Background of Cosmos Transportation and Logistics Company

Discuss about the Lean supply chain and logistics management.

In the present business environment, it can be seen that there are many companies that are planning for expansion (Wheelen & Hunger, 2011). It has become essential for the companies to make sure that they have effective strategies to make sure that is expansion does not fail (Griffin & Pustay, 2012). Apart from this they also need to understand the internal and external environment of the countries in which they are expanding (Lasserre, 2017). This report highlights the vision mission of the company as well as the environment present in the country in which company wants to make its expansion.

Cosmos Transportation and Logistics Company is one of the best performing company in the USA. It is operational in the industry of multinational package delivery and transportation. It is operational in among 100 nations and is planning to expand its business in the countries like Australia and New Zealand.  It delivers its product in more than 200 nations with the help of its other partners in many countries. It is having approximately 280,000 staffs in all around the world. This company is known for its fast delivery services anywhere in the world. It is planning to expand its business in the new emerging market where they can face competition from local companies as well as the bigger firms like FedEx.

To maintain a financially strong firm with larger employee ownership that provides long-term competitive returns to their shareholders.

• To expand their global business by serving the logistics and transportation requirements of consumers, providing excellence and values in all that they do.
• To inspire their workers and partners of business to perform their best, offering opportunities for their personal success and development.
• To become an example in the industry that is responsible cares for its stakeholders and company that is developing sustainably and making a difference in the society they serve.

• To become the leaders in the global parcel delivery market by adopting the best practices in the industry.
• To make a long-term growth in the market by adopting all the innovative processes and technologies in their operations.
• To enhance the financial performance of the firm through quality and efficiency.
• To transform the firm in such a manner that they perform as per the expectation of their consumers.
• Accelerating growth by leveraging their global network and scale.
• To build their infrastructure and presence in the major key emerging markets.
• To enhance their offering of integrated logistics solutions.

This company is making sure that they have to expand in the new markets especially in the regions where they were previously operating with the help of their partners. They have to make sure that they have adopted best strategies for expanding into the new market. For expanding into the new market, they need to analyse the whole market in a better way. The market that they have chosen for expanding is Australia. It is the market that they have chosen because both are developed nations and have a stable economy. Both they need countries have a lot of people that are from different parts of the world, and hence logistics and transportation are one of the challenge for them (Luthans & Doh, 2018). Apart from this, it is also to be taken into the consideration that Australia has an immense potential to nurture any new companies. One of another factor that will facilitate the expansion of this company is that Australia and has good connectivity through Airways and waterways. Both these nations have people having higher per capita income, and hence they can set the pricing on the higher side. This will help them in making higher profit margins.

Since the cultures in Australia and USA is almost similar and hence they will not face severe challenges in their expansion plans. Therefore, the company should expand its business in Australian markets. Apart from this, the government policies inside Australia have been promoting new businesses inside the countries (Ball, Geringer, Minor & McNett, 2012). In ease of doing business Australia provides more easier and supportive market. Australia is good in the technological means and has a good workforce that is highly skilled. The country has invested a lot in the innovation which can help the cited firm to develop in the longer run (Mangan, Lalwani & Lalwani, 2016). The legal factors are also promoting the business in the country. The company has to make sure that they apply green logistics and transportation facility in their operations so as to reduce the environmental concerns.

• Cosmos Transportation and Logistics Company offered its services in more than 100 nations with the help of more than 280,000 trained employees.
• The company has established advanced supply chain operation which assists in reducing human errors and overall cost.
• In order to increase revenue and volume of orders, the firm has established a vast network of clients across the world.
• Positive market reputation of the company in international markets.
• Strong and time efficient distribution network across the globe with the help of highly trained employees.

• The reputation and operations of the company are depending upon working of courier boys who deliver parcels or packages to clients.
• Low employee productivity and high attrition rate.
• The price of firm’s services is relatively high.

• The firm has the opportunity to expand its business in the international market and capture large markets such as Australia.
• The company can offer its services through an online platform to increase the number of clients.
• The corporation can enter into a partnership agreement with local companies to easily expand its market share in international markets.

• A large number of established competitors in international markets, such as United Parcel Service (UPS), FedEx, DHL, and Deutsche Post (Carbaugh & Tenerelli, 2011).
• Unpredictable oil prices can negatively affect firm’s profitability.
• High demand for talented labour
• Incoming of new entrants in the industry

The CAGE analysis enables organisations to identify various cultural, geographical, administrative and economic differences which might affect their business during expansion. Cosmos is planning to enter the market of Australia (Beddi & Mayrhofer, 2013).

• There is a significant difference in the cultural factors of the United States and Australia which makes it difficult for workers to operate effectively in the country.
• Australian did not trust new brands, and they prefer to use established and well-recognised brands, for example, global coffee chain, Starbucks, failed to maintain its business in Australia because people did not prefer to change their current preferences (Patterson, Scott & Uncles, 2010).
• Difference in American and Australia’s business culture

• Lack of common currency
• Due to political instability, transport regulations changes can negatively affect the firm’s business.

• Urban Challenges faced by transportation and logistics companies such as traffic congestion in coastal cities, particularly in Melbourne and Sydney.
• Majority of areas in Sydney are toll roads which increase firm’s overall costs.
• It is common in Australia for local authorities to modify and adjust roads for effectively managing the traffic which creates difficulties for drivers.
• Dangerous roads, climate change and long routes increase issues for drivers

• Economic difference between Aboriginal and non-indigenous people
• Ageing population makes it difficult for transportation companies to find local drivers.
• High inequality in people’s economic status

Following are difference key trends in transportation and logistics industry which may provide a competitive advantage to Cosmos.

• Globalisation enables companies to expand their business in international markets.
• The firm can invest in modern technologies such as Autonomous vehicle technology which will result in reducing costs relating to drivers’ wages, insurance, fuel prices and others (Myerson, 2012).
• The company can use its trucks to provide services such as Uber in transportation and logistics industry (Janse, Schuur & de Brito, 2010).
• The firm can maximise its profits by using automated technology which improves value chain functions by reducing human errors, overall costs, and requirement of human assistance which result in increasing its effectiveness and efficiency (Hu, Chiu, Hsu, & Chang, 2015).

Conclusion

In conclusion, Cosmos Transportation and Logistics Company operate in the USA, and it is planning to expand it operating in Australia. The mission and vision of the firm focus on providing high-quality services to its clients, fulfilling the interest of stakeholders and expanding its operations in the international markets. For expansion of the company, the Australian market has more opportunities for Cosmos than compared to New Zealand market. Before expanding its business, the firm has to evaluate different cultural, administrative, geographic and economic which are discussed above in the CAGE framework of Australia. Therefore, Cosmos should expand its business in the Australian market since it can receive more benefits than compared to New Zealand’s market. It will result in improving the firm’s overall performance and sustain its future growth.

References

Ball, D., Geringer, M., Minor, M., & McNett, J. (2012). International business. McGraw-Hill Higher Education.

Beddi, H., & Mayrhofer, U. (2013). Headquarters-subsidiaries relationships of French multinationals in emerging markets. Multinational Business Review, 21(2), 174-194.

Carbaugh, R., & Tenerelli, T. (2011). Restructuring the US Postal Service. Cato J., 31, 129.

Griffin, R. W., & Pustay, M. W. (2012). International business. Pearson Higher Ed.

Hu, Y. C., Chiu, Y. J., Hsu, C. S., & Chang, Y. Y. (2015). Identifying key factors for introducing GPS-based fleet management systems to the logistics industry. Mathematical Problems in Engineering, 2015.

Janse, B., Schuur, P., & de Brito, M. P. (2010). A reverse logistics diagnostic tool: the case of the consumer electronics industry. The International Journal of Advanced Manufacturing Technology, 47(5-8), 495-513.

Lasserre, P. (2017). Global strategic management . Palgrave.

Luthans, F., & Doh, J. P. (2018). International management : Culture, strategy, and behavior. McGraw-Hill.

Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain management . John Wiley & Sons.

Myerson, P. (2012). Lean supply chain and logistics management. New York: McGraw-Hill.

Patterson, P. G., Scott, J., & Uncles, M. D. (2010). How the local competition defeated a global brand: The case of Starbucks. Australasian Marketing Journal (AMJ), 18(1), 41-47.

Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic managementand business policy. Pearson Education India.