Friday, October 1, 2010
Strengths and Weaknesses
FedEx has an extremely well-known brand, and has solid financial resources to use for capital improvements such as equipment upgrades that can lower costs and add capacity as needed. Another strength is their ability to manage information to maximize efficiency of both package transportation, and the efficient use of vehicles. they tout their ability to receive packages longer at end of work day and have arrivals early in am. They have some cost advantages in the way they utilize contract drivers. I could not come up with much in the way of inherent weakness, but they are susceptible to external threats (unionization, legislation, possible costs increases if CAP and Trade for emissions comes about... I wanted to list their dependence on fuel as weakness, but that is same for all in industry, and they seem to have done ok at passing on costs in the form of fuel surcharges.
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Alice,
ReplyDeleteMy husband is a long-term FedEx manager and he says you are dead on in your assessment. As you mentioned, the threat of unionization has always been a concern and FedEx spends a lot of effort trying to keep that from happening.
I wonder if there are any threats at being acquired or if there are any opportunities to acquire other companies? Have you heard anything?
ReplyDeleteWith the industry primarily being a duopoly there is very little risk of being acquired. However, FedEx has acquired others in the past such as Flying Tigers, American Freightways, Watkins Motor Lines, and Caliber (aka RPS).
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