The Deutsche Post World Net which is commonly referred to as DPWN is considered to be among the largest companies dealing with logistics globally that is in the provision of mailing services with an ambition of satisfying their consumers.
The company is also found to be facing stiff competition from the following firms; EP (Europost), PIN AG and DBS who are found to be involving the delivery organizations which are small through which they use them as subcontractors with an ambition of having them bring up a wide market network. Research shows that DPWN Company has been utilizing Michael Porter’s five forces as frameworks to guide them to operate in the competitive environment.
The Closeness of Substitutes
Substitutes are alternative products that have the ability to satisfy similar needs and give solutions. Substitutes in the DPWN reduce the potential returns since they place a ceiling on the prices offered for products. Firms that realize that products being offered bring a lot of profits look for substitutes products that can substitute so that they may also enjoy profits. DPWN face a stiff challenge from the others and therefore it has been using extensive advertising, introducing new cheap products every time and increasing services to the customers since there is stiff competition from other mail servicing firms.
The Intensity of Rivalry Among Established Companies
DPWN face a very competitive environment that has a big concentration of rival competitors making it a very competitive venture in business. The company competes with its rivals such as EP (Europost), PIN AG and DBS across all levels and try all strategies to ensure that it beats their rivals and try to do extensive marketing and innovation to attract more customers every day. DPWN is stated to be having a well-developed network that has a good client base and that is supported by customer loyalty and therefore locking out the new firms that try to make an impact by trying the existing mailing markets.
The Bargaining Power of Suppliers
Suppliers take advantage of their unique supplies to ask and bargain for what they want and enjoy the monopoly and charge expensively for the products or services that they offer. DPWN has been trying as much as possible to bargain well with their suppliers so that they may get quality products and services at the right price so that they may also sell and price their products well in relation to those of the competitors so that they may not lose customers to the other mailing companies.
The Risk of Entry by Potential Competitors
The new competitors enter into business with an intention to bring new capacities that never existed before so that they may give competition to the existing firms. There are many barriers that are in the mailing industry that affect the DPWN They include the following: government policies on mailing companies, economies of scale, capital requirements that are needed to start a mailing company, brand identities and reactions from firms in the mailing industry.
The Bargaining Power of Buyers
This is the marketplace of outputs. Customers in DPWN put the businesses under a lot of pressure since they are very sensitive to any change in prices and are always ready to research and find where prices are relatively cheap. DPWN ensure that they use Porter’s five forces since they face stiff and very competitive challenges from firms that have realized that they can make lucrative profits from the mailing services since they are assured of a lot of profits from a large customer base that is attracted by these firms. It is only through these methods that they will be assured of remaining in business tomorrow.