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Business Failure Dhl Essay

1548 words - 6 pages

Business Failure PAGE \* Arabic 8
Running Head: Business Failure DHLBusiness Failure DHLMilton RamosUniversity of PhoenixLDR/531 Organizational LeadershipGroup: PA10MBA02Instructor: Margaret EttenheimJuly 1, 2010Workshop 1, Assignment 1DHL is considered to be one of the leading logistics and parcel delivery service providers in the world with delivery services in more than 200 countries. DHL was founded in 1969 by Adrian Dalsey, Larry Hillblom, and Robert Lynn. The company name DHL came to be by taking the first letters of each founding member. The company started by delivering door to door air service between San Francisco, California and Honolulu, Hawaii (DHL, History, 2010). Before DHL there were no express delivery services capable of offering the quick overnight delivery service. With no other company offering the express delivery services DHL expanded quickly to employing more than 30,000 people with more than 4000 offices world wide (DHL, History, 2010). In 2008 Deutsche Post AG became part of DHL as part of DHL's strategic plan to align with the European ground base services (DHL, History, 2010). By 2002 Deutsche becomes the majority shareholder and ne year later decides to purchase Airborne Express in an effort to compete in the United States market against FedEx and UPS.Five years after the purchase of Airborne Express DHL reported losses of $10 Billion dollars (DHL, 2008). Despite the dominant market share in the rest of the world DHL could not gain enough market shares and tale business away from UPS and FedEx. DHL decided to suspend and withdraw operations from the United States, lay off more than 9,500 employees, post a $1 billion dollar loss for the operating year and writedowns totaling $3.5 billion dollars for severance payments and other restructuring costs (DHL, 2008).DHL's advertizing and marketing campaign was aimed at communicating the organizations commitment to bringing fair competition and choices to the United States. In 2003 during DHL's attempt to penetrate the Unites States market they invested more than 150 million dollars in the marketing campaign to emphasize the company's unmatched global presence, improved domestic services and improved products and services from FedEx and UPS (DHL Brings Competition, 2004). DHL's marketing campaign focus on delivering the message through television commercials, news print, interactive and outdoor advertizing, and sponsorships to reintroduce DHL to the United States market and emphasize competition innovation and a new choice to express delivery (DHL Brings Competition, 2004). DHL's tagline was "Competition. Bad for them. Great for you."DHL had a simple objective and that was to develop in to a viable replacement to express shipping in the United States with a 40% market share in Europe, and Asia DHL set out to achieve and take away 12% from a combined 78% FedEx and UPS market (Esterl, 2006). To achieve this goal DHL focused on freight in which DHL believes UPS and FedEx were...

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