FEDERAL EXPRESS
SWOT ANALYSIS
STRENGTHS. With more than three decades of experience, FedEx has the strength of dependable know-how in the business. They changed the nature of delivery business by reconfiguring outbound logistics and HR management to originate the overnight delivery business. Convinced that customers would value not only overnight deliveries but also the ability to track them, FedEx developed a computerised tracking system called COSMOS (2003), which introduced computer technology to the industry. Over the years, the company had also invested heavily in IT systems, providing them with a technical architecture that had the potential to pioneer in Internet commerce. They likewise spent considerable resources in advertising campaigns designed to make the firm more known than it already is.
WEAKNESSES. With FedEx constantly redefining and increasing its scope of product and service offering, the company has globalised and has lacked strong personal relationships with the country’s clientele. Also, due to the need to fill their aircrafts with parcels, the company has been forced to take on deliveries with very low profit margins. Weakness in the controls over the use of FedEx at the front end of FedEx use or after the fact that would eliminate or minimize the opportunity for fraud, waste and abuse of this program is also observed.
OPPORTUNITIES. The firm’s main opportunity is to use cooperative strategies to create value for a customer that exceeds the cost of constructing value in other ways (2001) and to establish a favourable position relative to competition. Another opportunity seen for FedEx is the opportunity to take advantage of the recent developments in the globalisation arena, in terms of the increasingly boundless markets which would translate to bigger and a wider scope of market for the organisation.
THREATS. Their main competitor in their line of business is UPS, and the two companies compete directly against each other in several product categories. Although competitive actions and competitive responses take to build or defend a firm’s competitive advantages and improve its market performance (2003), the presence of competition, especially a tough one, is sometimes detrimental to the growth of the firm. Although both firms help customer better utilise information to track and ship inventory, UPS is pulling ahead of FedEx ( 2000). Rising fuel prices could also severely impact upon their net income.
PESTLE ANALYSIS
POLITICAL. This aspect of the external environment affects the company in the same way that the legal aspect affects it. Laws effected within the transportation industry are dependent on the political environment which formulates such laws. Governmental laws affect where and how companies may choose to compete, and deregulation and local government changes, affect not only the general competitive environment, but also the strategic decisions made by firms competing globally.
ECONOMIC. The growth of the express transportation and logistics industry was brought about mainly by the globalisation of businesses. As businesses expanded beyond national boundaries and extended their global reach to take advantage of new markets and cheaper resources, so the movements of goods created new demands for the transportation and logistics industry. Rising inflation and global competition gave rise to greater pressures on businesses to minimise the costs of operation, including implementation of just-in-time inventory management systems, etc., and also created demands for speed and accuracy in all aspects of business.
SOCIAL. The ever-changing market demand for value-added services affects FedEx’s corporate level strategies tremendously in that most of the business tactics that the firm employs centre on bringing about value-added services to their customers. After all, FedEx relies largely on their customers’ loyalty to sustain their leadership in the industry that they are in. As part of their corporate social responsibilities, FedEx is practising corporate philanthropy and employee volunteerism and is constantly developing relationships with charitable institutions that share the same values as FedEx.
TECHNOLOGICAL. The advances in IT to generate process efficiencies also served as impetus for the growth of the express transportation and logistics industry. The ability to share information between operations/departments within a company and between organisations to generate operational efficiencies, reduce cost and improve customer service was a major breakthrough for the express transportation industry. With the advent of IT, express transportation became an aggregation of two main function: the physical delivery of parcels, and the management and utilisation of the flow of information pertaining to the physical delivery.
LEGAL. Throughout the more than three decades of existence of FedEx, their growth was attributable to a number of external factors that the firm was quick to capitalise on, which included: (1) government deregulation of the airline industry, which permitted the landing of larger freight planes, thus reducing operating costs for FedEx; (2) deregulation of the trucking industry, which allowed FedEx to establish a regional trucking system to lower costs further on short-haul trips. Also, trade deregulation in Asia Pacific opened new markets for FedEx and expanding globally became a FedEx priority.
ENVIRONMENTAL. The FedEx Corporation recognises that one of its most important corporate priorities is effective environmental management. In efforts to fulfil their responsibilities to the environment, the company is engaged in several projects which aim at protecting the environment at large. Emissions and fuel use has been a constant source of concern for the care of the environment. Also, with respect to packaging and recycling, a continued evaluation of the environmental impact of their packages is on-going and the firm additionally makes sure that their packages are made from recycled materials that are equally recyclable.
STAKEHOLDER ANALYSIS
The main stakeholders of the FedEx company are: (1) their clientele; (2) the community in which they operate and (3) businesses in which they extend their service to. Obviously, the clients are stakeholders, as without them, FedEx will be a lost cause, and the firm has taken the right direction when it decided to focus on satisfying their customers through excellent service delivery. The community in which FedEx operates has a stake in the consequences of what the firm does because both exists in the same plane and has to complement with each other in order to subsist harmoniously.
CORUS GROUP
SWOT ANALYSIS
STRENGTHS. The change in management structure due to the privatisation of the British Steel company in 1999 led to strengthening the manufacturing company, which, prior to the merger, had suffered serious cumulative losses. A combination of increased investment, reduced overheads, devolved decision-making and revolutionised working practices has become the foundation of making Corus into one of Europe’s largest manufacturing companies as of date. The company used a range of different approaches to global development such as joint ventures, overseas transplants; and continued exports of high-added value products in order to further strengthen their international presence in the manufacturing business.
WEAKNESSES. In the crisis-filled years that Corus suffered, critics have commented that the company has a lack of long-term vision, evidenced by their concentration on small steel ventures in the US, when all the other competitors have been making giant alliance moves in order to give them stronger market positions in developing markets. It has not used its financial strength to spread its operations globally, in this day and time when going global is a key factor to success. Poor management prior to Moffat’s administration has also caused the firm a not-so-good image with employees, as in 2000, they were forced to reduce their workforce due to radical restructuring of its bulk steel operations.
OPPORTUNITIES. They have the opportunity to further increase their production capacities through adoption of systems which technology nowadays offers, and also to prepare for the increased demand for their products once they decided to conquer the wider international markets. The steel prices that are likely to continue to rise in the future – partly as a result of the dynamic Chinese economy’s effect on world prices – should present an opportunity for Corus to utilise to the fullest so that they could realise their true company potentials. With Philippe Varin now in the helm after Moffat resigned in 2003, opportunity offered by a new organisational structure is also evident.
THREATS. The strengthening of the pound against European currencies in the second half of the 1990s created a threat for the company, since by that time much of their sales were still in Europe. It is therefore a threat to the firm at this time, when the tug against who is the stronger currency still exists in the market. There is also the threat, not only for the Corus group, but for the whole steel industry as well, of the European rules with respect to opening the market of power generation, which would mean creating an unfair distortion of competition for the industry concerned.
PESTLE ANALYSIS
POLITICAL. The political arena is supportive of the steel industry in which Corus belongs. Public procurement policies and improvements in public infrastructures to enhance the delivery of manufactured products which benefit Corus are widely propped up by the government. the Additionally, the firm is known to adopt an open approach to dealing with external stakeholders, especially the government, through frequently updating the said stakeholder and discussing issues with national and devolved government, agencies and regulators.
ECONOMIC. The increased demand for steel products is a result of the global economic recovery witnessed by businesses. The Corus group benefited from the global recovery in steel prices, and together with the development in the manufacturing performance of the company, they have more than offset higher raw materials and energy costs which are part of the production process of their steel products.
SOCIAL. With its potential harm to the environment if resources are not utilised in a correct way, the steel industry is facing the wrath of the society as it is the one who will suffer the most if such problems in the environment occurs. It is the industry most faced with criticisms from a social aspect, and as such, the promise and fulfilment of corporate social responsibilities is one of paramount importance to the Corus Group. Through fulfilling their social obligations, the firm will be able to create a corporate image desirable to the community in which they are operating and thus establish a good illustration of what the Corus company is when it is not doing its normal take of business activities.
TECHNOLOGICAL. The different technological trajectories in Europe, US, Japan and other late industrializing countries led to varying competitive strengths of national industries. They also gave rise to new industrial governance structures for undertaking capitalist production. The restructuring of the steel industry is the link between institutions and their responses to technological change. The decision to adopt new technologies is based on firm and state strategy, which in turn is dependent on the institutional setting and the legacy of past decisions. In late industrializing countries the decision to adopt innovations was also based on strategy, but one which was significantly determined by institutional capability.
LEGAL. There are various legal implications in the conduct of the steel business which has repercussions for the environment, society and the government. Due to the nature of the work that the steel business is in, there are potentially more hazards in the industry than in any other existing industry nowadays. There is the antidumping law in the US, which could be possibly implemented in Europe given the right government initiative, in response to the various versions of a protectionist trade policy that exists in various countries.
ENVIRONMENTAL. Corus, in their attempt to fulfil their corporate social responsibilities, is committed to environmental protection through reducing the effects of its operations through adoption of sustainable practices as well as through continuous improvement in environmental performance and control. Also, the firm is also focused on the full life cycle of its products from ore to processing, through to use and recycling. This minimises raw material usage and consume less energy, in response to the government regulation regarding energy use and the Kyoto protocol on global warming. More importantly, Corus makes contributions to environmental agencies that maintain community causes, knowing that the manufacturing industry is often stereotyped as the industry who contributes the most pollution to the environment.
STAKEHOLDER ANALYSIS
Stakeholders for the Corus group would be pretty much the same as Federal Express, but emphasis should be given to the community in which the manufacturing company operates. As mentioned above, due to the higher risks in the environment and human health associated with the production of steel, the community is largely concerned. The problem for the firm is on how to gain the community’s support in order to continue its operations. The community therefore, must be made to realise that, coupled with efforts to put their concerns to rest that having such industries within the area is detrimental to their environment and health.
COMPARISON AND CONTRAST OF STRATEGIES
As seen in the analyses, FedEx and Corus both have very different approaches to business growth. When FedEx goes for aggressive global expansion to support its market leadership, Corus opts to focus on small industries and builds on them to maintain their competitive edge. FedEx can be seen with excellent management directions, whereas Corus has a record of poor administration which resulted to under-average company performance. Corus, however, places great importance in fulfilling their corporate social responsibilities, different from how Federal Express accomplishes them. This is largely due to the difference in the nature of industry that these two companies are engaged in. Also, as Corus has to deal with more legal technicalities than the FedEx firm, they are more careful in the performance of their daily business activities, to spare the company from being sued over legal matters and to maintain the law-abiding public image of the firm. Changes in the economy is likewise more felt by the Corus Group, reason for their ever-changing tactics on dealing with situations which involve economic changes. Although FedEx is also affected by the rise of fuel prices, its effect to Corus cannot be overemphasised, the factor being a part of every step of the production process of the company.
CONCLUSION / RECOMMENDATION
Calling on other businesses to build relationships should be on top of the list for FedEx, through sending representatives in countries in order to build them. Expanding to these businesses is essential to support the investment that they are planning in line with further expansion. With FedEx’s service guarantee as a shining example of what is possible and what customers can demand, it would not be hard to achieve. As for the Corus Group, the rapid industrialization and industrial maturity comes at a price, all factors which must be taken into consideration by the firm if they would want to continue what standing the manufacturing company has now, and if possible, make it better. In a capitalist world where industrial production is driven by commercial motives, it can only be assume that industrial expansion is a good thing and technology is a key determinant of industrial production, which the Corus Group should wisely utilise, coupled with more aggressive global expansion.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment