redefining the dhl brand by: joshua r. beyerlein to : avinash malshe, ph.d. and brand management...
TRANSCRIPT
Redefining the DHL Brand
By: Joshua R. Beyerlein
To : Avinash Malshe, Ph.D. and Brand Management Class
Date: 5/6/2009
Page 2
Preview
DHL Background
Situational Analysis
Repositioning of the DHL Express Brand
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Page 4
Page 5
Page 6
Page 7
The Situation
2008 - DHL Express Worldwide had around a $3 billion profit worldwide
DHL Express USA was losing $5 million a day
Operational costs were two times it’s competitors
Page 8
Restructure
DHL Express moves from 40,000 employees in the United States to 4,000 employees
Company moves back to an international only carrier
Over $10 billion in sunk cost after the merger of Airborne Express
Promised customers and employees you would not exit the United States domestic business
Brand loyalty and employee moral is at an
all time low
Page 9
SWAT Analysis
DHL’s Internal Strengths DHL’s Internal Weaknesses
World’s largest transportation carrier
Ship to more countries than our competition
Customs agents in 140 countries
Industry leading service levels
Strength of the DHL Brand World Wide
Outsourced operations (driving down cost)
Relationships with Lufthansa and Polar Air
Presence World Wide
Lean organization
Integration of EGAP system (new internal processing application)
Moral of employees
Contractor model at some stations
Lack of flexibility in the United States
Relationship with the USPS for rural deliveries which can take an additional 2-3 days in transit
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SWAT Analysis Continued
DHL’s External Opportunities DHL’s External Threats
We only own around 9% of the U.S. market share
World is becoming flatter increasing opportunities in countries we already operate in
Growth of world GDP
A worsening of the economic environment causing DHL to pull out of the United States
Terrorist act causing them to bring down the airline
Strong competitors in both FedEx and UPS
Currency fluctuation
Competition becoming stronger around the world
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Situational Analysis (Porter’s Five Forces)
1.) Risk of entry by potential competitors
– High barrier to entry cost
2.) Intensity of rivalry among established companies
– Two strong U.S. competitors FedEx and UPS
3.) Bargaining power of suppliers
– Controllable even the largest cost fuel
4.) Bargaining power of buyers
– Strong, but controllable as DHL has been able to add surcharges and annual rate increases
5.) Closeness of substitutes
– Air vs. Ocean carriage (2-4 days vs. 6 weeks)
– JIT environment with very little inventory
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Recreating the DHL Brand
Product – The Company, it’s employee’s and the DHL culture
– Kept 4,000 of the best employees
– Everyone needs to sell
– Incentives around revenue growth
– Proactive responsive company culture
– Empowerment of front line employees
– Proactive transit time guarantee
– Seamless and easy to use
– Company drivers versus independent contractors
Our text states, “The FedEx brand has identified that the delivery person who comes to pick up the sealed envelopes or delivers them is the key personality in the FedEx experience for companies.”
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Recreating the DHL Brand
Promotion – Advancing the brand awareness of DHL Express
– Small Marketing budget
– Trade show concept
– Team up with US Commercial Trade Organization or International Compliance Association
– Cost around $25,000 could hit 100 markets at a minimal cost of $250,000
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Rebranding the DHL Brand
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Rebranding the DHL Brand
Still in AmericaStill #1 in the World
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Recreating the DHL Brand
Price – What can we charge for our service?
– Reduced cost structure enough that we can discount heavily and make money
– In today’s economy need to offer an economic savings
– We currently can not charge a premium
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Control Measures
Operations
– Service guarantee comes out of local operations budget
Customer Service
– Customer service held accountable for resolution of issues
Promotion
– Measure revenue growth in markets that have had DHL Road Show
– Also measure brand awareness and customer satisfaction with small focus groups
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Conclusion
DHL Express will not leave the United States
– Largest economy in the world and over 55% of all transportation decisions are made I n the U.S.
– DHL is a strong brand everywhere else in the world
– United Kingdoms leading business brands – 2009
– Culture change needed to give customers a true transportation experience
Page 19
Conclusion
DHL Background
Situational analysis
Repositioning of the DHL Express brand