Macro Environment Analysis Australia

Subject Name : Strategic Management

Australia Post
Name of student

Executive summaryThe aim of this report is to critically evaluate the postal service industry on global level and analyzing of Australia post and brief working strategies. This report will provide insight of the macro environment analysis for organizations. It has also covered industry analysis of postal services through life cycle of industry and through porters 5 forces analysis. This will clear the understanding of the forces which work in market and govern organizations. A brief company analysis of Australia post has been done to understand the present condition of the organization and its future opportunities and problems. To sustain in this competitive market it is essential to properly do competitive analysis and hence a competitive analysis has been done for major competitors of the Australia post. A brief strategy analysis has been provided in the report to help the improvement of organization operations. Some recommendation has been provided for postal services industry and specific recommendations are also given for future growth of the Australian post. This complete report is based on the present situation and future opportunities of the Australia post. The purpose of the Australia Post is to build the best logistics so as to transfer their products and services to its prospective and potential customers.

Table of Contents
TOC o 1-3 h z u Introduction PAGEREF _Toc3796372 h 3Macro Environment analysis PAGEREF _Toc3796373 h 3Technological Factors PAGEREF _Toc3796374 h 3Demographic Factors PAGEREF _Toc3796375 h 4Economic Factors PAGEREF _Toc3796376 h 4Political Factors PAGEREF _Toc3796377 h 4Social Factors PAGEREF _Toc3796378 h 4Industry Analysis PAGEREF _Toc3796379 h 4Life stage of postal service PAGEREF _Toc3796380 h 4Porters 5 force Analysis PAGEREF _Toc3796381 h 5Company Analysis PAGEREF _Toc3796382 h 6Competitor analysis PAGEREF _Toc3796383 h 6Strategy Analysis PAGEREF _Toc3796384 h 7Recommendation PAGEREF _Toc3796385 h 8Conclusion PAGEREF _Toc3796386 h 8References PAGEREF _Toc3796387 h 9
IntroductionPostal services celebrated its 200th anniversary in 2009. It has been a long journey of postal services in the world but the evidence of postal services have been found way more back than the 19th century. The postal network constitutes the largest physical distribution network in the world. Around 5.26 million people are employed by the worlds postal services. The revenue of the global postal services was 331 billion USD in 2015 out of which 20.5 per cent was generated through parcels and logistics (Universal Postal Union 2015). Australia Post is the major player in the industry of Australian postal services. It is a government-owned corporation which has it is headquartered in Melbourne. It reported its revenue of 6.8 Billion AUD in 2017. Australia post has two clear purposes to deliver a community service that connects all the Australians no matter where they live and to earn profit to pay dividends to the commonwealth and reinvest in the business. The company facilitates 82 per cent of the Australia e-commerce and new identity services are changing the role of their post offices. Australia post has posted success with its future-ready strategies but its letter business in major losses. The challenge for Australia post is that their cross-subsidization is not sustainable in the medium to longer term. The profits which are generated by their competitive business are being eaten up by the companys letter business and soon steps have to be taken to sustain the profits of the company.
Macro Environment analysisThe macro environment affects the operation of any organisations. Therefore, it includes many factors such as technological factors, demographic factors, economic factors, political factors and legal factors (Barkauskas, Barkauskien and Jasinskas 2015).
Technological FactorsAustralia post is greatly affected due to the development of new technologies in billing as well in communications. Australia post has to update its products and services due to the fact that earlier only traditional methods are used to deliver the products and services to the users and the only post was only the source of communication in earlier days. But the world of communication has changed due to the user of email services for billing purpose as well as the emergence of online communication methods via mobile phones (ElSawy and Hossain 2014). As mobile phones and text messaging comprise of new technologies. In the year the company is focusing on using the digital platform while it is still practising its traditional methods of delivering the products and services.
Demographic FactorsBy 2008, Australia Post was serving one million of the customers on a daily basis. The company provides the postal services in the USA to the Australians so as to use a US postal address in order to obtain the goods and services.
Economic FactorsAustralia Post was also affected by economic factors. This was due to the reduction in the delivery of mail to the public. Only around one per cent of the message is delivered by the post and the mail delivery is falling down by 5 per cent each year according (Australia Post Annual Report, 2015). The company has also faced competition from the other courier companies as these companies offered personalised services which ultimately has impacted the financial position of the company.
Political FactorsAustralia post is a run by the Government of the country itself and is a commercial run. It is not subjected to any political issues.
Social FactorsDue to the change in the lifestyle of the people, Australia post services are chasing the e-commerce market so as to remain in the industry (Talamini et al. 2013). The company is readopting its organisational strategy so as to become the partner of e-commerce companies.
Industry AnalysisLife stage of postal serviceThe life cycle of any product or service has certain stages and they are Introduction, Growth, Maturity and Decline. Postal service industry also had these stages and its presence is observed from the fifteenth century but the actual introduction of the postal services could be started from the 1800s. In around 1820s America established there first postal services and in other countries also this was the starting period of the postal services (Basbagill et al.2013). This was the introduction stage of the postal industry. From the 1800s to the mid-1900s was the growth for the postal industry and industry expanded all over the world. It also expanded to logistics with letter delivery and money transfer. From the 1900s to the 1980s was the maturity period for the postal industry and it was among the one of the largest industry in the world. From the time of popularity of the e-mails and electronic media postal services started to decline. When the internet reached to the common people then there was a sharp decline in the postal industry due to better connectivity through the internet. From that stage, several companies have been struggling to stand in the market and many other explored different opportunities in logistics.
Porters 5 force AnalysisPorters five force model is an analysis tool that uses industry forces to analyze the intensity of competition in an industry and its profitability level (E. Dobbs 2014).
The competitive forces in Porters 5 force analysis are
Industry rivalry There are many competitors in the sector of postal services. Many brands and companies were in action from the old time when the industry was growing. Government is also one of the competitors in the postal industry.
The threat of Substitutes there are many new and advanced ways to do communication and to transfer goods and hence the prices of the services cannot be increased above a certain level.
Bargaining power of buyers this industry is low buyer price sensitive and the product is important to the customers. Due to the large number to customers in the market they have an edge to bargain the prices of the services.
Bargaining power of suppliers Due to the low cost in switching between suppliers the postal services have an advantage. Also the presence of the high competition among suppliers postal services many choices to choose from.
Barriers to entry This industry requires a high amount of initial capital investment and a strong distribution network is required in the postal services sector. Customers are also loyal to the existing brands and this acts a barrier for entry of new competitors.
From Porters 5 forces analysis it could be concluded that the postal services industry is attractive for business but it has high potential barriers.
Company Analysis
Company Analysis can be done by using the VRIO framework. It is a strategic analysis tool which is used to help the organization to protect its resources and capabilities so as remain competitive in the industry (Chatzoglou et al. 2018). The resources of the companies are valuable hence it has a diversified portfolio of parcels, emails, money amp insurance as well as travel and ID. The services which are provided by the company include postal services, digital services, and logistics services and so on. Rare and valuable resources grant a competitive advantage. The company has a diversified product and services portfolio. The company is targeting both domestic as well as international services. The company can gain a competitive advantage if the company makes collaboration with other e-commerce companies. The company is lacking in the international presence as compared to its competitors. The company can also take the competitive advantage by catering its services in the international market. The main competitor of Australia Post is FedEx. The core competencies of the company include 4406 post offices, 15591 street post offices and 10,000 delivery contractors. Among this, the main core competency of the company is distributed logistics. In order to capitalise on the core competence, the company should leverage the physical presence in every area. In order to gain a competitive advantage, the company should use brand promise in order to deliver the letter and parcels as quickly as possible its customers and at the lowest prices.
Competitor analysisDespite the big brand value of the Australia post, there are many competitors in the market. The major competitors of Australia post are Parcel point, Troll, TNT, Single, DHL and many more. Parcel point is a comparatively new brand to Australia post which was founded in 2011 but still, it is among top competitors of the Australia post. Parcel point operates in the internet software industry. The second major competitor of Australia post is Toll Holdings. It was established in 1888 in Melbourne, Victoria and operates in the Ground Freight Transportation industry. Troll industry generated approximately 6.2B more than Australia post. Single is another competitor of the Australia post and it was founded in 2014 in New South Wales. It operates in Marine Freight Transportation. It generates 2B less than Australia post. These are the main competitors of Australia post but there are also many more companies operating in the industry (Jin et al. 2016). Due to technological advancement new competitors have evolved and presented themselves as a threat to Australian post but the company is reinventing itself and adjusting according to the market.
Strategy Analysis
Australia post is one of the industry leaders of postal delivery within the country of Australia. The companies have a diversified portfolio of parcels, emails, money amp insurance as well as travel and ID and document services such as tax file number applications as well as passport services. Australia Post partnership ensures a diversified stream of income which includes online payment platform that enables the transfer of money between the banks and the customers. There are many logistics partners which provide logistics services between the countries (Grant 2016). The company has faced major challenges due to the advancement of technology due to these challenges the company is lagging behind the industry with the global rates. The companies can its competitive advantage collaborating as well as through strategic alliance with the other e-commerce companies. Therefore, the company can make a partnership with Australian tech companies so as to remain the industry as well as to gain more profits as well as revenues. Through developing strategic partnership and increasing globalisation opportunities would also result in achieving revenues from the overseas markets. The major difference between the Australia Post and its competitors is the physical presence of street boxes. The Australia Post can build strategic advantage so as to gain market share. Therefore, the company can build an empowered sales team who are providing internet parcel deliveries and considering shipping parcel through autonomous vehicles or drones.
RecommendationThe postal service industry is a big revenue and employment generator but its working standard has to be changed to keep it profitable in future. For Australia Post, it is recommended that the company should seek options for growth in its non-regulated services to remain a high-performance organization in competitive business. The company should also replace its lost letter business with future commercial freedoms (Parliament of Australia 2018). Legislation freedom is needed to Australia post to expand to its non-core business and to grab potential opportunities. The organization have to be more diversified in its business but the main issues which might be faced by Australia post are the capital required to expand and constraints in the ACP Act. The company should transfer its business from old practices of letter drop to technological services of the modern age to hold its position in the Australian market.
ConclusionIt can be concluded from the study that the operations of the company can be affected by many factors. Many organisations consider the macro environmental factors so as to remain competitive in the industry. Australia Post can gain competitive advantage through a strategic alliance. The company has done analysis through macro environmental factors which included technological, social, demographic, political and economic factors. The company analysis is done through the VRIO framework and it is a strategic analysis tool which is used to analyse the capabilities and resources of the company. The main competitor of the company is FedEx and the company should expand its business in other countries as well through the strategic partnership or coordination. The core competence of the company is logistics. The study of PLC cycle of the company is also done in the report. It is observed that the delivery of the letter business is comparatively declining but the logistics and the commercial business is growing.
ReferencesBarkauskas, V., Barkauskien, K. and Jasinskas, E., 2015. Analysis of macro environmental factors influencing the development of rural tourism Lithuanian case.Procedia-Social and Behavioral Sciences,213, pp.167-172.Basbagill, J., Flager, F., Lepech, M. and Fischer, M., 2013. Application of life-cycle assessment to early stage building design for reduced embodied environmental impacts.Building and Environment,60, 81-92.
Chatzoglou, P., Chatzoudes, D., Sarigiannidis, L. and Theriou, G., 2018. The role of firm-specific factors in the strategy-performance relationship Revisiting the resource-based view of the firm and the VRIO framework.Management Research Review,41(1), pp.46-73.E. Dobbs, M., 2014. Guidelines for applying Porters five forces framework a set of industry analysis templates.Competitiveness Review,24(1),32-45.
ElSawy, H. and Hossain, E., 2014. Two-tier HetNets with cognitive femtocells Downlink performance modeling and analysis in a multichannel environment.IEEE Transactions on Mobile Computing,13(3), pp.649-663.Grant, R.M., 2016.Contemporary strategy analysis Text and cases edition. John Wiley amp Sons.Jin, J., Ji, P. and Gu, R., 2016. Identifying comparative customer requirements from product online reviews for competitor analysis.Engineering Applications of Artificial Intelligence,49, 61-73.
Parliament of Australia, parliamentary Business, Chapter 5, 2018. https//www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/Australia_Post_in_Australian_communities/Report/c05
Talamini, E., Wubben, E.F., Domingos Padula, A. and Dewes, H., 2013. Scanning the macro-environment for liquid biofuels A comparative analysis from public policies in Brazil, United States and Germany.Journal of Strategy and Management,6(1), pp.40-60.Universal Postal Union, The postal sectors primary forum for global cooperation, 2015. http//news.upu.int/insight/backgrounders/key-figures/