DHL is a German based courier, express mail, and parcel services. It is one of the famous logistics company. DHL is working in 220 countries of the world, and operates through sea, air and roads. The company is operating its services very efficiently and delivers around 1.3 billion parcels every year. DHL’s operations are powered by logistics, trade, and passion of its employees (DHL, 2020).
VRIO Analysis of DHL
VRIO analysis is an analytical tool which is used by the companies to assess the capabilities and resources. These resources enable the company to achieve sustained competitive advantage that will bring different benefits in the company. VRIO stands for Value, rarity, imitability and organization. Here is the detailed VRO analysis of DHL.
Value
This is the first component of the VRIO model which identify the valuable resources and capabilities of the company. These valuable resources enable the company in availing more opportunities and mitigating threats for the company’s benefits. The company can take proper advantage of these resources to stand odd one out in the industry. DHL is one of the famous and best logistical company with valuable resources and capabilities. Its e-commerce facility is consider as highly valuable as it provides the customer with ease and tracking facility. Moreover, the quality of service is a valuable resource for DHL, as it provides best shipping service to almost every country across the globe (Virmani, 2017).
Rarity
This is the second component of the VRIO framework, which deals with the fact that company should acquire rare resources to gain competitive advantage. The resource will be rare if it is acquired by any one company. If resources will not be rare, every company in the industry will exploit it in their own benefits. DHL has developed strong brand image and reputation among the rivals. The company’s distribution network is rare and fast, which makes consumers to prefer the services of DHL over rivals. The custom service is one of the important factor which DHL has strong grip on. DHL provides one of the best custom services (Singh, 2013).
Imitability
This is the third component of the VRIO model, which enables the company to acquire resources which are difficult to replicate. The resource and capabilities should be either expensive to replicate or difficult to find the alternative for. DHL’s innovation and operations are costly to imitate. It requires huge sum of capital to duplicate the operations of DHL. The financial stability of DHL is valuable, rare and difficult to imitate. Moreover, company make sure it involves in continuous innovation to be a leader in the industry (Virmani, 2017).
Organization
This is the last and fourth component of the VRIO model, which helps the company in achieving sustained competitive advantage. The resources and capabilities are needed to be organized or else the company will not be ae to enjoy the advantages of sustained competitive advantage. DHL’s operations are highly organized. Its e-commerce facility is very efficient and highly organized. The company has well-managed organizational structure, culture, and employees. The company motivates its employees who work dedicatedly for DHL. The warehouse facilities are also managed properly by DHL so that no employees can face any delay in their parcels (Singh, 2013).
Conclusion
DHL is operating in the logistic industry, where there are no such barriers to entry. This makes it mandatory for the company to achieve sustained competitive advantage to avail new opportunities for the company. The company has to work hard in strengthening their market position.
| Resource/Capability | V | R | I | O | |
| Supply Chain | ✓ | ✓ | ✓ | ✓ | Sustained Competitive advantage |
| Inventory management | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Brand Equity | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Financial stability | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Service quality | ✓ | ✓ | ✓ | Competitive advantage | |
| Custom services | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| E-commerce | ✓ | ✓ | Competitive parity |
References
DHL, 2020. About us. [Online], Available at: https://www.dhl.com/global-en/home/careers/working-here.html, [Accessed on: 6th May, 2020].
Singh, A. 2013. Strategy analysis and evaluation of DHL. [Online], Available at: https://www.academia.edu/5611952/Strategy_analysis_and_evaluation_of_DHL, [Accessed on: 6th May, 2020].
Virmani, P. 2017. DHL strategic analysis. [Online], Available at: https://www.slideshare.net/PiyushVirmani1/dhl-strategic-analysis, [Accessed on: 6th May, 2020].