FedEx Situational Analysis

FedEx Situational Analysis

Conduct a situational analysis for FedEx. What are its internal strengths and weaknesses? What strategic opportunities and threats does it face? Think SWOT analysis.

FedEx has evolved into one of the most powerful freight and courier service providers, in addition to providing world class logistics and business support. It's core strengths in logistics and supply chain management continually lead the U.S. And global air express industry (Pettus, 2006). The company is organized into the divisions of FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services, Uniting all of these diverse divisions into a single unified identity has been possible through the use of world class branding and marketing. FedEx has one of the strongest brand images globally today, instantly recognized and considered a global leader in brand management (Murphy, 2011). In addition their strength in branding, they have been able to attain a very large scale operation in logistics and supply chain management that is comparable to WalMart and globally-based mass merchandisers and retailers (Oster, Rubin, Strong, 1997). FedEx is also known for managing their entire logistics, supply chain and services value chains at a very high level of cost control and precision which has also helped to revolutionize the entire air express industry (Pettus, 2006). The strengths of an exceptional brand image, well-run and globally-based operations and the ability to attain high levels of efficiency throughout their operations differentiate the company in the market.

Weaknesses the company is facing include a lack of sales in their core American markets and an inability to open new markets globally fast enough to compensate for declining revenues. There is also the many lawsuits the company is facing, partly from competitors domestically and from foreign governments for their pricing strategies (Pettus, 2006). These weaknesses are perennially impacting their bottom line over time as well, draining profits at a time when they are needed most (Oster, Rubin, Strong, 1997).

There are many strategic opportunities and threats the company is facing as well. First, the potential for global expansion is overdue in terms of being addressed. FedEx has struggled with its globalization plans yet must move quickly on this opportunity before it slips away. The second strategic opportunity is the commercialization of the Boeing 777F freight aircraft that FedEx will be pioneering the use of later this decade. A third strategy opportunity is the continual build-out of global supply chain services and the use of information technologies to automate them (Viaene, De Hertogh, 2010). The strategic threats include dis-intermediation due to emerging competitors having greater process efficiency in smaller markets based on IT investments and the intense competition on the supply chain services markets (Oster, Rubin, Strong, 1997). FedEx will need to use all their available IT talent, which is formidable, to overcome these weaknesses and still grow their business.

Given the information compiled in question #1, describe how you see FedEx's future in terms of business growth and continued success.