Strategies in a Global Environment: Case of Federal Express (Term Paper Sample)

Strategies in a Global Environment: The Case of Federal Express
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Strategies in a Global Environment: the Case of Federal Express
Executive Summary
The industry dealing with small packages in the world has recently become quite competitive and complex. Multiple strategies are now being put by companies in this trade to ensure that they remain relevant in the field and also maintain a profitable business ground. These strategies have seen most companies adopting models for profit such as the Porter’s Five Forces model among other innovative and economic progression models and ideas. This has given the companies a competitive advantage over others that still retain the traditional methods of doing business. Since most companies have progressed in this line, extreme rivalry especially between the big and well-established companies in the industry has been witnessed. The current paper deals with a case study of Federal Express, one of the giants in the delivery industry. Thus, the paper contains an analysis of the company’s value creation frontier, including the building blocks for its competitiveness and the efficiency of the strategies that the company uses in relation to the global market. Therefore, the paper will provide a deeper economic insight into the company and serve as a benchmark for other companies intending to join a global market environment (Berger, 2011).
The Background of Federal Express
Federal Express was established as a package delivery company in 1973. The initial goal of the initiation of the company was the streamlining of the express parcel and cargo delivery. Over the years, Federal Express has grown to become a global logistics company dealing with the supply and chain management at a global level. This has made the company a competitive party in the industry, which only few other companies can claim to have achieved. The company’s position and competence were boosted by the launch of the Internet in 1994. This enabled the integration of the company’s systems and activities to allow smooth running of bulk information involved in the business (Hill & Jones, 2013).
FedEx Value Creation Frontier
The competitive strategy for FedEx over the years has been specifically focused on the speed delivery and reliability. This has repeatedly allowed the company to acquire a better position in terms of trust by customers, helping the company to have better business and operational opportunities (Hill & Jones, 2013). However, this kind of speed and commitment comes with a cost. Being the first of its kind gave the company an upper hand in the business. However, many of the competitors have implemented strategies that mimic those of FedEx, moving at comparable delivery speed with less cost. They have tried to implement the strategy while adopting measures to reduce the cost of delivery.
Currently, the company has adopted the digital technology, which now allows their non-commercial customers to gain access to the procurement process and even to the delivery track. Therefore, the customers can follow their packages physically through the Internet (Pine II & Korn, 2011). This has helped to increase the customer's trust and boosted the reputation of the company. This kind of innovation has become an important factor in maintaining the competitiveness of FedEx. However, since the competitors are also working on strategies, the company should take advantage of its customer base and manipulate what others have developed, improving it and putting in new strategies that will help it remain relevant in the global market. These strategies may include allowing even more convenient access and inclusion of mobile phone applications and programs that will make the process even simpler. This will require updated programs and hiring of competent technicians who will aggressively uplift the system (Hill & Jones, 2013).
Product Differentiation and Capacity Control
To improve their position in the market and maintain the reputation that the company already has, strategies must be implemented in the company to ensure that there is active inventory management. This will allow for active monitoring of the products or packages that are moving. It can be done through the manipulation of the technology to integrate barcode tracking mechanism and the use of the Internet, which is currently being done for non-commercial consumers. This is a positive product differentiation strategy that will effectively help the company to reduce operational costs. The differentiation will also go a long way in helping the company develop an e-framework and, therefore, reduce the amount of overhead losses. Tracking technology is an alternative strategy that will assist the company to improve the management of the client’s supply chains, especially for those businesses that are operating and distributing products in the international market like FedEx (Berger, 2011).
Managing supply chains from the manufacturing companies can help the company to not only save the cost but also to enhance the reliability. Through the management of goods via all the transport systems, inspection of packages before and during transit, and effective management of multi-carrier systems, deliveries can be more effectively done and customers’ satisfaction duly ensured (Phatak, Bhagat & Kashlak, 2009).
Efficiency of Federal Expresses Current Business Model
The model of business currently adopted by FedEx is targeted towards the independent operation with collective competitiveness. It means that all the entities and related departments operate with the utmost independence and little interference from the main management. However, the strategies implemented in each of these entities are directed towards achieving the highest possible level of competitiveness (Thompson, Strickland & Gamble, 2008). Thus, the goal is achieved collectively by entities operating independently. Therefore, the main subsidiaries of FedEx have the freedom to operate their own transport and transit systems, distribution, logistics, and management independently. Each of their components is focused on their individual specific section of the market. Consequently, the subsidiaries work to achieve the best results at their individual levels and segments. This brings about a forward movement that is more organized and diverse without accruing great costs of development (Bate & Johnston, Jr., 2013).
The company now needs to improve the profit bearing strategy. It will be effective when the business level strategy through manipulation of the market to ensure that new entrants find them high above the average performance of the industry that the customers have less of a choice due to the company’s reliability and affordability compared to others in the field and also enhancing their reputation among the competent suppliers. This will also be boosted provided that alternative product that the customers would go for through diversification of the market (Beard & Dess, 1981). This strategy will be applicable and effective only when the company analyzes its operations and the value chain to reduce the overall cost of operation and add value to their products with a focus on the customer attitudes reception and requirements. The strategy will help improve the company’s market position and allow colonization of new markets through diversification. Further, the new products will discourage new entrants in the market, broaden the possible partnership opportunities and hence reduce competition (Bate & Johnston, Jr., 2013).
Global Competition and the Impact on Suggested Business Strategy
Globalization is a factor that has brought about mixed emotions in many entrepreneurs. The issue of a business going global does not only bring about expansion but also carries its own fears. With a global market, new and usually unpredictable competitors more familiar with the environment are encountered. Therefore, the new business struggles to rise in an unfamiliar environment and among established rivals. There is a strategy that can help to establish customer loyalty and earn profits but it should be well thought befor...