The need for the services of logistic companies has experienced a geometric increase in recent times, fueled by the spike in online shopping. Our company focus on this strategic analysis is the Federal Express (FedEx), established on April 17, 1973, by W. Smith a Yale graduate.
However, logistic companies have not been able to meet up with the demand for their services because they lack the capacity to fulfill these deliveries. This is largely due to the firm’s limited resources and unpreparedness for such geometric increase for parcel delivery. Even though the company was not able to meet all its scheduled parcel deliveries, the firm still recorded a substantial gain in 2017, the majority of which came from ground delivery.
Therefore, our strategic plan includes repositioning the FedEx ground delivery service to capture this externality and increase ground delivery services revenue by 20 percent. Using the EFE and IFE matrices, we determined that Amazon accounts for about half or 53 percent of the United States online sales. Although the company is entering the logistics business, we believe the rate of shop-and-ship commerce will double that of last year.
However, the existing system is not capable of meeting the demand for on-time delivery, especially during the peak period. To address the above problem, we recommended a strategic alternative for FedEx based on the results of various strategical analysis tools used that converged to the same conclusion i.e., the need for FedEx to expand its ground delivery service. Further, this strategic alternative consists of opening new Hubs, increasing ground delivery vehicles and delivery drivers. However, adopting these alternative strategies has its associated advantages and threats. Some of the advantages of expanding its ground delivery system are for the firm to effectively capture the benefits of the spike in online purchases.
Furthermore, opening more Pickup/Delivery Stations and (Hubs) can ensure speed of shipment and delivery. However, one of the major impediments to this strategy is the cost associated with increasing its delivery fleets and drivers. Therefore, channeling a portion of the Tax cut windfall to purchasing these vehicles and hiring new delivery drivers will yield a return on investment in the long-run based on the result of the strategic analysis.
Table of Contents
- Executive Summary
- Introduction
- The History of Federal Express (FedEx)
- Vision and Mission Statement
- FedEx External Assessment
- FedEx External Factor Evaluation matrix (EFE Matrix)
- Analysis of External Evaluation (EFE) Matrix
- Competition Profile Matrix, (CPM)
- Analysis of Competition Profile Matrix, (CPM)
- Conclusion
- Internal Assessment/Audit
- FedEx Internal Strengths
- Internal Evaluation Matrix of FedEx
- Financial Ratio
- Analysis of Result
- Our Conclusion
- FedEx's SWOT Matrix
- Analysis of Result
- Conclusion
- FedEx BCG Matrix
- BCG Matrix
- Internal Evaluation Matrix
- FedEx BCG and IE Matrix Analysis of result
- Conclusion
- SPACE Matrix
- Analysis of Space Matrix Result
- Conclusion
- Alternative Strategy
- References
Objectives and Key Themes
This strategic analysis of FedEx aims to identify optimal strategies to capitalize on the surge in online shopping and its impact on package delivery services. The analysis utilizes several strategic tools, including EFE and IFE matrices, SWOT analysis, BCG matrix, and SPACE matrix, to assess FedEx's internal and external environments and recommend appropriate strategic alternatives.
- Analyzing FedEx's competitive landscape and market position within the logistics industry.
- Evaluating FedEx's internal strengths and weaknesses in relation to its external opportunities and threats.
- Developing strategic recommendations to enhance FedEx's ground delivery services.
- Assessing the financial implications and potential return on investment of proposed strategic alternatives.
- Exploring the impact of external factors, such as the growth of e-commerce, on FedEx's strategic planning.
Chapter Summaries
Executive Summary: This section provides a concise overview of the strategic analysis, highlighting the significant increase in demand for logistics services due to the rise of online shopping. It emphasizes the limitations of existing delivery services and proposes a strategic plan to expand FedEx's ground delivery services to capture this market opportunity. The plan includes increasing ground delivery revenue by 20% through the implementation of strategic alternatives like opening new hubs and increasing the number of vehicles and drivers. The analysis uses EFE and IFE matrices to support the recommendations.
Introduction: This chapter introduces the paper's objective: to conduct a comprehensive strategic analysis of FedEx using various tools like EFE and IFE matrices, SWOT analysis, and other matrix methods to evaluate FedEx's strengths, weaknesses, opportunities, and threats. The goal is to recommend strategic alternatives for maximizing FedEx's return on investment.
The History of Federal Express (FedEx): This chapter details the founding of FedEx by Frederick W. Smith, highlighting his undergraduate term paper that foresaw the need for a specialized system for time-sensitive shipments. The chapter traces Smith's journey from his initial idea, through his military career, to the establishment of Arkansas Aviation Sales, and finally, the creation of Federal Express. It emphasizes the innovative nature of Smith's vision and its impact on the logistics industry.
Keywords
FedEx, strategic analysis, logistics, e-commerce, online shopping, ground delivery, EFE matrix, IFE matrix, SWOT analysis, BCG matrix, SPACE matrix, strategic alternatives, market opportunity, competitive advantage, return on investment.
FedEx Strategic Analysis: Frequently Asked Questions
What is the purpose of this FedEx strategic analysis?
This analysis aims to identify the optimal strategies for FedEx to capitalize on the growth of online shopping and its impact on package delivery services. It seeks to recommend strategic alternatives that will maximize FedEx's return on investment.
What strategic tools are used in this analysis?
The analysis utilizes several strategic tools, including EFE (External Factor Evaluation) and IFE (Internal Factor Evaluation) matrices, SWOT analysis, BCG matrix, and SPACE matrix to comprehensively assess FedEx's internal and external environments.
What are the key objectives of the analysis?
Key objectives include analyzing FedEx's competitive landscape, evaluating its internal strengths and weaknesses, developing recommendations to enhance ground delivery services, assessing financial implications of proposed alternatives, and exploring the impact of e-commerce growth on FedEx's strategic planning.
What are the key themes explored in the analysis?
Key themes revolve around the increasing demand for logistics services due to e-commerce, the need to improve ground delivery services, competitive analysis within the logistics industry, and the utilization of various strategic frameworks to formulate effective strategies.
What is covered in the Executive Summary?
The Executive Summary provides a concise overview of the analysis, highlighting the increased demand for logistics services and proposing a strategic plan to expand FedEx's ground delivery services. It emphasizes increasing ground delivery revenue by 20% through strategic alternatives and uses EFE and IFE matrices to support its recommendations.
What does the Introduction section cover?
The Introduction sets the paper's objective: a comprehensive strategic analysis of FedEx using various matrices (EFE, IFE, SWOT, BCG, SPACE) to evaluate its strengths, weaknesses, opportunities, and threats, ultimately recommending strategies for maximizing ROI.
What information is provided about the history of FedEx?
This section details FedEx's founding by Frederick W. Smith, highlighting his foresight in recognizing the need for specialized time-sensitive shipping. It traces Smith's journey from his initial idea to the establishment of Federal Express, emphasizing the innovative nature of his vision.
What are the key chapters and their content?
The analysis includes chapters on the FedEx history, vision and mission, external and internal assessments using various matrices (EFE, CPM, IFE, SWOT, BCG, SPACE), financial ratio analysis, alternative strategies, and a conclusion. Each chapter contributes to the overall strategic assessment of FedEx.
What strategic recommendations are likely to be included?
Specific recommendations will depend on the detailed analysis, but they are likely to focus on enhancing FedEx's ground delivery capabilities to meet the growing demand from e-commerce, potentially including expanding infrastructure, optimizing logistics, and improving operational efficiency.
What are the keywords associated with this analysis?
Keywords include FedEx, strategic analysis, logistics, e-commerce, online shopping, ground delivery, EFE matrix, IFE matrix, SWOT analysis, BCG matrix, SPACE matrix, strategic alternatives, market opportunity, competitive advantage, and return on investment.
- Quote paper
- Oluwagbenga Afolabi (Author), 2018, Strategic Management Analysis of FedEx, Munich, GRIN Verlag, https://www.grin.com/document/426889
