Federal Express Corporation was founded in 1971 with money that Frederick W. Smith had inherited. After purchasing controlling interest in Arkansas Aviation Sales, Smith went back to a C graded term paper that he had written years ago as a student and developed the idea of overnight package delivery. The company began operating on April 17, 1973 and used 14 aircrafts to distribute 186 packages to 25 cities within the USA. However, in a matter of approximately 40 years these figures have grown to 658 aircrafts, 7.500.000 packages/day and more than 220 countries around the globe. All this was possible thanks to FedEx’s global acquisition strategy – main competitive advantage – which has given the company a unique ability to access various markets around the globe. The multiple established firms and companies acquired by FedEx in various countries have all been integrated into a special widespread infrastructure, consisting of four segments - FedEx Express Segment, FedEx Ground Segment, FedEx freight Segment, FedEx Services Segment. These in turn have 11 operating companies, which operate independently. Package rates are calculated according to traveling distance, package weight and delivery service; the faster the package is to be delivered, the higher the price. Additional services such as picking up packages from the sender, even on weekends are available in case of additional payments. A SWAT analysis of the company revealed the below-presented characteristics.
* Strong brand image - The Company has a powerful reputation and is doing well especially in Asia. Moreover, in 1997 it became the only cargo carrier allowed to fly its own aircraft and use its warehousing facilities in Moscow. The company’s working strategy put all its customers in the heart of every single activity that the organization performed. That is why FedEx has been the pioneer in express delivery service, and has 95% customer satisfaction rate. * Cooperation with competitors –:
* FedEx has agreements with USPS according to which it Provides air transportation for certain postal services including priority mail, having drop-boxes placed in every US post office in exchange, * The company also has international agreement for the creation of the postal services global express guaranteed service – date certain international delivery to over 190 countries. The agreements that were made by these companies were renewed in 2006 and extended until 2013. All agreements were quite successful for FedEx and have generated over billion dollars of revenue for the company. * Well planned expansion – Allowing for large scale operations (air and ground services, consulting, and customers) and economies of scale – the company has acquired large trucking companies, airways with its own airplanes, etc creating a chain of transportation system. * One of the best companies to work for – named by Fortune magazine. The company’s employees have received high quality trainings and have advantages such as benefits. . The firm values its employees and support diversity in the workplace and in employees’ thinking. Management continuously tries to improve and enhance working style, maintaining the efficiency, feeling of trust and honesty among the company’s employees. As a result of these, FedEx was rated as the most admired corporation many times in a row * Good marketing – FEDEX is a master at recognizing untapped customer needs and filling them well. It is constantly working on improving quality of services in order to maintain high consumer satisfaction level.
* Labor costs – One of the main issues that FedEx faces nowadays is the continuous decline of its operating margin from 2007 to 2009 by 7.2%. One important reason for these changes is a global rise in employee salaries as well as the benefits that they receive, such as health care packages. * Fuel dependency –Since most of the shipments done by the company...
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