complete sm dhl(new)

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Nur Syahirah Husaini GM 04674

Sameena Siraj GM 04558Geetha A/P Valaidum GM 04556

Philominah Arkappan GM 04502


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COMPANY OVERVIEW

Founded in San Francisco more than 40 years ago by 3budding 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.

DHLs international network links almost 220 countries andterritories worldwide

Around 285k employees are dedicated to provide fast and

reliable services that exceeds customers expectations in 120k

destinations in all continents


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MISSION & VISION

Mission : to be the first choice worldwide

Vision : for the future is nothing less than totransform the logistic industry and to deliver

beyond customers expectations.


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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


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"FedEx Corporation will produce superior financial returns forits 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 marketsegment 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."

FedEx Mission & Vision


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Mission & Vision supporting the

Strategies

DHLs 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


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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 arefounded on these statements hence are

considered the idea of purpose


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Internal Assessment


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Organizational Chart

Deutsche PostDHL

Corporate

Center

CEO

(Dr FrankAppel)

Finance GlobalBusinessServices

(LawrenceRosen)

Personnel(Walter

Scheurle)

Divisions

Mail

(JurgenGerdes)

Express(Ken Allen)

GlobalForwarding

Freight(Roger Crook)

Supply Chain(Bruce

Edwards)


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Market Positioning Map

High Distribution Network

Moderate ServiceQuality Service

Low Distribution Network

FedEx

UPS

DHL

Nationwide

Skynet

City-LinkTNT


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DHLs 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)


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DHLs Website


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DHLs Strengths & WeaknessesStrengths Weaknesses

Strong Brand Image Not well-known globally

Globalism High Tariffs

Technology pioneers High Prices

Innovators Not fully operational in Domestic Markets

Corporate Symbiosis Customer loyalty issues

Reach and FrequencyNo difference of the services of DHL with

competitors

Quick delivery due to dynamic routeplanning system

Weak to tap and venture against itspotential domestically and internationally

Customers have control on what they

purchaseSubject to stagnate market

Excellent e-commerce services

Clear visibility of supply chains all the time


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IFE Matrix

Strengths W R WS

Strong Brand Image 0.12 4 0.48

Globalism 0.08 2 0.16

Technology pioneers 0.09 3 0.27

Innovators 0.09 3 0.27

Corporate Symbiosis 0.08 3 0.24

Reach and Frequency 0.15 4 0.60

Quick delivery due to dynamic route planning system 0.03 1 0.03

Customers have control on what they purchase 0.03 1 0.03

Excellent e-commerce services 0.04 2 0.08

Clear visibility of supply chains all the time 0.04 2 0.08


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Weaknesses W R WS

Not well-known globally 0.10 3 0.30

High Tariffs 0.08 1 0.08

High Prices 0.09 2 0.18

Not fully operational in Domestic Markets 0.12 3 0.36

Customer loyalty issues 0.02 1 0.02

No difference of the services of DHL with competitors 0.03 1 0.03

Weak to tap and venture against its potential domestically and

internationally0.04 2 0.08

Subject to stagnant market 0.03 2 0.06

TOTAL 1.00 2.67

Based on the results above, DHLs Internal Factor Evaluation is slightly above average

to their internal strengths and to abstain weaknesses.


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External Assessment


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Major competitors

Federal Express

UPS

City-Link International Nationwide Express

TNT Express Worldwide

Skynet Worldwide


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DHL FedEx UPS

Less expensive than UPS or

FedEx

Generally more expensive

than USPS or DHL

Somewhat expensive but

cheaper than FedEx

Offers fast delivery to some

locations.

very quick delivery system Relatively fast delivery

Offers free boxes and other

shipping supplies, but only

for their Air Express service

(not DHL Ground).

Provide boxes free of

charge

Insurance for valuables

worth up to $100 is

included free of additional

charge.

Provides online tracking at

no additional cost, but not

as detailed as FedEx

Provides the most detailed

online tracking system.

Ground, Express, and

Freight shipping servicesare available, as well as

extra fast same-day and

overnight options.


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Competitive Profile Matrix

FedEx UPS DHL

W R E R E R E

Service Quality 0.13 4 0.52 3 0.39 2 0.26

Price Pressure 0.15 3 0.45 3 0.45 2 0.30

Strong consumer orientation, segmented

approach

0.10 3 0.30 3 0.30 2 0.20

Completeness of service 0.09 3 0.27 3 0.27 1 0.09

Good quality for a competitive discount

price

0.12 3 0.36 4 0.48 2 0.24

Reputation 0.11 3 0.33 1 0.11 1 0.11

Advertising 0.10 2 0.20 3 0.30 4 0.40

After sales service 0.08 2 0.16 1 0.08 1 0.08

Customization 0.12 2 0.24 4 0.48 2 0.24

Total 1 2.83 2.86 1.92

The result shows UPS is dominating on critical success factors because the total weighted

score is higher compared to FedEx and DHL


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PESTLE Analysis

Political Environment

Europe is a stable environment where no major

political changes are expected.

European Union has removed border lines and hasmade trade and business more accessible

Enable bigger exports, free movement of services.


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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 outsourcingreduced cost


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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.


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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.


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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 enabledbuilding 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


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Environmental Analysis

Air pollution globally transportation industry

Projects have been implemented smart

truck project


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External Analysis

Opportunities Threats

Global Expansion Rules and restrictions of other countries

JV with foreign countries local

transportation companies

Competitors improvising DHLs strategies

Expansion of E-Commerce Economic and Political condition of thecountry

Increasing number of manufactured

goods

Insurance costs

Delivery products from city to city New Tax System

Creation of new market segmentation Increase in fuel price

Largest world sector Tough competitors


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EFE Matrix

Opportunities W R WS

Global Expansion 0.08 3 0.24

JV with foreign countries local transportation companies 0.08 3 0.24

Expansion of E-Commerce 0.07 2 0.14

Increasing number of manufactured goods 0.08 3 0.24

Delivery products from city to city 0.07 2 0.14

Creation of new market segmentation 0.07 3 0.21

Largest world sector 0.07 3 0.21


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Threats W R WS

Rules and restrictions of other countries 0.06 2 0.12

Competitors improvising DHLs strategies 0.05 2 0.10

Economic and Political condition of the country 0.06 1 0.06

Insurance costs 0.08 3 0.24

New Tax System 0.07 2 0.14

Increase in fuel price 0.08 2 0.16

Tough competitors 0.08 1 0.08

Total 1 2.32

Based on the results above, DHLs External Factor Evaluation is below average to the

environment for exploiting opportunities and to overcome threats.


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Strategy Formulation


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SWOT Analysis

Strengths Weaknesess

Strong Brand Image

Globalism

Technology pioneers

Innovators

Corporate Symbiosis

Reach and Frequecy

Not well-known globally

High Tariffs

High Prices

Not fully operational in

Domestic Markets

Opportunities SO Strategies WO Strategies

Global Expansion Joint Ventures

Expansion of E-Commerce

Increasing number of

manufactured goods

Advertise new technologiesand online ordering system

(S2,S3, O4)

Create joint ventures withlocal logistics companies (W1,

O1, O2)

Promoting business in China

and India (W1, W4, O1)

Threats ST Strategies WT Strategies

Rules and Restrictions Economic and Political

condition

Slow and stagnant economic

growth

Relationship with foreign

countries

The increase in fuel prices

Promotions when usingonline ordering system during

economic slow-down or

restrictions (S2, S3, S6, T1, T3)

Enhance the Smart-Truck

Project to overcome fuel price

increment (S3,S4,T5)

Acquire small localcompanies abroad to catch up

with competitors (W1,W4,T4)


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SPACE MatrixA SPACE MATRIX RATINGS TOTAL AVERAGE

Financial Strength (FS)

Revenue 4.00Cost reduction 2.00

Asset utilization 3.00 9.00 3.00

Industry Strength (IS)

Technology Savvy 6.00

Large distribution network 5.00

Brand 4.00 15.00 5.00

Environmental Stability (ES)

Risk in business -3.00

Increase in fuel prices -2.00

High rivalry in market -5.00 -10.00 -3.33

Competitive Advantage (CA)

Innovation -4.00

Service quality -5.00Product choice -3.00 -12.00 -4.00

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


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FS

CA

ES

IS

Competitive

Conservative

Defensive

Aggressive

SPACE Matrix


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BCG Matrix

DHL has been analyzed in 3 categories of its

businesslike mail, express and logistic

1) mail market growth rate


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DHL Market Growth Rate

53212 40935 X 100% = 30%

40935

BCG Matrix indicates that DHL is placed in Cash Cow. This

means DHLs market growth rate is low, but its market share is

high so it should milk as much profit as possible


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BCG Matrix


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Grand Matrix Strategy

Weak competitive position Strong competitive position

Rapid Market Growth

Slow Market Growth


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QSPMSTRATEGIC ALTERNATIVES

Enhance & focus on

innovation

Expand business & acquiremore logistics companies

domestically and

internationally

Key Factors Weight AS TAS AS TAS

Opportunities

Global Expansion 0.08 3 0.24 4 0.32

JV with foreign countries

local transportation

companies

0.08

2 0.16 4 0.32

Expansion of E-Commerce 0.07 3 0.21 3 0.21

Increasing number of

manufactured goods 0.083 0.24 4 0.32

Delivery products from cityto city

0.07- -

Creation of new market

segmentation 0.07- -

Largest world sector 0.07 - -


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Threats

Rules and restrictions of other

countries0.06

2 0.12 3 0.18

Competitors improvising DHLs

strategies0.05

- -

Economic and Political

condition of the country0.06

- -

Insurance costs 0.08 - -

New Tax System 0.07 - -

Increase in fuel price 0.08 3 0.24 2 0.16

Tough competitors 0.08 4 0.32 4 0.32

Total 1.00

StrengthsStrong Brand Image 0.08 3 0.24 3 0.24

Globalism 0.07 2 0.14 4 0.28

Quick delivery due to dynamic

route planning system0.03

- -

Customers have control on what

they purchase0.03

- -

Excellent e-commerce services 0.04 - -Clear visibility of supply chains

all the time0.04

- -

Technology pioneers 0.07 4 0.28 3 0.21

Innovators 0.07 4 0.28 3 0.21

Corporate Symbiosis 0.06 3 0.18 4 0.24

Reach and Frequency 0.09 2 0.18 4 0.36


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Weaknesses

Customer loyalty issues 0.02 - -

No difference of the services of

DHL with competitors 0.03- -

Weak to tap and venture against

its potential domestically and

internationally0.04

- -

Subject to stagnate market 0.03 - -

Not well-known globally 0.07 2 0.14 2 0.14

High Tariffs 0.06 2 0.12 2 0.12

High Prices 0.08 3 0.24 3 0.24

Not fully operational in

Domestic Markets0.09

4 0.36 3 0.27

Sum Total Attractiveness Score 1.00 3.69 4.14


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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


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Recommendation

Expand business & acquire more logistics

companies domestically and internationally

By acquiring small local companies in different

countries like China, India, USA, will give presencein that countries.

Creative solution for problems and acquiring new

brain


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Strategy Implementation


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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)

/


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EPS/EBIT ANALYSIS Earnings per share: Year 2012 (9 Months)

(Million) EBIT 1838

INTEREST 270

EBT 1568

TAXES 452

EAT 1116

SHARES 1209

EPS 0.92

Mail : 678

Express 829

Freight 346

Supply Chain 301Others -315

Consolidation -1

EPS/EBIT ANALYSIS


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EPS/EBIT ANALYSIS(assumption)

Capital needed 5000 million

EBIT range 2000 to 4000millionInterest rate 5%

Tax rate 25%

Stock Price 15.20Shares outstanding 2019 million

EPS/EBIT ANALYSIS


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EPS/EBIT ANALYSIS

(assumption)

100% DEBT 100% STOCK 50/50 DEBT/STOCK

EBIT 2000 4000 2000 4000 2000 4000

INTEREST 250 250 0 0 125 125

EBT 1750 3750 2000 4000 1875 3875

TAXES 438 938 500 1000 469 969

EAT 1312 2812 1500 3000 1406 2906

SHARE 2019 2019 2348 2348 2184 2184

EPS 0.65 1.39 0.64 1.28 0.64 1.33

/ ( )


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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.


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RATIO ANALYSIS OF DHL

2012 2013

Current Ratio = 12750 20000

13449 18600

0.95:1 1.08:1

Debt Equity ratio = 22929 2916134544 64264

66.38% 45.38%


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2012 2013

Return on Sales = 1838 3701

40935 53212

4.49% 6.96%

Return on Asset = 1196 238640935 53212

2.92% 4.48%

RATIO ANALYSIS OF DHL


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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


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CEO of DHL Logistics, enhancing the Smart-

Truck 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

FUTURE ASSUMPTION BY DHL


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The Financial Perspective

Strategic Themes

Strategy Revenue Growth &

Mix

Cost

Reduction/Producti

vity Improvement

Asset Utilization

Growth

Strategic Objective

Improve Market

Penetration

Improve Revenue

Productivity

Efficient use of

resources

Improve wallet

share

Improve Channel

Mix

Improve market

share

Reduce Operating

Expenses

Ensure Loyalty


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Strategy Evaluation Balance

Scorecard


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The Financial Perspective

Strategic Themes

Strategy Revenue Growth &

Mix

Cost

Reduction/Producti

vity Improvement

Asset Utilization

Growth

Strategic Objective

Improve Market

Penetration

Improve Revenue

Productivity

Efficient use of

resources

Improve wallet

share

Improve Channel

Mix

Improve market

share

Reduce Operating

Expenses

Ensure Loyalty


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The Customer Perspective

The Customer Value Preposition

Strategy Product/Service

Attributes

Image and

Reputation

Customer

Relationship

Growth

Strategic Objectives

Price/Performance Brand Image Contractual

Responsiveness

Ease of Use Brand Equity Flexibility

Product Availability Honesty and

Openness

Buying Experience

Customer Feedback


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The Business Process Perspective

Types of Business Processes

Strategy Innovation Operations Post-sales Service


Growth

Identify emerging

needs of customers

Reduce order

fulfillment cycle

time

Enhancing support

centres

Improve

communication

process between

customer and

company

Response time for

solving customer

problems


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Learning and Growth

Categories

Strategies

Employee

Capabilities

Information System

Capabilities

Motivation

Empowerment and

Alignment

Growth


Strategic skills

(improve selling

skills, analyst skills,

technical support)

Improve Intellectual

Property

Staff Empowerment

Skill leverage(multiple product

selling)

Tracking privacy Personal goalsalignment with

corporate goals

Morale


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Conclusion

DHL already established themselves and

holding the third largest logistic company in

the world

Based on all the strategies matrix above, willbe able to aid DHL future performance and

overtake their competitors


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THANK YOU

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