Discuss about the Challenges at Australian Post.
Australian Post is considered as the Australian government- owned business and it is governed under the Australian Postal Corporation Act 1989. Australian Post is the oldest and continues to operate business in Australia and it’s headquarter is situated in Melbourne, Australia. It is an organization which is a self-funded governmental business with the Australian Authority as the only shareholder and gives postal services locally as well as internationally; it even provides services in retail stores. It has about 4429 metropolitan retail outlets locally and about 2561 retail outlets in rural and remote locations. This governmental organization continually balanced its commercial goals and targets with the requirement to meet its Community Service Obligations. This study will demonstrate the overview and positioning of the industry and also show the industrial analysis. The paper will explain the Porter’s five forces for doing the analysis along with macro-environmental factors for the competitor analysis. Apart from this, the study will also represent the various strategies like, corporate strategy and business strategy used by the industry.
Australian Post is considered as the Australian government- owned business and it is governed under the Australian Postal Corporation Act 1989. Australian Post is the oldest and continues to operate business in Australia and it’s headquarter is situated in Melbourne, Australia. It is an organization which is a self-funded governmental business with the Australian Authority as the only shareholder and gives postal services locally as well as internationally; it even provides services in retail stores. It has about 4429 metropolitan retail outlets locally and about 2561 retail outlets in rural and remote locations. This governmental organization continually balanced its commercial goals and targets with the requirement to meet its Community Service Obligations(Australia Post Annual Report, 2014). The profits earned by the organization is basically used for paying a dividend to the shareholders and even for reinvesting in their services so that they can be prepared for meeting the modified requirements of the customers. The industry’s commercial goals to ensure that they can positively affect the societies within which they serve as well as carry on for improving the services and products it deliver.
Five forces of Australian Post
New entrants- The threat of new entry is determined through particular amounts of aspects in the industry and the market like, brand identity, cost benefit, scale of economies, inputs access and government policy. To overcome from the new entry threat Australian Post required strong and improved distribution network(Australia Post Annual Report, 2014). Apart from this, limiting geographical aspects impact over the Australia post as if existing rivalry have better geographical area then new competitors will have a competitive drawback.
Suppliers bargaining power- The force is determined by the several suppliers exists in entire key input and also the cost of switching for suppliers(Australia Post Annual Report, 2014). When the amount of suppliers are less than the requirement for the suppliers is more and the suppliers bargaining power become huge, so limited suppliers switching costs will be positive impact over the Australian Post.
Buyers bargaining power- Buyer’s power rely on the amount of buyers, the importance of every significant buyer to the business, their switching cost(Delivering eCommerce, 2015). If buyers will be low sensitive to costs, the cost will increase and the buyers still purchase the product, this can affects Australian post.
Competitors- The amount of competitors relies on the amount of factors like, fixed cost, switching costs, disparities in the products and development in the industry. These factors consider the competitive level in the industry and the market(Australia Post Data Guide, 2015). Rapid development of industry positively impacts over the Australian Post.
Substitute threat- If substitute’s price is less, then the price disparity increases and then there is an enhancement in the competitive threat. Limited amount of substitutes means that consumers can easily fine other services and products which satisfy their demands, so limited substitutes are positive fr Australian Post.
SWOT Analysis
Strength- Australian Post includes services like, digital services, retailing services, printing services, postal services, logistics and also express post. It has one of the biggest strength is that; it is government business organization nada los is self-owned business.
Weakness- Australian Post has less international existence in comparison to its rivalries which is quite an important weakness for the enterprise.
Opportunities- Australian Post has huge opportunities in the global market and also has a chance of mergers and acquisitions(Australia Post Data Guide, 2015). Powerful domestic reach because the large competitors like FedEx is recently concentrating on the international market.
Threats- Australian Post has a threat of loss of cash flow and also has a threat from its rivalries that is enhancing its abilities through acquiring other rivalries.
PESTLE Analysis
Political Factors- Australian Post is a Governmental business organization, but it runs commercially and also not relied on any political issues.
Economic Factors- Economic growth has lowered for Australian Post because of the various factors and the most critical being the declination in the requirement for the enterprise’s primer function to deliver mail to the public(BEER, 2012). Customers faith towards Australian Post has reduced because of slower delivering services and the non-emergence mail is being deliver for almost three days late to the residence, which has significantly affected the Australian post.
Social Factors- lifestyle and customer changes has left Australian post for chasing ecommerce, markets growth as well as struggling for staying appropriate in now a day developing customers market and retails. Australian Post is basically realigning its strategy for becoming a partner for Australia’s ecommerce market along with new associates.
Technological Factors- Establishment of new technologies in billing and communication has left postage services a bit outmoded for major enterprises which would use Australian Post for several client and customer billing and communication(Delivering eCommerce, 2015).
Legal Factors- Necessary for delivering mail an amount of times every week plus keeps the 4000 retail outlets as well as post offices open is damaging on the finance of organization and profit margins.
Environmental Factors- Environmental protections and regulations has cause a declination in the number of paper bills and letter that are sent, it destroying important motives for delivering mail and sorting of Australian Post(Delivering eCommerce, 2015).
A company analysis is a procedure that is mainly carried out by investors for evaluating the securities, collecting info relating to company’s profile, product and services and the profitability. Company analysis is also referred as fundamental analysis(Delivering eCommerce, 2015). Recognising and implementing business strategy that specifies prised resources and characteristic competencies, manoeuvring all resources and capabilities is a key for achieving success for every organisation. Australia Post has the legislative monopoly of delivering bulk mail but recognising the challenges and opportunities ahead, the stated organisation moved away from its traditional business of delivering mail and recognise its more wide range of logistics industry.
Resources are the assets of an organisation and competences are the ways through which those assets of the company are deployed effectively. The main resources of Australia post is its resources. The stated firm had more than 32,000 employees to operate its business operations(Howard, 2015). The company is currently delivering services in a very wide range. It is now providing many kinds of insurance facilities to its citizens such as car insurance, home insurance and travel insurance. It is also the major currency converter in the country. Australia post delivers third-party agency services that connect customers, businesses and government bodies such as bill payment services, banking services and also the identity services(Opportunities and challenges for Australia Post, 2015). A numerous kinds of retail good products such as complementary products, packaging products, and post office boxes and locked bags are offered across the network of Australia post outlets in all over Australia. Australia Post operates its business in three different markets, namely, letters and associated services, agency services and retail merchandise(Delivering eCommerce, 2015). In addition to it, it also offers parcels and logistics that have its grip on both domestic and international markets.
An organisation capability is a company’s ability to govern its resources, such as employees mainly to gain an advantage over its competitors. The capabilities of an organisation must focus on its business ability to meet the customer demand. The advancement in the technology, workforce and mechanics, the Australia Post has adapted itself to the changing environment(Opportunities and challenges for Australia Post, 2015). But the digitalisation of technology has smashed the main pillar of the Australia Post services which is its letter delivery service. It is gaining competitive advantage over the others by identifying its key areas of existing and potential competitive advantage. In 2012, Australia Post launched the soft MailBox and announced several other governmental departments such as Australian banks, government departments and utilities to utilise these digital MailBox.
It is evident that demand of the customers is now changed. People now seek solutions that deliver control, choice and convenience regarding when and where they can access the services. This is the main reason behind the change in business strategy of Australia Post. In the current business scenario, Australia Post is mainly concern towards the e-commerce. By the end of 2016, Australia Post has reported to get profits before tax of $197 million(Anon, 2016). The result was mainly due to solid growth in its parcels business. During 2016, the domestic parcel volumes up to 5.7 per cent and parcel profit alone sum up to 16%. According to Ahmed Fahour, former MD and group CEO of Australia Post, 70 per cent of the company’s revenue gets generated from the commercial activities mainly from the parcels and e-commerce. In the past six months, the company have installed new automated sorting machines at all its major letter facilities and also launched a new freight domestic parcels network.
Ahmed Fahour, the former CEO of Australia Post was one of the most flamboyant figures in corporate Australia. He was renowned for his sleek good looks and self-assured personality and his ability to command astronomical salaries. With his humbling experience, Fahour used to get all the works done in an easy manner(Delivering eCommerce, 2015). After Ahmed Fahour, Christine Holgate is keeping the position and is bringing the Australia Post operation in a positive way. The leadership of the stated firm are making important progress in managing the decline of letters and focusing in developing customer oriented attributes and culture which is required to get success in e-commerce market. The leadership of the company has been properly recording the company’s overall situation and are developing important headway with the reform of letters and their strategy to deliver e-commerce for the citizens of Australia, everywhere and every day(Post charges, 2017). Thus, the strategic leadership of the company are in good hands and with experienced personalities. The company has been building the infrastructure and the digital assets which will enable the company to get the support for the growth of Australia e-commerce.
As per the current situation, Australia Post is regaining its strength. The stated firm is back in 2016 with a profit of $36 million after posting losses of $222 million. Letter services of the Australia Post declined by a record 9.7 per cent which bought loss of $138 million. But with the boom in the parcel services of the company, Australia Post has gained its profit again in despite of increased competition from the overseas rivals. The company has been experimenting with drone deliveries and also identifying whether night deliveries may be convenient to customers. The Australia Post is also having its eye on the export market.
Conclusion
It has been found in the study that Australian Post is the oldest and continues to operate business in Australia and it’s headquarter is situated in Melbourne, Australia. It is an organization which is a self-funded governmental business with the Australian Authority as the only shareholder and gives postal services locally as well as internationally; it even provides services in retail stores. The study identified that Australia Post has announced a complete renovation in its organisational structure for the improvement in its digital businesses under e-commerce. The company is now focusing more towards the changing needs of customer.
References
Australia Post Annual Report. (2014). [online] Available at: https://auspost.com.au/annualreport2014/assets/downloads/AusPost_AR14_Full_report.pdf [Accessed 12 Aug. 2017].
Australia Post Data Guide. (2015). [online] Available at: https://auspost.com.au/content/dam/auspost_corp/media/documents/Australia-Post-Data-Guide.pdf [Accessed 12 Aug. 2017].
BEER, A. (2012). The Economic Geography of Australia and Its Analysis: From Industrial to Post-Industrial Regions. Geographical Research, 50(3), pp.269-281.
Delivering eCommerce. (2015). Annual Report 2015. [online] Available at: https://auspost.com.au/annualreport2015/docs/australia-post-annual-report-2015.pdf [Accessed 12 Aug. 2017].
Howard, D. (2015). Digital Post: Business transformation and the future sustainability of Australia Post. THE MCKELL INSTITUTE. [online] Available at: https://mckellinstitute.org.au/app/uploads/The-McKell-Institute-Digital-Post-March-2015.pdf [Accessed 12 Aug. 2017].
Opportunities and challenges for Australia Post. (2015). [online] Available at: https://www.aph.gov.au/~/media/Committees/Senate/committee/ec_ctte/Australia_Post_in_Australian_communities/report/c05.pdf?la=en. [Accessed 12 Aug. 2017].
Post charges. (2017). [online] Available at: https://auspost.com.au/content/dam/auspost_corp/media/documents/post-guides/post-charges-guide-ms11.pdf [Accessed 12 Aug. 2017].
Anon, (2016). Rates Determination. [online] Available at: https://auspost.com.au/content/dam/auspost_corp/media/documents/Australia-Post-rates-determination-Oct2016.pdf [Accessed 12 Aug. 2017]
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