Strategic Management and Leadership - Essay Example

Strategic Management and Leadership of FedEx Corporation Word Coundt-3613 Successful In the competitive global market of shipping industry Smith introduced FedEx Corporation with an aggressive strategy to grow and capture the global market. The company has grown over the years and spread its services to different parts of Asia and also in other parts of the world. The company has been continuously moving forward and is developing continuously a strong foundation for the future and for facing the strong completion from the competitors. FedEx Corporation is one among the big giants present in the shipping industry in the world who provide the best of quality service to the customers. The company’s headquarters is in Memphis, Tennessee. The corporation has many major divisions working under it which are like FedEx Express, FedEx Freight, FedEx Services and FedEx Ground. Among all these the flagship segment for the company is its FedEx Express which is the global leader in shipment industry providing the best quality service tot eh customers over the years continuously. The company has its business operations spread across in totally 220 countries with 300,000 employees, 660 aircrafts and 90,000 vehicles ready to perform at their best to provide the best quality service to the customers across all the countries. The company has been rated in the top 100 companies across the world in Fortune magazine and also has been ranked among the top 10 companies that are been admired globally in 2009 (FedEx, 2014). The corporation has got the highest number of aircrafts for shipment purpose than other companies in the shipment industry present in the global world. In 2012, in US the company had a market share of 49% and also had a dream to grow continuously and capturing 15-20% of the market share in the global market having its good presence in mostly all the countries. The company’s net operating income value is around $2 billion and the revenue of the company is approximately $42 billion, in this 80% of the income generated for the company is from its flagship service FedEx Express which has been on the top of shipment of goods among all the other competitors present in the market. Many big companies like Apple have trusted over FedEx for their shipment process and they have used the service of FedEx to ship their products and parts to different parts of the world. Looking at the financial report of the company over the last few years it can be seen that the company has grown in a huge way in the last few years and has increased its market share and revenue with a good percentage over the previous years. The graph showing the financial data for the company can be seen below. (Source: Yahoo Finance, 2014) Thus looking at all these things it can be seen that the company is a successful one and the strategies that the company has used in its business operations has been successful and also have helped the company to grow fast in this competitive global market in the shipment industry. Business reasons FedEx Corporation as a business has expanded in a huge manner increasing its market share by a good percentage and it has also been able to create a good image in the mind of the customers in the form of both individuals and also corporates. There are many reasons because of which FedEx has been able to achieve this success over the years and has been the global leader in this industry. Few of the key reasons that have helped the company to grow in such a fashion can be seen below. The company has been able to achieve such success with its strategy to provide best quality service to the customers by delivering the products in the right time at the right place and also maintaining the quality of the product intact. As for a shipment company it is very important to deliver the product at the right place and at the right time at which the customers want, and also it is very important to deliver the product without causing any defect to the particular product. The company does provides the facility to the customers to choose their own way of shipping the product based on the budget they have, the packaging of the product s been done and the mode of transport is been selected. Thus the customers get the chance to customise their shipment in their own way based on the budget they have with them. FedEx has classified its customers not only based on their size but the company has tried to classify the customers to even smaller groups to know the exact needs to customers and so that the exact need of the customers can be met by the company. This helps the company to offer the best service to the company and also creates a good image in the minds of the customers about the particular company. The customers experience is very important factor as it helps in creating a good brand image in the mind of the customers. FedEx has been able to acquired maximum customer satisfaction by having highly skilled and trained employees in its offices which helps the company to treat the customers in the best possible way and make them feel at ease in making a shipment. The company has continuously looked to implement the latest technology n its business process which has helped the company to track its order and also to maintain the good quality of the order. The latest technologies do helps the company to allocate the right vehicle for the right order and also help the officials to decide the correct route in which the vehicle needs to go for delivery purpose. The company has also allowed the customers with the platform from where they can tract the status of their shipment and the customers can get the exact status of their shipment. This helps the customers to get more engaged with the company and FedEx with such service do provides value added service to the customers increasing its brand value in the mind of the customers. The company’s organizations culture which allows all the employees to give innovative ideas for making the decisions for the improvement and the growth of the company as a result of which every employee feels involved with the organization and work very efficiently for the growth of the company. All these reasons which have helped FedEx grow it such a way over the years has also made it possible for the company to hold on the position of being the global leader and also in creating a good brand image in the mind of the customers (Fedex, 2014). Analysis and Interpretation of the company’s capabilities The company’ capabilities can be analysed by using the value chain and the VRIN analysis techniques which will help in knowing the positive points that the company has over the years which has helped the company to grow in such a way in the high competitive global market. Value Chain Analysis The value chain analysis explains the primary and secondary activities of the company that helps its business process to become successful and the company with the help of which has been able to capture the maximum market share and is able to create a good brand image in the mind of the customers. Primary activities of FedEx can be seen clearly in the below diagram which does explain that the company has put lots of focus over its logistics and shipment of every product so that they can reach the delivery point in time and in good condition without any defect. These primary objectives of the company do allow the company to focus more on the shipment of the order than in any other function which is the main function of the company. The marketing and sales team helps the company to maintain a good market globally and also create a good market awareness and also good image in the mind of the customers, thus enabling the company to achieve the maximum customer satisfaction and make its service worldwide best among all the other competitors present in the same industry. On the other hand the support activities of the company are the various other departments and facilities that the company has and which helps it to accomplish its primary objectives. These are like the human resource, infrastructure, technology and procurement. These support activities do perform efficiently to make sure that the company is able to improve its productivity and efficiency on a continuous basis and enabling the company to improve its service to the customers so that they can provide service beyond the expectations of the customers (Varbanova, 2013). This analysis involves the process in which the company creates huge value for the customers and the stakeholders in the global market by providing efficient and good service. The company creates a lot of value for the customers as it provides the customers with the option of making a choice and customise their shipment in the way they want by deciding the type of packaging to be done and also the transport medium that is to be selected for the shipment based on their budget. The company’s infrastructure and facilities is huge as it has around 660 aircrafts and 90,000 vehicles along with 300,000 employees all working towards a common goal of achieving maximum customer satisfaction and thus capturing maximum market share in the global competitive market. The IT system of the company is also very efficient as the company has continuously made efforts to implement the latest technology in their process so that they can have a good track of the order and also provide the customers the facility of knowing the status of their shipment in a correct way. Even the company’s CEO Fred Smith has mentioned n the company’s website that for the company the information technology is one of the most important factor because of which the company has been able to achieve such great heights in business and has been so successful over the years. VRIN analysis VRIN analysis helps to know the competitive edge company has over its competitors in the global market. VRIN means Value, Rarity, Inimitability and Non-substitutability characteristics of the company. Value in case of FedEx is related to the way the company creates value to the customers and the stakeholders. In FedEx the customers are been given huge preference and every effort is made to satisfy them by providing them to customise their shipment. The stakeholders also get lots of benefit as the company is continuously growing as a result of which the stakeholders also grow along with the company. Rarity refers to the way the company creates uniqueness in the global market. FedEx with its process of providing customization for the customers creates a huge impact n the shipment industry as this service is very rare and is not found in any other company in the shipment industry. Inimitability is related to the way other company intimates the strategy of the original company. In case of FedEx the biggest unique selling point that the company has its strategy of customizing the service as per the customers and to intimate this particular service it is very important to have a good capital in hand, thus intimating this strategy for any other shipment company which doesn’t have such huge capital is very difficult. Non-Substitutability is the factor which relates to the capability of other company substituting the service with some other similar service. But in case of FedEx which has its service using all the transport mediums it is very difficult for other companies to substitute as all the three transport mediums are already been used by the company and there are no other ways a shipment can be made. Looking at the value chain analysis and VRIN analysis it can be see that FedEx has very strong capabilities which has helped the company to work efficiently together towards achieving their goal and stay as the global leader in shipment industry. Innovation and the competitive strategy The innovations and the competitive strategy has been the strongest point for FedEx to grow in such a huge way and capture the global market in such a successful manner over the other competitors in the market. Competitive strategy The company has been able to achieve the success over its competitors in such a way because of the strong competitive strategy that FedEx has implemented in its business operations on a continuous basis. The company has been able to provide best facility service to the customers and also has been able to ship the product in the same way as it was been packed an in the right time in the right place. The company has been able to get so much competitive advantage over the competitors in the following ways which are been listed below. The company has its business operations very fast and also the most flexible one because of which it can bring upon the required changes as and when required based on the change of the demand in the market. The company has been able to attain high efficiency and safe delivery of the products to the delivery points. The company offers the facility for delivery of the products overnight and also provides the pick-up-service in 1 hour after the order is been placed. FedEx keeps the quality of the product intact without causing any defect to the items that is been shipped. The company has its presence in every part of the world by providing its service across the global market and provides a huge competitive edge to the competitors over the other competitors (Fidler, 2002). Innovation strategy FedEx depends heavily on the innovations and creative solutions that the company keeps different from others and also gives a lot of competitive advantage to the company over other companies present in the same industry. In the company every employee is involved in making the decisions and to give innovative ideas for getting a continuous growth in the business operations on a continuous over the years. The innovations and the changes are brought up based on the facts that the company can make to bring more efficiency in the process. The company has made tie ups with other companies like with National semiconductor to gets semiconductor chips for every order which helps the company to track the order in a proper way and also have a good control over the company’s shipments. FedEx uses various other technologies like hub and spoke for its IT infrastructure so that they can keep the information flow in the whole company updated on a continuous basis and the information’s about the shipment is been updated continuously. It uses COSMOS database information system so that the company is able to locate its package in a maximum time span of 30 minutes and also provide the information to the customers in the right way. The company has not only implemented latest technology in its operations system but also has provided latest technology in its marketing system also like Power ship system is been implemented to attract more and more customers which helps the company to also serve the requirements of the company as well. These innovations also help the company to save paper and also improve the productivity of the company across the world. Thus for FedEx implements both the competitive strategy ad innovations strategy helps the company to grow in a huge way and make a big impact in the shipment industry by providing best facility to the customers. Leadership The choice of leaders in FedEx is been done through a very strict and critical process which looks to find the best quality person who can be suitable for the particular position is been selected. The company looks to see few features among the leaders like the flexibility, adaptability, decision making, risk taking etc. The leader s been selected in such a way that they can motivate the employees in a better way so that the employees can work more efficiently and also increase their productivity. The leader s been selected who can make the employees involve and make sure they give their best in the business operations. The CEO of the company Frederick W. Smith over the years has been able to encourage the employees to perform in a very efficient way and make the company grow in such a way in this competitive market. He has been able to create company’s process more efficient and effective so that they are able to maximum customer satisfaction. The company is spread over 220 countries and is been able to create a good market image in every place, for having such a huge success the company needs to have a strong leader in the business operations. The CEO of the company has been able to make the agreements with the big aviation companies for making the shipment process successful. Recently he implemented the strategy to use energy efficient standards for making vehicles so that they can help the environment as well. The company has won the Malcom Baldrige National award for quality purpose and has been ranked one of the top ranked companies in the top 100 companies in Fortune magazine. The work environment in the company is very well maintained and it is the duty of the leaders and the managers to make process very efficient and innovative (Northouse, 2012). For a such huge company FedEx which has its presence in 220 countries and has many competitors in the same industry the leader of the company does play a huge impact in motivating the employees and making them work more efficiently and also provide the best facility in the operations so that the customers can get the best service. This also helps the company to attract more and more customers as a result of which it is able to increase its market share by a good percentage. The leader makes the key decisions at the crucial times which helps the company to get competitive edge over the other competitors present in the same industry and also helps the company to grow in a huge way over the years. The leader also needs to have a good control over the entire process across the entire world in 220 countries. The control needs to be very strong as the business process is been spread wide across to different countries and there is huge competition from different shipment companies present across the global market. Suggestions The company in its future might face problems from the external and internal forces which can affect the strategies of the company and affect in the growth of the company in a huge way. The internal factors that the company might face is when CEO Frederick W. Smith retires the company will get new leader who needs to jell around nicely with the company’s practices and policies in a proper way and keep the employees motivated in the same way and also keep the high efficiency of the employees constant. This will be very difficult for the employees and also the leaders to accept the change in a positive way as a resistance is always seen with a change and also the employees will have to be adapt to the new style of the leadership. Thus it will be very difficult for the new leader to cope up with the employees and company’s policies and practices. It will take a lot of time for the employees to cope up with such change as a result of which the company’s business operation will be affected in a huge way. Thus the management must look to appoint the next CEO as a person from the board of directors present in the company so that the person who will be appointed as the CEO will be one among them and employees can understand and cope with him easily and also it will be easy for the person to create a good impact as the leader for the company. Apart from the internal factor there are many external factors that the company can also face over the years in future which might affect the company in its revenue generation in a huge way. Because of the increasing competition in the shipment industry over the global market and the competitors will also look to implement the latest technology in their operations and make their process more efficient which is a big threat for the company and also they might provide service at low price to the customers. All these might affect the company as the customers might get attracted to shift their preference towards other companies and local shipment companies. The company not only can face high competition from its big competitor UPS but also from other small companies as well. For FedEx to overcome such problems it needs to have a continuous improvement in its process and the changes are needed to be brought in with the changing market conditions and also the demand of the customers. It needs to implement the best of information system and information technology in its process so that they can improve the efficiency of their business operations on a continuous process and keep having the completive edge over the competitors over the global market. The company and the employees must look to adapt themselves to the continuously changing environment and have a continuous improvement process in their practices and policies so that they can come up with better strategies to face the growing competition in a good way. Works Cited Northouse, P. (2012). Leadership: Theory and Practice. California: SAGE. Fidler, B. (2002). Strategic Management for School Development: Leading Your Schools Improvement Strategy. California: SAGE. FedEx. (2014). Annual Report 2013. Retrieved from:< http://annualreport.van.fedex.com/2013/Files/FedEx_Annual_Report_2013.pdf>. Varbanova, L. (2013). Strategic Management in the Arts. London: Routledge. Yahoo Finance. (2014). FedEx Corporation (FDX). Retrieved from:< http://finance.yahoo.com/echarts?s=fdx+Interactive>. Fedex. 2014. Company Information. Retrieved from :< http://about.van.fedex.com/company-information>. Read More