Strategic Management (Fedex)

Module No. U51062

Strategic Management

Assignment One

Alannah Williamson: 09048168

Seminar Leader: Judith Thomas

Word Count: 1397

Executive Summary:

Datamonitor (2002) defines the express delivery industry as a market that includes all packages that are delivered both domestically (within a country) and internationally (to other countries worldwide). The express delivery and courier market slightly varies from the ordinary postal system of mail delivery services. Express delivery services refer to an accelerated delivery service of which consumers pay an added on fee and receive same day, next day or time-definite deliveries as a result.

Using the PESTEL model certain key environmental factors were identified that affect the express delivery sector. These include: E-substitution, online shopping, emerging markets and rising fuel prices. It was found that online shopping and the economic growth from emerging markets will greatly benefit the industry and open up new markets for growth while e-substitution and rising fuel prices may decrease the demand for express delivery services. Porters Five Forces further demonstrated the attractiveness of the industry by assessing the levels of various factors in relation to competition in the sector. It was found that the power of buyers and suppliers, the threat of new entrants and competitive rivalry were all moderate while the threat of substitutes was weak. This demonstrates the attractiveness of the industry as firms may prove to be successful operating in these market conditions. The strategic groups in the industry were then identified. These were based on the size of the company and the company’s product range and included: Independent courier firms that have one specific person delivering the document or good from door-to-door, national post services dependant on the country of origin and large companies specializing in freight express delivery. The above information therefore placed the sector in...