Strategic Management of APL Logistics

Executive Summary

Strategic decisions sets the path of the firm that leads the business activities among the competitive activities. Strategy is the competitive plans which differs the performance of one company from the other. Strategic management is the use of various strategic models and take decisions to enhance the competitive advantages. In this assignment, the basic background of the APL Logistics will be delivered along with the strategic business issues faced by this company. Besides, the effects of the strategic business decisions taken by the firm shall also be critically discussed. The reasons for the effects of the strategic business issues will be clarified. Lastly, the impacts of the strategic business issues on the stakeholders of APL Logistics.

Organizations formulates the strategic management planning and implement it for the for the assessment of the strategic issues and taking necessary strategies for the firm that directs the firm’s all resources and efforts towards the accomplishment of the desired goals. Organizations must assess the strategic business issues which are constantly reducing the business efficiency and profitability. Besides, organizations must find the drivers which positively affects the firm’s operations through strategic analysis and use those most frequently for the greater value creation. APL Logistics must resolve the available strategic business issues for the greater benefits of the stakeholders.

Table of Contents

1. Introduction

2. Background of the APL Logistics

3. Outlining the strategic business issues of the company and overview of the strategic decisions that led to the current business situation

4. Critical analysis which sets out why the issue has strategic implications and its impact on its stakeholders

5. Conclusion

6. Recommendations

References

1. Introduction

Strategic decisions are taken by the strategic managers of the organizations which directs the companies towards the set objectives and goals. Strategic decisions sets the path of the firm that leads the business activities among the competitive activities. Strategy is the competitive plans which differs the performance of one company from the other. Strategic management is the use of various strategic models and take decisions to enhance the competitive advantages. In this assignment, the basic background of the APL Logistics will be delivered along with the strategic business issues faced by this company. Besides, the effects of the strategic business decisions taken by the firm shall also be critically discussed (Ansoff, 2014). The reasons for the effects of the strategic business issues will be clarified. Lastly, the impacts of the strategic business issues on the stakeholders of APL Logistics.

2. Background of the APL Logistics

APL Logistics is an international logistics organizations operating worldwide which deals with the delivery of the automotive, consumer goods, industrial products and retail products. The company is wholly owned by the Japanese company Kintetsu World Express (KWS) – a freight forwarding and transportation company. APL offers the detailed range of origin and destination services such as automotive, consumer, industrial, retail verticals in more than 60 countries which made it a global supply chain specialist (APL Logistics, 2018).The company had total revenue of $1.7 billion and $67 million net income. The firm has a specialty in the global supply chain sectors which has approximately 7600 employees. The firm was originally owned by NOL which was sold to KWE in 2015. The firm offers the servicers to the four major verticals such as automotive, consumers, retail and industries. The firm has the operations in 110 locations of 60 countries which constitutes of total of 200 logistics facilities. The operations of the firm is divided into seven geographical regions such as, Europe, Latin America, North America, Middle East and Africa, North Asia, South Asia and South East Asia (APL Logistics, 2018).

Figure-1: APL Logistics

Source: (APL Logistics, 2018)

3. Outlining the strategic business issues of the company and overview of the strategic decisions that led to the current business situation

Strategy is the plan which is widely used and accepted in the business environment. It is the action plan designed to accomplish the long term or overall aim of the business. It the process through which business positions becomes better along with the financial and operational performances. Through the strategy implementation, a business achieves competitive advantages over the close competitors. For example, if APL Logistics takes expansion strategy in the new country it involves a strategy that will enhance the overall revenues along with profitability (Brennan, 2011). Strategic management is the process of planning, monitoring, assessing, analyzing and assessment of the business aspects and other decisions which will help the firm o meet the organizational goals and objectives. The action of innovation, emerging technical advancement along with the other aspects must be strategically analyzed. The process of strategic management involves the assessment of the business processes and decisions before the implementation. There are several aspects which involves strategic management such as, analyzing internal and external business strengths and weaknesses. Besides, external opportunity and threats can also be understood by the strategic management process. Strategic management involves creating and implementing the action plans along with controlling the plan and making any possible changes (Daniels and Radebaugh, 2011).

There are various importance concerned with the strategic management. The firm can build a vision through creating the long term strategic planning which leads the firm towards the accomplishment of the goals and objectives. The resources of the firm can better be allocated throughout the business operations based on the significance through the assistance of the strategic management. Based on the strategic management through strategic analysis, organizations take the strategic decisions that signifies the organization out of the many organizations in the industry. Each of the strategic decisions has several consequences on the business operations and performances. Expanding operations in the new regions, enhancing the value of the products through the product differentiation, focusing on the advertisement more are all the examples of the APL Logistics (APL Logistics, 2018).

APL Logistics has several strategic issues which must be taken care of in order to operate the business in the most effective ways and accomplish the desired level of objectives. The firm deals with those issues that are constantly reducing the level of efficiency and competitive edges. The way of accomplishing the competitive edges is to take strategic decisions which will discard or at least reduce the strategic issues substantially. Among the several major issues, this report will discuss one strategic issue of APL Logistics. Digital transformation of the business operation of APL Logistics is that strategic issue which are reducing the firm’s capabilities gradually in the given industry. It is the global company with more than 110 locations in 60 countries. The span of operation for the firm is very large which will instigate the risks for the firm in various forms. Besides, the firm operates its own operations of delivery services through 7600 employees worldwide. The digital and innovation management of the operations of the businessalong with employee management for the higher productivity are the prerequisite for the sustaining growth and improvement in the financial performances (APL Logistics, 2018). APL Logistics designed its operations based on the sophisticated and effective supply chain with the focus in Asia through air and ocean. It combines the origin and destinations locations and logistics solutions through transportation services throughout the world. Because of that, the organization needs the system which will involve less time for the processing, delivery along with sourcing and delivering services. Besides, the system which the firm follows must involve less cost that will reduce the cost structure of the firm substantially. Moreover, modern business also focus on the consistent growth and expansion with higher focus on the value of the products and services. Beating the strategy of the competitors is considered as the wining card for many organizations (Drucker, 2012).

Figure-2: Capabilities and resources along with strategies of APL Logistics

Source:(APL Logistics, 2018)

APL developed several strategy for the business operations, promotions and delivery of the goods that has some strategic values. The digital transformation is devised by APL Logistics for inspiring the innovation in all areas of the business operation. There are various drivers behind this strategic issues of APL Logistics which can be discussed critically in the following.

1. Greater agility: The agility of the business operations can be accomplished through initiating this strategy within the firm. The digital transformation of the operation will most certainly reduce the overall time required to resolve the business issues that will reduce the delivery service along with enhancing the revenues, profitability and competitive edges. In the last year, the implementation of the guaranteed delivery of the goods reduces the operating time substantially which is 7% (APL Logistics, 2018).
2. Scalability:The economies of scale can be accomplished by the implementation of the digital transformation strategy within the business operations of APL Logistics. The firm can deliver the more goods within a given period of time. It enhances the revenues and profitability impressively. The firm can enjoy more competitive edges in the industry than the close competitors (David, 2014).
3. Use of artificial intelligence: Another driver for the digital transformation of the operation is the use of the artificial intelligence in the actual business environment. The use of this will reduce the time, reduce cost along with enhancing the deciding making capabilities and reducing the accident substantially which are seen in many established corporations in the world. Besides, it will involve less errors and slacks in the business operations and transactions.
4. Reduction of the costs: Use of the digital transformation in the APL Logistics’ operation will reduce the firm’s cost structures in every operations although it will raise the overall initial cost. The average cost will rise in absence of that which can create strategic issues inside the firm (Dess and Miller, 2014).
5. Better customer services through increased access to relevant data: The customers will get the necessary date from the firm because of the digital transformation. Digital transformation will increase the efficiency of the customer relationship management along with digital data development related to the business which resolves the outstanding strategic issues of the business operation.

Apart from that, there are several strategicissues of APL Logistics which enhances the firm’s competitive advantages substantially such as resource limitation, acquisition, mergers, developing of the e-commerce products.

APL Logistics takes several strategic decisions which turns the firm into this current positions. The strategic implications of the strategic decisions must be considered after implementing any strategies. The expansion to the new regions like South America, Africa over time raises the firm’s needs for the digital transformation (Gaither and Frazier, 2012). Besides, it also enhanced the firm’s capability along with the higher revenue generation capacity and competitive advantages. Besides, merger and acquisition decisions over time also leads to the current situation of the firm. The firm was acquired by the KWS of Japan that allowed the firm to the higher degree of innovation and technological advancement. It reduced the overall service time along with increased technology that reduces the business’s cost structure. Moreover, increased collaboration with the firm like KWS before the merger also helped the business in many aspects such as customer management to delivery services which enhances the firm’s competitive advantages. Delivering the quality service at differentiated prices also raised the firm’s value and business names in the industry. Improved productivity are materialized through the implementation of the control system with increased agility in the delivery service also brings the firm in the current situation which allows the firm to earn a premium profitability (Greasley, 2014).

4. Critical analysis which sets out why the issue has strategic implications and its impact on its stakeholders

The strategic issue of APL Logistics must be critically assessed in order to identify the cause and nature of the strategic issues along with the measures through which this issue can be resolved.Organization must analyze the strategic issues with relevant strategic analysis tool that will lead to the effective strategic business decisions for the short and long period of time. The strategic issue of lack of digital automation and transformation within the operation of the APL Logistics will significantly enhance the overall productivity of the firm along with profitability. Business cost level will be lowered with less salaries and expenses. Besides, competitive edges can be achieved through the automated decision making and implementing the automated business intelligence (Heizer and Render, 2011).

The issue has the strategic implications within the businesswhich can be represented in many ways. The issue of digital transformation of the business operation of APL Logistics has both positive and negative implications. This issue will reduce the firm’s efficiency as the time required to conduct the transactions and cost will be higher. The cost structure of APL Logistics has been increased by 4% in the last year because of the lack of sufficient digital presence in the industry according to the firm’s annual of APL Logistics.The issue is very crucial to be resolved because it hampers the firm’s regular business operations because of the lack of collaboration with other competitors and partners (Hitt et al, 2014). The use of the digital transformation, artificial intelligence and innovation techniques will allow the firm to collaborate and cooperate with the new resource enriched partners. It will enhance the firm’s profitability along with the overallcompetitive edges. Digital transformation would increase the connectivity with the various stakeholders of the firms and other parties of the industry. Those stakeholders of the firm may include customers, suppliers, collaborators, employees, owners, debtors, creditors. Those stakeholder can deliver data and resources which are necessary for business operations. For example, APL Logistics deals with various organizations such as Unilever, P&G and other multinational corporations which enhances the relationship and business transactions. This relationship with the stakeholders can be enhanced further if the firm would be digitally transformed with increased level of innovation and technically sophisticated (Hunger and Wheelen, 2013). Digital transformation increases the agility and scalability and the business operation which signifies its strategic implicationwithin the business. This process will reduce the time in every phase of the business operation such as customer contact, making contract, delivery of the papers along with customer relationship management, employee management etc. This helps the firm to achieve increased level of economies of scale that raises the revenues and reduces the cost structure. Competitors will be less capable to compete with the given firm if the digital transformation and innovation procedures can be implemented (Jeffs, 2011).Besides, it can be regarded as the platform for the future technologies of the firm based on which newer opportunities can be availed.

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APL Logistics has different stakeholders in line which has different rights and duties. The interests of various stakeholders differs based on the types of the stakeholders. The roles of stakeholders within the business are very significance for the direction of the organization along with strategy formulation, selection and implementation. Various roles of the stakeholders can be discussed in the following.

1. Decision making: APL Logistics’ owners and managers takes the decisions for the firm which leads and directs the firm in the industry. Various level of decisions are taken by the managers and owners such as strategic decisions, managerial decisions etc. For example, implementation of the expansion strategy in various regions are taken and conducted by the top level managers and shareholders (Jeyarathnam, 2012).
2. Direct management:The Company is directly managed by the mangers who take various policies and actions for the effective management of the business.Managers of the firm directly manages resources of the company along with various divisions such as HRM, production, marketing and sales etc.
3. Investors: Investors are the significant stakeholders and influences the decision making process of the firm. They oppose the business operations which involves higher level of risks and uncertainties. Sometimes, the investors of the APL Logistics allows the firm to use their money in the emerging countries like India, South Africa, China, Brazil and other developed countries because of the low risks involved and higher productivity.
4. Corporate conscience: Large investors often oppose the decisions which are harmful for their investors. This conscience is used to protect their rights and the firm itself from the severe risks (Krajewski et al, 2010).
5. Other responsibilities:Employees performs their responsibilities with implementation of the strategies formulated by the managers. Besides, employees plays various roles that facilitates the business operations.Customers also affects the decision making and strategies of the firm. For example, APL Logistics’ customers deters the strategy which compromised with the quality of the services.

The impacts of the strategic issues of the company on the stakeholders is immense. The owners of the firm are affected by the issues mostly because it reduces the profitability and performances directly. Apart from that, managers’ remunerations and performances are also affected negatively of the strategic issues has a negative impacts overall the firm. Employee gets less amount of remunerations and other motivating aspects if the strategic issues like lack of innovation and digital transformation exists. Customers will get the less amount of services with increased level of cost which negatively affect them along with the profitability of the organizations (Kumar and Suresh, 2009).

5. Conclusion

Strategic management is the special planning which directs the firm’s resources into accomplishing the stated objectives and goals. Organizations formulates the strategic management planning and implement it for the for the assessment of the strategic issues and taking necessary strategies for the firm that directs the firm’s all resources and efforts towards the accomplishment of the desired goals. Organizations must assess the strategic business issues which are constantly reducing the business efficiency and profitability. Besides, organizations must find the drivers which positively affects the firm’s operations through strategic analysis and use those most frequently for the greater value creation. APL Logistics must resolve the available strategic business issues for the greater benefits of the stakeholders.Before the strategy implementation, managers must assess the strategic implication of every strategy. The effects of the every strategy and their impacts on the stakeholders must be assessed periodically (Waters, 2012). Moreover, the influence of the each stakeholders must be considered before finally taking strategic decisions.

6. Recommendations

APL Logistics must have the best strategy which creates the best possible competitive advantages for the firm.Besides, the strategic issues like need for digital transformation have to be resolved through proper strategy. For the reason, the firm can take structured strategy for the implementation of the digital transformation. The current position of the firm can be assessed through various strategic models which may recommend strategic decisions such as value enhancement, cost reduction, automationand innovation within APL Logistics. The stakeholders of the firm must be valued before taking any decisions which protects their rights and interests that eventually helps to accomplish the business objectives of the company.

References

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