Australian Post Strategic Management-Free-Samples for Students

Question: Discuss about the Australian Post Strategic Management. Answer: Introduction: A government owned organization; Australian Post provides postal services both internationally and locally. Various retail houses are also being operated by the corporation. With its head office located in Melbourne, the company started its business in 1809 in New South Wales (Personal, Business, Enterprise Government solutions. 2017). The company has been changing its business models since its inception. Services To cope up with the market, the company has widened its service and product range to keep up with the consumer demand. The company has made several investments in technological programs. The three major areas where the company has been operating are letters, retail merchandise, agency services, associate services, logistics as well as parcels. It also offers services like direct marketing, database management services, fulfillments services and financial services. The firm has some joint ventures in China (Hair Jr and Lukas 2014) .The Company does not depend on the government for funds but runs on its own earnings. The profits made by the company are divided among the shareholders or re-invested by the company their mission is to provide a reliable service to all the nationals of the country. Industry Outlook The postal industry is the key source for communication in Australia. Earlier, the organization enjoyed monopoly of communication source; however, this has been lost due to the advent of technology. The industry is in a state of transition because the key actors of the industry are preparing themselves to face the decline in large volumes of mail (Perreault Jr, Cannon and McCarthy 2013). There are some other companies present in the industry, which are oriented towards third party services and bulk mail outs; however, Australian Post is the dominating company. The industry`s growth will be further limited by the decline in letter usage. Macro environmental analysis Pestle analysis PESTLE Analysis refers to the framework, which aims to analyze the external environmental factors in a business. The factors do not lie within the hands f the company however they do have an impact on the performance of the company` the section Analysis the external environment with respect to the Australia Post (Hollensen 2015). Australia Post Pestle Analysis: Political factors: Although the company is a government owned enterprise, the running of the firm takes place commercially and it is beyond the effect of any political instability. Economic Factors: The company growth and economic condition has come down due to various reasons. These reasons range from reduction in the key function of the company, which was delivering letters to the reduced need for visiting a post office for other services. The letter delivery has fallen by over a billion since its peak period during the 2007-08 (Czinkota and Ronkainen 2013). The rate of inflation as well the exchange has had an impact on the revenue of the firm. This revenue was earned from its travel and money transfer services. Following the case study provided, the staff has also been cut down by the firm, because of reduced business. Due to this, the delivery days rate of the parcel has increased. The lack of confidence has had an effect on the performance of the company financially. Social: There has been a change in the lifestyle of the consumer where letters are now considered old fashioned and are used by business services only. As technology has advanced, people have been chasing the e-commerce market (Team 2013). s. The company has taken a step to align its services and to render them to the export giant Alibaba in order to boost its sales. Technological Factors: Since the technology has developed in terms of communication, postal services like letters have been obsolete and only certain business enterprises use the services of the post to send letters for official purposes. Even then certain companies have taken over to mails and messaging for this purpose. To combat this, the post has come up with Mypost Digital Mailbox. The company has a long way to go as this service by the post has been launched recently, however online bill payments has existed for a long time. Legal Factors: The Company has to send out letters in various batches and has to be open on the prescribed days despite reduced operations (Ho 2014) for various legislations. These always have taken a toll on the company and affected its financial performance. The supply and demand has been unable to align with the regulations. Environmental Factors: In order to save the environment, many people including large business houses have limited the use of paper, which has further limited the use of letters and postal services. Industry Analysis Life cycle of Logistics Industry The history of the logistics industry goes back to the 1900s with its peak period during 1950-2000s. The industry can still be said to be in its growth stage because of the concept of e-commerce ( E. Dobbs 2014). The ecommerce companies have been able to open more opportunities for the logistics industry, where the goods purchased by the consumers need to be delivered to the consumers the industry is yet to reach its mature stage. Five forces analysis of Logistics Industry The model prescribed by Porter is used to analyze the industry environment of a particular company. These are: Intensity of Existing Rivalry Threat of Substitutes Threat of New Competitors Bargaining Power of Customers Bargaining Power of Suppliers Bargaining Power of Buyers There exists high bargaining power in the industry. The contracting companies tend to ask for high quality services. The pay huge amount to get into contracts. The services are copy able and therefore, buyers are provided with high power to avoid these practices. Bargaining Power of Suppliers There are many logistics company but not all are of the best services quality. Therefore, the top ranking companies have high bargaining powers. Only banks can provide the companies with financial assistance for such a business. Rivalry among Existing Competitors The industry is still in its growth stage, which tends to have an effect on its competition intensity, which can said to be relatively high. Price wars are highly prevalent. As some companies are merging with others, some competition is reduced up to a certain level. Barriers to Entry The industry has high barriers to entry and there is large investment costs involved in the particular business. The new entrants would find it very difficult to lease the vehicles and therefore it is difficult to enter the industry (Grant 2016). The distribution centre has to be located in the major art of the city, which further tends to increase the costs, as the price of the centre land is high. The requirement of skilled labor and high switching costs forms a further barrier. Threat of Substitutes Many companies are involved in the business thereby increasing the threat of substitutes. Life cycle of postal services industry. The services offered by the postal industry range from letters to deliveries and it too have a life cycle. There is a prediction that there will be major shifts in the postal industry and that the technological advancements will change the way the postal industries functions. Technology has let to new development. As well as removal of various postal segments (Horstmann, Krmer and Schnurr 2014). Therefore, it is advisable that the company changes their operations and be prepared for the change. The postal service of Australia is preparing to become a part of the change. The information technology will be playing a major role in the industry. In brief, the industry started growing in the 1800s and was at its peak period during 1930-1980s. However, the industry surpassed its maturity in 2000s and is moving towards its decline stage. Porters Five Forces of Postal Services Industry Intensity of Existing Rivalry There exists a certain degree of rivalry in the particular industry. FedEx is one of the biggest competitors present. Another company providing competition to the company is the Unites States Postal Services. The government has taken various efforts to limit the amount of competition present in the industry, however due to the large size of the industry, it is unable to do so. Bargaining Power of Suppliers The bargaining power of the suppliers is high as the switching cost in the industry is low. There is an existence of a high degree of competition in the industry, which tends to make the prices similar to each other. Bargaining power of Customers There is a presence of a large number of consumers, which tends to reduce the bargaining power of the single consumer (Barney 2014). The products are extremely important to the consumers and therefore reducing their power. Threat of Substitutes There are limited number of substitutes to certain items that need to be delivered hence the threat is low. Threat of New Competitors The industry has exciting dynamics that tends to attract the customers despite the large initial investment involved.. The entry barriers kept in the industry is extremely high which makes it increasingly difficult to enter thereby making the situation a tough one. Some of the consumers are extremely loyal to the existing brand and tend to hardly change their service providers. Company Analysis The main purpose of the company analysis is to let the decision maker come to know the core competency of the firms and understand those areas where the company is not doing well (Rothaermel 2015). SWOT Analysis SWOT refers to Strengths, Weaknesses, Opportunities and Threats. The company analysis of the firm will be implemented by conducting a SWOT Analysis. Strengths Operates on weekends. Offers wide portfolio of services like parcels, mails and insurance money. It is backed by the government. The company has employed more than 30000 people. Weakness The competitors of the company are present worldwide whereas the existing company has low international presence. There has been a decrease in the retail services, which have been extremely low to move to the advanced services (Healy and Palepu 2012). Opportunities The company can take advantage of the absence of FedEx in the domestic domain, which is presently concentrating internationally. The company can take up extensions and mergers in order to expand its operations to the international market. Threats The primary threat of the company lies in its loss of revenue in the hands of its various competitors. The competitors are Toll Holdings, US Postal Services and FedEx. Very often price wars are prevalent (Wheelen 2012). Hence, it can be observed that the strengths of the company lie in its government backing and strong base and presence. This could be extended and become a future strategy for expansion. The company can take advantage of the absence of FedEx in the domestic terrain and expand thereby. Competition Analysis Toll Holdings , US Postal Services and FedEx are some of the competitors of the Australian Post. FedEx has an international presence and its recent acquisition of the TNT express has made it the fourth largest logistics company (Mihet 2013). The FedEx is planning to use their extension to expand their network. The United States Executive has planned to improve their business however, there exists certain weaknesses faced by FedEx. It has not come to deal with the domestic operations, which can be utilized by Australia Post. . Toll Holdings has a strong domestic base and is engaged in pickup and delivery services . It has market holdings more than that of express services by DHL. Strategies and Recommendations Australia Post should increase its market share by investing in domains like Banking and Money orders. There services provide cheap prices and are able to attract more customers. The Australia Post can engage in wide range promotions to attract more audience. The company can collaborate with e-commerce websites to increase its revenue. Long-term strategies The company Australia Post should not let goes of its postal services and retain its primary operations. However, it should also indulge in other product offerings like telecoms, financial sectors and try to become a key partner of the government for the various services it provides (Zott and Amit 2013). These steps might help the company in the right position and secure their financial stability. The branches of the Post should revitalize themselves and become customer oriented. It is the duty of the government to take efforts and invest some money in the company in order to make the company at par with its competitors in the industry. Conclusion Therefore, from the analysis it can be established that due to the advent of technology, the industry has suffered a huge blow. As the social media applications and letters have developed, people have reduced their needs for a communication via letters. In order to save itself, the company needs to strategize and combine their core offerings along with other operations to remain in the business. As various e-commerce websites have come up, the company can collaborate and get into a deal with them to become their partner in logistics. It is now the need of the hour for the Post to scan the market and look out for better opportunities, which will help the company to retain and strengthen its position References Barney, J.B., 2014.Gaining and sustaining competitive advantage. Pearson Higher Ed. Czinkota, M.R. and Ronkainen, I.A., 2013.International marketing. Cengage Learning. Dobbs, M., 2014. 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