Fedex Externalanalysis

1. INTRODUCTION:

FedEx is an express transportation company founded in 1973 by Fredrick W.Smith. Since 1973 customers have turned to federal express when their important documents and small packages reaches their destination by next morning. Its products are post delivery, express mail, freight forwarding, third party logistics. FedEx has over 640 planes, 68,000 ground service vehicles. It makes about 4.8 million shipments each business day, keeping their more than 300,000 employees constantly on the move. The industry to which FedEx belongs to is air delivery and freight service industry. Its main competitors in domestic and international markets are UPS, DHL, Airborne express, and other cargo airlines. It has the second largest market share in the industry about 14.2% after its competitor UPS. (1)

2. EXTERNAL ENVIRONMENT:

I. ECONOMIC: FedEx faces problems when there are severe inflation or hike in exchange rates. Since FedEx trade with countries worldwide, interest rates and exchange rates may vary in every country. When the purchasing power of the consumer is lower, it will affect the organization negatively. An incline in the country's economy results in an increase in the use of FedEx services. With the worldwide network in many countries, FedEx needs to adapt itself and adjust with the fluctuations. Currently the oil prices are at an unpredictable level. The ups and downs in the price of oil affect FedEx fuel and operation cost. Although FedEx has expanded internationally but still it depends on the U.S. market for major revenue, their economy is sometimes sluggish, which affects FedEx performance.

II. POLITICAL ENVIRONMENT: FedEx a full private transportation firm need to compete with many transportation firms that are government owned. Such of the FedEx competitors may have greater resources, lower cost, and more favorable condition than FedEx does. Although FedEx currently holds certificates of authority to serve more foreign...