Fedex Macroenvironment Study

The Internet over the past few years has seen a huge increase in online businesses and consumers. Electronic-commerce is expected to generate $36 billion in revenue during 1999, up 140% from last year alone.[1] With such a huge amount of money to be made on the Internet it is becoming very appealing for small businesses and start-up companies to try and make their niche in e-commerce. The Internet is drastically affecting the way companies and people conduct business now. E-commerce encourages growth in existing as well as new businesses because of lower overhead costs, the huge consumer base and the freedom of information flow. However the online revolution has created a large

In addition to that, FedEx came up with new services such as Saturday deliveries, delivery by 10:30 A.M., customer interfaces (drop boxes, drive through stations and express delivery stores) and same day pickup of order. This is to distinguish its services. More on that, FedEx's philosophy of "People-Service-Profit" was successful in insuring a union free workforce devoted to customer focus. In 1978, deregulation in transportation helped FedEx to acquire larger planes therefore achieve lower cost. Trade deregulation in Asia-Pacific enabled FedEx to expand further. The acquisition of Gelco express, Tiger International, and establishment of Airport Hub in Brussels expanded FedEx internationally. Inflation and rising global competitiveness generated the need for "just-in-time" supply model, which was the advantage supported by FedEx advanced technologies.

I am choosing to do my Business Analysis paper on e-commerce. I will explain the importance of it as well as the effects on the global economy. I will discuss the advantages of telecommunications and information technologies in a business versus those businesses without e-commerce. I will also discuss the marketing strategies involved with e-commerce and how it helps businesses. Due to the global nature of internet business, electronic commerce (e-commerce) standards have become a priority on the national and international level. While most traditional businesses are subject to local, state, and national

By capitalizing on this strategy, FedEx was able to boost its average delivery volume in 1976 to 20,726 packages per day via its three services, Priority-One, Standard Air, and Courier Pack, compared with an average of 10,521 delivered daily the prior year. Clearly the company’s calculated use of strategically-located hubs, nighttime flight routes, and limited package size allowed the company to carve out a niche by reliably delivering packages on an immediate, overnight basis.

FedEx’s new product Courier Pak makes sense because of its’ high profit margin and potential to generate new volume. Out of the 3 services that Fed Ex provides, CP yields the highest profit margin at 66% while Priority-One is at 55% and SAS is only at 27%. In addition to this, the company believes that it will be able to boost up sale of CP from 1300 to 6000 packages per day. This shows that CP is the most profitable and huge potential for growth.

Mark Twain once said, “The man with a new idea is a crank until the idea succeeds”. This phrase could be applied to Fred Smith and Federal Express. From their beginnings in Little Rock, Arkansas in the early 70’s delivering 186 packages overnight to 25 U.S. cities, to three decades later parlaying it’s $20 billion dollar corporation into no less than five major operation companies. FedEx has become the world’s leader in global express transportation, providing fast delivery of documents, packages and freight shipments worldwide. As a result, the name “Fed Ex” is used in much the same manner as name “Band Aid” has today. Many use this term generically

FedEx is one of the top delivery companies in the world, competing with companies like United Parcel Service (UPS) and United States Postal Service (USPS) among a few. Online shopping has driven a huge demand for these type of companies. However, increasing costs like fuel and pressure for faster delivery have effected these companies. We will be analyze FedEx from four perspectives, ratios, horizontal and vertical analysis, and management discussions.

People live in a society where global information and transportation networks can shrink time and distance, creating competitive advantages for businesses, customers, and anyone who uses FedEx services. While FedEx does incorporate some of the aforementioned strategies, each of its employees helps to deliver the necessary quality of work in order for FedEx to continue its rise as a worldwide transporter of goods (Campbell, 1997). One of the strengths that FedEx possesses include superior

Competition within package delivery companies is hard to get into. There are a few dominant companies within this kind of business other than FedEx, which include DHL and UPS. These three companies are the real players while smaller shipping companies don’t stand a chance. FedEx market structure is an oligopoly, which is, “A state of limited competition, in which a market is shared by a small number of producers or sellers.” The competition is really just narrowed down between FedEx and UPS both of who started innovative ideas at an early stage in this market to help better the revenue of their respective companies. Coming up with new deals of pricing strategies through the air or on the ground is a huge part on how these two companies became so successful. FedEx and UPS offer discount freight shipping at prices at which other companies can’t compete or afford to do in order to maintain steady profits. Through the use of airplanes FedEx does around 80 percent of shipping this way while UPS does four times as less shipping by plane at 20 percent. FedEx has control in the market of air shipping, but UPS is considered to be more dominant in ground transportation. Overall the competition is primarily between these two companies and they are both continually

The continuous development of Internet leads to the growth of e-commerce. The electronic commerce is growing constantly due to the continuously increasing number of mobile and online users in the market, primarily the emerging markets. Besides that, the development of the Information Technology (IT), such as the advance of paying processes and the improvements of shipping method also the main reason to cause the growth of electronic commerce (John Ingham, 2015). Most consumers accept e-commerce as their feasible alternative in the purchase of goods and

The cultural environment is made up of institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviours.

FedEx Express, per the website, “invented express transportation and remains the industry’s global leader, providing rapid, reliable, time-definite delivery to more than 220 countries and territories, connecting markets that compromise more than 99% of the words gross domestic product.”(Investor.Fedex.2017) Which is the main selling point of FedEx express, the fact that companies can exchange information faster than normal business deliveries can is a major benefit when dealing with important and time sensitive documents. Another Major benefit would have to be the exchange of items overseas through

Technology and Communication: FedEx continues to search for new technology allowing a budget of $1 billion a year for information technology. They have a highly controlled distribution system with constant information about the status of shipments allowing customers to track them.

Federal Express is one of the well known brands and America’s well known companies in the world known as FedEx as it serves millions of customers through their service. Frederick W. Smith was a undergraduate of Yale University in 1965, who wrote a paper about a industry which would create shipments of products like medicine, computer, electronics, and other products that consumers can purchase. Even though, he didn’t receive a good grade on the essay, the idea that he created was never lost. As Smith, worked in an Aviation firm in 1971 he saw how inefficient the air freight industry was to get packages. As a result, FedEx was created by Smith as he called the company Federal to reveal how this company was created for the use of nationwide customers. Even though more companies, such as DHL, UPS, TNT have become FedEx’s competitors it still has not been successful as FedEx due to the technological advancements. As time progressed, FedEx continued to increase in size and in revenue due to the use of technology that helped meet the needs of customers globally despite the struggle they faced from competitors and different systems that they were creating.

Federal Express, or now known as FedEx, is an international express shipping company that ships anything from envelopes and small packages to large freight. It was the brain child of college student Fredrick Smith, when in 1965 at Yale a professor assigned the class to invent an industry. At that time the only option companies had was to utilized passenger routes to ship packages, which was not very efficient for time sensitive deliveries. Six years later after Smith left the military he bought a small company and experienced how difficult it was to get supplies delivered within a couple of days. Remembering the paper he had written in college, Smith founded Federal Express in 1973. Starting with 14 small planes today it has grown into the world’s largest al-cargo air fleet.