FedEx Corporation is a logistics provider, handling over millions of goods annually. It is one of the distinguished logistics company, with locations in most parts of the globe. The company rides on a culture of innovation and strategy aimed at fulfilling the needs of people. It is well established with a market share in ground services. Market share is a share of the market that particular brand controls (Cooper & Nakanishi, 1988). The market share has made the company record an impressive financial growth and rating due to an increase in ground services (FedEx profit Rises on Demand for Ground Shipments, 2014). This is due to an increase in home deliveries, with the same rising than the previous levels. This has increased FedEx earnings, with amounts totaling around $280 million dollars and $11 billion in 2013. This has not been easy to achieve due to fierce competition, but proper sales strategies have yielded fruits with an increase of 7% mostly attributed to the packaging services consisting of ground and daily freight shipments. The company has placed tremendous efforts in sales and advertising, using corporate social responsibility to drive its sales agenda. FedEx competes with other freight and logistics service providers for the 4 trillion market. The company should therefore plan how to offer unique services in such a competitive market dominated by larger U.S airfreight companies. This will enable it increase its market share due to the rising demand in global healthcare shipments involving biopharmaceutical products, mainly driven by medical technology. FedEx Corporation intends to venture into this lucrative market to help it increase the market share which has declined due to fierce competition from large carriers such as DHL and United Parcel Services (UPS).
Apart from this, another segment being targeted by FedEx to increase its market share is the e-commerce. This is because products will be shipped across the globe, hence the need to capitalize on the same in order to increase its ratings, because e-commerce is associated with more package deliveries (FedEx to open locations at Home Hardware to target growing e-commerce market, 2014). On the other hand, the company should plan to prioritize its international shipments since this segment has the potential to increase the revenue due to higher premiums. FedEx Corporation also intends to ship pharmaceuticals across the globe. This is due to the lucrative market currently held by the United Parcel Services. Revenues cannot be achieved minus the strategic input, and as such, the company has developed an advertising network, to help in brand penetration. On the other hand, it has effectively used the social media to advertise its products, and Tv shows to enforce the concept of on-time delivery. Despite an impressive operational approach, there are expenses that FedEx incurs in its daily operations of its fleets of aircrafts and trucks. These expenses consist of air premiums, fuel, wages and insurance costs. This is because they are the main entities involved in the shipment of goods. Despite the downward trend in sales, FedEx still has got the potential of returning to profitability. This is because of the emerging trend in e-commerce. It is expected that the online segment will hit over $300 billion in the coming few years. Apart from that, the company’s stock is doing well and that promises a bright future despite the other business segments recording marginal profits. There has always been an upward trend, apart from the 2008 economic crisis, but an improvement has been noticed hence shows that the company is profitable.
References
Bloomberg. (n.d.). Bloomberg.com. Retrieved May 6, 2014, from http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajI7yPsbXpvQ
Cooper, L. G., & Nakanishi, M. (1988). Market-share analysis: Evaluating competitive marketing effectiveness. Boston: Kluwer Academic Publishers.
Friend, D. (2014, April 23). FedEx to open locations at Home Hardware to target growing e-commerce market. Financial Post Business FedEx to open locations at Home Hardware to target growing ecommercemarket Comments. Retrieved May 6, 2014, from http://business.financialpost.com/2014/04/23/fedex-home-hardware/
