Brief History of FedEx Corporation - Essay Example

Fedex Corporation in United Arab Emirates Fedex Corporation in United Arab Emirates Company Brief History The corporation was incorporated in 1997 in Delaware. It is a corporation that mainly import and export goods and services globally. Further, it was later founded in 1998 after the acquisition of the Caliber System Inc (FedEx, 2013). It started offering other services despite shipping services (Howie, 2014). The corporation oversees numerous operations all over the world. Most of its acquisitions are meant to expand the corporation to offer more and expansive services to its clients globally. It continues to acquire more private properties and companies to date in different countries globally to establish it there. Due to this expansion, the companies under this corporation have dominated information and the transport industry globally. However, the able leadership and management have fuelled this since its inception (Gilbert, 2012). Industry, segment and type of services The corporation specializes in offering transport and logistics services globally. It ensures delivery of all parcels and services all over the world. When it comes to its market segmentation, the corporation mainly majors with all businesses that require their courier services. For example, different embassies representing different countries all over the world require their services. Mostly, it mainly transports their stationery, eBay among other office supplies (FedEx, 2013). The corporation’s target market globally is the business people or companies who require their packages to arrive at the next destination within 24 hours. With its cargo fleets, the corporation has always satisfied the needs of their clients in a competitive global market. Types of services The corporation offers different services globally. Firstly, its FedEx express service ensures that the package arrives at its expected destination within 24 hours. This is an international service where the corporation uses it fleet of aircrafts or freights from other airlines, which offer delivery services all over the world. Secondly, the corporation offers FedEx ground (FedEx, 2013). This is a less expensive service that ensures same day delivery of different packages in Canada and the US. To deliver this, the corporation uses it trucks, which are owned by different operators within different states. Therefore, the company partners with them to ensure delivery of services to their high esteem clients in the country. Most of these partners are independent contractors who specialize in different routes and territories within the country. The corporation also offers home delivery services in the country. This service is normally offered from Tuesday to Thursday in different residential areas in the states. Trucks are mostly used to deliver this service. Most clients prefer this service due to its flexibility and convenience. FedEx Smart post ensured delivery of parcels mostly from the merchants who conduct business all over the world. Most of these packages originate from the ecommerce business and companies whose catalogues uses the country’s postal services. The corporation also offers freight services within and outside the United States of America. When it comes to trading networks, the corporation offers services relating to transport advice to different clients, insurance covers and finally customs services. Another department within the corporation tales charge of all its inventory logistics requirements and those of their clients (FedEx, 2013). Additionally, it ensures smooth running of all its operations with all the global partners. This is enhanced through global marketing and planning. It also coordinates all its informational technology services to all its partners. Finally, the company’s customer care department ensures that all the needs and complaints of their clients in the global market are taken care of. Clients can make enquiries concerning their packages from their main headquarters. The company has greatly invested in training all their employees to ensure that they handle their clients effectively and professionally. Taking care of all their needs and offering them specific benefits acts as their source of motivation. Among these benefits are health and accident covers to cover for their health, they also provide education policies to support their families. Most of these employees are accorded annual leaves to rest and take care of their private and family businesses. Location in which the company operates The corporation is an American based company that offers global courier services to different countries all over the world. The company’s headquarters are located in Memphis, Tennessee (FedEx, 2013). However, the company has offices in different parts of the country and in other countries where it has established itself (FedEx, 2013). Further, the company plans to establish its offices in the United Arab Emirates region. The country is a big market whereby the company wants to offer its services. In addition, the market here is competitive because other service providers have already established themselves in the market. The company has created its brand name globally so its hopes that its ecommerce and eBay clients will take this opportunity and utilize their services. As the company plans to operate in this region, a number of partners have shown their interests in doing business with this global corporation. Mission and goals of the corporation The corporation aims at providing superior and audited financial returns to all its shareholders by the end of every financial year in their calendar. The company aims at giving them the best dividends derived from their extensive operations. The company also focuses on providing their global clients with value-added logistics. This is the core service offered by the company. Further, the company aims at providing the best transport and business services through partner companies, which are operating in their territories. Further, the company aims at handling all their customer requirements in the best ways possible in different market segments. This is achieved they their highly trained team of employees who take care of all needs of their clients in the global market. It also plans to establish a mutual and rewarding relationships’ with all their employees, major partners and suppliers in the global market. These partners ensure that all the requirements of different clients are well taken care of in different regions. The company also ensures safety of all their employees when performing their roles and responsibilities to ensure the success of the company. This is the reason why they provide all their employees with benefits and packages which am at improving their well-being. Finally, the company aims at conducting all its operations in a professional manner and observes all ethical issues that come along within its operations (FedEx, 2013). Macro environment analysis Many changes are taking place in the macro environment. These changes are affecting the industry both positively and negatively. As the corporation plans to widen its operations in the United Arab Emirates, more challenges and difficulties will be on their way. The macro environment of the company I broadly analyzed below; Social-cultural forces A number of factors characterize the cultural environment surrounding any company. Most of the factors is forces that drive the way of life in that specific community or the society in the territory in which the company is operating. These are the values and norms, which are observed by that particular society, preferences and other behaviors. It also concerns their beliefs and religion. As we all know, different regions in the world practice different religions. The company is planning to establish itself in this region, so, it has to follow and respect different religions practiced by their employees in their new territory. Invention of internet and websites provided a great and easy platform of conducting online business all over the world. Since its introduction into the business, the company has developed great online marketing opportunities. Functionality of these systems put in place and the innovative methods, which come along with the invention of the internet, enables the company to serve and give support to all of their customers in the global market. Ecommerce is an online platform, which has been adopted by different clients in the global market. It has become a major catalyst for business in the world today. Most people have adopted this culture of conducting most of their business transactions online. This has positively affected the company in many ways. For instance, packages and parcels of clients who conduct their transactions online mostly use their delivery services to transport all this in different locations in the world. However, this platform has some setbacks despite its great adoption. Fraud in the online transaction of business is alarming. Hence, it is always important for clients to make proper analysis and survey before they make any payments online. Additionally, they should use the services of the brands, which are known to be secure and loyal to their clients. Further, the society today is very competitive. Most people have adopted the use of internet in conducting online business. This is because it takes less time, and it saves the resources, which were to be used. This includes expenses such as travelling and other miscellaneous costs that are incurred when a person is travelling for business activities. In the business world today, most people use emails to communicate with their service providers and clients, planning for their necessary business trips, and the most important of all is the online banking system, which has made transacting business online even easier. This is been made easier by the use of visa cards which are recognized globally by all firms and organizations. Most clients and business people can also conduct an online business research to ensure that they get the best services in the global market. The service has been one of the factors that have contributed to the success of the company. The society is taking charge of their own welfare, and they prefer the best services where they are assured that their interests will be in safer hands. Further, in the business world today, purchasing pattern by different consumers has been influenced by the dramatic changes of the internet. Retailers of different products globally have also been influenced by this. Most of them prefer the best services; hence, a company like this has to strive to offer the best services. Hence, in a new environment, which the company intends to establish itself, it is required to conduct an extensive survey and understand its social, cultural factors. The United Arab Emirates region is known to be a business hub in the world. Therefore, the company needs to take this advantage and market itself well in order to win the attention of most business people who require their services. Economic factors The economic environment surrounding the operations of the company in the US can be classified to be favourable. When we focus on the economic factors affecting the operations of the company, two items come into our minds. Firstly, the purchasing power of people residing in that country must be considered. The nature of the economy affects the consumer’s purchasing power. Factors such as the rate of inflation affect the general economy. Hence, the ability of different consumers to conduct business online is influenced by the nature and how their currencies compete with others in the global market. Secondly, it is the spending pattern of different consumers in the global market affects the prosperity of the company. Globalization has enabled integration of the world economy in a great way. Most barriers that existed before the invention of the new technology no longer exist today. Further, there are no borders as to where business people should conduct their transactions since it is normally done online in the today’s world. The economy of the US is recovering from the global recession, which hit and the bargaining power of different customers also continue to increase. Growth of other continents has positively affected the US economy especially in the transport sector. The company really relies on the transport sector to conduct its business since most of its packages and parcels are transported by either road or air. Hence, the fuel prices affect them either positively or negatively depending on the trends of prices in the global market. The company has adopted a strategy of oil surge on all their aircrafts. In its new market in the United Arabs Emirates, the economic environment there is different; hence, the company will try to reduce the cost of operations in order to improve the profit margins of the company. The region is the global supplier of oil to most continents; therefore, the cost of operation might be lower. In addition, transport security is also another issue that has affected the company in a great way. International freights, which are mostly used by the company to transport packages and parcels of different clients globally, face the threat of insecurity due to the dangers and threats posed by terrorism. In addition, the cost of insurance covers for both the company and employees has also increased due to these factors in the today’s business world. Political forces The political environment surrounding the company is influenced by government rules and regulations; FedEx is a private company that runs all its operations independently. It faces a lot of competition from other firms, which are owned by the federal government. Most of these firms are not profit oriented in the country. Therefore, it losses the competitive advantage in the country. However, it is licensed internationally, so it can serve in other foreign countries globally. The federal government also ensures strict supervision of all air transport activities in the country. This is due to issues raised by the recent terror attacks in the country and in other nations on the world. New laws and regulations have been implemented to present these incidences (Wyborny, 2008). Technological factors The latest trends in the business world have enabled creation of new and better commodities and services all over. It has also provided new marketing opportunities by different firms globally. Security and intelligence of all data that is used ad sent to the company by different service clients and service providers is very essential. Hence, it must be protected from unauthorized personnel. IT plays an essential role in running all the business conducted by the company. The company has implemented a system that acts as a data warehouse and makes use of both internet and intranet. Most of the shipping solutions are also enhanced using internet. Further, clients from different parts of the world can make orders though the website of the company. This is faster, and it helps to save a lot of time and resources that are used by these clients. Adoption of the latest technology has also increased the speed and efficiency of sorting orders presented by different clients. This has helped to reduce human errors, which occur when these transactions are done physically. Technology innovation by companies is very vital at this age because it ensure smooth and faster running of all business activities in a firm. However, technology also comes with its different setbacks. For instance, the adoption and implementation costs of all systems that are brought by this technology are very high. Further, the cost of maintenance of these systems adopted by the company has cost it a fortune. Maintaining a technology system by any firm is an expensive affair. Therefore, they must be prepared with resources to enhance this (Rosaaen, 2002). Industrial five forces analysis Competition in this industry is very stiff. This is because the federal government has also established similar firms, which offer same services at a lower cost as compared to FedEx. This has posed a great challenge to the company because its aim is to maximize its profits through numerous transactions globally. To solve the situation, the company can be analyzed though the porter’s analysis as follows: Supplier’s power The company is a global champion and brand that has offered logistics and delivery services to different clients and individuals. It has already established itself in the country though it is facing a lot of competition from other established firms who are being run by the federal government. It must, therefore, enhance product differentiation and develop new packages, which take care of all the needs of their clients’ even in the new region. Competitive rivalry The company has dominated and depended on the United States of America market. It has established most of its networks, and it is headquarter in the country. However, it has a limited market share. It is for this reason that the company aims at expanding its markets in the United Arab Emirates soonest. This will ensure faster delivery of parcels and other services in the region. This will enable it to establish and maintain a larger market share for its expansion and growth. Other competitors have also established themselves in the competitive industry in the global market. Customers bargaining power The company has to consider in modifying its charges on different services, which it offers globally. This is because different economies are experiencing different challenges and growth. It has to consider its costs of operations there equate all this to arrive at an average price into which they should charge their services. During this era, the company has to ensure that it is fully maximizing its profit after eliminating all its expenses. Another issue that needs to be taken care of is insurance or covers against all the properties and services offered by the company. This is because the company has to ensure security measures are put in place due to the threat of terrorism in the global market today (Per berg, 2012). Threats of substitution The company has to conduct extensive marketing activities both in the existing and new market. More competitors are entering in the new market due to its profitability nature and demand by most consumers. Therefore, the company must ensure that its services meet the requirements of its clients in the global market which is highly competitive. The company has a competitive advantage because its rivals have not differentiated their products in the global market. Entrants in the market The company faces the threat of new other companies entering the market. The industry has attracted many investors due to high demand by clients. Invention of e-commerce has highly contributed to this, which is also fuelled by the new technology globally. Hence, the company must ensure that its marketing strategies are fully implemented in order to remain dominant with the largest market share in the global market. SWOT Analysis Strengths The company is much diversified globally with networks in more than 200 countries. In addition, it has employed approximately 290, 000 people to work for them in a highly competitive market. The company has ensured that all their employees are well trained with the required skills for them to handle their clients with professionalism. It also helps them to cooperate and coordinate all the activities of the company in the fastest way possible. Secondly, the company has utilized and adopted the latest technology in all possible ways (Ng, 2000). It has adopted an internal control system that enables it to track all the transactions and shipments that are sent into different regions in the whole world. Taking advantage of the latest innovations brought by technology has made it easier for the company to transact business more easily. For instance, clients from different regions all over the world can send their orders through their website and track them down. They are enhanced by the online banking system where payments are made electronically. Further, the company is one of the established brands in the world who offer delivery services. Most clients are loyal to the company because it does efficient and clean business with them. Moreover, the company has greatly invested in the latest information technology systems for the organization. In this era, storage of all data and its security is very important to every business in the world. Hence, the company has ensured that all its system are updated and working effectively. Finally, the company has experience as it has offered logistics and delivery services globally for many decades. Most clients have remained loyal to the company due to its efficient and great services. Weaknesses The company has always depended on the US market for more than three decades now. It has established a large network with different partners in the country. It has always depended on this market since its establishment. However, it continues to face numerous challenges and difficulties because the federal government has established firms, which offer similar service at a lower cost as compared to the firm. It is for this reason that the company has decided to expand its networks into the United Arab Emirates region. This will expand its market and increase the number of clients. Secondly, in the past years, the company has collided with the federal government due to instances of tax evasion. Finally, due to the competitive nature of the industry in the country, the market share of it is limited. This leads to fewer transactions hence fewer profits for the company. Opportunities FedEx corporation has initiated cooperative strategies that will enable it achieve its set objectives. One of them is to expand its territory by establishing itself in the United Arabs Emirates. This will enable the company to expand its market share hence increased profits by the end of every financial year in the coming years. This has been achieved through extensive market survey and assessment in this region. This region has a limited number of service providers hence the company can take advantage of this (US, 2009). Further, the economy of nations of nations in this region is really improving because of the developments that are taking place. A number of business people and investors who are taking advantage of the situations is many. Most of them have opted o use the services such as those offered by the company to run the operations. The company has a good chance of collaborating with different companies in this region in order to establish and stabilize itself in this region. Hence, when the company fully implements its sets of strategies in this region and globally, it will surely benefit. Secondly, over decades, the company has always challenged its competitors though acquisition of other companies who offer similar services in order to stabilize itself effectively in the market. It has also achieved this through mergers. Therefore, it the United Arabs Emirates region it can employ similar strategies and capture the best in the market in order to establish and stabilize itself in the market. Thirdly, the company can take advantage of the local competitors in the region who offer poor services. The company has been known to offer the best logistics and delivery services over decades. Therefore, with established brand and experience, it can really take over the market in the region and take the largest market share by the end of the day. This can be enhanced though aggressive online market and effective planning of all activities by the management of the company. The company has established systems that will enable it track all the transactions and shipments that are bound to take place in the region. Therefore, the company can greatly take advantage of the untapped market in the region and establish itself fully (Bertelsen, 2012). Threats The company mostly delivers all its parcels by air, road and other means of transport (Dealtry, 1992). In a global market today, fuel prices continue to rise due to effects of war and other challenges in regions where oil is imported. This has negatively affected in the entire profit of the company as fuel takes most of the income earned. This is a global issue, and the company has no control over it despite establishing oil sure for all their aircrafts. Secondly, the company faces the threat of varying market demand especially in the region where it aims at establishing itself in the near future. The consumption pattern has changed over years due to difficulties in the economies where the company has established its territories. Further, other able competitors who are already established in the region also dominate the market share. Therefore, the company has to invest heavily on marketing itself in the region. It also needs to adopt the latest trends and innovations in the world of technology. This is because most clients and service providers move with these trends. Finally, the industry is experiencing the insecurity present in the industry. Most of its delivery services are made through road and air. In the world today, there is the threat of terrorism, which has affected the transport sector in a great way. To cover for this, the company has to incur high costs in insuring itself, all its services and employees under it due to fear of the unknown. The company is also taking a great risk because it is planning to venture in a new market where there are already established brand s and competitors already. Hence, the company has to do proper planning and lay proper strategies in order to be successful in the market. Strategy assessment Adequate environmental assessment in the region where the company plans to establish itself has to be done adequately. This is because its input will be very vital in formulating an international marketing plan. Competitive strategy The company already has an established brand name globally. Therefore, establishing itself in a new market will not be a great challenge since most clients are already aware of it. Further, it offers quality and competitive products in all its territories. Further, the company will have to employ aggressive marketing campaigns in order to establish its name in the new market. It will also help create awareness of its existence in the new market (Kinney, 1998). Functional strategies The human resource management approach to this new market is to ensure that the company has the required number of employees who are fully qualified and trained to handle all the transactions of the company in the right. To promote corporate social responsibility, the company will give the citizens of the countries where it aims at establishing itself the first opportunity to be their employees. This will help solve and understand all social-cultural factors in the region. It will also help to create and strengthen the bonds with the communities in this region who are the main customers and clients of the company (Bensoussion & Fleisher, 2008). The production approach employed by the company is to grow its vital package business not only in this region, but also internationally. This means that the company plans to improve and offer more services than in other decades. This approach was chosen because the global market today has growing needs. This is like the results of the adoption of the inventions and innovations brought by the new technology. Additionally, the new region where the company wishes to establish itself may be having different needs. Hence, the company needs to diversify its services Finance approach In order to effectively establish and position itself in the market fully, the company aims at forming alliances and partnerships with international investors and business people. These are people who are already established in their different territories. Hence, they are fully aware of the challenges and difficulties, which exist in their environments. The company also aims at making a number of acquisitions and mergers in the new region. This will ensure easier establishments other that setting up its own structures in the region. Rather, it can buy the existing ones and improve them to achieve its goals. Market entry strategy In order to take over the new market effectively, the company will aggressively market itself in the region. It already has an established brand name, so most of the clients in this region are aware of it. Further, it plans to take advantage of innovations and inventions that come along with the new technology (Birla, 2005). References Bensoussan, B. E., & Fleisher, C. S. (2008). Analysis without paralysis: 10 tools to make better strategic decisions. Upper Saddle River, N.J: FT Press. Bertelsen, B. (2012). Everything you need to know about SWOT analysis. Newmarket, Ont.: BrainMass Inc. Birla, M. (2005). 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