Environment Analysis : Shipping Industry

1600 Words7 Pages
ENVIRONMENT ANALYSIS Shipping industry services is oligopolistic in nature with few global players like UPS, DHL along FedEx as its competitors. Shipping industry is in mature stage of industry life cycle. Low cost operations by competitors create barriers to entry into the industry. EXTERNAL ENVIRONMENT PEST ANALYSIS Political Factors Government rules and regulations are the primary political factors that affect an organization. As Fed ex has its reach across the globe, it has to interact with various nations around the world which are lenient in enforcing trade regulations and which grants them with the privilege of getting better international services. Other political factors which influence the business are political stability,…show more content…
Customers can check the status of their shipment from anywhere at any time. The evolvement of e-commerce is the new way with which FedEx is able to communicate with its customers and business partners. Porter’s Five Forces 1. Risk of new entry by potential competitors Barriers to entry are very high. High fixed cost associated with establishing the international transportation network is one of the reasons for a high entry barrier. Establishing hubs transport network, air fleet, ground transportation etc. requires a lot of capital. Existing companies can take full advantage of cost by achieving large shipment volume and economies of scale. 2. Extent of rivalry between established firms Rigorous competition can be seen between the already established firms in shipping industry. They have to keep themselves updated with the constantly changing environment. They have to strive for continuous improvement in quality and innovation, prices. Low switching cost in the industry. The low switching cost for this industry has further made the rivalry intense. Due to high fixed costs also and maintaining the infrastructure of express delivery has caused and intense rivalry between the firms. 3. Bargaining power of buyers Bargaining power of large buyers is very high as there is low switching cost in the industry. Due to this, the buyers can switch
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