NOTE: Free essay sample provided on this page should be used for references or sample purposes only. The sample essay is available to anyone, so any direct quoting without mentioning the source will be considered plagiarism by schools, colleges and universities that use plagiarism detection software. To get a completely brand-new, plagiarism-free essay, please use our essay writing service.
One click instant price quote
... new entrants are traditionally associated with the technological breakthroughs. This is very unlikely to happen in the field of transporting parcels. Therefore, we will describe the threats of new entrants as moderate. 4) Threat of substitute products The threat of substitute products, in case of FedEx, can be thought of as low. After all, we do not talk here about producing DVD players.
The only alternative to FedEx, which can be described as a substitute, is services of U. S. Mail. Nevertheless, the overwhelming difference in quality of FedEx and U. S.
Mail services does not allow us to compare them. After having taken into the account what has been said in this analysis, we can suggest that overall competitive rivalry, within FedEx market, is moderate. 5) Intensity of competitive rivalry and social factors Since the beginning of Fed Exs expansion on international market, the various political factors affect Companys strategic planning to much higher degree than they used to. While operating abroad, FedEx branches remain the subjects of local laws. In its turn, this makes it harder for the Company to achieve a true unification of its products and services, throughout the world. Nevertheless, the process of Globalization will inevitably offer a new prospective for the FedEx. In case of FedEx, the most important economic factor that affects its operating more than anything else is peoples willingness to spend money, in order to receive services, provided by the Company.
It is defined by current socio-political reality. FedEx services cannot be considered as such that are essential to peoples well being. Therefore, Companys ability to generate income is directly dependent on the level of economic prosperity among citizens. In other words FedEx can only remain profitable, while its functioning is protected from becoming affected by the economic instability. This is why Company only expands its operations to the countries, where inflation ration is being brought to the minimum. Social aspects of Fed Exs commercial activity cannot be underestimated.
This is because we cannot think of this Company out of socio-political context. Nowadays, the employment policies are supposed to correspond to the notion of affirmative action. In order to appease the hawks of political correctness, FedEx will have no option but to hire a large portion of useless employees. Their real task will be to promote Fed Exs public image as progressive Company. Yet, such practice will inevitably undermine Fed Exs commercial efficiency.
As it was being said earlier, the development of informational technology could only temporarily benefit FedEx. This is because the spread of such technology makes it possible for any particular product to be made locally, which will decrease the demand for FedEx services. Fed Exs large air fleet is the subject to the environmental regulations, which become stricter from year to year. Company is actively using many planes that made earlier than twenty years ago.
It is well known that some airports in U. S. and Europe apply restrictions, in regards to such planes, because of environmental considerations. This is why the environmental factor affects FedEx commercial activity to considerable degree.
Modules 3, 4, and 5 There can be no doubt that FedEx possesses a competitive edge. As we have mentioned earlier, Fed Exs major advantage over its competitors is its sheer size. This provides Company with operational flexibility. For example, if FedEx managers decide to close down a few Companys branches or to sell the portion of its cargo air fleet, it will not have an immediate negative impact on FedEx overall efficiency.
Fed Exs distinctive competencies are: 1) The speedy delivery of goods via air 2) The fact that, unlike its main rivals, FedEx has a very complex system of parcels labeling. The parcels are being packed according to the factor of fragility, which ranges from 1 to 5. 3) FedEx commercial reputation is associated with reliability of Companys services. While UPS, DHL and USPS apply similar tariffs, when it comes to delivery of goods, they are not capable of making customers satisfied psychologically, even before delivery takes place. As practice shows, only 30 % of FedEx customers begin to track their parcels with Companys web tracking system, immediately after these parcels are being given to FedEx representative.
This indicates a high degree of trust, on the part of Fed Exs customers Fed Exs top officials were able to realize that it is only the matter of time, before express transportation is going to represent only a fraction of Companys business activities. They have no doubts that in the future, FedEx will have to be reorganized into global supply provider. In its turn, this commercial concept is being increasingly associated with China. Nowadays, cargo vessels spend a few months in Chinese ports, while waiting for their turn to be loaded with industrial goods or with raw material, because the demand for cheep Chinese products is much higher than proposition. This provides FedEx with business opportunity that cannot be missed. Since FedEx has opened its first office in China in 1984, the total number of Companys branches in this country has grown to thirty.
At the same time, Company largely depends on corporate clientele in China, which gives us a right to suggest that FedEx is going to achieve a high degree of commercial specialization in the future. In its turn, it indicates that FedEx officials associate Companys future with exploiting distinctive competencies. FedEx tries to increase its operational effectiveness with variety of efficiency-enhancing practices. On of them is entitling Companys regional managers with executive powers. Until recently, FedEx favoured an authoritarian style of management.
However, the realities of economic globalization require every large company to be able to react to ever changing dynamics of regional markets. This is why FedEx currently undergoes an organizational restructuring, with emphasis being put on reducing the size of Companys bureaucratic apparatus. Also, FedEx continually renews its cargo fleet, in order to insure that it corresponds to the latest rules and regulations, related to safety and protection of environment. However, it becomes increasingly harder for the Company to do so, because old regulations become stricter, while government continues to impose new rules. In 2002, FedEx Ground introduced a new system of incentives for drivers, which was meant to increase the factor of safety. Unlike other companies that encourage its truck drivers to spend as much time on the road as possible, for the sake of increasing the volume of delivered goods, FedEx rewards its drivers with additional benefits, for as long as they make deliver goods on time, while driving safe.
Fed Exs officials understand that, in order to insure competitive edge, Company need to implement new technologies, once they become available. This is why FedEx is being rightfully referred to as truly innovative company. The 2007 article FedEx to Launch Commercial Hybrid-Electric Vans in Europe, which can be found on Companys web site, proves the validity of this statement: FedEx Express (FedEx), a subsidiary of FedEx Corp. (NYSE: FDX) and the worlds largest express transportation company, today announced plans to introduce 10 hybrid-electric / diesel vehicles to its European fleet, bringing the worldwide total of hybrid vehicles in revenue service at FedEx to more than 100 in North America, Asia and, now, Europe (FedEx Express). It appears that, in order insure its competitive position; FedEx will need to continue to expand the range of its operations, while simultaneously exploring new business opportunities, associated with recent technological breakthroughs. As we have shown earlier, Fed Exs products and services are differentiated to a considerable degree.
For example, FedEx is only the express transportation company that has one of its subsidiaries fully dedicated to publishing business. Companys distinctive competency can be referred to as combination of efficiency, quality, innovation, responsiveness to customers. At the same time, we can also talk about it as something that will cease to benefit FedEx commercially, as time goes by, because the concept of economic globalization is based on the principle of cost-efficiency, rather then on insuring the high quality of manufactured products or provided services. Even though FedEx started out as company that was fully dedicated to monopolistic business model, nowadays, it switched to multi-level marketing business model, as such that corresponds better than any other to the realities of post-industrial economy. The multi level marketing business model allows FedEx to exploit commercial opportunities that are associated with long-term investments. Only large companies can afford investing in business projects that do not yield immediate commercial benefits.
In seventies and eighties, Fed Exs top managers were quick to realize that Companys strong financial standing allows them to invest into the projects that are not necessarily related to the original essence of FedEx, as express transportation company. It is only now that such attitude, on their part, started to benefit Company. In its turn, it indicates that Fed Exs organizational and functional progress pursued along the proper course, ever since Company was founded. If Fed Exs commercial effectiveness is going to be undermined in the future, it will be due to the objective factors of economic reality.
FedEx is a company with many unexploited potentials, therefore it can make a desirable object of acquiring. Nevertheless, the further growth of the company can be only achieved if innovative commercial strategy is deployed. This is easier said than done, since current economic trends are marked with high degree of uncertainty. It is quite possible that FedEx will have to transform itself into different type of company, if it is to survive competition in the future.
FedEx within a context of Globalization. The fact that economic activities in the world are being increasingly affected by the process of Globalization, resulted in both: undermining Companys competitive edge and providing it with new business prospects. For example, FedEx keeps sustaining great financial losses over the fact that Internet provides people with quick and easy opportunity to send and to receive information, when geographical distance ceases to affect costs, associated with this process. At the same time, Internet also enables FedEx to make money by providing services to people for whom Internet is nothing but a business tool. The growing popularity of Ebay causes a situation when more and more people do their shopping online; however, the purchased goods still needs to be delivered, which often can only be done with the help of FedEx. The same can be said about other objective effects of Globalization.
This process enables a variety of products to be locally available. At the same time, it strengthens the division of labor, which often causes a situation when assembling a car, for example, requires the necessary parts to be brought from all over the world. This is when services of FedEx come in handy again. Bibliography: Gillies, Andrew FedEx's Stamp Act. 18 Mar. 2002. Forbes. Com. 13 Nov. 2007.
web FedEx Announces FedEx Tracking Plus 22 May, 2002. Denounce Newswire. 13 Nov. 2007. web FedEx Corporation. 2005. Answers.
Com. 13 Nov. 2007. web FedEx to Launch Commercial Hybrid-Electric Vans in Europe. 22 Oct. 2007. FedEx Ground. Press Releases. 13 Nov. 2007.
web MacNealy, Jeremy Can FedEx Still Fly? 12 Sep. 2005. The Money Fool. Com. 13 Nov. 2007. web
Free research essays on topics related to: fed exs, distinctive competencies, competitive rivalry, express transportation company, hybrid electric
Research essay sample on Express Transportation Company Fed Exs
