About Australia Post
Discuss about the Strategic Management of the Australia Post.
This report provides an understanding about strategic management of the Australia post. In this report, it discusses the competitor’s analysis and it discusses about its competitors such as TNT, FedEx, and DHL. It also explains about the various factors of the macro environment such as political factors, economic factors, socio-cultural factors, technological factors, legal factors and environmental factors. It defines corporate strategies of Australia post. It also explains the business strategy using Ansoff matrix. In this report, it also discusses about the strategic leadership of the Australia post.
Australia Post is a company, which offers the postal services in Australia and out of the country. It operates a business in the name of Australian Postal Corporation. Australia Post was founded on 25 April 1809 and its headquarters is in Melbourne, Australia. It is managed and controlled by the Australian government. It is ranked at position 23rd among top 100 financial brands in Australia. Generally, it deals in various services such as parcels and mail (stamps, packaging, parcel collection and delivery), money & insurance (prepaid cards, insurance, and financial services) and business solutions (parcel shipping and counters, finance and payment, and e-commerce solutions) (Australian Postal Corporation, 2017). Australia Post has more than 4400 post offices, and 11.4 million delivery centers, which are managed at different locations of the Australia.
Porters Five Force Model
Bargaining power of buyers:
There is large number of courier companies present in Australia. The competition among the postal service providers is very high. Australian post has two different types of customers who possess different level of bargaining power. The individual customers have low power. On the other hand, the contract/corporate customers have highest power. This empowers the buyers with the bargaining power. Postal service market in Australia is a mature market so the customer is aware of the price/rate offered by the courier companies. Moreover, due to low switching cost the bargaining power of customers is high (Rothaermel, 2015).
Bargaining Power of suppliers:
Australian post is having large number of suppliers present in the market so it is not dependent on specific suppliers. Due to large number of suppliers, the bargaining power of suppliers is low. In terms of logistics, the suppliers force is weak as there are several owned vehicles used for transportation. Moreover, there are several other dealers for vehicles, so the dependency on single or few players is very low.
Threat of Rivalry:
Rivalry among the existing competitors is high as there are large numbers of postal service providers in Australia. All the competitors such as FedEx, DHL, United parcel Service, TNT, DTDC etc. are present in market from a long period of time and are having good market share (Maiden, 2015). Service at lowest cost makes the difference among all.
Threat of Substitutes:
As there are large numbers of competitors present in the postal service. The threat of substitutes is high for Australia post as the price charged for the postal service is the only factor of difference among the competitors. The customer is aware of the prices of postal services, so the company providing services at lower rate are having the benefit of good business opportunity (Castle, 2014).
Porters Five Force Model
Threats of New Entrants:
Threat of new entry is the level of difficulty for a new company to enter the industry. For Australian post, threat of new entry is low due to high investment cost to start a new postal service. Need of transport vehicles and fleet are major requirements. Moreover, to compete with big players like DHL, Fed ex, Australian post etc it is very crucial to have good branding and extraordinary services, which are very difficult to opt.
Australia Post is a giant company in Australia. It has captured 60 percent of the market share in the business of delivery of the parcels. The main competitors of the Australia Post are FedEx, TNT, Toll, and DHL. These private companies are giving major challenges to Australia Post. The TNT grasps 10 percent and DHL holds 5 percent of the market share in the trade of delivery of the parcels. According to the analysis, the Australia post is the leader company in Australia but its markets shares are continuously decreasing because of its competitors. Its competitors increase their market share by acquiring and margining with other leading companies such as FedEx purchased TNT express for increasing its market share in Australia (Korporaal, 2015).
Its competitors like FedEx and United Parcel Service are dealing internationally and dominating the others companies. Australia post is also dealing internationally but has to increase its scope in various countries. FedEx is not giving domestic parcel services in Australia but after acquiring the TNT, it provides the domestic parcel services in Australia. Therefore, it can be said that Australia post is now losing its market shares but due to innovation, and research and development, it can sustains its market share (D&B Hoovers, 2017).
Macro environmental factors are the factors, which are not controllable and changeable. They affect the environment of the organization and also influence the decision-making of the business. The organization has to change and manage strategies and decision according to the external environmental factors. It is also called external environment. Macro environmental Factors include the Pestle analysis. Pestle analysis is a tool, which helps to evaluate the external factors by which organization can take effective decision and control its managerial functions. Pestle analysis includes six factors such as political factors, economical factors, socio-cultural factors, technological factors, legal factors and environmental factors (Whitehead, 2012).
Political Factors: Political factors of any country are also affecting the working of the organization. Australia is an industrialized nation and political surroundings are also stabled. There are lots of opportunities for Australia post to enhance its business in Australia and increases its market shares by the help of innovation and giving better services as compared to its competitors. Therefore, political factors of the Australia support Australia port (Metzger, 2014).
Economical Factors: Economical factors are also influencing the decision of the business. The economical factors of the Australia are very sound and its economic growth is also good. The government rates such as tax rate and interest rates are feasible for the multinational companies. Therefore, it can be said that economical factors of the Australia are favorable for the Australia post (Zhou, 2011).
Socio-cultural Factors: Socio-cultural factors of the countries are also affecting the business decision of the organization. The people of the Australia follow the western culture and they are highly influenced by the latest trends and style. Mostly, Australian people use e-commerce websites to order their daily routine goods and services. Therefore, Australia post has great opportunities to deliver postal packages.
Technological Factors: Technological factors have great impact on the environment of the business. Sometimes these factors change the decision of the organisation. Australia is advance in technology and their people are also techno savvy people. Australia post also matches its business according to new trends and lifestyle. It launches various e-services such as track items, find a postcard, pay a bill, and redirect and hold mail. It also uses various technologies such as Tray management system, Multi-line optical character reader, Video coding machines, Barcode sorting machines, and Small packets sorting machine to enhance the profitability and productivity of the organization (Australia Post, 2017).
Legal Factors: Every country has its own laws and regulations. Legal factors include consumer law, copyright law, and import/export law. Australia also has sound and strict rules and regulations but these rules and regulations are favorable to domestic companies. Australia post also takes such benefits from its country.
Environmental Factors: Environmental factors are also influencing the business process of the various organizations. It includes various factors such as geographical location, weather, and climate. Australia is a prosperous country and is rich in resources. Their environmental laws are very much focused on environment protection and conservation. Therefore, Australia post has to use such packaging, which is recyclable and not provide harm to environment (Miller et al., 2011)
Australia post is having focus on offering essential and appropriate service. Business of Australia post depends upon the customer satisfaction so the main focus is to fulfill the modern needs of the customers. In recent years, Australian post has renewed business strategy. They have alliance with Amazon, Armex and eBay for better logistics (Cummins, 2016). Change in technology has speeding up the courier service. Digitalization helped customers to track the courier from home. This satisfies the customers and brings faith towards the company. Australia post made strategy to enter into e-commerce and digital services to better serve its customers. This will ensure the accuracy and speed up the organisation in efficient and effective manner. The motive of the organisation is to build better relationship with customers, community and people. In the next phase, Australian post has also launched new drone technology for small parcels that are in nearby area by Remotely Piloted Aircraft (Swan, 2016).
Ansoff matrix is using to evaluate business strategies of the organization. It shows four types of business growth strategies such as market penetration, market development, product development and diversification. Market penetration is a strategy in which marketer sells its products offerings inclusive of general goods and services in prevailing market. Market development is a strategy in which marketer offers its prevailing goods and services in new emerging market. Product development is a strategy in which company offers new products in established market. Diversification is a business strategy, in which company launches its new goods and services in new market (Campbell et al., 2011).
Generally, Australia post is using diversification business strategy. It enhances its productivity and profitability by dealing in various segments such as parcels & mail, money & insurance, travel & ID and business solutions. In various segments, it provides various products and services to increase the satisfaction level of the customers. It also offers its various services in different countries like New Zealand, China, USA, Canada, UK, and Ireland to increase its business. The organisation also uses product development strategy to improve its position in Australia. Australia post provides new service like free parcel lockers, which can be accessed 24 by 7. It also uses drone technology to deliver packages, which are not easy to reach on time (Swan, 2016).
The current business environment is changing at a fast speed. There is lots of competition in postal service industry due to changing technology. To overcome pressure to perform and sustain, the leaders have to introduce new ideas and decisions. Implementation of such decisions and ideas in such a manner that employee accepts the decision and works benefiting the company. These strategies are different from the old theories of forcing or threatening employees in order to get followed (Joyce, 2016). It is about influencing employees in such a way that make them feel and want to contribute to the success of the company. These strategies are tracking postal parcel, use of drone technology and they provide different perks and bonus to employees get good rating from customers. Regular feedback from clients and satisfy their each need is again a strategic decision of Australia Post.
On the basis of above discussions, it can be concluded that all over position of Australia post is better in the market. By analyzing the portal five-force model, it can be said that power of buyers and suppliers is low because of high competition in the market and threat of new entrants is also low due to huge investment requirement in this business. It also analyses the competitor’s position in the market of Australia. By analyzing the competitor’s position, it can be reflected that the company is enjoys a huge market share than that of its competitors.
By analyzing the macro environment, it concludes that external factors such as political, economical, socio-culture, technological, legal and environmental factors are affecting the working of the Australia post. It also concludes that the organization uses the diversification business strategy to enhance or increase its scope in various countries.
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