Technological

According to UK National Statistics (2008), “Great Britain has seen an average increase of over 1 million households per year connecting to the Internet since 2004, reaching a total of 16.05 million in 2008” (See Figure 1). This growth of Internet users might bring opportunities to Hermes Courier where the customers can visit the Hermes Courier website to know their services to increase the sales.
  • This growth of Internet users of Internet users might bring opportunities to Hermes where the customers can visit the Hermes website to know their services to increase the sales.

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Figure 1: Households with access to the Internet, Great Britain and UK, 2002 to 2008 (UK National Statistics, 2008)

Based on the Figure 2, the user access Internet by using the mobile phone via 3G (3rd Generation) was increased 1 per cent in 2008 and using of mobile phone via GPRS (General Packet Radio Service) is remaining 15 per cent in 2008 (UK National Statistics, 2008). Even the growth of use of mobile phone via 3G or GPRS was not high, but there still have a specific number of customers might use their mobile phone visit the Hermes Courier website to know their services. Therefore, the growth of use of mobile phone via 3G or GPRS might able to help Hermes Courier to achieve a specific quota of sales.
  • The growth of use of mobile phone via 3G or GPRS might able to help Hermes Courier to achieve a specific quota of sales.

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Figure 2: Adults who have accessed the Internet in the last 3 months, by mobile devices, UK, 2007 and 2008 (UK National Statistics, 2008)

According to Henrik Dahlin of DHL Express Europe, DHL is using the GIS (Geographic Information Systems) technology to optimized their transportation network and given their customers reliable delivery timetables (GISdevelopment.net, 2008). Furthermore, Henrik Dahlin also said “GIS is used at DHL every day, and it makes a real difference to our business” (GISdevelopment.net, 2008). Therefore, Hermes Courier bough a GIS where it is able to helps the vehicle routing for deliveries and it also can save time on deliveries.
  • The GIS system where it is able to helps the Hermes Courier’s vehicle routing for deliveries and it also can save time on deliveries.



Environmental
In 2008, “DHL has launches a carbon neutral shipping service, DHL GOGREEN EXPRESS in Asia Pacific region”, this shipping service also available in Europe (Environmental Leader LLC, 2008). Basically, this shipping service is the customer need to pay three percent ‘green premium’ of the delivery charges, and ‘the money will go certified carbon management programs for example alternative fuel vehicle technology’ and etc (Environmental Leader LLC, 2008).

For the Hermes Couriers Ltd, they didn’t offer any alternative “Green” shipping services option to the customers. Therefore, for the customers that looking for a more environmentally responsible shipping option, they might choose other courier companies that environmentally friendly.

  • Hermes didn’t offer any alternative “Green” shipping services option to the customers. Therefore, customers might choose other courier companies that environmentally friendly.

Reference

2008, Internet Access - Households and Individuals [online], United Kingdom, UK National Statistics, Available from http://www.statistics.gov.uk/pdfdir/iahi0808.pdf, [Accessed 30th May 2009]

2008, Keynote from DHL Express Europe to kick off 2009 ESRI Business GIS Summit [online], India, GISdevelopment.net, Available from http://www.gisdevelopment.net/news/viewn.asp?id=GIS:N_dxnimkvagu, [Accessed 1st June 2009]

2008, DHL Program Lets Customers Offset Shipping Emissions [online], Environmental Leader LLC, Available from http://www.environmentalleader.com/2008/03/10/dhl-allows-customers-to-offset-shipping-emissions/, [Accessed 2nd June 2009]



Social

Customers demand variety i.e. providing individualized services and offering delivery services on Saturdays to address customers’ needs. This could well be a positive impact for Hermes as they could provide value-added service like their competitors in the CEP (Courier, Express and parcel services) industry. However, corporate clients are more interested in a well-integrated system with a nonstop transport chain. This could pose either positive as well as negative impact depending on the package destination. It will positively impact Hermes if they solve their integration problems, however, it could be a negative impact for them if the business customer deals a lot with foreign clients or business partners as that business may prefer one CEP company to handle all shipments domestically and internationally for convenience and cost. (DHL Logistik, The future of CEP services)

According to the OECD Economic Outlook Interim Report (2009: p.87), Household and business alike are careful in their spending patterns as a result of the overall reduction in output by 2.2 per cent in the second half of 2008 in United Kingdom because business investment dropped due to the global economic crisis. This affects Hermes in a negative way as most of the enterprises in the United Kingdom is service based.

However, Hermes should exploit one social issue that is the attitudes of the British people to foreign based goods and services. According to Venousiou (2003: p.4), British people are very patriotic and would prefer to buy a product or services that has its origin in the United Kingdom. The author quoted a survey result from Amicus that 87 per cent of locals prefer to buy British goods and services so long as it provides the same amount of quality and value as imports. Therefore, this is a positive impact for Hermes as they are a local based firm.



Environmental

The environment is an important challenge for many companies as customers today are very environmentally conscious especially in developed countries such as United Kingdom. Hooper, Hutton & Smith (2008: p.16) claimed that businesses and consumers have placed greater emphasis on environmental issues. In the same independent report, customers who have been surveyed have indicated that they want to know the carbon footprint of the products they buy and want businesses to be more proactive in tackling environmental issues.

The London Development Agency had implemented Freight Operators Recognition Scheme where any companies that owned lorries or vans can be accreditation under this scheme which will enable them operators of these businesses to operate efficiently, safely as well as friendly to the environment. Most probably this would positively impact Hermes as they could sign up for this scheme and see if their current operations meet the standards set by the agency. If they meet the standard, it will surely help their business as they can use the various membership benefits such as driver’s training and other benefits which will enable them to save cost in the long run and customer will trust their business as it has the logo showing that they are accredited under this scheme. However, even if the applicant firm failed to meet the standard, assistance will be given in the form of action plan to help them achieve their target (Transport for London, FORS).

The United Kingdom has also followed the initiatives of the European Union to implement emission standards on vehicles such as the lorries must Euro3 emissions from 2008 and Euro4 emission standards from 2012. Therefore, if Hermes doesn’t follow the initiatives by rival companies, it will negatively impact the company as they will have bad publicity as they have not followed quick enough and therefore, they should follow their rival company’s initiatives on employing vehicles running on cleaner and more fuel-efficient vehicles or vehicles running on alternative fuels (Transport for London, Emission Standards) .




According to OECD Economic Outlook, Interim Report (2009, p.87), “the economy growth is declining significantly as output decreasing by 2.2% for the second half period of 2008 (as shown in Figure 1) as housing investment, business investment and exports fell. House and commercial property prices dropped drastically; whereas United Kingdom (UK) pounds value has decreased by 20% since the end of 2007 as well as the gain in competitive market have been significantly decline in external demand”. Therefore, this shows negative impact on Hermes Couriers as the companies profit will be affected as they are service based firm by internally and externally.
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Figure 1: Declining exports and decreasing UK pounds sterling

Source: OECD Economic Outlook, Interim Report (2009)


In addition to that, unemployment rate has increased and inflation has trended sliding due to the current economic recession. Consequently, it again shows negative impact on Hermes Couriers which would indirectly turn into cost cutting and man power retrenchment are to be looked forward in order to stay effectively and efficiently as well as maintaining its services as their output. The Figure 2 below shows the deviation of unemployment rate.

The private sector enterprise in United Kingdom in general has increased to an estimated 4.7 million in 2007 according to the Department for Business, Enterprise and Regulatory Reform’s statistics (2008: p. 1), which is an increase of 4.8 per cent or 212,000 enterprises compared to 2006. This information is important for Hermes as according to some estimates, corporate clients takes up roughly 90 per cent of any CEP company’s customer base and therefore, when more enterprises and business are set up, there are more market opportunities available to be captured.

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Figure 2: Deteriorating employment outlook
Source: OECD Economic Outlook, Interim Report (2009)


According to Oxford Economic Forecasting and Mott MacDonald, (2009), the UK financial policy has been make less burdensome considerably as the Bank of England slashed the bank interest rates significantly from 5% in October 2008 to 0.5% in March 2009, consequently the lowest level in the 300 years of the financial institution. Therefore, this positively shows more courier industries such as Hermes Couriers to acquire additional financial loans to improve the business services more effectively and efficiently in the future.
References

Oxford Economic Forecasting and Mott MacDonald, 2006, The Economic Impact of Express Carriers for UK plc, [Online], Available From: <http://www.emda.org.uk/uploaddocuments/finalukexpress160106.pdf>, [Accessed on 2nd June, 2009]

OECD, 2009, Economic Outlook, Interim Report: United Kingdom, [Online], Available From: <http://www.oecd.org/dataoecd/17/4/42440943.pdf>, [Accessed on 2nd June, 2009]

Political

Legislation
UK is a long established parliamentary democracy with a constitutional monarch as Head of State. The Monarchy is the oldest institution in the UK system of government. The present monarch is Queen Elizabeth II that recently celebrated 50 years of reign. Domestic and international policies are determined by the parliament. (Rosita Venousiou, 2003). Hermes business activity should be bounded by the policies determined by the government.

Tax

According to HM treasury, 50% additional rate of income tax will apply to employee income over 150,000 in April 2010, and the income tax personal allowance will be restricted for those with income over 100,000. This case will affect Hermes Company in term of its employment.
Budget measures
According to BBC news UK, the fuel duty will increase by 2p per liter in September 2009, and then by 1p a liter above inflation each in April and that will be for the next four years. This will affect Hermes Company of their delivery process which they have to spend more for their delivery vehicles.


UK gov Talk, 2003, policy document, [online] available from :
http://www.govtalk.gov.uk/policydocs/policydocs_list.asp?topic=64&subjecttitle=Intermediaries, [Accessed on 8th jun 2009].


HM treasury, budget 2009, [online] available from:http://downloads.bbc.co.uk/news/nol/shared/bsp/hi/pdfs/22_04_09bud09_completereport_2591.pdf, [Accessed on 28th jun 2009]

BBc news, 2009, Tax rise as UK debt hits record, [online] available from: http://news.bbc.co.uk/2/hi/uk_news/politics/8011321.stm, [Accessed on 28th jun 2009].