Report of a company from the air - freight sector Essay

Report of a company from the air - freight sector - Essay Example This is done to understand how organizations will perform in their near futures and the steps that can be taken in order to improve. Thus, the report suggests that despite the decline in the organization’s revenue due to the fall in their volume, they still have high potential to perform well in the future. Table of Contents Executive Summary 2 Business environment 4 PEST Analysis 4 Political 4 Economic 5 Social 6 Technology 6 Porter’s Five Forces 6 Rivalry within the industry 7 Bargaining power of the customers 7 Bargaining power of the suppliers 8 Threat of new entrant 8 Threat of Substitute 8 Assessment of DHL 8 Assets of DHL 8 Strengths and Weaknesses 9 Customers Segmentation 10 Conclusion 11 Reference List 12 Introduction Today the performance of an organization is not only dependent on the internal factors within the organization, but also on the external factors that continuously affect the internal operations. In this context, DHL has been considered in this rep ort, on which the analysis will be conducted and recommendations will be made regarding the performance of their business. DHL is a segment of Deutsche Post DHL, a logistic company based in Germany that provides international express mail service. Deutsche Post is the world leading logistic company with major international presence. They are the global market leader in air and sea mail. The organization was originally founded in the year 1969 to distribute documents between Honolulu and San Francisco; however, the organization managed to expand their services throughout the world. Inter-continental and offshore deliveries were the main interest of the organization. The organization served many other countries, not served by any other air-freight organizations, such as, North Korea, Vietnam, China, Iran, Iraq, Eastern Bloc and Soviet Union (Zetes, n.d.). In order to conduct the performance analysis of the organization along with PEST analysis, Porter’s five forces, SWOT analys is as well as segmentation and targeting strategy of the organization, based on which the business performance will be discussed. Business environment PEST Analysis Political Air freight or air cargo is regulated by the policies established in the year 1994 in the Chicago Conference. When the policy was established, the air cargo industry was in its infancy and the agreements were mainly related to the limitation on foreign ownership and airline destination. These regulations were seen to affect the carrier operations such as, restriction towards the ground handling services and diversification of the ancillary functions related to air cargo. These restrictions had limited the ways of conducting business. In order to keep pace with the economic expansion and global trade, both the international and national regulatory frameworks related to air cargo were made more liberal. For instance, in US, the deregulation in air cargo not only liberalised the licensing of the carriers, but also opened domestic routes to encourage full competition. The common aviation area of Europe was decided, which allowed the carriers to operate in European Union. These reforms had considerable impact in the air cargo industry by open up skies, providing them additional trading and access opportunities. However, the liberalisation was taking place at a slower pace for South East Asia. In 2002, Memorandum of