Running Head: DOLTEC LOGISTICS COMPETITIVE STRATEGY 1

Doltec Logistics Competitive Strategy

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DOLTEC LOGISTICS COMPETITIVE STRATEGY 2

3.0 Competition Strategy

The courier and package delivery services sector in the United States comprises around

7,500 big and small businesses with total annual revenue of roughly $90 billion. In recent years,

the industry has experienced consistent development. FedEx, USPS, and DHL, the industry's

three largest companies, control a significant portion of the market.

FedEx Corporation, originally Federal Express Corporation and subsequently FDX

Corporation, is an American global conglomerate holding corporation based in Memphis,

Tennessee, specializing in transportation, e-commerce, and business services. FedEx Express,

one of the first major shipping firms to provide overnight delivery as a trademark service, is the

company's most well-known service today. Since then, FedEx has launched FedEx Ground,

FedEx Office, FedEx Supply Chain, FedEx Freight, and a variety of additional services through

its different companies, many of which are intended to compete with UPS (FedEx, 2019).

The United States Postal Service (USPS) is an autonomous agency of the United States

federal government responsible for providing postal service across the United States, including

its insular territories and affiliated states. It's one of the few federal agencies that the US

Constitution specifically authorizes. With the passing of the Postal Service Act in 1792, the Post

Office Department was established. In 1872, it was upgraded to a cabinet-level department, and

in 1970, the Postal Reorganization Act established the United States Postal Service as a separate

agency. Many direct tax subsidies to the USPS have been decreased or removed since the early

1980s (USPS, 2019).

DHL International GmbH is a part of Deutsche Post that provides international courier,

package delivery, and rapid mail services. Every year, the business distributes approximately 1.5

billion packages. The firm was formed in 1969 in San Francisco, California, and by the late
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1970s, it had spread its service all over the world. DHL Air Freight entered the Hawaiian Islands

in 1979 with an inter-island cargo service utilizing two DC-3 and four DC-6 aircraft under the

name DHL Air Cargo. Dalsey and Hillblom personally handled the day-to-day activities until the

company went bankrupt in 1983. DHL Air Cargo employed slightly over 100 people at its peak,

including management and pilots. Although the company's initial focus was on offshore and

intercontinental delivery, the success of FedEx inspired them to begin their intra-US growth in

1983 (DHL, 2021).

3.1 Assessment of Existing Competition

Although this business has a low risk of entry due to the substantial capital expenditure

necessary, worldwide distribution is projected to be inexpensive. Establishing a network of

aircraft, trucks, and couriers would also be prohibitively expensive, and competing with the

current margins given by rivals would be impossible if you attempted to break even on your first

investment. Nonetheless, Amazon2 represents an impending business disruption for the major

players, as they intend to enter the industry with their service, "Shipping with Amazon," which

will affect them not only with competitive service prices but also by reducing their business by

not using the existing company service to deliver their merchandise (Fitzpatrick, Nguyen, &

Cayan, 2015).

Analyze Threat of Substitutes

Customers will move to new alternatives if the service is delayed or the quality

deteriorates, and the freight prices are comparable. Customers will always have various choices,

whether they want to ship by air or truck, and whether they choose 2-, 3-, or 7-day shipment,

depending on the urgency and budget. Consumers nowadays are not willing to sacrifice their
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standards for anything. If customers are dissatisfied with the service, they will seek alternatives

with better pricing and services (Fitzpatrick, Nguyen, & Cayan, 2015).

Analyze Buyer Power

One of the most important aspects of the shipping line company is the buyer. Importers

and exporters, clearing agents, freight forwarders, and products manufacturers are all examples

of buyers. Even though there is too much competition in this industry, buyers' negotiating power

has risen concerning freight prices. The strategic group mapping3 was used by the main

businesses in the industry to decrease or diminish the influence that the buyer was developing,

which was previously regarded a danger owing to:

 The numbers of the customers are high due to the export and import of goods from different

parts of the world.

 The switching cost is low. o Customer's ability to demand is high. o Freight forwarders and

clearing agents are high.

 Nonetheless, in my opinion, the in-today's business point of view, the threat of buyers could

be considered as Low to Medium

Analyze Supplier Power

Suppliers don't make much of a difference to shipping line firms, especially the big ones. In

contrast, it may impact small companies trying to establish themselves in the market to some

level. Suppliers offer shipping firms packing, fuel oil, lubrication oil, freshwater, paints, and

maintenance services, among other things. Overall, suppliers have little clout (Van den Steen,

2018).

Analyze Rivalry
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Any tangible item purchased online is sent through UPS, FedEx, USPS, or a combination of the

three. As a result, UPS and FedEx provide access to the fast-growing online business world

without the industry's ever-increasing multiples. As a result, there is fierce competition among

the major players, ranging from shipping costs to delivery times, forcing them to continually

seek ways to cut costs and/or add value to their service to win or retain consumers. However,

with large debt being absorbed by courier firms, inefficient entities may be pushed to depart. The

Rivalry Among Existing Rivals is moderate because, even though there are few competitors,

FedEx, DHL, and USPS are fierce (Van den Steen, 2018).

Opportunities Enabled by the Differences

In my opinion is not an attractive business unless you have unlimited resources due to the

outcome of each of the 5 Forces: Threat of Entry: because the amount of help and network

connection need it, it's very hard to enter and be competitive without putting too much risk in the

process. The threat of Substitutes: There are too many options the consumer can use as a

substitute which can cause potential loss to the business. Buyer Power: This could be one of the

advantages of this industry that, due to the current strategy, buyers don't have much power.

Supplier Power: This is another positive outcome that the supplier doesn't influence this industry

due to the abundance of providers in the market (Van den Steen, 2018).

Rivalry: The intense rivalry among the major key player makes even harder to get into this

business because while they are in that war, the consequence leads to low prices, and better sales

offer; which make the cost more competitive and hart the achieve for any new company. One

important factor that might affect my conclusion about industry attractiveness: Despite all the

facts from the five forces, this industry is relatively easy to enter if you are not planning to
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compete with the big players. Therefore if the entrepreneur is satisfied with a small market

segment, it could be very attractive (Van den Steen, 2018).

3.2 Competitive Strategy Development

Doltec Logistics has been in business for 12 years and has built an extensive network

throughout the Rio Grande Valley of Texas. Doltec Logistics continues to expand its ground

services network through a series of acquisitions. Doltec Logistics has successfully developed a

very competitive total pricing in the industry and among its clients. The company is dependable

for its accountability and on-time parcel delivery services. This brand has aided the company's

rapid growth into a multimillion-dollar enterprise. The few rivals in this sector, such as UPS,

DHL, and the United States Postal Service, each have entirely devoted clientele and low-cost

operations, which provide significant obstacles to the entrance (Van den Steen, 2018).

The entrance hurdles are quite high. The high fixed fee associated with constructing the

international transportation network is one of the reasons for the high entry barrier. As seen by

the ongoing struggle between Doltec Logistics and UPS, established companies in the

transportation sector compete only for market share. The company that responds first to the

constantly changing environment wins. s. The negotiation power of huge patrons in the shipping

industry is high. The provider power among this business is fairly low. There don't seem to be

several substitutes to shipping. I would suggest that Doltec Logistics ought to think about the

concept of building a shipping line for itself (Fitzpatrick, Nguyen, & Cayan, 2015).

Doltec Logistics is that the clear leader in specific shipping understood through my

analysis. Currently, Doltec Logistics doesn't have any variety of a fleet. Since it's already within

the transportation business's load delivery sector, a shipping fleet might presumably offer Doltec

Logistics opportunities not solely to transport their own cargo but the cargo of alternative
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corporations yet. Functioning on this, may be a decent thanks to lower prices yet as conveyance

in further revenue. My best recommendation for Federal specific would be to mix and work with

a shopper merchant and to focus the combination through e-commerce (Fitzpatrick, Nguyen, &

Cayan, 2015). By building a relationship and a period price client with an outsized shopper

merchant, Doltec Logistics will produce a competitive advantage over all communicating

services. Additionally, in the long-run results, Doltec Logistics are ready to cut back on shipping

prices. By working with a serious merchant, Doltec Logistics can extend revenue, reducing cargo

prices through purchases created among the merchant (Fitzpatrick, Nguyen, & Cayan, 2015).

References
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DHL. (2021). Global Logistics - International Shipping | DHL Home |. Retrieved from DHL

website: https://www.dhl.com/

FedEx. (2019). FedEx | Tracking, Shipping, and Locations. Retrieved from Fedex.com website:

https://www.fedex.com/en-us/home.html

Fitzpatrick, B. D., Nguyen, Q. Q. A., & Cayan, Z. (2015). An Upgrade To Competitive

Corporate Analysis: Creation Of A Personal Finance Platform To Strengthen Porters Five

Competitive Forces Model Utilizing. Journal of Business & Economics Research (JBER),

13(1), 54. https://doi.org/10.19030/jber.v13i1.9081

USPS. (2019). Welcome | USPS. Retrieved from Usps.com website: https://www.usps.com/

Van den Steen, E. (2018). The Strategy in Competitive Interactions. Strategy Science, 3(4), 574–

591. https://doi.org/10.1287/stsc.2018.0068