Analysis of FedEx® Corporation Harvard Case Solution & Analysis

Introduction

FedEx is a worldwide delivery company and is ranked amongst one of the most admired companies around the world with highest ethical and corporate standards, focusing its customer needs. Working in the global markets, FedEx is subjected to vast range of economic environments, cultures, political stability, etc.

While in terms of financial performance, the company is running on its success path with remarkable pace. This can be further analyzed with the help of business models as well as evaluation of the financial performance of the company.

Environmental Analysis

By determining the environments that FedEx is subjected to, it can be most appropriately analyzed by using PESTEL model, which can be broken up as Political, Economic, Social, Technological, Environmental, and Legal. Taking each in turn will altogether will help in analyzing the company’s environment.

Political

Since FedEx has its main operations and headquarters in USA, therefore, it is likely to be exposed to the country’s political environment. Being in the service industry providing courier and logistics the company is vital for the economic growth for US economy. The outcome of globalization and free movement of goods are issues that can cause difficulties for the company’s operations in many countries, such as customs duties, sales tax and other political policies in different countries. However, this has been the core reason for the growth of FedEx having extensive market for its services around the world.

Economic

Economic factors are one of the foremost driving forces for the success of any business and same is in the case of FedEx. Since the company has outperformed in the logistics sector due to the demand for express services derived from business that are operating in manufacturing and service industries, this is why the company was even able to cope up with the worst effects of global recession. (Gutierrez)

Social

As a consequence of increased security measures for air freight, it had incremental impact on the costs of operations. Nevertheless, FedEx was still able to provide value added services at competitive prices, however the problems arising due to road congestions and road pollution have further increased the costs of road based logistic sector.

Technological

FedEx has been a pioneer in adopting technology into its operations by quickly utilizing internet facilities, high-level customer relationship management, etc. In the early 1980’s, the company launched a new system named COSMOS (Customer, Operations, Services Master Online) (BALDWIN) which used the prototypes of hand-held computers which scanned the barcodes. This shows how rapidly FedEx incorporates technology into the business, even in current times it is drastically exploiting the technological advancements.

Environmental and Legal

Conclusively the above factors combine to determine the environment that FedEx is operating in, with further aspects related to the affects that environments face due to operations of FedEx in various countries, such as, noise in air pollution, traffic congestions, etc. that leads to negative externalities. On the other hand, provision of employment, well managed services and the application of corporate social responsibility will contribute towards the positive externalities to the economies it operates in.

Being a globally recognized company, FedEx is determined to meet all the legal requirements in relation to carrying out operations in various countries around the globe.

Firm Analysis

By analyzing the firm with respect to different business models such as, Porter’s Five Forces (Porter, 1979) and SWOT analysis, which will determine the company’s position more appropriately. Firstly, by using the porter’s five forces analysis incorporating the SWOT analysis in order to proceed with the analysis. The five forces mainly consist of the following:

Supplier Power

Since FedEx cannot carry out its operations in isolation and would need supplies from external businesses, therefore, it would be expensive if company had limited supplier base due to which higher prices can increase the costs for the company and hence reduction in the profitability of the company. For FedEx mainly the suppliers would be the companies providing packaging materials, fuel, workforce working for the company, etc. In this regard, FedEx would need to have strong supplier relations which can contribute towards the STRENGTH of the company or else it would become a THREAT if future policies of the suppliers change.

Analysis of FedEx Corporation Case Solution

Buyer Power

Buyer power relates to the ability of customers to source the services of the company. Similarly, FedEx would need to analyze its prospective customer base, as the fall in buying power of the customers can result in lower profitability for FedEx. However, the operations of the company all over the world have opened up the entire world to FedEx market which shows how strong FedEx can be in terms of buyer power. This can be considered as STRENGTH for the company as well as an OPPORTUNITY that can be exploited further in line with company’s expansion policies...............................

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