DHL strategy in China

Entered the market in 2004. Separate services for individual and corporate
customers were developed by DHL- Sinotrans. To address the growing volume of
trade in the country, a special service called Import Express was introduced. With
the help of this service , shipments from any part of the world could be picked up
and delivered to anywhere across the globe. DHL also introduced the service First
in Asia with a mission to shorten the delivery time of packages within Asia. In
December 2001, DHL came with a product DHL Jumbo Box . 50 year long contract
with Sinotrans.

Competitive strategy in natural disasters

We do not have any competitive strategy for natural disasters. We follow any special instructions
given by the customers in such cases. Sometimes, we even collaborate with competitors in cases
of natural disasters in order to deliver the consignment in time. This was done during the Icelandic
volcanic ash preventing normal flights.

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Maintenance team productivity

Plant productivity and availability
Broad spectrum of suppliers
On-site transportation costs
In-plant safety and security requirements

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DHL strategy
Developing a global network and maintaining a decentralized management
structure. Growth was from international to domestic segment as compared to
fedex and ups.
To focus more on core competencies, DHL restructured itself ad withdrew itself from
the domestic delivery in US ad focused on business excellence. They follow FOCUS
strategy:
1. Divested no profit making domestic express service ( retained profitable units
such as India , Australia, Germany and Russia)
2. Centralized in planning and decentralized in execution. They follow a hub and
spoke model.
3 global hubs Cincinnati in the US, Leipzig in Europe, Hong Kong in the far
east.
700 network flights a day.
Fleet- 250 aircraft
3. Flexibility - Close long term connection with close to 300 carriers and national
airlines
4. Certified International Specialist program for 1,00,000 people globally.
5. Set of Global Standard Operating Procedures. Development of It systemcapacity management tool.
6. Four global quality control centers- Bonn, Leipzig, Cincinnati and Singapore,
which monitor shipments in real time from pick-up to final delivery. Within
each of the four regions, there is also a network for further quality control
centres and these are manned 24/7 by a service quality team who monitor
the shipment movements, identify delays or breakdowns in the supply chain,
source solutions to the problem and offer those solutions to the customer.
7. The company has a reputation for delivering this level of service not only in
stable and prosperous regions, but also in some of the worlds most troubled
places including Afghanistan, Syria, Bahrain and Algeria. DHL has globally
embedded a raft of thorough security measures, including investing heavily in
scanners at each of its facilities.
8. The company runs a crisis command centre at its head office in Bonn, from
where it monitors world events and how they may impact on global
operations, shipments and employees. And in times of crisis, the quality
control centres also take on some of the crisis management role. Whenever
disaster strikes, though, its not only the business DHL takes care of. The
company also marshals its logistics capabilities to bring in essential first aid
and disaster relief supplies. In the case of the Japanese tsunami, for example,
we put on extra charter flights to bring water and food into the region.

DHL strategy in US
For the operational level strategies, DHL builds its business by improving its customer services. DHL
wants to mold a more customers-friendly workforce, and to provide a better services for customers.It
starts with hiring the right person to provide services.
DHL has incorporated speed into its overall strategy. DHL focuses on U.S. customers who want to cut
costs by sending parcels overland rather than by air, DHL wants to provide a high quality services to both
the customers who send parcels overland or by air. Speed is important factor affecting the service quality.
Therefore, DHL has to provide a speedy service by expanding their worldwide network and also the
ground network. DHL provides speedy services by improving their infrastructure, expanding trucking
routes, creating air hubs, and improving the sorting centers, drop-off points, and other network. All these
improvements help speed up the service provided by DHL. Being hustle is the key reason why Skechers
has shifted a third of the business from FedEx to DHL.
(Word Count: 541)
2. Competitive advantage derives from the distinctiveness of an organizations capabilities. The most
important competitive advantages are mentioned as follow.
With a deep-pocketed corporate parent, DHL has a rich financial resources and has integrated more than
100 companies. DHL is the largest express carrier in Europe with a 40% share, and the largest
international express carrier in Asia, also with 40%, the intellectual capital helps DHL to sustain its
competitive advantages.
DHL has dynamic capabilities, DHL is developing durable strategic capabilities that provide advantage
over time. DHL has a better situated in terms of air transport after completing the integration of Airborne
Inc.. DHL is a company that capable to change, innovate, be flexible, adapt and learn. DHL changes its
focus to U.S. customers who want to cut costs by sending parcels overland rather than by air, it is a case
of changing itself to adapt the U.S. trend. Learning to employ and train staff as Starbucks can show its
capability of learning.
Moreover, DHL provide personalized service to customer and it becomes one of its most important
competitive advantages. Focused Differentiation is used by DHL to provide high perceived service
benefits to selected market segment. It can be explained by the case of Skechers USA Inc., UPS and
FedEx are more reluctant to go to remote locations. DHL will just do it. If their driver has to sit in the
parking lot and fill out the air bills, hell do it. says Michael Cardenas, Skechersoffice services manager.
All of the competitive advantages of DHL are best suited to aa mature industry. In this mature industry, it

is under Hypercompetitive conditions. As to sustain competitive advantages, organization have to focus

on ability to change, speed, flexibility, innovation and disruption of market. DHL is an expert in express
carrier, and all above-mentioned competitive advantages of DHL are suitable in this mature industry with
hypercompetition.
There are some weaknesses of DHL that may cause it in trouble when it enters the U.S..
Competitive rivalry is high. Taking on FedEx and UPS, which together command 78% of the U.S. parcel
market . DHL has only 16,000 drop-off points, which is about one-third of FedExs number. There are also
high fixed costs in this industry. Until this year, DHL had almost no ground network in much of the Midwest
and Rocky Mountain states. DHLs limited ground network has hurt its ability to attract domestic customers
who want to cut costs by sending parcels overland rather than by air. It takes a lot of money and a lot of
talent to build a high-quality ground network.
For the threat of entry, the problem of economies of scale becomes a weakness of DHL. DHL will not get
margins for a while because their competitors have larger economies of scale.
High capital requirements of entry is a barrier to entry. Lack of ground transport capability is one of the
weaknesses of DHL, it leads to an increase in amount of investment that DHL has to put into the U.S..
DHL had virtually none when it was acquired by Deutsche Post, while Airborne was just getting started.
Now, with high fuel prices boosting the cost of air shipment, the parcel market in the U.S. is shifting
toward ground transport, which is DHLs weakest link.
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3. According to the case of DHL, I would advice DHL to continus a global focus on parcels and express
mail. DHL can adopt the related diversification. Related diversification is the strategy development beyond
current products and markets, but within the capabilities or value network of the organisation.
The related diversification includes vertical integration and horizontal integration. DHL can have a
backward integration into input activities. For example, backward integration with manufacturers of automobile, ferry and plane. So that, DHL can ensure the quality of its own flight and trunk teams.
DHL can also have a horizontal integration. To develop into activities complementary to existing ones and
to exploit strategic capabilities in new markets. DHL has to integrate with company whose value chain
possess competitively valuable strategic fits with the value chains of DHL. For example, horizontal
integration with local delivery and logistics company in particular country, whose value chain is strategic
fits with DHL.
There are some reason why DHL should continus a global focus on parcels and express mail.
It can utilise strategic capabilities of DHL and another organization. The physical resources can be shared
among DHL and other organization. For example, vehicles, planes, ferries, and all facilities can be shared
or purchased at a relatively low price. It can ensure and increase the availability of resources. Lack of

ground transport capability is one of the problem of DHL in entering U.S. market, it takes a lot of money
and a lot of talent to build a high-quality ground network. After completing the integration of Airborne,
which had already established a ground-based network, it helps DHL to reduce cost and time for building
a ground network.
By related diversification, DHL can increase its financial resources. The increase of capital and cash,
helps DHL to have more opportunities to invest more valuable projects, develop its business to a global
network and also improve its infrastructure.
Economies of scale is a benefit of related diversification. In the case of DHL, their competitors are earning
nice profit rates, double-digit margins, but DHL will not get these margins for a while.It is because their
competitors have larger economies of scale. Combine related activities into a single operation, it helps
increase the economies of scale, with the economies of scale worldwide, DHL can also earn a nice profit
rates, or even a higher profit rates than its competitors.
Transfering expertise or knowledge between organization is benefical. DHL is an expert in the carrier
industry, related diversification can transfer its existing competencies to the new related business. It can
add value to customer and also gain competitive advantage. It helps to create new competitive strengths
and capabilities of DHL. It create the effect of synergy, and it can increase profit and lower cost of DHL.
Leverage use of brand name reputation of organization. Building and maintaining brand reputation is
costly, as brand name is kind of intellectual capital. DHL can share the goodwill and the customer
databases with other organization. Using an existing brand name to support related diversification can
have a more powerful impact to customers of both DHL and other organization. As DHL is an expert in the
delivery and logistics industry, its brand carries positive brand characteristics and attitudes to customers, it
helps increase the loyalty of customers.

DHL Supply Chain, the world's largest logistics specialist, is currently introducing a standardized
warehouse management system across its operations globally to further improve accuracy and individual
product availability for its customers.
RedPrairie Corporation, a global supply chain and retail technology provider, will deliver the Warehouse
Management System (WMS) and Workforce Management (WFM) tools that will help improve DHL
customers' service levels by providing a more simplified and cost effective approach to implementing the
systems with supply chain customers. The new deal expands upon an initial global framework agreement
between the two companies.
"DHL's expertise in designing and operating innovative supply chain solutions, together with utilizing
RedPrairie's quality tools, is bringing unique value to our customers across all sectors," said Alex Pilar,
Chief Information Officer DHL Supply Chain. "Improving the ability to synchronize and optimize
productivity in the warehouse and the workforce will enable DHL to continue to lead the way in meeting
the increasingly complex global supply chain challenges our customers face every day."

Accuracy and reliability of supply across the globe is of critical importance to customers from all industry
sectors and DHL develops specific logistics solutions to meet individual needs of the industries. Using
leading-edge WMS and WFM tools helps DHL to design optimized supply chains and inventory holding
systems which ultimately supports customers in improving their market position.
"RedPrairie is proud to continue to expand its business relationship with the most respected logistics
services provider in the world," said RedPrairie President, International Martin Hiscox. "With the world's
largest logistics network, DHL Supply Chain will be able to continue to take the lead in providing the
highest levels of visibility and collaboration throughout its customers' global supply chains using
RedPrairie's WMS and WFM solutions."

Deutsche Post DHL is the worlds leading mail and logistics services group.
The Deutsche Post and DHL corporate brands represent a one-of-a-kind portfolio of
logistics (DHL) and communications (Deutsche Post) services.
The Group provides its customers with both easy to use standardized products as
well as innovative and tailored solutions ranging from dialog marketing to industrial
supply chains. About 470,000 employees in more than 220 countries and territories
form a global network focused on service, quality and sustainability. With programs
in the areas of climate protection, disaster relief and education, the Group is
committed to social responsibility. In 2010, Deutsche Post DHL revenues exceeded
51 billion.
The postal service for Germany. The logistics company for the world.

References

http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy2/DHL
%20Business%20Strategy%20in%20China%20Business%20Strategy.htm
http://www.123helpme.com/dhls-american-adventure-view.asp?id=164600