FedEx SWOT Analysis 2022 – A Powerful Entrepreneurship

by Shamsul
SWOT Analysis of FedEx
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FedEx SWOT Analysis 2022 – A Powerful Entrepreneurship

 

The founder of FedEx, Frederick W. Smith, generated the idea of FedEx as his term paper while he was a student at Yale University. This idea became a powerful entrepreneurship plan facilitating freights, logistics, and couriers. Let’s read the FedEx SWOT Analysis.

Company Name: FedEx Corporation.

Founder:  Frederick Wallace Smith.

Founded:  April 17, 1973

Parent Company:  Headquarters: Memphis, Tennessee, USA.

CEO:  Frederick W. Smith

Type:  Public Company

Sector:  

Sticker Symbol: FDX

Total Employees: 289,000 (2021)

Revenue:  US$83.96 billion (2021)

Net Income:  US$5.21 billion (2021)

List of Services and Products:

  1. Logistics and Courier.
  2. Freights.
  3. Sales, marketing, and information technology.
  4. Customer service, communication, and technical support.
  5. Billing and collection facility.
  6. Back-office facilities.

Main Rivals:

  1. DHL International.
  2. United Parcel Service (UPS).
  3. CEVA Logistics.
  4. Kuehne + Nagel.
  5. Blue Dart.
  6. Deutsche Post.
  7. Royal Mail.
  8. DB Schenker.
  9. C.H. Robinson.
  10. XPO Logistics.
  11. GLS.
  12. Purolator.
  13. Amazon.
  14. Uber Freight.
  15. YRC Freight.

SWOT FedEx


Find a complete swot analysis of the FedEx brand. Download several other SWOT Analysis of the world’s leading brands for free from our page dedicated to SWOT Analysis.


Strengths of FedEx:

Brand Reputation:

This company is a popular brand when it comes to high-quality service with reliability and speed. According to a report published by Forbes in 2019, FedEx has the following titles.

1- FedEx is #35 among the best-regarded services.

2- FedEx is #51 among World’s Top Employers.

3- FedEx is #89 among the Most Valuable Brands.

Service Variety:

The customers can find their best choices with FedEx. It has a large network of more than 428,000 workers. It makes FedEx a powerful freight and logistics service for national and international clients. Moreover, it offers a wide range of facilities with a guarantee. FedEx owns the following corporate categories.

1- FedEx Express: It is an Express Transportation Service.

2- FedEx Ground: It deals with small-package delivery.

3- FedEx Freight: It offers economy and freight priority facilities.

4- FedEx Services: It delivers print facilities, business options, marketing, sales, and technology choices.

Brand Value:

According to the reports by Interbrand in 2019, FedEx has a total brand value of $6.9 billion.

Largest Supply Chain and Global Network:

FedEx has business in more than 220 countries. It has opened 2150 offices worldwide in more than 370 locations. It owns 1950 operation express stations, 39 ground hubs, and 13 air express hubs. From Asia to Europe, America, and anywhere in the world, it has a brilliant service network.

Competitive Rates:

Price is always a subject of significance for the customers. FedEx always utilizes national and international economic strategies to keep the service prices in a competitive range.

Time-Critical Delivery:

Customers prefer the services such as FedEx, DHL, and others just because of the speedy delivery of parcels and documents. When it is about the delivery time or duration, FedEx is the most important choice. FedEx offers a real Time-Tracking facility at the doorstep. In most cases, it delivers the parcels within 24 hours, depending on the distance.

Read More: SWOT ANALYSIS OF UPS | UPS SWOT ANALYSIS

Profitable Acquisitions:

Through economic acquisitions, it is increasing the service network worldwide. It also used the subsidiaries in order to improve the service quality. Following are the notable subsidiaries of FedEx.

Kinko’s Inc. (2004).

GENCO (2015).

Watkins Motor Lines (2006).

Parcel Direct (2004).

Flying Cargo Group (2019).

Prakash Air Freight (2007).

TATEX (2012).

TNT Express (2016).

Effective Marketing:

From Hollywood to sports and TV campaigns, FedEx uses solid marketing strategies with a compelling style.

Some of the main sponsor events include:

  • FedEx cup on PGA Tour.
  • ATP World Tour (Men) tennis circuit.
  • NASCAR Sprint Cup.
  • French Open (Tennis Tournament).
  • National Football League.

 

Electric Trucks:

FedEx is going to bring new vehicles to the industry. It has joined hands with Tesla to bring electric trucks for logistics and other services. This is a big step towards sustainability. These Green Vehicles will add more savings on fuel consumption.

Weaknesses of FedEx:

Overreliance on US Economy:

As a matter of fact, FedEx earns more than 685 of revenue from the US markets. This is an amount of $47.5 billion. This is a huge amount that’s why the US economy has a great influence on FedEx’s overall income. Any mishap in the US markets may drop the sales of FedEx.

Lack of Diversification:

FedEx lacks diversity. It is necessary for the company to enhance diversification in order to gain more growth.

Delivery Driver Behavior:

Rude behavior, improper package handling, and rash driving are some risk factors for FedEx. The reputation of this organization is at stake because of these factors. It is due to the fact that most of the drivers are on contract and they are not direct employees of FedEx.

Read More: HOW TO CREATE A WINNING STRATEGY WITH SWOT ANALYSIS

Increasing Cost of Transportation:

In order to meet the increasing demand and customer requirements, FedEx is hiring third-party contractors. These are handling 24% of the total delivery system. This is why transportation costs are increasing. It may go up in the future if the fuel prices and other costs increase.

Poor Claim Policy:

Due to the poor handling of packaging, damage claims are common. More and more clients are reporting the poor claim policy of FedEx. Customers are not happy with the claim policy because the company doesn’t support this matter. The companies may lose reputation when they don’t address such issues.

Bad Capacity-Demand Management:

While using a substantial capacity to deal with a big package in the logistics industry is the winning policy, poor management always undermines capacity building. FedEx has a prominent investment in package facilities, technology, vehicles, aircraft, and more. These are fixed costs, but any uncertainty can badly affect the profitability of an organization.

Opportunities of FedEx:

Expanding in Emerging Markets:

FedEx is curious to develop new service stations. It has hundreds of franchises and outlets in more than 220 countries. It knows how to expand into special markets such as Latin America, Africa, and Asia. FedEx is ready to see new business opportunities in the rural areas where no other courier service wants to go.

Preferring Retail Ecommerce:

International retail ecommerce revenues are predicted to go up from $3.5 trillion to $6.5trillion in 2023. FedEx sees it as an opportunity to invest more in the online industry. It is focusing on establishing more retail ecommerce hubs to catch more shares of the predicted profits.

Diversity Portfolio:

With an increasingly international market with a high operation network, FedEx gets more advantages over numerous digital retailers. It is diversifying the portfolio by acquiring more online retail portals.

Read More: REEBOK SWOT ANALYSIS WITH UNIQUE SELLING PROPOSITION

Acquisitions and Mergers:

Instead of investing in new setups, FedEx takes more interest in acquisitions and mergers. Certainly, this is an exploitation of huge financial resources. FedEx acquires small as well as medium courier businesses in the markets to expand the network.

Innovation:

FedEx consistently advances to satisfy client needs. It has acquired the trust and business of large companies and common purchasers. FedEx is presently one of the most creative organizations in operations and cargo. For instance,

  • Package Tracking: FedEx was the main coordinated operational organization to give bundle tracking.
  • SameDay Bot Delivery: This company has teamed up with DEKA (founder of Segway) to foster an independent conveyance robot “iBot.” Likewise, FedEx is in business with retailers like Walgreens, Pizza Hut, Walmart, and Target to deliver their products.
  • Blockchain Innovation: It will be a fundamental instrument to monitor and decrease misrepresentation in cross-line shipments.
  • Platooning of trucks to develop security plans: This organization is trying the idea of platooning of trucks. So, this platooning enables the truck drivers to maintain a close (safe) distance with the help of innovative technologies.

Threats of FedEx:

1. Tough Competition:

From UPS to Old Dominion, CEVA, YRC, DHL, Kuehne + Nagel, XPO, and some more, FedEx is facing a decline in its market share. It is due to the strong competition with these courier and logistics services. As a matter of fact, this stiff competition will increase and it may affect the business of FedEx in the coming months. It may be more challenging for FedEx to deal with these competitors.

2. New Opponents: Uber Freight and Amazon:

Amazon was a client of FedEx. Today, Uber Freight and Amazon are equipping to compete with FedEx. For instance, Amazon is gradually breaking agreements with FedEx Ground transportation. At the same time, Amazon has been building up an organization of franchises, vehicles, and airplanes to grow its planned operations and transportation capacities. Assuming Amazon develops its in-house transportation abilities, it can represent an extreme danger to FedEx’s income and market share of the overall industry.

3. Anti-Globalization Movement:

FedEx’s development depends intensely on globalist approaches. Thus, In 2020 and 2021, more countries have embraced anti-globalization belief in a backward and misinformed endeavor to safeguard their national interests against globalization. This is a condition for FedEx. In the event that the anti-globalization system spreads further, the organization might be compelled to withdraw back to operate as a public US company.

4. Shaky Fuel Prices:

The production cuts are reducing the cost of fuel all around the world. Oil costs remained profoundly unstable, with exceptional drops and spikes in 2021. Vulnerability in the business industry is terrible for all the impacted players.

5. Labor Laws:

State-run administrations progressively secure their residents working for worldwide organizations by embracing more work laws. With countless workers worldwide, even a slight expansion in wages can undoubtedly mean billions.

6. Government Relationships:

FedEx is profoundly defenseless against worldwide trade wars and anti-trade strategies. Moreover, exchange pressure between China and the USA, bans, exchange control, and restrictions can have severe unfavorable consequences for FedEx’s global transportation business.

Read More: SWOT ANALYSIS OF AMUL WITH UNIQUE SELLING PROPOSITION

7. Dubious Occasions:

With trucks, trains, planes, and transport across the world actually attempting to restart after the covid-19 lockdowns, FedEx’s activity will keep on being compromised until the world completely returns towards normal business.

8. Approaching Global Recession:

A few business sectors that FedEx relies upon with unsure economies internationally are now sliding into a downturn. FedEx’s benefits declined definitely in 2020, and it can deteriorate later on the off chance that the worldwide downturn endures. 

 
 

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