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FedEx Company: Five Forces Analysis
The company examined is FedEx and the relevant industry is the overnight and express ground delivery business. There are a few different types of market participants. The first of these are the overnight and ground providers, FedEx and UPS. These are the market leaders and offer the most comprehensive route networks and packages of services. TNT and DHL offer some competition but have a much more limited market presence. There are other firms in the business as well. USPS does not have an overnight business, but handles express ground deliveries. There are also many local courier companies, handling a range of deliveries including same day service. Many of these offer rapid service, but within a single geographic area.
The bargaining power of buyers is moderate in this industry. Most customers have regular or semi-regular business -- these are the revenue drivers. The switching costs are modest, but with few options the threat of switching is not a major lever more than once. Large customers...
Price sensitivity is relatively low, however, because these customers rely on the service as part of their business, but the costs usually are not a significant part of total operating costs.
The bargaining power of suppliers is moderate. Major inputs include labor, fuel and vehicles. The major companies are huge buyers of aircraft and trucks, to the point where they have bargaining power over suppliers. The need for quality labor and the lack of labor specialization moderates their bargaining power over labor. They have low bargaining power over the price of fuel, which is set in the global commodities markets. Sometimes they utilize a fuel surcharge to help mitigate the volatility of fuel prices, leveraging their bargaining power over buyers.
There is a low threat of substitution. Where substitutes are reasonable -- such as sending pdfs over email -- they are typically utilized. The existing demand tends to be non-substitutable. This is good for the industry. The threat of new…
References
Porter, M. (2008). The five competitive forces that shape strategy. Harvard Business Review. Retrieved February 12, 2014 from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1
Blue Nile Porter's five forces analysis focuses on the factors that influence a firm's ability to earn a profit: the bargaining power of buyers, the bargaining power of suppliers, the threat of substitutes, the threat of new entrants and the intensity of rivalry within the industry. The online jewelry business, and Blue Nile in particular, has only a moderately favorable business environment. The company is relatively small in the jewelry business
UPS (United Parcel Service) Porter's five forces Rivalry: there is intense competition within the courier industry. The stiff competition stems from the low number of firms in the industry. The major two competitors control almost sixty percent of the market share with the remaining minor competitors controlling the remaining percentage. Buyer power: the bargaining power of consumers in this industry is low. Producers have a tendency of threatening companies through forward integration. Producers
.....industries that are much more profitable than others. Per data from the BBC, there are two industries among five major ones that stand out (Anderson, 2016). Indeed, when looking at pharmaceutical firms, banks, car manufacturers, oil/gas refiners/sellers and the media, the first two of that list are clearly the best. The media does decently at about 12%, oil and gas does about 8% and carmakers are at about six percent.
FedEx was founded by Fred Smith after his tour in Vietnam, and he continues to run the company today, as the only CEO that FedEx has ever known. The company began by offering overnight courier services, an industry that to that point had not existed. Today, that unit is known as FedEx Express and it is still the largest in the company. There are competitors, however, mostly notably UPS, DHL
FedEx In the case of FedEx, some elements of its business would be subject to regulatory oversight from the Department of Justice, which enforces the nation's antitrust statutes. These laws exist to protect consumers from unfair business practices. If the DoJ were to be involved in a FedEx merger this might imply that the company was attempting to merge with UPS. The result of that merger would be to take the
FedEx Applying Strategic Market Planning to FedEx Marketing Foundations FedEx (NYSE: FDX) is one of the leading providers of global logistics services to the Business-to-Business (B2B) and Business-to-Consumer (B2C) marketplaces globally. FedEx is particularly strong in the U.S. where 73% of total revenues in their latest fiscal year were generated (FedEx, 2010). FedEx's approach to marketing is to accentuate the role of trusted advisor in shipping, 3rd party logistics (3PL), and supply chain