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The Internal Environment Institution: Student’s name: Date: Part 1. In business, "corporate culture" refers to the rules, customs, and beliefs that all employees follow and are taught (Wheelen, Thomas., & Hunger, J. David, 2014). However, in today's world, the CEO, CFO, and other top executives' actions and attitudes have a direct impact on the company's culture. FedEx has a culture that demonstrates to its employees and customers how much they are valued.
FedEx prioritizes service, people, honesty, innovation, responsibility, safety, and loyalty (FedEx, 2019). FedEx understands the importance of a positive work environment and a strong corporate culture in order to achieve operational success and provide excellent customer service. As a result, FedEx has implemented a "People-Service-Profit strategy" (P-S-P) and continues to promote a high-performance culture (FedEx, 2019). Frederick Smith, the company's current CEO and founder, came up with this idea because he believed that investing in employees would result in better work and, as a result, financial success. This philosophy emphasizes the importance of treating employees with respect and dignity, as well as rewarding team members based on how well they perform their duties.
FedEx believes that its employees are the best way to make big decisions, and it attributes its success to its innovative culture. Because service providers' employees are the ones who directly interact with customers, this philosophy is especially important in the service industry. Training, giving employees power, and providing incentives are all critical in a company whose culture is based on this philosophy (Peoplematters, 2019). FedEx Corporation's plan to make more money, in my opinion, is consistent with its core value of putting people first. People who are enthusiastic about their jobs are always more creative and productive.
On the review site Glassdoor, current FedEx employees gave CEO Frederick Smith an 84% approval rating, and 73% said they would recommend working there to a friend (Glassdoor, 2019). FedEx is the company most likely to hire these individuals as a result of this. In addition, some FedEx freight drivers chose not to join a union in 2017, indicating a favorable work environment (Dcvelocity, 2017). FedEx Corporation employs approximately 300,000 people in over 250 countries and territories. As a result, there are numerous programs in place to thank employees for their efforts.
This demonstrates how much FedEx cares about and values its employees. There is a list of awards and recognition programs on the main website, including "The Humanitarian Award," "The Five Star," "Bravo Zulu," and "Purple Promise" (FedEx, 2019). A five-star rating is the highest you can achieve at FedEx. The manager gives the staff theater tickets and quick cash bonuses in the form of Bravo Zulu. Pilots, couriers, customer service representatives, and meteorologists are among those who benefit from the "purple promise" (FedEx, 2019).
These projects will benefit FedEx Corporation's high-performance culture, and employees will be motivated to work toward the company's goals. FedEx also places a premium on a supplier base and a workforce that reflect and celebrate diversity. FedEx will be better able to adapt to the needs of its diverse customer base. In the United States, 41% of FedEx employees are not white (FedEx, 2019). Asian, African-American, Hispanic, female, transgender, gay, and lesbian people are among those sought after by the company (FedEx, 2019).
FedEx's Corporate Diversity Council oversees the company's efforts to make workplaces worldwide more inclusive and diverse (FedEx, 2019). This council's goal is to raise cultural awareness throughout the organization through activities such as multicultural training and diversity events (FedEx, 2019). FedEx Corporation believes that it should gradually alter its operations to meet the needs of the markets it serves. When leaders are committed to and supportive of their employees, it encourages employees to provide excellent customer service, which helps the company meet its objectives and put its plans into action.
Part 2
Internal Factor Analysis Summary Guidelines
| FACTORS | WEIGHT | RATING | WGTD SCORE | COMMENTS |
|---|---|---|---|---|
| S1 The strong brand image | 0.5 | The FedEx company has earned a trustworthy image by successfully catering to the needs of both individual customers and commercial clients through the provision of dependable services. When it comes to its interactions with customers, FedEx places a strong emphasis on being truthful and forthcoming. Because of this, both employees and customers will develop positive mental images of the company. In order to improve the company's brand image and increase revenue, FedEx uses a model of coordinated interaction that ensures there is strong coordination across all of the company's departments. This, in turn, results in prompt responses to the company's customers. | ||
| S2 The focus on sustainability | 0.5 | A commitment to sustainability is indicative of FedEx Corporation's commitment to its corporate responsibility. FedEx's commitment to sustainability is shown in its global citizenship report, which outlines the company's efforts to increase the corporation's long-term value for all stakeholders (FedEx Global Citizenship Report, 2017). Success rates increase for businesses that make sustainability a priority. A 50% reduction in earnings volatility over the past decade was achieved, for instance, by companies that made investments in carbon reductions. | ||
| S3 The high performance company culture | 0.5 | FedEx is a great place to work because the culture respects and appreciates everyone involved. FedEx places a premium on service, people, integrity, innovation, responsibility, safety, and loyalty (FedEx, 2019). This is why FedEx has a high performance culture and has embraced the "People-Service-Profit approach (P-S-P)" (FedEx, 2019). | ||
| S4 The large logistics network | 1.75 | When measured by the number of employees it has, FedEx ranks as the ninth largest corporation in the world. There are around 425,000 people working for it (FedEx, 2019). Therefore, the organization is able to manage deliveries to over 230 countries via a vast network of warehouses and retail outlets. More than 600 of FedEx's planes are capable of taking the corporation into new international markets. FedEx is able to run efficiently and reliably because of its excellent routes and strategically placed hubs (Supplychain, 2019). | ||
| S5 The leader in the overnight delivery market | 1.25 | Overnight shipping was pioneered by FedEx Corporation. So, they've maintained their monopoly on that sector of the market. Many consumers like this feature, and FedEx Corporation's reputation benefits from it (Encyclopedia, 2019). | ||
| Weaknesses | ||||
| W1 Overdependence of U.S market | 0.4 | Because of the magnitude of the risk involved, FedEx cannot afford to be overly reliant on a single region's economy, climate, or government. The only solution to this shortcoming is to expand into other markets. | ||
| W2 Rising prices | 0.2 | On January 7, 2019, an increase in prices was announced. Therefore, all shipping prices, including FedEx Ground and FedEx freight, were increased by 4.9% and 5.9%, respectively, because of limited available space. FedEx's shipping costs are somewhat more than those of UPS and DHL, and the company has been increasing their prices on occasion. | ||
| W3 Losing market share to competitors | 0.4 | Comparing FedEx and UPS using conventional size statements and financial statistics, we find that FedEx has a lower operating margin. FedEx can put the money to better use in the future, as seen by the current asset ratio and the liquid asset ratio. Comparatively, UPS's net earnings surpass those of FedEx. | ||
| W4 Rising operating expenses | 0.3 | FedEx operations cost a total of $60 billion in 2018, $55.28 billion in 2017, and $47.28 billion in 2016, respectively. When compared to 2017, expenses increased by 9.58 percent. To put it another way, FedEx's operational costs have been continuously climbing upwards over the past year. | ||
| W5 Differentiation and decentralized operations | 0.4 | There are now unprecedented levels of rivalry between shipping and parcel delivery firms. Given the proliferation of competitors, FedEx is having difficulty setting itself apart. Moreover, as FedEx's business units are run independently of one another, there is room for misunderstanding. |
TOTAL SCORES 3.00
Summary. FedEx has been able to successfully elevate the firm brand image by responding to changes in the external environment and adjusting to the needs of customers all over the world. The FedEx Corporation has built a loyal client base because of its consistent delivery of high-quality services for both consumers and businesses. As a result, FedEx Corporation enjoys a wide variety of advantages within its own walls. Some significant competitive advantage platforms are a high-performance business culture and access to a wide network.
However, losing market share to rivals like UPS and Amazon would be disastrous for business. FedEx needs to keep its delivery prices competitive despite the rise in its operational costs. Instead of raising delivery prices, FedEx would be better served by working to set itself apart from the competition. FedEx will be able to differentiate itself thanks to its commitment to sustainability and environmentally friendly services. FedEx also has to recover some of its lost market share by putting plans into action.
FedEx should increase its share of other commercial markets by utilizing its extensive network, large aircraft fleet, infrastructure, equipment, and more. Until now, FedEx has relied mainly on the U.S. market; the company must expand internationally, especially into Asia-Pacific markets. With 73% of its revenue generated domestically, FedEx faces a risk if the U.S. market declines significantly. Strategic alliances with leading technology companies could enhance operational efficiency and customer experience. Overall, internal factors such as a strong brand, innovative culture, extensive logistics network, and sustainability initiatives provide a foundation for future growth, provided FedEx addresses its weaknesses and adapts to global competition effectively (FedEx Annual Report, 2018; Wheelen & Hunger, 2014; Supplychain, 2019; Encyclopedia, 2019; Samaha, 2017).
References
- FedEx Annual Report | Superior Networks. (2018). FedEx Annual Report 2018. Retrieved from https://about.fedex.com/annual-report
- Encyclopedia. (2019). FedEx's market positioning. Encyclopedia of Business.
- FedEx. (2019). About FedEx. Retrieved from https://about.fedex.com
- FedEx Global Citizenship Report. (2017). The company's sustainability efforts. FedEx.
- Peoplematters. (2019). FedEx's corporate culture and employee engagement. People Matters.
- Supplychain. (2019). FedEx's logistics network analysis. Supply Chain Review.
- Glassdoor. (2019). Employee reviews and CEO approval ratings. Glassdoor.
- Dcvelocity. (2017). FedEx freight drivers' unionization preferences. DC Velocity.
- Wheelen, T. L., & Hunger, J. D. (2014). Strategic Management and Business Policy. Pearson.
- Samaha, L. (2017). Competitive analysis of FedEx vs. UPS. The Motley Fool.