Our strategy

Being brilliant at the basics

Being brilliant at the basics means getting delivery right first time, every time. We must focus on a number of areas to achieve this aim:

• giving our customers the right products at the right prices;
• improving our efficiency to meet our stretching quality of service targets, while simultaneously delivering our modernisation programme – one of the most comprehensive change management programmes ever undertaken in the UK; and
• improving safety, customer service, quality and productivity across the business through our World Class Mail programme.

Building a commercial future

Royal Mail has achieved significant legislative and regulatory milestones since the Postal Services Act received Royal Assent in June 2011. We are building a financially sound, commercially-minded business to attract external capital.

The new regulatory framework, introduced by our Regulator, Ofcom, gives us considerably more freedom to compete on a level playing field. There are some areas, however, where we would like further regulatory changes. We are concerned that the extension of safeguard price caps to some of our parcels products impose unnecessary constraints which make us less able to respond to customer needs. Find out more in our regulation section.

The European Commission’s recent authorisation of the Government’s proposals to take legal responsibility for our historic pension deficit and provide support to restructure our balance sheet has significantly improved our cash position.

More remains to be done. We are working very closely with our unions to develop stronger relationships, for the benefit of the company and our colleagues. This is vital to secure the future of the company.

Driving profitable growth

Royal Mail is no longer just a UK-focused, letters business. The traditional letters market is in structural decline. It is changing. So must we.

We are delivering an increasing number of parcels through our core UK network, through Parcelforce Worldwide, which is also based in the UK, and through our continental European logistics company GLS. Today, parcels represent a significant and growing proportion of our total revenues. 

Across the Group as a whole, parcel volumes continue to grow driven by strong demand for online retailing in the UK and overseas. With continued focus on improving our technology, Royal Mail is well positioned to benefit from continued growth in this area.

International mail and parcels are an important future revenue driver. Increasing demand for products from overseas, linked to growth in online retailing, underpins our confidence in future growth in our international business.

We are developing our media mail offer to deliver improved advertising services that meet our customers’ needs – introducing services across the value chain; from detailed campaign planning, through creative, to digital measurement and calls to action. Our medium-term aim is to capture a greater share of the £17bn UK advertising market by targeting the UK’s top advertisers.

Performance

We want everyone in the company to be focused on meeting our goals. That is why the business strategy is embedded across the Group through our performance management approach. All our managers are assessed against the corporate scorecard, which directly aligns with our strategic objectives.