Threat To The Growth Of The Company Samples †MyAssignmenthelp.com

Question: Discuss about the Threat To The Growth Of The Company. Answer: Introduction In modern day business, companies all around the world are facing several kinds of challenges (David, 2011). These challenges are posing threat to the growth of the company irrespective of the industry they belong to. It is essential for the firm to take care of the strategies they are making for their business. It is also due to the fact that there had been a lot of change in the ways of doing business (Kovarik, 2015). The mediums of communication have changed over the years where electronic forms of communication have superseded the traditional letter and mails. Australian post which was once one of the biggest in the industry has seen a downfall. This report highlights the environment that is present around the company as well as the condition of the industry. It also provides the analysis on the completion that it is facing in the market due to alternative sources of communication. Company and Industry Mail and post Industry have many years of history as in the olden times it was the only way of making the communication. Before the commencement of Digital era of communication it was considered to be as the best mediums of transferring messages from one place to another. This industry has seen a gradual decline in terms of becoming a way for doing the communication (Hitt, Ireland and Hoskisson, 2012). These days In Australia, 97 % of the post are send only for government works and only 1% is sent for having private communication. This has created a whole lot of challenges for the companies like Australia Post. This company has faced a huge loss to its financial resources due to the declining of the mail business. It is due to the reason that cheaper and faster mediums of communication have emerged (Milne, 2012). Another major challenge that Australia Post is facing is that the delivery of post have become expensive and they cannot charge high from the clients. Australia post was established in the year 1809 and in only a decade it was capable of delivering mails in almost every part of the Australia (Australian Postal Corporation, 2016). They have played a greater role in the Industrial revolution of Australia. This company was known for doing innovations in speeding and sorting of the mails and its delivery practices. At present this company is delivering around 60 million items per week. It is employing around 36000 employees in 3832 communities and having around 10000 delivery contractors (Australia Post, 2016). It has seen a steady growth in its revenue but has seen the drop in the letter volume. It is operating with 4406 post. Core competencies It is also having large consumer base that highly trusts them in terms of their services. This company has an experience of working in the Australian market for over two centuries. Higher cash deposits from the previous operations will help them in their plan of transforming their business. Large number of offices and a very skilled workforce. Lesser number of strategic failures in its record books. A good leadership at the top helps the firm in making quick decisions as per the requirement. Resources and capabilities This company is having one of the largest chains of networks approx. 4,379 post that help them in delivering services on time. Its financial performance is very good with a profit after tax is around $95.4 million. Their post registration is up by 146% in 2016/17 and greater choice and flexibility is provided to consumers. It is operating in rural and remote areas as well. It is operational in more than 190 countries all across the globe and they are capable of expanding their business in other parts of the globe as well. Macro Analysis It is essential for every organisation to understand its external environment (Wheelen and Hunger, 2011). This helps in understanding the factors that are influencing the business of the company. Factors that are making external environment of the company are as follows: Political: Government of Australia is planning to move towards e-governance. This is matter of concern for the company as 97% of the letter that cited company delivers is related with the government works. The government policies favouring electronic mediums of communication have also reduced the business of Australia Post. Economic: There is downfall in the economic stability of nations all around the world (Barney and Hesterly, 2015). This has forced people to choose those mediums of communication that are cheaper. Generation of higher margins of profits is a difficult task for the company. Social: Society has changed and so is its communication needs (Coffield, 2013). People now days are demanding for the communication mediums that is faster and cheaper. Electronic mediums have increased the ways in which people can express themselves and since post provides just a written form of communication and hence they have lost their position in the market. Technology: With the introduction of telephonic mediums of communication, post has lost their value in the market. People are using advance mediums of communication for transferring personal information (Keupp, Palmi and Gassmann, 2012.). With further advancement in internet facilities that too at cheaper rates has almost wiped out the conventional letters through companies like Australia Post. Environmental: Since the concerns related to the environment is increasing and hence communication has taken internet mediums. Mails and letters were using papers and hence use of such mediums of communication was discouraged. Industry Analysis It is also essential that company understands its position in the industry. Australia post also has to understand the position of the industry. Cited company also needs to understand the demands of the market and the condition of industry in the changing global market. It helps to make the strategies for the future business as well as it helps in making plans for their operations (Sebastian, 2012). From the age of Industrialisation mails become not only the part of personal communication but it also became the way for communicating with each other in the business. In the beginning, Horses were used for transferring mails from one place to another. In the 20th century they started the business of delivering goods also. But with the introduction of modern mediums of communication like the telephones this industry has seen a gradual decline (Beko and Jagric, 2011). It is due to the fact that method of delivering the message was too much expensive and it took a lot of time to deliver even a single page of message. Electronic mediums were capable of transferring messages overseas instantly. Mails provided complexity as the amount of message that can be delivered at one time was very less. With the further advancement in technology and introduction of Internet mediums like the e-mails, voice and video calls has affected the industry in a larger manner as it enabled people to communic ate with each other in various forms. Porters five forces analysis can be extremely helpful for understanding the condition of Australian Post. Threat of New entrants: Since the number of users that is using letters as a medium of communication are decreasing day by day and hence it is not attracting new firms to come into the business. But the major challenge is produced by the companies that are dealing in the business of goods delivery for example Fed EX. This somehow makes the chances of new firms to coming into this business otherwise this threat is on the lower side. Bargaining power of suppliers: Number of Suppliers in Australia has increased and hence bargaining power of theirs is on the lower side. Paper suppliers as well as the transportation suppliers are also present in high numbers and hence supplying required products at lower cost (Van der Linden, 2015). Australian post has stronger bonds with their suppliers. Bargaining power of consumers: People are adopting modern mediums of communication for transferring the message and hence the bargaining power of the consumers has increased. Day by day the speed of transferring the data is increasing and hence consumers prefer it over the traditional post office mails. Threat of substitutes: This threat is very high it is due to the fact that other mediums of transferring message have become easier, cheaper, real time and faster. This provided consumers with variable options to communicate with others. Goods and parcel delivery companies have taken the business from Australian Post as they are providing better services to their consumers. Threat of competitors: There are many competitors present in the market offering different forms of communication mediums (Thompson, 2013). Some of the bigger competitors of the cited company are Fed Ex., Toll Holdings, Japan Post, China Post and Telstra. These competitors are making it difficult for Australian Post to ensure higher growth. On a concluding remark it can be said that there is very less chance for the new companies to proper in this market if they seek to do business in only letter delivery services. The attractiveness of the industry for new ventures is on the lower side. Competitors analysis There are various competitors present in this industry and have the capability to influence the market and choice of people (Crowley and Heyer, 2015). Companies like Fed Ex. have captured the larger part of the Australian market. They have become a brand name in safely delivering goods on time. People already started to understand Australia post as the parcel company and hence other private parcel firms are making the difference. Australia post has its business in many other parts of the world but it is facing stiff competition from the companies like Japan Post and China post. With the changing global market of parcel and letter delivery the chances of expanding their business is further narrowing down (Peters, 2012). Company are finding innovative ideas for doing their business. Strategy analysis Identification of strategy Australian post has made many strategies for their future operations. First strategy that this company has decided is to convert its business into more of digital form. This strategy is necessary as it will help them in capturing the digital market of logistics and retail. It is the need of modern day business irrespective of the industry. It will not only help company in transforming their business but also helps company in reducing its cost of operations. Digital mediums will also help consumers in knowing their delivery status hence making the whole system more accountable. Apart from this cited company has decided to adopt strategy related to entering into new business like the parcel industry or the retail industry of Australia where it can be the partners of delivery for the other firms. This strategy will help company in ensuring a long term growth even when the letter delivery services will come into extinction. Is it working? On answering to this question it can be analysed that yes it is working since already people have started to understood it as a parcel delivery company. This image of the company will help them in entering into the new markets with such kind of service background. New strategy The present day strategy of the company is very effective as it will help them in capturing the larger part of the market. In order to continue with this strategy of becoming a digital company, they should make their own app that makes booking of the orders easier as well as facilitates customers in tracking their order status. Apart from this it is also essential for the company to adopt digital medium for marketing their products since the company has performed poor in terms of marketing its services. New strategy that this firm can adopt is to come into business of home delivery of retail products where it can become the partner of the new ventures that aims to deliver products at lower cost. Since this company has a long delivery chain which it can effectively utilised for this purpose. It has deeper understanding of the ways to operate in Australian market that too in the business of delivery and logistics. All these experience will help in start of new business. Conclusion From the above based report it can concluded that Australian Post was known for its service in letter delivery industry in all over the world. With the adoption of digital mediums for communication this mode of message transfers is very rarely used. In the coming years also this is expected to reduce to further lower levels. In order to ensure the long term growth company needs to come in other businesses also like parcel or logistic delivery. Adoption of digital mediums can help in this regards. It is essential for the company to understand the future of the industry as well as the environment in which it is working. Recommendation This is an era of digital business and hence company like Australia Post has to think about taking more of digital means for completing its operations. This will not only help companies in reducing their cost of operations but will also assist consumers in easily availing required services. This company must train their employees so that they can easily work on these digital mediums. It will help in ensuring that there is no loss of jobs while the company is making business shift. While predicting the future of this industry it can be said that the amount of letter that is sent through these companies is going to decrease. Even the government is shifting towards the electronic governance. This industry is going to somehow merge with the parcel and retail delivery services and hence companies also have to think about tending towards such business. References Australia Post, 2016. Australia Post- our past. [Online]. Available at: https://auspost.com.au/education/ourpost/students/our-post/timeline.html. [Accessed on: 21st February 2018]. Australian Postal Corporation, 2016. Domestic Letters. [Online]. Available at: https://auspost.com.au/sending/send-within-australia/compare-letter-services. [Accessed on: 21st February 2018]. 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