DHL – Dubai Company: Strategic Management


DHL – Dubai is a part of DHL Express, a German international logistics company that is a division of Deutsche Post DHL, which is the largest logistics company in the world. The company provides the services of express delivery, international shipping and logistics services (transportation, warehousing, distribution), and e-commerce. It is a private organization; some of Deutsche Post DHL’s stocks are held by the German KfW bank, but the rest are in the free flow. DHL Express was founded in 1969, and currently has nearly 325,000 workers worldwide; it is a service business.

The current project will assess a variety of strategic aspects pertaining to DHL’s operation, and provide several recommendations based on this assessment.

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DHL faces a moderate amount of competition in Dubai from such companies as Weiss Rohlig Logistics, Jenae Logistics LLC, and Global Shipping and Logistics Company. The company has a rather stable position in Dubai.

Use of Strategic Tools/Instruments

The company uses a number of strategic tools and instruments to analyze its current position in the market. For instance, DHL – Dubai utilizes the PESTLE analysis combined with SWOT analysis to understand its external environment and identify long-term strategies:

  • Political – currently stable political situation in UAE and Dubai in particular (opportunity);
  • Economical – UAE is actively developing its infrastructure (opportunity); high per capita income (strength);
  • Social – most of the population is immigrants, which may present an opportunity;
  • Technological – Dubai is rather strong technologically, and technologies, in particular, transport technologies, are developing further (opportunity);
  • Legal – benevolent legal climate for private companies (strength);
  • Environmental – UAE faces several environmental issues (e.g., exploitation of natural resources, lack of water and arable lands, etc.), and this may lead to the need to import some resources.

SWOT/PESTLE can get the rate of 4 on a 5-point scale in terms of its importance in the company.

Other tools used by the organization include Porter’s five forces (regularly used to assess the current situation in the market, rated 3 out of 5), benchmarking (utilized regularly to identify the successfulness of competitors and stay ahead of them; rated 5 out of 5); KPI (employed on a monthly basis to estimate the quality of own performance, rated 4 out of 5); stakeholder analysis (used to keep track of stakeholders and identify their importance, rated 5 out of 5); and HRM/SWOT analysis (to identify the possible issues pertaining to the company’s employees, rated 3 out of 5).

Formal Strategies Versus Emergent Strategies

DHL has both the formally written mission and vision statements; the vision is to be “the logistics company for the world,” whereas the vision is “Excellence. Simply delivered” (DHL, n.d.). The goals and objectives of the company’s activity are defined in its “Strategy 2020: Focus. Connection. Grow,” which sets rather ambitious goals, that are, nevertheless, based on the careful analysis of the market and the environment the company operates in (DHL, n.d.). The time horizon of the strategy is 5 years, for it was adopted in 2015.

The company attempts to stick to the created strategy; it is usually not difficult because the strategy only outlines the general way for the future development. This allows for a certain degree of flexibility; it is possible to incorporate new developments into it. For instance, measures aimed at addressing environmental issues can easily be implemented within the DHL’s strategy.

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The business strategy of DHL usually emphasizes corporate plans (e.g., business growth), as well as HRM plans (which is especially important lately due to e.g. the more and more extensive use of technology in warehousing). Very often, qualitative and global objectives are stressed upon. It is often stated that the quality and effectiveness of the service should be the highest; the company wishes to become the logistic company of the world (DHL, n.d.).

Planning Flexibility

The company of DHL does not appear to often make quick changes in its administrative structure; however, it is possible to appoint a new key executive member to lead, for example, a regional division of the corporation.

When it comes to operations, DHL can usually implement some quick changes in its current operations, for instance, due to the large numbers of transport vehicles available in the organization; however, this option can be limited in some branches of the company, for instance, when it comes to air transport.

As for financial management, it may sometimes be difficult to re-allocate the financial resources of the company; however, it should be stressed that this still can be done if the need is significant.

The company of DHL, and DHL – Dubai in particular, continuously attempts to implement innovative technologies to run its operations more effectively and efficiently. In fact, technological development is included in the company’s strategic plan. In particular, new technologies are currently being introduced in the storage/warehousing operations; the new technologies allow for greater efficacy, and do not require extensive workforce.

DHL – Dubai did not make crucial changes to its administrative hierarchy lately. However, DHL sometimes carries out such changes globally; for instance, key executives from a different location can be appointed to manage e.g. a regional division of the business.

Strategic Planning Responsibility

Global strategic planning in DHL is often carried out on international conferences, with the participation of experts in the sphere of logistics. Locally, senior managers and the CEO may take part in strategic planning for the organization.

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The key employees and managers of the enterprise seek commitment for the strategic plans; the CEO is responsible for overseeing the effectiveness of implementation of strategic decisions. It is also the CEO’s responsibility to ensure that the strategy is implemented appropriately and in a timely manner.

To ensure the successful implementation of the strategy, DHL creates plans for shorter periods of time (such as yearly, monthly plans) and continuously monitors their implementation; this also permits for controlling the effectiveness of the implemented measures. However, difficulties are sometimes encountered during the implementation of the strategy; these include unexpected financial spending, a lower than expected effectiveness of plans, and so on.

As has already been stressed, the CEO is responsible for overseeing the implementation of the strategy. When it comes to more local (both in geographical and temporal sense) plans, the CEO acts through the management of the business; the managers monitor the implementation of plans more locally. As for the evaluation of plans, apart from the company’s own analysts, outside experts might be invited in certain cases to help with the assessment of these plans.

Planning Outcomes

Strategic planning has been rather beneficial for the DHL company, and for DHL – Dubai in particular. As has already been noted, DHL is the largest logistics company in the world; its operations in Dubai have also been successful so far. It is possible to state that strategic planning has been one of the important factors which have made this possible.

The quality of service of DHL is rather high; the company tries hard to maintain the high standards of its service, provide reliable storage and timely delivery. The company has a significant market share in Dubai; its revenues are large enough to permit the company to spread quickly across Dubai and the Middle East region, and to justify such expansion (Jacotine, 2015).

When it comes to the introduction of new services, DHL regularly proposes these to attract new customers. As an example of such an innovation, the new multimodal rail delivery service has been introduced in Europe and Central Asia (Deutsche Post DHL Group, 2016).

When it comes to the bureaucracy associated with strategic planning, it might be possible to state that DHL does not suffer greatly from such a problem; because the strategy only outlines the way which is to be taken, it is not cumbersome and does not result in too much bureaucratic routine.

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Summary and Conclusion

All in all, it can be seen that the strategic management process in the company of DHL, and in DHL – Dubai in particular, is rather effective, and it allows the company not only to preserve its status as the international leader in the sphere of logistics, but also to grow further. DHL uses a number of strategic analysis tools and implements the results of these analyses to create plans for further development of the company. The fact that the strategy only provides a general outline of future development permits for greater flexibility when it comes to acting locally. On the whole, it is possible to state that such a manner of strategic planning allows DHL to operate successfully.

Recommendations

In general, DHL carries out rather effective strategic planning. However, it might be noted that probably some attention should be paid to the possible inflexibility of the management structure. To improve the strategic planning in DHL – Dubai, it might be possible to use the services of external consultants more often to evaluate the plans.

References

Jacotine, S. (2015). Logistics Middle East 3PL power list: 5-1. Web.

Deutsche Post DHL Group. (2016). MEDION brings trend-setting consumer electronics products to European consumers with DHL’s new multimodal service. Web.

DHL. (n.d.). Our vision, our mission, our strategy. Web.

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