Strategic Management Discussion Of Fedex Assessment Answer

Technological factors- In any industry technology play a vital a role. Due to globalization and technological advancement, transportation and shipping, as well as courier industry and company, gained a lot of importance. The increasing trend of online shopping has resulted to increase the economy of the FedEx Company as it is also dealing in the same transportation and courier services sector (Gleghorn et al., 2015). In regards to technology, FedEx is very much sound and its adopted fine technology in its supply chain management.

Legal factors- FedEx has sincerely following the legal formalities for its operation. FedEx follows the ISO 14001 certification regarding the environment as well as it also follows the regulation and rule. FedEx provides the information security online and stands answerable in any case of legal matter. 

Environmental factors- it has a major impact on any industry. In case of transportation and shipping industry in which FedEx also operate is getting affected by the environmental factor. Change in the climate may affect the air transportation and led to delay in the delivery of the goods. Apart from this FedEx ensure to make the environment healthy and clean.

External environment analysis of the logistics, transportation or courier industry.

FedEx is categorized in the logistic industry too that is determined by the porters five force model which has been detailed to know the industry analysis in the external context. This analysis includes 5 forces that are detailed below.

Five Force Model 

Forces	Strategic significance
1.    Internal rivalry	High
2.    Supplier power	Low to moderate
3.    Buyer power	Moderate
4.    The threat of new entrants	Very low
5.    Substitutes and complements	Moderate

Internal rivalry- in the transportation, courier or shipping industry the existing rivals is high such as the FedEx, UPS, USPS, and DHL. Regardless of the few competitors, still the transportation and logistics industry remain so competitive and main reason is a large number of the consumer, low cost of changing providers and poor demarcation among the competitors. FedEx competes with other firms across of its service lines.

Supplier power- a major product of the transportation services are available easily. So the power of the supplier is low in regards to service and transportation industry. There a huge number of supplier available in the market who are ready to supply raw materials and other required product to the transportation and service industry.

Buyer power- moderate or low due to medium shipping choice. In the same manner of bargaining power of the supplier, the bargaining power of the buyer is also moderate. But at the time it fluctuates also as a customer have full right to choose their service provider according to the demand and time, need. But though they lack the right to negotiate on the price.

The threat of new entrant- transportation, logistic or courier industry is been credited or have the advantage of minimum threat from the new entrant. Due to making the entry in this sector or industry require a high cost. And require a high cost of operation and capital equipment also.

Substitutes and complements- it is moderate and sometimes said to be low due to limited services for the large air freight and freight. Due to a low number of the substitutes or alternative this logistic industry has low that from the substitute.

Greatest threat and how to address it to make a profit. (Strategy)

According to five force analysis of the logistics and transportation industry, it has been found that the industry is facing many challenges in regards of rivalry as there are few major competitors in this industry namely UPS, USPS, DHL, and FedEx. So in a way to stay longer in the market and to compete in the industry the organization needs to build and focus on the strategies to cope with the challenges (Chen et al., 2017). And respond to the customer need in such a way that it may attract more customer and make them loyal. So for this company need to provide the reliable services.
So in a way to gain the competitive advantage, FedEx adopted the strategy of focusing on the customer need and provide the prompt and reliable service to the customer. Finally, the FedEx became a success in implementing this strategy that is to provide the same day delivery and reliable services to the customer globally. Which lead FedEx gain the strategic advantage over the competitors. 
FedEx can use it supply chain management in an effective manner and try to focus on the customer need in a way to gain the strategic advantage in the logistics industry.

VMO Strategy of the FedEx
FedEx focused to build a sound relationship with all the vendor and stakeholder. So for this, it appointed the person to look into the matter of relationship with every vendor. It adopted steward’s relationship tactic which led him in deploying the resources in much effective manner. A purchasing and sourcing group. To ensure FedEx Corp. and its operating companies get the best deals from their vendors, the corporate IT department created a purchasing and sourcing group within its vendor management office. The group is responsible for staying on top of the company’s top 100 contracts and the competitive landscape associated with each of those vendors (Thomas et al., 2016). It also provides the IT leaders of the operating companies with a dossier on their top vendors containing information they can use to negotiate the best deals. All these VMO strategies enable FedEx to be competitive and build a strong image. 

Organization strategic 
FedEx focuses on the below major five strategies to grow.
•    It's focus to grow internationally
•    Developing core packaging business
•    Focus to grow or develop the supply chain capabilities
•    Focus and concentrate to grow with technology and e-commerce (Thomas et al., 2016)
•    Focusing to grow new services and alliances

Strategic Group Mapping 

So from the above picture, it can be concluded that the level of service delivery of FedEx is better and fine in comparison to other competitors in the industry. Whereas it has to focus more on the quality because in regards of quality UPS is better but the quality of FedEx Is also fine and better but it needs to concentrate little more in a way to stay in the market and to make a more loyal customer.    
Through the adoption of the effective supply chain management, FedEx has gained the strategic advantage in the industry.
Its current position in the market is at the top that is FedEx is the leader in the logistics industry.

SWOT Analysis 

Strength  It has a sound brand image Good reputation for on-time delivery Well located hubs, great routes Fine Research and development  More focus on customer needs and making satisfied A leader in the domestic express delivery market	Weaknesses Relative high price  Lacks quality in regards to UPS Not fully differentiable from UPS
Opportunities  Growth chances more in Asia China Specifically due to economy beginning to recover (Burner et al., 2017). Growth chance due to continued globalization  Expansion of online retailing creates a great opportunity	Threats  High fixed cost  Worker and drivers are trying to form the union UPS is trying to take market share in the express delivery arena

Opportunities- through the continued globalization online buying has been growing exponentially. IBIS World research forecasted that per year 8.6 percent increase online revenue (Mishra et al., 2015). So it is the opportunity for the FedEx to utilize this opportunity and earn maximum revenue by delivering the quality services to the customer it can also expand the Chinese market in a way to cover the maximum market share at the global level. 

Threats- the price of the fuel has increased tremendously. Back in the 90s, fuel cost about a 50percent gallon. Presently it is near about 3.60 per gallon. The major market is been cover by the UPS and it is trying to tap the major market at the global level so to compete with this it is somewhat threatening. E-substitute from the ever-growing popularity of the internet it is creating the major challenges to the FedEx (Grant et al., 2016). It is relating with the VMO strategy as VMO strategy of FedEx is to ensure the sound relation with all the sourcing group to ensure effectiveness in the operation it strategy is also that it appointed an authorized person to look after the relationship of each vendor to maintain the relationship strong and competitive.  

Recommendation 

At the end of this assignment, various recommendation can be sought and recommended such as after analyzing the external environment of logistics and transportation industry where FedEx is also operating it can be recommended that it needs to focus and concentrate on the global expansion of the business as the China market is a good opportunity to serve and to generate more revenue and make the global presence. Besides this, it need also to focus on the fuel policy at the global level to meet the requirement as if the oil or fuel rate rise the delivery cost will also need to be addressed accordingly.
Need to concentrate on the quality of the services also as it lacks the UPS services proved in regards to quality.

References