Introduction

Globalization and technological advances have undermined economic change as the

world has discovered new successes. This essay is titled Strategic Management of
the Deutsche Post DHL Group Business. This essay focuses on the company's
strategic plan to get a better understanding of it. The essay outlines the industry
structure, the Porter’s five forces of analyses, and the competitive advantage for
strategies, governance ethics, corporate social responsibility, strategic innovation
and strategic capabilities. And finally, analyze the conclusions about Deutsche Post
DHL Group Business.

Global overview of the Logistic Industry

In the current scenario, the global supply market has emerged and result of that
integrating demand side and supply side trends. In addition, initiatives aimed at
increasing global trade activity have expanded the demand for supplies to meet the
growing needs of importers and exporters. According to the latest report, the global
logistics market reached USD 4,730 billion in 2018 according to the "Logistic
Market: Equity, Global Industry Trends, Size, Growth, Opportunity and Forecast
2019-2024". As expected, the market value is US $ 6,300 billion by 2024, with a
CAGR of 4.9% registered for the period 2019-2024. (Research and Markets, 2020)

Deutsche Post DHL Group

In the case of logistics, DHL is a leading logistics service provider. It was founded in
1969 by Adrian Dolsey, Larry Hilblom and Robert Lynn. But today DHL is one of the
world's leading logistics companies. 380,000 employees in more than 220 countries
reach new markets and grow your business. DHL specializes in a wide range of
sectors and sectors and provides solutions to meet the supply requirements of the
industry. DHL is at the forefront of sector development and the portfolio is
constantly tailored to your needs. (Research and Markets, 2020).

Their product families are by express, parcel, mail and sameday by air freight,
ocean freight, road freight and rail freight. Their solution families are ecommerce,
management service, warehousing, integrated and transport.

Figure 1: DHL products and solution portfolio (DHL, 2015)

According to Porter's Five Power, power analytics capabilities vary from industry to
industry. Generally, the structure of an industry is stable but may change over
time. Using Porter's five-force model, DHL can analyze the industry in which it
operates, taking into account the attractiveness of the profit margin. (Murphy,
2018)

How can DHL address the threat of newcomers? DHL can take advantage of
industry-scale economies to take advantage of the cost to fight newcomers. DHL
can focus on innovations for marketing costs. It can then be used to identify strong
brands. (Murphy, 2018)

How does DHL address supplier bargaining power? If some products are not
compatible with DHL, DHL will be able to transfer those products or obtain them at
a lower cost from suppliers. This is because the cost of switching is low. (Murphy,
2018)

How does DHL deal with buyer bargaining power? DHL is focused on innovation and
differentiation. The reason is to attract more buyers. Generally, quality and product
differentiation are important for industry buyers. It can attract customers. Also,
marketing efforts aimed at building brand loyalty weaken the bargaining power of
buyers, so DHL must build a customer base. DHL is able to grow its cost advantage
and sell it to low-income people in the low-cost industry. (Murphy, 2018)

How does DHL address the threat posed by substitute products? While DHL focuses
on delivering the highest quality of its products, buyers choose their products to
achieve greater quality. But it's a lot cheaper compared to the higher priced
options. Product focus can be changed, and DHL ensures that its products are
unique and not easily transferred to DHL instead of products that do not benefit
from it. Market research can help you better understand customer needs. (Murphy,
2018)

How can DHL deal with rivalry between existing companies? DHL has a lesser
impact on competitors' actions to change their products. It can focus on new
customers. As the industry grows, it can focus on new customers rather than
winning them from existing companies. (Murphy, 2018)

In this way, DHL looks at the strategic plans of its competitors. Understanding
market activities and competitors and understanding the business sector has been
identified as an important area of customer analysis. Generally, it is difficult to
identify competitors, so competitors are analyzed. But it is not easy to identify
potential competitors.

Customer satisfaction, high-tech, logistical services, good pay and green initiatives
are all strengths and opportunities that are considered DHL's competitive
advantages. Weaknesses include liability insurance, which can lead to loss of
customers, and increased workload. The evidence also confirms that DHL continues
to provide economic benefits while staying safe. There is stiff competition from UPS
and FedEx, who have DHL. As far as marketing campaigns are concerned, DHL
doesn't brag about spending too much on branding compared to UPS and FedEx.
(adamkasi, 2018)

Innovation through DHL is carried out in two ways. The first uses today's
technology to develop more energy efficient and more robust solutions. Second, it
seeks to develop alternative technologies. (Fink, 2016). DHL is increasingly
interested in innovative solutions that help streamline operations and keep pace in
this highly dynamic marketplace. When they look at each other:

 Customers and large-scale storage systems that pay close attention to after-
sales services.
 Innovative cycles and various sales channels can increase the market
demand for mobile devices and mobile phone providers. Also offer fast after
sales service.
 Imagination and printing expertise Re-managed by GOGREEN Law
Enforcement, a high-tech distributor with multi-channel distributors for
printing machine stationery manufacturers.
 Making supply chains more complex for manufacturers of semiconductor
chips and processors. Also, the need for capital equipment supplies through
wafer processing and VAT optimization solutions.
 Increasing demand for data capacity is leading to increased network demand
by project-based enterprises with specific logistical challenges operating in
emerging markets for telecommunications infrastructure developers.
 Retailers and entertainment / audio-visual devices that can be used to deliver
cost-based delivery through the ocean / road transport and regional
distribution center structure can be made in a highly competitive market with
short production cycles and rapid follow-up.
 Focus on partnering with supplier suppliers to enable broader footprint in the
aftermarket, logistics, sales channels, etc. for the design and manufacture of
electronic components and equipment. (DHL, 2020)

DHL has already taken great interest in the above mentioned innovations and
has already promoted it locally and globally. DHL has been named as one of the
Top 20 Companies to Work in Sri Lanka for 35 years.

DHL has been involved in several significant projects in Sri Lanka for decades,
with responsibilities as an integral part of the Deutsche Post DHL Group
strategy, under the Group's Gogreen, Gotech and Gohelp initiatives. (LBO,
2015). In the aftermath of the December 2004 tsunami under the GoHelp
program, DHL provided rapid relief and humanitarian assistance through its
Disaster Response Team, as an example of the DHL's continued support to Sri
Lanka during difficult times. Also in 2014, DHL in collaboration with the United
Nations Development Program (UNDP) organized a Disaster Ready Airport
(GARD) workshop. (LBO, 2015)

DHL focuses more on CSR. Their "Life Responsibility" model focuses on the
natural environment (gogreen). We also support the volunteer work of
employees on disaster (Gohelp) and education (GoTech) (Global Volunteer Day,
Life Responsibility Fund). (DHL, 2020)
Examples of several CR activities selected for DHL 2017 are, grade 01
workshops at 44 airports since 2005, DHL GoTeach Partnership with SOS
Children's Villages reaches 2,700 volunteers with 24,000 beneficiaries, About
398,000 volunteer hours in GVD activities, since 2007 32 % CO 2 efficiency
improvement, More than 60% of renewable energy sources are electricity,
Nearly two billion climate moderate shipments etc. (Bonn, 2018)

In line with the principles of the United Nations Global Compact, the Deutsche
Post DHL Group complies with the 1998 International Labor Organization's
"Declaration of Principles and Work Rights" in accordance with national law and
practice. (Deutsche Post AG, 2016)

However, the latest regulations are consent with the latest version of the Code
of Conduct: Those are: (all codes and policies) Anti-Corruption, Competition
Compliance, Code of Conduct for Suppliers, Corporate Health, Road Safety,
Deutsche Post DHL Group Data, Environmental, Paper, Guidelines for Dealing
with Insider Information (for internal purposes only) (Deutsche Post AG, 2016)

DHL's VRIO analysis will look at each of its internal resources one by one. Before
analyzing VIRIO, let's look at DHL's employees and financial resources. As of
December 31, 2018, DHL had a cash flow of $ 0.9 billion (target was for 2018
was $ 0.5 billion). As of December 31, 2018, DHL had a total workforce of
546,924 and positive rating for employee engagement KPI is 77% (target was
for 2018 was 76%). (Deutsche post AG, 2019)
Valuable, the first factor in VIRO analysis, has a wealth of valuable financial
resources to invest in and risk threats. Local food production is also a valuable
asset, as most of DHL's workforce is well-trained and a valuable asset to the
company. DHL's patents are a valuable asset, and the company acquires a
license when it is delivered to manufacturers. Having a good distribution
network is also a valuable asset to convert promotional activities into sales.
(Edwards, 2018). The second factor of VRIO analysis is that local food
production is not rare under rare. But the employee is well trained and skilled
and the work is rare for other agencies. DHL's patents are rare and some
licenses are not available to other competitors. DHL also has a rare distribution
network. (Edwards, 2018) The third factor of VRIO analysis, imitable, is that DHL
has long been a financial asset that is difficult to emulate. But imitating their
local food is not that difficult. Employees can also be trained by other agencies,
so it is not difficult to emulate. However, patent simulation is very difficult.
(Edwards, 2018). Under Organization, the fourth factor of VRIO analysis, DHL
has strategically organized financial resources to ensure sustainable competition.
But their patents are not fully organized because they do not use full
capabilities. However, DHL organizations have their distribution network well
organized. (Edwards, 2018)

According to the VRIO analysis, financial resources, distribution networks and

patents can provide a competitive advantage. But for workers and local food, it
seems to have a temporary advantage. However, cost and research and
development seem to have a competitive disadvantage.

Conclusion

Today, the logistic industry has become an essential service. The global
marketplace is well under way. There are also plans to expand the market for
the next four years. Deutsche Post DHL is also taking advantage of it. In
 general, the Porters Five force analysis shows that the company is doing well.
However, there is evidence that DHL is a company that embraces innovation.
This is because UPS and FedEx in the industry have a good competitive
advantage over competitors. It is very clear that GoGreen, Gotech and Gohelp
are new concepts. It also appears to be leading the way in CSR activities. But
according to the VRIO framework, financial resources and the distribution
network have a very competitive advantage. This is a very good progress. But if
DHL strategically utilizes the skills and training of its employees and utilizes its
patents effectively, it can have a competitive advantage.

References

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