Dhl Company Analysis
International Strategic Management
Strategic management as a discipline entails setting goals, procedures, and objectives with an aim to make a company or an organization more competitive. This phenomenon entails evaluation of the strategy brought forward, internal organization analysis, and the strategic execution throughout the company. Strategic management is therefore an ongoing process that is aimed at taking the organization to the level that it wishes to get. Concerning the Dalsey Hillblom and Lynn (DHL) company, this paper discusses the international strategic management concept while adopting a global perspective of the subject matter. In doing this, the paper is divided into four sections with the first section discussing the vision, mission, and purpose of the company, and an analysis of why and how the company carries out international environment analysis in the second section of the paper. The third and fourth sections of the paper present the evaluation of the international strategic development of a company, and a discussion of the importance of strategic implementation. The paper will have a conclusion and key recommendations on how the company will develop its strategy in the future to help in international strategic management.
Section One Analysis
This part of the paper discusses the vision, mission, and purpose of the company, and presents a brief appraisal of its current international strategy and its corporate social responsibility policies. It is one of the areas a capstone project writer like myself would perfectly craft.
DHL Company Vision, Mission, and Purpose
By definition, a mission statement defines a company’s business, its objectives, and its approach to reaching those objectives. The mission statement for the DHL company is to contribute to making the world better. The mission statement of the DHL company consists of four elements that are to make customers, employees, and investors more successful, show respect while achieving high scores, facilitate and simplify the lives of its customers and make the world better. The vision statement for the DHL company is to be a post office in Germany and a logistic company to the world. The company exists to serve the purposes outlined in the mission elements. Specifically, the DHL company exists to serve the purpose of enabling global trade through connecting people and markets across the globe.
In delivering its mission, the DHL company serves the purpose of connecting people and markets across the globe. The company has a global network of 220 countries and territories and 275,000 employees. The company offers service and always works towards delivering quality service to all its customers across the globe. The DHL company aims to be internationally known as a highly customer-centric company with high-quality leadership. The activities and the pursuits within this company are therefore aligned to this. The DHL company thus serves the overall logistics purpose with a motivation for profits and growth on the quantitative side and serving its purpose through quality service on the other hand. The international presence opens up the company’s strategic aim through its management to a global view and therefore pursuit towards achieving this. Being in operation in many countries, DHL is a company that undertakes strategic management from an international perspective and learns to apply it across all the facets of the company’s operations.
DHL Corporate Social Responsibility Policies
Corporate Social Responsibility (CSR) refers to the commitment of a company to ensure a concerted effort to operate in ways that enhance society and the environment other than degrade these two elements. Corporate Social Responsibility helps the overall society and builds the brand image of the companies. This concept serves the purpose to enable the company to give back to society, provide positive social value, and take part in the philanthropic causes of society. Corporate Social Responsibility gives the country the avenue to practice the qualitative aspects of its aims and objectives. The Corporate Social Responsibility concept entails environmental responsibility, ethical responsibility, philanthropic responsibility, and ethical responsibility. This concept incorporates the wholesome perspective of the company in society.
For the strategic aim of companies and the contribution these companies aim to get from practicing corporate social responsibility, the company has policies to govern this crucial aspect. Through CSR a company gains increased employee satisfaction, improved public image, and increased customer loyalty. Customer loyalty in ins case is due to the aim to showcase the company’s values, demonstrate teamwork, and the commitment of the company to involvement in the community. This improves the customer’s perception of the company and makes the strategic shift for the overall international strategic management. Through CSR also, the company tends to gain the exposure it looks forward to, and with this comes innovation and the urge to get new ways to make things better. For any company, CSR is a win situation for both internal stakeholders and the external stakeholders of the company. The concepts prove value addition and therefore alignment to expectations and perceptions.
As a company, DHL’s corporate social responsibility policies involve the Go Green policy that is aligned to the environment, Go Help for community support, Go Teach for education corporate social responsibility activities, and the Living Responsible Fund that supports the global volunteers’ day. The programs are therefore aligned to the four facets through which CSR is practiced that is the environment, ethics, and philanthropy. DHL is a company with a balanced perspective of its customers and puts its profits and expansion agenda and also gives the people the chance to gain from the company.
Current International Strategy
The international strategy of the DHL Company is built on the main business that this company engages in, which is logistics. The current international strategy for this company is Strategy 2025 which is ‘Delivering excellence in a digital world’. This strategy lays a foundation for the trajectory of growth. Strategy 2025 for the company will be focusing more consistently on harnessing the sustained potential for profitable long-term growth contained in its core logistics business. This will align the firm’s performance and help in maintaining consistency even in the future days. In this strategy also, there will be digitalization that is the company will step up the digital transformation of the group in all its divisions.
Section Two Analysis
Section two presents an analysis of why and how the company carries out the international environmental analysis. An explanation of how this process translates to short- and long-term performance will also be done. The section also talks about the insight into how the company performs in a range of different institutional settings. The performance of the company in the different settings will be addressed in this analysis. If stuck already or have some errands to do, you can find me on the management homework help page to take on the task. If you would still want to proceed with the draft, the aforementioned parts are discussed below.
International Environmental Analysis
Environmental analysis refers to an auditing process through which an organization examines all components, whether internal or external that is critical to the performance of an organization. Environmental analysis helps in assessing an organization’s performance and its alignment with the overall objectives. This analysis may take the form of the Strengths, Weaknesses, Opportunities, and Threats (SWOT) approach, the scenario analysis approach, and the Political, Economic, Social, Technological, Legal, and Environmental factors (PESTLE) approach. The DHL Company, being a global company with an international presence, therefore, undertakes the international environment analysis as part of its audit process. The international environmental analysis for this company is aimed at determining potential factors that affect the business and their impact on the performance of the company.
The DHL Company carries out an international environmental analysis because it brings out the various environmental factors and the potential impact that this will have on the various players in this industry. The environmental analysis assesses market opportunities and risks and serves to assess market attractiveness. The environmental analysis brings about the various factors and this helps understand the reliability and the ability to cope with market demands. Through this analysis, the company helps understand the strength of the company is tackling its challenges and responsibilities.
The role of environmental analysis is also to assess future market risks and opportunities and therefore bring forward the prospects of the company to book. The SWOT analysis, as a method of conducting environmental analysis, considers both the internal and external factors. Internally, this technique identifies the organization’s strengths and weaknesses. It helps to understand what an organization does best and where it needs to improve Externally, the SWOT analysis looks at opportunities and threats. Opportunities refer to the prospects of the company to make their performance better. This may be qualitative towards the image and other factors or quantitative towards profits and growth. The threats refer to potential inhibitors to a company’s performance. Understanding the threats brings about a planned course of action on how they will be minimized.
The other tool is the PESTLE analysis and this brings out the factors that affect a company’s business. In this analysis, for example, there are political factors that affect DHL operations globally. These include tax policy, environmental regulations, trade restrictions, tariffs, and political stability. DHL operates in 220 countries and these countries have different taxation policies and this may affect the financial reporting of the company. DHL operations for instance have to consider double taxation agreements and transfer pricing policies to ensure compliance. The political stability in the various countries should also be a great consideration. In politically unstable countries, the company may be affected by factors beyond its control and this brings about less performance. Politically stable countries on the other hand however stimulate great economic performance.
Still with the tools that are used in doing environmental analysis, this section aimed at addressing the ‘how’ question, is scenario analysis. For this tool, strategies on which a company is based are identified and this helps in analyzing an organization’s context. Scenario analysis provides the necessary tools to analyze the future risks and performance of the company. This allows more informed and accurate decision-making by the relevant stakeholders in the company. The tools that are utilized by the DHL Company involve both the SWOT and the scenario analyses. The company, therefore, has a comprehensive view of its environment as contributed by these tools.
Translation to Performance
Having considered environmental analysis, how and why it is done, we discuss in this section how this translates to performance in the short term and the long term. In the short term, the environmental analysis provides a basis for short-term decisions. It helps in managing performance. In the long term, this activity identifies the risks and opportunities and therefore helps in strengthening the risk management framework. It also provides a basis through which the strategic direction of the firm is crafted. With proper knowledge of the environment, the strategic direction of the company will be upheld and pursued. This leads to improving performance.
DHL Performance in the Different Institutional Settings
The institutional approach to strategic management looks at the social other than the economic perspective of an organization. According to Douglas North, a famous institutional economist, institutions refer to the rules of a game, in a society, or more formally, the humanly devised constraints that shape human interactions. The institutional settings that the DHL Company operates in therefore include the formation and transformation of institutions, fields, rules, and standards that govern the operations of the company. DHL has a globalization operation strategy, in all the 220 countries that the company operates, the company is guided by its mission and vision of the company. The company’s brand is also the same across various countries.
The other institutional setting is a balanced approach to performance. The company passed the performance emphasis on the qualitative and quantitative aspects. The company aims at increasing performance in both technological adoption, its impact on the society, and overall profits. This balanced approach is adopted across all the branches across the globe. The recent audits show that the companies have this factored in for all the branches and the aim is just to ensure that this is strengthened. The organization’s culture is another institutional setting. The culture to get things done the right way is adopted and emphasized by the DHL Company. The company is doing well in this aspect.
In the latest strategic management document, the company is looking forward to embracing technology in its core mandate and business practices. All the operations relating to transport and logistics digital transformation have been adopted across the world. The DHL Company has communicated and rolled out the transformation strategy aimed at a more digital perspective.
Section Three Analysis
While referring to the DHL Company, essay professors like myself would present an evaluation of the international strategic development initiatives at this point. Therefore, this section presents a critique of the current corporate and business level strategies, an analysis of how headquarters manages a portfolio of subsidiaries including the CSR approach and the reasons behind entry strategies utilized have been selected, and whether they are suitable for the long-term success of the company.
Critique of Business and Corporate Level Strategies
The business-level strategy involves a detailed outline that incorporates a company’s policies, goals, and actions with a focus on how to deliver value to customers while maintaining a competitive advantage. The corporate level strategy involves an action taken to gain a competitive advantage through the selection and management of the businesses competing in several industries or various markets. The difference between the two strategies, therefore, lies in the scope of operation (Seifzadeh & Rowe, 2019).
The DHL Company’s corporate level strategy is a combination of the optimal set of businesses and how these can be integrated into the corporate’s portfolio as a whole. DHL’s corporate level strategy involves diversification whereby the company operates in a conglomerate of both online and offline approaches. The company intends to do physical deliveries of some items for example perishable items and E-commerce for certain services. The adoption of E-commerce has in the near past led to an increase in the shipping volumes of the company. E-commerce as part of the diversification strategy has encouraged the use of technology and thus the innovation approach. The corporate level strategy of the DHL Company also incorporates vertical integration. Vertical integration as a strategy involves integrating the various stages in production and marketing under a single organization. The E-commerce platform for this company highly embraces this strategy and with it is the one-stop solution shop for all the products. With this, all the activities are under one roof.
On the business level strategy, emphasis is on obtaining value by exploiting the government’s core competencies. The business level strategy is a mechanism for a company to obtain a competitive advantage. It includes options such as cost leadership that is ensuring the costs of operating the business are the minimum and so the business operates at a less than competitor’s range. The other business level strategy involves differentiation where one is motivated by the need to be different from its competitors. The business level strategy involves choosing between a broad market and a narrow market. The difference between the broad market and narrow market is such that the broad market serves a diverse market the and narrow market focuses on the niche.
For the business level strategy, the DHL Company has adopted differentiation in the options that it offers as services. The company first started with shipping options and later adopted logistics as a business operation. Over time, the company has been adopting broader options and bringing more customers to the market. From the differentiation perspective, there is a wider perception and a range of services from which the customers make their choice. This ensures the overall goals of the strategy for the business are achieved. A strategy, being a course of action through which a company achieves its objectives, has specific goals which are attained over time through its practice.
DHL Management of Subsidiaries Portfolio and the CSR Approach
DHL has a presence in 220 countries. The company’s headquarters are in Bonn Germany. The DHL Company has four subsidiaries namely SNAs, Blue Dart Express, DHL Aviation, and the Aerologic companies. Blue Dart Aviation provides services to Indian destinations. The Blue Dart Express handles aviation and other related logistics in India. DHL Aviation on the other hand is based in the United Kingdom. It provides services to destinations for European destinations from the East Midlands Airport. DHL Aviation operates as a British Airline and was formed in 1982. The airline operates under the Boeing 757 brand and the Airbus A330-300, Armstrong Whitworth AW.660, and Handley Page Dart Herald name.
The other subsidiary is the Aerologic Company which is German based. The company is a cargo airline with scheduled international and long-haul cargo services out of its hub. The Aerologic operates under the Boeing 777F aircraft line. The parent company for the DHL Group is the Deutsche Post which handles logistics and the overall business of the company. The parent company manages the subsidiaries through the various leaders appointed in the various locations. The leaders align to the strategy of the organization that is communicated with the parent company.
The Corporate Social Responsibility approach involves four considerations. The economic consideration option of corporate social responsibility is concerned with the profit-making ability of a business. The sustainability of an economic approach involves making profits and paying the utilities and taxes for a business. A company should ensure this kind of sustainability for the business. The DHL Company through its various companies has ensured that this is done and is always focused on realizing more profits to make this realizable. The other consideration is the legal social responsibility. This is concerned with the requirement to pay taxes, law adherence, and the inspections to be allowed. The emphasis on legal social responsibility happens across all the branches and subsidiaries. The group company has always been working towards adherence to the taxes and laws of the various countries where they operate.
Ethical social responsibility presents the other dimension. This dimension is all about doing things right and in the right way. Ethical responsibility is all about welfare and ensuring that people live to the living standards that they find comfortable. This includes payment of expenses and purchases. The DHL has rolled up its sleeves in this facet. Despite the concerted efforts to ensure this is done, legal suits concerning the actions of this company have been on the rise. The management is however determined to ensure that this is done.
Entry Strategies Utilized
The operations of the DHL Company in other countries align with the market entry strategies that the firm has adopted. Market entry strategies relate to how a company gets to a certain market. Some of the market entry strategies include direct exporting whereby the company exports directly to the market where it intends. The other entry strategy is licensing whereby the firm transfers the right to use a product or service to another firm. With licensing comes right over a certain market. The other market entry strategy is franchising which is easily transferred to other markets through rapid market transactions. Franchising works well in a repeated business model. Successful franchising includes unique brand recognition and the ability to be utilized internationally. The entry strategy is joint ventures whereby there is a partnership to create a new company. With this strategy, two companies agree on how to work together and share profits and losses as well as risks.
DHL in its quest for market and thus entry into new places has utilized the franchising option in some of its locations. Franchising as an option ensures the success of the company in both the short term and the long term. This is because it ensured brand recognition and thus increased profits for the DHL brand.
Section Four Analysis
This section presents a discussion of the international strategic implementation that handles a critique of the current organization structure and the degree to which the structure is aligned with corporate aims and objectives. This is concerning the DHL Company, a multi-national company with a global presence. Organization structure refers to a system that outlines certain activities that an organization engages in to achieve the goals of an organization. Determining the organizational structure is an important function of the strategic management of a company. It is therefore a critical part to identify the appropriate structure.
Among the types of organizational structures, is the functional structure which relates to the division of the organization into different functions and thus easier management. The other structure is the divisional structure that involves various units and thus various product lines. Still under the organizational structure is the matrix structure that involves employees across different divisions and various functions. The employees in this case, therefore, are placed under different departments and handle different functions at the same time.
The DHL Company has a divisional organization structure whereby the business is divided into various divisions. The DHL group consists of the express, supply chain, post-e-commerce, parcel, freight, and global forwarding divisions. Still among the divisions is the supply chain division which is aimed at bringing forth the various products and services necessary to facilitate the business in its operation. The Express division of the DHL Company performs the role of transporting time-sensitive documents and goods reliably from door to door via fixed routes via standardized workflows. This division is in all the DHL branches across the companies in the globe including the subsidiaries. The main product for this division is the time-definite international shipments and this ensures delivery at predetermined times. With this packaging industry-specific services are provided to all clients across the globe.
The other division within the DHL Company is the supply chain division. The supply chain division combines value-added management services with the traditional fulfillment and distribution of the various services that the company offers. The supply chain division purchases the various goods and services that support the business. The purchasing function calls for coordination with the various units and ultimately ensures timely delivery and minimized delays. The other function of the supply chain division is operations that are demand planning and forecasting. This helps in determining what to supply and how much to do that. This therefore meets the demand as and when it arises. This division also ensures logistics that is planning, purchasing and transportation of the products to end users.
The freight and forwarding divisions are involved in improving the efficiency and cost effectiveness of the supply chain. This division offers great customer service options. The current organizational structure of the DHL Company is therefore aligned with the company’s aim to grow its profits, improve its brand image and giving back to the society in its corporate social responsibility. The divisions handling the different needs of the customers ensure that the customer is addressed as soon as they arise. This is critical in expanding the market of the company’s services and thus alignment to the overall objectives.
In conclusion, DHL Company has taken upon itself to practice international strategic management in the various processes and stages. The company adheres to the overall strategic management process and has put in place tools to ensure this. However, we recommend a matrix organizational structure that will ensure a wholesome perspective of employees within the company. We also recommend a risk management framework to ensure checks and balances to the process and thus ensure minimized interruptions in the strategic management process. We also recommend that a monitoring framework be adopted to assess progress throughout the strategic management process. Feedback throughout this process is crucial.
Final Remarks
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