FEDERAL EXPRESS
BRIEF BACKGROUND[1]
Owned by Frederick W. Smith, the company was incorporated in June 1971 and officially began operations on April 17, 1973, with the launch of 14 small aircraft from Memphis International Airport. It soon entered its maturing phase in the first half of the 1980s and grown to become the largest operating company in the FedEx family, handling about 3.2 million packages and documents every business day. During the fiscal year 2006, it netted a revenue of .4 billion (includes FedEx Trade Networks) and is currently employing more than 139,000 employees worldwide, serving in more than 220 countries and territories and 375 airports worldwide. is the current President and CEO of the well-known express transportation company. Since its inception, FedEx had transformed itself from an express delivery company to a global logistics and supply-chain management company.
SWOT ANALYSIS
STRENGTHS
With more than three decades of experience in providing logistics services to individuals and fellow businesses, FedEx has the strength of dependable know-how in the delivery business. They changed the nature of delivery business by reconfiguring outbound logistics (a primary activity) and human resource management (a support activity) to originate the overnight delivery business, creating value in the process. Convinced that customers would value not only overnight deliveries but also the ability to track them, FedEx developed a proprietary computerised tracking system called Customer Oriented Services and Management Operating System, or COSMOS (Hitt, 2003), which introduced computer technology to the shipping industry in previously unheard-of ways and permanently altered the nature of competition within it. Over the years, the company had also invested heavily in IT systems, providing them with a powerful technical architecture that had the potential to pioneer in Internet commerce.
WEAKNESSES
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. Living examples are the two that FedEx already engaged in. In an alliance between the firm and the U.S. Postal Service (SUPS), the company roughly transports 3.5 million pounds of SUPS packages daily on its planes and will earn FedEx more than billion – .3 billion in transportation charges and 0 million in drop box revenue in the seven-year deal with SUPS (Ulf elder 2001). The second alliance was with worldwide professional services firm KPMG, which intent is to deliver total, end-to-end supply-chain solutions to large and mid-sized companies. Another opportunity seen for FedEx is the opportunity to take advantage of the recent develope
THREATS
Their main competitor in their line of business is UPS, and the two companies compete directly against each other in several product categories. They are locked in fierce battles to dominate not only package delivery but e-commerce and logistics markets as well. 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. In FedEx’s case, they were caught off guard by UPS when the latter used its internally generated technology skills to offer e-tailors a multitude of shipping options and prices. Although both firms help customer better utilise information to track and ship inventory, UPS is pulling ahead of FedEx (Haddad & Ewing 2000). Rising fuel prices could also severely impact upon the company’s 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 and regulations effected within the transportation and logistics industry are dependent on the political environment which formulates such laws and regulations. The contemporary political environment is shown supportive of such technological advances in the industry under discussion to the extent that it has given impetus to the growth that the industry is experiencing now. Governmental policies and laws affect where and how companies may choose to compete, and deregulation and local government changes, such as those in the global transportation industry, 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. With this, the competitiveness of transportation companies depended upon their global network of distribution centres and their ability to deliver wherever their customers conducted business. 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 and the application of new technology 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. However, of even greater significance was the way n which new technology redefined logistics. At a time when competition within the transportation industry was tough and transportation firms were seeking to achieve competitive advantages through value-added services, many of these companies expanded into logistics management services. Interconnectivity through the Internet and Intranets and the integration of systems enabled businesses to redefine themselves and re-engineer their selling and supply-chains. Information came to replace inventory. 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. In line with this, the firm partnered with the Environmental Defence in 2000 to create a delivery truck that would dramatically decrease emissions and fuel use. 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
Stakeholder
Interest in FedEx
Assessment of Impact
Strategies for Obtaining Support
ORGANISATION 2
BRIEF BACKGROUND
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
PESTLE ANALYSIS
POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGICAL
LEGAL
ENVIRONMENTAL
STAKEHOLDER ANALYSIS
Stakeholder
Interest in FedEx
Assessment of Impact
Strategies for Obtaining Support
COMPARISON AND CONTRAST OF STRATEGIES
SIMILARITIES AND DIFFERENCES
SUCCESSES AND FAILURES
CONCLUSION / RECOMMENDATION
[1] All information appearing herein is from the company website, unless otherwise indicated.
Credit:ivythesis.typepad.com
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