2

CONTENT
INTRODUCTION ................................................................................................................ 3
Chapter I. THEORETICAL ASPECTS OF THE ENTERPRISE EXTERNAL
ENVIRONMENT AND COMPETITIVENESS ANALYSIS ................................................... 5
1.1 Importance of finance and financial management in the world business .......... 5
1.2 Concept, principles and forms of enterprise performance analysis ................. 15
Chapter II. ANALYSIS OF THE OPERATION AND FINANCIAL CONDITION OF
THE ENTERPRISE DHL .......................................................................................................... 20
2.1 Short history of the enterprise DHL ....................................................................... 20
2.2 Financial and Economic Analysis of the enterprise DHL ..................................... 28
Chapter III. STRATEGY AND LOGISTIC ACTIVITIES OF THE DHL
MOLDOVA ENTERPRISE AND THEIR INTEGRATION IN GLOBAL BUSINESS ...... 45
CONCLUSION ................................................................................................................... 57
BIBLIOGRAPHY .............................................................................................................. 59













3

INTRODUCTION
The present thesis is the result of an intense activity of documentation and scientific
research during several years on main aspects regarding Analysis and management of financial
resources of the enterprise. The analyze of this theme supposes, in my opinion, knowing a
great number of techniques, methods, ways, regulations and commercial, international or civil
usances which will allow to logistic to contribute to the intensification of international business
of the companies in conditions of increased efficiency.
This thesis focuses on a DHL company mainly to examine what reasons or factors make it
one of the most successful logistics companies all over the world, and what competitive
advantage DHL can gain through external analysis and internal analysis of marketing strategy.
According to Aaker, external analysis is an exercise in creative thinking from different
perspectives, such as competitor, customer, environment and etc. These perspectives can help
define the relevant industry. On the other hand internal analysis identifies brand association,
products quality and customer satisfaction of companies. In the end SWOT analysis would be
used to summarize the companys strength, weakness, opportunity and threats.
In this thesis, a brief introduction of external and internal analysis is given and it would be
the main theory that can support carrying out the purpose of this work. According to Aaker and
Gerhardt, external analysis can influence on business strategy if a company adapted it in current
dynamic competition. when customer and competitor are researching and classifying by external
and internal analysis, stronger strategies can be developed to sustain a companys growth. Thus,
external and internal analysis is crucial process for business. This analysis can help companies to
understand themselves better and deeper. Thereby the manager can use SWOT framework to
analyze what strength, weakness (internal factors) the company has and what opportunity, and
threats (external factors) the company faces. After that an appropriate market strategy can be
developed and applied.
In the paper we have started from the consideration that successes of the companies in
their external activity can not be realized but by using a performing informational system of
logistic service.
Here, we have mentioned their role in taking decisions by the companies, main directions
of informatization of these logistic services so that in the final to analyze the logistic
informational system on fields of activity: international transport of merchandise and expeditions;
supply, storage and delivery; customs integral.
4

The aim of this thesis is to study what competitive advantage DHL can gain from external
and internal factors and what DHL can learn by analyzing the competitive advantage.
We have considered usefully that doctoral thesis be concluded with a chapter of final
considerations which emphasis a set of general conclusions to which will be added own
contributions as part of the paper.



























5

Chapter I. THEORETICAL ASPECTS OF THE ENTERPRISE
EXTERNAL ENVIRONMENT AND COMPETITIVENESS ANALYSIS
1.1 Importance of finance and financial management in the world
business
Finance involves the evaluation, disclosure, and management of economic activity and is
crucial to the successful and efficient operation of firms and markets.
The same mechanisms that underpin the positive role of finance, however, are also a
source of risk and fragility. The history of finance is full of boom-and-bust cycles, bank failures,
and systemic bank and currency crises. Just as there is a comprehensive literature on the impact
of finance on growth, there is an equally important literature that has explored the causes and
socioeconomic costs of financial fragility, including systemic banking crises. Historic analyses
and case studies have given way to more systemic cross-country explorations of idiosyncratic
and systemic banking distress and their determinants.
1

Given the importance of finance for growth, its inherent risks, and the large
socioeconomic costs of banking crises, it is not surprising that the financial sector is often at the
top of the policy agenda. However, the importance of access to credit as entry barrier into the
real sector and the relative ease with which owners and creditors of financial institutions can be
expropriated also makes financial sector policies an important tool in the political process.
Subsidized credit programs and credit guarantees are often an easy and cheap tool of fiscal
policy as they create contingent rather than real liabilities. The dependence of most real sector
enterprises on access to external finance makes the financial sector critical in the attempt of
ruling elites to entrench their socioeconomic dominance and prevent entry of competitors. The
reliance of financial institutions and markets on contractual institutions makes them dependent
on the political sphere.
2

The recent crisis has brought these issues to the forefront of the academic and also
political debate. The crisis has also shed doubt on the previous findings of a positive impact of
finance on growth. How much finance is good for growth? Are financial crises too high a price
for having a thriving financial system? Are credit boom-and-bust cycles behind economic cycles?
What is the politics behind financial development and fragility?
Financial institutions and markets depend critically on contractual institutions, and this
survey is thus closely related to the institutions and development literature. Specifically, given

1
Ibidem
2
Pearce, D., Barbier, E., Markandya, A & Aldershot, H. (1990), Sustainable Development: Economics and
Environmental in the Third World, E. Elgar, London.
6

the intertemporal nature of financial contracts, the financial system is one of the most institution-
sensitive sectors of the economy.
The financial sector depends as much as contractual institutions on property rights
protection and thus the political structures of societies.
At the core of the existence of financial institutions and markets are market frictions,
which financial institutions and markets can help alleviate, such as asymmetric information
between contractual partners resulting in agency problems and risks of illiquidity and default.
Building on the insights by Stiglitz and Weiss on the importance of agency problems,
several articles have shown how financial institutions and markets can economize on screening
and monitoring costs of many individual lenders and, by diversifying risk across many different
projects, improve on a world without them.
3

By pooling savings across a large number of savers with differently timed liquidity needs,
financial institutions can help overcome liquidity risks and ultimately provide savers with a
higher return. Similarly, more liquid financial markets increase incentives for investors to
relinquish control over their savings, as they are able to access them through financial markets
on an immediate basis, while at the same time earning higher returns. The emergence of financial
institutions and markets can thus be explained by the gains for economic agents, a theoretical
argument that is consistent with the historical observance that financial institutions and markets
have arisen at an early stage of human history and especially as exchange of goods and services
across larger geographical distances and within larger societies or between societies has become
more prominent.
Finance is important to an organisation as the firm has to know how viable it is and
balance profit with costs.
The Role of the Finance Department can be summarised:
Prepare and create financial accounts such as Trading, Profit and Loss Account and the
Balance Sheet.
Keep and maintain financial records sales figures and records of expenditure would be
held by the Finance department and used by other departments also.
Prepare and plan internal financial information this would mainly be performed in the
case of a budget, which is a financial plan and can help managers take corrective action.
Analyse current financial performance how the firm has done in trading or expenses
would be analysed primarily using ratio analysis tools.

3
Lieb, R. C. (2005), The 3PL industry : where it's been, where it's going, Supply chain management review,
Vol.9 No. 6, pp. 20-27.
7

Pay creditors Finance Department would ensure that bills are paid to people the firm
owes money to.
Pay employees wages and salaries running the payroll system is another important task
for Finance to undertake.
Managerial finance concerns itself with the managerial significance of finance. It is
focused on assessment rather than technique. For instance, in reviewing an annual report, one
concerned with technique would be primarily interested in measurement. They would ask: is
money being assigned to the right categories? Were generally accepted accounting principles
(GAAP) followed?
A person working in managerial finance would be interested in the significance of a
firm's financial figures measured against multiple targets such as internal goals and competitor
figures.They may look at changes in asset balances and probe for red flags that indicate problems
with bill collection or bad debt as well as analyze working capital to anticipate future cash flow
problems.
Corporate finance is the area of finance dealing with monetary decisions that business
enterprises make and the tools and analysis used to make those decisions. The primary goal of
corporate finance is to maximize shareholder value. Although it is in principle different from
managerial finance, which studies the financial decisions of all firms, rather than corporations
alone, the main concepts in the study of corporate finance are applicable to financial problems of
all kinds of firms.
4

The discipline can be divided into long-term and short-term decisions and techniques.
Capital investment decisions are long-term choices about which projects receive investment,
whether to finance that investment with equity or debt, and when or whether to pay dividends to
shareholders. On the other hand, short-term decisions deal with the short-term balance of current
assets and current liabilities; the focus here is on managing cash, inventories, short-term
borrowing, and lending (such as the terms on credit extended to customers).
The terms corporate finance and corporate financier are also associated with investment
banking. The typical role of an investment bank is to evaluate the company's financial needs and
raise the appropriate type of capital that best fits those needs. Thus, the terms "corporate finance"
and "corporate financier" may be associated with transactions in which capital is raised in order
to create, develop, grow, or acquire businesses.

4
Pearce, D., Barbier, E., Markandya, A & Aldershot, H. (1990), Sustainable Development: Economics and
Environmental in the Third World, E. Elgar, London.
8

Sound financial management creates value and organizational ability through the
allocation of scarce resources amongst competing business opportunities. It is an aid to the
implementation and monitoring of business strategies and helps achieve business objectives.
Financial management is the management of monetary resources. It involves planning
accurately, directing the monetary resources at correct time and controlling the financial
activities of a firm. Financial management is very important for a business to ensure it can run
smoothly. Finance is an aspect which, if neglected, can lead to severe losses and closure of a
firm.
The financial matters are one of the most important matters when it comes to your
business. Some people think that the business is all about marketing and selling the product and
they start a business on this assumption that this knowledge will be sufficient for them in running
the business. The ugly truth about starting a business is that the financial matters should be
solved at the first priority, if you want your business to grow. At the start of the business, the
financial managers and stakeholders will face problems that will require financial decisions. The
questions such as where you should invest your money and from where the revenue should be
generated are the questions that need to solve quickly in order to get maximum profit out of the
business. To handle such matters, one should have extra knowledge in the field of finance. The
specific field of knowledge can be termed as financial management.
5

Finance involves the evaluation, disclosure, and management of economic activity and is
crucial to the successful operation of firms and markets.
The endogenous emergence of financial institutions and markets does not in itself imply a
positive impact on economic growth. A large theoretical literature, however, has explored
several channels through which financial systems can help increase economic growth rates, both
through improved capital accumulation as through higher productivity growth. On a broader
level, these theories have shown how financial markets can help overcome the market frictions
of indivisible projects and inability to diversify risks that have held back development in many
developing economies. I discuss these different channels in turn.
First, and on a very basic level, financial systems can support the efficient exchange of
goods and services by providing payment services and thus reducing transaction costs.
Financial services can foster specialization by enabling more transactions, thus fostering
productivity growth.

5
Manzini, A. R., Pareschi & Persona, A. (2007), Logistics outsourcing: an examination of third-party
providers, International Journal of Logistics Systems and Management, Vol. 3 No.2, pp. 125-157.
9

Second, by pooling savings from many individual savers, financial institutions and
markets can help overcome investment indivisibilities and allow exploiting scale economies.
This does not necessarily have to be national financial institutions but can be local
coalitions of investors, as was the case in the early days of the Industrial Revolution for
infrastructure projects.
Third, by economizing on screening and monitoring costs and thus allowing more
investment projects to be financed and, ex ante, increasing the aggregate success probability,
financial institutions and markets can ultimately have a positive impact on investment and
resource allocation. Similarly, by identifying the entrepreneurs with the most promising
technologies, financial intermediaries can also boost the rate of technological innovation and
ultimately growth. A similar argument holds for financial markets: in larger and more liquid
markets, agents have greater incentives to invest in research on enterprises and projects, which
produces information that can be turned into trading gains, ultimately improving resource
allocation.
6

Financial management can be defined as taking financial decisions with the goal that
they should maximize the stockholders wealth. Finance management is very important in the
business and in the world of finance; financial management can be called by many names such
as corporate management and managerial finance. Financial Managers ultimate goal is to
maximize the stockholders profit but this goal is aligned with smaller goals and they collectively
increase the profitability of the organization. Some other goals performed by the financial
managers are increasing the day to day profitability, managing the funds of short term loans and
managing daily finances. These goals can be managed by completing a lot of activities such as
financial accounting, managerial accounting, risk management and auditing.
7

These tasks are very difficult and a small businessman cannot spare time to perform all
these functions. So, if you have a small company then you should contact the financial manager
and seeks their help in managing the finance of the organization. Alternatively, businessmen may
avail themselves of the services of a financial manager or seek the aid of companies providing
financial management services. Some firms also take help form the financial management
software. By purchasing such software, you will not have to contact the financial managers every

6
Pearce, D., Barbier, E., Markandya, A & Aldershot, H. (1990), Sustainable Development: Economics and
Environmental in the Third World, E. Elgar, London.
7
Kolter, P., Armstrong, G., Wong, P.V., Saunders, P.J & Wood, M. B. (2010), Principles of marketing pack,
5th ed, Financial Times/ Prentice Hall. London.
10

time you face a financial problem. This financial software is expensive so it is advised that you
should start with software which has basic features and then move on to the advanced one.
8

This financial software can help in preparing the bills and they can also be used for
making invoices and generating payrolls. You should look for these features in the software
because they will help you in daily work. Furthermore, if you are more oriented toward visuals,
choose programs that make use of graphs and charts, as these probably will be easier for you to
use.
The Functions of Financial Management are as follows:
Estimation of capital requirement: The main function of a finance manager
is to estimate the costs of the firm. They must be capable to estimate the expected profits
and future requirements of finance with regards to new policies, etc. This leads to an
increase in the earning capacity of the firm.
Determination of capital composition: The finance manager has to
determine the ratio of capital involved in various projects. For example, the amount to be
invested in short term projects and long term projects, what is the amount required to be
kept for sundry expenses, staff salary, etc. If the money is short they must find out ways
to increase the equity from outside resources.
Investment decision: The finance manager is a key decision maker in
terms of investment making. They should always be aware of all the monetary resources
available with the business which can help increase the company's profit margins by
investing it.
Profit management: In case of surplus profit, the finance manager can
declare either dividends or issue bonus shares.
The importance of financial management can be stressed with the following points:
Good reputation of the company: Proper financial management brings
name, fame and good reputation to the company.
Diversification: Funds can be diversified to various areas with proper
management.
Growth: Financial management leads to growth of the company.
Survival: In this competitive time, financial management can help the
company survive in the market.

8
Bennett, R & Thiele, S.R. (2004), Customer satisfaction should not be the only goal, Journal of Services
Marketing, Vol. 18 No. 7, pp. 514-523.
11

In a big organisation, the general manger or the managing director is the overall incharge
of the organisation but he gets all the activities done by delegating all or some of his powers to
men in the middle or lower management, who are supposed to be specialists in the field so that
better results may be obtained.
9

For example, management and control of production may be delegated to a man who is
specialist in the techniques, procedures, and methods of production. We ma designate him
Production Manager'. So is the case with other branches of management, i.e., personnel, finance,
sales etc.
The incharge of the finance department may be called financial manger, finance
controller, or director of finance who is responsible for the procurement and proper utilisation of
finance in the business and for maintaining co-ordination between all other branches of
management.
10

Importance of finance cannot be over-emphasised. It is, indeed, the key to successful
business operations. Without proper administration of finance, no business enterprise can reach
its full potentials for growth and success. Money is a universal lubricant which keeps the
enterprise dynamic-develops product, keeps men and machines at work, encourages management
to make progress and creates values. The importance of financial administration can be discussed
under the following heads:
a. Success of Promotion Depends on Financial Administration. One of the
most important reasons of failures of business promotions is a defective financial plan. If
the plan adopted fails to provide sufficient capital to meet the requirement of fixed and
fluctuating capital an particularly, the latter, or it fails to assume the obligations by the
corporations without establishing earning power, the business cannot be carried on
successfully. Hence sound financial plan is very necessary for the success of business
enterprise.
b. Smooth Running of an Enterprise. Sound Financial planning is necessary
for the smooth running of an enterprise. Money is to an enterprise, what oil is to an
engine. As, Finance is required at each stage f an enterprise, i.e., promotion,
incorporation, development, expansion and administration of day-to-day working etc.,
proper administration of finance is very necessary. Proper financial administration means
the study, analysis and evaluation of all financial problems to be faced by the

9
Koh, S. C. L. T. (2005), Using e-commerce to gain a competitive advantage in 3PL enterprises in China,
International Journal of Logistics Systems and Management, Vol. 1No.2, pp. 187-210.
10
Gerhardt, P.L. (2002), A paper presented in partial fulfillment of the requirements of OM 814 marketing
strategy and practice, Journal of Service Marketing, Vol. 20 No. 8, pp. 150-160.
12

management and to take proper decision with reference to the present circumstances in
regard to the procurement and utilisation of funds.
c. Financial Administration Co-ordinates Various Functional Activities.
Financial administration provides complete co-ordination between various functional
areas such as marketing, production etc. to achieve the organisational goals. If financial
management is defective, the efficiency of all other departments can, in no way, be
maintained. For example, it is very necessary for the finance-department to provide
finance for the purchase of raw materials and meting the other day-to-day expenses for
the smooth running of the production unit. If financial department fails in its obligations,
the Production and the sales will suffer and consequently, the income of the concern and
the rate of profit on investment will also suffer. Thus Financial administration occupies a
central place in the business organisation which controls and co-ordinates all other
activities in the concern.
d. Focal Point of Decision Making. Almost, every decision in the business is
take in the light of its profitability. Financial administration provides scientific analysis of
all facts and figures through various financial tools, such as different financial statements,
budgets etc., which help in evaluating the profitability of the plan in the given
circumstances, so that a proper decision can be taken to minimise the risk involved in the
plan.
e. Determinant of Business Success. It has been recognised, even in India
that the financial manger splay a very important role in the success of business
organisation by advising the top management the solutions of the various financial
problems as experts. They present important facts and figures regarding financial position
an the performance of various functions of the company in a given period before the top
management in such a way so as to make it easier for the top management to evaluate the
progress of the company to amend suitably the principles and policies of the company.
The financial manges assist the top management in its decision making process by
suggesting the best possible alternative out of the various alternatives of the problem
available. Hence, financial management helps the management at different level in taking
financial decisions.
f. Measure of Performance. The performance of the firm can be measured by
its financial results, i.e, by its size of earnings Riskiness and profitability are two major
factors which jointly determine the value of the concern. Financial decisions which
increase risks will decrease the value of the firm and on the to the hand, financial
13

decisions which increase the profitability will increase value of the firm. Risk an
profitability are two essential ingredients of a business concern.
The recent economic climate on St. Eustatius has resulted in many businesses and even
non-profit organizations having to tighten their belt. Cost cutting measures are being
implemented by key decision makers in the face of high inflation, a stagnant economy and
uncertainty about the future.
In light of recent developments, good financial management is becoming increasingly
important in helping businesses on St. Eustatius make the best use of limited financial resources,
whilst at the same time preparing for better times ahead.
Good financial management is simply an effective approach of managing an
organisation's money in-order to acheive its objectives. These objectives may include achieving a
certain amount of profit for a business or keeping spending within allocated subsidy limits for a
non-profit organization. In either case, the aim is to utilise financial resources as a means to
achieving a predetermined end.
There are three elements that lie at the heart of any sound financial management system
namely; FP (Financial Planning), FC (Financial Control) and FA (Financial Analysis). We will
briefly consider each of these elements.
This process entails creating a budget, which is an estimation of an organizations' income
and expenditure over a fixed period (e.g. 1 year). This projected analysis of how an organization
will use its resources is important in preventing overspending, wastage and ensuring profitability.
Budgets can also be invaluable in helping businesses create a financial roadmap which ensures
that they accumulate sufficient capital over a period of time to invest in new opportunities.
11

This aspect of financial management is concerned with ensuring that an organization lives
within its means. This essentially involves monitoring an organization's actual spending against
its budget and identifying spending variances (e.g. overspending or underspending). In-order to
achieve this, a bookkeeping system is required usually in the form of an accounting software
program to record financial transactions. It is important for key decision makers within the
organisation (e.g. board members, directors) to receive periodic financial reports providing
insight into the organisation's income and expenditures (profit & loss report) in-addition to an
overview of its assets and liabilities (balance sheet).
Last but not least is the important process of making decisions relating to investments.
This involves careful consideration of the financial health of a business or organization typically

11
Ahmed, P.K &Rafiq, M. (2003), Internal market issues and challenges, European Journal of Marketing, Vol.
37 No. 9, pp. 1177-1186.
14

by analysing its annual financial statements. It is important that directors and other decision
makers (particularly from a non-financial background) have a good grasp of the concepts and
terminology of financial management. This is important if they are to be effective in monitoring
performance and making key financial decisions. At this stage it is not uncommon for
organizations with limited internal accounting expertise to acquire assistance from external
accounting firms.
The financial manager plays a dynamic role in a modern companys development. This
has not always been the case. Until around the first half of the 1900s financial managers
primarily raised funds and managed their firms cash positions and that was pretty much it. In the
1950s, the increasing acceptance of present value concepts encouraged financial managers to
expand their responsibilities and to become concerned with the selection of capital investment
projects.
Today, external factors have an increasing impact on the financial manager. Heightened
corporate competition, technological change, volatility in inflation and interest rates, worldwide
economic uncertainty, fluctuating exchange rates, tax law changes, and ethical concern over
certain financial dealings must be dealt with almost daily. As a result, finance is required to play
an ever more vital strategic role within the corporation. The financial manager has emerged as a
team player in the overall effort of a company to create value. The old ways of doing things
simply are not good enough in a world where old ways quickly become obsolete. Thus todays
financial manager must have the flexibility to adapt to the changing external environment if his
or her firm is to survive.
12

The successful financial manager of tomorrow will need to supplement the traditional
metrics of performance with new methods that encourage a greater role for uncertainty and
multiple assumptions. These new methods will seek to value the flexibility inherent in initiatives
that is, the way in which taking one step offers you the option to stop or continue down one or
more paths. In short, a correct decision may involve doing something today that in itself has
small value, but gives you the option to do something of greater value in the future.
If you become a financial manager, your ability to adapt to change, raise funds, invest in
assets, and manage wisely will affect the success of your firm and, ultimately, the overall
economy as well. To the extent that funds are misallocated, the growth of the economy will be
slowed. When economic wants are unfulfilled, this misallocation of funds may work to the
detriment of society. In an economy, efficient allocation of resources is vital to optimal growth in

12
Bergman, B & Klefsj, B. (2010), Quality from customer needs to customer satisfaction, Studentlitteratur
AB, Lund, Sweden.
15

that economy; it is also vital to ensuring that individuals obtain satisfaction of their highest levels
of personal wants. Thus, through efficiently acquiring, financing, and managing assets, the
financial manager contributes to the firm and to the vitality and growth of the economy as a
whole.
13

1.2 Concept, principles and forms of enterprise performance analysis
Term analysis is derived from the Greek language which translates as divide, split.
Any division allows for an insight into the inner parts of the object of study and to find out the
meaning of each component. Analysis is in the wider meaning understood as the ability to
cognise the subject and the phenomena of the external environment, based on the division of a
single item into its component parts and their examination in its entirety.
14

Enterprise management is the process of implementation of the management functions. It
is related with performance of numerous business transactions altogether comprising the
business operations of the enterprise. Business performance analysis is carried out before the
adoption of important decisions; it is used to justify management decisions and actions, and
serves as a scientific substantiation in enterprise management, as well as ensures the objectivity
and effectiveness of the decisions taken.
Managers cannot rely solely on their intuition. Management decisions and action must be
substantiated with accurate estimates and comprehensive economic analysis.
Business performance analysis should always provide answers to the following questions:
What happened?
Why did it happen?
What and how should be done in the future?
The answer to the first two questions only provide with the statement of facts. The third
question is the most significant one. To provide the answer to this question is exactly the purpose
of the enterprise performance analysis.
Management decisions and the consequences of their execution depend on enterprise
performance analysis. Enterprise performance analysis should correspond to preset requirements
(principles) and it should be as follows:
Objective and definite based on clear, strongly tested measures
Complex and systematic, i.e., every measure must be studied in
combination with other related and analogue measures;

13
Aaker, D. A. (2001), Strategic market management. John Wiley & Sons, Inc. Courier-Westford, United
States of America.
14
WCED. (1987), Our Common Future, Oxford University Press, Oxford.
16

Perspective all measures must be set for the perspective in order to be
able to forecast what impact would be exerted on them by introducing novelties in
technology, machinery, labour organisation of the enterprise as well as in the application
of experience;
Operative and timely requiring constant and daily control over enterprise
activities, fast processing of data and implementation of the necessary measures;
Specific the results obtained from the analysis should transform in real
activities for the improvement of all areas of enterprise activities;
Scientifically grounded;
Practically applicable and usable;
Effective.
This is the only approach to the enterprise performance analysis that can make it effective
and necessary for improvement of company activities. There is a certain information base
required in order to perform analysis. Its quality depends on the overall enterprise financial
accounting and the quality of reporting, and the extent to which the figures included therein are
true and fair.
15

Each group of its users have their own interests in the enterprise, as well as their own
object and target, for example, the main target for the enterprise owners is the dividends,
therefore, the object of financial performance for them is the enterprise operating results, while
the target for the suppliers is the payment for the goods, therefore, they are interested in the
solvency status of an enterprise.
The following data are used for analysis:
accounting records, statistical reports;
budgeted and standard materials (consumption standards of materials,
estimates, payroll rates);
contracts, orders, minutes of production meetings;
individual studies of those performing the analysis, stock-take information.
Business activities of an enterprise in a wider sense are comprised of several sub systems
(operational, financial, investment etc.) Analysis may be aimed at one of the above mentioned
sub-systems of business activities. In this respect analysis is further divided into the following:
economic analysis;
financial analysis;

15
Pearce, D., Barbier, E., Markandya, A & Aldershot, H. (1990), Sustainable Development: Economics and
Environmental in the Third World, E. Elgar, London.
17

marketing analysis is used to research how the external environment is
functioning. Measures in the raw materials market and the ready goods sales market,
competitiveness of an enterprise, formation of the pricing policy, development of the
strategy for marketing, enterprise SWOT analysis is being researched and analysed;
investment analysis, which is used for the development of the investing
operations programme and the assessment of its efficiency as well as for justifying of the
optimal investment option;
social analysis used for the assessment of further development
opportunities in the social field. Studies the opportunities for improving the terms of
employment, employee motivation incentives, increasing the efficiency of enterprise
functioning;
institutional analysis, which is used when assessing the political and
organisatorial conditions affecting the activities of an enterprise. Here the legislative
framework, the enterprise relations with the local government, business partners and
competitors are studied Strategic policy in the area of business cooperation that
influences the improvement of efficient functioning Economic analysis is the structural
process of the research, as well as the assessment of exposure to changes in external and
internal factors as well as to the impact of management.
There are the two following types of economic analysis distinguished.of an enterprise is
being developed.
Macroeconomic analysis, which investigates the economic phenomena and
processes across the world and within the economy of one state
Microeconomic analysis which investigates the same processes and
phenomena at the level of individual business entities. The last one is exactly what is
called business performance analysis.
The complex enterprise business performance economic analysis occupies the central
place in the enterprise management system. Management decisions are developed and
justified based on this analysis. No organisational or operational decision may be
executed until its economic usefulness is proven. Management decisions and actions must be
based on direct estimates as well as on thorough and extensive economic analysis.
16

Financial analysis is a component part of business analysis. Bringing the financial aspects
in the forefront of a business entity performance as well as the increase in significance of the

16
Novicevic, M.N., Harvey, M., Aurty, C.W & Bond III, E. (2004), Dual-perspective SWOT: synthesis of
marketing intelligence and planning, Marketing intelligence & Planning, Vol. 22 No.1, pp. 84-94.
18

financial role is a characteristic trend across the world. Therefore the priority of an analysis
grounded in the enterprise financial model is growing.
17

The financial analysis of an enterprise may be performed not only by enterprise managers,
but also by the existing and potential investors, banks, suppliers, and, therefore, it is possible to
distinguish between the internal and external financial analysis according to the subject of
analysis.
Financial analysis can be defined as follows: accumulation, transformation and
application of financial information for the purpose of:
evaluation of the current and perspective financial position of an enterprise;
evaluation of the possible and targeted speed of development of an
enterprise from the point of view of the financial provision;
clarifying the available sources of finance and assessment of their
possibilities of mobilisation and usefulness;
forecasting the status of an enterprise in the goods and capital markets.
Financial analysis is based on the assessment of the financial statements.
The goals of financial analysis are as follows:
to establish the financial position of an enterprise and to identify the
possibilities to improve the existing financial management methods, and to improve the
financial status of an enterprise; financial analysis of an enterprise allows to establish and
to measure by quantitative means the correlation between the enterprise performance
final results and the resources used (material, financial, human etc. resources) that it uses
in order to realise its current activities and enterprise development;
to obtain the largest possible number of key measures that would allow for
the most complete assessment of changes in the enterprise financial position, profit and
loss account, structure of assets and liabilities;
to early establish and prevent weaknesses in the financial and operating
activities of an enterprise as well as to find the possibilities for improvement of the
financial position.
Upon the arrangement of the financial analysis of an enterprise business activities a firm
should carry out the following procedures:
select the methods for performance of analysis;

17
Thakkar, J., Deshmukh, S.G., Gupta, A.D & Shankar, R. (2005), Selection of Third-Party Logistics (3PL): A
Hybrid Approach Using Interpretive Structural Modeling (ISM) and Analytic Network Process (ANP), International
Journal of supply chain forum, Vol. 6 No.1, pp. 32-46.
19

identify the factors influencing the enterprise performance results;
establish the trends of development of an enterprise by comparing the
results of the financial analysis with the preceding period;
develop an action plan for strengthening of the financial position upon
completion of the analysis.
The objectives to be achieved upon performance of the financial analysis are as follows:
assess the efficiency of utilisation of the financial resources by performing
analysis of the financial results of the enterprise business activities;
prepare a forecast of the possible financial results, based on the existing
business performance results and alternative options for use of the resources;
design the activities for improvement of the financial position and further
efficiency improvement of the use of financial resources.
In free market economy the enterprise itself is an object of research by the environment
that it operates in. Subjects of analysis are the users of information who are interested in the
enterprise activities.
Subjects of analysis are enterprise owners, investors (banks, stock exchanges), the
management, employees, customers, suppliers and also the government (tax authority).
The different groups of interest provide different input in the activities of an enterprise
and they are each differently interested in the enterprise performance results. Each group has its
own object of financial analysis.














20

Chapter II. ANALYSIS OF THE OPERATION AND FINANCIAL
CONDITION OF THE ENTERPRISE DHL
2.1 Short history of the enterprise DHL
DHL Worldwide Express, a privately held worldwide delivery service comprised of DHL
Airways and DHL International, is the world's oldest and largest international air-express
company.
International shipping, courier, and packaging service. DHL was established in 1969 by
Adrian Dalsey, Larry Hillblom, and Robert Lynn. The name DHL is derived from the first initial
of each founder's last name. DHL has numerous cargo transport systems including planes, trains,
and boats. DHL serves more than 120,000 designations and 220 countries. As of 2002, Deutsche
Post World Net owns the majority of shares the firm has grown phenomenally and dominates the
global express marketplace, delivering to over 70,000 destinations in 227 countries.

DHL International Offices
DHL delivers both small and heavyweight parcels to destinations from the Middle East
and Pacific Rim countries to throughout Europe and the United States. DHL's ever-expanding
international presence prompted such stateside competitors as Federal Express and United Parcel
Service, as well as the United States Postal Service, to join the fray of global express delivery.
DHL was founded by three young shipping executives - Adrian Dalsey, Larry Hillblom,
and Robert Lynn - who were casting about for a way to increase turnaround speed for ships at
ports. They reasoned that if the shipping documents could be flown from port to port, they could
be examined and processed before the ships arrived, and speeding up the process would decrease
port costs for shippers. With this in mind, the trio combined the first letters of their last names to
21

form the acronym DHL, thus beginning an air-courier company that revolutionized the delivery
industry.
18

DHL rapidly developed into an express delivery service between California and Hawaii,
then quickly expanded to points east. The company's primary customer was the Bank of America,
which needed a single company to carry its letters of credit and other documents. DHL branched
into the international market in the early 1970s when it began flying routes to the Far East. In
addition, while competitor Federal Express was developing its domestic overnight delivery
network, DHL focused on further developing its international service.
In 1972, the three original investors recruited Po Chung, a Hong Kong entrepreneur, to
help them build a global network. Chung started DHL's sister company, DHL International Ltd.,
headquartered in Brussels, Belgium. Since that date DHL Worldwide has functioned as two
separate companies, DHL Airways, Inc. based in Redwood City, California, and DHL
International. While each company acted as the exclusive agent for the other, by 1983 DHL
International had grown to be five times larger than its domestic counterpart. DHL International's
rapid expansion continued throughout the 1970s, adding destinations in Europe in 1974, the
Middle East in 1976, Latin America in 1977, and Africa in 1978.
The 1980s would bring the firm increased growth as well as greater competition. During
this time DHL continued to expand, by turns cooperating with competitors and warring with
them. The company also sought new outlets for service, working out an arrangement with Hilton
International Co. in 1980, agreeing to provide daily pickup of documents at 49 Hilton Hotels,
arranging for international delivery--its couriers moving the packages through customs--then
delivering them locally. It was a win-win situation as Hilton was able to offer its patrons a high-
class delivery service and DHL was guaranteed new outlets for its business. The next year, 1981,
DHL flew 10 million shipments between 268 cities and had approximately $100 million in sales.
The following year, Lawrence Roberts, who had founded Telenet Communications Corp. and
headed GTE, joined DHL Corp. as president.
Although DHL had a strong international presence, business was occasionally made
difficult because it was necessary for the company to negotiate with foreign governments. In
1982, for example, the French post office sought to reassert a monopoly dating back to the 15th
century, and DHL--possessing 80 percent of the French market--was ordered to halt operations
outside Paris. What could have been a potential crisis for the company was, however, favorably
resolved.

18
Jordan, G.J & Fortin, M-J. (2002), Scale and topology in the ecological economics sustainability paradigm,
Econogical Economics, Vol. 41No. 2, pp.361-366.
22


DHL intercontinental direct distribution
DHL continued to expand its horizons, though, adding Eastern bloc nations in 1983. Prior
to 1983, DHL had not pursued much business in the United States, leaving the field to Federal
Express and United Parcel Service (UPS). Despite counting 97 percent of the nation's 500 largest
companies among its customers, DHL still held only a minuscule share of the overall domestic
market. To bolster its share of the American market, DHL installed two major hubs at airports in
Cincinnati and Salt Lake City, and added nine mini-hubs in major cities across the country. The
company also bought three Boeing 727s and seven Learjets, as well as new sorting equipment. In
addition, in 1983 DHL Worldwide started using helicopters in New York and Houston to
expedite documents during rush hour and the following year initiated helicopter service in Los
Angeles as well.
Once the hubs had been installed, DHL Airways began offering point-to-point overnight
service between 126 American cities. Still, for the year ending in 1983, DHL reached only two
or three percent of the domestic market--yet had more than 5,000 employees with 400 offices in
over 90 countries. As in its earliest days, banks accounted for a large portion of its business;
other common shipments consisted of computer tapes, spare parts, and shipping papers. That
year, DHL estimated it carried 80 percent of the bank material traveling by courier from Europe
to the U.S. and revenues were approximated at $600 million. In 1984, as former courier-driver
Joseph Waechter became president of DHL Airways, DHL provided service to more than 125
countries, and its 500 stations were handling 15 million international and domestic shipments
annually.
But just as DHL was looking to cut into the business of its domestic competitors, those
same companies were aiming to siphon off portions of DHL's international business. In 1985
both Federal Express and UPS entered the international express market. As competition became
more intense, DHL increasingly began to cooperate with businesses in similar areas. The
company teamed up with Western Union to deliver documents generated on Western Union's
23

EasyLink electronic mails, allowing people to send documents via courier without having to
hand-deliver material to the courier's office. The next year, 1986, as DHL International formed
its first joint venture with the People's Republic of China, known as DHL Sinotrans, Charles A.
Lynch was named chairman and chief executive of DHL Airways, replacing Roberts. Lynch
remained with the company just two years and was replaced by Patrick Foley, the former
chairman of Hyatt Hotels. Meanwhile, FedEx and UPS were eroding DHL's market share, which
fell from 54 percent in 1985 to 50 percent in 1987. However, an important competitive
battleground existed in Japan, and while FedEx and UPS gained footholds in that country in the
1980s, by 1988 DHL still controlled 80 percent of the Japanese overseas market.
As the world economy boomed in the 1980s, DHL followed suit, even breaking new
ground in the Communist-bloc countries. The company had first cracked the eastern bloc in 1983,
when it began delivering packages to Hungary, East Germany, and several other countries. DHL
Airways was not slouching either, reporting that between 1986 and 1987 alone, its volume rose
34 percent; in 1987 it was the 318th largest private company in the United States, with 5,000
employees and estimated sales of $375 million. Revenues for the entire DHL network, in 1988,
were calculated to be between $1.2 and $1.5 billion, helped in part by another joint venture with
a Hungarian company to create DHL Budapest Ltd. That year, DHL controlled 91 percent of the
packages bound for Eastern Europe from the West and 98 percent of all outbound shipments.
19


Name DHL worlwide
In 1989, DHL Worldwide was the 84th largest company in the United States with 18,000
employees, more than 50 million shipments, and service to 184 countries. However, though

19
Reisch, L. A. (2001), Time and wealth: the role of time and temporalities for sustainable patterns of
consumpetion, Time & Society, Vol. 10 No ., pp. 367-385.
24

DHL's international success was becoming firmly established, the company was not making the
headway it had planned in the United States. As of 1989, DHL had only five percent of the
domestic market. To bolster its name recognition in the United States, the company turned to
innovative advertising techniques, including the use of humor. Cartoonist Gary Larson, creator
of the wildly popular comic "The Far Side," was employed to draw cartoons for use in DHL
advertising, and in 1990 the company introduced a campaign featuring flying DHL vans
whizzing past competitors' planes. DHL also took an unusual approach to air delivery. Although
the company used its own fleet of planes within Europe and on some major routes, DHL often
used scheduled airlines to carry its shipments. Federal Express, in contrast, maintained its own
fleet and seldom used other airlines. Rather than purchase its own planes, DHL chose instead to
invest its capital in technology and ground-handling equipment, spending some $250 million on
those areas in 1990 and 1991 alone.
In 1990, in order to infuse the company with fresh capital and take advantage of the
resources of larger airlines, DHL International sold parts of its business to three companies.
Japan Air Lines and the German airline Lufthansa each purchased five percent, while Nissho
Iwai, a Japanese trading company, purchased 2.5 percent. Each firm also had the option of
buying greater shares. In addition, the three companies also own a combined stake of 2.5 percent
in the U.S-based DHL Airways. The sale of these closely held interests brought $500 million in
capital into the firm. The same year, despite a 60 percent share of the international overnight
delivery market, the company began to expand into new areas of business. To keep up in an
increasingly competitive industry, DHL Worldwide entered the freight services industry and
began carrying heavier cargo. In the company's 20-year history of carrying small packages--
generally under 70 pounds--this was DHL's first major departure from its core business. In 1991,
DHL Worldwide had revenues of $2.3 billion, and was the 59th largest private company in the
U.S., its 21,000 employees handling more than 80 million shipments.
20

In June 1992, all three of DHL's major shareholders exercised their option to increase
their shares in DHL International; Japan Air Lines and Lufthansa each increased their stake to 25
percent, while Nissho Iwai's holdings grew to 7.5 percent. This was also the year DHL began
service to Albania, Estonia, Latvia, and Greenland, and reestablished ties with Kuwait. In
addition, in an unusual move DHL signed an agreement to share transatlantic and European
aircraft operations with one of its competitors, Emery Worldwide. The economic recession and
an overcrowded North Atlantic airway were cited as the reasons behind these cooperative

20
Jordan, G.J & Fortin, M-J. (2002), Scale and topology in the ecological economics sustainability paradigm,
Econogical Economics, Vol. 41No. 2, pp.361-366.
25

measures, which would allow greater operating efficiency and expanded service. The
arrangement represented the first of several alliances between integrated carriers, due to
increasing pressure from other competitors, including Airborne Express and TNT.
In 1993 as revenues hit $3 billion, DHL commenced a four-year $1.25 billion capital
spending program to step up its technological capabilities, automation, and communications.
By 1994, DHL Worldwide's 25-year anniversary, the company controlled 52 percent of
the Asian express shipment marketplace, with FedEx and UPS garnering a 24 percent slice each.
The next year, DHL poured over $700 million into expansion of its Pacific Rim operations. DHL
was not only shoring up facilities in Hong Kong and Australia, but venturing into 16 new cities
in China, India, and Vietnam. A new $60 million hub at Manila's Ninoy Aquino International
Airport was scheduled to open in late 1995, with additional facilities slated for Bangkok, Tokyo,
Auckland, and Sydney. In the midst of its ambitious expansion, DHL was rocked by the news of
founder and majority shareholder Larry Lee Hillblom's death. Known as an avid though reckless
pilot (he had survived a previous crash and had his pilot's license suspended), Hillblom, who had
withdrawn from DHL's daily operations in 1980, was killed in a seaplane accident near Saipan
where he lived.
The management at DHL was soon embroiled in an ugly controversy after Hillblom's
1982 will was released, as a spate of paternity claims and lawsuits were filed. Lurid details of
Hillblom's penchant for young island girls reached the press, including an in-depth expos in the
generally staid Wall Street Journal. Since Hillblom had retained a mighty 60 percent of DHL
Airways and 23 percent of DHL International (valued conservatively at the time at around $300
million), the company's officers scrambled to exercise an option to repurchase his shares. Yet
financing and a host of complications held up the buyback and soon the entire estate was a
miasma of lawsuits, bad judgement calls, and island politics.
Yet 1995 was still a good year for DHL Worldwide, as the company debuted its web site
(www.dhl.com) and experienced an overall 23 percent growth in revenue to $3.8 billion, with an
incredible 40 percent surge in volume in its Middle East operations. In response to the
encouraging numbers, DHL broke ground on a new $4 million state-of-the-art express facility at
the Dubai International Airport in the United Arab Emirates in 1996. The new 42,000-square-
foot hub was to complement DHL's existing facilities in Bahrain. Over on the Asian continent,
DHL broke with its longstanding tradition of leasing planes to buy its own cargo fleet. Though
DHL International's previous strategy of leasing out cargo space had proved both successful and
prudent, Chairman and CEO Foley told the San Francisco Business Times the company needed
26

to control its own destiny, and having its own fleet would help alleviate the space limitations and
scheduling snafus of commercial flights.
21

In 1996, DHL was looking to the future again by announcing plans for a $100 million hub
in the Midwest to carry the company through the next two decades. While its Cincinnati
"superhub" handled around 45 incoming flights every night, and sorted over 135,000 pieces at a
rate of 60,000 per hour--DHL believed its growth would soon outpace the facility. The same was
true for the San Francisco area, where Silicon Valley shipments represented 40 percent of DHL
Airways' business in the Bay Area. Internationally, DHL was still growing at the speed of sound
with expansion in the former Soviet Union to 37 branches, a new facility at Ferihegy Airport in
Budapest, and the acquisition of Shigur Express in Israel. Though DHL had worked with Shigur
for years, the $3.5 million purchase gave DHL a firmer presence in the country's emerging
market. By 1998, DHL served 227 countries with 2,381 stations in cities from Paris and Prague
to Bombay and Bangkok with over 53,200 employees. Stateside, however, DHL Airways still
represented less than two percent of the market, though the California-based company got a
boost from the Teamsters' strike against UPS.
As the 1990s came to a close, DHL International announced its intention to sell a 22.5
percent stake in the company to Deutsche Post AG, for an infusion of funds and to strengthen its
presence in Germany. With the air cargo industry projected to grow at an annual rate of 6.7
percent for the next dozen or so years, DHL International continued to stave off competitors and
dominated global express shipments with over 40 percent of the market. Its U.S.-based sibling,
DHL Airways, maintained a healthy bottom line and was positioned to carve away at the market
share of FedEx and UPS.
Deutsche Post DHL is the worlds leading mail and logistics group offering expertise in
express, air and ocean freight, overland transport, contract logistics solutions as well as
international mail services linking 120,000 destinations in more than 220 countries and territories
with a network of about 6,500 offices, a fleet of nearly 76,200 vehicles and about 420 aircrafts
(DHL, 2012).
While looking at the 2008 industry figures it is worth noting that difference in terms of
revenue between the 1st and 10th globally rated company is more than 13 times. A considerable
difference when global logistic market in 2008 generated total revenue of $ 3566 billion, show
casing how fragmented the industry is (Data Monitor, 2009) and (World Logistics Council).

21
Lieb,K.J & Lieb, R.C. (2010),Environmental sustainability in the third-party logistics (3PL) industry,
International Journal of Physical Distribution & Logistics Management, Vol. 40 No 7 pp. 524 - 533
27


DHL is one of the largest 3PL company in the word founded by Adrian Dalsey, Larry
Hillblom and Robert Lynn in San Francisco in 1969and DHL is a part of the Deutsche Post
DHL group. According to Dirk, DHL is made of DHL Express, DHL Global Forwarding, DHL
Suplly chain and DHL Mails. Since 1969, DHL employees were more than 285,000 people and
provides its service in 220 countries all over the world. For its contributions in past 40 years,
DHL has become the global leader of the International express and logistics industry.
Depending on its deep understanding of global Internet and local market, DHL provides
professional services in express, air freight and ocean shipping, ground transportation and
international postal service areas, etc. In addition, supply chain and enterprise information
solution are two important business issues which DHL deals with in connection to contract
logistics and enterprise solution services.
According to the growing British network shopping market, DHL Mail launched a new
cross-border service for American electronic retailers and mail-order companies Track UK. As
a personal parcel delivery service, Track UK offers customers a cheap, speedy, mail-tracking and
customer-oriented service which fulfils the needs of American companies. Along with this
service, DHL finds another way to help customers to expand their international business.
Nowadays, more than 32 countries mail-tracking service is established in DHL.
22


22
Shapiro, C. (1982), Customer information, products quality and seller reputation, The Bell Journal of
Economics, the RAND Corporation.
28

According to Dirk, DHLs recent task is to focus on developing Asian market. DHL has
built six distribution centers in Hong Kong, Singarpore, Bangkok, Soul, Sydney and Toykyo.
Imports and exports are the two important components of a foreign trade. Foreign trade is
the exchange of goods and services between the two countries, across their international
borders.'Imports' imply the physical movement of goods into a country from another country in a
legal manner. It refers to the goods that are produced abroad by foreign producers and are used
in the domestic economy to cater to the needs of the domestic consumers. Similarly, 'exports'
imply the physical movement of goods out of a country in a legal manner. It refers to the goods
that are produced domestically in a country and are used to cater to the needs of the consumers in
foreign countries. Thus, the imports and exports have made the world a local market. The
country which is purchasing the goods is known as the importing country and the country which
is selling the goods is known as the exporting country. The traders involved in such transactions
are importers and exporters respectively.
2.2 Financial and Economic Analysis of the enterprise DHL
DHL has customers cover all over the world according to Sara Arrhenius. DHL accept
any kinds of delivery requirements no matter who the clients are.
According to Yunfeng Gao, DHL in order to know customer life cycle deeply, DHL
segments its customer into different groups. According to different customer needs, customers
are segmented as: strategic customer; long-term relationship customer; and normal customer.
Strategic customer is someone who has large amounts of logistics needs or complex supply chain
requires. Usually strategic customer group is made up of top 250 customers in the world.
23



23
Wright, S. Pickton, D.W & Calliw, J., (2002), Competitive intelligence in UK firms; a typology, Marketing
intelligence & Planning, Vol. 20 No. 6, pp.349-360.
29

DHL customers in the world
Long-term relationship customer is someone who asks DHL to serve for them regularly
and frequently, but their logistics needs are simpler than strategic customer. In terms of normal
customer, they are not loyal which means they can choose another 3PL company if they like. In
general understanding, DHL always provide best technology and service to strategic customer to
build strong cooperation relationship with them. However, the main task for DHL is to focus on
long-term relationship customer, in order to achieve profit maximization. And DHL can do
something for normal customer to turn them into loyal customer.
As the worlds biggest logistics company, the main service of DHL is to deliver goods or
mails all over the world. According to Dirk, the DHL staff can speak local language to ensure the
communication between customer and them is easy. In each of European countries DHL Freight
has a terminal in business centres to ensure the convenience and efficiency of transportation
(Figure 2). The main transportations are through air, ocean, road and rail. With the extensive
range of delivery service, DHL is able to satisfy all kinds of requirements and needs by linking
professional experts idea and latest technology, while it brings benefits to its customer as well
(Figure 3). Addtional, the DHL staffs are very patient when they talk with customer. For
example, Sara Arrhenius, our interviewee who is very kind to accept our interview. Even though
she was busy, she answered our questions with comfortable attitude every single time.
24

Moreover, Dirk believes that DHL would be the prior choice due to high quality service.
Dirk provides a few of examples that what benefits DHL can be brought to customer:
1) Professional advice on all matters pertaining to customs, import VAT (value-added
tax), excise duties and security via DHL consultancy services;
2) Full transparency of your flow of goods;
3) Bonded warehouses for easier import, export and transit operations and etc.

24
Walliman, N. (2005), Your research project-a step guide for the first time researcher, 2nd ed. London
Thousand Oaks New Delhi: SAGA Publication.
30


Figure 2 DHL Freight subsidiaries
Source: DHL road & rail service.

Figure 3 DHL transport solution for every need
Source: DHL road & rail service.
According to Yunfeng Gao, there are six factors can infulence DHL service: 1) indvidual
skills and knowledge; 2) system of organization; 3) equipments; 4) technological process; 5)
measurement and testing; and 6) working condition. So far, DHL has tried its best to ensure any
31

little detail wok well by concerning these six factors. However, the situation may be diifferent in
another place. It also depends on different region and differet place.
By deploying proactive solution DHL enables more flexible and faster response to
dynamic marketing and finish a specific requirement to customer. Regarding automotive
business demand, DHL has controlled every single component, such as shorter delivery times,
low cost, supply chain process and transportation improvement. As a result, DHL ensure other
companies to work with their suppliers and customers closely.
DHL measures customer satisfaction in different ways and sometimes it even differs
between regions and countries. For example: DHL Express in Sweden has processes, i, g, Key
Performance Indicators (KPIs) to measure customer satisfaction (for instance, measuring how
fast DHL pick up the phone, first time resolution of customer query), and it can also handle
customer complaints. The compalints should be dealt with within a specified timeframe and
resolved according to agreed timings. According to Sara Arrhenius and DHL official website, in
2011 DHL Express won customer service award for the best B2B customer service in Sweden.
However, DHL does not provide more detail about customer satisfaction.
25

DHL develops strong customer relationships to understand and know customer views. By
good understanding of customer, the company can adapt the specific service to fulfill customer
needs. Usually, DHL plays the role of a dependable partner when customer needs them. The
company always finishes their service optimally due to its excellent personal approach. For
instance, according to Dirk, the customs experts of DHL see to it that customers goods get to
their final destination with maximum reliability. Consequently, DHL generates the trust and
expectation to their customer. In addition, the Global Customer Solutions which is launched for
top 100 customers also make a great contribution to company and customer to create win-win
situation.
Air freight logistics has become an important factor in supply chain management, keeping
up the pace with the changing world market, and ensuring costly backlogs or shortages are kept
to a minimum. DHL Global Forwarding carrying 12% of the air freight worldwide market, the
air freight operations are managed through DHL private network that including 7,000 specialists
in 600 offices from over 150 countries. According to Yunfeng Gao, DHL owns exclusive
airplanes (air bus A300, Boeing 757 mainly). The core air center is in Brussels, Belgium. All air
freight services are time-defined, and by working together with carefully selected preferred

25
Qureshi, M.N., Kumar, D & Kumar, P. (2007), Selection of potential 3PL services providers using TOPSIS
with interval data, IEEE, India.
32

carriers. However, although DHL has exclusive airplanes, but sometimes these airplanes wont
be arranged to delivery DHL goods or mails.
Key Performance Indicators (KPIs) is mainly used by DHL HR department. It is a
professional HR tool to estimate employee issues, including absences, health and occupational
safety, employee turnover, vocational training and further training for employees, and employees
ideas. Figure 4 shows the KPI index comparison which made by annual Employee Opinion
Survey (EOS) between 2009 and 2010. Basically, this survey help DHL understand and know
employees view so that company can determine and create follow-up strategy.
26

The high values recorded for Customer Promise (77 %), Cooperation (74 %) and
Working Conditions (73 %) emphasize where DHL major strengths are to be found. The KPI
also indicates that 73 % of participants are generally satisfied with employees job. Additional,
Dirk indicates that more and more employees satisfy with their working condition. The working
environment makes employees feel comfortable. Nevertheless, EOS Follow-up Measures (53 %)
and Living First Choice (59 %) continue to indicate that there is a room for improvement.

Figure 4. Employee estimation by KPI (2010)

26
Lovelock, C & Wirtz, J. (2011), Services Marketing People, Technology, Strategy. 7th ed., Upper Saddle
River, New Jersey: Prentice Hall.
33

Source: Deutsche Post DHL official website-DHL employee.
Based on customer needs, the DHL workforce is diversity. DHL launches diversity
strategy which emphasize equality of opportunity, balancing work time with family life and
supporting womans careers generally. There is no prejudice or any kinds of discrimination
existing in DHL, each employee can get opportunity to develop his or her career without barriers.

Figure 5 DHL Sickness rate
Source: Deutsche Post DHL official website-DHL health management
Health and safety at work as the joint statement in DHL, it sets high standard of health
and safety for all workforce. According to figure 8, the sickness rate of DHL employee was 5.4%
in 2010. By comparing to 2009, the rate was decrease. DHL is trying to reduce the sickness
rate.Eeven though the progress is not obvious, DHL still wants to take care of its employees
health.
Yunfeng Gao told something about salary. In China, most of DHL employee think the
salary is ok, at least it is higher than competitors. Further, sometimes they can get extra
economic compensation, such as: bonus, dividend, and overtime pay. Thus, DHL can provide a
comfortable life for its employee. However, it also depends on individual skills and experiences.
The main product of DHL group is delivery service and the company is active in below
divisions, targeting both B2B and B2C customers:
a) Mail - Providing Mail and Parcel Services mainly in Europe and from Europe.
b) Express - Providing courier, parcel and express services by rail, road and air.
c) Global Forwarding and Freight - Providing International air and ocean freight as well
as European overland transportation services.
d) Supply Chain - Tailor-made contract logistics services and Corporate Information
Solutions.
34


(Deutsche Post AG):
a) Mail communication deals with mail products, special services, franking and philately
with revenues for H1 2013 at 2804 million euros.
b) Dialogue marketing deals with advertising mail and tailored end-to-end solutions with
revenues for H1 2013 at 1121 million euros.
c) Press services deals with nationwide distribution of about 2 billion newspaper and
magazines annually with revenues for H1 2013 at 371 million euros.
d) Parcel Germany deals into inbound and outbound parcels with revenue of 1770 million
euros for H1 2013.
e) Global Mail deals with cross border mail and parcels with revenue of 877 million euros
for H1 2013.
f) Pension services deals into database administration and payment processes with
revenue of 45 million euros for H1 2013.
DHL express has three product to offer namely Time definite, Same Day and Day
definite with Time definite international delivery being the core product. The revenues from
this product are spread geographically with revenue spread (H1 2013) as mentioned below
(Deutsche Post AG):
a) Europe contributing 2902 million euros.
b) Americas contributing 1106 million euros.
35

c) Asia Pacific contributing 2102 million euros.
d) Middle East and Africa contributing 466 million euros.
DHL Global forwarding and freight has two core products to offer global forwarding
and freight with revenue contribution as mentioned below (Deutsche Post AG):
a) Global forwarding has operations in more than 150 countries and revenues for H1 2013 at
5306 million euros.
b) Global Freight has operations in more than 50 countries with revenues for H1 2013 at 2096
million euros.
DHL Supply Chain provides solutions in warehousing, distribution, managed transport,
value-added service, business process outsourcing and supply chain and management consulting
with focus sectors being direct consumer, retail segment, technology, life science and healthcare,
automotive and energy. The revenues generated by this division are split between two sub-
division :
a) Supply chain contributed 6407 million euros for H1 2013.
b) William Lea services which deals into marketing and office document solutions
contributed 629 million euros for H1 2013.
To explain the above product portfolio the figures have been explained in a chart below
for quick synopsis (refer Chart-1).


Chart 1. Gist of above discussed revenue in graphical representation
The primary modes or vehicles of DHL group for attaining the above needed market and
geographical segment has mainly been a balanced mix of organic (own point of sales or outlets
36

and franchisee) and inorganic {acquisitions}. Deutsche Post AG (now known as Deutsche Post
DHL) progressively acquired DHL as global air express service provider from 1998 to 2002 and
enhanced its expertise by purchasing other leading logistics companies, e.g. 1999 acquisition of
Danzas, 2004/2005 acquisition of 88 percent of shares of Indian express company Blue Dart,
end of 2005 acquisition of Exel (Deutsche Post DHL, 2013).
The key differentiators of DHL group are its geographical coverage where it has unique
pan-European coverage with more than 200 offices in 25 countries and in cases where it does
not have its own freight presence, it has an alliance or co-operations in place to ensure its
services are provided to its customer. Broad range of services where DHL provides one stop
shopping services to its customers from import and export to custom consultancy and excise
duty handling; the vast fleet of DHL group adds to the list of differentiator where it uses
alternative transport modes like intermodal, short sea, conventional rail to provide weekend
deliveries (improved transit time than others). Innovation where the group through the
GoGreen program, has not only pioneered the growth of more environmentally friendly
products and services in the mail and logistics sector, it is also trying to transform the way they
do business, with phenomenal increase (387%) in sales figures (refer figure 1) achieved within
the groups Gogreen product range shows growing demand for more sustainable options by
consumer and the business side (Deutsche Post AG, 2010).

Fig.1 Image Source: Deutsche Post AG (2010), page 50
The key points which we can infer from above are that it is the brand, customization and
innovation which are key differentiator for the group (Diallo, 2012).
The speed of expansion of DHL group was foresighted and fast which we can analyze
from its acquisition planning where when the World Bank in 2005 raised its forecast for East
37

Asia to 7.8% from 6.6%, DHL had already initiated discussions to acquire companies which
would help create synergy and market expansion for the group.
27

The company has positioned itself as a premium service provider to achieve its return
and profitability. They demand premium from customers as they can provide reliable service,
customise solutions (as already discussed in differentiator section) and provide superior account
management services (DHL, 2012) and (Diallo, 2012). We can also infer this information from
article by Reid (2012) where he discusses the service bifurcation amogst top three players UPS,
Fedex and DHL, where DHL is only catering to the premium segment.

Image source:
http://www.iglobalexports.com/internationalblog/2012/01/05/international-shipping-services-
for-ups-fedex-and-dhl/

27
Storbacka, K & Lehtinen, J.R. (2001) Customer Relationship Management: Creating Competitive
Advantage through Win-win Relationship Strategies, McGraw-Hill, Singapore.
38


Present analysis about share of search or media mix modeling or upstream and downstream
traffic or task completion or other such things.
DHL has a wide product portfolio and to understand the lifecycle of the customers
segments, they have bifurcated their B2B & B2C customers into three different groups: strategic
customer; long-term relationship customer; and normal customer. Strategic group consists of
customers with large amount of logistical needs or complex supply chain requirement with
usually top 250 customers globally, long-term customers are those looking for regular and
frequent service from DHL but with simpler logistical needs than strategic customers and
normal customers are the one who are not loyal and can choose any other company if they want
to. To support this wide variety of customer base with customised requirements, DHL required
timely acquisitions (staging and vehicle) to fulfil the demand of its customer requirements.
These acquisitions have helped DHL to expand its geographical base and technological skills
(differentiator) to focus on long term relationship building with customers, this focus will help
them achieve profit maximization (economic logic) by providing premium and customized
services (Wen, 2012). Overall, they have consistent elements of strategy.
28

With growing changes in environmental sustainability and increase in costs of fuel DHL
is looking at efficient usage of their transport [example - optimizing the aerodynamic drag of the

28
Thakkar, J., Deshmukh, S.G., Gupta, A.D & Shankar, R. (2005), Selection of Third-Party Logistics (3PL): A
Hybrid Approach Using Interpretive Structural Modeling (ISM) and Analytic Network Process (ANP), International
Journal of supply chain forum, Vol. 6 No.1, pp. 32-46.
39

truck helps DHL save 10% - 20% of fuel efficiency and 11.3% of CO2 efficiency] (Deutsche
Post AG, 2010).
DHL consolidated 700 inbound deliveries a week into 300 outbound runs; the centre
achieved significant environmental and operational benefits.

Fig.2. Image source: Towards Sustainable Logistics by Deutsche Post AG
It has been estimated that in 2012 up to 30% of finished products already involve some
kind of 3D printing which by 2016 is expected to rise to 50% and potentially up to 80% by 2020
(John Manners-Bell, 2012) and (Deutsche Post AG, 2010). Even though threat by 3D
manufacturing is seen not to effect in the short term but in the medium term (coming 10-15
years)3 it is expected to have some effect, where DHL has already started preparing itself to
work on hybrid model (refer figure 3) to counter the impact of this technology in future.

Fig.3.Image source: Towards Sustainable Logistics by Deutsche Post AG; Page 122
The company is efficiently exploiting its resources by smart and effective usage of
transportation and other resources like infrastructure, and regularly investing in technology and
innovation to come up with niche products4 which are rare but not costly to imitate for the key
competitors like UPS who have equivalent or better cash flows (refer figure 4) of DHL and are
40

looking for expansion in similar areas but these resources are effectively exploited by DHL as an
organization.
29


Source: (DHL, 2012), (UPS, 2012) and (FedEX, 2012). The figures of DHL have been
converted from Euro to USD from xe.com as of 05-05-2014 12.30 p.m
Basically, all logistics company do the same or similar job in the market. But the main
competitors of DHL are UPS and FedEx. Though UPS has more manpower which can be
advantageous for them as the industry is majorly manpower driven but this also means increase
in costs for DHL if it tries to compete on basis of manpower, instead DHL is trying to automate
its logistics to an extent possible for effective use of manpower. Looking at the key differentiator
of company, branding is the area which has helped DHL improve its presence in certain market
where they wanted higher market share, Silverstein discusses article published by BusinessWeek
that DHL had about 40 percent market share in both Europe and Asia, but had only 7 percent
market share in the US before it launched the campaign.
According to Sara Arrhenius, the main competitors are UPS and FedEx. Dirk Klasen
considers TNT is another significant competitor. Thus, the comparison among these four
companies is made (see Table 1). By considering the features of logistics industry, several
significant issues are picked up to make a comparison, such as: safety & insurance, service of
company, environmental policy and company structure.
Size/No of Position Safety/ Service/ Environmental Organization/

29
Rahman, S., (2011), An exploratory study of outsourcing 3PL services: an Australian perspective, An
International Journal, Vol. 18 No: 3 pp. 342 . 358.
41

employees Insurance Logistics policy/
Sustainable
strategy
Company
structure
DHL International
large
logistics
company
with
285,000
employees
in 220
countries
No. 1 in
logistics
industry
Customs-
Trade
Partnership
Against
Terrorism
(C-TPAT);
a growing
network of
highly
secured
locations
worldwide;
satellite
networks;
GPS
Shipping;
tracking;
export &
import
service;
freight
and etc.
DHL
GOGREEN;
DHL in-house
Carbon
Management;
environmental
management
system (EMS)
and etc.
DHL Express

DHL Global
Forwarding

DHL Supply
chain

DHL Mails
UPS International
large
logistics
company
with
426,000
employees
in more than
200
countries
a leading
global
freight
provider
with
access to
almost
any kind
of
aircraft
or
vehicle
around
the
world
Auto
Liability
Insurance;
property
insurance;
cargo
insurance
and etc.
Shipping;
tracking;
critical
freight;
LCL and
etc.
Carbon impact
analysis;
package design
and test lab;
transportation
management
U.S. Domestic
Package
International
Package
Supply chain
& Freight
42

FedEx International
large
logistics
company
with 80,000
employees
in 220
countries
A
younger
logistics
company
Auto
Liability
Insurance;
property
insurance;
cargo
insurance
and etc
Package,
envelope
or freight
express;
freight
shipment;
provide
special
supplies
etc.
Earth Smart
Solutions;
Earth Smart @
Work; Earth
Smart Outreach
FedEx
Express
FedEx Ground
FedEx Freight
FedEx
Custom
Critical
TNT TNT
Express
employs
over 75,000
people in
200 coutries
the
world's
leading
business
to
business
express
delivery
company
Claim
programme;
'Managing
Safely'
training
programme
Time
critical
service;
special
handling
etc
Planet Me
Programme
TNT Express
Table 1. the comparison between DHL, UPS, FedEx and TNT
Source: DHL offical website, UPS official website, FedEx official website and TNT
official website
According to DHL official website and Sara, DHL was founded in 1969, DHL has gained
No.1 in the industry. UPS was founded in 1907, nowadays UPS has been a leading global freight
provider with access to almost any kind of aircraft or vehicle around the world. FedEx was
founded in 1971. Regarding the size and employee, UPS has more employees than DHL and
FedEx, but the service region is almost same, which means around 220 countries. TNT Express
employs over 75,000 people, TNT operates 26,000 road vehicles and 47 jet freighter aircraft. Its
worldwide network has over 2,300 company owned depots in 200 countries.
Regarding service, these four companies provide similar service to customer. For instance,
their main tasks are to deliver goods and mails via air, sea or land to another place as customer
requirement. UPS Critical freight consists of multiple transportation modes: air, surface, charter,
and hand carry; advanced tracking accessible via the internet; specialized equipment and value
added services. FedEx offers a variety of shipping supplies including an assortment of
43

corrugated box sizes, padded envelopes, plastic bubble wrap, mailing tubes, packing tape and
more. Especially for high-tech items, such as cell phones, laptops and MP3 players, FedEx offers
a specially designed and cushioned FedEx Laptop Box and Small Electronics Box. DHL can use
different high-techs to track goods and mails. TNT is good at managing special handling, for
example: TNT tranported two pandas half way around the world.
30

By combining all the external and internal factors discussed above, SWOT matrix of
DHL (see Table 2) is made to show what strength, opportunities, weakness, and threats DHL has.
Competitive advantages Competitive disadvantages
STRENGTH
1) customer satisfaction
2) hi-tech service
3)green performance
4) salary
WEAKNESSES
1) the total number of employees
2) liability insurance
3) price
4) attitude of staff
OPPORTUNITY
1) learn from competitors
2) cooperation improvement
3) innovation
THREATS
1) maintain the leading positin
2) tough competitors
Table 2 SWOT matrix of DHL
Source from authors own
Using the SWOT analysis and Value Chain Analysis I have identified the main DHL Express
objectives and goals.
Increase profitability and productivity
Work on further growth despite economic crisis and invest into emerging markets
Balance the economic decline by restructuring and cost-cutting initiatives
Remain preferred provider and retain market share
Remain technology leader and improve relationship with suppliers
Specialize and customize products to achieve customer satisfaction
Differentiate by expansion of climate-neutral and climate-friendly products
Provide services in high quality and efficiency
Use Research & Development organization and improve products and services through
innovation
Invest into strategic programs

30
Sahay, B.S & Mohan, S. (2006), 3PL practices: an Indian perspective, International Journal of Physical
Distribution & Logistics Management, Vol. 36 No.9 pp. 666 . 689.
44

Use power of Sales & Marketing and communicate with customer and educate
employees and become their first choice
The strength and opportunities would be regarded as companys competitive advantages. For
instance, the competitive advantages of DHL are customer satisfaction, hi-tech transportation
service, good salary and sustainable program - GOGREEN. If DHL can study from other
companies or improve teamwork it will be more successful.
31

Strength- According to Berry (1999) company should concentrate on
customer; build long trust with its closed customer. DHLs customers are everywhere. As
a global player, DHL is acting all over the world with understanding and respect for
different cultures. DHL always listen to its customers voice. In 2011 DHL Express won
customer service award for the best B2B customer service in Sweden. Further, DHL
provides short time delivery, safety insurance service with hi-tech equipment. It brings
customer satisfication and high efficiency. On the other hand, regarding GOGREEN
programme, all transport-related emissions of carbon dioxide would be offset through
external climate protection projects. Therefore, balancing sustainability efforts with
customer expectation can be achieved by DHL. DHL can satisfy most employees with a
good salary, it stimulates employees to work hard.
Threats- The biggest challenge for DHL is to keep the leading position.
And there are many competitors are trying to catch up with DHL all the time, such as:
FedEx, UPS and so on. As Thakkar (2005) statesthe relationships associated with 3PL
are typically more complex than any traditional logistics supplier relationships. Therefore,
the competitor can be friend of DHL one day. On the contrary, friend could also turn to
your competitor. It means that it is possible to feed competitor by working together by
sharing knowledge, skills, resource and etc.
Weakness - DHL does not have employees as many as UPS. Which means
UPS is able to exploit its rich human resource to accomplish more tasks than DHL does.
Comparing to comparing with DHLs competitor, DHL lacks liability insurance.
Probably it might cause customer loss someday. The most serious problem is price.
Indeed, DHL is more expensive than its competitors. And in some areas, the quality of
service is difficult to guarantee. Especially some staffs bad attitude would have
significant influence on company image.

31
Walliman, N. (2001), Your research project, 1st ed. London Thousand Oaks New Delhi: SAGA Publication
45

Opportunities - Different companies have different exclusive strategies.
Even the core competency cannot be copied there is still a lot of things DHL can learn
from other companies. For instance, DHL can establish its own liability insurance by
taking example by its competitors. In addition, regarding employee cooperation, Key
Performance Indicators (KPIs) state that the credit of cooperation in 2010 is 74%. It is
not enough for such large international company. In our opinion, DHL still has more
ability and possibility to improve cooperation between employees. Moverovall, DHL
must innovate its service to give cutomer more suprise.
On the other hand, weakness and threats would be discussed as competitive disadvantages.
DHL lacks complete liability insurance which might lead to customer loss, and weaken safety
issues. Besides, the total number of DHL employees is not enough to deal with global business.
More employee means an opportunity to provide more service to clients. Meanwhile the
workload of each employee can be reduced. So that excessive toil can be prevented.











Chapter III. STRATEGY AND LOGISTIC ACTIVITIES OF THE DHL
MOLDOVA ENTERPRISE AND THEIR INTEGRATION IN GLOBAL
BUSINESS
DHL Express is well known organization with recognizable brand and good financial
situation. Economic crisis has brought less revenue and profit of the organization decreased.
Therefore, the first goal is to stabilize the company situation and return to the level before
economic crisis as soon as possible. It means increase profitability and productivity of the
46

organization. This is an opportunity for the company to make the organization more transparent
and start with restructuring initiatives like improvement of cross-divisional cooperation, work on
standardized process workflows, create easy cooperation channels among people in different
levels of organizational structure and make redundancies if it is necessary. All these activities
will bring lower cost for the company.
1. DHL used several strategies for entering market of the Eastern Europe, they can be
divded into corporate level ,business level and operational level strategies.
For the corporate level strategies, Globalization Strategies are adopted, DHL invests $1.2
billion in entering the Eastern Europe market. DHL is the largest express carrier in Europe with a
40% share, and the largest international express carrier in Asia, also with 40%. There is a global
economy now, all businesses involved in foreign trade, world trade has to be transported, and
DHL thinks that they have to be everywhere for providing the transport. If DHL did not enter in
the Eastern Europe with a completed network, it would be very difficult for them to hold onto
the No. 1 position in Europe and Asia.
Acquisitions and Integration Strategies are adopted by DHL. DHL has integrated more
than 100 companies, the horizontal integration with Airborne Inc. helps DHL to expand their
worldwide network and also the ground network. It helps increase the ability to attract Eastern
Europe customers who want to cut costs by sending parcels overland rather than by air.
Diversification Strategies are adopted in entering Eastern Europe market. The Eastern
Europe market is moving toward a ground network, DHL diversified a new market of ground-
based network as to capture Eastern Europe customers of small-and medium-size businesses. A
good ground network is needed for the new market, DHL invests more in developing and
improving its infrastructure for satisfying the new market.
For the business level strategies, DHL adopts the Differentiation Strategies. DHL
differentiates itself with competitors by identifying strategic customers and knowing what they
value. As to raise awareness of DHLs brand in Eastern Europe, DHL is spending $150 million
annually on promotion that tweaks UPS and FedEx. DHL offer benefits which is different from
competitors, for example, going to remote locations where UPS and FedEx are more reluctant to
go to. DHL provides a better services at same price by improving their infrastructure. It includes
expanding trucking routes, creating air hubs, and improving the sorting centers, drop-off points.
Moreover, Focused Differentiation is adopted, DHL provides high perceived service
benefits to a selected market segment. DHL focuses on the midmarket and smaller businesses, as
to provides high perceived service benefits to the niche, DHL offers more personal service to
them.
47

For the operational level strategies, DHL builds its business by improving its customer
services. DHL wants to mold a more customers-friendly workforce, and to provide a better
services for customers.It starts with hiring the right person to provide services.
32

DHL has incorporated speed into its overall strategy. DHL focuses on Eastern Europe
customers who want to cut costs by sending parcels overland rather than by air, DHL wants to
provide a high quality services to both the customers who send parcels overland or by air. Speed
is important factor affecting the service quality. Therefore, DHL has to provide a speedy service
by expanding their worldwide network and also the ground network. DHL provides speedy
services by improving their infrastructure, expanding trucking routes, creating air hubs, and
improving the sorting centers, drop-off points, and other network. All these improvements help
speed up the service provided by DHL. Being hustle is the key reason why Skechers has shifted
a third of the business from FedEx to DHL.
2. Competitive advantage derives from the distinctiveness of an organizations
capabilities. The most important competitive advantages are mentioned as follow.
With a deep-pocketed corporate parent, DHL has a rich financial resources and has
integrated more than 100 companies. DHL is the largest express carrier in Europe with a 40%
share, and the largest international express carrier in Asia, also with 40%, the intellectual capital
helps DHL to sustain its competitive advantages.
DHL has dynamic capabilities, DHL is developing durable strategic capabilities that
provide advantage over time. DHL has a better situated in terms of air transport after completing
the integration of Airborne Inc.. DHL is a company that capable to change, innovate, be flexible,
adapt and learn. DHL changes its focus to Eastern Europe customers who want to cut costs by
sending parcels overland rather than by air, it is a case of changing itself to adapt the Eastern
Europe trend. Learning to employ and train staff as Starbucks can show its capability of learning.
Moreover, DHL provide personalized service to customer and it becomes one of its most
important competitive advantages. Focused Differentiation is used by DHL to provide high
perceived service benefits to selected market segment. It can be explained by the case of
Skechers Eastern Europe Inc., UPS and FedEx are more reluctant to go to remote locations.
DHL will just do it. If their driver has to sit in the parking lot and fill out the air bills, hell do it.
says Michael Cardenas, Skechersoffice services manager.

32
Deutsche Post DHL official website, DHL employee:
http://www.dpdhl.com/en/responsibility/employees/engaging_in_dialog_with_our_employees.html, Access date:
2012, 04, 22.
48

All of the competitive advantages of DHL are best suited to aa mature industry. In this
mature industry, it is under Hypercompetitive conditions. As to sustain competitive advantages,
organization have to focus on ability to change, speed, flexibility, innovation and disruption of
market. DHL is an expert in express carrier, and all above-mentioned competitive advantages of
DHL are suitable in this mature industry with hypercompetition.
There are some weaknesses of DHL that may cause it in trouble when it enters the
Eastern Europe.
Competitive rivalry is high. Taking on FedEx and UPS, which together command 78% of
the Eastern Europe parcel market . DHL has only 16,000 drop-off points, which is about one-
third of FedExs number. There are also high fixed costs in this industry. Until this year, DHL
had almost no ground network in much of the Midwest and Rocky Mountain states. DHLs
limited ground network has hurt its ability to attract domestic customers who want to cut costs
by sending parcels overland rather than by air. It takes a lot of money and a lot of talent to build
a high-quality ground network.
For the threat of entry, the problem of economies of scale becomes a weakness of DHL.
DHL will not get margins for a while because their competitors have larger economies of scale.
High capital requirements of entry is a barrier to entry. Lack of ground transport
capability is one of the weaknesses of DHL, it leads to an increase in amount of investment that
DHL has to put into the Eastern Europe DHL had virtually none when it was acquired by
Deutsche Post, while Airborne was just getting started. Now, with high fuel prices boosting the
cost of air shipment, the parcel market in the Eastern Europe is shifting toward ground transport,
which is DHLs weakest link.
3. According to the case of DHL, I would advice DHL to continus a global focus on
parcels and express mail. DHL can adopt the related diversification. Related diversification is the
strategy development beyond current products and markets, but within the capabilities or value
network of the organisation.
The related diversification includes vertical integration and horizontal integration. DHL
can have a backward integration into input activities. For example, backward integration with
manufacturers of auto-mobile, ferry and plane. So that, DHL can ensure the quality of its own
flight and trunk teams.
DHL can also have a horizontal integration. To develop into activities complementary to
existing ones and to exploit strategic capabilities in new markets. DHL has to integrate with
company whose value chain possess competitively valuable strategic fits with the value chains of
49

DHL. For example, horizontal integration with local delivery and logistics company in particular
country, whose value chain is strategic fits with DHL.
There are some reason why DHL should continus a global focus on parcels and express
mail.
It can utilise strategic capabilities of DHL and another organization. The physical
resources can be shared among DHL and other organization. For example, vehicles, planes,
ferries, and all facilities can be shared or purchased at a relatively low price. It can ensure and
increase the availability of resources. Lack of ground transport capability is one of the problem
of DHL in entering Eastern Europe market, it takes a lot of money and a lot of talent to build a
high-quality ground network. After completing the integration of Airborne, which had already
established a ground-based network, it helps DHL to reduce cost and time for building a ground
network.
By related diversification, DHL can increase its financial resources. The increase of
capital and cash, helps DHL to have more opportunities to invest more valuable projects,
develop its business to a global network and also improve its infrastructure.
Economies of scale is a benefit of related diversification. In the case of DHL, their
competitors are earning nice profit rates, double-digit margins, but DHL will not get these
margins for a while.It is because their competitors have larger economies of scale. Combine
related activities into a single operation, it helps increase the economies of scale, with the
economies of scale worldwide, DHL can also earn a nice profit rates, or even a higher profit rates
than its competitors.
33

Transfering expertise or knowledge between organization is benefical. DHL is an expert
in the carrier industry, related diversification can transfer its existing competencies to the new
related business. It can add value to customer and also gain competitive advantage. It helps to
create new competitive strengths and capabilities of DHL. It create the effect of synergy, and it
can increase profit and lower cost of DHL.
Leverage use of brand name reputation of organization. Building and maintaining brand
reputation is costly, as brand name is kind of intellectual capital. DHL can share the goodwill
and the customer databases with other organization. Using an existing brand name to support
related diversification can have a more powerful impact to customers of both DHL and other
organization. As DHL is an expert in the delivery and logistics industry, its brand carries positive
brand characteristics and attitudes to customers, it helps increase the loyalty of customers.

33
DHL air freight service: http://www.dhl.com/en/logistics/freight_transportation/air_freight.html, Access
date: 2014, 05, 10.
50

Marketing and Sales organization must further work on image of DHL Express and its
brand awareness worldwide. This department communicates with inside and outside world of the
company and together with Research & Development must by financially supported by the
company to bring advantages. I see these two organizations as one of the most important ones
and as the top layers above all innovations, specializations, customizations, solutions, education,
trainings and programs.
Multi-modal expert develops new solution that reduces transit time by more than 60 per
cent compared to ocean freight at one-sixth the cost of air freight; Extends partnership with YHF
Logistics, operator of fastest rail service between China and Europe
Singapore, 20 Jun 2013: DHL Global Forwarding, leading provider of air, sea and road
freight services in Europe and Asia, has developed a multi- modal means to reduce transit time
between Western China and Russia by up to 40 days compared to ocean freight at one-sixth the
cost of air freight. The solution builds upon DHL's latest multi-modal service launched earlier
this year in partnership with YHF Logistics, operator of the rail service that runs along China's
West Corridor the Chengdu Express Train. Dubbed the fastest rail connection between China
and Europe, the service starts in Chengdu, China and runs along China's West Corridor to DHL's
intermodal hub in Maaszewicze, Poland.
Kelvin Leung, CEO, Asia Pacific, DHL Global Forwarding, said: "Looking at a map
alone, the solution seems counter-intuitive at first as it requires us to back track from Poland into
Russia. However, our innovative multi-modal team has found that mixing the two different
modes of rail and truck and taking this route in fact cuts transit time and transport costs
significantly by pre-empting and overcoming potential delays that can be encountered when
entering Moscow by rail. Such innovation is a very important part of the way we do business,
and is especially meaningful on this trade lane given China is one of Russia's top trading
partners."
Bilateral trade between China and Russia rose to a record $88.16 billion in 2012, up 11.2
per cent year-on-year. It is widely believed that trade between the two countries will likely reach
the $100 billion and $200 billion goals set for 2015 and 2020 respectively .
Sofiane Rachedi, President, YHF Logistics, said: "We are happy to be DHL's chosen
partner in an ever-changing, challenging and competitive market. As an established leader in
freight services in the region, DHL is a reliable partner with business ideals and ideas that we are
happy to support and be a part of. We look forward to more innovative ideas on how we can
further enable trade between not just the two countries, but the two continents."
51

Connecting seamlessly from DHL Global Forwarding's network in Asia to DHL Freight's
network in Europe, DHL's rail/road multi-modal service ensures complete supply chain visibility
and enables a faster-to-market approach between both continents. To date DHL has conducted
several trials along this route to Moscow for various customers successfully while demand for its
latest rail/road multi-modal service continues to climb steadily.
DHL The Logistics company for the world. DHL is the global market leader in the
logistics industry and "The Logistics Company for the world". DHL commits its expertise in
international express, air and ocean freight, road and rail transportation, contract logistics and
international mail services to its customers. A global network composed of more than 220
countries and territories and about 285,000 employees worldwide offers customers superior
service quality and local knowledge to satisfy their supply chain requirements. DHL accepts its
social responsibility by supporting environmental protection, disaster management and education.
DHL is part of Deutsche Post DHL. The Group generated revenue of more than 55 billion
Euros in 2012.
Leveraging and expanding on this service, goods originating from various locations in
China bound for Russia can now be trucked to Chengdu, transported from Chengdu to
Maaszewicze by train and then trucked to Moscow all within 20 days. The door-to-door
service departs once-a-week every Saturday from Chengdu and can be utilized by businesses in
any sector.
In the present stage of development of new international economic activities, international
logistics plays an important role in the commercial politics of the company. To emphasis this
role, we have approached the problematic of logistic, elaborating the correspondent theoretic
edifice, starting from system concept which, in my opinion supposes the research and analyses of
the modality in which a system behaves. The approach of great logistic systems is realized based
on the following principles: principle of coordination, principle of incompatibility, principle of
optimization adapted to each case that will be analyzed, depending on established objective.
34

The logistic activity of the company is a basic component of its politics and is realized
from a set of rules applied at borders of the country or in interior for coordination of the activity
for development of international commercial transactions. Logistic politics is a complex activity
connected with daily activities of the exportation and importation companies, which realizes
operations of actual external commerce (transportation, customs, circulation of the information)
and supposes a certain number of elections which governs this quotidian practice. As a part of

34
Salih, T.M. (2003), Sustainable Economic Development and the Environment. International Journal of
social economics, Vol. 30 No. ., pp. 153-162
52

the process of strategic organization, exploitation and administration of the products of logistic
system of the company, represents a modality of action for this, which tends to be progresses and
efficient, especially if Moldovan companies acts in U.E. and implicitly in Unique Common
Market.
Logistic system of the company, of the organization and the institution once with increase
of the role of the logistic manager, is recognized by companies oriented in a strategic manner, as
a key component in response given to challenges that generates turbid periods. The managers of
the logistic department (system) must adopt a correct strategic approach if they want to be
prepared for challenges that appeared for companies, effective participation at Unique Market.
The concept of business environment, generally, was rapidly replaced with global
business environment, fact that justifies the contradictory evolution at the level of international
relations. The global economic environment can be considered, from a historical perspective as
that stage of the process of enlargement of the dimensions of economic activities space, which
has as effect maybe, in a paradoxes manner, not only markets multiplication or formation of a
unique global market but the development and perfection of logistic systems of the companies.
Due to these tendencies, world economy became independent, structurally speaking, integrated,
so that is can be named global economy in which companies are focused on activities of
international logistic which are having an increased importance.
Passing from classical model of the logistic systems to the one of the net economy, in the
context of development without precedent of the informatics technologies and
telecommunications, industries which realizes their activities, more and more in conformity with
a logistic of chains. Chain organization of the economy and logistic systems of the companies is
so a reality that the development of new technologies bring, designing the global company on
new coordinates and offering in the same time a more and more integrated and unitary space.
Due to increased need of integration of the actions in the fields of production, storage,
transportations, inventories, accountability and information, etc, appeared and is developed at the
present moment in all countries and at the level of companies, the concept of network enabled
logistic (Network Enabled Logistic -NEL), which comes to support the other new concepts from
the field of external commerce. NEL represents an operational concept, based on network, on
information, which allows the development of logistic activities based on effects and ensures
precision and flexibility in granting logistic support. At present moment, NEL is seen as an
approach that allows space to development and perfection of the adaptable logistic system and
capable of response and which recognizes the operation context, coherence and coordination.
53

The first indicators of NEL are speed and efficiency, in rapport with objectives of the logistic
department.
35

These tendencies, manifestes as part of logistic systems of the company allowed us to
reach the conclusion that logistic activity as part of companies with international activity
supposes from their part a design strategy practiced in the present moment as part of logistic
systems, which are connected in a significant manner and with practical positive consequences.
In this chapter, I have oriented myself towards those operations of logistics, like: selection
of transportation and expedition modalities to companies, generally, by the Moldovan ones
especially, as well as tendencies in merchandise transportation from European Union and
presentation of the initiatives of the Commission for improvement of durability and efficiency of
this sector. International competition and geographical expansion of markets forced producers
and exporters to focus on integrated production strategies and logistics of transportation with the
purpose of reducing costs and in the same time obtained an increased standard of the service.
International transportation is tightly connected with this phenomenon that we
call .globalization. and which in essence supposes international integration of merchandise and
services markets, of capital markets, free access and unhindered, on commercial basis, at sources
of raw material and energy, to new technologies, at results of scientific and technological
research. In which concerns the transportation system in Moldova, globalization raises even
greater problems, if we take into account, on one side the necessity of efficient connection to the
European and planetary transportation system, and on the other side, the present status that does
not correspond to infrastructure of railways, decreased level of the mechanization of the loading-
unloading operations, using on reduced scale the modern transportation technologies.
36

In the context of globalization of world economy, international transports become
effectively a more important component of the strategy of unloading goods on external markets
as was mentioned by a known logistics company., According to the general theory of systems,
logistics treats transportations in a large and modern vision of marketing, which includes the
ensemble of necessary activities for technical, commercial and juridical using of goods, from
producer until final consumer.
The logistic of the company integrated in the activity of transportation, generally, in
Moldovan companies generally is a necessity for its introduction in the management activity,
which, in my opinion means more than simple supply of transportation means with goods as the

35
Novicevic, M.N., Harvey, M., Aurty, C.W & Bond III, E. (2004), Dual-perspective SWOT: synthesis of
marketing intelligence and planning, Marketing intelligence & Planning, Vol. 22 No.1, pp. 84-94.
36
Doyle, P & Wong, V. (1998), Marketing and competitive performance: an empirical study, European
Journal of Marketing, Vol. 32 No. 516, pp. 514-535.
54

manager of the company with logistics problems must know very well which are the existing
internal and external infrastructures and organized on logistic platforms that must introduce in
the strategy of the company, to spare resources and dimensioning of storage surfaces.
Practice and activity of the companies showed that positioning of logistic platforms must
be realized in connection points between transportation forms of great capacity and the system of
overtaking goods that goes for external advantage. The objectives of designing logistic platforms
are the optimization of transportation processes of goods and reduction of costs that resulted
after these processes. Concerning selection by the company of the modalities of transportation,
the international logistics manager must take into consideration the performance of each point of
view on four variables: transit time, forecast, cost and noneconomic factors.
37

Logistic integrated in the activity of maritime transportation, generally, in Moldova
especially, is a challenge for its introduction in the strategic administration of informational
luxes, of purchasing materials and exchange parts for ships, of the marketing channels to realize
maritime transportation contracts with lowest costs and maximum profit. As new challenges for
the management of the companies of maritime transportation we can mention: strategies of
superior performing of the maritime transportation service, distribution and identification of
serving customers, strategy of a distribution channel and its structure with all participants to it,
electronically systems for taking decisions that are necessary to logistic, information electronic
exchange, hardware and software equipments.
38

Danube played always an important role in Moldovan economy, as well as in countries
from Central Europe without direct exit to the sea. With the purpose of establishing some unique
general conditions regarding goods transportation which makes the object of external Danube
commerce, companies of fluvial navigation from Bulgaria, Hungary, Moldova, former URSS
and former Czechoslovakia, concluded in 1955 the Convention regarding general conditions for
goods transportation on Danube, known also under the name of Bratislava Conference.
Experience showed that fluvial transportations require commercial integrated efficient
services. That is why consider there should be realized efforts to join all connections in logistic
chain (consigners, ship owners and any other part involved in industry of water transportation)
for face the intermodal transportation, as flexible as easy to use as road transportation.
Civil international aerial transportations will be organized and developed based on some
governmental international Conventions under the aegis of the Civil Aviation Organization as

37
DHL road and rail service:
http://www.dhl.com/en/logistics/freight_transportation/road_and_rail_freight.html, Access date: 2014, 05, 10.
38
Novicevic, M.N., Harvey, M., Aurty, C.W & Bond III, E. (2004), Dual-perspective SWOT: synthesis of
marketing intelligence and planning, Marketing intelligence & Planning, Vol. 22 No.1, pp. 84-94.
55

organism specialized ONU. The aerial transportation activity knew an important development,
determined by economic increase, by Moldova involvement in international goods exchange, in
international tourism. In conformity with the nomenclature of the activities proposed by UE , .the
sector of aerial transportations., civil aerial traffic is grouped in 2 great subsectors: commercial
and general aviation.
In the field of aerial transportation, will be applied a series of conventions, regulations
and agreements, which, even if does not succeed to offer a unitary character, facilitates normal
development. Organizational frame is ensured by a series of organisms and international
organizations of the civil aviation (OACI, IATA). To be able to function valid and legal, an
aerial company must be registered at the Registrar of Commerce and at Ministry of Finances, to
have authorization of air operator, the aircrafts that he has to be registered in the Air Register. It
must be in conformity with national and international regulations regarding the use of the air
space. The development and expeditions of internal and international goods transportation
depends on the evolution of some factors determined at world and national level, which can be
classified in two great categories: exogenous factors (increase of the world economy,
geopolitical phenomena, petroleum price, protection of the environment, contribution of new
communication technologies) and endogenous factors (technical evolution, politics of
liberalization of air transportation, agglomeration of the air space, concurrency of the other
transportation modalities).
39

International road goods transportation represents, undo ubtfully an important segment as
part of international transports of the company. This modality of terrestrial transportation
ensured the movement in space of goods and products with the aid of auto vehicles and
connected means. Still.
The most important conventions and agreements of the road international transportation
of goods are: Convention T.I.R., Convention regarding the contract of international
transportation of goods on roads (C.M.R.), European Agreement regarding transportation of
dangerous goods on road(A.D.R.)., International association for transportation of perishable
goods (Transfrigorute Europe), Convention on road circulation and Protocol regarding rod
signalizing. Logistics through the role that has in this sector can contribute to its development, to
fulfillment of proposed objectives, reducing the negative impact in environment by improving
the use of auto vehicles.

39
Razzaque, M.A & Sheng, C.C. (1998), Outsourcing of logistics function: a literature survey, International
Journal of Physical Distribution & Logistics Management, Vol. 28 No. 2, pp. 89-107.
56

International railway transportation is settled by international Conventions which contain
uniform rules that apply to railways that participate at transportation. Beside these there are
multiple party conventions: Convention regarding TIF - COTIF, Regulation for reciprocal use of
the goods carriages in international traffic..
Multiple way transportation is the most used transportation modality, with tendency for
increasing from year to year. Multiple ways transportation brings advantages, allowing exports
to be situated on markets of the world, at reduced prices and so be more competitive. Multiple
way transportation and movement of goods door-to-door under the responsibility of a unique
transport operator, become with success the concepts of the last years, at world level. This thing,
as shown by the reality is the most popular form of the system of logistic transportation in
international commerce for efficient delivery door-to-door, using one document named
Multimodal Transport Document. (MTD) under responsibility regime covering all modalities
of transportation from the origin place to destination place.
40

International expedition of goods is in tight connections with the international
transportation activity. It is an activity of external commerce, situated in the service of
operational development of exports and imports. International expedition proposes the space and
time position of goods of external commerce with the aid of different means of transportation
being a complex process, to which realization brings contribution next to the transporter also the
international exporter which should not be taken for the transporter. The development of the
international commerce with goods determined international shippers which attracted in there
sphere of activity those services that contributed to increasing the goods value: sorting and
conservation operations of goods quality, of processing and adorning, of packaging and marking,
storage, clear custom.
The strategy of the expeditions companies gravitates around satisfying the requirements
of the customers in the sense of arranging some transports in which rapport quality - price should
be fully satisfied. The international practice proved that, in most of cases, the ones that elects the
transporter, means and transportation route is the international sender, he is the one that issues
documents coming to support operational all requirements received. As a conclusion, I consider
that international activities of expedition for goods have an especially important role in
economical development as ensures the logistic displacement of goods by realizing the
connection between producer and consumer.

40
Sahay, B.S & Mohan, S. (2006), 3PL practices: an Indian perspective, International Journal of Physical
Distribution & Logistics Management, Vol. 36 No.9 pp. 666 . 689.
57

In which concerns tendencies in goods transportation in European Union: the new
initiatives of the Commission for the improvement of the efficiency and permanency, this
adopted a series of initiatives that had as objective the improvement of the efficiency and
permanency of goods transportation as part of the Union.






















CONCLUSION
In brief the analytic conclusions are: the companys financial system as a big system
perceiving it in my conception as a dynamic, complex, system with a determined structure and
pre-established objectives made up from many interconnected subsystems; the technology based
58

on automation and information represents the essential factors of the modernization of the
logistic systems of the companies in the new global business environment; the financial activity
of the sea navigation company points out the fact that logistics is an important factor in see
transportation and the main principles of logistics, the global organization of the activities, the
total involvement of the human resources, the strategic alliance, obtaining the financial
performances, establishing the optimal level sea transport services, optimizing the volume of
transported merchandises, take place accordingly and in direct connection to what is going on at
financial management of the modern see companies; aerial transport companies in order to be
able to offer quality services resorted to international cooperation with other companies which
allows the company to ensure prompt and safe services; regarding the logistics processes from
the international road transport one can notice the preoccupation for modernizing the car fleet,
the national roads and the quality of the services provided to the external customers and
environment protection; preoccupation of the Moldovan companies regarding the modernization
of the international rail way transports: the creation of new rail ways, modern wagons and other
infrastructure elements such as the stimulation of the restructuring process of the companies;
financial techniques used by companies in general, especially the Moldovan companies in the
international transactions contribute decisively to efficient carry out of the international
transactions, and the use of these financial techniques constitute a support for all who have the
responsibility of managing these activities pointing out the permanent correlation that is being
established between them and the success of the companies with external trade activities.
Briefly our own contributions are reflected this way: we have analyzed international
finance management as component of the trade policy of eth company pointing out a series of
practical and conceptual aspects, both at company level and international level. also we have
pointed out the need to manage logistic activities in an external, dynamic business environment,
compulsory adapted to the fast changes of the environment that concerns the financial strategies.
We have pointed out a series of changes in the global business environment and we
showed the multitude of consequences on the financial services of the company and on their
management by research realized I have contributed at emphasing the impact of the external
business environment on logistic activities and still I have drawn attention to the participants in
internal and international commerce that not knowing and neglecting changes and evolutions in
this environment for the company or organization might have as consequences only increased
costs, but also problems of uncompetitivity that might lead, in my opinion, to a reduces market
quota, more expensive suppliers or smaller incomes;
59

I have made a presentation and an analyze in an exhaustive modality of logistic activities
of the company, in connection with international transportation and their integration in business;
I have presented and analyzed main logistic and financial techniques used by Moldovan
companies in development of international transactions combining in a fair manner analyze with
synthesis.
I have realized analyze of the informational system of financial services of the company
in the global business environment emphasing the indestructible connection between the
Informational System (SI) and logistics of all elements of the logistic system.
I have issued a series of theoretic and practical conclusions of great importance for the
logistic system of the companies with international activity research realized during masters
degree was concretized in elaboration of three specialty books and publishing several articles in
specialty revues, participation with papers at symposiums, national and international conferences
and scientific debated in that field.
Bibliography of the thesis is based on a wide range of books and revues from the country
and abroad, as well as a series of directives.













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