PROJECT OF STRATEGIC MANAGEMENT
GROUP MEMBERS
ANAM JAMAL
FAIZA ABBAS
MEHWISH SABEEN
MINAL RASHID
SUBMITTED TO
SIR ABID SALEEM
1
ACKNOWLEDGEMENTS
First of all we would like to thank Allah Almighty, by whose
Grace; we were able to complete this project in time.
We would like to thank Mr. Amir Mehmood, Branch Manager
DHL, F-8/2, Madina Market Branch for his cooperation and help
with our project.
We would also like to thank Mr. Abid Salim who taught us with
dedication throughout this semester. Through the numerous
assignments he gave throughout the semester and especially this
project, we have attained a lot of knowledge.
Finally we would like to thank our parents, who have always
supported us and through their efforts and prayers, we are where
we are today.
May Allah grant us success in our lives and studies.
2
TABLE OF CONTENTS
ACKNOWLEDGEMENTS .......................................................................................................................... 2
COMPANY OVERVIEW ............................................................................................................................. 4
DHL VISION .............................................................................................................................................. 4
DHL MISSION ............................................................................................................................................ 4
DHL CORPORATE VALUES..................................................................................................................... 4
CORPORATE SOCIAL RESPONSIBILITY.............................................................................................. 5
DHL PAKISTAN.......................................................................................................................................... 5
NETWORK IN PAKISTAN ......................................................................................................................... 5
BUSINESS MODEL FOR DHL ................................................................................................................. 7
PORTER’S FIVE FORCES MODEL....................................................................................................... 11
PEST ANALYSIS ...................................................................................................................................... 13
COMPETITIVE PROFILE MATRIX FOR DHL.................................................................................... 15
INTERNAL FACTORS EVALUATION (IFE) MATRIX ....................................................................... 17
EXTERNAL FACTORS EVALUATION (EFE) MATRIX ..................................................................... 18
SWOT ANALYSIS ..................................................................................................................................... 19
TOWS ......................................................................................................................................................... 23
SPACE MATRIX ....................................................................................................................................... 25
THE INTERNAL- EXTERNAL (IE) MATRIX) ...................................................................................... 27
BCG MATRIX ............................................................................................................................................ 28
QSPM ......................................................................................................................................................... 31
CONCLUSION AND RECOMMENDATIONS: ...................................................................................... 33
APPENDIX: ............................................................................................................................................... 34
REFERENCES: ......................................................................................................................................... 35
3
COMPANY OVERVIEW
DHL is the world leader in mail and logistics services. DHL corporate brands provide a unique
business portfolio of logistics and communications services. DHL is the world market leader in
global express transport and air freight. It is also no .1 in ocean freight and contract logistics.
Almost 500,000 employees in 220 countries and regions form a world network emphasis on
service, quality and stability that crosses customer's perceptions in 120,000 locations in all
continents. [1]
Three companies joined the brand of DHL in 2003, to set new and better standards in the courier
business the world over. These companies are:



The worldwide leader in air express. DHL Worldwide Express
Global leader in sea and air freight , Danzas
European leader in parcel services. Duetsche Post Euro Express.
VISION:
“Customers trust DHL as the preferred global express and logistics partner, leading the industry
in terms of quality, profitability and market share.” [2]
MISSION:
“Making the most of scale experience and passion DHL’s mission is to be the first choice
worldwide.” [3]
DHL CORPORATE VALUES:
DHL is customer conscious and working upon the strategy of “Customer is King”. Therefore
their corporate goal is to get the customer satisfaction by providing good quality, reliability, and
accepting the challenges… Also






To provide superb values
To act with honesty externally and internally
Foster openness
Act in entrepreneurial way
To act according to specific priorities
Accept social responsibilities [4]
4
CORPORATE SOCIAL RESPONSIBILITY:
Since the company operates globally, company has a distinctive responsibility to avail their
knowledge, experience for the improvement of society and to control any bad influence that their
business may have on the environment. Living Responsibility appreciated DHL’s struggle in the
field of education environmental protection and disaster relief. DHL took many steps in Go
Green, Go Help and Go Teach programs supported by the skills and devotion of their 500,000
employees. [5]
DHL’s business emphasizes on health, ethics, safety, and protection of cultural differences.
People, environment and community are basis of DHL philosophy of citizenship. Company
brands are true representative for commitment and honesty. Company efficiently avail its
logistics expertise by using its resources and managing disaster in the affected areas. Company
tried their best to support victims of the 2005 and 2008 earth quakes by delivering donations to
victims. Company also supports a variety of social welfare organizations one of these are Family
Educational Services Foundations and SOS Children’s Village. [6]
DHL PAKISTAN
DHL Pakistan started its operations in Pakistan in 1982 headed by Sarfraz Siddique country and
director manager of DHL. After the acquisition of Exel Inc., the company started its logistics
operations in 2002, headed by Imran Sheikh, who is the Managing Director. [7]
 Employees more than 600
 Gateway:4
NETWORK IN PAKISTAN:
DHL is the largest service provider in Pakistan and also largest air express company with 65%
market share. Operating in more than 40 location and have above 200 vehicles and over 300
employees.
DHL delivers documents and heavy weight parcels efficiently. Besides this, it also provides
unique services that add value to their customers. DHL Logistics presents end to end Logistics
solutions to clients.
Head office of the company is in Karachi, with branch offices in Lahore, Sialkot and Islamabad.
There are 48 branches of company in different cities of Pakistan as Express Centers, Service
Centers and Gateways. Dominantly company operates in four locations with a workforce of
above 300. [8]
5
The main cities where DHL has its service centers are
 Karachi
 Lahore
 Islamabad
 Multan
 Sialkot
 Peshawar
 Faisalabad
Besides these it is operating with its Express Centers which are located in different cities of
Pakistan.
6
BUSINESS MODEL FOR DHL
1) INFRASTRUCTURE:
Key partners:







DHL International
Manufacturers and service provider Customers.
Pakistan & country Business community
Government of Pakistan
United Nations (Go Teach Project)
Logistic Providers
Airline Express
Key activities:





Research & Development
Marketing
Sales(Product &Services)
Finance Operations
IT and Procurement.
Key Resources:

Human resource.
Key Competitors:







FedEx
UPS
TCS
OCS,
Leopard`s
Pakistan Post (Mail)
NLC
7
2) FINANCING:
Cost Structure:




Cost incurred in delivering all services and basic cost incurred in transportation.
Air freight charges and rent charges of warehouses.
DHL invested up to $8 million in construction of Logistic Centers in Karachi and Lahore,
new and modern Airside Express and in improving its facilities.
Investment of DHL assures DHL’s honesty and commitment towards partnership with
Pakistan and toward business community of Pakistan.
Revenue Stream:


Sales from all channels throughout the company
National Sales profitability by an efficient operation of the Priority Support Service
3) OFFERING (VALUE PROPOSITION):

DHL MAIL:
Global Mail of company is directly connected with 40 production centers in 5 continents and
with 100 sales offices in 200 countries and also in touch with cross border solutions for global
mail shipments. DHL provides cross border mail and parcel solutions and variety of added value
services to make cost reducing customized mail solutions for you and to your customers from
each country in DHL network. [9]
Mail service includes:
 International Services
DHL works to create a flexible, cost reducing solution to match with your distribution and mail
fulfillment needs in areas of
(1) General correspondence (2) direct mail (3) catalogs (4) publications ((5) invoices (6) parcels.
[10]

DHL EXPRESS:
Is the world leader in global Express Shipping and ships more global packages as compared
to rest of them. Result is more customers trust DHL with their package no matter it’s around
the world or around the corner. [11]
8
 Shipping:
Express Shipping of DHL support area for both new and old customers. [12]
 Export Services – International Express Delivery
DHL offers reliable and variety of delivery options to other countries in export services.
Including incase of emergency same day to guaranteed time to next day and offer certain
options for less urgent days. [13]
 Import Services – Inbound Express Delivery
DHL offer variety of delivery options in import services to Pakistan ranges from time
critical guaranteed next day to days which are not urgent with certain choices. [14]
 Domestic Services – Local Express Delivery
In Pakistan domestic service offers wide range of delivery options including emergency
same day to guaranteed time critical next day to less urgent. [15]

DHL LOGISTICS:
DHL Logistics included:
 Warehousing and distribution
 Supply chain solutions freight transportation.
Because of which DHL is the globally largest logistics expert. [16]
 Freight Transportation
DHL is a logistics partner because of which it is able to deliver cargo of any type to any
location through air, ocean, road or rail. DHL has the capability of giving its customers
the personal attention they require. [17]
 Warehousing and Distribution
Specialist of DHL provides uncountable and quick solutions that will drive value for your
business. Make sure that businesses can deliver their service promise to their customers
worldwide DHL provides dedicated warehousing and distribution services. [18]
 Supply Chain Solutions
DHL provides a variety of services on their global network local insight to provide value
covering your supply chain. As the world's largest logistics specialist, from the initial
consultancy and design, to last mile delivery and reverse logistics; they provide tailored
supply chain solutions covering all industry sectors. [19]
9
 Industry Sector Solutions
Company emphasis on specific industry sectors like customers benefit working with
experts. [20]
4) CUSTOMERS:
Relationship with customers:
DHL’s customers come from across the commercial spectrum and the public sector.DHL is
customer conscious and working upon the strategy of Customer is King therefore there corporate
goal is to get the customer satisfaction based with providing good quality, reliability, and
accepting the challenges.
COMPETITIVE ADVANTAGE:
DHL is enthusiastic regarding sustainable competitive advantage for our customers by delivering
their products to market as fast as possible effectively and more efficiently. Regardless of their
size DHL customers can rely on company to draw on our international scale and domestic insight
to provide value covering every area of their supply chain.
Deutsche Post DHL is built upon two strong pillars to strategically position for the future.
 An integrated international logistics business
 Solid mail business with new electronic value added services.[21]
10
PORTER’S FIVE FORCES MODEL
RIVALRY:
On the basis of prices, strong competition is found between the transportation firms. These firms
frequently cut prices to secure their market share. The large companies in the global
transportation industry are FedEx, UPS, and OCS.
THREAT TO ENTRY:
To become leader in the international transportation business the companies must have large
distribution network, well capable hub for parcel organization all around the world and have
contact to a huge number of planes, truck, trains and ship. Any new entrant who want to come in
the market oh having specialize in one of the sub division of the market, not necessary to be in
the competitive situation. Entrant having obligatory market capitalization has to fight for making
brand image. A very important matter that large companies have with big organization is the
long term contracts and commitment. Entrants also experience big revenge from existing
competitors on the considerable level.
THREAT OF SUBSTITUTES:
Substitute does not appear with the probable threat on the transportation business. Though
present all feasible shipping solutions, competitors ensure their market share whether the user
decide to alternate his air fright operation with a land or marine fright operation. Yet one market
division, the sudden text delivery marketplace is in front of a considerable risk of alternative by
facsimile and email. ISP train more individuals about the email and online text delivery.
11
Businesses and companies are more convivial than before to allow ODS to accumulate money
and time.
SUPPLIER BARGAINING POWER:
Profitability of shipping industry is strictly distressed by the changeable prices of fuel. Oil
suppliers are in strong bargaining position which is due to the prices that are indomitable based
on the political as well as economic concern. On other hand the transportation business fighting
with this issue on collecting fuel charges due the continuously increase in fuel prices. Suppliers
that wrap tools like plastic and boxes are not in position of having high bargaining power. The
vehicle supplier will not be in a high bargaining position due to the competition of automobile
assembling business. Workers of shipping vehicle with limited power such as train have some
bargaining power. Bargaining power of check providers can be reduced by making investment in
the technology that automates the wrap-up arrangement process.
BUYER BARGAINING POWER:
To offer delivery services to the large businesses and firms, the shipping firm faces severe fight.
Shipping firms are facing large competition to arrive at storage and ware houses as well as spare
parts. The users of these corporations don’t have the lightness to select their shipping supplier
but they have used the services of other shipping firms to take advantage of transportation
solutions. Furthermore switching cost is also low. This condition laid these firms in a very high
bargaining situation. Users want to select the companies that provide low prices. But by
providing competitive advantage to the users, companies can capture them. Also many supply
centers as well as warehouses are combined with shipping firms each user with some bargaining
power.
12
PEST ANALYSIS
POLITICAL ENVIRONMENT:
Political environment of Pakistan is very weak and unsure. The problem there is the security
condition and has clear impact on the sustainable expansion of DHL Pakistan. As an example the
high security risk in Pakistan, most of the embassies, consulates and international organizations
(e.g. NGO's) cease their operations temporarily, thus crafting a direct impact on the business of
DHL Pakistan.
The country's import and export regulatory authority (Pakistan Customs) has a direct interaction
with DHL Pakistan as all their inbound and outbound shipments must be accepted by custom
authority. The company has contracted an independent broker to get all their inbound and
outbound shipments cleared through Pakistan Customs but the delays are still occurring on
standard basis. It generates a detrimental pressure on the company's repute and customer base.
ECONOMIC ENVIRONMENT:
Pakistan is an agrarian country with a large number of populations associated with agriculture.
State Bank of Pakistan decides the monetary issues.
Till 2007 the economic conditions of the country were flourishing, while the country maintained
a growth rate of 6% third highest in Asia after China and India. Government policies made the
country got rid of IMF dictation for the first time ever in history. It also favored foreign
investors. Lots of money was coming in the country as foreign aid.
For the past few years, there has been virtually no Foreign Direct Investment. Inflation rate is
12.9% and the interest rate is 14%.Dollar reached record high of Rs87 severely deteriorating the
debt management. Pak`s role in War on Terror costs billions of rupees leaving very few funds for
development work. Although many countries and organizations like Friends of Pakistan
promised huge amount of aid but actually they just turned out to be loans on extremely strict
conditions putting the country’s sovereignty in question. Electricity, gas and water shortages
have become a common thing.
Many areas of the country especially north and south westerns region have been untapped. They
can turn out great markets. As the economy of Pakistan becomes more and more service
oriented, there are huge prospects of growth for DHL as people all over the country want faster
communication.
13
SOCIAL ENVIRONMENT:
Pakistan's economic forecast, flawed by aggressive human development indicators, low levels of
foreign investment, and dependence on international creditors for hard currency inflows, were
however on an upswing during most of 2001. Musharraf government made considerable progress
in macroeconomic reform. While Pakistan has exploited its international standing after the 11
September terrorist attacks on the US, long-term prospects remain unclear. GDP growth will
continue to turning point; oil prices also goes high and foreign and domestic investors remain
careful of starting new projects with Pakistan. Moreover the level of trading system decline as a
reason of global economic recession.
The facts recommend that maximum of population is very price aware and because of great
rivalry in the courier business, DHL suffers in the context of profit with certain limits.
TECHNOLOGICAL ENVIRONMENT:
Technology is important as main driver of globalization as well as for the competitive advantage.
It also provides way to the firms to be in touch with the users, for example CRM. Because of the
low income level and literacy rate the technological environment in Pakistan is simply old
fashioned as compared to the developed countries.
The employees of the company are provided training on regular basis to help them understand
and digest the new systems in place and how to use them effectively. Furthermore, DHL
Pakistan also keeps its customers up-to-date of any new developments. An example of this is the
launch of a new software by the company for its customers ("Fast Forward") enabling them to
track down their shipments in transit plus also be able to monitor the exact route of their
shipment. This software also permit clients to carry out a comparison between the Air Freight
prices being charged by different Airlines and DHL's prices for different weight slabs. In
addition, a training session was also organized to educate the clients as how to use the software.
14
COMPETITIVE PROFILE MATRIX
DHL
FEDEX
UPS
COMPETITIVE WEIGHT RATING AVG.
RATING AVG.
RATING AVG.
FACTORS
SCORE
SCORE
SCORE
Price
Financial
Position
Service Quality
Customer
Loyalty
Innovation
Management
Reach and
frequency
Market Share
Advertising
Total
0.11
0.10
3
4
0.33
0.40
2
4
0.22
0.40
3
2
0.33
0.20
0.15
0.09
3
3
0.45
0.27
4
3
0.60
0.27
2
3
0.30
0.27
0.12
0.10
0.10
4
3
4
0.48
0.30
0.40
4
3
2
0.48
0.30
0.20
2
2
2
0.24
0.20
0.20
0.11
0.12
1.00
4
3
0.44
0.36
3.43
2
2
0.22
0.24
2.93
1
1
0.11
0.12
1.97
Critical Success Factors:
Critical Success factors are factors important for a company’s success. They are identified after
an analysis of the firm. A high rating means that the firm’s strategy is supporting the critical
success factors well and lower rating means that the strategies do not match them well.
Rating:
The rating represents the firm’s response towards the CSF. Higher rating means better response
and vice versa. Rating ranges from 1 to 4.
•
1 means poor response
•
2 means average response
•
3 means above average response
•
4 means superior response
15
Weight:
The weight assigned in the CPM indicates the factor’s importance in the industry in which the
company operates. The weight ranges from 0, which indicates not important and 1, which
indicates important. The sum of all the weights should be 1.
Weighted Score:
The weighted score is obtained by multiplying each factor weight with its rating.
Total Weighted Score:
The sum of all weighted scores gives the TWS. Its value can be from 1 (low) and 4 (high). If a
company’s TWS is higher than 2.5, it is considered to be in a strong position. In CPM, the firm
with the higher TWS is deemed to be most successful among its competitors.
RESULTS:
DHL’s total score is higher than its competitors which show that it has an edge over its
competitors in terms of the CSF, due to which it is the market leader in the industry.
16
INTERNAL FACTORS EVALUATION (IFE) MATRIX
STRENGHTS:
WEIGHT
RATING
WEIGHTED
SCORE
1. Global reach
0.11
4
0.44
2. Brand image
0.15
4
0.6
3. Corporate symbiosis
0.10
2
0.2
4. Technology and eservices
0.13
3
0.39
5. Innovators
0.15
3
0.45
1. High Prices
0.15
2
0.3
2. Less revenue from import service
0.10
2
0.2
3. Weak Visibility
0.11
1
0.11
WEAKNESSES:
TOTAL
1.00
2.69
RATING SCALE:




Rating 1 – Major Weakness
Rating 2 – Minor Weakness
Rating 3 – Minor Strength
Rating 4 – Major Strength
RESULTS:
The IFE matrix results show that the company has a score of 2.69, which indicates that the company has
an above average internal position and is strong internally.
17
EXTERNAL FACTORS EVALUATION (EFE) MATRIX
OPPORTUNITIES:
WEIGHT
RATING
WEIGHTED
SCORE
1. Global Expansion
0.10
4
0.40
2. Expansion of e-commerce
0.10
3
0.30
3. Joint Ventures with local transportation
companies
4. Expansion of customer base
0.10
1
0.10
0.09
3
0.27
5. Products and Services Expansion
0.10
3
0.30
1. Economic Recession
0.09
3
0.27
2. Political Uncertainty
0.09
3
0.27
3. Increase in fuel prices
0.10
3
0.30
4. Threat of new entrants
0.06
3
0.18
5. Lower Cost Competitors
0.06
2
0.12
0.11
3
0.33
THREATS:
6. Rules And Restrictions In Foreign
countries
TOTAL
1.00
2.84
RATING SCALE:




Poor - 1
Below Average- 2
Above Average- 3
Superior- 4
RESULTS:
The EFE matrix results show that the company has a score of 2.84, which indicates that the company is
strong in position and responds well to the external environment.
18
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
S1
Global reach
W1
High prices
S2
Strong Brand image
W2
Weak Visibility
S3
Corporate symbiosis
W3
Low revenues from import
services
S4
Technology and e-services
S5
Innovators
OPPORTUNITIES
THREATS
O1
Global Expansion
T1
Economic Recession
O2
Expansion of E-commerce
T2
Political Uncertainty
O3
Joint Ventures with local transportation
T3
companies
Increase in fuel prices
O4
Expansion of customer base
T4
Threat of new entrants
O5
Product and service expansion
T5
Lower Cost Competitors
STRENGTHS:
Global Reach:
DHL has a global network and a presence in 220+ countries. They operate in a large market and
provide remarkable services and solutions to fulfill the needs of their worldwide customers.
Therefore they are able to earn outstanding revenues. They are also able to achieve global
economies of scale through their worldwide network.
19
Strong Brand Image:
In 1997, DHL became the transportation and logistics company to acquire concurrent ISO
9001certification in International Quality Standards. DHL also has its own quality system to
ensure that they meet their customer’s requirements.
Corporate Symbiosis:
DHL has developed its own executive structure, to enhance its position in the global market,
which is known as “Corporate Symbiosis”. This technique requires the empowerment of the
DHL personnel at a local level and simultaneously acknowledging the interdependence of the
units of DHL, which combined together, form a corporate and cohesive whole.
Technology and e-Services:
DHL currently uses and strives to explore new technology. Nearly 10% of their revenues are
spent on information technology. DHL also has good e-services that provide access to systems,
which ensures that customers can control and are in charge of their supply chains at all times.
Shipments and deliveries can be tracked and queries can be made online.
Innovators:
Customers of DHL receive innovative products and services which meet the needs of both
businesses and individual customers. DHL is the pioneer of the innovative services and solutions
in the global courier and logistics industry and has positioned itself at the cutting edge of the
growth market.
WEAKNESSES:
High Prices:
DHL’s prices are somewhat high in comparison with their competitors. This is a weakness for
the company if the customers do not differentiate between the other companies’ services and
DHL’s.
Weak Visibility:
The company has weak visibility in the community as compared to its competitors.
20
Low revenues from import services
DHL contributes only 10 to 15% of revenue from import services which needs to be improved.
They should improve their import services in Pakistan.
OPPORTUNITIES:
Global expansion:
DHL can continue to expand its business globally. This is an opportunity for the company since
it operates in many countries and can still tap into some new territories as well as expanding its
business in the more remote areas of Pakistan.
Expanding e-commerce in Pakistan:
DHL has a major presence of online shipping. They have an opportunity to try and find internet
companies to deliver their services on contract delivery. As e-commerce is growing day by day,
DHL can earn more revenues and increase their brand name recognition through such ventures.
Joint Ventures:
DHL can enter into strategic partnerships and joint ventures e.g. with local transportation
companies, to benefit from the opportunity and growth of incorporating their customer bases and
lower their costs.
Expansion of Customer Base:
Pakistan is a country where still large numbers of people are still residing in rural areas. They
aren’t much aware of DHL, so it has an opportunity to capture that market by forming strategic
alliances with the organizations like Pakistan Post, as it has countrywide presence and in rural
areas people are much aware of it so they can access it easily.
Products and services expansion:
The World Trade Organization has estimated that the rate of world trading in manufactured
goods will increase in the coming years. So this is an opportunity for DHL. Also they have an
opportunity to expand their business to tap small industries like the hotel industry which are few
in number but have high weight or frequent imports. They can also introduce the Smart Truck
Project in Pakistan. It is a project which allows DHL to deliver faster. The data regarding the
location is transmitted directly to the dynamic route planning system, which calculates the most
efficient routes, while considering the current order situation and volume of traffic. [22]
21
THREATS:
Economic Recession:
Like other countries in the world Pakistan is also suffering from the economic recession.
Inflation rate was almost 13% as of Feb ’11, there hasn’t been virtually any foreign direct
investment over the last few years, and purchasing power of people is also decreasing. So it can
be threat for DHL.
Political Uncertainty:
Political uncertainty in the country always poses threats to investors as they fear laws and
regulations that may not be friendly. Besides there is also a risk of operational difficulty.
Increase in fuel prices:
Nowadays, fuel prices are climbing everyday due to international increase in oil prices. DHL can
pass that along to the customer but even then fuel is always a concern, both in price and
availability.
Threat of New Entrants:
Small and new coming organizations reduce the business of the DHL. With low cost packaging
services offered by competitors are also the threats for the DHL.
Lower competitor prices:
Competitors of DHL are offering their services at lower prices and lower cost as compared to
DHL. This can be a threat if the customers do not recognize a difference between DHL and their
competitor’s services.
22
TOWS MATRIX
STRENGTHS
1. Innovators
2. Strong Brand
image
3. Corporate
symbiosis
4. Technology and eservices
5. Global reach
OPPORTUNITIES
WEAKNESSES
1. Weak Visibility
2. High prices
3. Low revenues from import
services
S-O STRATEGY:
W-O STRATEGY:
S1,4-O5
S1-O1
W1-O3
W3- O5
S-T STRATEGY:
W-T STRATEGY:
S1,2,4-T1
W1-T1,2
1. Product and
2.
3.
4.
5.
service expansion
Expansion of Ecommerce
Joint Ventures
with local
transportation
companies
Expansion of
customer base
Global Expansion
THREATS
1. Lower Cost
2.
3.
4.
5.
Competitors
Political
Uncertainty
Increase in fuel
prices
Threat of new
entrants
Economic
Recession
23
S-O STRATEGY:
S1, 4-O5
In order to increase their market share and find new customers, they need to make their
advertisements about their new technologies and online ordering system.
S1-O1
The company can introduce their innovative smart- truck project which was introduced in
Europe in 2009. It is an environmental- friendly, fast and efficient way of transportation, which
uses the advanced Radio Frequency Identification (RFID) technology for navigation purposes.
S-T STRATEGY:
S1, 2, 4-T1
To decrease the negative effect of economic recession they need to focus on more promotions on
online ordering system.
W-O STRATEGY:
W1-O3
To decrease their prices by cutting cost and increase their market share, they can enter into joint
ventures and strategic partnerships with local logistics and transportation companies.
W3- O5
To offer low price import services, by reducing their costs.
W-T STRATEGY:
W1-T1, 2
To decrease their prices as the competitors and the negative effect of economic recession and
political uncertainty begin to acquire small local companies.
24
SPACE MATRIX
FINANCIAL STRENGTH
RATING
ENVIRONMENTAL STABILITY
RATING
Return on Investment
Leverage
Net Income
ROE
Cash Flow
5
4
6
5
5
Inflation Rate
Price Elasticity of demand
Risk Involved in Business
Economic Conditions
Barriers to entry in new markets
-4
-3
-4
-3
-2
Average
5.00
Average
Y-AXIS
-3.2
1.8
COMPETITIVE ADVANTAGE
RATING
INDUSTRY STRENGTH
RATING
Market Share
Product/Service Quality
Customer Loyalty
-1
-2
-2
Ease of entry into market
Financial stability
Profit Potential
Demand Variability
Growth Potential
Competitive Pressures
2
5
3
3
3
5
Average
-1.66
Average
X- AXIS
3.5
1.84
Internal Strategic Dimensions:


Financial Strength (FA)
Competitive Advantage (CA)
External Strategic Dimensions:
 Environmental Stability (ES)
 Industry Strength (IS)
 The CA and IS values are graphed on the x-axis.
 CA values vary from -1 to -6.
 IS values vary from +1 to +6
 The FS and ES dimensions are graphed on the y-axis.
 ES values range between -1 and -6
 FS values range between +1 and +6.
25
1.84 , 1.8
RESULTS:
An analysis of the company on the four dimensions of financial strength, environmental stability,
competitive advantage, and industry position in the SPACE matrix shows that the company needs
to follow an aggressive strategy.
The company has a strong competitive position in the market with an opportunity of rapid growth
therefore it should utilize its internal strengths to develop a market penetration strategy to utilize
the opportunities present in the environment. Their strategies can also include product
development, integration or partnerships with other companies, acquiring their competitors etc.
For this purpose the company can choose from the strategies developed in the TOWS matrix.
26
THE INTERNAL- EXTERNAL (IE) MATRIX:
EFE SCORE
Strong
4.0
1.
GROW
4.
2.84
HOLD
7.
HARVEST
Average
2.
AND
5.
AND
Weak
3.
High
BUILD
6.
MAINTAIN
8.
9.
OR
DIVEST
Medium
Low
1.0
4.0
2.69
1.0
IFE SCORE
We have obtained the IE matrix by plotting the scores from the EFE matrix and the IFE matrix
along y-axis and x- axis respectively.
The score for the EFE matrix is 2.84, which shows that the company has an above average
ability of responding to the external factors. The total score for the IFE matrix is 2.69, which
shows that the company has an above average internal strength.
The point where the horizontal line meets the vertical line is in Quadrant 5. This suggests that
the company should follow a Hold and Maintain Strategy. Therefore the strategies of the
company should concentrate on market penetration and product development e.g. introducing the
Smart- Truck project in Pakistan and cutting costs to reduce prices.
27
BCG MATRIX
DHL MAIL:
STARS
QUESTION MARKS
DHL
MAIL
CASH COWS

DHL Market Share =41.35 %
DOGS
Market Growth Rate = 0.09%
INTREPRETATION
BCG matrix indicates that in terms of mailing services DHL is placed in cash cows. It means that
market growth rate is low but DHL`S market share is high so it should milk as much profits as
possible. Increasing investment in supporting infrastructure can help in improving efficiency and
increase cash flows for the company.
28
DHL EXPRESS:
STARS
QUESTION MARKS
EXPRESS
CASH COWS

DHL Market Share = 50.2 %
DOGS
Market Growth Rate = 11%
INTREPRETATION
An analysis of DHL Express shows that in express, DHL is a star. It means that it has high
relative market share and also high market growth rate, so it should continue in express as there
is tremendous potential in it. Increasing investment in Express can help DHL in further
increasing its market share and profitability. They can use intensive strategies like market
penetration etc. to further enhance their business.
29
DHL LOGISTICS:
STARS
QUESTION MARKS
DHL LOGISTICS
CASH COWS

DHL Market Share = 34.6 %
DOGS
Market Growth Rate = 2.43%
INTREPRETATION
BCG matrix indicates that the logistics operations are placed in question marks. It means that the
rate of market growth is high and DHL`S market share is low so it should make any decision
considering the market conditions. The company can invest more in its Logistics business and
can also use the revenues generated by the Express Business to help out the Logistics Business.
30
QSPM
INTRODUCE SMART TRUCK
PROJECT ( NEW PRODUCT
DEVELOPMENT)
Key External Factors
Weight
Attractiveness
Scores (AS)
Total
Attractiveness
Scores (TAS)
OFFER LOW PRICE IMPORT
SERVICES (MARKET
PENETRATION)
Attractiveness
Scores (AS)
Total
Attractiveness
Scores (TAS)
STRENGTHS:
0.11
0.15
0.10
0.13
4
4
3
3
0.44
0.60
0.30
0.39
3
4
2
1
0.30
0.60
0.20
0.13
0.15
3
0.45
3
0.45
0.15
2
0.30
4
0.60
Less revenue from
Import services
3 Weak Visibility
TOTAL
OPPORTUNITIES:
0.10
0
0
4
0.40
0.11
1.00
3
0.33
4
0.44
Global Expansion
Expansion of ecommerce
3 Joint ventures with
local transportation
companies
4 Expansion of
customer Base
5 Product and services
expansion
THREATS:
1 Economic Recession
2 Political Uncertainty
3 Increase in fuel
prices
4 Threat of new
entrants
0.10
0.10
4
1
0.40
0.10
3
3
0.30
0.30
0.10
3
0.30
3
0.30
0.09
4
0.36
4
0.36
0.10
4
0.40
4
0.40
0.09
0.09
0.10
3
1
4
0.27
0.09
0.40
4
2
3
0.36
0.18
0.30
0.06
2
0.12
3
0.18
Low cost
competitors
6 Rules and
Restrictions in
foreign countries
SUM TOTAL
ATTRACTIVENESS
SCORE
0.06
1
0.06
4
0.24
0.11
3
0.33
3
0.33
1
2
3
4
5
Global reach
Brand Image
Corporate Symbiosis
Technology and eservices
Innovators
WEAKNESSES:
1
High Prices
2
1
2
5
1.00
5.64
6.37
31
Attractiveness Score:





1 – Not Acceptable
2 – Possibly Acceptable
3- Probably Acceptable
4- Most Acceptable
0- Not Relevant
RESULTS:
On the basis of the strategies developed in the TOWS matrix, we chose two strategies. Either
DHL can introduce its Smart- Truck project in Pakistan or it can introduce low price Import
Services. From the results obtained from the QSPM matrix, we can conclude that DHL should
choose the second strategy of offering low price import services in Pakistan. Because market
research shows that DHL is earning lower revenues from its import services (Only about 10-15%
of the total revenues). This is because of high prices, due to which, customers prefer to utilize
their competitor’s services.
Therefore DHL should try to lower their operation costs and to differentiate from the competition
to gain a stronger competitive advantage. To do this, heavy cost driver of the operations like gas
prices, government policies and restrictions etc. have to be observed. They can also create new
partnerships and joint ventures with transportation and airline companies, with an aim to reduce
their costs. They should also increase their advertising to increase their visibility. These steps can
help DHL in increasing their market share and consolidate their status as the market leader.
32
CONCLUSION AND RECOMMENDATIONS
From our analysis, using various strategic management tools and techniques, we have concluded
that DHL is the market leader in courier services in Pakistan, since they have the majority market
share. Therefore its strategies should aim at holding and maintaining its strong market position.
Like any other company, there is always some room for improvement in every company’s
performance but regardless of the tough economic and political situation in Pakistan, DHL seems
to be going strong.
Using the strategies proposed in the TOWS matrix, we narrowed down the list to two strategies
for the QSPM analysis, which concluded that DHL should offer low price import services in
Pakistan. But the other strategy proposed in the QSPM should also be kept in mind. If DHL
introduces its smart- truck project in Pakistan, it would enhance both their services and
reputation, but the current market conditions are not feasible for this project. Therefore, DHL
should consider introducing this project in Pakistan in a few years time. In the meantime they
should concentrate on differentiating from the competition to gain a stronger competitive
advantage and staying ahead of the competition.
33
APPENDIX
WORKING FOR BCG MATRIX:
1) MAIL
YEAR
Market Share:
DHL
DHL=12747*100= 41.35%
30825
SALES-2009
SALES- 2010
12495
12747
TOTAL
30546
30825
YEAR
SALES-2009
SALES- 2010
5878
6786
TOTAL
12154
13515
YEAR
SALES-2009
SALES- 2010
10516
11178
31449
32216
Market Growth rate:
30825-30546*100=0.09%
30546
2) EXPRESS
Market Share:
DHL
DHL=6786 *100=50.2%
13515
Market Growth rate:
13515-12154*100= 11%
12154
2) LOGISTICS
Market Share:
DHL
DHL= 11178 *100= 34.6%
32216
TOTAL
Market Growth rate:
32216-31449*100= 2.43%
31449
34