This is the detailed PESTEL analysis of DHL which is world famous courier service. This analysis will cover the external factors which has positive or negative impact on the company however, DHL can capitalize on the opportunities and minimize the threats.
DHL is a company based in Germany that provides services including courier, parcels and express mail. It operates around the world in various countries and is world’s leading postal and logistics company (DHL Website, 2017). Analyzing the company on the basis of PESTEL framework, we will be able to see how external factors can affect the company’s operations and market in various countries.
Political Factors
Originated in Germany but then expanded around the world, DHL has to keep in view the political conditions of the regions that they operate in. The political structure of Europe is usually stable with very easy trade rules so it’s easier for companies to gain the market. However, if it is about operating in a region where there are unstable political conditions, this will affect DHL’s business and might result in more costs and less sales. Other than that, DHL also has to comply with import and export restrictions, tariffs and trade policies. At times, higher tariffs will cost more for DHL to operate in a certain country.
Economic Factors
If there are economic crisis globally, that will have a negative effect on DHL’s business, decreasing their business and causing them financial losses. If a certain country is going through inflation, the customers will have lesser buying power and this might reduce the sales for DHL. On the contrary, if a certain country is flourishing in terms of its growth rate, this will increase the business for DHL. When operating globally, exchange rates can either cause DHL to suffer with huge costs or may help them gain profits.
Socio-cultural Factors
People’s perceptions and attitude towards the company can affect the sales of DHL. For instance, if people of a certain country perceive products based on their country of origin or prefer using their local services, this perception may cause huge losses for DHL. Moreover, if a certain country is developing stage and majority of the population belongs to a social class which prefers low cost products and services while DHL is a high-end brand, then DHL will not be that successful in that certain country because majority of the people will not have the power to afford their services.
Technological Factors
Technology is one of the most important factors when it comes to logistics business because DHL has based its brand on the basis of reliability and speed. So keeping up with the technological trends is very important for its business as it helps them maintain their brand image and also results in higher profits, though it may come with higher costs at times. Thus, providing convenience to the customers comes with huge costs in using technology but it also gives them a competitive edge.
Environmental Factors
The logistics or transportation industry involves use of vehicles; they contribute a lot to the air pollution which is damaging to the environment as well as the company’s reputation. Due to this, they might lose out on customers if they develop this perception about DHL. DHL can recover from these loses by investing in CSR activities as they are currently involved in waste-management solutions and recycling and implementing these solutions in all their supply chains. This will gain them consumer trust and thus profits.
Legal Factors
With DHL expanding to various countries, it has to comply with legal requirements of different countries. These include patents, copyrights, and consumer protection laws. Some of these legal conditions can be beneficial for DHL in some countries, but can also result in huge costs for them in other countries. Fulfilling all these legal requirements help DHL to maintain their brand name and save them from possible law suits in the future.
References
Company Portrait. Retrieved September 30, 2017, from http://www.dhl.com/en/about_us/company_portrait.html
Technology. Retrieved September 30, 2017, from http://www.dhl.com.pk/en/logistics/industry_sector_solutions/technology_logistics.html
Envirosolutions. Retrieved September 30, 2017, from http://www.dhl.com/en/logistics/supply_chain_solutions/what_we_do/environmental_compliance.html