Fedex Strategic Analysis

4446 WordsMay 13, 200918 Pages
1. Strategy Analysis FedEx Corporation is an international transportation company whose primary business is the shipment of goods. The company offers a broad portfolio of transportation services including air freight and time-bound delivery (FedEx Express), ground parcel transportation (FedEx Ground), and less than truckload freight (FedEx freight). In addition, the company complements its transportation business by offering a range of supply-chain solutions including inventory logistics and business services via FedEx Services. a) Industry Analysis Transportation of goods or shipping is an essential part of doing business since for the vast majority of industries resources (inputs) are usually not available at the company’s location and consumers of final goods (outputs) maybe all over the world. The transportation industry is as old as civilization and has evolved over the millennia with the aid of technology. Before the industrial revolution, the shipping business was dominated by sail boats and carriages, nowadays; it is dominated by intricate networks that unite people and businesses worldwide. In the United States shipping is ubiquitous; shipments range from documents to manufactured products and raw materials. According to Standard & Poor’s estimates, the aggregate revenue for the US commercial freight transportation market was about $771 billion in 2006 (or 5.8% of the U.S. GDP). Currently though, the industry is suffering a massive slowdown. Competition in the Commercial Transportation Industry The following facts describe the nature of competition in the commercial transportation industry: • The industry is segmented into five major sub-industries: trucking including truckload (TL – shipments bigger than 10,000 lbs) and less-than truckload (shipments smaller or equal to 10,000 lbs), railroads, maritime and air cargo. Since each segment

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