How Google Found Out It Should Be Doing Advertising

How Google Found Out It Should Be Doing Advertising There aren’t many companies in the world more popular and famous than Google. The technology giant has been successful in taking control of the Internet. The brand popularity is evident in the name not being just a company name anymore, but also representing the action of searching information online. Not many companies can boast about making it into the dictionary.But Google has been unique in its approach to advertising. Although the company makes most of its money through advertisements on its platform, the company itself can hardly be found on billboards and TV ads. What is this strategy all about and how has Google’s approach to advertising changed in recent years?This article will look at Google’s successful business model, the benefits it enjoys from its unique business strategy and approach to advertising. Finally, we’ll also look at the evidence behind Google’s shifting strategy and whether the company will use a more traditional approach in the future. © Shutterstock.com | Maksim KabakouIn particular in this article, you will find out about 1) history of Googles business model, 2) the benefits of Googles focus on advertising, 3) Googles experience with advertising, and 4) a conclusion.HISTORY OF GOOGLE’S BUSINESS MODELGoogle is an interesting company to study because it has done many things differently to other big technology companies. Its business model has definitely had its quirks in the past. Before you can understand Google’s approach to advertising, it is important to understand the company’s business model a bit better.Larry Page and Sergey Brin founded the company while they were studying for their PhDs at Stanford University. They both still have majority voting power in the company through a system called supervoting stock, although they don’t own the majority of the shares. The company went public in 2004 and it has reorganized its operations recently under a holding company called Alphabet Inc.Google’s missi on is focused on the idea of organizing “the world’s information” and making “it universally accessible and useful”. The unofficial Google slogan has often cited to be “don’t be evil”. The company’s mission statement is a great way to understand its business model as well.Unlike most companies, which charge people for their services, Google has always provided its search engine and the other related platforms free of charge. The profits have been solely derived from its advertising platform AdWords, as well as through other ventures it is currently running. Some of its newest innovative ventures include the Google Class and Google Car.While the company has since started many other adventures, its business model is still driven by selling advertisement page on its services. In fact, the company generates nearly 90% of its revenue through its AdWords program and other such marketing adventures.Part of Google’s successful start came from the strong foundations it re ceived in terms of funding. Despite the company being a small start-up, with the self-proclaimed geeks at the control, it received a huge venture capital backing. The funding allowed Google to pursue its business strategy, even though it didn’t have much to prove in terms of getting it all to work for the investors.Introducing AdWordsThe company launched its revolutionary AdWords program in 2000. The system is an online advertising service that allows users, such as website owners, to add ads on their platform and to benefit from the clicks the ads generate.Google has the right to select the ads used by the program and companies purchase advertising from Google through the service. But as well as becoming the main source of revenue for Google, the system also provides benefits to many users.AdWords has become one of Google’s most successful systems and helped the company take its advertising game on to a next level. Following the footsteps of AdWords, Google has also introduced advertising services such as the Google Advertising Professional Program and the Google Online Marketing Challenge.AdWords started out with a monthly subscription model, but it has since changed its revenue structure to accommodate separate business needs. The fee structure proved to be very successful, because businesses began noticing the benefits of advertising with Google. As Internet use grew, the program has become even more beneficial for many companies.Improving its own advertising strategyGoogle’s owners didn’t feel inclined to do a lot of advertising at the start of the business venture. Much of the company’s own advertising has relied solely on the word of mouth model, whereas satisfied customers are expected to provide the company with more users. With more users, the company will also increase its attractiveness to companies who want to pay Google for advertisement space.But it is important to note Google has made sure to actively target its products and services to two separate groups: companies and the “tech geeks”.The first group is obvious, as companies are what provide Google its main revenue. In this sense, marketing has been mainly done through hard cold data. Google is the master of metrics and it has been able to highlight the benefits of using Google as an advertising platform for companies. The more Google’s user base has grown, the easier this advertising campaign has become.But the second group has also been a big target for Google’s marketing team. It relies highly on the word of mouth of the so-called tech geeks. The innovative new products are especially focused on targeting these relatively wealthy and technologically driven people. As we’ll discuss later, the tactic has worked especially well with the company’s more innovative products.These technology converts help advertize the product and service further. By targeting these influencers, Google has been able to spread the word about its service to the wider pu blic without the need to create costly advertising campaigns.For example, the Google Glass was only available to a limited amount of people. First, offering a product, as a limited only option, will get the tech converts excited â€" people want to feel part of the exclusive group. Once these people got their hands on the actual product, they began talking about it and sharing their experience online. Blogs, tweets and YouTube videos of the product caught the public’s attention and Google was able to enjoy a buzz around the product before it has even launched! THE BENEFITS OF GOOGLE’S FOCUS ON ADVERTISINGBut why did Google’s focus on advertising revenue become such a successful model? To understand it, you need to understand the four Ps behind Google’s own marketing strategy: product, price, promotion and place.Product, price, promotion and placeGoogle’s business strategy put a lot of focus on the product. From the start, the aim has been to enhance user convenience and to ensure people get exactly what they want from the product: an answer to their questions. When Google started its search engine business, other operators were already doing the same thing. But while search engines such as Yahoo were filled with clunky ads and mention’s of the company’s own products, Google simply had the company logo and a field to search for answers.Google’s also been clever with its pricing. Because it has been so successful in its word of mouth advertising, companies have wanted to get a share of the advertising money. Instead of enjoying this revenue themselves, Google created the clever AdWords software. This way, simply by using Google’s services, users have also been able to receive a part of the revenue pie! Not only do you get many of Google’s services free, you might even use them to make money. This then gets more people interested, which in turn meanmore companies are interested in advertising with Google.This leads to the third P â€" promotion. Google doesn’t need to do much of initial advertising for its own product because it spread like wildfire through word of mouth. Its product was so much better to the alternatives, which got people interested. Its pricing was just perfect to get the attention of users as well as advertisers, increasing its visibility on the Internet even further.Finally, Google operates in the perfect place for advertising in the 21st century: the Internet. Advertising in the older mediums is becoming less relevant and by dominating the search engine world, Google has ensured companies can’t do without its platforms. For any company, it would be a near advertising suicide not to be on the Internet. Furthermore, when 1.2 trillion searches in the world are done through Google each year, it would be crazy not to associate yourself with this company.90% of revenue comes from advertisingThe above strategy of the four Ps has resulted in Google generating the majority of its revenue from advertising. This has been an effective method and allowed Google the freedom to skip branding its products and services with expensive marketing strategies.By attracting a massive revenue stream without spending lots of money in marketing, Google has been able to use the money to enhance its current services as well as to innovate new things. Google hasn’t had to spend a lot of money on becoming a talked about business â€" it has done so by creating a great service.Big part of Google’s success is its focus on innovation. Instead of just relying on its search engine, the company has pursued aggressive innovative strategies that have spiralled on from operating systems to smart cars.Not all of Google’s products have become a success, but its revenue model has made it possible to pursue these different ideas. Undoubtedly some of them will fail, such as its tablet device, but some might become the key technology of the future.Word of mouth tactic works well because it also strengthens the Goo gle brand. In a meaner analogy, Google has created the perfect prisoner’s dilemma for advertisers. Because of its current position as the market leader, companies cannot afford to overlook the company, but companies might also not receive as many benefits from the business as they did in the past. You can read a bit more about this in the following section.GOOGLE’S EXPERIENCE WITH ADVERTISINGGoogle’s founders Larry and Sergey have held rather hostile views towards marketing since the beginning of the company. While the company itself based its business revenue model on advertising, it didn’t think it needed to go aggressively after advertising itself. According to the founders, advertisement often lacked the accountability of conversion. A company could put millions into a TV ad, but not receive any new customers.Much of the lack of enthusiasm towards marketing stemmed from the mistrust towards branding. According to reports, Larry didn’t like to use the word branding simp ly because it implied “technology alone was insufficient for success”.But the technology geeks at Google soon also discovered branding doesn’t need to be solely about self-appreciation. With a popular product, a great branding follows as well.Google’s winning concept in terms of its business has always been simplicity and speed. It managed to succeed as the world’s favourite search engine because it was fast and straightforward to use.Focus on the heart not the headIt could be argued that Google’s approach to marketing is focused on the heart not the head. Instead of selling big ads on their front page or spending a lot of money to advertise on TV, the company focuses on winning people’s hearts. They want people to use the products because of the convenience and reliability, not because you happened to see their ads on TV.Since the beginning, this has been the winning tactic for Google. Its whole success has relied on viral marketing â€" growing by word of mouth. The c ompany has always relied on targeting the right influencers with their product.For example, the latest example of this is the Google Glass. The product, or the prototype of the product, was available for people to test. Now, the whole point of it was to be a prototype and to give the users the chance to be part of the development process. It directly got people interested because it gave people’s inner geek room to play. Instead of targeting the people who would perhaps want the real and readymade experience, Google went after the heart.Getting a core group excited about the product will help spark more interest. People will talk about the product and recommend it to other people â€" especially at a time when the blog has become a big part of our communication.Creating a plan BBut Google’s business model is also partly the reason why the company has upped its advertising game. Since the company’s revenue mainly comes from one source, it has started to realize the problems this can cause to a company.No matter how successful Google is now in attracting advertisers to its service and guaranteeing a relatively free service for the user, it cannot rely on its luck forever. The technology world is especially cruel and new companies have popped up to replace old ones in a blink of an eye. Consider, for example, Google’s social media platform Orkut, which was quickly rundown by the success of Facebook.So far, Google’s strategy has been successful and advertisers continue to spend money to receive higher ranking or advertising space on Google’s services. But it doesn’t take much for this to change. In fact, studies have found companies aren’t benefitting as much through advertising on Google’s platforms as they might have hoped. While the model works quite well with new companies, established firms don’t necessarily benefit from spending thousands of dollars on the platform.This is one of the reasons Google became involved with other things outside of the world of search engines in the first place. Glasses, cars, apps, and other such products are there to boost Google’s revenue stream â€" to act as a so-called plan B.With these new sorts of ventures, Google has also required some advertising support as well.Using crowdfunding as part of its marketing strategyWhen it comes to marketing tactics, so far Google has relied heavily on the crowdfunding method. Consider its Google Glass project, for example. The company offered the Google Glass experience and was up front about it being still in development phase. The glasses itself cost quite a bit for the consumer, but the idea of being part of something new was enough to get people excited.Asking people to spend money on an unfinished product worked with Google well. It received a lot more new funding, not to mention it was able to gather people’s input and data to further enhance the product. Although Google didn’t advertize the product as a general kickstarter project, it surely fits the model perfectly well.CONCLUSIONWhen it comes to branding, Google has truly discovered the winning tactic: by creating a reliable and functional service and product, the branding will follow automatically. Google has been able to grow into a multibillion organisation simply by ensuring it offers customers something they want and something which works efficiently.But the company has recently also understood the dangers of becoming too successful. Google’s traditional advertising model is not providing as many benefits to some of the biggest companies as previously thought and the company has realized it must adventure into new strategies in order to stay on top. But the heart of its strategy hasn’t changed much â€" it still wants to provide a top-class service and product to get people talking.

How Does The Us Congress Differ From The British Parliament

Lesson 21 RUL: 1. In what ways does the US Congress differ from British Parliament? The US differs from the British Parliament in its methods of representation; as US Congress uses districts and state representatives in the House of Representatives opposing the Parliamentary system of a representative House of Lords, using ‘honorary life peerages’ to represent the distinguished upper class and House of Commons to represent the everyday man of each required geographic division. Additionally, the two systems of government differed in their separation of powers; with the majority party of the House of Commons endorsing a specified member to be the Prime Minister, and utilizing common members as cabinet-level position holders, and thereby contradicting Article I, Section 6 of the Constitution, which prohibits all members of Congress from holding any other power in office. The length of terms also work to diversify the systems. The British House of Commons must occur every 5 years, but does not follow a fixed schedule, and the votes for Prime Minister elect ions depend greatly on the backing of parliamentary party, and votes of confidence and, more importantly, ‘no confidence’. Members of the US House of Representatives stand for election every 2 years, and Senate every 6. The elections for the Senate are staggered into thirds, so a third of the Senate is re-elected or re-placed every 2 years. Finally the idea of Federalism separates US Congress from British Parliament. ForShow MoreRelated1.In The Parliamentary Debate, What Were The Primary Arguments1660 Words   |  7 PagesParliamentary debate, what were the primary arguments for and against enacting the Stamp Act? The debate started in order to oppose enactment of the Stamp Act which Americans believed was denying them the Englishman right. 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The Welfare System A Middle Aged Couple Who Live With...

Jim and his wife Cassidy are a middle-aged couple who live with the aid of welfare benefits. Jim must start looking for job number two right away because his wife just got the news that she is pregnant with twins, and he only makes $7.25/ hour; that is definitely not enough to raise a new family! The two are not so happy with the news because times are hard, and it can cost a fortune to raise two babies. So, to ease their troubles, Cassidy reapplies for benefits that have expired, sells her card for actual money, and uses the disability checks from her deceased grandmother to help pay for home expenses; her husband supports her actions one hundred percent. Although times are rough for the couple, are their actions morally correct?†¦show more content†¦Current welfare programs deny the independence of individual recipients in various ways. Americans on welfare tend to become very dependent on the government since they constantly gain benefits without having to work as ha rd as the average American. Because of handed-out benefits, America s look on self-reliance, personal responsibility, and advancement has weakened (Will 10). Many welfare programs encourage others to accept benefits from the government, resulting in people becoming lazy and unable to search for work. This is somewhat hypocritical due to the fact that America is known for its independence, responsibility, and self-determination. Because of the encouragement from organizations, the number of food-stamp recipients has increased dramatically (Bovard 2). Self-sufficiency will continue to be an issue if organizations encourage people to accept benefits. In agreeance with O’Brien, if we truly want low-income families to achieve self-sufficiency, we need to give them the tools, education, and incentives to save for the future--not penalize those who try (13). Another reason why dependency has increased in Americans is because many are afraid of failure in life and costs of living modernly. The United States has citizens who rely so much on private benefits to be protected by the risks of modern living (Platt

Gender Inequality in the Work Place Free Essays

Gender inequality and The Work Place The society in which we live has been shaped historically by males. The policy makers have consistently been males and therefore it is not surprising that our society reflects those biases which exist in result of this male dominating society. One might think that gender inequality in the work place is rooted in what shapes future employees and employers. We will write a custom essay sample on Gender Inequality in the Work Place or any similar topic only for you Order Now Whoever said men and women are equal? Women have always taken a back seat to men in American society. This is not only found in the United States, but in other countries as well. The problem of men and women not being equal can be traced back to the Declaration of Independence. The Declaration of Independence proclaimed that all men are created equal. There was no mention of women being equal, only men. At the time of the drafting of the document, the men had all the power. The document was even drafted by a man; Women were confined to the home to take care of the domestic housekeeping duties. Sociologist Perspective In my research on work place inequality, I read a perspective from a sociologist named Sandra Bem who focuses on gender. However, unlike most female sociologist, Bem chooses not to focus on the differences between males and females, but rather on their similarities. She says that polarized gender socialization, the way that we assign masculine or feminine characteristics to things such as walking and talking to make males and females appear to be different, keeps us from realizing that the sexes are more alike than they are opposite. Men and women have the same needs for food, clothing, shelter, affection, belonging and so on. Whether by choice or economic necessity, woman have entered the paid labor force in numbers recent years, and so they should be entitled to equal pay and respect. Although many people who know these statistics are optimistic about the gain women have made in the United States specifically in employment, it should be noted that women’s positions as a social category in the labor force is lower than men’s in term of status, opportunities and salary. Feminist researchers have used the advancements of women into top-tier management jobs as a litmus test for how well women are faring in the labor force as a whole. Studies continue to confirm that women hold a small percentage of the top positions. Causes of Gender Inequality in the Workplace The causes of gender equality in these positions stem from four stereotypes; Sexism : American cultural belief that women are best suited for jobs that emphasize service, nurturing, housekeeping, men best suited for careers of high-level decision making and authority, Lack of qualifications: Men typically have more education and job experience than women 28% of men age 25+ have completed at least 4 years of college 27% of Women Men have more job experience because women loose time during pregnancy and child care, The glass ceiling: subtle and unconscious discrimination that prevents them from reaching higher and better-paying positions for which they are qualified. Women and minorities make up 30% of middle managers in U. S. but less than 1% of chief execs, networking: Men use golf clubs, other rec places where women were discouraged from going. The Functionalist Perspective According to functionalist Talcott Parsons (1955), gender inequality is inevitable because of the biological division of labor: Men are generally stronger than women and have certain abilities and interest. Parson said, men find themselves more suited to be goal oriented and women to expressive. Other functionalist explanations of gender inequality focus on the human capital that men and women bring to the workplace. According to human capital explanations, what individuals earn is based on choices they have made, including choices about the kinds of training and experiences they accumulate. For example, human capital analysts argue that women diminish their human capital when they leave the labor force to engage in childbearing and child care activities. So this is why they have less experience. It takes two to tangle that’s unprecedented. Conclusion/Solution Inequality has kept in place because of beliefs and practices that have been drilled into people’s minds for so long. When will women be treated as equals to men in the work place? I don’t see a change happening in the near future. Women are slowly being treated more as equals to men but the gap will never narrow to complete equality. Women should, not only be treated as equal in the work place, but also in everything else as well. Whether it is a computer scientist, an athlete, or a president of the United States, women should be treated as equal to men. Gender discrimination has gone too far and we, as a society, have to draw the line. We can’t change past issues, but we can certainly change the future. Work Cited: â€Å"The Declaration of Independence. † The Declaration of Independence. N. p. , n. d. Web. 10 Feb. 2013. Greenbuam, Vicky. â€Å"Seeing through the Lenses of Gender: Beyound Male/Female Polarization. † English Journal 88. 3 (1999): 96-99. Web. 10 Feb. 2013. Kendall, Diana Elizabeth. Social Problems in a Diverse Society. Boston: Pearson, 2013. Print. ——————————————– [ 1 ]. Web. 10 Feb. 2013 [ 2 ]. Greenbuam, English Journal 88. 3, 1999 [ 3 ]. Kendall, 2013. [ 4 ]. Kendall, 2013, Pg. 94 How to cite Gender Inequality in the Work Place, Papers

All About Me free essay sample

Who am I? I am Camila M., a freshman in high school. A few things about me is that I’m the youngest in my family. I’m also a very shy and quiet person who wants to travel the world. Also my family is really important to me and I really like to read. Also in the future I want to be a psychologist. Family is really important to me because theyre not just family they’re people that I can trust with anything. They’re people also really supportive. They would do anything for me and I would do anything for them.I’ve learned to be a better person because of them. I have also learned from them to work hard and be successful in life. That’s why my family has a huge impact of who I am today. Reading makes me unique and who I am because it’s not very common for young people to read books in this generation. We will write a custom essay sample on All About Me or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page But I love to read. I like how reading takes you into a whole different world whether it’s fictional or not.I also like how every book has a differentstory to tell. Another thing is that you can travel the world with books.One book can be about a kidnapper in the U.S,drug cartels in Mexico, or queens and kings in Europe. I think that every book has an important message you just have to read in between the lines. I also want to travel the world when I’m older. I want to learn about the cultures and the history of other places.I would also like to try to new foods and just to see new places. I know I’m only a freshman in highschool but I often think about my future. For a couple of years now I’ve been wanting to study psychology in college and hopefully make it my career. I want to be a psychologist because I like to help people. Ever since I was little I would always want to help people best I can or at least try to make them feel better. And I believe becoming a psychologist is the best way to full-fill that. I’m very determined to become a psychologist.With my family’s love and encouragement. I know I can have a great future.I have a huge passion for reading. As I get older and learn more about myself I hope that will never change because I think that reading is an amazing way to learn new things. I hope to continue school and to be successful in life. Also to reach all my goals. All About Me free essay sample Being a senior in high school you would think is one of the best feelings in the world. Well it is! The past three years you have worked hard to get this far and now you are finally here. You have a whole new title†SENIOR†! I am a track and field member and a very enthusiastic and friendly person. Hopefully i can continue in college and get even better. I hope to become caption this year; it has been my high school dream. I would love to be the one to give the big â€Å"encouragement† speech before a track meet and set a good example for the following year caption. I am interested in becoming an early childhood education teacher. I love being around kids and weather people know it or not you can learn as much from them as they can learn from you. I have two little brothers who I just adore. We will write a custom essay sample on All About Me or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page One of my brothers has been attending school since the age of two and he has really learned a lot. He can spell his name count past ten and even count to ten in Spanish. He knows how to share and interact with other children with no problem at all. He knows his days of the week and all his colors of the rainbow. I can guarantee that not many children between the ages of four know all these things if they aren’t in school; some are just barely potty trained. These little things show how important it is to have more early childhood teachers to expand the brains of these little ones. I wake up to my brothers and fall asleep with them, they tell me to have a good day at school and to be good just as they are told. They say these kids are the future and this is the perfect place to start and I want to be a part of the process. One of my main goals is to graduate high school. My mom was the first female in our family in a long time to graduate high school and I will be the second! It’s really important to make a difference and show people that things don’t have to be the way they are. My younger cousin just turned 16 and feels that school isn’t one bit of important. She’s more concerned about what brand her clothes are and a new hair style for the week. Little does she know she can graduate high school and get her cosmetology license or even go to the Art Institute of Chicago and be known worldwide for her fashion. You can grow up and say you made something out of yourself instead of sitting around doing nothing. Overall life is what you make of it. People think you can just breeze through high school and be okay. Many jobs require at least an associate’s degree to even be considered for the position. You have to be enthusiastic about wanting to do better in life for your future and in my opinion that doesn’t stop after high school.

Arboriginals and the White Government essays

Arboriginals and the White Government essays Aboriginals and the White Government The white government is racist and Eurocentric; as a result they have brought about racial discrimination against the aborigines. The colonial attitude of the Aborigines was that they represented primitive animals not deserving respect as they belonged to the menial class of the suppressive society. The Laffey family does not accept this attitude as Cornelius criticise the hypocrisy of the Europeans as poaching is approved by the government, and murdering the owners of the local grouse, blinked at (p. 32). He uses his job to write an article condemning a massacre of Aborigines which he witnesses first-hand. Cornelius refers to it as needless and foolish acts of provocation and aggression on the part of the diggers (p. 31) and says that even the quasi-official road-blazing part...had indulged in unprovoked killing of natives (p. 31). His article deliberately has been used to position the readers of the article to see European Australians as malicious and at fault. The dominant colonial view of the Aborigines is that they were criminals and troublemakers. From Corneliuss action, it can also be seen that Aborigines were marginalised and suppressed as they were seen to belong to the lower class of the society compared to the Europeans who were considered to be of a higher class. The physical violence that the white people have imposed upon the Aborigines constructs the readers negative view towards racism as it helps to position the reader to be with Astleys point of view about racial discrimination as she also challenges the typical traditional view of Aborigines. The physical violence has been endorsed by the mainstream Australian but is not accepted by the Laffey and Astley and therefore the reader too. Men in the constructed reality of the novel are privileged over women. Astley criticises the patriarc ...

DHL Case Study †Strategic Planning and Strategy

DHL Case Study – Strategic Planning and Strategy Free Online Research Papers Contents: Unit 1 Management Strategy 1. Definition of Management Strategy. 2. Proposal of a suitable structure for Identification of DHL’s appropriate participation from its stakeholders for the development of strategic management 3. Development and description of the key criteria of that DHL considers when reviewing management strategy options 4. 4.1. Construction of an appropriate strategy of DHL employs and indication of its resource implications in the organization. 4.2. Discussion of DHL’s proposal of strategic alliance with UPS for strengthening of market posisstion and share. Unit 2 Vision, Mission, Objectives and Measures 1. 1.1. Identification of DHL’s ethical, cultural, environmental, social and business Objectives. 1.2 How these influence by the current business and economic climate between 2002 and 2008. 2. Description of DHL’s vision and mission statement. How these effect on DHL’s core organizational values. 3. 3.1. Establishment and evaluation of any organizations achievements with its objectives like DHL. 3.2. Process of management of DHL’s culture issues as a result of being a global player. Unit 3 Implementation of the Strategy 1. Development of a timetable outlining the anticipated strategy implementation of the partnership between DHL and UPS including key milestones. 2. 2.1. Appropriate dissemination processes that might assist DHL to encourage participation and commitment to the new strategic collaboration with UPS. 2.2. Setup monitoring and evaluation systems for this new strategy. 2.3. Outlining how this might be possible within DHL. MANAGEMENT STRATEGY can be defined as the future oriented conception in which the relationship between the industry and environment (pattern for adopting to the environment) is described and forms the guiding principles for the people in the industry for decision making. It is definite that the state of affairs with regard to the management strategy like the number of years for which the strategy has been planned, how clearly it has been described and for what level of people it forms the guiding principles etc., differ from industry to industry. Strategic planning of an organization determines over the next years or more, how its going to get there and how it will know if got there or not. The focus of strategic plan is usually on the total organization, while the focus of a business plan is usually on a particular product. Service or program. There are variety of perspectives, models and approaches used in strategic planning both in profit of non-profit organizations. The way that a strategic plan is developed depends on the nature of the organizations leadership, culture of the organization, complexity of the organizations environment etc. Regarding with my assignment on a case study on DHL’s success partnering with UPS, it is found that both of these organizations adapted the goals-based strategic planning with issue-based and organic based strategic planning. 1. DHL ensures appropriate participation with different stakeholders in different ways for the development of its strategic management processes. DHL believe that it is vital that they identify their stakeholders and either consult them, or establish a dialogue with them to understand their key concerns-this will help them shape their future activities and to be sensitive to the impact that they have. Engaging stakeholders can allows them to gather input. After engaging with the World Economic Forum’s Logistics and Transportation Corporate Citizenship Initiative (LTCCI), DHL can participate with stakeholders for the development of its strategic management process on the two levels: First, stakeholder consultation, for the main concern about environmental emissions, ensuring positive impact on local communities, the health safety and well-being of employees. For example, Currently DHL consulting with customers relate to suppliers meeting strict environmental management systems standards, the monitoring of greenhouse gas emissions and adherence to human rights codes etc. Second, multi-stakeholder dialogue: which is convened by the much-respected Goal Reporting Initiative (GRI). Most importantly, DHL can make corporate governance. It is the set of processes, customs, policies, laws and institutions affecting the way in which a corporation is directed, administered and controlled. It can help DHL in declaration of conformity, their corporate values with other stakeholders like employees, suppliers, customers, bank and other lenders etc. O One of the important example of the development of the strategic management process is its partnership with the rival party UPS. By partnering with this win-win strategy, DHL has benefitted shipping, financial services and telecommunication industries and has yielded a positive outcomes in the Fed-ex-US postal services which was signed in 2001. Partnering with rival party can play a major cost-cutting initiatives as the fuel prices are on the rise, may be positive step towards controlling pollution by optimized use of planes. 2. DHL’s most important reviewing management strategy criteria is the cost reduction programs. The chief executive of DHL’s global business, John Mullen admitted that maintaining a scale of network similar to that of UPS and FedEx with just 6% or 7% market share, gave them financial benefits. According to this agreement, UPS will carry DHL’s US domestic and international shipments within North America. The agreement mention that UPS will carry express, deferred and international packages but not freight. It was identified that UPS will also transport DHL air packages between US, Canada and Mexico. Under the deal DHL is expected to pay every year $1 billion to UPS. DHL also plans to restructure its domestic footprint. The third point is the go green programme by reducing carbon emission by implementing a number of measures including, Reducing gas and electricity usage across DHL’s building portfolio, through a means of increased awareness and technique and improve building management. Using 100% renewable energy across all DHL express UK properties. Investing alternative fuel option- DHL is proactively seeking alternative to the fuel volume that are purchased. These trails have been undertaken in collaboration with DHL’s industry partners and have included both courier vans and trucks and are helping to pave the way for future transport solutions. The introduction of 12 fuel efficient double-decker trailers, contributing to a reduction of circa 250 operating runs per annum. Continuing increased amount of waste that is recycled. DHL has three pilot schemes underway whereby waste is sorted on site, baled and sold to recycling agent. 3. Strategic alliances with its rival company like UPS, FedEx can be an appropriate strategy for the DHL and it can be a resource which can DHL implement for its organizations development. Jerry Hempstead, president of Hempstead Consulting in Orlando, said that a large number of shippers who use DHL because of its flexibility with its flight scheduling to accommodate the special needs of specific shippers, will see at least 3.3% decline in the service performance. As a part of its strategic move in 2003, DHL acquired Airborne Express which was the third largest player in the US and ABX Air started providing airlift along with ASTAR Air Cargo for DHL. DHL had big aspirations for its express business in the US after it acquired Airborne Express. Making alliances with other parcel services can save a lot of money especially if these express companies can create a similar route network. Alliance with UPS can cut costs a lot. UPS will carry express, deferred and international packages. It was identified that UPS will also transport DHL air packages between US, Canada, and Mexico. Under the deal, DHL expected to pay every year $1 billion to UPS. Proposed strategic alliance can strengthen the DHL not only for above reason but also this deal was one of the series of transactions such as acquisition of Emery by UPS in 2006 and Airborne by DHL in 2003 which reduced the competition in the express industry. Unit 2 1. 1.1 There are varieties of objectives in related with ethical, cultural, environmental, social and business can be found in DHL. Such as a) Ethical commitment: ? Quality focus- DHL’s commitment is the quality first makes the difference.In order to achieve high quality standards; it works constantly to improve its structure and processes to satisfy the customers. ? Customer’s satisfaction- DHL believes that customer’s satisfactions guarantee their own success. They prioritize customer focus in all of their business processes, projects and dealings. ? Besides these, DHL believes in laws and ethical standards, transparency, accounting and reporting standards, and money laundering as well. b) DHL’s business integrity: ? Shareholders trust- DHL’s corporate management very much transparent to their shareholders and investors. ? Business partner dialogue- share principles of ethical behavior, social engagement, respect their suppliers, subcontractors, agents etc. ? Besides these, conflicts of interests, fair competition, bribery and corruption, gifts and benefits, facilitating payments etc. c) Social responsibilities: ? Communities- DHL is committed to support the communities in which they work. They work for community development with non government organizations. ? Environment- They are committed to improvement the environment as well. They regularly assess and monitor their impacts on the environment. ? Cultural achievements. 1.2. After purchasing by a privatized German postal services, DHL could not fill the planes with cargo to capacity made way for losses. Within a short span, 2004-2008, DHL’s US business lost $3 billion. But, for the above objectives, in 2003, it contributed $64 billion to world GDP. In 2004, it became a global market leader of the international express and logistic industry by attaining revenues over $32 billion. DHL’s overall revenue for the year 2007 was $20.2 millions. Globally, in 2007, DHL express processed approximately $1 billion shipments annually. It was reported that the worlds number 1 in ocean freight and contract logistic in 2008. 2. DHL’s mission is to be first choice worldwide by making the most scale and experience and the passion. Its vision is the transform the logistic industry and to deliver beyond customers experience for the future. DHL’s vision is To intensify customer focus. To deliver consistence service excellence. To extend capabilities ( creating local strength and driving practical innovation) To attract, develop and retain talents. To relentless drive efficiency. To be proactive in social. With using the vision and mission statement, DHL’s core organizational values can be increased by examining its weakness, threats, strength and opportunities. The following swot analysis can be done in DHL. STRENGTH: WEAKNESS: o Strong brand image. High price o Globalism Market share estimate o Eservices and technology Weak visibility o Corporate symbiosis Not as well known as UPS or FedEx o Smart-truck projects. OPPORTUNITIES: o Expansion globally o Joint venture o Expansion of ecommerce o Increased the number of manufacture good. THREATS: o Relation with foreign countries. o Economic and political condition o Restriction o Economic slow down. COMPANY STRENGTH: Strong brand image- In 1997, DHL became the global express transportation company simultaneous system-wide ISO 9001 certificate in international quality standards. Globalism- DHL operate mare than 220 countries over the world on a global scale. E services and technology- it uses and search for a new technology. Product can be tracked, queried, and ordered online. Corporate symbiosis- it helps to encompass the empowerment of its personnel at a local level. Smart-truck projects- it allows DHL to deliver faster. COMPANY WEAKNESS: High prices- prices above their rival company. Mistakes in market share estimate- it it’s the biggest weakness of DHL. Weak visibility- in the community compared with its potential. COMPANY OPPORTUNITY: Expansion globally- it can expand globally including other companies under DHL. Joint venture- DHL can form joint venture integrating their customer bases. Expansion of ecommerce- it serves with shipping online. DHL can enjoy both profit and brand name recognition form this kind of expansion. Increased in the number of manufactured goods- manufactured goods will increased exponentially as a report given be WTO. COMPANY THREATS: Relations with foreign countries- in every country, DHL subjects to laws and order which hinders their operation and efficiency. Economic and political condition- as a global company they are subjects to more risks than other domestic companies. Restrictions- some restrictions like to prevent from china are big problems in the logistic sector. Economic slow down- it decrease the number of products they produced. 3. It is very much difficult to establish and evaluate the achievement of objectives of any organizations like DHL. However, if any organization can manage its own cultural issues properly, then it may be possible to achieve. DHL employees can share common value and strong corporate culture. Their corporate values represent a responsibility and a challenge. They can view themselves as a member of society, and this attitude is reflected in the responsibility that they assume for people and environment. UNIT 3 Implementation of the strategy: 1. Implementation of the Group strategy presented by CEO Frank Appel in the spring of this year is progressing according to plan. Deutsche Post DHL presented DHL Solutions Innovation (DSI), its newly launched business unit at the 26th German Logistics Congress in Berlin. As a motor of innovation and a cross-cutting function of DHL it pools and drives technological development within the Group. Headed by Petra Kiwitt, it reports directly to CEO Frank Appel. Logistics is becoming a sector for trendsetters and setting standards not only with respect to technological development. Petra Kiwitt and her team will contribute to ensuring that our Group remains one of these trendsetters and helps to secure the economic success of our customers by offering future-oriented logistics solutions, said Frank Appel.The newly created organizational unit consolidates the innovation activities of the individual branches of DHL. Based on the results of market studies, analyses of sector strategies and inte nsive customer surveys, DHL Solutions Innovation lays the groundwork for future-oriented and standardized logistics solutions that are becoming applicable across sectors. Our customers expect sustainable solutions, understandable services that are easy to use and uncomplicated access to their service provider. We are achieving this among other things by enhancing connections between the various DHL Units dealing with research and development. This is a way to tap the full creative potential of our staff, Petra Kiwitt stressed.Right from the start, DHL Solutions Innovations has been able to benefit from successful platform approaches, such as the Control Tower Concept. Used for several customers, this concept enables a strategic transport management through modern IT solutions which provide a permanently updated access to all details of the supply chain. The experience and innovative strength of the DHL Innovation Center, which opened in 2007, is another asset. This is where ground breaking logistics solutions such as the parcel robot, the carbon offsetting procedure and the smart truck originated.DSI also proves that the Group Strategy presented in March 2009, which is aimed at strengthening Deutsche Post DHLs leading role in the international logistics market, is being implemented. The strategy is aimed at leveraging the full potential of the worlds leading logistics provider and increasing the profitability of DHL by improving cooperation as One DHL and increasingly dovetailing operations with DHL Global Customer Solutions (GCS). The needs in particular of the 100 biggest customers handled by GCS are valuable indicators, which are now being fed into development processes at an early stage.DHL Solutions Innovations is also the result of the study Delivering Tomorrow Customer Expectations in 2020 and Beyond that was recently presented by Deutsche Post DHL. Our study shows that the omnipresence of the Internet, sustainable resource management and climate cha nge are issues of relevance to society. The logistics sector too must respond to these challenges, stated Frank Appel. DHL Solutions Innovation is another building block that will help Deutsche Post DHL turn these challenges into opportunities. Strategy 2015: The Strategy 2015, which CEO Frank Appel announced on March 11, 2009, is based on two pillars: The first is a strong mail business that is clearly committed to carrying out the universal service obligation of Deutsche Post and that plans to add new value-added electronic services to its range of offerings. The second is an integrated international logistics business that vigorously focuses on quality and customers. The core aim of this strategic shift is to unleash the companys unexploited potential following the aggressive phase of expansion pursued in recent years. The objective is to achieve growth in all divisions that exceeds market performance by 1 to 2 percentage points. At the same time, the Group is committed to ensuring that these growth targets are reached in accord with its responsibility for the environment and society. At DHL, the individual divisions in the future will work even more closely together in order to better address customer needs and to improve profitability of the entire business. The Group has also introduced a new guiding principle for employees with the aim of increasing employee involvement and commitment and of ensuring swift implementation of the Strategy 2015. The strengthening of the First Choice customer initiative will also contribute to this end. Challenges 2009: The worlds economy has been experiencing a tailspin of historic proportions since the fourth quarter of 2008. Throughout all regions and sectors, many customers of Deutsche Post DHL are seeing unparalleled decreases in demand, which then result in lower shipping volume. In the United States, the restructuring of the Express business continues to make good progress. The termination of the entire domestic business was carried out on schedule at the end of January. The remaining international express cargo will be shipped by DHLs current carriers ABX Air and ASTAR Air Cargo. The talks between UPS and DHL about a potential airlift agreement have been terminated. Despite having to master major economic challenges this year, the Group will remain fully committed to its responsibility for the environment and society. As presented in its Sustainability Report 2009, the Group has introduced various initiatives in all Corporate Divisions covering the areas of fleet, buildings, innovative technologies and employee motivation to help improve carbon efficiency. Deutsche Post DHL a year ago launched its Go Green climate protection program aimed at improving carbon efficiency by 10 percent through 2012 and by 30 percent through 2020. Financial improvements: In terms of costs, DPWN expects to see overall profits for DHL Express US improve by $1 billion in 2011, with expected losses of $1.8 billion in 2008, $900 million in 2009, $500 million in 2010, and $300 million in 2011. Although this restructuring is expected to have a significant material impact on DHL’s cost base and overall infrastructure, it is expected to have a smaller impact on customers, said DHL Express CEO John Mullen. DPWN said it expects to spend up to $2 billion to finance the restructuring plan, which will go towards termination costs, leases, severance, aviation assets, and pickup and delivery optimization. And DPWN noted that it anticipates these restructuring efforts will result in annual savings of $1 billion per year (in earnings before taxes), with key changes expected to be completed by the end of 2009 and full plan implementation taking hold by 2010. â€Å"As a result of this, we will have a less complicated ground and air network than we had before, which should deliver more reliability across the whole platform of our combined operations,† said Mullen. â€Å"Most importantly, we believe this plan will protect our international network franchise and our global coverage, which is critical to a global player such as us. It is essential that we have a continuing presence in the U.S.† Industry analysts suggest that there are pros and cons in terms of the type of impact today’s news may have for shippers. â€Å"DHL has stated in the past that its customers pay less than its competitors on many occasions,† said Doug Caldwell, executive vice president of ParcelPool, a small parcel delivery consultancy and services provider. â€Å"So now you have a situation where current DHL shippers with good rates can think this is a positive, because it says DHL is clearly staying in the U.S. and they don’t have to worry about DHL shipments down the line.† But shippers will want to see a smooth transition for DHL’s U.S. restructuring, noted Caldwell, and he said they don’t necessarily need to be exploring other options. Instead, shippers using DHL should be looking to hold onto those rates for as long as they can for two reasons: one being that DHL’s rates are by and large better than what the competition offers, and the second point being the reliability of UPS airlift. â€Å"Why would a shipper want to switch from DHL to UPS, when UPS is already handling the line haul for airfreight on shipments right now? Also, UPS operationally is second to none linehaul with very few service failures. This is a plus for DHL shippers, except for those with a lot of rural shipments, and for those in rural areas normally have a different service expectation.† While Parcel Pool’s Caldwell, said that DHL’s probable agreement with UPS is largely favorable for shippers, Jerry Hempstead, president of Hempstead Consulting in Orlando, Fla., said that today’s announcement overlooks some important points for shippers. One point being that this deal with UPS leaves DHL bound to the UPS flight schedule. DHL, said Hempstead, has a large number of shippers that use DHL, because it has been flexible over the years with its flight scheduling to accommodate the special needs of specific shippers. As an example, he said DHL has a special flight into Memphis that allows it to deliver as early as 4 a.m. to a company that repairs laptops. This gives the laptop repair company the ability to extend its repair window so that laptops can be turned in the same day and shipped out to the customer. He also pointed out that other businesses have special flights into certain cities via these specific DHL flights. â€Å"I am not sure how the new arrangement with UPS is going to address the special situations DHL has developed over the years,† said Hempstead. â€Å"In addition large shippers, by way of the announcement, will see, by DHLs admission at least a 3.3 percent decline in the service performance, and the delivery will be through a hand-off to the USPS. DHL was already struggling with its service image in the marketplace. You can’t price poor service low enough to keep many of the large shippers upon which DHL built its domestic business.† He also cautioned that there are a lot of unknowns in this announcement, with the most disconcerting one being that they announced a deal with UPS without having a definitive contract in hand with UPS, leaving UPS in the driver’s seat in negotiating the final agreement. Its infrastructure network and in aviation with a restructuring plan that focuses on three mainelements: 1. Reducing infrastructure network capacity by approximately 30 percent through the following detailed measures: Consolidating and closing smaller sorting facilities into modernized, larger stations, resulting in reductions of approximately 34 percent Rationalizing pickup and delivery routes by 17 percent, including new courier routing plans to enable better route planning and avoiding peaks in the operation, as well as making changes to staffing plans Ground linehaul network rationalized by 18 percent through improved capacity utilization and footprint reductions in some remote areas. 2. A proposed contract between DHL and UPS whereby UPS will provide air uplift for DHL Express U.S. domestic and international shipments within North America 3. Reduction in overhead and other administrative costs As one central part of its restructuring activities, DHL and UPS will pursue a contract to provide air uplift, creating a single airline partner for DHL Express in the U.S. DHL will continue to operate its courier and ground network as well as pickup and delivery services to its customers across the country. The proposed agreement, in character and scope representing an efficient model in the express industry, will extend for 10 years. The commencement of UPS service into the DHL network is expected to begin later this year. The proposed contract provides both DHL and UPS substantial economic benefits in the U.S. Express market, which remains one of the most challenging marketplaces worldwide in light of the current economic downturn. DHL will continue to compete in the U.S. market under its own brand, offering attractive value to customers. The restructuring action in no way diminishes DHLs commitment to retaining a significant presence in the U.S. market, which is key to DHLs global network. DHLs strategic priorities in the U.S. will be to continue to provide record service reliability, and accelerating growth in more profitable segments of the market through leveraging innovative sales channel strategies like the recently announced Walgreens partnership. To drive the implementation of the restructuring plan, DHL recently announced the appointment of long-time DHL senior executive, Ken Allen, as CEO of DHL Express U.S. Allen has extensive experience executing restructuring plans within DHL. In his previous role as CEO of DHL Express Eastern Europe, Middle East and Africa (EEMEA), Allen has doubled revenue growth and margin within two years. In addition, his experience as CEO of DHL Express Canada resulted in turning many years of negative performance into what is now positive financial development for the company. Conclusion: From the above discussion, it can be said that-Centralization is not a benefit in and of itself, but it does enable the practice of strategic planning. Strategic Planning can be applied to both a centralized and a decentralized model. But is easier to apply strategic planning to a centralized model, and it’s more difficult to apply strategic planning to a decentralized corporate culture. It allows for economies-of-scale on a worldwide basis, the benefits of which can be applied to every component of the value chain. In my opinion, DHL can make successful their business buy developing a contract whereby UPS will provide airlift for DHL express US domestic and international shipments within the US. The two parties will now rapidly conclude a definitive contract with the goal of being able to provide service in the second half of 2008. The two parties will now rapidly conclude a definitive contract with the goal of being able to provide service in the second half of 2008. References: ? Applied Strategic Planning: How to Develop a Plan That Really Works, by Leonard Goodstein. ? The Board Member’s Guide to Strategic Planning: A Practical Approach to Strengthening Nonprofit. ? Organizations (Jossey-Bass Nonprofit and Public Management Series) by Fisher Howe. ? Organizations (Jossey-Bass Public Administration Series) by John M. Bryson, Farnum K. ? Alston. Jossey-Bass, 1995. ISBN: 0787901423. ? High Impact Tools and Activities for Strategic Planning: Creative Techniques for Facilitating Your. ? Organization’s Planning Process by Rod Napier, Patrick Sanaghan, Clint Sidle. ? Strategic Planning: What Every Manager Must Know, by George Albert Steiner. Free Press. Additional Resources ? Websites ? www.wikiswot.com/swot4_user_generated/DHL.html ? Community Associations Institute- www.caionline.org ? 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