Sales Force Integration at FedEx Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Situation Analysis of FedEx

Situation analysis is used to analyze the internal and external environment of the company in order to identify the capabilities, weaknesses, customers and competitors of the company. FedEx Corporation was established in 1973 and since after that it has turned out to be a worldwide logistics and supply chain management. The company has invested greatly in innovation and capital over the years but its major factor of expansion and growth has conventionally been through acquisitions.

The acquisition of the multiple companies enhances the market and competitive position of the company. FedEx Corporation has diversified the business mix that provides the company a competitive edge over its rivals. The company offers its customers wide range of diversified services through its group companies.

The company uses a strategic management tool in managing and meeting their goals. It is strong in its corporate structure with low turnover rate at corporate level. The business has the capability to react to the changing customer environment by providing quality services for 24 hours. The project namely ARISE that stands for “Achieving Revenue and Information Technology Synergies across the Enterprise” was established by the company with an objective to enhance the shipping capabilities and to redesign the FedEx express and FedEx ground sales units.

FedEx Corporation has faced intense competition from its rival in the industry that includes major competitors like UPS and Airborne Freight. There are very less legal issues with the company because it has implemented all the essential legal necessities for the protection of the employees as well as benefit of the company. The company offers a wide range of products and services with the competing price in the industry. The company has highly innovative R & D team and softwares.

The rivalry among the competition in the industry is high as there are many competitors of the FedEx like UPS, DHL, Airborne Freight and TNT. The factor that causes an increase in the competition among the rival includes the level of product differentiation among the competitors, the low cost of switching in the industry and lastly the high fixed cost.

The threat of new entrant in the industry for FedEx is low as it requires huge capital investment. Secondly, there are large numbers of players already in the industry that are competing against each other, which make difficult for new competitors to enter the industry and they also have economies of scales, distribution channels and technologies advancement advantages.

The bargaining power of the buyer in the industry is moderate for the reason that of the presence of intense competition and low switching costs as FedEx may have a relationship with some particular suppliers and secondly most companies in the industry buy packaging material in large quantities and can easily switch to other supplier at low costs.
The threat of substitute is high for the company as the global expansion of the internet has created an alternative for the FedEx and for the whole industry. On the other side, frequent use of e-mail has certainly cut the revenue stream of FedEx, particularly in the delivery of overnight letter market.

The external factors that can affect the company that may include the declining world economy increase in the fuel prices and the rising cost of fuel jet.

2. Problems

The problems that FedEx comparison was facing include how they can establish the best compensation plan for the incorporated FedEx Express and FedEx Ground services that create a well-balanced sales approach between the strategic areas of FedEx package delivery that is Express and Ground services, which must be aligned with the objectives of ARISE. In addition to this, another problem that the company is facing is about how to appropriately assess the factor that can contribute to the success of the new compensation plan while having positive support from both Ground and Express sales teams. The expansion of a new compensation plan for the combined sales force would be one of the most important elements of the overall sales integration effort of FedEx Corporation.

3. Decision Statement And Recommendations

The company needs to focus on the advertising and sales strategies in order to target more customer segments in different global markets. In addition to this, the company also needs to focus on its information systems so as to maintain the wide automation of their package delivery system. FedEx Corporation should work to retain a controlling stake in the market of express delivery whereas stealing the market share from UPS in domestic ground delivery. The company should make the goal to increase the market shares of their ground services.

The main problem with the shipping trade is that customers usually do not have high brand loyalty as the switching cost varies from one seller to another that are quite negligible so in order to develop customer loyalty towards its brand, FedEx can acquire small companies in the industry, which will increase their market share. The company also needs to expand their ........................

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