Competitiveness Creation and Maintenance in the Postal Services Industry

Recently due to the competition, which is getting more intense in the regional markets and in the global market as well, the concept of competitiveness has attracted special attention of scientists and economists. The concept of competitiveness is used in the political and scientific societies; that is why it gets a lot of meanings. Let us have a look at the variations of the concept of competitiveness throughout the history. For example, such famous representatives of the theory of classical economics as Smith and Ricardo define competitiveness as the use of competitive advantages for the purpose to increase the capacity of production, which is different subject to the country or the branch of the production due to the different technologies, which are used in the production, work-sharing and specialisation. Smith in his theory of absolute advantage emphasised that the production with the lowest expenditures provides competitive advantages in international trade. According to Smith the level of the development of the countries’ economies and the differences in capacity depend on work-sharing and the benefit, which is provided due to specialisation, i.e. the investments in the capital (developing of machinery) and trade (expansion of the markets) determine the specialisation of the countries, capacity and growth in production. Due to growing production the labour becomes more specialised, which stimulates the more intensive growth in production in the country. Smith maintained that if a country can produce the same amount of the product with the lower expenditures (the labour), it has the competitive advantage compared with another country; that is why the first country exports the products and the second country imports. So, the appearance of international trade is caused by the differences in the capacities of the production. Ricardo maintained that the countries can get the profit from international trade if they specialise in the production, where they have competitive advantages (the output of the employees and others).

Postal services, as services of general economic interest, continue to have a central role in an effective and dynamic single European market and are vital to the wider economy. However, the role of postal services has changed as electronic communication services change traditional patterns of communication and business across Europe.

Postal services, i.e. the clearance, sorting, transportation and delivery of postal items, still remain an important part of the country’s economic and social development. In addition to being some of the oldest and most widespread means of communication, they are also rapidly and extensively changing services. The postal services sector covers several change drivers. Changing demand, i.e. the declining demand for letter-post items, the growing demand for postal parcels; organisational changes, automation and new technologies; and the increasing use of electronic means, is considered the most significant change driver in the postal services sector. Taking into consideration the above-mentioned changes, new postal services are constantly being developed both internationally and nationally.

On December 31, 2014, the Lietuvos Pastas Group was comprised of the parental public limited liability company (PLC) Lietuvos Pastas (Lithuanian Universal Services Provider) and its subsidiaries Baltic Post, Ltd., Financial Services of Lietuvos Pastas, Ltd., and LP Payment Solutions, Ltd. The major activities, performed by the Lietuvos Pastas Group companies, have been presented in Fig. 4.1. The Lithuanian Universal Services Provider (hereinafter LUSP) has the largest network of access points in the country. In addition to postal services, LUSP also renders logistics, financial intermediation and electronic services.

Lithuanian transport network is an integral part of the EU and the Baltic Sea Region’s transport system. According to the Lithuanian Department of Statistics, in 2013 transport and communications sector has created 13 % of Lithuanian GDP; in 2009–2012 sector revenue grew almost twice as fast as the Lithuanian economy, achieving a positive export and import balance; thus, the transport sector is one of the most strategically important Lithuanian industries. In order to ensure further growth of the economy, it is important to maintain the current level of infrastructure and efficiently develop transport infrastructure on both national and international levels, considering sustainable development aspects. Sustainable transport system is understood as an effective interaction of social, cultural, economic and ecological aspects. Good communication system ensures close cultural and social ties, increases population mobility, expands international cooperation and tourism, improves business conditions and encourages its development, without causing damage to the environment and humans. Modern communications system policy must be based on a long-term point of view, thus the implementation of 2014–2022 National Transport Development Programme; a lot of attention was paid to global challenges—climate change problems, energy efficiency improvements, mobility demand management and formation of new, sustainable mobility habits (Ministry of Transport and Communications of the Republic of Lithuania 2013). The main strategic direction and strategic goals followed by the Lithuanian Postal Services Provider are consistent with the 2014–2022 Lithuanian Transport Development Programme.

The analysis of the competitiveness experience in Lithuania and foreign countries has been performed focusing on four main directions of such analysis (see Fig. 6.1). The analysis of the competitiveness experience in foreign countries will reveal the common global trends and solutions of competitiveness creation and maintenance as well as competitiveness improvement solutions in global postal sector. The analysis of the competitiveness experience in Lithuania will disclose the common trends of competitiveness creation and maintenance and postal service competitiveness creation and maintenance in the country.

Competitiveness occurs differently at different levels, and it is possible to analyse it in company, industry, state, block, country regions, international company, international sale, country local sales and in other aspects. In most cases, the scientists refer to company’s industry (sectors) or the country’s competitiveness. Foreign and Lithuanian scientists have created a variety of competitiveness assessment methodologies. This chapter overviews competitiveness maintenance methods and models that are used by scientists mostly.

LUSP’s competitiveness maintenance strategy is developed on the basis of LUSP’s competitiveness maintenance model and proposed alternatives for the improvement of problematic areas in LUSP’s competitiveness.