The case in DHL gives the situation faced by DHL Worldwide Express (India), a division of Airfreight Ltd, which is a company engaged in different activities connected with transportation of cargo (both domestic and international), domestic surface transport, logistics and express operations. It also has two subsidiaries, one a travel agency and another engaged in money transfer operations. Shipping is also under a subsidiary. The DHL division has an alliance with DHL Worldwide Express, the worldwide leader in air express industry. The case presents a situation where the company faces competition from its domestic rivals M/s Blue Dart Ltd, M/s Elbee Express Ltd and many others, as well as express companies such as Federal Express and TNT which have just started their operations in India. The strategic choices faced by the DHL Division of the company concern; i) its relative concentration on its international express business as compared to its domestic business; ii) how to handle its domestic operations; iii) relative emphasis on documents vs. non-document segments and iv) how to leverage the strengths of the operations of the other divisions of Airfreight Ltd. How to ensure that DHL Worldwide Express does not feel the need to enter India on its own (like Federal Express did) is also a critical issue that comes out of the case. DHL Worldwide Express
How do customers purchase air express service? Are there differences between documents and parcels? Customers purchase air express service based on the carriers standing in the market place, specifically that are well-received and well-respected by their own customers, both external and internal. Many of them are price sensitive as well as very service sensitive. Customers split their air express service requirements among several firms – usually between 2 or 3 three preferred providers. Parcel services are scrutinized for best cost options and often discounts and annual contract are negotiated on anticipated volumes by the purchasing department. Large companies consolidate these shipments and put up the business for bid soliciting proposals from interested parties, the decision of service provider is taken by the VP – Logistics, Yes, there are differences between documents and parcels.
Documents are non-dutiable and non-declarable items and mostly comprised of inter-office correspondences, computer printouts and contracts. Documents had no commercial value at all. They are also light weight shipments managed by the individual or their secretaries. Parcels are usually non-document items that have a commercial value and/or need to be declared to the customs authorities. Typical items would include prototype, samples, spare parts, diskettes and videotapes; had external dimension and weight restrictions of 175cms and 50 Kg respectively. Most companies have dedicated teams managing these within the Logistics or SCM. What are DHL’s strengths and weakness when compared to its competitors? Strengths:
• Fastest delivery amongst all service providers in the industry • DHL is a large player; their revenues are more than the combined revenues of their 3 nearest competitor. • Split operations – US (DHL Airways) and International (DHL International) • Efficient use of the Hub model
• Usage Optimization of own
DHL Case Analysis
Determining a right type of pricing is one of the most important decisions that any international company has to face. As depicted in the case, DHL comprises two mutually exclusive companies: DHL and DHL International. The circumstances involved in the matter clearly contribute to making the whole process of finding or developing a right type of conclusion even more difficult because managers are exposed to a number of hidden threats and difficulties involved in the situation. One has to realize that various aspects, features, and issues are to be thoroughly discussed and carefully analyzed in order to determine...
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