SWOT Analysis Of The Post Office Ltd

The Post Office Ltd in United Kingdom, a subsidiary of Royal Mail Group Ltd, attained its separated identity in 1987 Post Office in UK is quite famous for two main services, first and the obvious one from its name is clear, that it provides the Postal services to its customers. Second reason for its popularity is the Post Office Card Account which is basic account allowing customers to collect benefit payments. There are other services also being provided by the Post Office, which are discussed in brief in the assignment. Today, Post Office has around 11,843 (according to an auditor working for the post office) branches spread around UK, and offer various range of services for its customers.

The management of Post Office have been very resourceful in adopting technology as a part of its operational functions, with the new horizon system introduced in the year 2000 (ref), revolutionizing the basic system of serving Post Office customer. As, technology is advancing, traditional manner of Post ing letter is fading away, exposing the entire Post al industry with danger of extinction. Thus, it has now become imperative for the organization like Post Offices to conduct a through SWOT analysis in order to sustain and survive in immensely hi-tech global market.

Strengths

The Post Office of United Kingdom has to be appraised of its diversified operations. The process of division and diversification can be traced back to the year 1986, when the company got separated and became subsidiary of Royal Mail Group Ltd, to attain its separate identity from mere the once providing the Post al services. The process of diversification was persistent and continuous and today Post Office provides more than 8 different kinds of services to its customer veering from saving and investment, to telephone and from government licenses to bill payments. So, it would be justified to evaluate this diversification of Post Office in different services to be one of its major strength. This diversification helps Post Office to attract a large mass of customer, ranging from men, women and children, old and young as well as business and social.

Extensive and Diversified Services

The different kind of services that the Post Office provides starts from its Post al services, where the branches accept mail for two collection and delivery divisions i.e. Royal Mail and Parcel Force. In banking services, the Post Office has arrangements with various banking corporations and customer of these banks can use basic services of banks like cash withdrawals and cash deposit. In savings and investment services, the Post Office since long has been an agent of national saving and investment, providing customers with the basic services of depositing money and withdrawals from their saving accounts. For telephone services the Post Office provides home landline telephone services, and also provides top-up for various services networks.

Insurance services is quite diversified in itself, as Post Office provides insurance in most of the areas, starting with Car and Van Insurance, Home Insurance, Business Insurance, Life (term) Insurance, Over 50’s cover (for elderly citizens) pet insurance and its very famous travel insurance. Foreign Exchange services is a very essential service that the Post Office provides, as the customers just walk in to their Post Office and can convert currencies, but not all Post Office branches provide these services. Government Services include providing checking and sending services for passport Offices and the driving license authority (DVLA), and providing fishing and well as road tax. It was important to briefly describe the services the Post Office provides, as it is one of its major strength diversified services for diversified group of people.

Post Office has done extremely well in identifying its opportunities in the past and kept on introducing new service lines in its portfolio, this has helped the Post Office to survive in its long journey, and grabbing these opportunities in the past has today become its strength, the Post Office no longer just survives on the Post al services that it provides to its customer, and has successfully made its other services like insurance and license services very profitable.

Infrastructure

The venture of General Post Office began in the 1660, by Charles II and has eventually evolved as the modern Post Office as we know of today. Today the Post Office has around has 12,000 branches spread widely and all around UK. This major establishment sure has taken time, but today when we evaluate this wide coverage by the Post Office it sure is its true strength. The only word to describe this coverage by the Post Office is National infrastructure. It truly has developed over a period of time a national infrastructure enabling it to reach to each and every customer all around UK. Possessing this national Infrastructure is quite advantageous for the Post Office as it becomes quite effortless to make its new product reachable. This large infrastructure also facilitates more customers spread all around UK. It has also helped the Post Office to reach its customer and for the customers to reach it easily, making them closer and intact with their customers.

Weaknesses

Improper distribution

It is very important for every organization to be able to evaluate its weakness. Weakness is internal interference that becomes hurdle for the organization to achieve its objectives. In case of Post Office the operations have been suffering losses since the year 2006 and the management had to take drastic measures to convert these losses in profit in order to survive. There lies the weakness in its strength of national infrastructure, in the financial year 2008-09 the Post Office had to close down around 2500 Post Offices all around UK in order to reduce the operating expenses of the organization. The organization had around 14,376 branches spread around UK, which got reduced to around 12,000 branches in the year 2009, which shows how the distribution of the Post Offices was unproductive. Unproductive distribution of Post Office resulted in division of customer to a part that it became unprofitable.

Questionable customer service quality

Out of its extended number of branches which is around 12,000 only 373 are directly owned by the Post Office Ltd. The rest around 98% are either sub-Post Offices or franchise are privately owned. The Post Office has not got any consolidated training system, which would enable its braches to provide consolidate training to its customer advisors. The only training method adopted in Post Office all around UK is the old staff training the new staff, which is certainly not a professional manner of training a staff. Training becomes an important part of working with the Post Office as the system it uses to serve the customer is horizon. It is a very complex hi-tech system, which enable the advisors to reach all its product with ease, but in order to be able to use the system efficiently, a systemized training methodology should be adopted, which is not practised in case of Post Offices. Hence leaving an efficiently trained customer advisor to serve the customer, which certainly reduces its quality of services, and the direct effect of these can be seen with the Post Offices losing its largest footfall customer to highly efficient and quality customer services competitors.

Industrial dispute

Post Office is a subsidiary of Royal Mail Ltd, which also own Royal Mail, and Parcel Force, which are its collection and delivering division. Royal Mail is been a centre of a number of recent industrial disputes with the Communication Worker’s Union. The extended dispute between the management and the staff lasted around 7 months and resulted into the staff going on a number of strikes, which disrupted the business severely. Post Office thrives certainly, but not majorly on its Post al foot fall customer for its other services. There was a enormous decrease in the number of Post al customer, because of the strike called on by CWU, in the year 2009, which makes its internal dispute with the staff a major weakness. The strike carried on by the staff resulted into inefficient delivery of the mails, which makes the customer hunt for another more efficient delivery or courier service provider, hence decreasing its own customer line.

Opportunities

Extensive range of services enabling cross-selling opportunities

Extended customer line of the Post Office, from banking, Postal, investment, insurance, pension, licensing customer and others provides a huge potential to the Post Office to enable the cross selling to its customer. Every pension customer is a potential over 50 life cover customer, and bureau de change customer is a probable customer for selling travelling insurance. Every DVLA customer is a probable car insurance customer. With such a huge potential customer foot fall, the Post Office surely gets a competitive advantage over its rivals in the market.

Further consolidation in the banking industry

The Post Office offers a huge line of financial products, from foreign exchange, to insurance, from credit cards to investment opportunities to its customer. The Post Office offers basic banking services by the means of cash withdrawals, cash deposit, cheque deposit etc, looking at such a huge line of customers. The post office should capitalize on their banking customers by providing basic savings and current account services either through organic growth or with a joint venture with a trustable partner and take advantage of reforming financial services. A national infrastructure would surely provide them with the competitive advantage and make their operations economical and sustainable for longer period of time.

Further consolidation of brand image

The Post office in the year ending 2008-09 closed down 85 of its crown post offices, out of, which 70 were sold to W H Smith, which is expected to make 2.5 million in additional profit in that financial year. This strategy can be critically evaluated and taken at a next level, by creating a joint venture with Hallmark, Greetings cards or such established organization, to which posting services can be related. The customers will have the convenience of two related services at a single stop. This can work in advantage for both the organization as it adds value to the product and the services.

Threats

Revolutionary changes within the Industry

The postal Industry, is going through a lot of changes, technology is taking over the traditional mailing system. People as well as corporate industry rely heavily on technology for communication. Using the technology has its own set of benefits, as it is safer, cost effective and faster than traditional mailing methods. Advancements in technology are inevitable and the near future can be visualized with reducing dependence on postal system. This is a sure threat for the postal industry as technological advancements is eating away its probable market. A research conducted at the royal mail showed a reduction of 10 million customer using postal services compared with the last year, this give a serious indication as to how the reliance on the postal system is reducing (http://search.bbc.co.uk/search?q=royal%20mail%20strike&tab=all&scope=all&start=2).

Increase in competition

The mailing industry is becoming intensely competitive, unlike in the past, where the post office enjoyed the monopoly of having the maximum share of the industry. Companies like DHL, TNT, Fed-ex etc are providing intense competition to the UK’s oldest posting organization. The customer has evolved from merely being cost effective to cost against time evaluation, today the customer are ready to pay a suitable extra amount for ensuring the time and safety of the delivery, the private players have certainly gained their confidence in this sector by providing safe, secure and timely services. Thus, the Post Office faces sever competition from these private players in national and international market.

Overall assessment of the organisation’s position

10% of the marks are allocated for overall conclusions on the balance of SWOT elements.

SWOT analysis is a continuous process, and just as important as other management functions. The fact that the post office has been extending its line of product and service offerings to its customers proves that the post office has been conducting a continuous research on the product line. Recently, it has been offering its postal services on-line, which facilitates the customer to utilize their services at the comfort of their home. Industrial dispute, for which the Royal mail has faced much criticism, has proved very damaging for it overall brand image.

National joint-venture or organic growth in banking industry is one of the biggest opportunities that lie in-front of the post office. Advancing the product line of the post office, a national level merger with W H Smith or any other stationary or greeting cards organizations will be an opportunity of adding brand value to its organization. Finally, talking about the threat that the post office faces is quite clear with the significant increase in the number of customer reeling on technology to communicate. Modern customer is ready to let go of cost if the services offered are time specific, private player are surely a notch ahead of post office in providing such time efficient services, which gives a set back to post office services.

But, I see a promise in post office management, as it has been able to overturn its losses into profits and been able to maintain an extended and well diversified product and service portfolio, which I see being continued in the near future.