Nur Syahirah Husaini Sameena Siraj Geetha A/P Valaidum Philominah Arkappan

GM 04674 GM 04558 GM 04556 GM 04502

COMPANY OVERVIEW
• Founded in San Francisco more than 40 years ago by 3 budding entrepreneurs - Adrian Dalsey, Larry Hillblom and Robert Lynn • DHL is the one of the global market leader in international express, overland transport and air freight • DHL offers integrated services and tailored, customer-focused solutions for managing and transporting letters, goods and information. • DHL’s international network links almost 220 countries and territories worldwide • Around 285k employees are dedicated to provide fast and reliable services that exceeds customer’s expectations in 120k destinations in all continents

MISSION & VISION
• Mission : to be the first choice worldwide • Vision : for the future is nothing less than to transform the logistic industry and to deliver beyond customer’s expectations.

NEW MISSION & VISION
• Mission : enhances the business of our customers by offering highest quality express and logistics solutions based on strong local expertise combined with the most extensive global network presence. • Vision : create and promote innovative logistics solutions that aims to deliver freight services that are beyond customers expectations

FedEx Mission & Vision
• "FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx Corporation will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards."

Mission & Vision supporting the Strategies
• DHL’s strategies :
– To intensify customer focus – To deliver consistent service excellence – To extent capabilities – To attract, develop and retain talent – To relentlessly drive efficiency – To be proactive in social

Mission & Vision supporting the Strategies
• Statements of vision and mission of the company are a manifestation of the commitment of achieving success as these statements drive strategy. Strategies are founded on these statements hence are considered the idea of purpose

Internal Assessment

Organizational Chart
Deutsche Post DHL

Corporate Center

Divisions

CEO (Dr Frank Appel)

Finance Global Business Services (Lawrence Rosen)

Personnel (Walter Scheurle)

Mail (Jurgen Gerdes)

Express (Ken Allen)

Global Forwarding Freight (Roger Crook)

Supply Chain (Bruce Edwards)

Market Positioning Map
High Distribution Network

FedEx UPS DHL Quality Service TNT City-Link Nationwide Moderate Service

Skynet

Low Distribution Network

DHL’s Marketing Strategy
• • • • • • • • • Aggressive promotion strategy (Promotion) Just in Time High quality service Advanced technological support Planning and scheduling Horizontal management practices Optimization of HR & OM (People) Location (Place) Product choice (Product)

DHL’s Website

DHL’s Strengths & Weaknesses
Strengths Strong Brand Image Globalism Technology pioneers Innovators Corporate Symbiosis Reach and Frequency Quick delivery due to dynamic route planning system Customers have control on what they purchase Excellent e-commerce services Clear visibility of supply chains all the time Weaknesses Not well-known globally High Tariffs High Prices Not fully operational in Domestic Markets Customer loyalty issues No difference of the services of DHL with competitors Weak to tap and venture against its potential domestically and internationally

Subject to stagnate market

IFE Matrix
Strengths Strong Brand Image Globalism W 0.12 0.08 R 4 2 WS 0.48 0.16

Technology pioneers
Innovators Corporate Symbiosis Reach and Frequency Quick delivery due to dynamic route planning system Customers have control on what they purchase Excellent e-commerce services Clear visibility of supply chains all the time

0.09
0.09 0.08 0.15 0.03 0.03 0.04 0.04

3
3 3 4 1 1 2 2

0.27
0.27 0.24 0.60 0.03 0.03 0.08 0.08

Weaknesses Not well-known globally High Tariffs High Prices Not fully operational in Domestic Markets Customer loyalty issues No difference of the services of DHL with competitors

W 0.10 0.08 0.09 0.12 0.02 0.03 0.04 0.03

R 3 1 2 3 1 1 2 2

WS 0.30 0.08 0.18 0.36 0.02 0.03 0.08 0.06

Weak to tap and venture against its potential domestically and internationally
Subject to stagnant market

TOTAL

1.00

2.67

Based on the results above, DHL’s Internal Factor Evaluation is slightly above average to their internal strengths and to abstain weaknesses.

External Assessment

Major competitors
• • • • • • Federal Express UPS City-Link International Nationwide Express TNT Express Worldwide Skynet Worldwide

DHL

FedEx

UPS

Less expensive than UPS or Generally more expensive Somewhat expensive but FedEx than USPS or DHL cheaper than FedEx

Offers fast delivery to some very quick delivery system locations.
Offers free boxes and other Provide shipping supplies, but only charge for their Air Express service (not DHL Ground). boxes free

Relatively fast delivery

of Insurance for valuables worth up to $100 is included free of additional charge.

Provides online tracking at Provides the most detailed no additional cost, but not online tracking system. as detailed as FedEx Ground, Express, and Freight shipping services are available, as well as extra fast same-day and overnight options.

Competitive Profile Matrix
FedEx W Service Quality Price Pressure
Strong consumer orientation, segmented approach Completeness of service Good quality for a competitive discount price Reputation Advertising After sales service Customization Total

UPS E 0.52 0.45
0.30 0.27 0.36 0.33 0.20 0.16 0.24 2.83

DHL E R 2 2
2 1 2 1 4 1 2

R 4 3
3 3 3 3 2 2 2

R 3 3
3 3 4 1 3 1 4

E 0.26 0.30
0.20 0.09 0.24 0.11 0.40 0.08 0.24 1.92

0.13 0.15
0.10 0.09 0.12 0.11 0.10 0.08 0.12 1

0.39 0.45
0.30 0.27 0.48 0.11 0.30 0.08 0.48 2.86

The result shows UPS is dominating on critical success factors because the total weighted score is higher compared to FedEx and DHL

PESTLE Analysis
• Political Environment
– Europe is a stable environment where no major political changes are expected. – European Union has removed border lines and has made trade and business more accessible – Enable bigger exports, free movement of services.

Economical Environment
– companies should not stop their investment plans because of economic crisis. – It is important in current situation to strengthen position in the market and expand if possible. –Emerging markets represent a potential of rapid economy growth. –E.g restructuring or outsourcing –reduced cost

Socio-cultural Environment
• affect customers' needs and wants • Research & Development - to respond to changes in society quickly not to loose market share and demand for services. • Customer satisfaction surveys, market surveys, employee surveys play important role in building company's brand and image in the market.

Technological Environment
• IT is the most important technology factor for logistics business because speed and reliability are equal to success. However, there is an indisputable constant threat of falling behind. • Investments to the modernist technologies are evitable and in times of economic crisis are much more important then anytime before. • Company has to decide if it runs internal IT organization or if it outsources most of the services and reduce cost.

Legal Environment
• obligations - directives, taxes and rules that they must be aligned with to be able to operate in the market. • Liberalization - Removal of border lines enabled building and strengthening of positions in the logistics market. There are no special and expensive authorizations necessary in CEP industry which is another benefit for companies

Environmental Analysis
• Air pollution globally – transportation industry • Projects have been implemented – smart truck project

External Analysis
Opportunities Threats

Global Expansion
JV with foreign countries’ local transportation companies Expansion of E-Commerce Increasing number of manufactured goods Delivery products from city to city Creation of new market segmentation Largest world sector

Rules and restrictions of other countries
Competitors improvising DHL’s strategies Economic and Political condition of the country Insurance costs New Tax System Increase in fuel price Tough competitors

EFE Matrix
Opportunities Global Expansion JV with foreign countries’ local transportation companies Expansion of E-Commerce Increasing number of manufactured goods Delivery products from city to city Creation of new market segmentation Largest world sector W 0.08 0.08 0.07 0.08 0.07 0.07 0.07 R 3 3 2 3 2 3 3 WS 0.24 0.24 0.14 0.24 0.14 0.21 0.21

Threats Rules and restrictions of other countries Competitors improvising DHL’s strategies Economic and Political condition of the country Insurance costs New Tax System

W 0.06 0.05 0.06 0.08 0.07

R 2 2 1 3 2

WS 0.12 0.10 0.06 0.24 0.14

Increase in fuel price
Tough competitors Total

0.08
0.08 1

2
1

0.16
0.08 2.32

Based on the results above, DHL’s External Factor Evaluation is below average to the environment for exploiting opportunities and to overcome threats.

Strategy Formulation

SWOT Analysis
Strengths • Strong Brand Image • Globalism • Technology pioneers • Innovators • Corporate Symbiosis • Reach and Frequecy Opportunities SO Strategies • Global Expansion • Advertise new technologies • Joint Ventures and online ordering system • Expansion of E-Commerce (S2,S3, O4) • Increasing number of manufactured goods Threats ST Strategies • Rules and Restrictions • Economic and Political condition • Slow and stagnant economic growth • Relationship with foreign countries • The increase in fuel prices Weaknesess • Not well-known globally • High Tariffs • High Prices • Not fully operational Domestic Markets WO Strategies • Create joint ventures with local logistics companies (W1, O1, O2) • Promoting business in China and India (W1, W4, O1) WT Strategies

in

• Promotions when using • Acquire small local online ordering system during companies abroad to catch up economic slow-down or with competitors (W1,W4,T4) restrictions (S2, S3, S6, T1, T3) • Enhance the Smart-Truck Project to overcome fuel price increment (S3,S4,T5)

SPACE Matrix
A SPACE MATRIX RATINGS Financial Strength (FS) Revenue 4.00 Cost reduction 2.00 Asset utilization 3.00 Industry Strength (IS) Technology Savvy 6.00 Large distribution network 5.00 Brand 4.00 Environmental Stability (ES) Risk in business -3.00 Increase in fuel prices -2.00 High rivalry in market -5.00 Competitive Advantage (CA) Innovation -4.00 Service quality -5.00 Product choice -3.00 CONCLUSION Directional Vector X-axis: CA + IS = -4.00 + (+5.00) = 1.00 Y-axis: FS + ES = 3.00 + (-3.33) = -0.33 Strategy to pursue is Competitive Strategies TOTAL AVERAGE 9.00 3.00

15.00

5.00

-10.00

-3.33

-12.00

-4.00

SPACE Matrix
FS Conservative Aggressive

CA

IS

Defensive

Competitive

ES

BCG Matrix
• DHL has been analyzed in 3 categories of its businesslike – mail, express and logistic • 1) mail – market growth rate

• DHL Market Growth Rate
53212 – 40935 X 100% = 40935 30%

BCG Matrix indicates that DHL is placed in Cash Cow. This means DHL’s market growth rate is low, but its market share is high so it should milk as much profit as possible

BCG Matrix

Grand Matrix Strategy
Rapid Market Growth

Weak competitive position

Strong competitive position

Slow Market Growth

QSPM
STRATEGIC ALTERNATIVES Expand business & acquire more logistics companies domestically and internationally AS TAS 0.24 0.16 4 4 0.32 0.32 Enhance & focus on innovation AS TAS 3 2 0.08 0.07 0.08 0.07 0.07 0.07 3 3 0.21 0.24 3 4 0.21 0.32

Key Factors Opportunities Global Expansion JV with foreign countries’ local transportation companies Expansion of E-Commerce Increasing number of manufactured goods Delivery products from city to city Creation of new market segmentation Largest world sector

Weight

0.08

Threats Rules and restrictions of other countries Competitors improvising DHL’s strategies Economic and Political condition of the country Insurance costs New Tax System Increase in fuel price Tough competitors Total Strengths Strong Brand Image Globalism Quick delivery due to dynamic route planning system Customers have control on what they purchase Excellent e-commerce services Clear visibility of supply chains all the time Technology pioneers Innovators Corporate Symbiosis Reach and Frequency

0.06 0.05 0.06 0.08 0.07 0.08 0.08 1.00 0.08 0.07

2 3 4

0.12

3 2 4

0.18

0.24 0.32

0.16 0.32

0.03
0.03 0.04 0.04 0.07 0.07 0.06 0.09

3 2 4 4 3 2

0.24 0.14

3 4 -

0.24 0.28

0.28 0.28 0.18 0.18

3 3 4 4

0.21 0.21 0.24 0.36

Weaknesses Customer loyalty issues No difference of the services of DHL with competitors Weak to tap and venture against its potential domestically and internationally Subject to stagnate market

0.02 0.03

-

-

0.04
0.03 0.07 0.06 0.08 0.09 1.00 2 2 3 4 2 2 3 3

Not well-known globally High Tariffs High Prices
Not fully operational in Domestic Markets Sum Total Attractiveness Score

0.14 0.12 0.24 0.36 3.69

0.14 0.12 0.24 0.27 4.14

Recommendation
• Enhance & focus on innovation
– Make difference to have new customers and increase their half market share – Making little difference on the current product or services to be better – Delivery will be faster and cut cost by using less fuel

Recommendation
• Expand business & acquire more logistics companies domestically and internationally
– By acquiring small local companies in different countries like China, India, USA, will give presence in that countries. – Creative solution for problems and acquiring new brain

Strategy Implementation

EPS/EBIT ANALYSIS
• Earnings per share: Year 2011 € 1Y(Million) Q4(Million) • EBIT 2436 599 • EPS 0.96 0.14 (0.82 for 9 months)

EPS/EBIT ANALYSIS
• Earnings per share: Year 2012 (9 Months) € (Million) Mail : €678 • EBIT 1838 Express €829 Freight €346 • INTEREST 270 Supply Chain €301 • EBT 1568 Others €-315 Consolidation €-1 • TAXES 452 • EAT 1116 • SHARES 1209 • EPS 0.92

EPS/EBIT ANALYSIS (assumption)
Capital needed EBIT range Interest rate Tax rate Stock Price Shares outstanding € 5000 million € 2000 to 4000million € 5% 25% € 15.20 € 2019 million

EPS/EBIT ANALYSIS (assumption)
100% DEBT EBIT INTEREST EBT TAXES EAT SHARE EPS 2000 250 1750 438 1312 2019 0.65 4000 250 3750 938 2812 2019 1.39 100% STOCK 2000 0 2000 500 1500 2348 0.64 4000 0 4000 1000 3000 2348 1.28 50/50 DEBT/STOCK 2000 125 1875 469 1406 2184 0.64 4000 125 3875 969 2906 2184 1.33

EPS/EBIT ANALYSIS (CHART)

CONCLUSION: THE BEST FINANCING ALTERNATIVE IS 100% DEBT SINCE THE EPS VALUE ARE LARGEST; THE WORST FINANCING ALTERNATIVE IS 100% STOCK SINCE THE EPS VALUES ARE LOWEST.

RATIO ANALYSIS OF DHL
2012 12750 13449 2013 20000 18600 1.08:1 29161 64264 45.38%

Current Ratio € =

0.95:1 Debt Equity ratio € = 22929 34544 66.38%

RATIO ANALYSIS OF DHL
2012 1838 40935 4.49% 1196 40935 2.92% 2013 3701 53212 6.96% 2386 53212 4.48%

Return on Sales € =

Return on Asset € =

FUTURE ASSUMPTION BY DHL
• The group intends to generate annual EBIT growth by an average of 13to 15% through 2015 • EBIT Range 2.6 to 2.7billion • Dividend Payout ratio will be 40 to 60% • Number of employees in 2012 ( 426,104) tend to increase by 10% in 2013

FUTURE ASSUMPTION BY DHL
• CEO of DHL Logistics, enhancing the SmartTruck Project is going to be his first strategy. This project will allow their company to deliver faster and cut cost by using less fuel. • To achieve this goal, we will follow some steps: a)Increase the budget of R&D 10%. b)Prepare an office for a new innovation team and assign a leader to work on this project

The Financial Perspective
Strategic Themes Strategy Cost Revenue Growth & Reduction/Producti Mix vity Improvement Strategic Objective Improve Market Penetration Growth Improve wallet share Improve market share Ensure Loyalty Improve Revenue Productivity Improve Channel Mix Reduce Operating Expenses Efficient use of resources Asset Utilization

Strategy Evaluation – Balance Scorecard

The Financial Perspective
Strategic Themes Strategy

Cost Revenue Growth & Reduction/Producti Mix vity Improvement
Strategic Objective Improve Market Penetration Improve Revenue Productivity

Asset Utilization

Efficient use of resources

Growth

Improve wallet share
Improve market share Ensure Loyalty

Improve Channel Mix
Reduce Operating Expenses

The Customer Perspective
The Customer Value Preposition Strategy Product/Service Attributes Image and Reputation Strategic Objectives Customer Relationship

Price/Performance
Growth Ease of Use Product Availability

Brand Image
Brand Equity

Contractual Responsiveness
Flexibility Honesty Openness and

Buying Experience
Customer Feedback

The Business Process Perspective
Types of Business Processes

Strategy

Innovation

Operations
Strategic Objectives

Post-sales Service

Identify emerging Reduce needs of customers fulfillment time

order Enhancing support cycle centres

Growth

Improve Response time for communication solving customer process between problems customer and company

Learning and Growth
Categories Strategies

Employee Capabilities

Information System Motivation Capabilities Empowerment and Alignment
Strategic Objectives

Growth

Strategic skills Improve Intellectual Staff Empowerment (improve selling Property skills, analyst skills, technical support)

Skill (multiple selling)

leverage Tracking privacy product

Personal goals alignment with corporate goals
Morale

Conclusion
• DHL already established themselves and holding the third largest logistic company in the world • Based on all the strategies matrix above, will be able to aid DHL future performance and overtake their competitors

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