Strategy Formulation of FedEx Corporation

 

Question: Write about strategic management.

Answer:

Introduction

Strategic analysis is an important concept for the corporates as it helps the organization in the identification of internal and external analysis of the company, which will benefit the organization in the long run. In the competitive scenario, the companies have to make strategic planning for the future prospects of the business. In the present paper, we have discussed the strategy formulation of FedEx Corporation the biggest logistics corporation of US, by making an analysis on the basis of internal factors and other strategic tools for the successful implementation of organizational goal and strategies. The company has already attained a high reputation in the world market (Villamayor,2015). This report will help the company in assessing the resources of the company by using VRIO analysis and value chain analysis that helps in providing recommendations to the CEO of the company in terms of strategic vision and objectives that helps the company in making more competitive.

Company profile

Fed Ex is the multinational corporation which deals with the wide range of supply chain, logistics, and transportation-related business information services. FedEx was incorporated in 1971, by the 28-year-old Frederick Smith with the name Federal Express Corporation. Smith is a former marine pilot that identify the problem of difficulty in getting packages within two or three days of operating the firm. This problem gave an idea to him to provide the delivery services for making the delivery effective. And here the idea of FedEx has evolved. The corporation was created in 1998 as FDX Corporation, and converted into FedEx Corporation in 2000. Presently the company is having more than 2, 90,000 employees and committed the safety on the basis of ethical and professional standards.

Vision, mission, and objectives

The company is having a vision of making possible for people and business in connection and collaboration with each other. FedEx emphasize on people first as they are the important assets, with the help of them the goals are accomplished. The company is focused on providing high-quality services Save Time and Improve your Marks. (2018)..The company is using its strategies in making itself competitive in terms of acquiring the market share with respect to its competitors.

Pestle analysis

Political
The company has to be focused on the political factors as they deal in logistic business, so the company has to take permission from the government for making upgradations in business for the success of the organization. Any political instability will lead to the problem for the company as it results in the major impact on the FedEx contribution.
Economic
The company has to consider the economic factors as the sole growth of the company is linked to the economic growth of the country. The changes in the dollar process will affect the economic growth of the country, as according to statistics FedEx is considered as the 21st largest contributor, which result in trade opportunities.
Social
Social practices for FedEx involves that the freight should be time bound and reached to the customers without any damage, to increase the customer demand (FedEx - FedEx - FedEx Express Strategy. (2018). . The countries who are having high population rate are seen as the potential customers for FedEx. In addition to that, the business of the company is dependent on the literacy rate as more literate people need more services.
Technological
The firm is having the strong technological concept for the tracking system of couriers in the market. The concept of online shopping increases the business of the company due to the online concept of home delivery (Chatzoglou, 2017). The technological advancement results in easy tracking of packages and makes the company more effective in terms of customer queries and feedback. 
Environmental
These factors impact the company as the climatic change will delay the delivery system of the company, and affect air transportation. So the company has to work hard for the sustainability of the environment of any country, to reduce the impact of environmental factor on the company.
Legal 
The company also has to analyze the legal factors of the country as every organization is having different legal factors. So the company has to understand the legal procedures in terms of labor laws and ISO certification. In addition to that, the company also has to provide information security and become answerable in terms of lawsuits.

Internal analysis SWOT table

Strategic management is having an important impact on organizational goals and actions. Strategic decisions are helpful for the managers in reaching the long-term objectives of the company. For providing the recommendation here we have conducted the SWOT analysis for the future development of the company.
Strengths
The brand value of FedEx stands at $ 65.418 million as in 2016 and the company is holding a high market value of 68% in the same year. These figures, as well as the additional services that are provided by the company, provide the strong brand image to the company (FedEx SWOT Analysis, 2018). The financial strength of the company is shown in the quarterly growth revenue of the company for the year 2017, which attract investors in terms of making investments in the organization (Paras, 2017). In addition to that the patents and the diversified organization size act as the strength of the company against its competitors.
Weaknesses 
The company is having the dependency on the US market for the revenues as it leads to many external problems for the company .in addition to that the company is facing the decline in the annual growth rate due to lack of innovative products and services.
Opportunities
The company is having global opportunities in the areas of Europe, Middle East, and Africa regions. The company is also working on the strategic alliances for making diversification in the service portfolio and improve profits (Bauer, 2015). The company is also having hybrid electric vehicles which are the largest in the logistics industry.  
Threats
The company is facing intense competition due to the competitors like DHL International, US Postal service, TNT NV,Con Way Inc. etc. as they provide innovative services to the customers at low cost (Marketing Plan of FedEx Express. (2018). . The company is also having the threat of seasonability as in the US the volume  is there between Oct and Nov , whereas Freight LTL group handle lower volume in Dec,-Feb. the business is also affected by labor relations Act 
VRIO analysis
VRIO is a tool used to understand the competitive advantage of the form by analyzing the internal and external environment of the organization.
Valuable
Fed ex is creating value in terms of its operations with 656 aircrafts that are working worldwide in the areas of Asia, Europe ,Latin America etc.in addition to that the company is created value in terms of environmental stability by the use of hybrid buses and trucks and all the FedEx envelopes are carbon neutral , which do not harm environment.
Rare
The company is having the largest air cargo airport in the world. In addition to that, the company is having the air-ground infrastructure, which is customer oriented and provides door to door services to the customers at international locations, for meeting the varied needs of customers.
Imitability
The organization is different in terms of P-S-P philosophy, which means people, service, and profit.as it is saying that nature of the industry makes processes but the uniqueness lies in the skill and quality of the workforce. The company is employee oriented and possess the value of the company. 
Organization
FedEx is the organization that provides integrated business applications with the help of competing companies under the brand name of FedEx brand (Bull, 2016). The company is initiating the international presence by closing their hubs in Asia Pacific region which make the company the largest logistics company in the US, in terms of high barrier of entry at the social and the legal environment.

Recommendations 

FedEx is primarily concentrating on the US market, but after doing the strategic analysis of the company and by the identification of opportunities it is found out that the company needs to focus on the Asian market as well which includes India and China as these countries are showing tremendous growth opportunities. UPS is considered as the biggest competitor of the coma0ny in the national and international market. UPS is playing a political game against the company due to the labor rules, which is considered problematic for the company. For that, the company needs to follow proper labor laws. And as per the value chain analysis model, the company is focused towards its employees as they considered employees are the backbone of the organization. So to achieve the competitive advantage the company needs to focus on employee satisfaction.

Conclusion

On concluding the report, it is obtained that FedEx is having a competitive advantage in the market, but the company needs to move in the foreign market for increasing the market share. The intangible and tangible asset analysis states that the company is having a good financial position in terms of current assets with an increase of 12,678 from the previous year, and the company is also having valuable resources in terms of hybrid buses and vehicles FDX : Summary for FedEx Corporation - Yahoo Finance. (2018). . The company is also following the P-S-P principle which makes it differentiate from other organizations. This report is of great advantage to the researchers those who are interested in the same field of study as its focus on the strategic and competitive analysis of the company.

References:

FedEx - FedEx - FedEx Express Strategy. (2018). Investors.fedex.com. Retrieved 22 February 2018, from http://investors.fedex.com/company-overview/fedex-express/strategy/default.aspx
Save Time and Improve your Marks with Cite This For Me, The No. 1 Citation Tool. (2018). Cite This for Me. Retrieved 22 February 2018, from http://www.citethisforme.com/topic-ideas/business-marketing/Business strategy for FedEx-36180050
 FedEx SWOT Analysis | USP & Competitors | Brand Guide | MBA Skool-Study.Learn.Share.. (2018). MBA Skool-Study. Learn.Share.. Retrieved 22 February 2018, from https://www.mbaskool.com/brandguide/transport-and-logistics/2689-fedex.html
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 Marketing Plan of FedEx Express. (2018). Marketing Dawn. Retrieved 22 February 2018, from http://marketingdawn.com/marketing-plan-of-fedex-express/
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FedEx Corp. (FDX) | Assets. (2018). Stock Analysis on Net. Retrieved 22 February 2018, from https://www.stock-analysis-on.net/NYSE/Company/FedEx-Corp/Financial-Statement/Assets
 FDX : Summary for FedEx Corporation - Yahoo Finance. (2018). Finance.yahoo.com. Retrieved 22 February 2018, from https://finance.yahoo.com/quote/fdx?ltr=1
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Paras, M. K., Pal, R., & Ekwall, D. (2017). Systematic literature review to develop a conceptual framework for a reuse-based clothing value chain. The International Review of Retail, Distribution and Consumer Research, 1-28.
Chatzoglou, P. D., Chatzoudes, D., Sarigiannidis, L., & Theriou, G. (2017). The role of firm-specific factors in the strategy-performance relationship: revisiting the resource-based view of the firm and the VRIO framework. Management Research Review, (just-accepted), 00-00.
Villamayor-Tomas, S., Grundmann, P., Epstein, G., Evans, T., & Kimmich, C. (2015). The water-energy-food security nexus through the lenses of the value chain and the Institutional Analysis and Development frameworks. Water Alternatives, 8(1), 735-755. 

 

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