Owned by Frederick W. Smith, the company was incorporated in June 1971 and officially began operations on April 17, 1973, with the launch of 14 small aircraft from Memphis International Airport. It soon entered its maturing phase in the first half of the 1980s and grown to become the largest operating company in the FedEx family, handling about 3.2 million packages and documents every business day. During the fiscal year 2006, it netted a revenue of $21.4 billion (includes FedEx Trade Networks) and is currently employing more than 139,000 employees worldwide, serving in more than 220 countries and territories and 375 airports worldwide. David Bronczek is the current President and CEO of the well-known express transportation company. Since its inception, FedEx had transformed itself from an express delivery company to a global logistics and supply-chain management company. SWOT ANALYSIS
With more than three decades of experience in providing logistics services to individuals and fellow businesses, FedEx has the strength of dependable know-how in the delivery business. They changed the nature of delivery business by reconfiguring outbound logistics (a primary activity) and human resource management (a support activity) to originate the overnight delivery business, creating value in the process. Convinced that customers would value not only overnight deliveries but also the ability to track them, FedEx developed a proprietary computerised tracking system called Customer Oriented Services and Management Operating System, or COSMOS (Hitt, Ireland & Hoskisson 2003), which introduced computer technology to the shipping industry in previously unheard-of ways and permanently altered the nature of competition within it. Over the years, the company had also invested heavily in IT systems, providing them with a powerful technical architecture that had the potential to pioneer in Internet commerce. WEAKNESSES
WEAKNESSES. With FedEx constantly redefining and increasing its scope of product and service offering, the company has globalised and has become remote to China, shown in their lack of strong personal relationships with the country’s clientele. Also, due to the need to fill their aircrafts with parcels, the company has been forced to take on deliveries with very low profit margins, causing FedEx little financial setbacks, which, when ignored, could blow up to proportions that would cause the organisation serious trouble. Weakness in the controls over the use of FedEx at the front end of FedEx use (i.e., when the agency employee prepares the air bill for shipment) or after the fact (supervisory review of FedEx usage) that would eliminate or minimize the opportunity for fraud, waste and abuse of this program is also observed.
The firm’s main opportunity is to use cooperative strategies to create value for a customer that exceeds the cost of constructing value in other ways (Desarbo, Jedidi & Sinha 2001) and to establish a favourable position relative to competition. Living examples are the two that FedEx already engaged in. In an alliance between the firm and the U.S. Postal Service (USPS), the company roughly transports 3.5 million pounds of USPS packages daily on its planes and will earn FedEx more than $7 billion - $6.3 billion in transportation charges and $900 million in drop box revenue in the seven-year deal with USPS (Ulfelder 2001). The second alliance was with worldwide professional services firm KPMG, which intent is to deliver total, end-to-end supply-chain solutions to large and mid-sized companies. Another opportunity seen for FedEx is the opportunity to take advantage of the recent developme THREATS
Their main competitor in their line of business is UPS, and the two companies compete directly against each other in several product categories. They are locked in fierce battles to dominate...
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