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 | | Wednesday, 8 May, 2002, 13:04 GMT 14:04 UK First Class Post?  Working Lunch's Rob Pittam reports from a Post Office in Bristol It just can't go on! The Post Office, which is a business, just like any other, is losing �1.5 million a day! To make things worse, it's under even more threat. Parts of its business, which are protected from competition at the moment, are going to be open to all. Consignia must deliver letters and parcels to every home and business in the country, a very expensive process. We want our post first thing in the morning. If it's late we get upset. This means that Consignia must employ enough people, own enough vans and have a system to do this. In towns, its not too difficult but the cost of getting the post to isolated places is very high. Just think... Why is it expensive to deliver post to isolated places? If you ran a delivery service to compete with the Post Office, where would you deliver? Why? If you could set your own prices for delivery, what would you do? Many businesses depend on the post. If the Post Office can't provide the service they want, what will they do? The source of the problem? Email! How many of us use email, the web and text messages to communicate with our friends and businesses? This is a trend that won't go away. The Post Office has lost masses of business because it's quick, easy and the shop doesn't have to be open. There has also been a lack of investment. Hi-tech systems might have cut costs and helped Consignia to compete with couriers, which have stolen a big slice of parcel delivery. Just think... What are the effects of these changes, or lack of change, on the cost of running the business? Explain why. Cutting costs? No business can survive for long if it's losing �1.5 million a day. What should Consignia do? It has to cut its costs. But cutting costs will affect the services it provides. Just think... What products and services does the Post Office provide? Which ones are available from other people too? If Post Offices close down, how are people affected? Who is affected most? Can it succeed? Consignia wants the price of a stamp to rise by 1p. It may not be enough. At the moment, there are parts of the business which are protected from competition. Consignia has a monopoly. It's just like the board game, where one business is in control and ends up with no competitors. Because the government felt the post was important, it decided years ago that the it should be protected so it gave the Post Office, now Consignia, a monopoly. No other businesses were allowed to offer postal services. It's hard to be a monopoly and still be efficient because competition keeps people on their toes. The monopoly has been broken down as parts of the business have been opened to competition. But, if Consignia is only left with the parts of the business which are expensive to run - and no one else wants to do - it's hard to make a profit. Just think... Which of the services that Consignia provides are unlikely to be provided by other businesses? How do you think such changes will affect the community? | |
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