FedEx SWOT and PESTLE Analysis

ID : 52182553| Feb 2023| 15 pages

COMPANY PROFILE -FedEx

Business Sector :Logistics

Operating Geography :United States, Global

About FedEx :

FedEx is an integrated transportation service provider. It is one of the largest express transportation company delivering small package worldwide. It provides integrated services under three vertical – FedEx Express, Ground and Freight. FedEx Express is one of the largest transit companies across the globe to provide agile, secure, and time-definite delivery to more than 220 countries and territories as of 2019. From tiny packages to heavyweight parcels, from less critical to express deliveries, from import to export of goods FedEx offers a broad portfolio of transportation services, accommodating the changing needs of patrons. FedEx is headquartered in Memphis, Tennessee. As of 2019, FedEx has roughly 239,000 employees, 103,000 drop-off locations, 681 aircraft, and nearly 91,000 vehicles in its global network.
FedEx’s mission and vision as per the company website states is “FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its team members, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.”
FedEx’s Unique Selling Proposition or USP sprawls in being one of the world's largest express transportation company. The company is also well known for its unique overnight shipping service and has been a pioneer in developing a package tracking system that could render real-time updates on package location.

FedEx Revenue :

US $ 69,693 Million- FY ending 31st May 2019 (y-o-y growth of +6%)
US $ 65,450 Million- FY ending 31st May 2018

Ownership / Major shareholders :

The major holding is by institutions. The top institutional holders with their holding shares as of 31st March 2018, are mentioned below:
1) Vanguard Group INC – 7.13%
2) Primecap Management Company – 5.69% Dodge & Cox – 3.90% as on 03.31.2018
3) State Street Corp – 3.64%
4) BlackRock Inc. – 3.13%

Competitive Analysis of FedEx

SWOT

PESTLE

FedEx proffers an extensive range of U.S. domestic and foreign transit services for the shipment of packages and freight. From the past 45 years, FedEx has been and will continue to be a global leader in the transportation and information industry. The company invented the express distribution for overnight shipping of parcels with a real-time package tracking system. The money-back guarantee on all FedEx Express services is a striking business strategy that helps them procure customer trust and build a strong customer relationship. Thus, the SWOT analysis of FedEx manifests a discussion on the assets that generate surplus cash and are the greatest strengths, that the company relishes as a competitive advantage over its rival(s) in the transportation and information industry. The analysis highlights the opportunities in the external environment that can be consolidated to further strengthen the company. The SWOT report also confers intelligence on the internal weaknesses and external threats that the company confronts being in such a highly competitive environment.
It entails exceptional skills to become one of the world's largest logistics company, from a vast distribution network to innumerable warehouses and stores, from competitive rates to high margins, FedEx has it all. Besides, FedEx also has strong brand equity and market position, the capability to provide overnight shipping, the best technology in hand, on-time deliveries, over 45 years of experience in logistics services, renowned acquisitions and mergers, diversified business operations, and a broad portfolio of services. Despite all its impeccable strengths certain internal factors like high dependency on the US market for major revenue, carrier damages, limited scope for differentiation in services, etc. turn out to be the internal weakness of the company affecting the brand and its operation. Further, due to saturation in the industry, FedEx faces huge competition threats from international and local companies providing almost the same array of services. Thus, the logistic industry is witnessing huge competition, an aggressive battle for market share and price wars among its players. However, FedEx can overcome its weaknesses and threats by encompassing opportunities in its external environment. Some of the important opportunities in the transportation industry are an immense demand for parcel industry due to exponential growth of E-commerce, technology like Blockchain and AI will transform shipping, Asian economies like China and India have huge scope for brands like FedEx, etc.
The SWOT analysis for FedEx is presented below in a matrix followed by detailed analysis:

Strengths	Weaknesses
1. Strong diversity in customer base 2. High degree of cross-selling of existing services 3. Optimal logistic efficiency of the network	1. Model of Operation: Employment of contractual workforce 2. Overdependence on US market
Opportunities	Threats
1. Positive outlook for air freight sector 2. Penetration into new geographies 3. Globalisation of US companies	1. Price and availability of fuel 2. Intense competition in the economy 3. Change in Labour laws in operating states

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Detailed SWOT Analysis of FedEx

Strength

1. Strong diversity in customer base:The customer base of FedEx is vast and diverse by design. No single customer contributes more than 3% to the total revenue. This reduces the bargaining power of customers and prevents high potential loss to FedEx due to the migration of any customer.

2. High degree of cross-selling of existing services: 96% of U.S. revenue is generated by customers using two or more of the services out of FedEx Express, FedEx Ground, and FedEx Freight. About 77% of the US revenue comes from customers using all the three transportation companies.

3. Optimal Logistic Efficiency of the network: FedEx has invested a lot on automating its facilities enabling it to process growing volumes of packages. It has replaced its every aircraft with new Boeing 767-300 Freighters which are more fuel efficient and require less maintenance. Also, Network enhancements have accelerated service by at least one day in U.S. Recent acquisitions like TNT, GENCO have further expanded their global portfolio of solutions.

Weakness

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Opportunity

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Threat

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A company's business strategy needs to cater to the evolving needs of existing and potential customers, which is shaped by the most trending aspects of the industry. Similarly, the global logistics industry is governed by key trends like growth of E-commerce, globalization of trade, demand for faster and efficient supply chain, advancements in technology to transform shipping, digitization of logistics industry, the emergence of third-party(3PL) and fifth party(5PL) logistics, etc.
The PESTLE tool helps to study more such trends and influencers that impact the transportation industry and widely FedEx Corporation. The PESTLE / STEEPL / PEST analysis report is a structure to examine the consequence of external factors on the macro-environment that influences the business of FedEx. The PESTLE analysis is a useful technique to study the impact of influencers like political, economic, social, technological, legal and environmental on FedEx’s business model, growth trajectory, its business case, and market strategy.
Though FedEx has a strong global foothold and operates in more than 220 countries and territories, a large slice of its revenue is generated from the US market. Due to over-dependency on a particular market, FedEx faces a huge political, legal and economic risk as any variations in the US region may lead to an unfavorable impact on the company’s business. Further, it could also limit it's market share and growth opportunities. A slowdown in global trade, weak economic conditions, uncertainty due to Brexit, fluctuation in currency rate, and changing fuel prices are few amongst many economic factors that influence FedEx's margins, profitability, and outcomes. The global logistics industry has been evolving significantly due to the emergence of e-commerce, globalization of business, rise in the number of online shopping websites and increasing digital literacy amidst consumers. Social Factors such as thriving disposable incomes, luxurious lifestyles, demand for international products, multiple sources of income in families, and consistent urbanization have created enormous growth opportunities for logistics. Both online and offline companies have started collaborating with logistics service providers for catering to the requirements of the consumers. Advancements in technology is highly influencing the logistics sector and leading to the digitization of industry. For instance, Blockchain Technology is a vital tool for tracking packages, reducing friction and fraud in the supply chain, and providing more transparency. Additionally, technologies like Artificial Intelligence, Big Data, IoT, Data Analytics, etc. are also the most trending technological trends in the industry. "Reduce, Replace, Revolutionize" is the approach FedEx has exerted to reduce its environmental footprints. The company has set ambitious goals to achieve the same. By 2020 FedEx aims at reducing aircraft emission by 30% and increasing its vehicle efficiency by 30%.
The PESTLE / PESTEL/ STEEPL Analysis for FedEx is presented below in a nutshell followed by the detailed analysis:

Political	Economical
1. Participation in political process and policy issues 2. Political developments leading to economic uncertainty	1. Macroeconomic factors and logistics industry 2. Impact of currency fluctuations
Social	Technological
1. Online retail growth to boost e-commerce deliveries	1. Big Data and analytics for efficient supply chain execution
Legal	Environmental
1. Involvement in class action lawsuits	1. Leveraging new transport technologies for environmental sustainability

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Detailed Pestle Analysis of FedEx

Political

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Economical

1. Macroeconomic factors and logistics industry: Macroeconomic factors such as U.S. Retail Sales, Wholesales inventory, GDP, Unemployment rates, Consumer sentiment index, Oil price, etc. help logistics companies in building econometric models for accurate supply chain forecasting. FedEx uses the above models which takes a combination of the factors to generate business growth insights using predictive business analytics so that it can make business expansion plans accordingly.

2. Impact of currency fluctuations: FedEx operates in more than 64 countries globally with over 27% of its revenue generated outside the United States. Thus, differences in market growth, adverse economic events and fluctuations in foreign currency rates may have an impact on the company. The Brexit referendum in UK is also an important political event which may lead to major economic shifts such as volatility in currencies. FedEx needs to monitor the potential implications of the same and prepare in advance for the business impact it may cause in the in UK markets in future.

Social

1. Online retail growth to boost e-commerce deliveries: Online retail has seen a tremendous growth over the last decade as retailers are changing business models in line with shifting consumer behaviour and expectations. Further, cross-border shopping is expected to increase to $627 billion by 2022, commanding a share of 20 percent of e-commerce. These trends present major business potential for logistic majors like FedEx. The company is working on more innovative ways to deliver goods ordered online and enhance its digital capabilities to meet consumer expectations.

Technological

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Legal

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Environmental

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Major Competitors :

United Parcel Service
Deutsche Post AG
JB Hunt Transport Services Inc.
XPO Logistics
C.H. Robinson Worldwide
Landstar Systems Inc.

Major Brands :

FedEx Services
FedEx Office
FedEx Express
FedEx Trade Networks
FedEx Ground
FedEx Supply Chain
FedEx Frieght
FedEx Custom Critical

Key Business Segments / Diversification :

FedEx

Integrated Shipping & Logistics Couriers and Express Delivery Services

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Open Table Preview

Name	Business Segment	Year	Type	Objective/Synergy Achieved
P2P Mailing Limited	E-Commerce Transportation solutions	2018	Acquisition	Extend product offering in a fast growing market segment while expanding our industrial footprint in North America.
Northwest Research Inc.	Inventory research and Management	2017	Acquisition	Acquisition of Northwest Research helped Fedex in expanding their global logistics portfolio.

Source: Company website and other reliable sources. The detailed table is available in the Complete Report.

Sample Complete Report

This is the sample complete report which will give you a glimpse of what your complete report will cover after purchase.

Free Summary Report

This report contains the table contents only. In case you need the complete report please purchase using the buy options displayed.

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SWOT & PESTLE (combined)
Complete Report
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On purchase the FedEx SWOT and PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 1 hour might be caused.

WHY BUY THIS REPORT?

DELIVERY AND FORMAT

WHY CHOOSE US?

1. The SWOT and PESTLE analysis report offers a quick glimpse into the internal and external factors concisely in a matrix format, followed by a detailed analysis
2. The SWOT analysis of FedEx highlights the company's prevalent internal Strengths and Weaknesses, external Opportunities and Threats.
3. The Report covers compelling initiatives that were taken by FedEx, to stay ahead of its competitors and adversaries and attain a competitive advantage
4. The PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors namely, political, economic, social, technological, legal and environmental and highlighting their impact on the logistics industry and specifically on FedEx
5. Provides holistic information about FedEx’s mergers and acquisitions, strategic partnerships and alliances, capital raising, market value, market segmentation, and equity transactions, consented with deal valuations and the synergies that were achieved with them.
6. Penetrates into FedEx’s business diversification, studies its key business segments and elaborates upon its business case study
7. Cognizance of current trends of the transportation and logistics industry and its influences on the FedEx company
8. A comprehensive company analysis of FedEx to gain knowledge about company information, company profile, business model, business plans and marketing strategy
9. Evaluation of FedEx’s USP or unique selling proposition, mission statement, and vision statement
10. Synopsis of FedEx's business model, business case study along with a peek into the company’s key performance indicators, value proposition, and success factors.

You may also be interested in other analyses of FedEx:

FedEx Porter's Five Forces Analysis
FedEx VRIO Analysis
FedEx Value Chain Analysis
FedEx Covid-19 Impact Analysis
FedEx BCG Analysis
FedEx Segmentation, Targeting and Positioning (STP) Analysis
FedEx Ansoff Matrix Analysis

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FedEx SWOT and PESTLE Analysis

COMPANY PROFILE -FedEx

Business Sector :Logistics

Operating Geography :United States, Global

About FedEx :

FedEx Revenue :

Ownership / Major shareholders :

Competitive Analysis of FedEx

Detailed SWOT Analysis of FedEx

Strength

Weakness

Opportunity

Threat

Detailed Pestle Analysis of FedEx

Political

Economical

Social

Technological

Legal

Environmental

Major Competitors :

Major Brands :

Key Business Segments / Diversification :

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

WHY BUY THIS REPORT?

TABLE OF CONTENTS

DELIVERY AND FORMAT

WHY CHOOSE US?

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