Fedex External Environment
FedEx External Environment Audit
1. How is the industry structured?
The industry is defined by NAICS as the logistics, transportation, and related business services. This is a very broad definition because it doesn’t define the main function of the business, which is express delivery and shipping that includes a wide range of services for both businesses and consumers. FedEx offers express delivery, ground, and freight shipping, in domestic and international markets.
The most important dominant economic traits of the express delivery and shipping industry are: -Market Size and Growth * The express delivery and shipping industry is $189B with a growth rate of 0.1% globally. Although there has been a -2% decline in the industry in the U.S., there is a tremendous amount of potential growth in the developing and international markets. The shipping services industry could be classified as being in the mature stage of the industry life cycle since the main focus is increasing market share and increasing cash flow. Future growth is dependent on the penetration and development of new markets. -Degree of Product Differentiation * Companies within the industry are differentiated by price, the markets they serve, reliability, and speed. Smaller firms who serve local segments are differentiated by the custom and personalized level of service. Larger firms who serve the global segment are differentiated by price, guaranteed delivery, and service. Price is a major factor for e-commerce businesses relying on the price of shipping and delivery times. Prices for shipping smaller individual packages are similar, but companies who ship in high volume get a break. Although there is some loyalty, price is a determining factor for businesses. -Scope of competitive rivalry/number of rivals * A few major players in the shipping industry dominate the world market. FedEx, UPS, DHL, and USPS hold 67% of the market share who ship worldwide and
1. How is the industry structured?
The industry is defined by NAICS as the logistics, transportation, and related business services. This is a very broad definition because it doesn’t define the main function of the business, which is express delivery and shipping that includes a wide range of services for both businesses and consumers. FedEx offers express delivery, ground, and freight shipping, in domestic and international markets.
The most important dominant economic traits of the express delivery and shipping industry are: -Market Size and Growth * The express delivery and shipping industry is $189B with a growth rate of 0.1% globally. Although there has been a -2% decline in the industry in the U.S., there is a tremendous amount of potential growth in the developing and international markets. The shipping services industry could be classified as being in the mature stage of the industry life cycle since the main focus is increasing market share and increasing cash flow. Future growth is dependent on the penetration and development of new markets. -Degree of Product Differentiation * Companies within the industry are differentiated by price, the markets they serve, reliability, and speed. Smaller firms who serve local segments are differentiated by the custom and personalized level of service. Larger firms who serve the global segment are differentiated by price, guaranteed delivery, and service. Price is a major factor for e-commerce businesses relying on the price of shipping and delivery times. Prices for shipping smaller individual packages are similar, but companies who ship in high volume get a break. Although there is some loyalty, price is a determining factor for businesses. -Scope of competitive rivalry/number of rivals * A few major players in the shipping industry dominate the world market. FedEx, UPS, DHL, and USPS hold 67% of the market share who ship worldwide and