Introduction
Frederick Smith formed Federal Express (FedEx) in 1971, from a term paper he had written about logistical challenges faced by companies in the information technology business. However, FedEx started operating officially on April 17, 1973, with 389 staff. Federal Express was well established by the early 1980’s. It had an annual growth rate of approximately thirty-nine percent which made it a highly competitive firm ( Goldner, Karlin, & Koutsoupias, 2016 ). Consequently, in 1983’s fiscal year, FedEx made history in the United States by becoming the first firm to report one billion dollars in revenues within the first ten years of operation, and without any acquisitions or mergers ( Goldner, Karlin, & Koutsoupias, 2016 ). Federal Express Corporation serves businesses and clients globally with an extensive portfolio of e-commerce, business, and transportation services. Additionally, having an average of $63 billion in annual revenues, FedEx provides cohesive business applications by running companies that compete jointly, and are managed collectively under the renowned FedEx brand ( Goldner, Karlin, & Koutsoupias, 2016 ).
Federal Express’s Vision statement
The vision statement of Federal Express Corporation echoes the firm’s approach in its quest to guarantee steady growth and success. FedEx will endeavor to create mutually fulfilling interactions with its entire partners, suppliers, and employees ( Goldner, Karlin, & Koutsoupias, 2016 ). Similarly, the company focuses on the safety of its employees and clients in all its operations. FedEx endeavors to provide the safest working environment for its employees. Federal Express also strives to conduct corporate transactions that meet the highest professional and ethical standards. The company values innovation and service by improving its expertise and services. Additionally, Federal Express focuses on loyalty and integrity in its operations, which helps to maintain a worldwide customer base (Walker, Ni, & Dyck, 2015) . FedEx wants to have one voice and one message, which will help it to compete collectively. Finally, yet importantly, FedEx strives to have a collaborative management system that works together to preserve relationships with employees and clients (Hofmann & Lampe, 2013) .
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Federal Express’s Mission Statement
FedEx’s mission statement is an assertion of the organization’s core focus and purpose. The company commits itself to provide exceptional customer experience. FedEx also strives to become a great working place for its employees ( Goldner, Karlin, & Koutsoupias, 2016 ). Similarly, the company endeavors to take care of the environment within which it operates. Federal Express Organization commits to being a caring partner in the surrounding community (Walker, Ni, & Dyck, 2015) . Additionally, FedEx is enthusiastic about connecting people and places in a sustainable environment and equally advancing the value of life worldwide. The company will concentrate on producing high returns for its shareholders ( Goldner, Karlin, & Koutsoupias, 2016 ). FedEx will use dedicated operating companies to provide high-quality transportation, logistics, and other related transactions.
External Audit
Opportunities
Taking advantage of the current E-Commerce boom—FedEx should take advantage of the present E-Commerce boom in developing nations because of the high transport demand in these countries. Many packages that are shipped every day and FedEx has an opportunity to utilize that chance. FedEx has resources to deal with the E-Commerce boom that gives it a competitive advantage (Walker, Ni, & Dyck, 2015) .
Making a faster system—Federal Express can improve its client satisfaction by making their systems more efficient and faster ( Goldner, Karlin, & Koutsoupias, 2016 ).
Mergers and acquisitions—TNT express is one of FedEx’s important acquisitions. However, the company has to make more of these similar acquisitions to increase its presence in the market (Hofmann & Lampe, 2013) .
Improving the retail network—Federal Express needs to expand its retail channel and the number of deals in customer-to-customer courier in developing economies (Hofmann & Lampe, 2013) .
Threats
Demand vs. Capacity management— most logistics companies, struggle to balance demand and capacity. Low demand and high capacity make the company incur losses because of fixed costs. Conversely, high demand and low capacity make the company lose on such opportunities. Consequently, FedEx faces a challenge dealing with Demand vs. Capacity management ( Goldner, Karlin, & Koutsoupias, 2016 ).
Price war—a major threat in FedEx’s SWOT analysis is the saturation in the logistics market and the resulting price war. Currently, FedEx is insusceptible to any new entrants in the logistics market. However, the company’s margins are reduced because of the huge spending and stiff competition from the other top logistics companies (Walker, Ni, & Dyck, 2015) .
The external corporate environment—the current fuel cost is one crucial element in the external corporate environment. A high fuel cost will consequently affect the bottom-line. Another factor that affects FedEx is the availability of workforce and space. Similarly, Government intervention, Labor laws, and transport policies affect the company as well ( Goldner, Karlin, & Koutsoupias, 2016 ).
EFE Matrix
Competitive Profit Matrix
Internal Audit
FedEx’s strengths
Commitment to time—FedEx has an advantage when it comes to its commitment to time. The company has made it possible to have faster deliveries both during the day and at night ( Goldner, Karlin, & Koutsoupias, 2016 ). The management at FedEx has done an exceptional job that ensures that all deliveries are on time. Consequently, FedEx’s brand is chiefly associated with timely deliveries (Hofmann & Lampe, 2013) .
High competitive rates—FedEx has a highly competitive rate because of its economies of scale (Hofmann & Lampe, 2013) .
Premium positioning— FedEx’s extensive distribution network and constant performance give it a premium positioning in the logistics business. Similarly, FedEx has particular brands focusing solely on premium positioning. A good example is FedEx custom critical, which deals with very urgent or important documents ( Goldner, Karlin, & Koutsoupias, 2016 ).
Acquiring TNT express—FedEx managed to acquire TNT express in 2015 for approximately $4.4 billion. TNT express was one of FedEx’s mid-level competitors. The acquisition will help FedEx to broaden its market in Europe (Walker, Ni, & Dyck, 2015) .
FedEx’s Weaknesses
Saturation—the logistics market is completely saturated and divided between major brands. Differentiation is a challenge because all services are fast when adopting to differentiation points ( Goldner, Karlin, & Koutsoupias, 2016 ).
Damages during transportation—the damages caused during shipment are a major challenge facing the transport business especially in developing countries. The company’s bottom-line is directly affected because the firm has to repair the damages (Walker, Ni, & Dyck, 2015) .
Policy Claims—FedEx claims are rarely honored because it has loose policies regarding claims (Hofmann & Lampe, 2013) .
IFE Matrix
SPACE Matrix
FedEx’s Strategies and Long-Term Objectives
FedEx should first focus on merging and acquiring most of its top competitors like DHL, Emery, and UPS (Hofmann & Lampe, 2013) . The mergers will help to reduce competition significantly and increase FedEx’s market share growth ( Goldner, Karlin, & Koutsoupias, 2016 ). The projected annual budget for acquisition should be $3.5 billion. Secondly, FedEx should broaden its global market base to reduce its dependence on the United States market. The projected annual budget for widening the market should be about $1.3 billion (Walker, Ni, & Dyck, 2015) . Thirdly, Federal Express should also improve its marketing strategy by advertising its brand more. The projected annual budgets for marketing will be $500 million.
Implementing the strategies
To implement these strategies, FedEx should engage talks with its competitors like DHL. These talks should lead to either a merger or an acquisition (Walker, Ni, & Dyck, 2015) . However, if these top competitors refuse the offer, the company can focus on talks with smaller companies to form the mergers and acquisitions. Additionally, FedEx should spread its business to Asia and Africa to broaden its market base (Walker, Ni, & Dyck, 2015) . The countries in these continents have developing economies, which means higher demand for transport businesses. FedEx should also advertise its brand more especially in the developing economies. The company largely depends on the United States market, which is quite risky for any business ( Goldner, Karlin, & Koutsoupias, 2016 ). Consequently, FedEx should start marketing itself in these developing economies through advertising vigorously.
FedEx Annual Objectives and Policies
Improving its technologies by embracing technological advancements in the logistics business.
Improving customer service in all its departments.
Investing in the logistics sector of most countries.
Strategy Review and Evaluation
FedEx should gauge its performance by first checking if it has merged or acquired competing firms on an annual basis. Similarly, the company should then determine the level of competition after the mergers and acquisitions ( Goldner, Karlin, & Koutsoupias, 2016 ). The competition should be less than before. However, the company should merge more if there are no changes in competition levels. FedEx will also achieve its marketing objective if it advertises in all media like television, radio, billboard and many more. Additionally, FedEx will have achieved its objective if it will have entered the logistics market in most Asian and African countries ( Goldner, Karlin, & Koutsoupias, 2016 ). Merging FedEx with its competitors and broadening its market will make the company a force to reckon with in the logistics industry.
References
Fiat, A., Goldner, K., Karlin, A. R., & Koutsoupias, E. (2016, July). The FedEx problem. In Proceedings of the 2016 ACM Conference on Economics and Computation (pp. 21-22). ACM.
Hofmann, E., & Lampe, K. (2013). Financial statement analysis of logistics service providers: ways of enhancing performance. International Journal of Physical Distribution & Logistics Management , 43 (4), 321-342.
Walker, K., Ni, N., & Dyck, B. (2015). Recipes for successful sustainability: empirical organizational configurations for strong corporate environmental performance. Business Strategy and the Environment , 24 (1), 40-57.
