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Fedex Inc

In: Business and Management

Submitted By siconnex
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Federal Express Corporation (Fedex) was established in 1973. Since then, Fedex had become a global logistics and supply chain management. The company had invested heavily in information technology systems. It had a powerful technical architecture that had the potential to pioneer in Internet commerce. However, there are some difficulties, the company’s logistic and supply chain operations have trouble to keep up the company’s image, The transportation volume growth was slowing down because the competitive industry was too intense. In early 2000 The company announced major reorganization within the entire Fedex family. Each five subsidiary companies was to function independently but to compete collectively.

In order to analyze the situation carefully an external and internal analysis of the company and industry must be done so a complete picture of the industry could be understood.

External analysis:

Determinants of threat of new competitors:
The global express transportation and logistic industry has a very high barrier to entry because it requires enormous capital resources, economies of scale and brand identity.

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Large firms have a cost and performance advantage in the industry. All of the established firms had a very strong foothold in the global market as they have established brand identities. There are economies of scale in the industry: firms have to be big enough to provide services in many countries. Also firms have to be big enough to achieve cost saving and to make profit. It is extreemly hard or almost impossible for a new competitor to enter the industry. Currently there is no substantial differentiation in products and services among competing firms in the industry. All of the firms provide similar service such as express, ground, logistics and freight. Also there is no switching cost...

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