Strategic Management Analysis of Fedex

Strategic Management Analysis FedEx’s mission is to produce outstanding financial returns through its operational companies by providing shareholders with, “high value-added supply chain, transportation, and business and related information services” (FedEx, 2005u, para. 1). FedEx strives to provide reliable, competitive, global, air and ground transportation of priority goods at a remarkable speed. FedEx will continue working to develop outstanding relationships among its employees, partners, and suppliers, while maintaining ethical and professional principles within its corporate staff, keeping safety the “first consideration in all operations” (FedEx, 2005u, para. 1). FedEx has based its strategic mission on three distinct levels. First, by focusing on its independent networks, FedEx will operate independently to meet its customers every need. Secondly, offering its services worldwide with the same mission, FedEx competes collectively to achieve the same goal. Lastly, FedEx management strives to “develop mutually rewarding relationships with its employees, partners and suppliers” (FedEx, 2005u, para. 1). FedEx has a number of core competencies that continue to put it above its competitors. The company has built a corporate culture around these major strengths. One of the company’s major focuses is on its customers. It strives to maintain loyalty to its customers while working to go above and beyond what the customers’ needs are. Another core competency is FedEx’s expectations of its members to “display honesty, integrity, ethical behaviors, personal accountability and freedom to perform” (FedEx, 2005u, para. 2). FedEx has continued achievement of its goals by setting high expectations for performance. FedEx managers create an environment that generates enthusiasm, commitment, and a positive attitude among its employees, with focus on achievements of company goals as well as personal goals. Another one of FedEx’s proficiencies is its ability to be innovative, which develops within the company. This is accomplished through encouragement by managers towards employees “helping the employees think creatively to develop new ideas and business solutions” (FedEx, 2005i, para. 3). Creativity is the “first step in innovation, which is vital to long-term organizational success” (Daft, 2004, pg. 280). The core values of FedEx allow it to be ranked highest in performance among the transportation industry. Its focus on the people within the company through promotion of diversity in their thinking is one of the key values FedEx holds today. FedEx is committed to managing its operations honestly and efficiently while maintaining reliability. FedEx also focuses on maintaining a safe and healthy environment for the communities in which we all live and work. In order for a company to maintain high profits, and keep its employees and customers happy, the company must maintain a strategy or strategies to do so. The “unique FedEx operating strategy works seamlessly - and simultaneously - on three levels” (FedEx, 2005u, para. 2). The first strategy FedEx tries to maintain is its ability to “operate independently by focusing on our independent networks to meet distinct customer needs” (FedEx, 2005u, para. 3). This means that FedEx must maintain reliability on all networks so it does not have to branch off to other companies for support. FedEx will always “compete collectively by standing as one brand worldwide and speaking with one voice” (FedEx, 2005u, para. 3). When people think of FedEx, one word should come to mind вЂ" “Fast”. Customers know that the package will be delivered on time when they either ship with FedEx, or are receiving a package via FedEx from someone else. FedEx also makes sure to “manage collaboratively by working together to sustain loyal relationships with our workforce, customers and investors” (FedEx, 2005u, para. 3). Reliability and trust are two major components of good business. If these are not established a business will surely fail. FedEx has maintained a highly reliable method of shipping with its logistics system, simultaneously sustaining consumers’ trust. This has helped FedEx keep a firm grasp on the shipping industry. This success will continue because FedEx keeps a firm grip on its responsibility to its customers and to its employees.

SWOT Analysis

A scan of the internal and external environment is an important part of the strategic planning process. “Environmental factors internal to the firm usually can be classified as strengths or weaknesses, while those external to the firm can be classified as opportunities or threats” (QuickMBA.com, 2004, para. 1).

A major strength that FedEx has today is the firm grasp on the shipping and transportation industry, which is due to the concept of overnight express delivery. This concept is FedEx’s major strength because FedEx was the first to exemplify the express delivery option we have today. This has made FedEx “the world's largest express transportation company, providing fast and reliable delivery to every U.S. address and to more than 220 countries and territories” (FedEx, 2005c, para. 1). FedEx has experienced consistent growth in terms of net income almost every year of operation. This increase in revenue is due in large part to the “People-Service-Profit” method, which puts FedEx employees first, service second, and profit last (FedEx, 2005, para. 3). FedEx believes that if the employees are happy, they will be motivated to provide the best customer service possible subsequently making profits rise.

Another major strength of FedEx is in the development of its logistics. By supplying logistical services, FedEx gives its customers peace of mind while the package is in transit, allowing the customer to know when to expect a package and where the package is at any certain time. This is a large leap over the United States Postal Service, because detailed tracking is not an option when sending a package USPS.

Along with FedEx’s great strengths, there are some weak areas that need to be improved. A good example of one of FedEx’s weaknesses was the slow adaptation to new business innovations in early 2000. For example, FedEx did not integrate its ground and overnight services, therefore failing to cut costs internally and for consumers. In 2001, National Semiconductor terminated its contract with FedEx when FedEx