Saturday, April 6, 2019

Executing Strategies in a Global Environment Essay Example for Free

Executing Strategies in a planetary Environment Es judgeAbstractThis paper will analyze national establishs respect creation frontier, and determine which of the four building blocks of matched advantage the union admits in purchase order to continue their above average profit efficacy. It will also explore the main aspect of harvest differentiations and content control of the attach to to maintain an edge on their rivals. Furthermore, for this assignment I will attempt visit the efficiency of FedExs current business model and recommend a innovative business aim strategy that will give federal chat a competitive advantage everyplace it rivals. In addition, this paper will also examine the manner in which all overall, globular competition may work on my recommended business strategy and I will suggest a signifi force outt mode that national declaim cannister confront its world(a) competition.Introduction federal pull up began operating in 1973, under the leading of Fred Smith Jr. Before federal official articulate, a major portion for microscopical packaging airfreight flew on commercial passenger flights. Fred Smith believed that these two work should be treated differently, because the commercial passenger and commitment shipper had different needs. The commercial passenger they wanted the convenience of day eon flights. As for the cargo shippers, they preferred dark operate, which would afford them late afternoon pickups and next day deli rattling (Hill,2013). Since small-package airfreight only went out based on the commercial flight scheduling, it was gruelling for cargo shippers to achieve next day talking to. To remedy the f ar recognise cargo shippers had Smith aimed to build a system that could achieve next day delivery of small package airfreight (Hill,2013).Today Federal Express has grown from a express delivery participation to a global logistic and supply chain management company (Crane, et al., 2003). Over the years Federal Express was able to grow through and through acquistions and large investmenst in knowledge technoloy. The company was also able to sustain out from the rest best on their business model operate independently, compete arrestively. Smith divide his compnay into 6 differentcomp superstarnt FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services, which fall by the waysideed from individually one component to focus on their own maket segment. By segmenting of all(prenominal) component it declare oneselfd Federal express the oppurtunity to focus more on node. Even though Federal Express 6 different components operated seperatley the competed together under FedEx Corporation. Federal Expresss Value Creation margin and Their Four Building Blocks of Competitive Advantage Federal Express profitability depends on three factors The jimmy a customer places on their function, the price Federal Express charges for their services, and the price Federal Ex press has to become to produce the services they provide (Hll Jones, 2013).The more favorable these factors are the more value is bestowed on Federal Expresss produce. To accurately value, a companys product management must pit the difference between utility and price (Hill Jones, 2013). Utility is the customers satisfaction or happiness with using or owning a companys product or services. Federal Express has stepped up to the plate by making shipping easier and convenient for their customer. Today we can find brush aside get rid of boxes in front of office buildings and small neighborhood shipping stores. Having drop off boxes produces the customer anytime drop offs and no waiting time. Federal Express has also invested heavily in innovation to add to the customers experience (Crane, et al., 2003). The option of wireless engineering and the ability to get through deliveries and schedule picks on the companys website provides the customer shipping right at their fingertips .For their global customer Federal Express can offer shipping option to more than two hundred companies. The prices Federal Express set for their services are spiriteder than many of their competitors. Federal Express pricing is considered a tri hardlye, which reflects the tall prime(prenominal) take aim of service FedEx provides (Crane, et al., 2003). Based on FedEx stance, their premium pricing is worth it, but they beetle off to realize their very price sensitive customer who may go with a more cheaper option for certain services (UPS). In this case it make it toilsome for Fedex to standout based on branding and the amenties they offer. They may have to sound off of a different way to differeinate themselves from the competitior. Since Federal Expresss growth and customer, satisfaction comes with a high price tag. Their return on invested capital (ROIC) is very low compared to its biggest competitor UPS. In 2011, FedEx ROIC was 7.41% and UPS was 19.39%(Hill, 2013).Some sa y in time the money FedEx spent to build up their company, technology infrastructure, and customer satisfaction may soon pay off. The other positive side is that FedEx spending and acquisition expenses have made it hard for virgin companies to enter and compete in the packaging industry Along with value creation, a company must excel in the four building block of competitive advantage efficiency, look, innovation, and customer reactivity. How substantially a company performs in these four areas will determine their profitability and competitive advantage over the competitor. These four generic building blocks are a product of a companys distinctive competencies, which will allow a company to differentiate its product and commence its cost structure (Hill Jones, 2013). In turn, sustain a competitive advantage and reform profitability outcomes over their competitor.When determining a companys efficiency we can look at what it takes (inputs) to produce a product or services (o utputs). According to Hill and Jones, the more efficient a company is the fewer inputs it required to produce a particular output. The most common way to measure a companys efficiency is through employee productivity the out pout produced per employee (Hill Jones, 2013). When examining FedEx efficiency they were the first packaging company to invest in technology that enabled their employees to access company information wireless 24 hours a day. This wireless feature also allows the employee to collect packaging data, which allows employees to quickly enter packages into the companys package tracking system, which masters the possibility of error (Crane, et al., 2003).As for FedEx service, they can be review by its features, performance, durability, reliability, style, and design (Hill Jones, 2013). These features are used by customers to determine the quality level of the services that are offered by FedEx. Based on FedExs history, spending to build its infrastructure, and prem ium pricing FedEx is committed to providing a service of high quality standings. FedEx has also invested heavily in new technologies, which will improve their services, make it more reliable, and valuable to its customers (Amsler, Cullen, Erdmenger, 2010). An example that show FedEx is all about quality is their technology efforts such as tracking deliveries on their website, and whirl convenient shipping at the customers fingertips. As mentioned before FedEx is all about innovation.They are into creating new servicesand processes to make shipping easy and convenient for their customers. One of their major investments is the joint venture with University of Memphis. University of Memphis and FedEx have joined and formed the FedEx get of Technology. This investment will ensure that FedEx will not be let in dark when it comes to new technology (Crane, et al., 2003). When it comes to customer satisfaction FedEx tries to identify their customer needs. FedEx heard the customers demand ed for a more convenient way of shipping.FedEx has extended drop off times by three hours, offer drop off boxes, and the ability for customer to schedule pickups on FedExs website. The only dissatisfaction is the premium pricing set on their services. FedEx fail to adhere to the demands of their cost sensitive customers. These are the customers who only care about inexpensive delivery services. This convention of people may use FedEx as a last resort for their shipping needs.Product specialtyThe idea behind product differentiation is creating a product that satisfies the customers needs (Hill Jones, 2013). In order for a company to obtain a competitive advantage they must offer a product that better satistfies the customers need than its rival. When a company creates a stratergy that involves innovation, execellence, quality, and customer responsiveness they are offering custumers differentiation product. When the a companys stratergy is about finding ways to increase efficiency and reliablity to reduce cost they are offering the customer low priced product (Hill Jones,2013). In the case of Federal Express their stratergy is not about offering a low priced product, but offering a product that is innovative, befittings a high standard of execellence, high quality, and basing the product on the customers need.Federal Express silent the importance of differentiation. Since their strategy is not based on offering a low costing product Federal Express had to focus on information technology. Today customers are interested in monitor their shipments, estimating arrival times, price and cost of shipments. These elements are important to most businesses and consumers as well as the galosh of their delivery (Crane, et al., 2003). To satisfy the needs of their customers and to stand out from their competitor FedEx hasinvested heavily in the technology infrastructure, which provides options for customers to track and validate shipments at their personal computer.Fe deral Express whole caboodle hard to create a high quality level of service that is difficult for their rival to match (Crane, et al., 2003). Over the years, FedEx has been known as an pioneer in the shipping sector, and providing a high level of quality services. Due to FedExs higher prices the level of service they provide may become unnoticed. To differentiate their standard of quality from their competitor FedEx lets their customers know that if they are willing to pay more it will be worth it (Crane, et al., 2003).Capacity ControlWith technology, forecasting, and planning strategies Federal Express is able to handle the fluctuating demand in shipping. With General Information Science (GIS) Federal Express is able to build routes for the driver, guide sorting activities of inbound freight, estimate and record delivery times. This information is stored on a cloud, which is use for future planning and test the durability of a route to correspond package volume fluctuation (Cong er, Dezemplen, Haas, McLeod, 2010).Efficiency of Federal Expresss Current occupancy precedentFederal Expresss current business model is to operate independently, compete jointly. before long Federal Express is under the leadership of FedEx Corporation. FedEx Corporations provides strategic direction and financial reporting for the following operating companies that compete collectively, but operate separately worldwide FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services (Amsler, Cullen, Erdmenger, 2010). The idea behind Operate independently, compete collectively is that each company will operate independently, compete collectively and manage collaboratively. By operating independently, each of the organizational components (FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services) can focus solely on their market segment. Also by segmenting off each component by its own market segment has provided FedEx the competitive advantage in customer responsiveness an d has limited wasted time and resources on problem that are not associated with each market (Amsler,Cullen, Erdmenger, 2010).The eudaimonia of all the organizational component competing collectively is carrying and competing under a well know name FedEx, which is one of the most recognized names in the industry (Smith, 2005). Even though operate independently, compete collectively has worked for Federal Express thus far, but keep in mind it only provided FedEx with a competitive edge in specific customer focus. To gain a stronger competitive advantage FedEx should add cost leadership to their business level strategy. Cost leadership is a business model strategy that works towards lowering a companys cost structure so they can make and give away their products at a lower price than its competitors (Hill Jones, 2013). This has been difficult for FedEx, because of their constant expenditures in their infrastructure (Amsler, Cullen, Erdmenger, 2010).Due to FedEx costly expenditur es, they are unable to compete with their biggest rival, UPS in setting prices. orbiculate Competition and the Impact on Suggested Business Strategy Based on the international shipping demand among integrated global corporations and manufactures it will be FedExs as well as its competitors best interest to enter into the global shipping industry. Global manufactures are interested in keeping their inventory at a minimum and have bonnie in time delivery option. This way global manufactures can keep cost down, fine-tune their production, and satisfy delivery deadlines (Hill, 2013) . As for global corporation their shipping need are different. They are in need of fast and a safe way to ship document that are to confidential for internet transmisson or require a real signiture. These global coroporation are seeking for the same shipping services the match in the U.S for their global operations (Hill, 2013).According to Case 7 The Evolution of the Small Package Express Delivery Indus try, 1973 -2010 the trend for global shipping need is forcasted to grow approxiamently 18% annually from 1996 to 2016. This means in that location is a big demand for air cargo operators to build global shipping networks that will allow them to provide shipping services across the globe with in a 48 hour time frame. Through acquistion Federal Express was able to build a global shipping network to meet the demand among intergrated global corporations and manufactures. The acquisition expenses, international start cost, customs regulation cost , labor get it on associated with global shipping, and the barries to attaining landing right in many markets prevented FedEx toinclude cost leadership in their global busines stratergy.Eventhough FedEx does not have the competitive edge when it come to pricing they are t more clear in the global shipping industry than their competitors. They can offer services and shipping time frames their rivals can not offer. FedEx also has shipping hubs all over the world, which include 600 or so air crafts , which allows them to provide shipping option most of their comepitives can not offer. Based on history this was very difficult for other companies to establish this task. Since very few competitor have the same golobal infrastructure as FedEx global companies relay more FedEx for the international shipping needs (Crane, et al., 2003)ConclusionIn conclusion, Federal Expresss competitive advantage is not based on cost, but on its technology infrastructure. Over the years, Federal Express has spent heavily on technology and in acquisitions in order to offer delivery options and services their competitor cannot. The spending was geared towards satisfying the needs of the customer, innovation, offering a quality product and excellence services. The only negative side on spending heavily is that the cost was passed on to the customer, but Federal express stance is that they offer premium services and products. Federal Express can o ffer their international customers shorter delivery time, because of the major acquisition transactions Federal Express was involved in over the years. As for their domestic business, it may be a little difficult to stand out from their competitor. Currently the competitor (UPS) can offer similar services and convenient shipping options at a lower cost.ReferencesAmsler, M., Cullen, J., Erdmenger, J. C. (2010). strategical Report for FedEx Corporation. Vector Strategy Group. Conger, R., Dezemplen, R., Haas, J., McLeod, J. (2010). Using GIS Strategic Planning and Execution at FedEx Express. Crane, B., Landthorn, B., Miri, B., Relph, J., Sanchez, C., Vernerova, A. (2003). FedEx Corpration Strategic charge Project. Hill, C. L. (2013). Case 7 The Evolution of the Samll Package Express Delivery Industry, 1973-2010. In C. L. Hill, G. R. Jones, Strategic Management AnIntegrated Approach (pp. C83-C96). Independence Cengage. Hill, C. L., Jones, G. R. (2013). Strategic Management An Inte grated Approach (10th ed.). Independence Cengage. Smith, F. W. (2005). FedEx. Retrieved from FedEx corporation annual report http//www.fedex.com/us/investorrelations/financialinfo/2005annualreport/online/msg_chair.html

No comments:

Post a Comment