Strategic Process and Competitive analysis on Royal Mail
The title of this dissertation is “Strategic Process analysis and Competitive Analysis of Royal Mail in UK Market”.
The aim of this study is to carry out a strategic analysis of the Royal Mail to be able to develop a marketing strategy for the company in the UK.
The objective of this dissertation is to assess the competitive environment of Royal Mail in the United Kingdom Market. Moreover, certain strategic processes that are associated with the Royal Mail are discussed in detail. The entire analysis is based on the evaluation of secondary sources and a hypothesis is formed which is accepted or rejected on the basis of research.
1.4. Research Questions
This research would cover certain questions which are listed below:
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* What services are offered by Royal Mail UK?
* Who are the direct and indirect competitors of Royal Mail UK?
* What are the strategies applied by Royal Mail UK to target its customers?
* What managerial and marketing approaches are adopted by this organization?
1.5. Scope of the Research
The scope of the research is limited because the topic of the research is based on strategic and competitive analysis of a specific organization. An attempt is made to restrict the research to analysis of Royal Mail in United Kingdom only. Emphasis is laid on different strategies that are employed by this organization in order to attract the customers and face the competition.
1.6. Formation of the Hypothesis
The hypothesis that is formed is actually based on a deductive approach and the hypothesis of this research paper is “Royal Mail is the most trusted and affordable mail service provider in the United Kingdom that focuses on quality and reliability”.
1.7. Structure of the report
The entire report consists of certain areas which are listed and discussed below:
Chapter 1: Introduction
This chapter introduces the main aspects of the research. This chapter includes title, aim of the research and what is the objective of research. Besides that it also includes the scope of the research and what are the questions of research. The questions of research are designed in such a way that it gives complete information about the research and what areas are covered in this research. Besides that, this chapter gives background of business operations of Royal Mail. The background information analyzes basic information of Royal Mail and the financials of this organization. Furthermore, the history, business services and certain other related aspects are discussed in this study.
Chapter 2: Literature Review
The literature review section discusses the core aspects that are associated with Royal Mail UK. The entire chapter evaluates the secondary sources which include books, academic journals and certain websites. In the similar manner the competitive analysis of Royal mail UK is evaluated through the analysis of different competitors of Royal mail UK.
Chapter 3: Research Methodology
The research methodology that is used in the research is discussed in this chapter. Although there are different methods of doing the research but due to the limitations of this research only secondary sources are used. Secondary sources are extensively used in this paper and the entire research is based on books, peer-reviewed journals, scholarly articles etc.
Chapter 4: Findings and Analysis
The findings and of the results are included in this chapter and all the results that are achieved are interpreted into meaningful form for further research and analysis. Examples of different competitors of Royal Mail UK will be given. The secondary data is analyzed for finding out the result.
Chapter 5: Conclusion
The findings and of the results are included in this chapter and all the results that are achieved are interpreted into meaningful form for further research and analysis.
1.8. Background of the research
Organizations are changing their normal horizon of working and they are managing their routine tasks in a modernized way. However, emphasis is laid on the core principles of management. Management is basically the process of getting activities done in an effective and efficient way with and through other people. Effective use of management has helped different organizations to achieve their goals. These organizations implemented different theories of management which has helped them to achieve their strategic, tactical and operational goals. An organization that only relies on theoretical approach and doesn't stress on practical implications of these theories suffer in the long run. That's the reason why organization must apply these management models and they must implement them for the betterment of their organization. There are different phases of management and in the early days Americans believe that management is all about worker productivity and people in France in the early days focus on organizational efficiency and administration. Organizations measure their effectiveness and devise a proper way of working with the help of management tools (Griffin 2006). These management tools include theories, strategies and measures that help organizations in achieving their tasks. Organizations heavily rely on these strategies because implementing these strategies would help them in both the short and the long run. Organizations implement these tools because of the fact that the efficiency of these tools is measured and they believe that the best tools are those which stands the test of time. Certain researches believe that these management tools and techniques are fashions oriented statements of management and organizations must not implement them because they incur cost and time of an organization. But certain tools possess an attribute to provide a sustainable competitive advantage to the organization.
Always on Time
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‘An Organization' short term and long term objective are quite important for its existence and growth. Strategic management is basically the art of implementing and formulating cross functional decisions for the organization (David 2008). These cross functional decisions include mission, vision, situational analysis, objectives, plans and policies etc.
Organizations have to incorporate all these aspects in order to achieve their objectives in both the short and the long run. There are different organizations that have achieved strategic advantage and a competitive advantage by following these strategies. Royal mail is considered as an organization that have incorporated most of these strategies and that is the reason why they are quite successful in both the short and the long run.
Royal Mail is considered as national postal service of Britain and British government is considered as the major shareholders of this organization. There are 160,000 employees of the company and there are total nine divisions of this organization. The strategic headquarters of this organization is based in London (Tjepkema 2002). This organization is a public limited company and that is the reason why the secretary of state for business enterprise and regulatory reform own about 50,004 ordinary shares. Royal Mail in the United Kingdom is responsible for international mail collection and delivery in the UK. The letters are deposited in a wall box or a pillar which is ultimately taken to a post office. The deliveries are made at least once in a day except bank holidays and Sundays. This organization caters all the areas that are covered in the United Kingdom. This organization is progressing day by day and it delivered 84 million items every working day. The network of this organization is extremely vast and it has 14,376 post offices which gives revenue of £9.056 billion. In the similar manner the profits after tax were £312 million in the year 2006 (Royal Mail Holdings 2006).
The history of this organization is quite wide and varied and the traces of this organization range back from 1516 when the Henry VII established “Master of the Post”. This service of Royal mail was first inaugurated by Charles I on the 31 July, 1635. At that time the postage was paid by the recipient and in the similar manner the General Post Office was officially established by Charles II in the year 1660 (Marshall 2003). In the era of 1719 and 1763 a postmaster at Bath actually signed a series of contracts with the general post office in order to expand the postal network of Britain. He co-operated with different organizations that assisted him in the scenario of sending and receiving mails. In this period certain mail coaches were formed which were quite successful in both the short and the long run. The entire GPO in the year was changed from the government department to a proper public corporation and after that the position of the postmaster general was abolished. That is the reason why certain changes were incorporated into post office and the post office renamed itself as ‘Consignia'. However, this change was considered as an unpopular change among the people and even the employee were not satisfied with this change. There were different individuals in the organization that boycotted the name.
After that the organization focused on the change management and the name of the entire organization was transferred and it was named as Royal Mail Group plc. There are certain operational divisions of this organization which are given below:
* Delivering Letters to the customers.
* Delivering parcels to the customers.
* Managing the retail outlets in the country which were termed as retail outlets.
Chapter 2: Literature Review
According to Weihrich and Koontz (1993) “Management is the process of designing and maintaining an environment in which individuals working together in groups efficiently accomplish selected aims”. They further explain this definition by stating that the process of management involves the functions of planning, organising, staffing, leading and controlling. Management applies in every type of organisation and in all organisational levels. They imply that management is involved with effectiveness and efficiency which is directly linked with productivity. Efficient and effective management has always been the success factor for organisations operating in various types of industries throughout the world. Organisations are growing day by day as their workforce and operations widen to cover various aspects of manufacturing and services. The globalisation phenomenon has also affected the way companies manage their operations in various parts of the world in a diverse cultural environment. As the size of an organisation increases in terms of economy and work force the need for improved management also increases. The need for effective management and strategies has been stressed by many individuals and researchers throughout the years. Effective management not only increases the profitability of the firm but it also gives the company a competitive edge over other organisations as objectives are achieved and accomplished more effectively and employees are much more motivated which entails employee satisfaction and directly affects customer satisfaction (Chi and Gursoy 2009).
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Importance of management in organisations in today's world has increased substantially as companies grow larger and larger and issues in organisations get more complex. The phenomenon of globalisation has also impacted the style of management and how functions are performed in an organisation. In order to cope with the changing environment and complexity of issues companies need to implement effective management and marketing strategies. As the current research analyses the strategic process in Royal Mail United Kingdom and its competitive analysis the theories and concepts relevant to this dissertation are highlighted and explained in this chapter. This chapter covers theoretical concepts of strategic process and management including the steps in the strategic process and implementation of strategic change, ways of achieving competitive advantage and an overview of United Kingdom mail services industry with an introduction of Royal Mail United Kingdom.
2.2 Strategic Planning Process
The strategic planning process involves various strategies such as formulation, implementation and evaluation strategies to complement the functional design of an organisation. In today's world organisations and processes in organisations are changing at a very rapid rate which makes strategic planning even more important for organisations to cope with these changes and to compete effectively in an industry (Swayne, Duncan and Ginter 2006). The competition in various industries has risen to significant levels especially in wake of the recent financial crisis where consumer spending figures have dropped significantly especially in United Kingdom which is the sixth largest economy of the world (Mahalakhsmi 2008).
If companies do not implement the strategic planning process and follow traditional planning and management methods they are bound to fail in today's post modern era where the rate of change and competition are both quite high. The strategic planning and management process has become a necessity in identification of various functions of an organisation such as objectives, mission, vision, internal resources, external resources, threats and factors. Organisations implement strategic planning and management to cope with increasing competition and changes in consumer behaviour where strategic planning and management enable companies to achieve their objectives effectively and efficiently (Napier, Sidle and Sanaghan 1997). The strategic planning and management need not be implemented only on an organisational level but companies can also improve the image and sales of their brands as well by implementing strategic management techniques (Chernatony 2006).
The concept of strategic planning and management process is not new for managers as it has been around for more than 30 years and companies have implemented top-down strategic planning models to achieve effectiveness and efficiency in all organisational functions which eventually lead to the accomplishment of organisational objectives (Khosrowpour 2003). Companies and executives employed by these companies have implemented the strategic planning and management process for a long time which involves developing the mission and vision of a company based on its short term and long term objectives, analysis of current situation and resources, analysis of external factors, formulation of a strategy, implementation of this strategy and evaluating and controlling the strategy implemented in the organisation (Bryson 2004).
The strategic planning process includes the following five stages.
1. Development of vision and mission
2. Situational analysis
a. Internal factors
b. External factors
3. Strategy formulation
4. Strategy implementation
5. Strategy evaluation and control
Although it can be applied at any organisational level the process of strategic planning is most appropriate at a business unit level. In larger organisations strategies are formulated and implemented at the corporate level and are primarily concerned with portfolio management of the business. The strategic planning process at corporate level involves many key decisions such as allocation of resources, selection of business units or departments for growth purposes, creating and developing synergies through combination of business units, subsidiaries or departments and decisions involving mergers and acquisitions (Havaldar 2005). The strategic planning process at a lower level incorporates decisions such as selection of raw material for production, development and implementation of policies and procedures, devising marketing strategies and product mixes and deciding what services will b offered to the customers (Clark 2008). The individual aspects of the strategic planning process are explained in the following sections.
2.2.1 Mission, Vision and Objectives
The mission of a company is the primary reason the company has been incorporated and it is the reason why a company exists. The mission of a company is articulated as its mission statement and is usually included in a company's important documents such as policies and annual reports. The mission statement of a company communicates the sense of purpose of a company's existence and the overall aims of the company including the specific purposes of various projects and employees. Creating a mission statement is the first stage of a company's strategic planning process (Pakroo 2009). The vision of a company on the other hand is a statement of a company's long term objectives and expresses where the company envisions itself after a period of 10-20 years. The objectives are the short term goals and aims of departments, individuals and the organisation as a whole which enable the company to complete its mission and attain the level of performance which has been devised in the vision statement. Objectives are created for individuals, departments and business units to accomplish the mission and vision and managers also perform controlling activities based on these objectives (Roussel, Swansburg and Swansburg 2006).
2.2.2 Situational Analysis
After the mission, vision and objectives have been developed and established the company focuses on a situational analysis to review the current situation of the company regarding internal and external factors which include analysis of resources, environment, opportunities, threats, strengths and weaknesses. During the situational analysis the company implements various techniques such as a SWOT analysis, PEST analysis and porter's five factor analysis. After the situational analysis a company acquires information about its limitations and capabilities regarding operations and functions (Henry 2008). The situational analysis is performed to evaluate the internal and external factors of an organisation so that future strategies can be implemented and formulated based on the current situation of a company. One of the most important aspects of a situational analysis is the analysis of the overall industry environment especially in the context of major competitors of an organisation (Hillestad and Berkowitz 1991). The external analysis of a company includes factors such as strengths, weaknesses, opportunities, threats, customers, competition and overall industry environment whereas an internal analysis covers aspects such as company culture, image, structure, employees, resources, brands, and financial position (Jackson and Schuler 2004).
2.2.3 Strategy Formulation
The company formulates a strategy after the situational analysis has been performed and completed. The strategy is formulated based on the evaluation of current resources, opportunities, threats and strengths of the organisation. The company designs and develops various strategic options and alternatives which can be implemented to take advantage of the opportunities and steer clear form threats. The development of alternatives depends heavily on the specific environment of a company and these alternatives may differ from company to company and situation to situation. The strategic alternatives are designed in the context of competitors and their strategies as well (Martin, Porter and Schwab 2004). Michael Porter recommended three basic strategic alternatives which are cost leadership, differentiation and focus. Porter identified these three alternatives which can be implemented in organisations depending on the internal factors and external factors such as competitive forces. Porter suggests that only one out of the three alternatives should be used instead of a combination of these strategies to achieve most effective results (Bowersox and Cooper 2004).
2.2.4 Strategy Implementation
The strategies are formulated and stated in terms of priorities, policies, procedures and preferences on how various objectives will be accomplished. If the alternatives defined during strategy formulation are to be implemented effectively then the terms, policies and procedures need to be clearly explained so that individuals in all organisational levels can understand these strategies easily. The personnel and staff of various departments need to be educated regarding these strategies during the implementation phase for effectiveness and efficiency. The implementation stage of the strategic planning process also involves the identification of available resources and applying these resources to organisational functions. The strategies need to be implemented in specific departments and areas such as production, human resources, marketing, research and development and procurement (Flood 2000).
2.2.5 Strategy Control and Evaluation
The last stage after the implementation of strategy is the control and evaluation phase where the results of the implemented strategy are evaluated and measured to check if these strategies have resulted in any improvements to previous conditions. In order to evaluate and manage the controlling phase of the strategic planning process control systems are developed and implemented. These control systems use various predetermined standards of performance. The actual performance is matched with standards to evaluate any deviances and relevant management actions are taken to remove variances and ensure that objectives are achieved efficiently and effectively (Doole and Lowe 2008).
2.3 Achieving competitive advantage
Competitive advantage is the advantage a company possesses over its competitors and keeps makings profits and maintains an aggressive position against its competitors. In order to become successful in an industry or segment companies need to achieve competitive advantage over their competitors and once they have achieved this advantage they need to sustain it in order to benefit from increased sales and profits. If a company in a specific industry has competitive advantage over other companies than it can achieve a higher amount of sales which eventually turn into higher profits which entail a company's success (Coker, Del-Gaizo and Murray 2000).
There are various strategies through which companies can achieve competitive advantage over competitors and other companies in the same industry and the theory of generic strategies which were explained in the previous chapter are some of the strategies which can be implemented to gain a competitive advantage. The three strategies for gaining competitive advantage presented by Porter include cost leadership, differentiation and focus. The three strategies can be implemented by organisations to gain competitive advantage over their competitors (Armstrong 2000).
The first strategy is cost leadership which means that companies sell same products and services as their competitors but lower their costs which gives them a cost advantage over their competitors and consumers are attracted to products and services of lower cost (Lusch and Vargo 2006).
The second strategy is differentiation where companies can achieve competitive advantage by providing goods and services of higher quality with same prices as that of their competitors. The high quality at similar prices also attracts customers to the company which is offering higher standards and quality. Cost leadership and differential advantages are collectively referred to as positional advantages as both of these strategies result in a company's better position in an industry wither through lower costs or higher quality of goods and services (Wit and Meyer 2005).
The third strategy suggested by Porter is the focus strategy which entails the implementation of a focussed strategy on a specific segment of a market referred to as market niche where a company focuses on implementing the cost leadership strategy or differentiation strategy in a particular segment. This gives the company a competitive edge in that segment but does not enable the company to gain competitive advantage throughout the industry. Although this strategy does not give the company a competitive advantage throughout the industry but enables the company to gain an advantage in various sectors or segments of the industry (Mintzberg, Ahlstrand and Lampel 2006).
Apart from these strategies there are various other strategies which an organisation can implement to gain competitive advantage such as achieving competitive advantage through replicable management standards such as installing and using ISO 9000 and previous studies show that implementing ISO 9000 gives a company a significant level of competitive advantage over its competitors (Naveh and Marcus 2005). Another study indicates how competitive advantage can be achieved through implementation of group technology in companies (Fraziera and Spriggs 1996).
A white paper published by the Oracle Corporation explains how competitive advantage can be achieved through enterprise planning. The company explains how enterprise planning can be implemented to achieve competitive advantage where organisations can not only reduce their costs and eventually decrease selling prices but can also improve the quality of their products and services. The paper suggests that businesses can optimise their resources and take full advantage of opportunities if the management of the company is involved in analysis of data rather than information gathering and processing (Oracle Corporation 2008).
The concept of lean marketing which was first implemented by Toyota has been applied by several other companies to achieve competitive advantage in their respective industries. The concept of lean thinking is based on the elimination of wastes from the manufacturing process which directly implies the efficient allocation and use of resources. The lean thinking strategy can also be implemented in service oriented organisations to achieve competitive advantage such as financial institutions, banks, travel and tourism services and mail and courier services. This means that the concept of lean thinking is not only applicable to manufacturing companies but to service oriented organisations as well to achieve competitive advantage in their respective industries (Appiotti and Bertels 2006).
Although companies can achieve competitive advantage over their competitors but the real challenge is to transform this competitive advantage into sustainable competitive advantage also referred to as SCA. In order to sustain a competitive advantage companies need to formulae strategies that cannot be duplicated by competitors. The strategies should be quite flexible regarding affects of change on competitive advantage. The company can sustain competitive advantage for a long period of time if it implements effective strategies which cannot be easily imitated. In the post modern era trends and fashions tend to change quite rapidly which means that companies need to implement sustainable competitive advantage strategies which are flexible and can be amended with changes in trends and consumer behaviour (Barney and Clark 2007).
2.4 Overview of United Kingdom mail services industry
The mail services and logistics industry in the United Kingdom is based mainly on same day delivery services of mail and parcels. There are many companies in United Kingdom that offer same day or next day courier and logistics services. These companies include Royal Mail U.K., FedEx, UPS, DHL, TNT, City Link and local divisions of worldwide courier services including APC Overnight. Apart from these giants there are also quite a few smaller freelance mail and courier service providers which are pretty popular in the country as well. There are thousands of small scale local courier service providers in the United Kingdom which provide same day or next day courier services delivering mail, documents and parcels to different parts of the country. These smaller companies operate on a small budget and usually provide mail and courier services through a small number of vehicles operating within a city. Research carried out by Data Monitor indicates that the value of logistics and courier market of United Kingdom increased by 2.6% in 2008 and reached a total value of $11.1 billion. The research also indicates that the volume of the industry increased by 3.2% in 2008 and reached 1,162.1 million units (Datamonitor 2008).
2.5 Royal Mail United Kingdom
Royal Mail Group Ltd. is a postal and courier service company with various subsidiaries which include Royal Mail, Post Office and Parcel-force Worldwide. The company offers various services through these entities which include postal mail services, general products and services related to post, parcel delivery systems and general logistics systems. Royal Mail United Kingdom focuses on letters and packages which can be delivered to any part of the world by all regions in the United Kingdom. The company has 113,000 post boxes and 14,300 post office branches throughout the United Kingdome which collect items like letters, parcels and packages directly from more than 87,000 businesses. These letters and packages are processed through 70 mail centres, 8 regional distribution centres and 3,000 delivery offices. These items are collected through a diverse transportation and collection network which includes 30,000 vehicles and 33,000 bicycles (Royal Mail Group Ltd 2009).
This chapter of the dissertation report provides a review of the literature used in the research stage of the study. The literature review is important in this particular dissertation as the research completed for this dissertation is primarily based on data from secondary sources. The secondary reviewed in this chapter was collected from various sources such as books, periodicals, articles from journals, previous research reports and websites. The chapter explained the strategic planning process in detail with brief descriptions of the stages of this process. The methods and strategies through which companies can achieve competitive advantage and how these companies can sustain this competitive advantage were also explained in this chapter. The last parts of the chapter provided a brief overview of the United Kingdom postal and logistics industry with a specific overview of Royal Mail.
Chapter 3: Research Methodology
The methods implemented to study and assess the data collected for research are examined and analysed in this chapter. The concept of research methodology, various paradigms and methods used in research and explanation of these methods and paradigms is covered in this chapter. The data collection techniques utilised for secondary research are also analysed in this chapter.
3.1 Research Methodology
The process of assessing past data from previous researches, books, articles and other sources while carrying out personal research in order to present original ideas which increases human knowledge on a specific topic is research methodology. The main aim of a research is to increase the knowledge in a specific area and present or prove some other facts in any subject area or discipline. Research methodology is based on interpreting researches performed previously and explanation of details of those studies. It also includes the examination and analysis of a specific part of a discipline to provide a fresh and new viewpoint (Kumar 2002).
It is not possible to carry out an effective research just by collecting and interpreting data. This analysis should be backed by conclusion from other researches as well. The methods through which data is collected, analysed and results are presented should be recognised in order for the research to be effective. The process by which people try to study the unknown and explore new ideas is referred to as research. The methodology in a research describes the methods through which data is collected, interpreted and analysed to form a conclusion in a particular area of study (Goddard and Melville 2004).
3.2 Quantitative Approach
The quantitative approach interprets and presents results by utilising data associated with measurements and implementing numerical data. This approach is based on numerical and statistical data. Various statistical techniques are applied to the numerical data obtained from research areas through research subjects and other sources. The quantitative approach is most commonly applied to various scientific areas such as psychology to test research hypotheses after evaluation of data obtained from various sources. The similarities and differences present in the numerical and statistical data are demonstrated through the research based on this approach. The components and data of the research cannot be tampered by the researcher and if another research is conducted using the same data and similar statistical and mathematical methods it should yield the same results. The statistical analysis of data collected during research in the quantitative approach is performed using averages or measures of central tendency. The relationship among the variables of the collected data in a population is tested by applying statistical methods such as regression and correlation (McNabb 2002).
3.3 Qualitative Approach to Research
The qualitative approach to research unlike the quantitative research establishes a new hypothesis instead of testing a previously established hypothesis. The qualitative approach is used to test the strength, concentration and richness of an occurrence or problem by analysing life experiences and behaviour patterns. This approach is usually applied to research studies involving social sciences, finance, economics and behavioural studies. The qualitative approach emphasises the abilities of the researcher and the interaction of the researcher with participants involved in the whole process while the quantitative approach puts emphasis on data and interpretation of data in a research. This approach implies that the personal beliefs, knowledge, abilities and perception of the researcher play a very important role in the outcome of the research. Researches performed in areas of finance, economics, social sciences and other areas of study where numerical and statistical data is not available and quantitative approach to research cannot be applied, the qualitative research approach is applied (Burns and Grove 2004).
3.4 Secondary Data
The data acquired from secondary sources forms a firm base for the primary research to be carried out. The biggest advantage of secondary sources which attracts researchers to use these sources during the research process is the cost and time effectiveness. The cost and time spent in collecting secondary data is much lower than primary sources. Though secondary sources are widely used in researches there are some limitations to it as well such as the reliability of sources from where data is gathered. Another limitation of secondary data is difficulty in finding relevant and recent data. The secondary data is collected from books, articles, journals, periodicals, reports and other reliable sources. This data can also be collected from other sources such as university and public libraries, government sources which have extensive data available on various research areas. Data can also be collected from directories and catalogues available in libraries or internet (Reid and Bojanic 2009).
3.5 Proposed Research Strategy
The researcher has to select a particular research strategy and implement a specific methodology out of the many methodologies available for the research to be effective. The current research has been carried out by implementing the qualitative approach to analyse the strategic planning process in Royal Mail United Kingdom and competitive advantage of Royal Mail in the postal and logistics industry. The current research has been carried out by implementing the qualitative paradigm of research with the deductive approach of research. The findings and observations are primarily based on secondary data acquired from various sources such as books, journal articles, previous researches, periodicals and websites. The research methods have been applied so that the research hypothesis can be tested and accepted. The research hypothesis laid out in the first chapter of this study is that Royal Mail is the most trusted and affordable mail service provider in the United Kingdom that focuses on quality and reliability.
This chapter covers the various research methodologies and approaches implemented in researches. The qualitative and quantitative approaches to research have been discussed in this chapter to enable the researcher in applying an appropriate research methodology and approach to the current research. The qualitative approach applied in the current research is also discussed to reflect the process of research in this approach. The method and sources of collecting secondary data with reference to performing researches have been analysed in the chapter. The proposed research methodology and approach utilised in the current research is also discussed at the end of the chapter.
Chapter 4: Findings and Analysis
Strategic management and analysis plays an important role in every organisation because the core decision making rests on it. When an organisation is implementing a change or when they are implementing a strategy the strategic management plays an important role in this aspect. In the similar manner it can be said that once an organisation implements a strategy it should be backed by its core objectives and the mission and vision of the organisation. This chapter focuses on the scenario that what strategies are used by Royal Mail. Similarly, what are the competitors of this organisation and what are the strategies that ensure competitive advantage against their competitors.
4.2 The core strategies used by Royal Mail
Royal is the oldest postal mail service that is mostly controlled by the government in the United Kingdom. The core strategies that are incorporated by this organisation are listed below:
4.2.1 Corporate re-organisation
In the United Kingdom for the last 20 years the restructuring and re-organisation of Royal Mail is the biggest corporate restructuring. The organisation changed its conventional strategy and depicted that all the employees that are working for the organisation have a stake in the success of the organisation and that is the reason why all the employees and the decision makers feel values and they are proud to work for this organisation. They incorporated different strategies in this regard and increased pay of the employees that was based on quality and performance can be considered as a viable step towards the success of this organisation. Furthermore, this organisation restructured itself when they started a diversity oriented program which is viable for all the employees. Royal Mail faces challenges in hiring and retaining people because of the economic slum. But this organisation is managing this department quite effectively and efficiently in both the short and the long run. In the initial stages there were two issues that needed to be addressed by this organisation and these two issues were poor recruitment success and high staff turnover. In the similar manner the changing managerial and customer ascendency created many problems for this organisation. But, through proper business restructuring they managed both the issues quite effectively and efficiently.
After the evaluation of policies and strategies that were incorporated by this organisation. Royal Mail Group actually evaluated their own recruitment data and it was suggested by their decision makers that they need to change their traditional practices if they want to succeed in hiring top quality employees which is socially inclusive and diversity oriented. The business created a strategy in this regard and they identified certain groups that can be hired for Royal Mail group. These groups include 380,000 hidden homeless people, 700,000 people working people with certain disabilities and 47,000 servicemen who actually were retired from the army forces. These groups were actually included in the recruitment because research suggests that there is a long term bond with employees who are socially excluded from the general groups.
A pilot program was implemented in 2002 which was developed in partnership with (BitC). In the initial stage of the plan eight homeless people were recruited and after certain tests and filtration processes they were actually considered as appropriate candidates for the organisation. Proper strategies were developed by this organisation in terms of recruitment of employees are concerned because through this strategy the retention levels of the employees were also increased and this can be beneficial in both the short and the long run.
4.2.2 Royal Mails Pricing Strategy
All the strategy of Royal Mail is based on customer centric approach and proper managerial implications are kept in mind when they are implementing their own strategies. This organisation works on the principle that since the needs of the customers are changing that is the reason why they should adapt to these changes and through that they can easily benefit in both the short and the long run. In the similar manner customers should believe that the services that are offered by the organisation are value added and they are meant for the targeted customers only.
As far as the pricing strategy of this organisation is concerned this organisation focuses on offering low cost services and real prices so that the customers can bear this price. Although there are different pricing strategies that can be incorporated by organisations like discount pricing, premium pricing, competitive pricing etc. However, in the initial stage when this organisation was launched they focused on premium pricing concept because the product was new and customers were responding quite well (Mail Users Association 2008). However, after a certain period of time this organisation focused on discount pricing and after that competitive pricing options were also opted by this organisation because new entrants were entering into the market. They have also implemented zonal pricing in order to achieve sustainable competitive advantage in both the short and the long run.
4.2.3 Royal Mails Marketing Strategy
The marketing of this organisation is quite proactive and that is the reason why this organisation focuses on different marketing strategies that are available. Competitive measures are also taken by this organisation in this regard and these strategies are usually developed by the decision makers of the organisation. Royal Mail is also beneficial in offering organisations the services of direct mail marketing.
The strategists at Royal Mail actually believed that direct mail can be considered as the most cost effective strategy which can benefit the organisations. In the similar manner businesses can reach and create new and stronger relationships through this strategy (Smallbusiness.co.uk 2008). That is the reason why royal mail is emphasising a lot on the direct mail strategy because this option of marketing is extensively used by different organisations. The direct mail strategy that is adopted by this organisation is quite a proactive one and there are certain other players in the market that are following the similar marketing strategy of direct mails (Ogilvy 1985).
In the similar manner it can be said that this organisation is one of its own that embraces information technology with marketing management in order to succeed in both the short and the long run. Royal Mail group were considered as the first organisation in the postal mailing industry that actually incorporated the technological aspects of information technology and the targeted approach of marketing management. The most recent development that is incorporated by this organisation is that they are in process of developing which enables to understand who their customers are and what are the preferences of their customers. In the department of direct mail the customers depicted that they want to talk about the company so that they can benefit them effectively and efficiently. The methodology that is developed by this organisation is that integrated databases are created and in depth analysis of customers are placed in that. The scenario that was created in this aspect is known as database direct marketing (Beamish and Ashford 2007). However, it can be said that the benefits of this marketing that is directly focusing on the customers can be beneficial for the organisation. After a certain period of time a new marketing structure was developed by Royal Mail in order to properly cater the needs of the customers. The decision makers of this organisation are developing a new structure so that they can align the members with the sales force of this organisation. This move can be considered as a customer oriented move through which customers can benefit in both the short and the long run.
Research and analysis actually suggests that five new areas were focused by this organisation in order to develop a new marketing structure. These five areas would be products, sectors, brand, commercial policy plus certain value added services and pricing of the company's offering. In the new marketing structure revamping of the entire organisation actually took place and that is the reason why this revamping resulted in the introduction of new stamps and philatelic products. In the similar manner certain international services were also established in this scenario and the previous policies of carrying out marketing within separate business units was actually change. The entire process of this organisation including the marketing revamping was actually taking place in a single roof and all the employees brainstormed together so that they can make their viable contributions for the organisation. The approach that was actually implemented in this scenario was a customer centric approach and this customer focused approach can be very beneficial for the organisation (Beamish and Ashford 2007). The core message that will go out to the customers will be that our services are meant for the customers that are the reason why we are offering low prices products at a higher quality so that the customers can benefit from it in both the short and the long run. Furthermore, the emphasis should be laid on the process of brand development and the enhancement of the strategy that is underway.
In the similar manner besides that certain managerial implications were also implemented in this organisation. The new performance management practices and systems were implemented in this organisation because the implications of this system were quite wide and varied. The entire program of this management principle was revolved around management workshops which were beneficial in both the short and the long run. New management reports were introduced in the strategic design of the organisation. That is the reason why after these changes new and improved workforce was added in the organisational design which benefitted the organisation a lot.
4.3 Competitive analysis of Royal Mail
The competitive advantage of Royal mail is achieved because of quality and price. In the similar manner the distinctive approach of this organisation can be considered as a viable method of achieving a competitive advantage. Since 2003 the rivals of this organisation have been allowed to provide restricted services to certain companies that can send more than 4000 items in a single time. The strategists and the analysts actually believe that the strike oriented days of this organisation was quite strict on this organisations performance and they were unable to meet the competition in this phase (Fraser 2006). In the strike oriented days the organisation were actually losing 1.2 million pounds in a single day and the main competitors of this organisation Fed Ex, DHL and other small mailing companies were cashing on this point. The market share of this organisation was 97 percent and at that time they were loosing this market share.
The competition in the UK postal market has actually benefitted many organisations and customers because of the low prices and high quality. That is the reason why Royal Mail actually changed their organisational strategy and it offers best price and quality to the customers. The post com research actually depicted that:
* About 20% of the respondents actually believed that the mail price has been reduced significantly.
* The choices of the services available to the customers have improved significantly and 38% of the customers reported that.
* About 34% of the customers believed that the quality of royal mail had also improved.
Customers also claim that different significant options were included in the services of Royal Mail and they were satisfied with the offerings of this organisation. The customers also claim that the prices and the strategies are quite beneficial in both the short and the long run that is the reason why different organisations and individuals prefer royal mail over other competitors. The market share of Royal Mail is quite staggering and this organisation has captured more than 96 percent of the addressed letters marker. However, the strategist at Royal mail suggests that the competitors of this organisation are extending their customer base and they are developing new services.
A report actually evaluated that Royal Mail changed its strategy and certain facts were quite evident in this scenario. These facts are listed below:
* The Royal mail made 1.2 billion access deliveries in 2006 compared to 87 million in 2004/2005.
* The access volumes of this organisation has grown rapidly and it accounts to 10.5 percent of the Royal Mail's total volume.
The competitive analysis and different market reviews actually suggested that the United Kingdom postal market is increasing quite rapidly but the market is still growing. The main goal of different organisations is to focus on the needs of the customers and to engross this industry with latest technology trends. But through research it can be said that Royal Mail still remains the largest postal mail operator in the United Kingdom besides certain competition (PostComm 2006). The competition that has increased has actually increased the quality of this organisation. The major changes in the business mail market can be considered as the rapid growth of success of this organisation. Although, it can be said that the end-to-end competition in this industry has actually favoured this organisation and new and modernised approaches are engrossed by this organisation.
Thus, the above given analysis quite clearly depicts that the implications of strategies that are implemented by Royal Mail Group are quite wide and varied and that is the reason why this organisation is regarded as one of the most efficient organisation that deals in postal services. Although, certain lapses occur in the strategy of Royal Mail but the competitive advantage of this organisation can be evaluated by the long existence of this organisation. In the similar manner it can be also said that the marketing and managerial strategies of Royal Mail are quite proactive which are beneficial for them in both the short and the long run. Furthermore, it can also be said that the strategic implications of this industry are quite enormous and that is the reason why they stresses a lot on the strategy and competition that is prevailing in the postal industry. They have also revamped their entire organisation and when the restructuring was taking place the strategic option which includes the mission, vision and other related factors were enhanced. This revamping of the organisation was also admired by the customers and after a new look was given to the Royal Mail the average yearly orders of this organisation actually improved and the customers were satisfied in both the short and the long run. However, it can also be said that this organisation is quite an ancient organisation but the policies of this organisation needs to be polished which they have changed and that is the reason why the decision makers believe that a new life has been given to the organisation.
Chapter 5: Conclusion
The overall research carried out in the current study analysed the strategic planning and management process in general and how companies can achieve competitive advantage. The research focussed on the mailing and courier service industry in the United Kingdom and strategic process of Royal Mail United Kingdom and how the company applies various strategies to achieve competitive advantage. Companies achieve competitive advantage by applying effective strategies in business processes and functions on the business unit as well as the corporate level. It was analysed and observed from various secondary sources that applying effective strategies in companies can help in achieving sustainable competitive advantage. Competitive advantage as explained in the second chapter of this research report is the advantage of companies over their competitors in a specific industry. The literature review and findings and analysis of this research provided answers to the research questions in order to test the research hypothesis presented in the first chapter of this report.
The research hypothesis presented in the first chapter of this report was that Royal Mail is the most trusted and affordable mail service provider in the United Kingdom that focuses on quality and reliability. This research hypothesis was tested and evaluated thoroughly in the findings and analysis of this chapter. The strategic process of Royal Mail United Kingdom was analysed and explained in detail in the findings chapter which indicates that strategies implemented by Royal Mail do in fact provide the company with an edge and advantage over its competitors in the mailing and courier service industry of United Kingdom. The research indicates that various services are provided by Royal Mail United Kingdom which are superior in quality than its competitors and the company covers a larger geographical area than any of its competitors. The competitors of the company either provide lesser amount of services or charge a higher rate for services than Royal Mail. The research hypothesis presented in the research is accepted and it is concluded that Royal Mail United Kingdom is in fact the most trusted and affordable mail and courier services provider in the United Kingdom which achieves competitive advantage by focussing on quality and reliability in all services it offers.
5.2 Limitations of the Research
There are various limitations of the current research with reference to time, resources and research methodology implemented. There are various limitations regarding the qualitative research methodology and deductive approach applied in the current research. The qualitative approach was implemented using secondary method of research.
The main constraint during the whole research process was the shortage of time and a more comprehensive research could have been achieved if more time was available. The shortage of time not only affected the analysis of the researcher but the gathering and analysis of data from various secondary sources were also affected due to shortage of time. The amount of time required for carrying out an effective research far exceeds the time spent on the current research.
Another limitation to this research is the lack of proper resources to carry out an appropriate research. The researcher had to utilise various techniques to make effective use of the available resources but the limited availability of the current resources impacts the research severely. A higher amount of resources would have enabled to research the areas more effectively and efficiently.
The current research has various limitations as discussed in the previous section. Future researches in the area of strategic planning process and competitive analysis of Royal Mail United Kingdom and other postal, logistics and courier services in the United Kingdom should be carried out keeping the limitations of the current research in mind. The two main limitations of time and resources should be considered and provisions should be made in these areas for future research. Based on the findings and analysis of the current research and the conclusions derived from this research Royal Mail United Kingdom the company can further implement improved strategies to achieve sustainable competitive advantage. Although Royal Mail United Kingdom is one of the most trusted and affordable mail services in the United Kingdom the company can improve its quality of services to sustain competitive advantage for a longer period of time.
5.4 Suggestions for Additional Research
The current research on strategic planning and management process and what strategies can be implemented to achieve competitive advantage was based on a qualitative study of various secondary sources involving companies in the United Kingdom mailing and courier industry with a particular focus on Royal Mail United Kingdom. Further research in this area can be done by analysing other industries and increasing the number of companies studied in an industry. A comparison of two companies, industries or countries can also be done to evaluate the strategic planning process in these companies, industries or countries. The ways companies implement specific strategies in place of others to take advantage of conditions and environment in an industry to achieve competitive advantage can also be explored and analysed in detail. The importance of strategic planning and management process and the techniques applied to achieve competitive advantage in other service industries and trading industries also provides an interesting and comprehensive area of research. The strategic planning and management process in international business with respect to companies exporting and importing goods and services from various countries can also be researched and evaluated.
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