Summary DHL was established in 1969 as an international delivery company.
Over the years, it has grown and now provides professional services in express, air freight and ocean shipping, ground transportation and international postal service areas, etc. The company caters to many across the world, providing services to business customers and consumers as well. DHL is the biggest Third Party Logistic (3PL) company in the world. As a logistics company, specializing in Logistics Process Outsourcing and Managed Processes, DHL is No. 1 globally in about 5 different categories. This list includes the biggest network for mail distribution, No.
1 cross border express in about 220 countries and territories, No. 1 in global air freight and many other number categories in world mail, freight and distribution. In addition, supply chain and enterprise information solution are two important business issues which DHL deals with in connection to contract logistics and enterprise solution services.
Reaching such a great recognition requires great planning, implementing and controlling procedures. The purpose of this paper is to attempt to examine and identify the processes that help with the distribution of materiel, service, and information. Throughout this paper, the logistics system for DHL will be examined to determine the solutions used for manufacturing and distributing goods. In addition, the paper will examine the three different marketing strategies implemented by DHL, which consist of segmentation marketing, differentiated targeting market, and positioning market. Problems relating to DHL’s logistic process are discussed, as well as suggestions to help improve the logistical process within the organization. Business History In 1969, Adrian Dalsey, Larry Hillblom and Robert Lynn established DHL, in San Francisco, California. The term DHL was established using the first letter of the founders’ last name. Originally, the goal of the company was to provide door-to-door delivery services and transport documents between San Francisco, California and Honolulu, and Hawaii.
As the customers began to grow and operations began to expand, DHL worked hard to meet the demands for other territories. By the early 1980s, DHL was providing services to Bahamas, Uruguay, Bangladesh, China, India, Austria, Ivory Coast Zimbabwe, and other places. Today, the company is operating in over 220 countries and providing services across the world (Bhasin, 2017). Service provided include express mail distribution, freight transportation, domestic and international parcel, and supply chain solutions. In 2002, the DeutschePost Group gained complete ownership over DHL. The parent group, DeutschePost Group, is the leading mail distribution and logistics company that encompasses the business units DHL Mail, DHL Express, DHL eCommerce, DHL Global Forwarding, DHL Freight and DHL Supply Chain (Bhasin, 2017). DHL is the biggest Third Party Logistic (3PL) company in the world and has become a worldwide pioneer of the Worldwide express and logistics industry. It covers freight transportation, warehousing and distribution, and supply chain solutions.
The company has grown to become the World’s No. 1 in warehousing, distribution, and contracting logistics and No. 1 in air and ocean freight. Market Strategy A market strategy is implemented to help businesses achieve a specific objective, goal or results. This could entail recognition, sale growth, profit making potentials, and co-ordination of the business. Given the professional services provided by DHL in mail distribution, cargo and sea shipping, and ground transportation, marketing strategy is needed. DHL focuses on three main strategies: segmentation, targeting, and positioning.
DHL is a worldwide company that has global customers. Thus, implementing segmentation marketing strategies are important for the success of the company. Segmentation marketing is a process that consist of grouping customers into a category, based on certain characteristics such as location and needs.
In particular, DHL uses demographic and geographic segmentation marketing strategies. Demographic segmentation strategies group customers based on age, income, gender, religion, and race, whereas geographic segmentation group customers based on location and language. Utilizing such strategies help DHL to meet the demand and cater to its diverse customers. As a marketing strategy, DHL also emphasizes differentiated targeting market. Targeting market focuses and works to obtain individuals in a segment (Bhasin, 2016). For example, a segment may be geographical or demographical. Implementing a target market requires value, customer preference, and lifetime value.
DHL implements differentiated targeting in order to understand and strategize deliverables (Bhasin, 2017). In addition to segmentation and targeting strategies, DHL also implements positioning strategies as a part of their marketing plan. Positioning strategies focus on being able to position a brand so that is distinguished from products from competitors. In the case of DHL, there are many known competitors such as FedEx, UPS, Amazon express, TNT express and many others. Logistics Process Outsourcing According to DHL they specialize in managing processes. As customers increasingly focus on their own core competencies, we have been asked to provide solutions for logistics processes which fall well outside traditional warehouse or transportation management. This Logistics Process Outsourcing (LPO) encompasses both overhead and line functions and is an effective way for our customers to reduce their costs and achieve their strategic objectives.
Logistics activities represent a significant portion of an organization’s overall budget. This is why supply-chain managers and business owners are always looking to get the most out of their logistics spending. The majority of companies outsource logistics to cut costs, access expertise, and improve the bottom line. Some companies outsource logistics functions because they believe that third party experts can better simplify supply chain management and deliver goods to customers faster and more cost-effectively. Whatever the reason, the use of outsourced logistics services is rising across industries. Service providers clearly bring value to organizations in the form of cost savings, improved processes and better customer satisfaction. Strengths Customer service -As the world’s biggest logistics company, the main service of DHL is to deliver goods or mails all over the world. According to Dirk, the DHL staff can speak local language to ensure the communication between customer and them is easy.
In each of European countries DHL Freight has a terminal in business centres to ensure the convenience and efficiency of transportation. Moreover, Dirk believes that DHL would be the prior choice due to high quality service. Dirk provides a few of examples that what benefits DHL can be brought to customer: 24 1) Professional advice on all matters pertaining to customs, import VAT (value-added tax), excise duties and security via DHL consultancy services; 2) Full transparency of your flow of goods; 3) Bonded warehouses for easier import, export and transit operations. Weaknesses DHL is more expensive than other 3PL companies.
The main reasons are: 1) DHL is able to provide many ports for transportation. 2) DHL also can arrange flight for urgent claims immediately if it is essential. 3) DHL can deliver goods or mails to anywhere customers claim to, but DHL is not responsible for tariff. It means customers have to pay the tariff by themselves.
4) DHL owns high tech to ensure the safety of delivery. To sum up, the cost of DHL makes the price of DHL become expensive. DHL runs business via an accepted price all over the world. But there is an exception, China. In the mainland of China, DHL is rather expensive due to tariffs. Solutions Would be to increase Multimodal transportation including the increase of Air transportation to keep up with demand. Transportation is currently routed from Russia to midpoint by air then divide back by routes to transportation.
By the solution based on research is to end midpoint transportation by air and make the complete route by air then use truck routes to Europe. Add more railways connecting Europe and Asia. The suggestions the processes be restructured to develop these capabilities would be the cause of the increased congestion and environmental pressure to change green products or more sustainable alternative fuels. The company in the future must look into the development of the continental railway networks as alternative for road and sea transport. Also to focus on international trade dealing with the governments on how to open more borders with access and to develop along with that a standardized customs guidelines Page Break Reference Aaker, D.
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