SWOT analysis
Strengths
FedEx is a highly reliable supplier having a robust and reliable base for suppliers to offer raw materials. Thus, it can overcome any bottlenecks along the supply chain and continue with customer service.
FedEx customers show a positive response to the company since the company practices customer satisfaction through quick service delivery anytime and anywhere.
It also has a constant cash flow giving in hand resources for expanding into new projects and innovations (Qing et al. 2020, p.49)
Fedex’s specialization focuses on time-sensitive express services, and thus most customers are aware that FedEx is the choice for delivery of something in a hurry. The organization’s Flagship service is known as FedEx Express, and it distributes services to over 200 countries worldwide. FedEx is also able to continually maintain its 30 percent U.S. market share in overnight services.
FedEx’s key aspect of efficiency is acquisitions and mergers. They are expansion methods that offer improvement opportunities, excluding costs linked to internally developing stated opportunities, and they make the company globally recognized (Kang and Huh, 2017, p.13).
Most organizations charge services based on parcel weight. However, FedEx also considers other factors as volume and dimensions; thus, customers may pay according to the occupied space. A parcel may be small yet heavy or huge yet very light. This increases company profitability by about 30-50 percent due to increased customer preference for their services.
FedEx understands customer preferences. It, as a reason, created partnerships with other companies to offer customers better service access. For example, a partnership with the United States Postal Service to support its services, making the organization more competitive (Kang and Huh, 2017, p.14).
FedEx has generated a sense of employee empowerment by increasing its efficiency throughout the company. The employees can directly address customer concerns and find solutions to their issues, and they can act accordingly without supervisory consultation (Kang and Huh, 2017, p.12).
FedEx has titles such as “World’s Most Admired Corporations” by Fortune and “100 best companies to work for, ” supporting the organization’s global recognition.
A strong corporate culture and a well-trained workforce are considered a robust strength to its success (Bamousa 2016, p.729).
Weaknesses
FedEx is compatible with only the present business model, limiting the company’s expansion in the adjacent product segment. The organization’s top management needs to allow workers to participate in their frequent discussions as such discussions may generate service ideas and new products.
FedEx faces limited success in other activities outside its core business. The company finds it challenging to move to new services or product segments since its strong image is only on express shipping. Customers lack confidence in their new products, and FedEx may not, therefore, create new products or offer new services.
The U.S. market is FedEx’s key revenue driver. This is a risky act for FedEx to over-depend on the U.S. due to the possibility that this market can at some point fall, or if the market growth rate does not happen as expected (Qing et al. 2020, p.50). Moreover, concentrating on the U.S. market upsurges FedEx’s exposure to country-specific aspects like economic conditions, labor strikes, and increased competition from rivals (Kang and Huh 2017, p.16).
Although acquisitions and mergers are FedEx’s strengths, they are also are possible weakness sources. This may occur due to customer uncertainty and confusion for those who seem unsure of the organization’s new services. If the unfamiliarity is too much, they might seek another service provider.
Although FedEx is a global leader in transporting overnight packages, the company’s quality service for small parcels is no longer very reliable. Most retailers rely on regionalized and local delivery options, unlike long-haul options. FedEx quickly moves parcels, but its reliability for small parcel delivery to customers has come to question (Kang and Huh 2017, p.13).
The distribution market is facing heavy competition. Air transportation may not be very effective in delivering hefty products, and the global building and maintenance markets are high (Bamousa 2016, p.730).
Opportunities
The rapid internet growth is an opportunity for FedEx to use online platforms more to pass their benefits to customers and increase profits and market share. Using big data analytics, FedEx can better know their customers and value them by adequately serving their needs. Also, FedEx can create customer loyalty by using a lower-cost strategy in its operations (Qing et al. 2020, p.50).
FedEx needs to invest in Information technology to enhance its I.T. network. These advancements will enable globalization advancements and support for the company. The company can also install tracking systems using computer terminals for its ‘FedEx Ship Manager.’ The company can also make deals with fuel companies to reduce fuel costs, which will reduce overall operation costs (Bamousa 2016, p.730).
Threats
The growing local distributor strengths are a threat to FedEx because they are affecting its market share. Thus, competitiveness stiffness still seems to increase, as the local distributor margins are rapidly growing. The more convincing the local markets become, the less growth to the company.
Rising payments in other countries is a threat to FedEx as it has to increase the payment cost for its employees as well; it may affect its revenue income.
The shortage of skilled labor force in given markets is a threat to FedEx in such markets. This is because if employees are not competent enough to accomplish their duties, it means the company cannot satisfy its customers per their needs fully. The customers will cease to seek FedEx services for their needs (Qing et al., 2020, p.50).
Retaining an expensive services portfolio is crucial in attracting and keeping customers. However, if the company rivals offer a broader range of their bundle services, this could impede the company’s ability to grow and retain its market share (Kang and Huh 2017, p.18).
The main FedEx competitors are a significant threat to the company, and they include electronic-document delivery services, RPS, DHL, Emery, UPS, and U.S. Portal services (Bamousa, 2016, p.730).
Bibliography
Bamousa, W., 2016. FedEx SWOT Analysis. International Journal of Scientific & Engineering Research, 7(3), pp.728-735. Available at https://www.ijser.org/researchpaper/FedEx-SWOT-Analysis.pdf
Kang, H. and Huh, C., 2017. Exploration of the Sources of Competitive Advantage: UPS vs. FedEx. Journal of Management Cases, 21(3). pp.1-67. Available at http://www.ijmc.org/IJMC/vol_21.3_files/21.3.pdf#page=5
Lieberman, O.R., 2013. Strategies and Policies: Case: FedEx. Pp.1-24. Available at https://d1wqtxts1xzle7.cloudfront.net/54456183/Strategies_and_Policies_Case_of_FedEx_2013.pdf?1505668966=&response-content-disposition=inline%3B+filename%3DBusiness_Management_Strategies_for_Infor.pdf&Expires=1604747440&Signature=adPfnbcDYXZNJ845a2i0DNaQe4DSPP56dI3Kwt9YcPV0mMK8JSuoZVj6KTPx-vPGRhkAEdSHuiwFtVcmRzfk6Cny4DBXTt2AmFcVaGi8XPW275PiKAXxz~5zIyWLklhOZ3hWKFfxLqtLb4uN-bCWX9zABn1my-0UEaMAlhuol3WRXycWKxsRsu6je7ij-2VT9ZxwJJfTqhgbXKQ3aWyk~KYBIqPwl0OzsTXoY~MO4druylXCFaJqSEVq0~5ojHdPX-volMxdCJMCvZVoFOEL~FblzzZagO-c9ZXlBKvdFitybso-00FowxZSuriKky3iWk-YrvCTmEATi-UrzOHltg__&Key-Pair-Id=APKAJLOHF5GGSLRBV4ZA
Qing, K.J., et.al. 2020. The impact of employee satisfaction, organizational commitment, job performance and teamwork as the success factors in FedEx: A study of FedEx’s employees in Malaysia. International journal of Tourism and hospitality in Asia Pasific, 3(2), pp.48-56. Available at https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=FeDEX+usa+swot+&btnG=
