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Business Analysis of FedEx

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    FedEx is one of the world's largest and most successful businesses. Centered around making sure that millions upon millions of packages are processed and delivered on-time and without mistakes, FedEx represents a fantastic business on the world market. This is a sample essay and is one example of academic writing help at Ultius.

    Background on FedEx

    FedEx is one of the most well-known and successful businesses in the shipping industry. The structure of this organization has enabled it to become a major competitor in its field. Analysis of the structure and inner workings of this multifaceted organization shows that it has been streamlined and set up in such a way that has maximized its efficiency in the market. FedEx has created a company that has financially been quite successful.

    However, that does not imply that it does not have room to grow and improve from its current standing. The incorporation of new, emerging trends in technology and social media business initiatives could help to make the process of managing and shipping easier for the company. Additionally, there exist several measures that the company could take, or at least consider taking, in order to ensure that it is protected and secured against possible security vulnerabilities.

    Regardless of these small modifications that could be made to improve the productivity and safety of the company and its records, the current structure of FedEx has still allowed it to become one of the most successful shipping companies in the history of the business.

    FedEx corporate chain

    There is an old saying that a chain is only as strong as its weakest link. If this expression were applied to a company such as FedEx, the corporate chain would be able to easily support an extreme amount of weight. The workers of FedEx are what help the company remain a competitive within the industry. The impressive workforce of FedEx, over 300,000 strong, allows the company to move more than 9 million shipments on a daily basis including by ground, freight, and expedited services (About FedEx, 2012).

    The company uses incentives to motivate employees to work tirelessly to ensure that all of the orders are packaged, labeled, and delivered to their destination as quickly and safely as possible. For such a large supply of shipments being moved daily, the use of technology plays a crucial role in the daily operations of FedEx. It uses technology that manages more than 90,000 ground vehicles and 663 aircraft or the innovative, and effective computer system that helps to track, inventory, archive, and recall shipping information.

    Technology used to manage industry

    FedEx welcomes the use of technology when it comes to ensuring that the company can provide a means of delivering their shipments to the customer in as little of time as possible (About FedEx, 2012). The corporate structure and distribution and integration of people and technology have not gone unnoticed either. FedEx recently received an award as the 6th placed company in the category “World’s Most Admired Companies” offered by FORTUNE magazine, showing that the infrastructure of FedEx is one that is admired by both clients and competitors of the business world (About FedEx, 2012).

    One of the interesting items to analyze about the shipping industry that FedEx is associated with is the relation that the industry, as a whole, looks when compared with Porter’s five forces analysis. It is important to recall that this analysis is a means of the overall competitiveness and, by association, attractiveness of a market in the business world (Porter, 1979). For a company such as FedEx, the analysis shows some rather interesting trends. In terms of pure competition, FedEx is not in a whole lot of trouble because they can block real emerging competition because of their large share of the market as it stands.

    The company's competition

    The company's market structure leaves little room for competitors to advance. Any new competitor can be undercut by FedEx and driven out of business or bought out if they provide enough of a significant threat to profits. There are not substantial threats coming from the chance of customers substituting the business either because the shipping industry is too essential and necessary for basic consumer habits.

    The only real concern that could exist for FedEx is if customers stop utilizing them for shipping and start exclusively going with one of their major competitors like UPS, however, the threat of the industry becoming obsolete is not a real threat for a company such as FedEx. The bargaining power of both the consumer and suppliers are not really areas of concern for FedEx either mostly because they are a company based on being a glorified middleman.

    They are not producing a product so they do not require raw materials for production, and clients cannot argue price very much as the service fee is usually just attached to the product and is assumed to be nonnegotiable. The biggest impact from Porter’s analysis comes from the competitive rivalry aspect. The major rival of FedEx, UPS, also has a vast amount of financial and human resources to sustain a competitive rivalry with the company. The two jostle for position based on factors such as advertising schemes, the incorporation of new technology, and general business strategies.

    FedEx's supply and data management

    FedEx’s supply and data management is one of the most advanced in the world, as it needs to be to incorporate the capacity of one of the world’s largest shipping companies. FedEx has extensive network in place when it comes to keeping track of exactly where their shipments are currently located, where they are heading, and the expected arrival time.

    This information is constantly logged and archived so that any person (either an employee or client) can enter specific order information and track exactly where a particular shipment is. The information that is stored can then be updated or referenced for orders of similar type and stature such as a product from the same distributor going to a client in the same city as a previous client. This sort of information can be accessed to give a very accurate representation of when the client should expect to see the arrival of their shipment. At the same time, extensive measures have to be implemented to prevent cybercrime and other online breaches of security.

    This level of organization extends to the storage and warehouse functions that FedEx has. All of the stored products are immediately accounted for and categorized so that they can be quickly found and shipped after their storage period has ended. These factors help to keep the company with time management by preventing workers from having to find specific products when there are some many that must be shipped on a daily basis.

    When one speaks of agent-based technology, they usually are referring to “a computer system capable of flexible autonomous action in a dynamic, unpredictable, and open environment,” (Luck, McBurney, & Priest, 2003).

    This is almost the definition of the conditions that a company such as FedEx works under. The shipping of products depends heavily on many complex evolving factors on a daily basis. What if there is increment weather or traffic delays? How will that effect the arrival time of the products currently en route? These are questions that FedEx must address every day.

    Outside factors affecting the FedEx supply chain

    To combat the constantly shifting factors that can cause stressful conditions for the workers of a company of FedEx that have to spend a great deal of time researching and calculating new arrival times, the company can apply some of the newer agent-based computer systems to make the calculations for these unknown, potentially changing factors.

    A system of this sort would be told to constantly update its calculation based on reports from departments such as the National Weather Service, the FAA, and local traffic reports of shipping routes to calculate a much more detailed arrival time for packages. For example, during the extreme weather patterns in 2014, FedEx constantly updated its weather reports to adequately manage shipping interruptions, delays, and course corrections.

    FedEx slowly implements e-commerce

    In terms of an e-commerce business model in place for a company such as FedEx, one could argue that the company fits multiple models to an extent. However, it is best categorized as the model of business to consumer. Classifying FedEx under this business model makes the most sense because the majority of the shipments that FedEx sends out are received by a consumer that is connected from one business service to another.

    The model states the business will sell a good or service to the consumer and then the consumer receives said service, which perfectly fits the build of the function of FedEx. For FedEx, an individual will ask the company to ship a product from one location to another for a cost the consumer pays for. At this point, FedEx carries out its end of the bargain and performs said service for that client (Duff).

    One of the tools used in e-commerce technological to great effect over the last several decades is the system development life cycle. Though this process is not as useful in the programming world of computers as it once was, it can still be a useful concept to the application of general business practices. The process consists of the idea that a sort of cyclical nature occurs with implementing and adjusting changes to procedures within a company (Kay, 2002).

    For FedEx, the company could make small trial changes to the way that they run their business such as the categorization and storage system for the products at a single warehouse. After the implication of this new procedure, adjustments can be made to it during its testing phase as well as an overall decision of how useful and effective it has been for the company as a whole.

    If the procedural adjustment works out well, general application and deployment can occur on a company-wide basis. If not, the proposed change can be scrapped and not used again. This sort of business practice allows for the limited use of new, innovative ideas to see their effectiveness in action without making potentially large shakeups that may be unsuited for the company as a whole.

    FedEx efforts to create an effective business continuity

    For a business as uncertain as that of the shipping industry, it is important to have an effective business continuity plan in place. FedEx offers its clients some quality services citing, “when disaster strikes, you need transportation that you can rely on,” (FedEx Disaster). FedEx continuous services include:

    1. 24/7 availability
    2. Continuous monitoring
    3. Tracking by satellite
    4. Proactive communication
    5. Direct, door-to-door service

    The basic idea behind the company’s policy is that it wants to be able to immediately provide services to those that have been affected by an external force that threatens to disrupt and disturb communications to the specific group of clients. With such a limited market segmentation, it is no wonder that FedEx has emerged as one of the globe’s most successful shipping companies. This does not mean, however, that they should not continue to push for a future effort of progression, especially in certain key areas.

    FedEx could use some improvements in the incorporation of emerging technological trends as well as that with security measures taken for the protection of some sensitive information. These changes would help to ensure that the company continues to provide its clients with the superior support that has become expected of FedEx and will help to keep the company in a place of dominance within its industry.

    Use of new technology

    In terms of the implication of new trends in the technological world, FedEx does an adequate job of utilizing new technology. The company will integrate the technology that helps its most important aspects of business, however improving the technology that the common employee has access to would be of extreme benefit to the company. One such use of this sort of technology incorporation is a combination of preexisting technology.

    Modern cellular phones are standard equipped for the employee of almost every major company, especially one that is as mobile as FedEx needs to be. However, there is a more practical use of technology for this shipping company. Employees should be equipped with tablets such as iPads or Samsung Galaxy Tabs to be fully integrated with the business. Social media integrated into marketing would also raise the awareness of these services.

    If employees all had this form of technology, they would have a greater ability to access essential information such as customer profiles and shipping info, traffic and GPS messages, work-related emails, and even, in some cases, the ability to directly interact with other members of the company through services such as Skype and Facetime. This would allow the employees to also rid themselves of the standard data-tracking unit that is carried for customer signatures and data processing of order information as the tablet could be substituted for both that and the company cell phone that is needed.

    Implementing technology security features at FedEx

    Another area that could prove to be beneficial to FedEx’s company long term would be to adapt and constantly improve the security measures that the company has on protecting its data and other security from DDoS cyber attacks. Companies such as FedEx have access to very sensitive data on its clients including addresses, credit card information, phone numbers, and other means of contact and personal information.

    That being said, it is the companies responsibility to not release or misuse this sort of technology, but what if this were to be taken by a hacker or other sort of security intrusion? The company would be looking at a multimillion-dollar lawsuit. Though the current security protocols that FedEx has in place have kept a situation like this from happening until now, it is never a bad idea to be as careful as possible on such matters.

    FedEx needs to constantly be testing the procedures that it has in place while still looking for other means of protection of its data. Perhaps the hiring of a team that specializing in trying to break into the system would be the most beneficial because they could easily identify the ways that thy broke into the system and, thereby, close these holes as a way from entering illicitly.

    Conclusions

    FedEx is one of the biggest, most organized companies in the world today. It is truly a leader in the shipping industry. The organization and business practices of this company from the ground up promote and provide an atmosphere in which the company is able to prosper. From a standpoint of the potential competition that faces FedEx, the company should only worry about existing competitors, as the market is very hard for a startup to break into.

    The business model that is followed by FedEx currently will allow it to undercut new competitors with minimal loss and remain as one of the dominant forces in the shipping industry. Though the company has thrived and done very well, it cannot become complacent. New, innovated technologies and business practices need to continually be developed and implicated to keep the business a leader in the field.

    Such changes as the improvement of the security system and the complete technological upgrade of the working force will provide the company with a means by which they can remain as leader in their industry. FedEx has historically been a successful corporation, and so long as it does not sit back and refuse to adapt, it will continue to be a force for years to come.

    References

    Duff, V. (n.d.). e-commerce business models. eHow, Retrieved from http://www.ehow.com/about_4793990_ecommerce-business-models.html

    FedEX About. (2012, Sept). Fedex corporation. FedEx, Retrieved from http://about.van.fedex.com/fedex_corporation

    FedEx Disaster. (2012, Sept). Disaster recovery transportation services. FedEx, Retrieved from http://customcritical.fedex.com/us/services/market-industry/disaster.shtml

    Kay, R. (2002, May 14). Quickstudy: System development life cycle. Computer World, Retrieved from http://www.computerworld.com/s/article/71151/System_Development_Life_Cycle

    Luck, M., McBurney, P., & Preist, C. (2003). Agent technology: Enabling next generation computing. Agent Link, Retrieved from http://www.agentlink.org/roadmap/al2/roadmap.pdf

    Porter, M. (2008, Jan). The five competitive forces that shape strategy. Harvard Business Review, Retrieved from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-trategy/ar/1

     
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