Unit 1: Business and the Business Environment Industry Analysis Factsheets Case Study

Introduction: Organizational Structure and Market Performance Insights

The report is divided into two parts. The first part of report includes critical analysis of logistics industry to gain access to industry perspectives. Different types of organizations along with their purpose and legal structure are discussed in the report. The study also involves a complete factsheet of Royal Mail Company which is identified as plc in the UK. The factsheet includes visual map of internal departments of the case company to achieve business objectives and their influence on organization structure. The critical analysis of complexities of different organization and their structure are also considered in the first part of the report.

The key feature of second part is to find out the impacts of external and internal factors on travel and tourism industry. The traffic light chart is also highlighted in the report to ease the understanding level of the study. The second part also carries out the identification of internal weaknesses and strengths of a case company. Along with all the highlighted points the report also includes interrelation between external factors and company’s strengths and weaknesses. The report critically evaluates a SWOT analysis and provides Royal Mail Group’s expansion plans to justifying all the recommendations.

Market segmentation refers to the procedure of dividing a broad customer or business market, usually consisting of obtainable and potential customers, into sub-groups of customers based on some kind of common characteristics. 

The four Elements of the marketing mix:

1. Product: this refers to what products and services a business is selling to its customers in the market.
2. Price: this refers what costs or prices a business is charging from its customers for their services and products. 
3. Place: this refers to where the products and services will be sold or in which areas.
4. Promotion: these are the activities through which the company makes the target market aware about their products. 

Part 1

Letter to the group chairman of Royal Mail Company presenting the factsheet portfolio

The honorable Keith Williams,

185 Farrington roads, London

Subject: Factsheet portfolio for future development of Royal Mail

Dear group chairman, 

Subject: Analysis of the logistics industry to gain access to an industry viewpoint

I am writing to you today to present you with a factsheet portfolio on the subject of the logistics industry. As the leader of one of the most renowned postal services in the world, I believe that gaining an industry viewpoint on this subject would be of great value to your company.

The logistics industry is one that is constantly evolving, and staying up to date with the latest trends and technologies can be challenging. This is where our factsheet portfolio comes in. We have compiled information on a wide range of topics related to logistics, including transportation modes, warehousing and distribution, supply chain management, and technology trends. Logistics firms are in front of an era of exceptional changes as digitization has led to customers changing demands (Buchheim, et.al 220). New technologies enable superior efficiency and a more mutual operating model. The industry is considered a critical sector to improve international trade as a result of digitalization and globalization. Logistics services in the nation is an important sector in term of support to the state and national economy, FDI (Foreign Direct Investment), trade flows, as well as employment. 

Our portfolio also includes analysis of market trends, case studies of successful logistics companies, and projections for the future of the industry. All of this information can help your company gain a better understanding of the challenges and opportunities that exist in the logistics industry. As the world becomes increasingly interconnected and e-commerce continues to grow, the importance of logistics and supply chain management has never been greater. By gaining access to our factsheet portfolio, your company will be better equipped to navigate the rapidly changing landscape of the logistics industry and ensure that you remain competitive in the years to come.

I hope that you will find the portfolio to be of great value and I would be happy to discuss any questions or concerns you may have.

Thank you for your time and consideration.

Sincerely, 

Structure and size of the different types of organization

The firm’s structure and size are determined according to the products and services or activities provided by the company to its customers. There are 3 types of organizations i.e. private, public, and voluntary that is explained below through a flowchart:

Types of organization:

A factsheet for Royal Mail Company 

• Brief background of the organization: Royal Mail Group is the main postal service public limited company (plc) that operating in the United Kingdom. The organization provides delivery services to all its customers and has a sound history. Royal Mail Group focuses on leveraging the inflated number of posts being determined by the development of an online shopping industry. Business innovation such as technology and digital services which are introduced and expanded globally and nationally (Quan, et.al 2020). 
• Products and services: Royal Mail Group (RMG) is a contributor to delivery and postal services. The business offers letters and parcel delivery services under the brand name and express parcel service under the parcel force global brand in the UK. The organization also provides overnight parcel carrier service through postal express. The company serves to the medium and Small-sized enterprises, sole traders, consumers, access operators, and big enterprises.
• Market segments: Royal Mail Group has separated itself into three different categories in a different market. The first one is the personal consumers they get their everyday demands and needs satisfied by sending out a small package to other people around for individual use. The second is small and medium businesses as this provides their services to the small business, which needs to send the package to their customers and other small businesses. The last one is the public sector and corporate which provide their services to all the big companies that want to increase their consumer base and desire to send packages and mail to different businesses and people.
• Targets: The Company has a straight forward target of achieving net zero carbon business by 2040. Royal mail also targeted to become universal service provider and also want to cover-up more regulation than its competitors and other postal operators. 
• Several local and international branches: International distributions services (IDS) plc is a British international courier and postal company that was recognized in the year 1516 as a government functional unit. The company is a subsidiary of Royal Mail Group which carry letter and parcel services worldwide through Parcel force. 
• The organizational size and legal structure: the company is owned by Royal Mail Holdings plc which comprises 3 main businesses that includes Parcelforce worldwide, Royal Mail, and General Logistic System (GLC). Parcel Force Worldwide is operated in the UK and provides international parcel services. Royal Mail provides modernization and operation in the global market through letter and postal services. The general logistic system is an international logistic company that helps the company to run its business efficiently. Post Office Ltd is now an entirely detach corporation from Royal Mail Group as the firm continues to provide a variety of counter services as well as receipt of products for cart and delivery by Parcel Force and Royal mail company. Critically evaluation a business size, structure, and scope of the organization interrelate to the organization's objects or products and services. The size, structure, and area of any organization are linked with the goal, mission, vision, and objectives of the business organization. It is observed that any company can set enormous targets as its objective only, when they have a superior managerial structure. If the company has limited employees in the organizational structure and work has not been known regarding their job roles and subordinate, then it comes difficult for the company to reach the target. As it become not possible to achieve the targets because of less clarity in the role.
• Royal mail factsheet that reflects interrelation between different functional units with a chart map of finance and marketing department.Royal Mail provides safe and planned distribution of urgent documents, parcels, and division stock between all locations overnight (Royal mail, 2022). It’s flexible, fast, and efficient services saves money, by rolling all of the company’s logistics requirements into a particular service.

Figure 1: Interrelation between different departments of Royal Mail Plc

Income statement of Royal Mail Company

The financial and operating performance of Royal Mail

According to a comparative analysis of the financial report of Royal Mail Group, total revenue and operating profit have regularly been continued. In the year 2014, there was a major increase in profit before taxes. Producing marketing partnerships and services with diverse types of companies will help to grow more funds for Royal Mail Group to increase its financial portfolio.

Marketing mix of Royal Mail

Pricing: this refers to price point at which the company sells their products and services to its customers. Price is the complex element that the consumer must exchange to obtain the offering. The Royal Mail Group's pricing strategy is based on generating different prices for different customer segments. The product and service can charge more for the firm and can move from profit to loss but these losses can reach the prospective customer and it can readdress the company to other profitable products or services. Bearing in mind this pricing strategy of Royal mail should focus on position quo-oriented pricing. 

Place: The place aspect is considered by the efficiency of delivering definite products or services to consumers. Royal Mail Group needs to look for new ways to sustain place factor as it will help the company to get high reach ability. This is the major way to reach potential customers in different countries.

Product/ services: These are the main factors of the company’s promotion plan. The main purpose of company’s providing efficient product and service can produce better value for consumers which are the main factor of business marketing strategy. The Royal Mail Group re-evaluates its product/services according to its present marketing position. Supporting an efficient balance for tomorrow and today's changes on the market has key point and to achieve this new type of product or service needs to develop royal Mail to improve its range of the products and services line. The company’s existing product line should have the suitability to respond to potential changes in delivery markets. 

Promotions: Its a marketing tool that generates short-term improvement in the current sale and helps firms in reaching new customers situated in specific areas or segments. To create an effectual promotional mix, Royal Mail needs to target retail advertisements based on a loyalty scheme. This can help the company to gain more information about new customer sectors to access. This also establishes diversified priced promotional offer organization, based on customers who get services from the business which may aid to increase the variety of promotions (Sokol and Flach, 2020).

Interrelationship in organizational structure and critical analysis of different organizational complexities

The postal market is the most vital segment of business in the world which includes delivering products or services and it efficiently has become a key factor for the corporate opportunity. The Royal Mail Group is the oldest and largest parcel company which has a significant role in national as well as global markets. Reflecting on the main objective the Royal Mail Group has inspected their sustainability in their marketplace with successful activities in the short-term,. According to the financial report of the company and its subsidiaries, particularly on annual turnover rate, a major increase rate between 2013 and 2015. In a marketplace that has rising rates and a growing number of consumers if the business makes no development in a specific period. Royal Mail Group's income is higher because of its brand reputation and market share but when a new competitor takes into account, it is extracted that they also have effective and aggressive marketing plans. The Royal Mail’s reputation and market share would not help to continue its market shares in the long and medium term periods (Dekker, et.al 2019).

The above letter presents the factsheets portfolio of the royal mail plc. The factsheets is conducted into three different parts. First part contains different types of organization, second part has factsheet of royal mail group, and third part involves visual map of internal departments for the canalization of the industry with regards to future development.

Part 2

The positive and negative effects of external factors and influences on the tourism industry with appropriate examples

Tourism is a vital industry that aids the growth and expansion of low-income countries. The industry is very significant for countries as it brings a lot of money into a country but the tourism industry can have negative as well as positive effects on countries in political, economic, social, legal, technological, and environmental factors (Capobianco, et.al 2019). To observed external environment of tourism industry, the PESTLE analysis is conducted: 

Political- The government's decision to open up restrictions to foreigners has become easier than ever to travel to new countries. These factors also include policy-related factors like labor law, legislation, taxation, trade-related restrictions, and official charges or tariff. In many countries, tourists can maintain a tax repayment on the product purchased during their trip upon departure.

Economic- These factors include economic issues like growth, interest rate fluctuations, currency value change, and change in price level and purchasing power of money, such as inflation and deflation. The failure of purchasing power will have a downfall effect on consumer consumption patterns, which harm the travel and Tourism Company’s sales and economic growth (Nikbin, et.al 2021). As the world economy grows, people can earn more money with increased living expenses growing.

Socio-cultural- This factor includes things like attitude, social trends, lifestyles, family demographics, educational levels, age distribution, as well as falling or rising trends in people. The social factor has a huge impact on society which affects seasonal sales and holiday recessions in the tourism industry. This factor contributes to the strategies and plans of the travel companies.

use my discount

Technological- The factor includes technological changes related to issues like research and development and technological innovation. This factor may include artificial or virtual intelligence, automation technology, enlarged intelligence, and virtual reality to name a few. Technology has a significant market effect on tourism firms in terms of control, price, quality, security and safety, cost, production, distribution, and service (Steininger, 2019).

Legal- Legal factors are closely related to politics and include subjects such as consumer protection, competition, legislation on discrimination, employees' rights, worker health, and employees' safety and health. From a business viewpoint, the legal factor is divided into 2 parts i.e. internal and external factors which affect the firms in long run. The external part of travel industry consists different requirements, laws, and restrictions from outside the industry that contribute to the company's operation. The internal factor of Tourism Company consists of a business-to-business policy that dictates the industry's internal operating environment, such as safety practices and regulations. 

Environmental- This factor includes concerns related to the environment and ecology, such as weather, environmental constraints, climate changes, recycling, carbon footprint, and sustainability. The environment has a significant impact on practitioners in some fields of the tourism industry. Indirectly, each business contributes to the environment either negatively or positively, which affects the way firms operate in the market.

'Traffic light chart' evaluating the level of competition, legal complexity, funding activity, political and social influences on and investment opportunity.

Figure 2: Royal mail plc traffic light chart

Currently, 0.6% of all the letter deliveries by volume and 0.4% of all the letter deliveries by value are due to E2E competition. 99.4% of all letters are delivered by Royal Mail, and 95.9% of all letters are delivered by value. Bulk mail is also the mail with a lowest value and smallest margin per item, whether it is entrance mail or E2E bulk mail. An access letter typically costs 23p, whereas a 2nd class stamped letter costs 53p, and the 2nd class meter letter costs 37p. 32 Prices will rise to 54p and 38p as of April 2015.

Due to the aforementioned circumstance, Royal Mail submitted a thorough report to Ofcom in June 2014. On the grounds that competition from the Whistl presented a major threat to its ability to provide a universal service, it sought Ofcom to enact regulation on Whistl (in the form of specific regulatory criteria known as "generic universal service conditions"). 31 Among other things, Royal Mail claimed that Whistl unfairly chooses low-cost areas, high-density, like London, for E2E competition, leaving Royal Mail to deliver in remaining unprofitable areas and winding down the cross-subsidies from other mail services required to support a universal service (Van de Vyvere, et.al 2019). The USO, according to Royal Mail, places it at a competitive disadvantage because it must deliver six days a week, whereas an entrant is not required to do so. Entrants are not subject to such a demand.

Royal Mail, on the other hand, is allegedly given an unfair edge in the postal market by its VAT status, according to Whistl. However, the High Court recently ruled in a case brought by Whistl that the UK Government's exemption of Royal Mail's DSA services from VAT is legal. Therefore, according to Ofcom, unless Whistl can offer prices containing VAT that match (or are lower than) Royal Mail's VAT-exempt access prices, VAT-exempt customers (such as charitiesand financial institutions) are not likely to find E2E services provided by the Whistl financially attractive, which is likely to limit the market share that Whistl will reach. Royal Mail claims, however, that VAT exemption is insufficient to the price difference Whistl can give, which it argues is substantiated by the fact that Whistl is attracting customers from the financial institutions like banks that are unable to claim VAT.

According to Ofcom's statement from December 2014, Whistl's arrival in a specific geographic area did not constitute "unfair competition" or threaten the cross-subsidies required to fund a universal service. Royal Mail's ability to deliver the universal service in the financially viable manner is not endangered by an end-to-end competition at this time, according to Ofcom, who also noted that "universal service mail is now more profitable than many other categories of mail, including bulk mail." Royal Mail's delivery network, which "is characterized by a high amount of fixed expenses," was taken into consideration by Ofcom. So, even if entrance were on a national basis, the average cost of sending a universal service mail increases when quantities fall. This might happen for a number of reasons other than E2E competition, such as e-substitution and competition in packages. Ofcom noted that a general universal service requirement might be implemented "within six to nine months" should it decide to intervene in light of new evidence (Turchin, et.al 2018).

The internal strengths and weaknesses of GLS Group 

Most notably, GLS employees are specialists in transportation and organised operations, caring for various specialists. They contribute to differentiation through excellent execution, coordinated computerised technology, location, mastery, quality, a distinctive expectation of administration, and the ability to meet the most demanding requirements.

Strengths

In an industry where rules, terms, and preferences are subject to rapid change, GLS has chosen to strengthen its internal expertise by bringing together experts and talented people who will strengthen the Gathering's administration offering, yield value and separation, and enable the opening-up of new business sectors.

Controlled enhancement is followed by ability profit as a driver of advancement in emerging fields. The Gathering is able to accompany its clients into new development markets because of the restored trust of their customers, providing appropriate arrangements. The organisation has achieved similar success to the new presence in India, the Middle East, and Russia (Villajos, et.al 2020).

The first concern is the highest quality for a package delivery, and dependability is a great supporter. The company’s cargo will be delivered efficiently and quickly in Belgium and in 40 other European countries thanks to GLS. In the Benelux countries, the products can travel in a day, and the rest of Europe and the world may be reached in a short amount of time.

For a surcharge, GLS also provides express delivery options for several domestic and international transportation services (Royalmail, 2022).

Weaknesses

Through its extensive planned operations network throughout Europe and in the USA/Canada, GLS provides freight delivering administrations. The biggest drawback is that this assistance is only offered to businesses, and clients must file a request in order to receive a response.

GLS protection options vary according on the country and the selected administration. For instance, the company is liable for up to €750 per package at the time when bundle departs from Germany.

However, firms that frequently need to plan shipments between Europe and the USA and that need cargo or capacity arrangements may use GLS as their best alternative.

The strengths and weaknesses linked with external factors that influence the business economy

The business environment changes regularly and requires thought when forecasting, planning, and performing operations. Business managers have the accountability of examining internal concerns for how they may influence the company's decisions. It is also vital to supervise any external environmental factor that can involve the business functions and also develop a method to overcome these challenges. External factors are significant because they can cause an indirect and direct effect on business personnel, operations, sales, and revenue. The weakness and strength of a corporation are interrelating with the external macro factor because an organization may be exaggerated by the outside factor. The firms are not able to recognize various factors that affect the organization's decision-making directly and indirectly. So the macro factor can be recognized with the help of external factor analysis. 

Strength and weakness are the reverse forces that give power and disadvantage to the organization. A proper analysis of these 2 factors provides different kinds of achievement to the corporate. Both factors are interconnected to each other and they may enlarge the risk of macro factors in an organization. These factors may affect the company from outside restrictions of the organization and affect the business operations positively and negatively. They are observed with the help of PESTLE analysis like political factors which may affect the business in political ways which increases the weakness of a business. Social factors have an impact on the business in a negative way like corporate social responsibility (CSR) in the organization thus industry is liable to do social activities. Social accountability is a responsibility and obligation of every business and in financial conditions; it can be a weakness for the organization. External factors consist of government policy, market changes, competitors' policies, legal rules and regulations, and many other factors.

Critical evaluation of macro and micro factors along with SWOT analysis and their impacts on business objectives and decision-making

The SWOT analysis appraises a company’s potential opportunities and threats, which can then be mitigated. Organizations can critically estimate their competitors and build up strategies to ensure that they maintain and gain a sustainable competitive advantage. The analysis will help the organization in strategic planning and brainstorming (Mir, 2019). This will help the company to decide to take benefit of new business opportunities and respond to new trends. This will also help in implementing new technology and dealing with changes from competitor firms. The SWOT analysis will help a corporation to identify the areas of an industry that are performing well. These areas are the company’s essential success factors that provide businesses to gain a competitive advantage in the global as well as national markets. 

Identifying the strengths can help an organization to ensure maintain lose of competitive advantage. Growing the business includes resulting ways of building and using these strengths. Weakness is the distinctiveness that put the business at a weakness to competitors. Conducting a SWOT analysis can help to identify the characteristics and minimize the risk along with to improve them before they become a big issue in an organization. When accomplishing an analysis, it is important to be practical about the weaknesses in a company to deal with them adequately. It can help the company to recognize opportunities that it could take an advantage of to make better profits and increase sales. Opportunities are formed by macro factors, such as new customer trends and changes in the market. This will also help the company to understand an internal that will influence the ability to take an advantage of a new opportunity (Puyt, et.al 2020). 

Threats are those macro factors that can cause big problems for any business operations, such as a competitor's new advertising campaign, changes to the market, and the new government policies. A SWOT analysis can help the firm to identify threats and ways to offset them, depending on the strengths and weaknesses of an organization. The company can handle these issues related to staffing, business culture and image, organization structure, new product expansion, financial resources, promotion, and operational efficiency. While conducting a personage SWOT analysis the company should strengthen for one issue may be the weakness for another. They might also recognize a weakness, such as a gap in marketplace that is not covered, and that can become an opportunity for the business.

Recommendation

In response, Royal Mail sent a fresh DSA value proposition to the Ofcom in January 2014. This was monitored by an administrative accommodation to Ofcom in June 2014 that stated the Whistl's E2E extension plan is amounted to "carefully choosing" and would cause Royal Mail to lose up to £200 million by 2017 (Royalmail, 2022). Royal Mail felt this could seriously jeopardize its ability to support the money of USO and asked that Ofcom mediate. Privatization may result in more significant business awareness and benefit focus, as well as improved access to venture capital, which Illustrious Mail requires to compete with Whistl and Amazon in its core business areas and achieve the vital development it needs in a package market. As a component of their foray into single for Royal Mail's mailing station organization, additional package administrators have set up optional get and drop-off access organizations. Various administrators have agreed to game plans with current merchants, such as Warble's Collect Plus product, which makes use of numerous local businesses to supply selection and delivery services across the nation, and DHL's agreement with Rymans. It is anticipated that the cost of competition will continue to decrease. Royal Mail's potential to raise prices in the future, however, remains a concern given its market share in the single piece packages sector and its prior evaluation practices. This concern specifically relates to whether or not the protection cap on packages under 2 kg should be maintained.

Conclusion

From the above report it is concluded that the Royal Mail Company which is considered as a case company for the report has large base of market in the UK as well as at international level. The SWOT analysis of a company provides greater opportunity criteria with the advance estimation of upcoming threats in the market. The report concludes that how interrelationships of different functional units define the organizational structure of a company. The brief overview of a case company’s factsheet defines the various business functions of an organization with an interrelationship among them. To better understanding the external factors of Royal Mail Company, the PESTLE analysis are taken into consideration.

References

Akpasam, E., 2019. Flow chart of the proposed mail management system (online). <Flow chart of the proposed mail management system | Download Scientific Diagram (researchgate.net)> (accessed on 19 October 2022).

Benzaghta, M.A., Elwalda, A., Mousa, M.M., Erkan, I. and Rahman, M., 2021. SWOT analysis applications: An integrative literature review. Journal of Global Business Insights, 6(1), pp.55-73. 

Buchheim, L., Krieger, A. and Arndt, S., 2020. Innovation types in public sector organizations: a systematic review of the literature. Management Review Quarterly, 70(4), pp.509-533.

Capobianco, N., Basile, V., Loia, F. and Vona, R., 2021. Toward a sustainable decommissioning of offshore platforms in the oil and gas industry: a PESTLE analysis. Sustainability, 13(11), p.6266.

Comet, M., Martin, C., Schnell, F. and Spitzer, D., 2019. Nanothermites: A short review. Factsheet for experimenters, present and future challenges. Propellants, Explosives, Pyrotechnics, 44(1), pp.18-36.

Dekker, H., Donada, C., Mothe, C. and Nogatchewsky, G., 2019. Boundary spanner relational behavior and inter-organizational control in supply chain relationships. Industrial Marketing Management, 77, pp.143-154.

Lewys, T., 2016. The U.K. Mail Sector Looks Tough - A View On Royal Mail And Its Future (online). <The U.K. Mail Sector Looks Tough - A View On Royal Mail And Its Future (OTCMKTS:ROYMY) | Seeking Alpha> (accessed on October 2022).

Mir, F.A. and Mir, M.A., 2019. Macro-Environment Analysis of the Tourism Industry of Kashmir. E-Commerce for Future & Trends, 6(1), pp.65-76.

Nikbin, D., Iranmanesh, M., Ghobakhloo, M. and Foroughi, B., 2021. Marketing mix strategies during and after COVID-19 pandemic and recession: a systematic review. Asia-Pacific Journal of Business Administration.

Puyt, R., Lie, F.B., De Graaf, F.J. and Wilderom, C.P., 2020. Origins of SWOT analysis. In Academy of Management Proceedings (Vol. 2020, No. 1, p. 17416). Briarcliff Manor, NY 10510: Academy of Management.

Quan, C., Cheng, X., Yu, S. and Ye, X., 2020. Analysis on the influencing factors of carbon emission in China's logistics industry based on LMDI method. Science of The Total Environment, 734, p.138473.

Royalmail, 2022 (Online). < https://www.royalmail.com/> accessed on 18.10.2022.

Sokol, K. and Flach, P., 2020, January. Explainability fact sheets: a framework for systematic assessment of explainable approaches. In Proceedings of the 2020 Conference on Fairness, Accountability, and Transparency (pp. 56-67).

Steininger, D.M., 2019. Linking information systems and entrepreneurship: A review and agenda for IT?associated and digital entrepreneurship research. Information Systems Journal, 29(2), pp.363-407.

Tomaiuolo, M., Matzko, C.N., Poventud-Fuentes, I., Weisel, J.W., Brass, L.F. and Stalker, T.J., 2019. Interrelationships between structure and function during the hemostatic response to injury. Proceedings of the National Academy of Sciences, 116(6), pp.2243-2252.

Turchin, P., Currie, T.E., Whitehouse, H., François, P., Feeney, K., Mullins, D., Hoyer, D., Collins, C., Grohmann, S., Savage, P. and Mendel-Gleason, G., 2018. Quantitative historical analysis uncovers a single dimension of complexity that structures global variation in human social organization. Proceedings of the National Academy of Sciences, 115(2), pp.E144-E151.

Van de Vyvere, B., Colpaert, P., Mannens, E. and Verborgh, R., 2019, May. Open traffic lights: a strategy for publishing and preserving traffic lights data. In Companion Proceedings of the 2019 World Wide Web Conference (pp. 966-971).

Villajos, E., Tordera, N. and Lorente, L., 2020. Employees and supervisors perceptions of human resource practices in different types of organizations over a lifespan. RevistaPsicologiaOrganizações e Trabalho, 20(4), pp.1188-1197.