Free Marketing Dissertations - Penske Had To Convince Companies To Change The Way They Worked And That
Penske had to convince companies to change the way they worked and that outsourcing their transport function was the best way to operate. Consequently, Penske Logistics compiled a list with all the benefits the customer would gain from using this kind of service. Firstly, they outlined the fact that pushing down transport tariffs was not really leading to cost savings carriers face increased costs e.g. fuel, road tax etc thus, inevitably, the quality of the service would suffer, if forced to charge lower rates. Penske suggested to start looking at the customer’s internal processes instead and see if cost savings could be achieved by modifying those areas related to transportation. Penske argued that by outsourcing their transport function, companies would achieve higher cost savings and better quality.By outsourcing this activity, companies would save money in staffing less people would be needed to work with the high number of carriers companies use: Penske would deal with the carriers instead. Furthermore, being part of the GE’s family, means that Penske has a sound quality programme in place Six Sigma and carriers’ performance would be thoroughly monitored. Moreover, Penske offered the benefits of state-of-the-art technology: companies would have to invest a large sum to acquire the latest technology, themselves. Another benefit is the multi-lingual staff available at Penske.
PEST Analysis.
The logistics sector has been recently predicted will experience a downturn, in the coming years; mainly due to rather gloomy global economic forecasts. Europe will be the continent to suffer the most. However, companies that have global presence and offer a variety of services, will be able to survive.
With regard to political factors, the access of other Eastern European countries into the EU, will have a major impact: more competition coming from the East; those companies usually tend to charge much cheaper rates than their Western counterparts. Furthermore, stricter regulations from the EU on Environmental Policy (pollution) will affect logistics companies greatly fuel charges; higher road tax; vehicle specifications, laws concerning the management of ADRs (hazardous goods) etc.
Technological advances will continue to take place; the aim is to make logistics processes as automated as possible. In this kind of environment, consumers will have a wider selection of logistics companies available those joining from the East. Since the economic forecast is not so positive, consumers might be tempted to switch to those carriers offering lower rates. On the other hand, quality issues might arise.
Most likely, however, customers will keep working with their current logistics providers, especially if they have global reach. Developing long-term relationships with customers, has been the focus of many companies. Nowadays, it’s more important to ‘retain’ current customers than constantly seeking new ones.
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