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FedEx Analysis: Tows Matrix Principle

TOWS Matrix indicates threats opportunities, weaknesses, and, strengths and illustrate the scope of business to facilitate the external threats and opportunities comparing with internal weakness and strengths. As a market leader with brand value, innovative technology, FedEx enjoys its strength by modernization of services and capturing global market. Here high prices, increased debt, expensive technology and racial discrimination stand as its weakness. Increasing demand of logistics, technological expansion, joins venturing and e- commerce integration has created vast opportunity for FedEx while global competitors, recent global financial downturn and political aspects have demonstrated some threats for FedEx.

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Introduction

FedEx Corporation has operated as a logistic service company, which provides transportation, e- commerce and supply chain management all over the world. It started its business in United States, but now it is providing its services in more than 30 countries including Asia, Europe etc. The top management of the corporation is confirming the ethical and professional standards of safety of goods and services of their customers. FedEx is successful in competing in transportation and business services as large parcel carriers (Hoover’s, Inc, 2). The major competitors of FedEx Corporation are UPS, DHL, TNT and others, their contribution in US and International market is shown in below: (FedEx Corporation, 16)

Name of the company US market of Parcel International Market of Parcel
FedEx 22% 7%
UPS 48% 10%
DHL 7% 23%
TNT —– 11%
Other 23% 49%

TOWS Matrix

TOWS Matrix has used to describe the scope and emphasized on the business to facilitate the external threats and opportunities comparing with internal weakness and strengths of FedEx Corporation (Case Analysis: Federal Express, 5). To analyze the TOWS matrix, first FedEx is necessarily developed the internal and external environment according to strengths, opportunities, weaknesses, and threats, which is given below:

Strengths of FedEx

  • Capturing Global Market: FedEx is operating its services in 211 countries all over the world and it has great source of revenues for the corporation (Rodrigo et al. 4).
  • Modernization of Services: FedEx has operated with the help of airplane and truck, which is totally different from other parcel service companies, which helps FedEx to being global leader.
  • New Innovation of Technology: FedEx always continue its services with new technology with $1 billion investment in every year,
  • Proper Communication with Customers: With user friendly web site and proper tracking devices, FedEx is assuring the customers an excellent communication with them (Hitt, 85).
  • Strategic Management Decision: The managers of FedEx are directing strategic vision to hold the company position as a market leader.
  • Market Leader: FedEx is continuing its services from 1973 as a market leader in parcel and transportation services.
  • Brand Value: As a first international transportation service provider, FedEx has developed strong brand value to their potential customers.

Weaknesses of FedEx

  • High Prices: FedEx is providing its services in higher price than competitors, which is making the opportunity for competitors to switch FedEx’s customers towards them.
  • Racial discrimination between employees: The employees of FedEx are highly biased towards racial differences, which are hampering the image of the brand.
  • Causing disputes with labor and pilots: FedEx has more than 3500 pilots who are grouped as Pilots Association, where they are demanding extra salaries, retirement benefits from their jobs (Hitt, 86).
  • Treating different subsidiaries in different way: There are number of subsidiaries in FedEx, which is treated as different ways from others. For an example, FDX Umbrella is operating delivery services independently in specific market.
  • Costly technological improvements: The technological innovation of FedEx is being too much costly to utilize it for its services.
  • Debt Increased: The portion of debt of company has increased in high levels.

Opportunities of FedEx

  • Successful Global Expansion: FedEx is successfully expanding in global market with all its subsidiaries.
  • Technological Expansion: FedEx is concerning more in technological expansion to develop its services than competitors.
  • Great synergies between subsidiaries: FedEx is continuing its business with technological movements in all subsidiaries successfully in market.
  • Communication with large corporation: FedEx is communicating with large corporation as value added benefit to its services.
  • Benefit from Joint venture: FedEx is benefited by joint venturing with Netscape and American Express according to customers demand.
  • E- Commerce development: The expansion of e- commerce through online and internet, FedEx is enjoying delivery of products in rapid growth.
  • Demand of Logistics services: The demand of logistics services are increased rapidly, so FedEx has increased its demand in the market.

Threats of FedEx

  • Responsibilities of Community in US market: FedEx has less community support to provide its services in United States.
  • Connection with Foreign Countries: For restrictions and regulations of foreign countries, FedEx suffer problems to operate its business in there.
  • Global Economic and Political Conditions: Fuel prices, customers’ perception about services of FedEx are not matched with current economic and political conditions with every country.
  • Online Advantages of Competitors: The competitors are taking the advantages of internet in same manner as FedEx;
  • Foreign Competition in lower costs: FedEx has to face foreign competitions, which provide service in lower costs.

The following table shows the TOWS Matrix with appropriate strategies (Weihrich, 16):

Strengths – S Weaknesses – W
1. Capturing Global Market
2. Modernization of Services
3. New Innovation of Technology
4. Proper Communication with Customers
5. Strategic Management Decision
6. Having First Mover Advantages
7. Market Leader
8. Brand Value
1. High Prices of Services
2. Racial discrimination between employees
3. Causing disputes with labor and pilots
4. Treating different subsidiaries in different way
5. Costly technological improvements
6. Debt Increased
Opportunities – O SO – Strategies WO – Strategies
1. Successful Global Expansion
2. Technological Expansion
3. Great synergies between subsidiaries
4. Communication with large corporation
5. Benefit from Joint venture
6. E- commerce development
7. Demand of Logistics services
1. Continuing Online Subsidiaries with customer retailer services
2. Starting FedEx travel services
3. Opening FedEx mail services
1. All subsidiaries should be expand with same technology
2. The joint venture can improve costs and debt of current situation
Threats – T ST – Strategies WT – Strategies
1. Responsibilities of Community in US market
2. Connection with Foreign Countries
3. Global Economic and Political Conditions
4. Online Advantages of Competitors
5. Foreign Competition in lower costs
1. Fulfilling of community responsibilities can be possible with global expansion
2. Understanding global market with appropriate managerial decisions.
1. Minimizing costs of services than competitors
2. Avoiding community and racial problems of customers and employees

Conclusion

So, FedEx can develop its strategies according to strengths, weaknesses, opportunities and threats, which would help to improve the subsidiaries of FedEx with technological expansion and would assist to fulfill community responsibilities with avoidance of racial problems between customers and employees.

Works Cited

  1. Csustan.edu, Case Analysis: Federal Express.
  2. FedEx Corporation, FedEx., Web.
  3. Hitt Michael, Ireland Duane, Hoskisson Robert, Strategic management: competitiveness and globalization: concepts & cases, 8th edition, 2007, Web.
  4. Hoover’s, Inc, FedEx Corporation.
  5. Rodrigo Loya, et al, Welcome to FedEx.
  6. Weihrich Heinz, “The TOWS Matrix – A Tool for Situational Analysis”, University of San Francisco.

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