Assessment Type: Case Study – 2000 + 10% word report – Individual Assessment
Purpose: This assessment is designed to allow students to analyse an organisation’s strategic management practices and evaluate these against best practices as proposed by modern theorists. This assessment relates to learning outcomes. This assessment relates to learning outcomes a, b and c.
Topic: Macro environmental analysis (PESTEL, G &D). Industry analysis (life cycle stage of the industry, Porter’s 5 forces analysis). Company analysis (resources -based model, VRIO Framework). Competitor analysis.
Task Details: Students need to examine the organisation’s current strategic management practices using relevant theories and models and provide an appropriate strategic recommendation to the challenges it faces in turbulent industry. Students are required to analyse and develop professional strategic plan report.
The report should include the following sections in the report:
Introduction – brief description of the company background and the industry of which its is part and identify the main challenges being faced, include the aim of the case analysis.
External environmental analysis – factors which are changing or impacting on the company and/or the industry – include some discussion as to how its impacts the company. Include PESTEL analysis.
Industry analysis (for each industry if more than one). Brief analysis of industry life cycle and trends.
Porter’s Five Forces analysis – comment on bargaining powers of buyers.
Company analysis: resources, capabilities, and competencies – include some discussion on companies’ mission, vision in achieving corporate objectives or are most important to identified environmental factors – micro and /or industry. Include RBV framework and its impact on profit.
Competitor analysis: draw conclusion about main competitive threats, identify its strength and weaknesses. Strategic analysis:
Identify strategies – Corporate, Business and Functional level.
Analyse if its effective or not – why /why not.
Suggestions for improving current strategies or suggestions for new strategies (at least three) – link back to analysis and explain why you think they will be effective.
Research Requirements: Students need to support their analysis with reference from the text and a minimum of eight (8) suitable, reliable, current and academically acceptable sources – check with your tutor if unsure of the validity of sources.
Presentation: 2000 +10% word report format – Word .doc or .docx. Title page, table of contents, executive summary, introduction, suitable headings and sub-headings, recommendations/conclusion, reference list (Harvard – Anglia style), attachments if relevant. Single spaced, font Times New Roman 12pt, Calibri 11pt or Arial 10pt.
Australia Post is the government owned corporate entity, which offers postal services within Australia. Being headquartered at Melbourne, established in 1975, the organization serves with multiple ranges of services and products like, printing, retail, logistics, express, digital and postal services. National post offices are worldwide prominent institutions thereby have been crucial to the trust-based communications since industrial revolution. However, the organization is now enduring key challenges with the development of globalization and technological advancements, which is consistently affecting its financial position and overall business performance. The report is aimed at an in-depth- evaluation of the case of Australian Post along with the wider postal service industry, utilizing strategic frameworks and models in order to provide effective suggestions to the case company to ensure sustainable growth of business in competitive sector.
External environmental analysis
PESTEL analysis is one of the key frameworks that help modern business entities to undertake in-depth evaluation of the external business environment along with its implication on the business operations. With the help of the PESTLE analysis, Australia Post could be able to determine key risks and opportunities currently prevailing in the market thereby be capable of designing strategic planning for responding to those fluctuations in business strategically. It is useful in gaining a competitive edge in postal service marketplace.
Australia’s political stability helps companies like Australia Post to function their business smoothly. Moreover, remarkable FDI arrangements in Australia create key opportunities for organisations to foster profitable growth of business. Moreover, deregulation of stamps price federal government have led to higher revenue with challenges in making cost-neutral delivery (Hanson et al. 2016). Furthermore, emergence of COVID-19 pandemic, reflected by serious lockdowns has led to a key economic slowdown which affected business growth of Australia Post significantly.
Australia’s emergence from recession with rising GDP has reflected significant opportunities for entities as Australia Post to operate business profitably (Bylinskaya and Loginova 2021). However, rising inflation rate to 2.2% has reduced overall productivity of Australia Post. Nonetheless, decreasing rate of interest in Australia by to 0.1% have raised opportunities for Australia Post to avail loans at low interest, expand its business strategically by incurring minimal cost of operations.
With the emergence of digital communication technologies, people in Australia are deprived of sending messages through post, which has affected productivity of Australia Post (Bylinskaya and Loginova 2021). However, improvement of courier and digital services by Australia Post to customers are likely to help them create a significant influence on buyer behaviour by maximising their satisfaction through effective logistics and other services. Moreover, rising education populace in Australia shall challenge the company to leads its business on ethical aspects for sustaining image in society.
Technological breakthrough such as social media, AI and others have supported companies as Australia Post to drive business in cost- efficient manner as well as ensure most quality and efficient services to its audiences. It is useful in effective management of profitability and productivity. However, it would have to face staffs’ costs in training them towards adaptation to new technology.
Effective compliance of key legislations associated with data protection, employment under the Australian Postal Corporate Act, 1989 creates opportunities for Australia Post to manage the interests of stakeholders whilst functioning of business as well as maintain a strong repute in the competitive industry of postal services.
Considering the impact of postal, transport and other services, Australian government have enforced numerous stringent laws associated with use of natural resources and protection of environment against minimum carbon and water footprint. It is likely to challenge Australia Post to comply with strict CSR policies for sustaining business and social role for long term (Bylinskaya and Loginova 2021).
Porter’s five forces remains a key model, which analyzes and identifies five key forces that tend to shape each industry thereby helps in determination of industry’s weaknesses along with strengths. With the help of this model the structure of postal industry in Australia could be effectively determined for developing key corporate strategies for Australian Post to improve performance (Laseinde and Mpofu 2017).
Threat of competitive rivalry
Australia Post operating in postal service industry faces high level of intensive competition with multiple private companies such as FedEx, Toll, DHL, TNT and many more. Key pricing strategies, technological and marketing approaches utilized by the private organization are posing immense challenges to Australia Post for operating business competitively in market.
Threat of substitution
Due to existence of substantial number of rivals in postal service industry, the substitution threat remains moderate as they sell slightly differentiated services however, competitive pricing followed by Australia Post for sale of its services to targeted customers remain a key factor of difference amongst competitors. They efficiency in service delivery encourages Australia Post to stand ahead of substitution and competition (Laseinde and Mpofu 2017).
Threat of new entrants
It remains at moderate rate due to already established companies like Australia Post enjoying economies of scale and effective branding (Laseinde and Mpofu 2017). Further, higher endowments in technology might not be affordable for small postal and courier companies initially. However, the business involves labor and vehicle running costs in parcel deliver, which could be controlled by vehicle leasing or hiring casual workers, which support entry in market.
Bargaining power of suppliers
It remains at moderate level. There is a large base of suppliers in postal industry, which limits their bargaining power. Forward integration by Australia Post considering introduction to bikers, sedans, vans having higher fuel efficiency also shipping API integration activities are lessening supplier bargaining power in the industry of postal services.
Bargaining power of buyers
Multiple numbers of courier organizations are existing operations in Australia. Competition amongst providers of such services remains higher (Hanson et al. 2016). However, individual customers possess low power whereas corporate customers possess higher bargaining power in Australia’ Post’s business. As Australia’s postal market is mature, customers are strongly familiar with pricing strategies of service providers in courier and postal industry. Therefore, low switching costs leads to high power of customers in bargaining.
Industry lifecycle model of Australia Post
An industry lifecycle consists of 5 key stages such as the startup stage, growth stage, shakeout stage, maturity stage and ultimately the declining stage (Kollara 2017). In consideration with the model, it could be observed that the lifecycle of postal services of Australia has been facing the maturity stage, where it is involving multiple players operating competitively in the market and providing effective services to customers with high level of rivalry. Growth within online shopping is forecasted of driving enhanced demand for the parcel delivery facilities. As a result, industry revenue is forecasted of rising by 2.4% within current year. Australia Post declared its strategy of reducing metropolitan letter delivery to one each second day encouraging company towards stress on parcel delivery. As an outcome, Australia Post is estimated of experiencing sharp rise within revenue in recent year. Growth in the online shopping accelerated a decline within letter delivery facilities. Postal Service Industry assembles, delivers and sorts mail products via an established postal channel. While industry’s function remains stable its operating atmosphere is shifting, Australia Post being major player in the industry was formed for offering mail services at a time when letter remained key form of distance communication. However, technology changes have weakened entry barriers that led to emerging number of multiple mail services provider in entering to industry.
Prior to the corporate analysis, mission of Australia Post is necessary to be outlined. The mission statement of Australia Post is that it delivers economic and social dividend for each Australia. Australia Post continues balancing its community service obligations with commercial objectives. Further, vision of Australia Post is to be at heart of the Australian societies connecting people to one another and the world. As per the resource based view, it could be stated that the company Australia Post utilizes both VRIO framework to analyze its competency as well as Porter’s Competitive strategies for improving its business competitiveness in the marketplace.
In consideration with the application of Porter’s competitive strategies such as cost leadership, focus and differentiation strategy, it is observed that Australia post tends to follow a differentiation strategy, in which it has diversified and differentiated its business from postal services to logistics and courier service, which has led the company to face the challenge of rivalry in the market, drive cost effectiveness as well as respond to challenges of emerging digitalization(Hanson et al. 2016). Application of the differentiation strategy has been useful for Australia Post to dominate the market and create a niche in the industry of postal, logistics and courier services.
Application of the VRIO framework in context to Australia post reveals that the services offered by Australia Post including courier and postal services remain highly valuable. Moreover skilled staffs used by the company help it to manage business risks much effectively. Furthermore, services of Australia post remain rare in nature, as it is a government owned corporation, it enjoys monopoly in the postal service market. The organization solely gains the regulated governmental stamp on its posts for revealing authenticity and quality of the service. It provides security of its services and ensures effective protection of customers’ interest. Moreover, in consideration of the imitability factor, it could be stated that services Australia Post are highly non-imitable, the services of the company enjoy monopoly, which could be very expensive and challenging for the private companies like FedEx and others to duplicate it or acquire it. However, staffs and physical resources of the company could be imitable with higher investment of financial resources by rivals. Australia Post being a monopoly and government-owned post services organization enjoys high level of organization factor. It possesses strong business processes driving effective decision-making, hierarchical structure fostering effective coordination and effective systems of management that is useful for the organization to maintain its sustainability in the market (He and Haasis 2019).
In order to analyze the competitive threats of Australia Post, it is necessary to take its weakness and strengths into consideration under competitor analysis. Considering strengths, Australia Post possesses diverse portfolio of insurance, money, parcels, mails, travel and ID. Strong backing support by Australian Government helps the company to create a positive image in the market. High base of over 30000 employees in the business helps Australia Post in managing its productivity and offering excellent services to customers. However, lack of focus on digital platforms reflected by online communication is resisting its growth, customer satisfaction and overall financial performance (Auspost 2021). In consideration with the postal services, Australia Post enjoys monopoly in the market. However, it faces high competitive rivalry in the courier service where companies like FedEx, DHL and others are operating strongly. Continuous decline of letter volumes with revenue shall continue presenting key challenges to financial performance and operations of Australia Post (Auspost 2021). In effective management and implementation of digital technologies in Australia Post services unlike other private companies have led the organization face a consistent decline in profitability and sales since year 2011 to 2015. World of communication change, challenges Australia Post. It was sole way of communicating at a specific distance. When telegraph arrived it was within AP’s domain, bonus instead of threat (Raguseo and Vitari 2018). Subsequently, after telephones came in prominence as central communication device, it lost Telstra and new world of communication with it (Hanson et al. 2016). New technology like text messaging and mobile phones benefits old table mate; however also challenges it.
In consideration with the strategic analysis, it is stated that Australia Post strategizes on three key level such as functional, corporate and business strategies (Weng 2020). Considering business strategies, Australia Post update changes in price of business mail services, undertake detailed analysis of cost allocation in business and account back to committee. With reference to corporate level strategies, Australia Post could form and improve its formal postal network strategy group, which could engage unanimous stakeholders within the growth of a wider strategy for informing changes to its business in face of developing challenges to technology (Hanson et al. 2016). Further, referring to functional level strategy, Australia Post could undertake consultation from all the licensee representative groups in respect to additional needs associated with expansion in delivery of the trusted facilities involving staffing, training, remuneration, technology and shop front face.