Business Strategy – TNT

Date: Feb 4, 2019

Abstract

This business essay provides a report on the strategic performance of the TNT Company. The essay begins with an introduction based on the origin and performance of the company from the home country Australia. It is followed by the discussion of the company’s strategic performance, which is represented in questions and answers format. The body illustrates the performance of the company in the developing and emerging markets and its performance in these regions. The report ends with a conclusion that serves as a summary and recommendation concerning what the company should do to make its strategic positioning in the logistic industry better.

Introduction

TNT has been the European market leader in logistics, express and the international mail services. The company has always ensured that the customers’ documents, freights and parcels are delivered safely through the door to door integrated network of road and air transport. The company focuses its international operations on major regions in the world, such as Asia, Europe, North and South America with an excellent domestic network in Australia. The company’s operational network has been excellent through the use of modern and sophisticated technology, which has been reliable for long and provides the management with real-time, online data updates regarding the status of all the clients consignments. The core value of the company is ensuring that the customers remain the heart of the business with the aim of guarantee total satisfaction in all their services through fast and reliable service delivery .

Process of Strategic Planning

TNT’s Strategic Purpose

In order to continue with its market share in the industry and provide the customers with the best services, the corporate missions and strategies of TNT provide the workforce with a clear guideline of the company’s expectations. It was not by chance that the TNT Company became the market leader; the company developed its strategic visions, goals, objectives through careful planning together with the outstanding quality and commitment of the staff members. Through its worldwide planning, the company has managed to identify its strategic goals through the mission, aims and clearly stated objectives .

The business mission of TNT is a clear statement that reflects its core purpose and goals in business. TNT’s mission statement is to exceed the customers’ expectations in the movement of goods and documents around the globe and deliver value to the customers by offering the most reliable and efficient solutions throughout the network. This mission statement is a clear indicator of what the business is like, what it does and where it is heading to. The employees and others who have some interest in the company have to understand the mission of the company carefully.

The objectives of TNT are to support the mission focus in enhancing the efficient transfer of goods and documents to offer customers a service beyond the expected. In order to achieve these goals, the TNT Company has to establish several objectives at different levels. The SMART objectives are designed by the senior management in a simple way to ensure that everybody understands what is required and when it is required. The company has always made it easy to evaluate the performance in order to know when the aims have been achieved to make it the most admired express delivery company worldwide according to its vision statement.

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All these objectives, mission and vision statements contain a manageable execution strategy, which is based on the company’s core competencies. TNT is a strong company that is able to withstand major challenges in the local market and the industry at large. Its wide coverage and strong network makes it possible for the company to achieve profitable growth.

TNT Strategic Planning Process

TNT’s strategic planning process basically focuses on customer satisfaction, teamwork, strong support staff and profit making. However, due to its wide coverage, the company has encountered several challenges in their attempt to achieve these strategic plans. The company has always sought to maintain the same image all over the world. Nevertheless, due to differences in culture, regional diversity and political factors, it has been a challenge to maintain homogenous nature of corporate operation. Cultural diversity, language, religion and race problems have been an obstacle in dealing with human resource issues, especially in management and stakeholders’ involvement. he planning process of TNT has to be preceded with an efficient environmental scan, which makes it hard to meet all the requirements due to inadequate resources and vastness of the region covered.

Applicable Planning Techniques for TNT to Increase Strategic Effectiveness

TNT could apply different planning techniques in order to increase the organisation’s effectiveness in its strategic goals. TNT company can make use of the following strategic planning techniques; BCG matrix, PIMS, SPACE matrix, Scenario planning.

BCG growth share matrix is normally a chart that helps an organisation in analysing the business units along with the product lines. BCG growth share matrix can help the TNT company to strategically allocate resources and also in analysing its strategic management and portfolio analysis. The BCG matrix has four major components used to allocate resources along with the company business units .

  • Cash cows – this represents where the company has a high market and slow growing pace, such as TNT’s investments in Australia and the UK. These units generate excess profits that can be used to maintain the business and are normally regarded as mature markets. The resources in these business units should be used to develop growing and upcoming markets in less developed areas.
  • Dogs – these are business units located in low market share but in a mature market structure with a high growth rate. These business units basically break-even and do not generate enough cash for the business. For TNT, these businesses can be located in much of the Asian and South American markets and they require a lot of care in order to make them a cash cow in the future.
  • Question marks – these are business operations in high market but having a low market share. For TNT, these are businesses that are in the African and Far East markets. They have a higher potential for growth and become the future stars and eventual cash cows.
  • The stars – these are business units with a high market share and are located in a fast growth market. In the case of TNT, these are business units located in the European market, and the company has to adopt a strong maintenance strategy to ensure they continue making profits.

Scenario Planning

According to Andersen (2007) , this is a strategic planning method that can be used by TNT to make long-term plans that are flexible to achieve. Scenario Planning can help the TNT company to learn about the future and create a strong corporate strategy by drawing from a number of small scenarios, success stories and strategies that can move the company ahead and make it easier to achieve. The method can help TNT to understand the nature and the impacts of the most uncertain and important success drivers for the future.

SPACE Analysis

SPACE matrix is an analysis tool used in link analysis in combination with other methods to consider the developing strategic plans for the company. SPACE matrix (Strategic Position and Action Evaluation) is an important tool in assessing the TNT Company and its environment. The four quadrants of the matrix indicate the strategy that TNT can adopt to create effective strategic goals. The x axis of the matrix contains the company’s internal dimension, such as financial strength and competitive advantage, while the y axis contains company’s external dimensions such as the environmental stability and industrial strength. These dimensions can help TNT in determining the best strategic goals .

Formulating a New Strategy

TNT Organisational Audit

The strength of TNT includes a variety of employees from different cultural backgrounds, which enables the company to provide diversified services. The most preferred business is the Malaysian market with over 2,300 company operated depots having more than 50 trucks and 26,000 trucks. However, the company’s limited diversification of service is a strong weakness in the competitive market. There are various opportunities available for the company in terms of diversification of products and services, penetration and expansion in new markets in Malaysian economy. However, in each region, there are small competitors who prove to be a threat in market penetration, and this signifies economic slowdown .

External Environmental Audit for TNT

TNT’s Porter’s 5 forces model is a framework for an industrial analysis and strategic business development. The TNT analysis in the logistic industry represents a competitive market with TNT having a core advantage in the long-term and advanced operation services. The company applies this model in achieving the profit in the market. Due to its advancement, TNT has made it hard to have new entrants in the market by offering superior and affordable services to the customers. The threat of substitutes is countered by offering a variety of service packages in all aspects. The firm maintains high pressure to the buyers by offering to increase its distribution strategies. The high switching costs and high differentiation of inputs increases TNT’s bargaining power as a supplier .

Significance of Stakeholder Analysis for TNT

TNT has to undertake a stakeholder analysis regularly in order to make sure the company’s goals are in line with the expectations of all stakeholders. These stakeholders include customers, management, employees, government and the community. The need for a stakeholder analysis is to help the company effectively include everyone in its strategic objectives.

Conclusion

In conclusion, TNT appears to be a strong company in the logistic and transport industry. According to the mission statement, strategic objectives, aims and values that the company has put in place, the company can become the best logistic company as indicated in its vision statement. However, there are a number of issues that need to be addressed so as to rid the company of the obstacles that can make it fail to achieve the set objectives.

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