Introduction
The political factor by which an organization is most affected is the prescribed rules & regulations by the Government. FedEx is an international company working worldwide. There are certain nations where the rules & regulations are not being implemented in true letter and spirit. Being a company working internationally, the FedEx should interact with these nations and let them to use international services in a better way. Other than rules & regulation, there are many other factors which affect the business; these include the industrial limitations, political stability, and the business standards. The adherence of the pre-requisite laws is the key of success of a business. The basic reason of success of FedEx in international market is that it strictly and firmly adheres to every rule & regulation necessary for business.
Competitive advantage
In the market it is a challenging task for every organization to attain a competitive advantage. It is difficult for any new entrants in the business. In case of FedEx, this was also a case, but it has competitive advantage in terms of advance services, availability in many places and innovated products as compared to the competitors, especially the UPS.
In this regard, advantage of dedicated employees and customers’ satisfaction lies with the FedEx, which is termed as competitive advantage for FedEx. The participation of the employees has provided a good reputation that FedEx is an excellent place to be joined for employment. On the other hand, the labor unions and strikes have badly discarded the reputation of UPS. Due to the excellent services provided by the FedEx the customers are satisfied as compared to FedEx competitors.
Numbers at Glance
Huge revenues have been generated by the FedEx in last quarter of this year. The statistics reveals that FedEx generated approximately, 11.3 billion dollars revenue. In the previous year it was estimated that 11 billion dollar in a quarter was generated. It is enhancing in every year. The operating margin of the company was stated as 5.7 % which was 5.4 percent in the last year. The net income of FedEx was reported dollars 378 million which was dollar 361 million in the previous year. Number of agreements were signed by the company in order to purchase the total of dollar 2 billion of common stock of the company.
Positive Outlook
It is expected by the management of FedEx that due to the excellent performance, the earning of diluted share in next quarter would be dollar 2.25 to dollar 2.50 and for the fiscal year 2014, the expected earnings would be from dollar 6.55 to 6.8 at the end of the year. It is also anticipated that the repurchases of the share will be continue at the discretion of the company. The capital spending of the company in the year 2013 was dollar 200 million which exceeded to dollar 3.8 million in fiscal year 2014.
Initiatives
FedEx embarked in the fiscal year 2013 a program for improvement the business. This program was based on the efficiency of staff functions. To modernize fleet of the company and to transform to domestic network of US was also some of the objectives of the company.
International revenues have significantly been increased by the FedEx through approaching India, Mexico, Poland and Brazil. Numbers of European facilities have been opened in order to improve the European network’s density.
Competition
The freight sectors and the express packages are competitive in nature. The level of competitiveness depends on the rivals of the company. The chief competitive threat faced by the FedEx is from Amazon (AMZA) and the UPS United Parcel services. Other than these two, there are some other competitive in international market and mainly they are the companies controlled by the government. There is a competitive advantage with FedEx despite tough competition. By the use of efficient model of business, FedEx is generating solutions for their customers.
Wings across World
The basic reason of the FedEx profit in international market is improvement in lowering cost and efficiency of the company. One of the other reasons is the offering of services to the new nations and its expansion of its portfolios. In this context, the services of the FedEx have been launched in Asian countries especially in India and China. New offices of FedEx have been established in Europe and Latin America.
China at a Glance
One of the rapid growing markets of FedEx in Asia Pacific Region is China. In China, domestic service for delivery of products into the provinces and each major city has been launched by the FedEx. The authorities of China has recently granted permission to FedEx to start service of express shipping in major cities of China; although such services is already being provided by FedEx in almost 400 cities of China. These operations, however, are run by the help of the Chinese firms
A Look on America
Although headwinds are being faced by the FedEx, yet it continuously evolves new strategies in order to achieve the revenue growth rate on its minimal level. The acquisition of “R. Cometa” has been completed successfully by the FedEx in Brazil. The expansion of offices and alliances are being carried out by FedEx significantly .
Economical
As for the economic factors are concerned, few important factors can contribute vitally which can suffer the consumers and have severe effect on the business. These factors are exchange rate, inflation, rise in the prices of fuel and the interest rates. The recession in market may have impacts on the financial assets of company. The recent economic circumstances of the world have badly affected the FedEx; therefore the charges of the services should have been reviewed by the company. In the US market the saturations is alarming for like businesses which is negatively affecting the company. The EURO and US dollar instability also has negative impacts on the company like FedEx.
Innovation Culture
Innovation in the business is considered as integral part of FedEx on which the FedEx was built upon. The mission of the FedEx is create open culture, ideas’ development, services and the product which can empower the customers to help assists to grow business throughout the world. FedEx looks the innovation as practice of strategic business, whether it is completed through the new technology development, practices of alternative energy or web services, which are persistently encouraged, developed and enhanced. This is the main factor which keeps the FedEx in front of marketplace.
FedEx Innovation
Innovation is one of the characteristics of FedEx. It is established by most of stakeholders that FedEx always initiate a new idea in the market. The employees are motivated to come up with innovations. The employees of FedEx are assigned innovation as their job. Among the employees, one group of them has been categorized and assigned the job of changing ideas. The basic objective of the innovation is to identify the emerging needs of the customers and the latest technologies to fulfill the desires of the customers. The team carries out the researches and identifies new areas and develops concepts with incubation, accelerated prototyping and commercialization. These ideas and innovations developed by the researchers help in increasing the revenue and driving strategic advantage.
In continuation to the FedEx obligation to the development and pursuit of latest technologies, FedEx strive to offer innovative solutions and best services to the customers. The main objectives of these innovations are to satisfy the customers’ needs up to maximum level. The innovations keep the FedEx competitive in the market. There are number of innovations; the one out of many is SM (senseaware) by FedEx. It is a sensor based logistics service which pairs with a sensor device with an application which has web based collaboration and monitoring application. This application is helpful in locating the shipments’ position. It enables the customers to check and monitor the shipments in real time along with information like the location, temperature, and light exposure. This information can also be shared with the chain partners of supply .
Social
There are few social factors which influence on the organization’s development. In this context, education status and the population of a country are the main social factors affecting the organization. These two factors play a significant role to take decision regarding customers’ needs and demands. The education will affect the total revenue generation in this particular area. The more urbanized area in a country, greater will be the revenue generation annually. Increased urbanization is in favor of FedEx as more educated people are there who can easily be marketed and use the services and product of FedEx. The expectation of the people is also rising day by day due to huge competition; therefore, FedEx has to offer best, reliable and fast services to their customers having quality world class but modified as per demand of their customs and culture.
Technological Factors
In the success of FedEx, technology has played tremendous role as has been the case of every successful organizations. The advanced technology has also been utilized by FedEx; for instance, use of internet for providing electronic service throughout the world. This facility provides the opportunity to the customers to check the position of their package from anywhere and at comfort of the house. Another advanced technology, the E-commerce, allows the FedEx to link the world for the purpose of business transactions.
Distinctive Competencies
FedEx have existing competencies which make it distinct form other like organization in the market. It has more existing competencies than the distinctive one. There are number of proficiencies FedEx have, but the some important one which make the FedEx a leading organization worldwide are its aggressive assurance to the innovation, brand equity, technology and strong infrastructure.
There is a service namely; express package delivery and the customers recognize first the FedEx for this service. Lot of Comments on net have been posted for the services of FedEx that it is a great brand in this regard and great brands always provide identification source. These brands cement the leadership qualities and assure the quality.
The devotion to the innovation and its latest technologies’ implementation is the third competency of the FedEx. This trend of FedEx to serve the people as per their demand has made it giant worldwide. FedEx has dedicated for the customers’ service and this dedication in not new as Frederick Smith in year 1979 said that information about the shipment is as essential as the shipment itself.
The strategies being carried out in the FedEx are revealed from its vision. FedEx has been motivated to be one of the leaders of world with their existing core competencies. If we glance on the history, it can be revealed that the leader of the world before 1980 in the industry of shipping was UPS. After amendments in the Acts of Motor Carrier and the Staffers Rail Act in the year 1980, way for the FedEx was created to have competition with the UPS in this field .
FedEx using the information technology (IT)
During the period of 1990, internet provided significant opportunities for the FedEx to widespread its services by marketing. The company had already spent lot on investment and generated EDI system. Now FedEx took decision to use combination of EDI and the internet. One of the examples of this is purchasing of the products. A product was procured by FedEx through a company known as Ariba, which is a system of requisitioning housed on FedEx internet. This system was established so that the database of the catalogs may be maintained by the suppliers and could also be accessed by every employee of the FedEx .
In 1970 the FedEx started as an air delivery express company namely as Federal Express (the FedEx), but it successfully has converted into integrated logistics and transportation service provider. The success of FedEx is mainly due to its usage of information technology in all its fields. The information technology not only assisted its business procedures like customer services and training of employee but also combined the network of information and providing the customers with solution of supply and seamless logistics .
GPS Tracking
The GSP tracking is comparatively a simple scheme, offering an extraordinarily level of the control and access for owners of the business and the fleet managers.
- Reduced Fuel Costs
The price of the fuel cannot be altered by the GPS fleet tracking, however, GSP is capable of telling that the driver is idling or speeding unnecessarily. This is also helpful and lets the owners monitor the routes the drivers take. By this the drivers can be suggested with better routes with lighter traffic and less distances.
- Pinpoint Dispatching
With the help of GPS tracking, specific vehicles can also be dispatched in the real time effectively instead of using traditional methods. By this method there will be no need to wait for the drivers to report back or radioing for location. The fleet manager or the business owner need to determine their location of nearby vehicle and can electronically dispatch them.
- Increased Accountability of the Employee
The monitoring of the drivers in not an easy task, but the drivers should be reminded time to time that their performance and location is being watched. The GPS fleet tracking will help the managers to know that which driver is not taking efficient routes and using the vehicle without authentication.
- Providing Better services to the Customer
Sometimes the customers want high priority and delivery. The customers must be entertained by reducing the time of waiting. In this situation, instantly locate the customer and dispatch a nearby vehicle to him. Do not rely on pre-determined routes in this situation.
- Improved Roadside help
The customers must be given priority who are in emergency, whether it is due to the malfunction of the vehicle or otherwise, the GPS can reduce the time by identifying location of vehicle .
Conclusion
Distinguished levels of the performance and competitive advantage are achieved by the firms based on managerial choices and internal characteristics and services. The FedEx has proved themselves as innovator industry and jumping into new markets without fear of loss. FedEx put them ahead of all the competitors. There is a hub of FedEx in the Iraq. FedEx has lots of facilities for every field of business. It has its own large aircraft fleet, huge storage places, tremendous capabilities of packaging and the tracking functions. FedEx has great competency in the field of innovation and technology. The competitor of the FedEx is UPS. In US market the UPS has a competitive advantage as it is cheaper there. Globally, FedEx has also numbers of competitors. There are hubs of FedEx in the world and about 600 aircraft fleet of FedEx.
FedEx is well positioned organization in the world market as it is in the business of freight sectors and express package for the last forty years. Initiative to drive and taking every challenge willingly is another remarkable advantage of FedEx. The accelerated repurchase program of FedEx and its financial position makes everybody optimistic about the company.
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References
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Galloway, R., 2013. 5 Ways GPS Tracking Gives Businesses A Competitive Edge. [Online] Available at: http://www.forbes.com/sites/fedex/2013/04/23/5-ways-gps-tracking-gives-businesses-a-competitive-edge/[Accessed 29 November 2014].
icmrindia.org, n.d. FedEx: Competitive Advantage through IT. [Online] Available at: http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy3/BSTA063.htm[Accessed 29 November 2014].
isoncc.weebly.com, n.d. FedEx Corporation: Investing in Information Technology for Competitive Advantage in a Dynamic Global Environment. [Online] Available at: http://isoncc.weebly.com/uploads/1/0/1/0/10105517/fedex_corporation.pdf[Accessed 29 November 2014].
Price, P., 2014. FedEx Can Keep Up with the Competition. [Online] Available at: http://www.gurufocus.com/news/252140/fedex-can-keep-up-with-the-competition[Accessed 29 November 2014].
