This report endeavors to look at FedEx from the strategic initiative point of view and how it was able to adapt to changing business environment to improve itself. While organisations the world over have come and gone a few leave a lasting footprint on the way they have moved in the particular sector. FedEx with its various innovative ideas has left lasting footprint that has forever altered the scope of service within the logistics industry.
From its humble beginnings as a delivery company, it has set itself up a global logistics and business services organisation that has shaken the belief held by behemoths regarding the level of innovation and service that they can ...view middle of the document...
Thus to avoid both the situations above requires an approach that would clearly steer away from such binary views. It is very rare for managers to not appreciate the importance of strategy even in the most unforgiving environments.
If one were to look at the specific instance of FedEx introducing the overnight services based on clearly outline business requirements under the auspices of Mr. Smith. This particular step by FedEx has caused a sea change in the realm of the logistics industry. It also puts the other contenders within that space under quite a uncertain position. As far as UPS was concerned it would be put in a dilemma on whether to start this or wait and see how to respond. It also raises such questions as why was this not put forward by the incumbents who were already established in the industry. After this particular step was introduced by FedEx the industry did take some time to come back to normalcy. However, the gamble did pay off for FedEx forcing the rest of the players to see how they can replicate this move and reduce the uncertainty that this caused for them.
Corporate Strategy - Industry Analysis:
Porters Five Forces
Before analyzing the corporate strategy of an particular company, it always good to examine its industry first. In the case, the organisation FedEx is the logistics and the supply chain management company, we need to analyse the logistics industry and its impact in the overall market. Hence for this reason Michael Porter created the five important forces to understand the present and the future position of an particular industry (Porter, 1985). This analysis provides an clear understanding of the strength and weakness of the industry, logistics industry as in this case. Apart from providing information on the present situation, further it gives the information on the future position where the company wants to move to and thereby it helps the organisation to make the future decision. As the name denoted, it uses the five important forces to determine the strength and weakness in a particular force.
The five important forces such as the
1. Bargaining power of the Buyer
2. Bargaining Power of the Supplier
3. Threat of New Entry
4. Threat of Substitution
5. Existing Rivalry
Thus in order to examine the corporate strategy of the FedEx group of companies, it is mandatory to find out what is its present and the expected position in the logistics industry.
Bargaining Power of the Buyer
The bargaining power of the buyer is something like a risky factor for the organisation when the power actually increases. It determines, on to what extent, the customers can bargain with the organisation for the services they offer (Porter, 1985). This is usually happen when there are more competitors are available in the industry. This allows the customers to switch to new customers with a lower switching cost. And more particularly in the shipping industry, the switching cost is very low....