Strategic Management Analysis of FedEx

Seminar paper from the year 2018 in the subject Business economics - Business Management, Corporate Governance, grade: 100.00, Saint Leo University, language: English, abstract: The need for the services of logistic companies has experienced a geometric increase in recent times, fueled by the spike in online shopping. Our company focus on this strategic analysis is the Federal Express (FedEx), established on April 17, 1973, by W. Smith a Yale graduate. However, logistic companies have not been able to meet up with the demand for their services because they lack the capacity to fulfill these deliveries. This is largely due to the firm¿s limited resources and unpreparedness for such geometric increase for parcel delivery. Even though the company was not able to meet all its scheduled parcel deliveries, the firm still recorded a substantial gain in 2017, the majority of which came from ground delivery. Therefore, our strategic plan includes repositioning the FedEx ground delivery service to capture this externality and increase ground delivery services revenue by 20 percent. Using the EFE and IFE matrices, we determined that Amazon accounts for about half or 53 percent of the United States online sales. Although the company is entering the logistics business, we believe the rate of shop-and-ship commerce will double that of last year. However, the existing system is not capable of meeting the demand for on-time delivery, especially during the peak period. To address the above problem, we recommended a strategic alternative for FedEx based on the results of various strategical analysis tools used that converged to the same conclusion i.e., the need for FedEx to expand its ground delivery service. Further, this strategic alternative consists of opening new Hubs, increasing ground delivery vehicles and delivery drivers. However, adopting these alternative strategies has its associated advantages and threats. Some of the advantages of expanding its ground delivery system are for the firm to effectively capture the benefits of the spike in online purchases. Furthermore, opening more Pickup/Delivery Stations and (Hubs) can ensure speed of shipment and delivery. However, one of the major impediments to this strategy is the cost associated with increasing its delivery fleets and drivers. Therefore, channeling a portion of the Tax cut windfall to purchasing these vehicles and hiring new delivery drivers will yield a return on investment in the long-run based on the result of the strategic analysis.