Final Report Strategic Management Case Study: DHL &Federal Express

Executive Summary During one semester i learn about DHL and FedEx companies, can compare each other about DHL and FedEx as delivery service companies, both of companies have different strategy to reach competitive advantages. The firm should have a tighter fit than its competitors because survival and success is reserved to the fittest, not merely the fit. Distinctive fitness or competitive advantage represents the essence of strategy. Strategic management theory explains competitive advantage by the fit between the strengths and weaknesses of the DHL and FedEx the opportunities and threats of the firms environment. From case study has been learned in which the types of competition between DHL and FedEx is Oligopoly competition competition because global shipping has few providers. However, we can find some Monopolistic competition. Both of DHL and FedEx are very active implementing strategies to gain competitive advantages and ultimately to dominate the market FedEx and DHL have a competitive advantage with their information systems and company infrastructure. Network and range of operation can be different, but overall, the companies are very powerful. FedEx and DHL M-Form organizational structure to implement diversification strategy based on geographic scope of business. Objectives of the Study The main objective of this study is to distinguis between FedEx and Dhl. Specifically, the study has purpose to accomplish the following goals: To know both of the companies how their gain competitive advantages, Learn on mission and vision both of companies, to analysis the target of the companies, to understanding strength and weekness both of companies, to know which level strategic that companies uses and analysis which company was doing merger and acqusition with both of companies. The First Assignment The first assignment learning on mission, vision, strategies objective, market share from DHL and FedEx companies. FedEx has mission like superior financial returns to shareowners; customer oriented service; develop mutually beneficial relationships with employees, partners and suppliers; safety; highest ethical and professional standards. In the other side DHL has mission like To be the 1st choice worldwide by making the most scale and experience. From this assignment I learn that FedEx was doing strategic and objective such as FedEx operating strategy works seamlessly-and simultaneously-on three levels Compete collectively by standing as one brand worldwide and speaking with one voice, Operate independently by focusing on our independent networks to meet distinct customer needs, Manage collaboratively by working together to sustain loyal relationships with our workforce, customers and investors. For Dhl has strategies and objective such as cost reduction programs, go green program by implementing several measures such as using renewable energy in Dhl express delivery, focus on quality to create customer satisfaction to guarantee their own sucess.

For the market share of companies, FedEx has market share such as Operates worldwide with 290,000 employees, market leader in USA (57%), has considerably low market share in Europe (10%) and Asia Pacific (21%). In the other side Dhl has market share such as Operates in 220 countries around the world with 275,000 employees, Market leader in Middle East (46%), Europe (37%) and Asia Pacific (34%). The Second Assignment From this cases, I know how the companies to evaluate general external environment, SCP model, five-forces model to identify Threats and Opportunities, market segmentation, the type of competition and complemented for the company. For general environment consist of technological change, demographc trend, cultural trend, economic influences, legal/political condition, specific international events. FedEx and Dhl have simillarity for general external environment. Five force model consist of threat of entry for FedEx such as High entry barrier /very expensive and time-consuming to start up a major shipping company, Market is already very competitive, Technological exploits are difficult to imitate. And also from this assignment i learn about complementor of FedEx and Dhl are supports from environmental groups, large network of distribution lines, insurance on shipped items, online shipment tracking, air cargo terminals. The Thrid Assignment The thrid assignment was discussing on internal analysis, capability and resources of FedEx and Dhl. For internal capabities FedEx has strengths such as Excellent infrastructure (70,000 vehicles, 643 aircrafts that fly 500,000 miles a day), Own weather forecasting system. But for Dhl has strengths such as smart trucks that allow fast and precise delivery, uses renewale energy. In the other side For weakness of FedEx consist such as high cost, because of their constant expenditures in their infrastructure, they are unable to lower their prices and thus take away market share from UPS, FedExs weaknesses derive from their inability to differentiate themselves on a wide scale basis from UPS. Dhl has weakness like mistakes in market share estimates, high prices, weak visibility compared to its real potential. FedEx and Dhl have resource such as financial resource, human resource, physical resource, organizational resource. From this assignment i can understand that they have good strategies and spend huge sums to improve their technological capabilities as well as infrastructure. The Fourth Assignment Regarding fourth assignment FedEx focus on product differentiation for example FedEx charges higher prices for its services than many of its competitors in the industry. This is considered a premium that a customer pays for the quality of service FedEx provides. By differentiating their standard of quality from their competitors, FedEx lets their customers know that if they are willing to pay more, it will be worth it. In the other side Dhl focus on cost leadership. FedEx and DHL are very close rivals and are tracking each others movements in the market. Both are comparable in terms of market research and having centralized organizations with annual business planning processes decided by their headquarters. Both organizations leveraged on investment in organization and employee development, rooted in strategic planning culture.

The Fifth Assignment The value chain analysis, The value chain for FedEx Express can be seen as starting with the pick-up of the packages. FedEx employees gather the packages from various locations such as drop boxes, businesses and residences. After the packages are initially picked up, they must then be transported to a hub. DHL has the largest logistics and infrastructure of any international express delivery company in the market. Most of the activities are either done by DHL itself or with cooperation with other companies. Most of the vertical integration carried out by FedEx looks to be in the downward direction. In vertical integration, DHL is in the middle. It lacks both downward activities such as raw materials and upward activities that the company is currently hiring other companies. The Sixth Assignment Discussing about diversification strategy of FedEx and Dhl, FedEx Corp. is a heavily diversified company, consisting of several independently run subsidiaries in different related industries. Although independent, the subsidiaries function collectively in competing with other companies, and collaborate with one another to achieve individual success. This undoubtedly explains why FedEx Corp. is the worlds premier shipping and information services provider. 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. The Seventh Assignment FedEx has organization structure base on M-form structure, and Dhl base on M-form structure&U-form structure. : FedEx and DHL M-Form organizational structure to implement diversification strategy based on geographic scope of business. The companies operations target worldwide customers, thus geographic scope of business seems to be only natural. They strive to reach every possible target location in order to gain competitive advantage over their competitors. We have discovered that FedEx have better network, political support and brand image in the USA, while having much smaller power in the Middle East. FedEx and Dhl adopts related-constrained diversification because all the businesses are centered on freight delivery. Most of the operations are designed as supporters for the service in whole. The Eight Assignment For FedEx seems to be well aware of the global market and economic conditions, and is trying to create much greater influence on the emerging markets. Most notable acquisitions that prove this are FedExs move to acquire Tianjin Datian (China) and Prakash Air Freight (India). These M&As show that FedEx is forcing its way towards leading and emerging economies of the world. DHL on the other hand did not make much M&A compared to FedEx. Since DHL has better distribution network globally, it would appear that the company is now working to strengthen its already strong network.