UK Mail industry - Assignment Example

Download file to see previous pages On the other hand, the problems, which the Royal mail has recently faced, made consumers think about the necessity to make the mail market competitive and open for the new participants. As soon as the decision to open the mail market for new companies from the beginning of 2006 has been taken, two questions appeared: will Royal Mail stand the competition and is the competition a threat to its operations and position
In order to answer this question, the position of Royal Mail on the British market should be considered from the following viewpoint: is the leading position of Royal Mail connected with the high quality of its services or with the impossibility for the similar companies to enter this marketing segment To my mind, the quality of Royal Mail service in the recent years has somewhat decreased and new competitors may create a serious threat to the Royal Mail leadership, though new companies will have to break the resistance of those consumers, who rely on their constant preferences and are not willing to change the supplier of universal mail services. Royal Mail still carries several advantages and meets some challenges, which help it to keep its profitable position. It is noted among the most reliable employers of the UK, having over 193,000 workers in its staff, which is almost 1% of the working British population. (http://www.royalmail.com) The number of addresses serviced by Royal Mail is the biggest in the country, making up to 84 million deliveries a day. As Royal Mail itself quotes,
'Since then we've undergone a huge transformation, turning losses of more than 1 million a day three years ago into a 537 million profit fromoperations in 2004-05. And we are delivering our best quality of service on record with world-class performances.
This success has given giving us a base to meet the next challenge of full competition in the UK mail market from 1 January 2006. We will fight hard for every single letter. We are determined to compete successfully in the open market - but in order to do so we need a fair regulatory regime and the ability to invest in the modernization of our business.' (http://www.royalmail.com)
The key words here are 'modernization and investment', which are the urgent needs of Royal Mail today to stand the competition. Despite the serious organizational changes, through which it went in the year 2001, Royal Mail is still fully owned by the Government, thus the need of about 2 billion to renew the equipment, technologies and premises should be invested from the state budget, which now seems problematic. The open mail services market becomes a threat to the Royal Mail and its profitability. Modern customers choose speed, quality and reliability, especially when it concerns such services as mail, which are in fact the foundation of everything. Mail services all over the world face the decrease of the mail volumes, with the wide spreading of emails. Speed is often a decisive factor in relation to the universal mail services, thus new technologies are crucial for Royal Mail to stay a leader on the British market. (Cohen & Waller, 2000)
It can be said, that Royal Mail has 'subscribed' on receiving its competitors, as it now faces the ...Download file to see next pagesRead More