Dhl’s American Adventure

Topics: Strategic management, Express mail, Vertical integration Pages: 6 (1689 words) Published: April 7, 2009
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. 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 organization’s 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...
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