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DHL america case study
Dhl operations and supply chain management
Dhl operations and supply chain management
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DHL’s American Adventure 1. DHL used several strategies for entering market of the United States, they can be divded into corporate level ,business level and operational level strategies. For the corporate level strategies, Globalization Strategies are adopted, DHL invests $1.2 billion in entering the U.S. market. DHL is the largest express carrier in Europe with a 40% share, and the largest international express carrier in Asia, also with 40%. There is a global economy now, all businesses involved in foreign trade, world trade has to be transported, and DHL thinks that they have to be everywhere for providing the transport. If DHL did not enter in the U.S. with a completed network, it would be very difficult for them to hold onto the No. 1 position in Europe and Asia. Acquisitions and Integration Strategies are adopted by DHL. DHL has integrated more than 100 companies, the horizontal integration with Airborne Inc. helps DHL to expand their worldwide network and also the ground network. It helps increase the ability to attract U.S. customers who want to cut costs by sending parcels overland rather than by air. Diversification Strategies are adopted in entering U.S. market. The U.S. market is moving toward a ground network, DHL diversified a new market of ground-based network as to capture U.S. customers of small-and medium-size businesses. A good ground network is needed for the new market, DHL invests more in developing and improving its infrastructure for satisfying the new market. For the business level strategies, DHL adopts the Differentiation Strategies. DHL differentiates itself with competitors by identifying strategic customers and knowing what they value.As to raise awareness of DHL’s brand in U.S., DHL is spending $150 million annually on promotion that tweaks UPS and FedEx. DHL offer benefits which is different from competitors, for example, going to remote locations where UPS and FedEx are more reluctant to go to. DHL provides a better services at same price by improving their infrastructure. It includes expanding trucking routes, creating air hubs, and improving the sorting centers, drop-off points. Moreover, Focused Differentiation is adopted, DHL provides high perceived service benefits to a selected market segment. DHL focuses on the midmarket and smaller businesses, as to provides high perceived service benefits to the niche, DHL offers more personal service to them. For the operational level strategies, DHL builds its business by improving its customer services.
Per Kalogeropoulos (2016), the company is better able to ensure product availability while managing their costs because of their latest logistics initiative. They have recently created a network of deployment centers that reduces the time between when the product leaves a supplier to when it hits the shelf at the Home Depot store which drives profits higher. Parnell (2014), relays that companies who use low-cost strategy seek distribution channels that minimize cost. Home Depot’s new logistics initiative provides the company with economies of scale and a market advantage because it adds to their low-cost
As a company who provides a service for their customers, TQL has great strength in honesty with customers and freight companies. The founders saw some of the unethical practices used in business by other brokers and decided at inception of their business they would show fairness with their business contacts as a competitive advantage. Another strength of TQL is their customer service team. Unlike many competitors, TQL is available to their customers 24 hours a day, 7 days a week, and 365 days a year. TQL also keeps in close contact with drivers of freight companies carrying customer loads to ensure that everything runs smoothly throughout the delivery process.
Breaking into new markets helps the company grow and brings in new customers, which leads to higher profit margins.
By building international reach; Wal-Mart would gain economies of scale, which increase the ability to reduce prices to its customers. Furthermore, global suppliers would help the company facilitate the entry process into new markets by having the “wisdom and support” of an established presence in the market who know customer trends and market needs and specifications. Not to forget the advantage of e-commerce in breaking the international barriers and increasing sales, which is already happening in Mexico through kiosks, where consumers order online and pay/pick at the
Business level strategies identify the company’s overall competitive theme (Hill & Jones, 2013). In addition, business level strategies evaluate the ways a company creates its competitive advantage and the various positioning strategies that are used in a numerous of industry settings. Companies may use a cost leadership strategy, differentiation strategy, focus strategy, or a combination of these: Cost leadership is a company’s use of effectiveness in order to sell their products at the lowest price than its competitors. Differentiation strategy is the creation of desired products or services. Focus strategy is when a company offers specific services in a niche market. Focus strategies put emphasis on a precise role or division of the industry.
Product Characteristics: diverse; customers can receive top end service through to low cost travel and ongoing international hook-ups.
Real Threat of Substitute Products or Services: High customer satisfaction earned through conscientious drivers, high reliability, and Internet-based tools has kept UPS at the top. UPS has created an economic advantage by assembling a dense integrated global shipping network that is unlikely to be matched by any but a few global players.
Moreover, Ansoff suggested some main direction that companies should follow to develop market and product conditions. The market development and differentiation strategies suggest that in order to increase sales, WRSX have to offer their services in new developing markets such as China or India. The strategy for market development gives the opportunity to expand their service in order to attract competitors' clients and to expand in unreached markets (Barry, Witcher and Chau, 2010). Potential solution could be acquisition of UK agency competitor to assist WRSX to enter new market quicker and smoother go through the barriers of entry such as government regulations and different culture.
After this decision internet distributors and Express respectively has to be considered as strong competitor due to the price-sensitivity of the electronic industry. Therefore A/S should work on its company image to highlight their advantages compared to discounters. Therefore A/S has to point out that they are aware of being not the cheapest but nevertheless will create more benefit for the customers by offering service and competence.
Competing with not only with domestic carriers but also with foreign carriers, Delta Air Lines has to do everything possible in order to win the business. Well-funded airlines in the Gulf regions like Emirates, Etihad and Qatar Airways who increase their services to the United States from their hub in Middle East make it impossible for domestic carriers like Delta to stay in profit ("DAL 12.31.2014 10K," n.d.). Furthermore, these international carriers who are either funded or supported by the government are able to purchase the newest wide body aircrafts. Having a newest fleet amongst its competitors pleases the customers and helps save more fuel on the long haul international flights saving the company money on fuel and increases the customer service at the same
In the horizontal integration, the company product range is from a wide clientele. That is they sell product either clothing or luxurious foods from different manufacturers. These give them the edge since the products they offer a variety for the customers to choose from, and hence they can shop less than one roof (Cole, 1997). In the vertical integration strategy, the firm will deal substantial with products from a single supplier and M&S gets the exclusive rights to deal with the product and its supply to the market. This is necessary when the company aim is to serve an identified target market which is exclusive and has the potential to sustain and grow the company substantively. These employ a tar...
In the modern world of conducting business, any company that wishes to succeed must differentiate its products or services from others in the industry. Differentiation makes it possible for consumers to point out notable differences between one company’s products as compared to those of competitors. Differentiation helps companies build brand loyalty as the uniqueness keeps customers fixed on a particular product. BMW is one of the most popular automakers in the world today. It definitely uses differentiation as a strategy to beat off competition by building products that are innovative, detailed and incomparable to those of competitors.
By expanding internationally, Wal-Mart can promote their domestic product and services at international market as whole. It is more advance compare depend only at one country. Customer came from variety of the country in the world which makes the business which led to the increasing the growth of the product and services itself. This is referring to the Wal-Mart where their product and services are totally known by lot of the country in this world. Buyer power has increasing by the expanding of the business at international level.
To expand in the U.S. market and open new stores, Aldi should continue to execute a Niche Cost Leader strategy with a bit of revision to its promotional activities. Aldi’s cost leadership orientation and low prices will enable them to gain a competitive advantage in the U.S. market, gain market share, and subsequently expand and open new locations.
Vertical integration is where a company becomes their own supplier or distributor through acquisition. Seprod uses the strategy by their acquisition of Belvedere Estate in 2006 so as to expand its dairy farm pastures to increase their supply of milk output from the dairy farming. They also use vertical integration in their subsidiary Industrial Sales Limited. This is done by making them the main distributer and marketer of their