FedEx SWOT Analysis 2022 – Federal Express Corporation

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SWOT Analysis Of FedEx analyzes, FedEx is a global logistics and courier company founded in Memphis, Tennessee, by US Marine Pilot Frederick W. Smith in 1971. From its beginnings as an air cargo carrier, today, the company is one of the most recognizable brands in the world, with truly global coverage.

Did you know? Did you not know the fact that Frederick Wallace Smith wrote the idea behind FedEx in an essay in the course of his studies while he was a student studying at Yale University?

FedEx Corporation, ranked 47th in the Fortune 500 index, posted higher growth than United Parcel Service (UPS) for the 2019 fiscal year that ended on May 31, 2020. It posted annual revenues of $69.69 billion with a $540 million net income.

Although the net income is 88.2% lower compared to the previous fiscal year, FedEx remained committed to going the extra mile in order to revamp its delivery network and fulfill its commitment to deliver boxes to residential doorsteps.

Amidst the intense competition in the express delivery, courier, and shipping services, FedEx’s performance and market standing remain strong.

This can only be achieved through a firm with extensive knowledge, experience and innovative strategies. To determine the strengths of the company potential, weaknesses, opportunities and threats, it is necessary to conduct a SWOT analysis by FedEx.

FedEx At A Glance – FedEx SWOT Analysis

FedEx SWOT Analysis

 

Company: Federal Express Corporation
Founders: Frederick W. Smith
Year of establishment: 5 May 1971, Little Rock, Arkansas, United States
CEO: Frederick W. Smith
Headquarters: Memphis, Tennessee, United States
Employees (Dec 2020): 500,000
Ticker Symbol: FDX
Type: Public
Annual Revenue (Dec 2020): $84 billion
Profit net income (Dec 2020): $69 billion

Products & Services: Warehousing Services | Package Express Services | Transportation Solution | Temperature Sensitive Shipments Services | Supply Chain Solutions | E-Commerce Services | Courier Services

Company Website: www.fedex.com

FedEx Competitors 

Competitors: Stamps.com | Owens & Minor | DACHSER | ÖBB | CEVA Logistics | Royal Mail | DHL | C.H. Robinson | Deutsche Post DHL Group and UPS

FedEx SWOT Analysis

SWOT Analysis Of FedEx analyzes the brand based on its strengths weak points, weaknesses, opportunities, and threats. With FedEx SWOT Analysis it is clear that the advantages and disadvantages are internal factors, while threats and opportunities are external elements. Here we are going to talk about FedEx SWOT Analysis. Below Is The Detailed SWOT Analysis Of FedEx.

FedEx Strengths – FedEx SWOT Analysis

1. Brand Reputation: The company has a strong brand recognition at a global level. Consumers instantly consider FedEx for its delivery needs. Notably, FedEx built its brand recognition through its consistently dependable services through the years. Overall, brand recognition remains one of FedEx’s strengths, and the brand is well-trusted by consumers

2.Global Presence: As a global brand, FedEx provides services to roughly 220 countries, with nearly 2200 offices, 370 service locations, 13 Air Express hubs, 39 Ground hubs, and 1,950 operation express stations. The company operates in the Americas to Europe, Asia, and across the world. This is considered a strength because the company’s global reach means that it has operations in places that its competitors do not have. These operations are done through an extensive air and ground network that are some of FedEx’s important assets.

3.Technological Capabilities: FedEx’s technological capabilities allow the firm to operate efficiently and precisely. These technological capabilities facilitate the delivery and pick up of over 14 million shipments daily. FedEx made significant investments in its nearly 700 aircrafts, and over 180,000 vehicles. With this level of technological capability, it will be difficult for competitors to match the scale of service FedEx has to offer.

4.Service Portfolio: FedEx owns a large service portfolio, having built this up through strategic investments. Through this extensive portfolio, FedEx can consistently target emergent customer segments and fulfill needs in those segments. Part of the FedEx portfolio are FedEx Express, TNT Express, FedEx Ground, and FedEx Freight, with the company further expanding its FedEx Freight Direct services to deliver heavy, bulky items into homes and businesses.

5. Competitive Prices: No matter what you’re selling, the price is important to customers. FedEx leverages economics of scale in order to provide high-quality service at an cost that is competitive.

6. Time-critical deliveries: In the case of package delivery the time is essential. If a buyer is looking for an overnight delivery they are guaranteed (with an actual-time monitoring) of the fact that FedEx will arrive at their doorstep the following day. This has led to the to attract and retain customers.

7. Effective Marketing : From the Tom Hank film Like “Cast Away” to sports and a variety of TV advertisements that are innovative, FedEx has exploited the potential of marketing with an aim very successfully.

8. Electric Trucks: FedEx has reserved a fleet in the amount of twenty Tesla completely electric vehicles. FedEx has always been focused in the environment and has embraced alternative fuel vehicles to boost efficiency in its operations and use of fuel.

FedEx Weaknesses – FedEx SWOT Analysis

FedEx SWOT Analysis

1.High Operating Costs: Due to FedEx’s goals in satisfying customers and rolling out innovative services, the company has been incurring high operating costs. For example, its operating costs have been increasing yearly, which rose from $47.3B in 2016, $55.3B in 2017, to $60.6 billion in 2018. Increasing operating costs reduces the profitability of FedEx that could be invested in other projects and assets.

2.Overdependence on the North American Market: Over-reliance on a single market is risky. In the event that there are economic, political, social, and environmental crises in that given market, a company could be vulnerable to be affected by these factors. FedEx is currently over-reliant on the North American market for its revenue. Indeed, half of its revenue in 2018 was generated from the North American market.

3.Lack of Diversification: FedEx lacks diversification of its services. Today, consumers have become fickle and discerning mostly because of the availability of information over the Internet, resulting in them doing business with companies that offer different services. FedEx’s lack of diversification could be a weakness that competitors can exploit by offering services that FedEx does not.

4.Bad Customer Service: There have been complaints involving FedEx and its drivers’ behavior and instances of inappropriate handling of packages. These harm the company’s reputation and image that, in a competitive industry, can result in the decline of the customer base. FedEx’s claim policies are also frustrating, with complaints taking a long time to resolve for damages of goods while in transit.

5. Claims Policies that are frustrating: Many customers are becoming increasingly frustrated with FedEx’s claims policies in the event their items are damaged during shipping.If FedEx fails to resolve issues related to the claim procedure, then it will fall behind on the growing number of shoppers who purchase online.

6. Inadequate Management of Capacity Demand: While having a large capability to manage a huge amount of packages in the logistics industry is the successful strategy however, poor management could cause inadequate utilization of capacity. FedEx has made an enormous expenditure in the purchase of aircrafts, vehicles and technology, as well as package facilities as well as other facilities. Given that they are fixed expenses and any uncertainty about the quantity of deliveries can seriously affect the profit margins of the business.

FedEx’s Opportunities – FedEx SWOT Analysis

1. Develop into Emerging Markets: The need for couriers and logistics services is rising quickly across the emerging markets across Asia, Africa, and Latin America, along with an improvement in the economic conditions. FedEx could expand its operations within these markets to meet the increasing demand.

2. Focus on retail e-Commerce: Retail e-commerce sales worldwide are expected to increase by $3.5 trillion in 2019 to $6.5 trillion by 2023.FedEx has the potential to profit from the increasing demands for services for delivery in online retail industry.

3. Diversify Portfolio: With its vast global network in place, FedEx has a major advantage over internet-based retailers. FedEx is able to diversify its offerings by incorporating into the retail industry online.

4. Expand your business through Mergers and Acquisition: Instead of investing hugely in the beginning to create a new company in new markets FedEx can leverage its huge financial resources to purchase small and medium-sized couriers in these markets for rapid expansion.

5.AI and Digital Technology: Into the 21st century, AI and digital technologies hold significant promise for FedEx. Through these technologies, it can further increase customer satisfaction and efficiency in operations. These technologies in particular can address the aforementioned weaknesses such as the improvement of customer experiences. They can also be used to enhance FedEx’s core offering of service delivery.

FedEx’s Threats – FedEx SWOT Analysis

1. Stiff Competition: From DHL from DHL to UPS, YRC, Old Dominion, XPO, Kuehne + Nagel, CEVA, and numerous others, FedEx is losing market share to new and old companies in the logistics, courier and freight industry. If fierce competition grows the long-term viability of FedEx is likely to be a problem for FedEx.

2. New competitors: Amazon and Uber Freight: Amazon as a customer of FedEx and Uber Freight are getting ready to take on FedEx. For instance, Amazon is slowly breaking the ties to FedEx Ground transportation, and simultaneously, Amazon is setting up a network of hubs as well as vehicles and aircraft to increase its transportation and logistics capabilities. If Amazon expands its internal transportation capabilities, it could cause a significant risk for FedEx’s revenue as well as market share. 

3. Anti-Globalization Movement: In the past few years, more nations have been embracing anti-globalization beliefs in a retrograde and uninformed effort to defend their interests from globalization. FedEx’s expansion is heavily based on an open-door and globalist policy. If globalist ideologies are spread more widely the company could be forced to change to a traditional US operating company.

4. Unstable Prices for Fuel: Although the reduction in production has reduced the cost of fuel around the world, oil prices remain volatile, with a variety of fluctuations and drops. Uncertainty in the business climate can be a negative for participants.

5. Stronger Labor Laws: The government is increasingly protecting its workers working for global conglomerates through the adoption of stronger laws regarding labor. In the case of hundreds of thousands employees worldwide even a modest increase in pay could easily amount to billions.

6. Relationships between Government and Government: FedEx is extremely susceptible to trade policies that are anti-trade and trade wars across the globe. Trade tensions between the US with China and China, embargoes and sanctions as well as trade controls can have devastating negative effects on FedEx International transportation business.

7. Uncertain times: Trains, planes trucks, planes, and other transport across the globe still trying to get going after the  lockdown FedEx’s operations is in danger until the world is completely reopened for commercial.

8. Looming Global Recession: In the face of uncertain global economies, certain markets FedEx is dependent on are going through a recession. FedEx’s profits fell dramatically through the beginning of the year 2020 and the situation could get worse in the near future, if the worldwide slowdown persists.

This is our SWOT report that FedEx has done. Please let us know if you have additional suggestions to add.

FedEx SWOT Analysis Template

FedEx SWOT Analysis Template


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