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Nanhua University

Mid-Term Assignment

Strategic Management Course

Topic:

Logistic Industry - FedEx Company

Team Member 倩蓮 10833022 安宋朗 10833025 蘇妮卡 10833027

1. PROFILE of FedEx

2. Mission, Vision and Value

3. Major Stakeholders

Input to the materiality process included a literature review, analysis of global trends, and benchmarking of leading sustainability practices. It also included internal and external stakeholder engagement. Internal engagement comprised interviews with senior management across the business and an online survey to hundreds of employees around the world. External stakeholder engagement included phone interviews with representatives from academia, customers, industry associations, media, NGOs, and suppliers, as well as an online survey. Major Internal Stakeholders:

• Admission Employees
• Consignor
• Managers
• Owners
• Planner and Regulators
• Supply Chain Workers Major External Stakeholders:
• Customers
• Suppliers
• Industry Association
• Media
• NGOs
• Carrier and agents
• Government
• Local Communities

e. Competitive Prices

Regardless of what you are selling, price matters to consumers. FedEx exploits economies of scale to offer quality service at a competitive price.

f. Time-critical deliveries

When it comes to package deliveries , time is of the essence. If a customer orders an overnight delivery, they are assured (with a real-time tracking) that FedEx will deliver on their doorstep the next day, which has enabled attraction and retention of customers.

g. Profitable Acquisitions

Through acquisitions, FedEx has broadened its global reach and services with subsidiaries such as:  Kinko’s Inc. (2004)  Parcel Direct (2004)  Watkins Motor Lines (2006)  Prakash Air Freight (2007)  TATEX (2012)  GENCO (2015)  TNT Express (2016)  Flying Cargo Group (2019)

h. Effective Marketing

From famous Tom Hank’s movie like Cast Away to sports, and creative TV ads, FedEx has exploited the power of marketing with a purpose very effectively. Some of the FedEx sponsor events:  FedEx Cup on the PGA Tour  French open tennis tournament  ATP World Tour men’s professional tennis circuit  NASCAR Sprint Cup series  National Football league (NFL

i. Electric Trucks

FedEx has made a reservation of 20 Tesla fully electric trucks. FedEx has always focused on sustainability and utilizing alternative-fuel vehicles to increase efficiency in operations and fuel usage.

4.2 Comparative Advantages of FedEx

a. Expand into Emerging Markets

Demand for the courier, logistics, and freight services, is increasing rapidly in emerging economies in Asia, Africa, and Latin America, along with improvement in economic situation. FedEx can expand its operations in these economies to tap into the growing demand.

b. Focus on retail e-Commerce

Global retail e-commerce sales are forecasted to grow from $3.5 trillion in 2019 to $6. trillion in 2023. FedEx has the opportunity to capitalize on the growing demand for delivery services in the retail e-commerce sector.

c. Diversify Portfolio

With its extensive global network already functional, FedEx has a major advantage over many online retailers. FedEx can diversify its portfolio by entering into the online retail sector.

d. Expand through Mergers and Acquisition

Instead of investing immensely to set up from scratch in new markets, FedEx can exploit its vast financial resources to acquire small and medium couriers in these markets for quick expansion.

e. Innovation

Moreover, styles of governments also influence the operations of a business. For example, FedEx primarily operates in countries with a democratic form of government. One of FedEx’s perks is doing business in countries with a democratic form of government. Such governments provide companies with a friendly and supportive environment to carry out their operations. Talking of supportive policies, governments with a relaxed taxation policy toward businesses are considered a haven for inventors. However, while considering the political factors that influence a company’s operations, we must not forget that tax policy broadly impacts businesses. FedEx should invest in countries where governments facilitate investors and impose low taxes on investors.

5.2 Economic Factors

Another critical element of this PESTLE analysis framework is economic factors that affect the performance of a business. Like any other business, economic factors such as inflation, interest rate, and recessions influence the operations of FedEx. The economic growth of countries directly impacts the business residing within its geographical boundary. Therefore, if a country is observing economic growth, a good level of economic activity is taking place in that country which is beneficial for any business. The GDP growth can be an excellent indicator to guide FedEx while making expansion decisions. Therefore, to expand its operations, FedEx Corporation should choose countries with a high GDP growth rate for expansion. A high economic growth rate provides opportunities for long-term growth objectives and can stimulate the demand for FedEx’s products. However, if a country’s economy grows slowly, consumers will be more conservative spenders, directly affecting FedEx’s revenue growth. Another economic factor that is considered to be very important is inflation. Inflation is when the cost of living rises, and people spend more money than the number of goods they can purchase. Therefore, it affects companies negatively since it reduces consumer spending on goods and services. Currently, we are observing high inflation worldwide as post-COVID-19 effects and now due to the Russia-Ukraine war. Operating in such circumstances can be very damaging for FedEx since high inflation would cause a drop in the demand for FedEx services, and the company’s cost of operations would also increase. This would lead to a loss in revenue and market share.

5.3 Socio-cultural Factors

Social factors are the third essential component of the PESTLE analysis. Social factors represent the important demographic characteristics such as norms, social values, and customs of a society. When a business carries out its operations in different countries, that business must understand the social factors of those countries. Therefore, the success of FedEx can be attributed to its ability to identify social factors and adapt its strategies accordingly. One of the key social factors that impact the operations of businesses is consumer behavior. The amount of money you have available to spend on goods and services is your disposable income. People who possess more disposable income and are willing to spend more on goods, products, and services to improve their lifestyle will provide exciting growth opportunities for FedEx Corporation. FedEx should target markets like the USA to operate since it has the highest household consumption in the world. This means operating in such markets could help FedEx in generating high revenue.nMoreover, FedEx should keep a close eye on the demography of its operating countries. Today, in a world where marketing plays a crucial role in making a business successful, you need to know the demographics of the market for efficient marketing. For instance, FedEx could use marketing strategies targeting immigrants with diverse backgrounds by showing its soft side towards immigrants in a country like the USA, where more than 51 million immigrants reside.

5.4 Technological Factors

As the world is getting technologically advanced, FedEx needs to stay connected with modern technological developments to gain a competitive edge and stay relevant in the market. This article section will discuss some technological factors that have important implications for FedEx Corporation. Back in the days’ businesses only used to look at the infrastructure of a country before expanding their operations in a country, but now to perform well in a market, it is essential to look at the technological infrastructure of a nation. Countries that have well-developed technological infrastructures are more likely to be able to provide the foundation for cost reductions and innovations in a company. It is very beneficial for FedEx if they work in countries that have a well-developed

5.6 Environmental factors

Environmental factors, such as natural resources and waste disposal, have always been important for all businesses. However, environmental factors have gained higher importance in the business environment due to global warming and climate change. Since many countries impose heavy fines and even bans on companies that harm the environment due to their practice, FedEx should gain an understanding of all environmental regulations to avoid lawsuits and reputation damage in the market. Strict laws and regulations to protect the environment push businesses to take action towards reducing environmental harm. FedEx corporation should adopt responsible production and consumption practices, improve its marketing image, and ensure full compliance with environmental regulations. The development of renewable energy sources emerged as a powerful trend in various sectors. In some world regions, governments even offer attractive subsidies for renewable energy sources. By taking advantage of these benefits, FedEx Corporation can achieve sustainable business development objectives by investing in renewable energy sources. This will not only improve the image of FedEx, but it will also cut down the operating costs of FedEx, which will generate high revenues for the company.

6 Challenges and Suggestions