Examining A Business Failure (Dhl) Essay

939 words - 4 pages

Business Failure PAGE 2
Running head: EXAMINING A BUSINESS FAILURE DHLExamining a Business Failure (DHL)Organizational LeadershipLDR/531August 2010"Over forty years ago founded in San Francisco California by three entrepreneurs- Adrian Dalsey, Larry Hillblom and Robert Lynn (DHL)." The company is considered a leader in the global market in an industry of international express and logistics. The company has been a leader in ocean freight and contract logistics. In 2003 DHL as many companies with capital do purchased an ailing Airborne Express. This buyout's primary focus was to capture a segment of the United States Market. After about three years in 2008 the company was forced to suspend service of the US bases operations along with layoffs of about 9,500 employees."The German postal service known as Deutsche Post World Net has been the controlling force since 2003. The objective has been clear to become a viable entity in the market with United Parcel Service (UPS) and Federal Express (Fed Ex). The two giants make up a combined total of approximately 78% of the US market share. DHL has had success overseas with a controlling 40% of the European market and 40% of the Asian market. With assertiveness DHL made expansions to the routes, creating air hubs along side of a $150 million advertising campaign. The focus proved successful by working on the aspects of the freight business that DHL may have previously overlooked." (Ewing 2008).Within a five year period of the purchase of Airborne the company lost an estimated $10 billion. With modest goals set in an effort to capture at least ten to twelve percent of the US market. The challenges were Fed Ex and UPS which landed DHL about seven percent shy of the total US market. "Despite some dominance worldwide, DHL was unable to win along side of the leaders in the US market." (Ewing 2008) The decision was made in 2008 to exit from the US market with an estimated loss of over $1 billon for the year. With the massive layoff's and severance packages with corporate restructuring the loss was originally estimated at $4 billion (Ewing 2008).Leaderships FailureIn an effort to establish direction DHL made an attempt to at entering into a territory that was unfamiliar. With the development of a vision and of future strategies the company did establish changes that were necessary to the success of that vision. Lack of research entering into a new market fell on the leadership of the company while only the growth potential was taken into consideration. Moving into a new market, leadership must devise plans that will encompass all areas of the business. In this case the need for growth against large American companies was not a full proof plan to enter into the US market. Success did not come as a natural occurrence for the DHL as previously planned and thought by the leadership, which resulted in a loss.Employee buy-in is a factor needed when companies plan to reorganize, re-locate or merge. DHL failed to...

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