Strategic Management and Leadership of FedEx Corporation - Report Example

Strategic Management and Leadership of FedEx Corporation Word Count - 3623 Successful FedEx Corporation has got i9s brand as one of the best shipment company present in the world in the global market. The company has its headquarters in Memphis, Tennessee. The major divisions that the company has under its operations are FedEx Ground, FedEx Express, FedEx Freight and FedEx Services. FedEx Express is the flagship segment for the company which has helped the company to get huge revenue and mostly 80% of the revenue is been generated from this segment for the company. The segment is well known for its high quality service and timely pickup and delivery to the customers across the global world continuously over the years. The company was been introduced by Smith in the competitive global market with an aggressive strategy to make sure that the company grows at huge pace and also gains lot of popularity with its good service quality. The company has grown at a fast pace and spread its branches across every part of the world including Asia, Africa, Europe etc. The company has developed a strong foundation and has made stringent efforts to expand its business process. FedEx corporation has got its presence in approximately 220 countries with high level of infrastructure and facilities wherein it has around 660 aircrafts and 90,000 vehicles for transportation and shipment process in which approximately 300,000 employees are working towards utilising there resources in the best possible way and to make sure that the company achieves its objectives and to make sure that they provide the best quality service to the customers (FedEx, 2014). FedEx Corporation has been listed in the Fortune magazine as one of the world’s top 100 best companies and also been listed among the top ten companies which are been looked as the fastest growing company in 2009. The facilities that the company has for shipment purpose is one of the best in the industry as it has highest number of aircrafts that can be used for shipment purpose. The company has a market share of 49% in the US market and has got its objectives set to capture a market share of 15-20% across the global market. The annual revenue of the company is around $42 billion. Few of the big companies like Apple have made an alignment with FedEx for their logistics purpose to get the raw materials in best quality and also to make sure that the customers get the product in the best quality and in time across the whole world (FedEx, 2014). The financial growth of the company over the last three years can be seen in the below diagram. (Source: Yahoo Finance, 2014) It can be seen from the graph that the company has grown at a good pace over the years and has performed very well to make sure that their revenue and net profit keep increasing at a good pace. Having a study about the company’s performance and growth over the last few decades it can be understood that the company is a successful one and has got a good percentage of growth and that to in a continuous manner to make sure that they have a good market share and good presence in the global market. Business reasons FedEx as a company has grown at a good pace over the years and has created a good position in the global market in the shipment industry. The company has successfully been able to create a good brand image and also provide good quality service to the customers over the years continuously. The company not only has customers in the form of individuals but also in the form of corporate who are present in different parts of the world. The company has been one of the successful business because of many reasons which are been listed below. The company has provided the facility of customization to the customers with the help of which the customers are able to plan and decide on the type of packaging and transportation medium in which they want to ship their product. This helps the customers to get their products shipped in proper order and also within their budget limit (Varbanova, 2013). The experience of the customers is a vital factor in service industry thus the companies need to see that they take care of the customers in a proper way. In this regard FedEx has got highly trained and skilled employees both in their office and also in the delivery process to make sure that the customers are been treated in the best possible way and to make sure that the customers get the best of facility in all possible way and they get fully satisfied with the service. Quality of service is very important and in case of shipping companies it is very important that they deliver the product in the right quality, in the right time and in the right place. FedEx has got such huge success over the years because of this practice of the company of providing high quality service to the customers by delivering the products in right time, right place and in the right quality (Fidler, 2002). FedEx has made sincere efforts to understand the needs and wants of the customer to make sure that they can make best efforts to satisfy the needs and wants of the customers and also make sure they meet the satisfaction of the customers fully. The company makes efforts that they don’t give any chance of complain for the customers of any size be it a corporate or even for the small individual customers across the globe. The company has provided the customers with a very good option of tracking their order from anywhere and very easily at any time. This is like a value added service provided to the customer by the company which makes the customers very happy as they can track the condition and also the location of their order from their home itself. FedEx has always implemented the latest technology in their operations to make sure that they achieve the best process and have a continuous improvement in their operations and thus it helps the o9fficials to provide good service to customers and also to track the order exactly and to maintain the condition of the shipment in the exact manner as it was been packed. It also allows the employees to choose the right route to go about the delivery process so that they reach the right place in the right time (Northouse, 2012). FedEx has maintained a good organization culture as a result of which the employees are always motivated to work efficiently and also feel involved with the business process providing constant creative ideas to the management for bringing improvement in their process and they work as a team towards achieving the company’s main objective. These reasons clearly show why the company has grown at such a huge pace over the years and has got such a strong hold in the shipment industry across the global market. Analysis and Interpretation of the company’s capabilities The value chain analysis and the VRIN analysis help to understand the capabilities of the company that has allowed the company to grow in the global market with so much competition present. These analyses will help to understand the key points and strategies that have been implemented by the company to become so successful in the global market. VRIN analysis It helps to understand the key success points and the way the company has a competitive advantage over the other companies present in the same industry across the global market. VRIN is been expanded as Value, Rarity, Inimitability and Non-substitutability of the particular company in which the company has got the competitive edge over others. Value for FedEx is related to the way the company has created a good value for its customers and also for the stakeholders. The company has looked to provide the best of service to the customers and has provided the facility for customization to the customers based on their budget and thus they get more and more of customers thus their revenue keep increasing as a result of which the stake holders are also been provided lots of opportunity to grow (Coleman, 1988). Rarity refers to the unique character that the company has and in case of FedEx the unique and rare characteristic that the company has is its practice of providing the facility of customization to the customers, which does helps the customers in a big way and the process is highly rare in the market with only UPS being the other company providing this facility to the customers in the global market. Inimitability is the characteristic where in other companies imitate the original company’s strategies. To imitate the type of service and the facilities that FedEx has and also for its unique characteristic of customization any company needs to have a huge amount of capital and also infrastructure. Thus for all the companies to do this globally is very difficult (Fitzroy and Herbert, 2007). Non-Substitutability is the character which is related to the factor that the service can be replaced by a certain other similar facility. This in case of FedEx is not possible as FedEx has got its service present in all the forms of transportation that can be used for the shipment process which are road, marine and airways. Thus substituting it with any other process is highly impossible for any other company. Value Chain Analysis This analysis helps to understand the primary and secondary activities that are been followed in the company. Both these category of activities do help the company in their own way to make sure that they get good growth and also achieve their objective in a good way. The primary activities of the company has the main departments which are been given high level of concentration in the whole business process. These activities include the inbound and outbound logistics, operations, marketing and sales and also the service department. These primary activities help the company to make sure that they are able to ship a particular order in time, in right place and at the right time (Hutt and Speh, 2012). The marketing and sales team for the company helps the company to make sure they create a good global brand image and also for positioning the brand in the best way so that they get more and more customers in this competitive global market. This department helps the company to generate more customers and also make sure that they get more and more number of leads to get competitive edge over the competitors present in the same industry. In the same way the service department is concerned with providing the best service to the customers so that the customers’ expectations are been met and customers are happy from the service been provided by FedEx. The secondary activities of the company involve the other departments like human resource which is responsible to get the best skilled employee in the team and also provide the best training to the employees to develop their skills. The infrastructure, the technology, and also the procurement department fall under the company’s secondary activities. All these activities work together as a single unit to make sure that the company can achieve its goal and make sure that they get their goal in the best and efficient way. FedEx as a company has huge amount of infrastructure with many capable employees working over day and night to achieve the goal. The company has used the best and most efficient IT system for their business operation to make sure that they get the best quality service in the process of shipping the order in the exact way as wanted by the customers across the globe. The CEO of the company Fred Smith has explained in the company website that the company focuses a lot on improving the IT system of the company so that they can get the best quality service for the customers and also have a continuous improvement in their business operations (Coade, 1997). The diagram which does represent the value chain for the company including both the primary and secondary activity is been shown below. This analysis helps to understand the process in which the company creates a strong value for both the customers and also for the stake holders. The company does provide a lot of value to the customers with the help of both primary and secondary activities which perform in the best efficient way making sure that get the maximum productivity and the best quality as well (Pearce, 2009). Analysing the capabilities of the company using both the VRIN and value chain analysis it can be seen clearly that the company has huge capabilities in making a strong forward movement and also the way they work efficiently for making the company as a global leader is very much clear. Innovation and the competitive strategy For FedEx the strongest strategies implemented by them are related to the innovations and the competitive strategy that the company has used over the years to get such a huge success in the global competitive market. Competitive strategy FedEx has been able to implement many competitive strategies over the years which have given a huge competitive edge to the company over the competitors which are present in the same industry in the global market. The various strategies that has allowed the company to get a competitive edge are been listed below. The wide spread branches of the company which are present in many countries over the whole world gives the company a huge advantage as they are able to cater huge number of customers and also it gets new opportunities for exploring new markets. FedEx has very flexible business operations which helps the company to adapt quickly to the changing external market demand as and when required across the global market. The company offers special service to the customers as they ensure pick-up of the order within 1 hour of the order been placed and also allows overnight shipment process thus making the order been shipped within 48 hours of the order been placed (Kozami, 2002). Innovation strategy The company makes sincere efforts to make sure that they come up with new innovative and creative methods for building strong and better business process. This allows the company to get a huge competitive advantage over the competitors and also grow at a good pace in the competitive environment. The company has a good work culture which enables the employees feel more involved with the process and also come up with innovative ideas for betterment of the process and for making it more efficient and productive. FedEx has made alignment with other companies to take technical support like with national semiconductor to make sure that they can provide semiconductor chips for their each order thus enabling them to track each order very easily and also accurately. It has also made strong efforts to make sure they bring the latest IT system in their business process so that they can convey the information easily and also accurately on a continuous basis (Stonehouse and Houston, 2012). The company uses latest technology in its marketing process as well like Powership system to make sure that they can attract more number of customers. FedEx uses COSMOS database system to store the data and also to allow the customers to get the information related to the order within 30 minutes in the accurate way (McLoughlin and Aaker, 2010). FedEx thus implements both the competitive and innovative strategy in a very effective manner which enables the company to have such success in the high competitive global market in constant basis over many years. Leadership FedEx looks to choose its leaders by going through a very stringent process and making it sure that they select the correct candidate as the leader who can help the company grow more and develop in more better way. The management of the company focuses to see certain points like adaptability, motivation, risk taking ability, flexibility and decision making among the persons to select the leader. The leader of the company has to make sure that the employees get motivated and also they work more efficiently to achieve the objectives of the company. Company’s CEO Frederick W. Smith has continuously made efforts to make sure the employees are highly motivated and also are involved in the company’s business process in most efficient way. He has been able to make the crucial decisions at the right time enabling the company to grow in a good way and for making sure that they get the most innovative and creative technologies in their business process on a continuous basis over the years. He has been able to make sure that the company has spread its wigs across globally to around 220 countries and working efficiently in each country. In recent items he has brought in the policy of using energy efficient vehicles for their transportation process which has helped the company to build a good brand image in the society. He has been able to make sure that the work environment inside the company is well maintained an all the employees are been involved in the decision making process and for providing crucial information to the management thus helping the company to improve on a constant basis (Cunningham and Harney, 2012). FedEx being such a huge company and having its branches across in 220 countries has to have a strong leader who can have a good control over the entire business operations and also for making sure that the right decisions are been made at the right time for the company to become successful in the global competitive market. The leader makes the employees perform in a very efficient way and thus helps the company to make sure that they provide the best of service to the customers over the years on a continuous basis. It also helps the company to get more and more customers on a continuous basis. The leader is been selected in such a way that he/she can help the company to grow on a continuous basis and also have a good percentage increase in their profit margin over the years on a continuous basis over the 220 countries and also keep exploring new markets in the global world (Mazzucato and The Open University, 2002). Thus the choice of leader is been done very efficiently and also by following a stringent procedure. Suggestions FedEx Corporation having its huge business in the entire world may face in future certain problems from both internal and also external forces which can severely affect the strategies that are been implemented by the company for their growth process. There are many external factors that can also affect the company in future in its business operation in a huge way. The increasing competition in the global market in this industry may affect the company in a huge way. The upcoming new companies in the same industry can provide the service in the cheapest rate which can attract the customers in a huge way and people can look to prefer the local shipment companies more than going for FedEx. Apart from the small companies the big companies like UPS which also has its huge presence in the global market can look to attract more customers and bring latest technology in the process thus make their operations more efficient this will affect FedEx a lot as the customers will prefer towards UPS more (Rogers, 2001). To overcome this company needs to continuously make sure that they bring in the latest technical improvements in the business process and also look to make the changes that are required from time to time based on the changing market conditions. The company should also look to conduct quality functional deployment to know the exact needs of the customers and also to understand the requirements of the customers based on which the changes can be made over time. In relation to the internal forces that can affect the business process is when the CEO of the company Mr. Frederick W. Smith retires, than the entire process will be affected in a huge way. The new leader who will be selected to replace the CEO of the company will have to adjust to the company’s policies and practices and also it will bring a new style of leadership in the company. Every person has a different style of leading thus the employees may not adapt quickly with the new leader and this might result to revolt from the employees. In general it is seen that people generally don’t prefer to take the changes in a positive way. Thus it will be very difficult for the company then to have smooth and efficient business operations for their entire process on a successful manner (Marr and Gray, 2012). To overcome this problem it can be suggested to the management of FedEx that after the retirement of Frederick W. Smith as the CEO, the next CEO should be selected from the company itself who has worked under Smith over many years. This will help a lot as the new CEO will be used to the work culture followed in FedEx and also for the employees it will be easy to accept the new person as the CEO as the person is one among them and has been used to the working in the same environment and also the plus point it will have is that the new person will be able to make the crucial decisions in the right way as he/she has already worked under Frederick W. Smith. Works Cited Coade, N. (1997). Managing International Business. UK : Cengage Learning EMEA. Coleman, W. D. (1988). Business and Politics: A Study of Collective Action. Canada: McGill-Queens Press. Cunningham, J. and Harney, B. (2012). Strategy and Strategists. UK: Oxford University Press. FedEx. (2014). Annual Report 2013. Retrieved from:< http://annualreport.van.fedex.com/2013/Files/FedEx_Annual_Report_2013.pdf. Fedex. 2014. Company Information. Retrieved from :< http://about.van.fedex.com/company-information>. Fidler, B. (2002). Strategic Management for School Development: Leading Your Schools Improvement Strategy. California: SAGE. Fitzroy, P. and Herbert, J. M. (2007). Strategic Management: Creating Value in a Turbulent World. USA: John Wiley & Sons. Hutt, M. D. and Speh, T. W. (2012). Business Marketing Management: B2b. USA: Cengage Learning. Kozami, A. (2002). Business Policy and Strategic Management,2e. India: Tata McGraw-Hill Education. Marr, B. and Gray, D. (2012). Strategic Performance Management. USA: Routledge. Mazzucato, M. and The Open University. (2002). Strategy for Business: A Reader. UK : SAGE. McLoughlin, D. and Aaker, D. A. (2010). Strategic Market Management: Global Perspectives. Spain : John Wiley & Sons. Northouse, P. (2012). Leadership: Theory and Practice. California: SAGE. Pearce, J. (2009). Strategic Management. New Delhi: Tata McGraw-Hill Education. Rogers, S. C. (2001). Marketing Strategies, Tactics, and Techniques: A Handbook for Practitioners. USA: Greenwood Publishing Group. Stonehouse, G. and Houston, B. (2012). Business Strategy. UK: Routledge. 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. Read More