHL Freight, which deals with heavier loads and part-loads (thus making efficient use of the companys fleet of trucks and aircraft): DHL Global Forwarding, which supplies logistical solutions for moving parcels and freight worldwide: DHL Exel Supply Chain, which supplies consultancy services and support in logistics, storage and sales: and DHL Global Mail, which is in effect an alternative post office for the world. To do all this, the company employs nearly 300,000 people worldwide, has 420 aircraft split between four separate airlines, 6,500 offices, 76,200 vehicles, and 450 hubs, warehouses and terminals. DHL ships 1.5 billion shipments per year throughout the world to 120,000 destinations. DHL even has its own delivery boat for Venice, and uses canal barges and bicycles to deliver in Amsterdam. For DHL, the internet revolution might have seemed like a threat. As more and more documents are sent via email, and more and more transactions take place online, the need for postal services is diminishing. The companys original business, that of carrying important documents by personal courier worldwide, is in decline. However, the internet has created a massive increase in business for firms such as DHL because of the explosion in online buying. Delivery of purchases bought from internet retailers has proved to be the success story of the early 21st century, with delivery companies experiencing a bonanza. Not least of the advantages is that the delivery company works for many online retailers. Most e-tailers, as they are known, are struggling to make money, but it makes little difference to DHL which is successful and which is not; they all have to have the goods delivered by somebody. As a global company, DHL has its share of problems. Despite being German-owned, and headquartered in Europe (in Brussels and London) the company is often thought of as American, and bears the brunt of American foreign policy as do many others. In 2003, a DHL aircraft flying from Baghdad was hit by a surface-to-air missile and had to turn back the crew managed to land safely, despite only being able to control the aircraft by using the engines. DHL can, and does, deliver virtually anywhere not being an

American company, it is not subject to Amercan embargoes and therefore delivers to Cuba and North Korea. On the environmental front, such a large company inevitably creates a lot of pollution, but DHL are very active in minimising their environmental impact. The company is gradually converting its vehicles to run on natural gas rather than petrol, for example, and seeks to offset its pollution from aircraft by reducing its carbon footprint on the ground. DHL has come a long way in only forty years by providing a good service based on real customer need. Reliability, consistency, and a positive approach have given it an unbeatable advantage over the public mail services it replaces. Questions 1. You are to assume the role of marketing assistant to DHL. Your boss has asked you to produce a report on DHLs business environment.
2. Ways in which DHL might monitor its internal and external environment Possible threats the company

might face in the future Sources of information about the environment