DHL's Business Strategy in China
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Case Code : BSTR138
Case Length : 17 Pages
Period : 1995-2004
Organization : DHL International
Pub Date : 2004
Teaching Note : Available
Countries : China
Industry : Logistics
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
Offering Innovative Services
To maintain and fortify its position, DHL-Sinotrans introduced many new services catering to both individual and corporate customers. In 2000, the company brought in a special service called 'Import Express,' for its Chinese importers, to cater to demands arising from the growing volume of trade in the country.
This service enabled importers to get their shipments picked up from the supplier's doorstep overseas and get them directly delivered anywhere in the world. This helped Chinese traders avoid hassles of arranging shipments from multiple origins using different vendors. Another new service introduced in 2000 was 'First in Asia'. It was designed to accelerate the growth of DHL's intra-Asia business, focusing on shortening delivery time of packages within Asia. Anticipating the growing access Chinese people would have to international products and services, DHL launched another new-look product in the market. In December 2001, the company initiated its well-known global product, "DHL
Jumbo Box"in China...
The Advertising Strategy
In August 2003, DHL-Sinotrans launched an advertising campaign in China to reflect DHL's global brand image. The campaign projected DHL as the world's largest express and logistics provider, leading the market by virtue of its unparalleled capabilities in providing 'one stop' services, covering every key segment with its variety of logistics services.
DHL created a new bright and eye-catching company logo in which the letters 'DHL' were written in red colour against a yellow background. The company's vehicles, office facilities, uniforms, packaging and stationery throughout China displayed the new logo. In another advertising initiative, a new TV commercial was aired in 15 major Chinese cities, reflecting DHL's entire range of services using the imagery of the Egyptians building the Pyramids. Print ads were also placed in over 30 leading publications nationwide. In the light of the growing importance of the Asia-Pacific region in its business portfolio, DHL
launched a 360-degree advertising campaign in early 2004. The campaign
was spearheaded by a new ad with a catchy tagline, 'No one knows Asia
Pacific like we do...'
By the end of 2003, DHL had captured 37% of China's express delivery market. The company had already built up 160 delivery centres and planned to set up delivery sites in every major city in China by 2005 end. To cement its relationship with Sinotrans, the company entered into a 50- year-long contract. In 2003, China was DHL's third largest market after Japan and Hong Kong in the Asia-Pacific region. However, China was expected to become the largest market by 2006...
Exhibit I: China's Export Partners and their Share in the Market (2001)
Exhibit II: China's Import Partners and their Share in the Market (2001)
Exhibit III: Share of Logistics Industry in China's GDP
Exhibit IV: China's Air Cargo Volumes & Their Growth
Exhibit V: Revenues of Top Five Logistics Companies Operating in China
Exhibit VI: DHL-Sinotrans's Network in China (2004)
Exhibit VII: DHL-Sinotrans Services Network (1986-2003)
Exhibit VIII: A Note on the Logistics Industry in China
Exhibit IX: Regulatory Framework for Foreign Participation in Logistics Industry in China
Exhibit X: Facts and Figures on Courier Industry in China (2003)