DHL holds a strong leadership position in the global logistics industry. The company was founded in 1969. Since its establishment, the American-founded German logistics firm has achieved enormous success due to its effective business strategies. This article conducts a DHL SWOT analysis to understand how DHL responds to its internal and external environment, and preserves its competitive positioning in the market.
2. Company information
Next, we present the background information and SWOT analysis of DHL. Before that, let’s have a look on answers to some frequently asked questions about DHL.
3. FAQs about DHL
• Who owns DHL?
In 2002, DHL became the Deutsche Post’s wholly-owned subsidiary.
• DHL stands for?
Dalsey, Hillbolm and Lynn
• What is DHL net worth?
The total assets of Deutsche Post DHL Group amounted to EUR 63.6 billion in 2021.
• What services does DHL offer?
DHL offers a portfolio of logistics solutions and products that range from local/international parcel delivery to the international express, ocean, road and air freight. It also provides end-to-end supply chain solutions to the small and large companies. After answering the frequently asked questions, now we present the DHL logistics SWOT analysis.
4. DHL SWOT Analysis 2023
SWOT analysis for DHL highlights key strengths and weaknesses (identified from internal environment analysis), and opportunities and threats (identified from external environment analysis).
4.1. DHL strengths
The DHL internal environmental analysis highlights six key business strengths. We discuss how each strength contributes to DHL business success.
1. International presence
DHL currently operates in 220 countries. This worldwide coverage is DHL’s core strength, which provides a strong competitive edge over rivals.
2. Strong revenue growth
DHL has strong financial health. The DHL revenue is experiencing strong growth, as depicted in the following graph:
Being world’s largest postal service, DHL generated more than €81.7 billion in 2021. Strong revenue growth enables DHL to invest on new projects.
3. Digital innovation
DHL is at the forefront of digital innovation. In 2022, DHL won the ‘most innovative company’ in the digitalization award category. From 2021 to 2025, DHL aims to invest $2 billion on various digital transformation projects. The proactive attitude towards innovation enhances the DHL’s ability to keep pace with change.
4. Top employer
In 2023, DHL achieves the top employer position for four consecutive times. A strong employer brand image enables DHL to attract the top talent from the market.
5. Strong CSR image
DHL holds the strong CSR image. In an effort to reduce emissions, DHL has announced that it will invest $8 billion during 2021 to 2030 to have 80,000 electric vehicles. Strong CSR image enhances the stakeholder satisfaction, and helps DHL in building a positive brand reputation.
6. Market share
DHL has the highest market share in the European and Asian Pacific regions. Following graph shows the market share of key players:
The market leadership position strengthens the DHL’s competitive positioning against rivals at the international stage. After discussing key DHL strengths, next, we elaborate on some key DHL weaknesses that threaten the company's performance.
4.2. DHL weaknesses
The DHL SWOT analysis highlights five key weaknesses. We discuss the implication of each weakness for DHL performance.
1. High prices
One of the key weaknesses of DHL is that it charges higher prices than its competitors. It can shift customers towards the competitors, and hurt the DHL revenue.
2. Poor customer service
At many locations, DHL is criticized for offering poor customer service. Based on 509 customer ratings, DHL attained 34.23 scores out of a possible 200 score, showing customer dissatisfaction. High customer dissatisfaction can negatively affect the brand image.
3. Poor marketing strategies
DHL does not invest heavily on the marketing and promotional strategies. Recently, a DHL advertisement drew criticism for the fake and unclear brand message. See the full story here. Poor marketing strategies limit the DHL market reach, and weaken its position against competitors like FedEx, who invest heavily on the marketing and branding.
4. Day-only delivery
DHL only delivers within 8 AM to 6 PM. It does not deliver on weekends. The limited delivery time could affect the sales, and limit reach to the market.
5. Reliance on external collaborations
DHL relies on the local private companies to operate at the global stage. It reduces the company’s control over business operations, and puts the brand reputation on risk.
4.3. DHL opportunities
After conducting the internal environmental analysis, now we present key opportunities and threats identified from the external environment analysis.
1. Autonomous vehicles
The trend of using self-driving trucks is on the rise in the postal service industry. Following graph shows the growth in the use of self-driving trucks in the freight industry:
DHL may also increase investment on the self-autonomous vehicles to capture this trend.
2. B2C market growth
Strong B2C market growth directly influences the parcel services industry. B2C express is the largest segment of the global parcel market, particularly in North American, European and Asia Pacific regions. The dramatic rise in the B2C growth can drive the revenue of the parcel industry. From 2019 to 2021, the B2C parcel revenue grew by 9.5%, comprising 60.3% of the express market.
3. Digital marketing
DHL may invest on the digital marketing tactics (like social media marketing and influencer marketing) to expand the reach to the target market, particularly young customers.
4. Drone delivery
The following graph shows the growing popularity of the drone delivery in the logistics industry:
The market will likely grow from $8.7 billion (2020) to $59.52 billion (2030). DHL may invest more on the drone delivery technology to capture this market trend.
5. Innovative technologies
DHL may invest on innovative technologies to improve the customer experience. DHL has already won the most innovative company award due to its proactive attitude towards capturing digitalization trends. Some innovative technologies that DHL can invest on include- truck platooning, same-day bot delivery, drone delivery, and blockchain technology.
4.4. DHL threats
The external environment analysis highlights five key threats that put the DHL on risk.
1. Intense competition among existing players
The global postal service industry has a high competitive rivalry. The market is mature and saturated. Existing players compete hard to grab and maintain the market share. The current industry situation threatens the DHL, and compels it to take diversification initiatives.
2. Competition from new players
DHL is facing stiff competition from the new players. For instance, Amazon imposes a direct threat to DHL and other postal service industry players. Amazon is expanding its transportation and logistics infrastructure, which threatens the DHL revenue and market share.
3. Rising production cost
DHL supply chain SWOT analysis suggests that, not only DHL, but the whole postal service industry is struggling with supply chain issues. Rising material and labor cost is compelling the postal service industry players to take cutting measures. For instance, recently, FedEx and TCS took aggressive cost-cutting measures to reduce the production cost. DHL also needs to take similar measures, as rising costs could affect the company’s bottom-level results.
4. Labor shortage
Growing skilled labor shortage has become a serious issue for the postal services industry. Recently, the company discussed how the deepening skilled supply chain labor shortage is affecting the DHL performance at the international stage.
5. Electronic communication
Today, the emerging digital technologies have reshaped the traditional communication ways. People now prefer sending emails rather than posting the letters. This rising trend directly threatens the traditional postal services industry.
5. Summary- DHL express SWOT analysis
• Diversify its portfolio to handle the competition
• Offer more delivery options (including night and weekend deliveries)
• Invest more on autonomous vehicles
• Improve its marketing and branding strategies, and invest on digital marketing activities
• Reduce the production cost by taking cost-cutting measures
• Introduce drone delivery
DHL SWOT analysis highlights various strengths (like digital innovation, market share and strong revenue growth) that enhance the DHL competitive positioning. However, it needs to overcome key weaknesses (like poor marketing strategies, high prices and limited delivery options) to handle the threats, and leverage opportunities.
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