Essays on Strategic Management Organization Analysis - the Australia Post Case Study

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The paper 'Strategic Management Organization Analysis - the Australia Post" is a good example of a management case study. Australia Post operates in the postal service industry. It was established in the early 1800s and as seen growth in a number of variables including employees and services. Australia Post is owned by the government and the government determines the operation at the post based on the employed leaders. Australia Post as a strong structure, which is divided into business and functional units. The business units are the core process of Australia Post while the functional units assist in the achievement of core processes.

Therefore, Australia Post has both business and functional level strategies. The financial position of Australia Post and with the help of strategic tools e. g. SWOT analysis, the future of the organization is not viable. If strategies and approaches are not changed, it is not advisable to invest in the company.   2012 2013 2014 Average ROIC -2% 0.65% 0.48% -0.87 The statistic indicates that it is not appropriate to invest in Australia Post. Debt Ratio It estimates the consumer’ s or company’ s leverage. It is the ration obtained after dividing the total debt against the total assets.

The following table summarizes the debt ratio of Australia Post.   2012 2013 2014 Average Debt Ratio 29.1 27.3 28.8 28.4 Current Ratio The role of current ratio in financial analysis is to test an organization’ s ability to meet its short term financial obligations. An organization has to have more than 1 value and less than 1 means that the organization does not have enough resources to meet the short term obligations (Treworgy and Wong 2013). The obligations are usually within one year period. The following table summarizes the current ratio. Australia Post had enough resources to fulfill short term obligations in 2012 but in the subsequent years, the short term obligations cannot be fulfilled.

In the table (below), the average for the last three years indicates that the incoming cash cannot meet the obligations. Based on the current ratio assessment, it is not appropriate to invest in the Australia Post.   2012 2013 2014 Average Current Ratio 1.06 0.64 0.74 0.81 Return on Equity (ROE) Return on Equity ratio estimates the net income generated as a percentage of the equity the shareholders have contributed (Australia Post 2015b). The return on equity determines the amounts of profits that an organization generates based on the investments of the shareholders.

The recommendation appropriate level of REO is between 15% and 20% in which an investor can decide to invest in the company. The 2012 and 2013 ratios are within the recommended level but in 2014, the REO is weak. Moreover, the average is below the recommended levels meaning that a cumulative review of the entire operations is appropriate before arriving at any conclusion.   2012 2013 2014 Average Return on Equity 18.6 18.54 6.6 14.58 Operating Profit Margin The ratio determines the amount, which remains after subtracting the expenses. The ratio is imperative because investors and creditors can determine the profitability level of an organization’ s operations.

A higher percentage indicates that the company generates enough income to meet operations. A lower percentage means that an organization will need to seek alternative sources to fund operations (Australia Post 2014). In the case of Australia, the table illustrates the summary of the operating profit margin for the periods between 2012 and 2014. Based on the ratio, the profit generated meets the expenses of operation but there is no additional income generated to sustain the Australia Post operations.

Moreover, the data indicates that the operating profit margin is decreasing meaning that alternative sources of income will be required in the near future to fund the operations.

References

Australia Post 2012, Future Ready: Annual Financial Report 2012, Australia Post, viewed October 22 2015,

Australia Post 2013, Future Ready: Annual Financial Report 2013, Australia Post, viewed October 22 2015,

Australia Post 2014, Future Ready: Annual Financial Report 2014, Australia Post, viewed October 22 2015,

Australia Post 2014b, Australia Post at a Turning Point, Australia Post, viewed October 22 2015,

Australia Post 2015b, Home Page, Australia Post, viewed October 23 205,

Cavusgil, ST, Knight, G, Riesenberger, JR, Rammal, HG and Rose, EL 2014, International Business, Sydney: Pearson Australia.

Crew, MA and Kleindorfer, PR 2012a, Regulation and the Nature of Postal and Delivery Services, Sydney: Springer Science & Business Media.

Crew, MA and Kleindorfer, PR 2012b, Commercialization of Postal and Delivery Services: National and International Perspectives, Sydney: Springer Science & Business Media.

Finger, M and Bukovc, B 2014, Postal Services in the Digital Age, Sydney: IOS Press.

Lawrence, D, Coelli, T and Kain, J 2015, Updated Estimates of Australia Post’s Mail Centre and Delivery Centre Cost Elasticities, viewed October 22 2015, https://www.accc.gov.au

Ryan, P (26 June 2015), Australia Post To Slash 1,900 Jobs Amid $500m Mail Losses; Boss Warns Of 'Tipping Point' As Letters Business Plunges, Australian Broadcasting Commission, viewed October 24, 2015.

Shim, SJ, Kumar, A &Hakami, H 2013, Internet Usage Trend and Postal Service Performance In Australia. In Industrial Engineering and Engineering Management (IEEM), 2013 IEEE International Conference on (pp. 427-431). IEEE.

The Boston Consulting Group June 2014, Australian and International Postal Services Overview Background Report, viewed October 23 2015,

The McKell Institute 2014, Digital Post: Business Transformation and the Future Sustainability of Australia Post, The McKell Institute.

Treworgy, DE and Wong, EY 2013, Assessment and Responses of Postal Sector Operators.Postal and Delivery Services: Pricing, Productivity, Regulation and Strategy, vol. 41, pp. 373.

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