Fedex Five Porter's Forces and Swot Essay

2614 Words Nov 9th, 2014 11 Pages
Introduction
There is no doubt that FedEx Freight is a leading U.S. provider of less-than-truckload (LTL) freight services. It is known for exceptional service, reliability and on-time performance. (History of FedEx Operating Companies About FedEx) With the rapid rise of virtually instantaneous electronic mail, some wondered if FedEx overnight mail delivery was as important as it was in the past. Margaritis pointed out that the company received only 9.3 percent of its revenue from overnight express mail, and that much of that mail could not be delivered electronically, such as gifts, electronic components, and medical equipment. (FedEx Cooperation) Nevertheless, “While FedEx Ground and FedEx Freight posted solid financial results, the
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Nevertheless, documents and packages delivery is still needed. For example, demands of important documents delivery like hard copy of contracts and visa material still exist. Furthermore, in 1978, FedEx founder and Chairman Fred Smith famously said, “The information about the package is just as important as the package itself.” FedEx has been keeping innovating new things over the thirty years. For instance, FedEx launches fedex.com as the first transportation Web site to offer online package status tracking in 1994. (http://news.van.fedex.com/fedex-marks-40th-anniversary-community-service-eye-future-0) It provides convenience for customers to check their packages at every hub instead of sitting there and not knowing the days they to wait for. With the good public praise and continuously updating service, FedEx will not be easily substituted by others.
The bargaining power of buyers
This refers to the extent of pressure that customers can place on a business. In FedEx’s case, consumers who purchase a large amount from FedEx have an enormous power of bargaining.
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As more and more international delivery companies exist, consumers have various choices to choose. In addition, consumers will choose the lower prices services since they have more and more symmetric information. In 1982 UPS decided to offer overnight air service, charging about half of FedEx's rate. By 1983 its second-day and next-day services were shipping a combined 140,000 packages a day.

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