Presented by : FARIS Salma 2406 ARROUB Aicha 2396

Presentation of Fedex. Vision, Mission and objectifs. External analysis. Internal analysis. Swot analysis. BCG Matrix. Financial ratios

Presentation of Fedex :
FedEx Corporation (FedEx), is a holding company. It

provides a portfolio of transportation, e-commerce and business services under the FedEx brand. The Company operates in four segments: Federal Express Corporation (FedEx Express) is an express transportation company, offering time-certain delivery within one to three business days and serving markets. FedEx Ground Package System, is a provider of small-package ground delivery service. FedEx Freight is a provider of less-than-truckload (LTL) freight. FedEx Corporate Services provides its other companies with sales, marketing and information technology support.

FEDEX believes that globalization is the future for the express delivery business the company plans to become a major player in the international deliveries.

MISSION of FEDEX
FEDEX insures the express delivery in various countries in the world with a high consideration of the needs of its customers by offering a wide range of services with high quality and good prices.

OBJECTIFS OF FEDEX
1- The company has run head on into

entrenched overseas rivals, such as DHL, and onerous foreign regulations. 2- From 1987 to 1988, Federal Express purchased 15 minor delivery companies, mostly in Europe 3- In the December 1988, Smith announced the merger with Tiger international, best known for its flying tigers airfreight service

External environment

Analysis P.E.S.T.E.L
Political environment

-Being a global company FEDEX interacts with many countries worlwide which make it possible to have better international services like customs clearance and freight forwarding. -There are difficulties in the negociations of bilateral aviation treaties.

Analysis P.E.S.T.E.L
Economical environment

slow growth of overnight business Increasing competition between express services and air freight trade. Expressing delivery is one of the fastest growing sectors in Europe.

Four huge companies share the European

market which make it difficult for the other companies to enter to this market. The Asian market is expected to grow by 20 to 30 % annually.

Analysis P.E.S.T.E.L
Social environment Presence of unions in tigers whereas FEDEX is

non unionzed company which can create difficulties after the merger.
High population is an opportunity for FEDEX,

as there are more consumers to deliver to.

Analysis P.E.S.T.E.L
Technological environment Technology can help to reduce the time which

take a parcel to move from one country to another. Appearance of computerization in cargo operations

Analysis P.E.S.T.E.L
Legal environment Legal processes in negociating land rights

Government regulations affecting mergers in the late 80s

Demand and Offer by

D.A.S

First SBU: Express service

Opportunities Demand High competition between Threats Big companies delivery services and are buying small traditional air freight carriers ones
Some companies are giving extra services such as consulting, custom assistance, and trafficking. Selection of the level of desired services

Opportunities Offer
Sending documents is a necessary convenience Good services at lower costs Fast growth in Asia and Europe Remove of European custom barriers On-time delivery

Threats
Overnight letter business has a slow growth in the US Price war Entry of Airlines in the market providing regional services Legal processes in negotiating for landing rights that are restricted by bilateral aviation treaties

Second SBU : Heavy freight

Opportunities Demand High competition Threats Big companies are buying small ones Price war Entry of Airlines in the market providing regional services

Offer

Fast growth in Asia and Europe Remove of European custom barriers

Porters five competitive forces

- Rivalry among competitive firms

Introduction of speed and information into a powerful competitive edge. Companies try to offer good service with lower cost.

The competition between companies is

increasing, they are introducing next generation services.

Undeclared price war in Asia in order to win

more parts in the market.

-Potential entry of new competitors.

In European market, there are big difficulties

to enter to the market, four huge companies share the market and they buy the small rivals.

- Potential development of substitute products.

The Airlines are developing new products in

order to enter to the market.

- Bargaining power of consumers.

Customers and shippers have the choice between the conditions offered by the different companies. Sending documents became a priority rather than a luxury.

Critical success factors

1)The factors that led to the explosive growth of the private courier service are: -Resources and Skills Innovation - The explosion of international trade - T he geographical coverage areas of America

2) Three major external CSF which allowed FedEx to create competitive advantages are: - The time-guarantee, which has resulted in customer satisfaction - The money-back guarantee in case of timeout - The management and package tracking thanks to softwares

3) internal FCS are:

- Improved productivity - A good command level personnel management, leadership that is to say the motivation level of wages, know-how and equipment level - Diversification - The improvement of sales

Internal environment

Core competence:
They are Specific factor that a business sees as being central to the way it, or its employees, works. It fulfills two key criteria: 1-It is not easy for competitors to imitate 2-It can be leveraged widely to many products and markets.

Through the case we have been able to detect some elements that make the core competence of FedEx and make it different from others companies present on the overnight transportation.

1 -People oriented approach: employees of

FedEx believe that FedEx is a great place to work, because the latter has established a policy fully oriented towards the employee, who, according to FedEx, essentially makes the business of the company.

2 -Emphasis on servicer to costumers: FedEx focus on keeping a high standard of quality when dealing with different customers.

3- Strong leadership: Frederick W. Smith

brings strong leadership by his strategic vision that FedEx should adopt in the globalization process and sing his long academic knowledge.

STRENGTHS

Extensive use of IT and new technological

devices (S1) First mover advantages world leader in overnight delivery (S2) Integrated logistic and management services provider (S3) Key partnership with big corporations (S4) FedEx goodwill recognized worldwide (S5) Strong resources (S6)

WEAKNESSES Subsidiaries allocated all over the globe,

coordination among all the subs might be a challenge(W1) FedEx Services still not making profits despite growth in sales (W2) Failed to achieve targeted sales in US market (W3

OPPORTUNITIES Globalization and trade deregulation create

new business opportunities (O1) Deregulation of airline and trucking industries (O2) Outsourcing trends by customers (O3) Continuous growth in B2B, B2C & C2C (O4)

THREATS Fierce competition (T1) Innovation is easily imitated by competitors

(T2) Terrorism (T3) HIN1 and bird flu (T4) Rising inflation and fuel prices (T5)

FedEx Freight 12.44% FedEx Ground 19.85% FedEx Service 5.57%

FedEx Express 63%

Liquidity ratios:

Financial ratios:
Current ratio Quick ratio

Leverage ratios :

Activity ratios:

Debt to asset ratio Debt to equity ratio Long term debt to equity ratio Time interest earned

Profitability ratios:

Inventory-turnover ratio Total-assets turnover Fixed assets turnover Average collection period Accounts receivable turnover

Gross profit margin ROE Return on total assets (ROA)

Liquidity ratios:
Current ratio:
Quick ratio:

Comment

For every dollar the company owes in the short term it has $1.34 available in assets that can be converted to cash in the short term. Fedex is liquid and has the ability to pay its current obligations in time and when they become due.

Comment

For every dollar of current liabilities there are 1,1 dollars of readily convertible assets. Inventory is excluded from current assets because it is often difficult to convert to cash . This makes the quick ratio more accurate than the current ratio.

Leverage ratios
Debt to asset ratio Debt to equity ratio

Comment Comment

A ratio above 1 means a majority of assets of Fedex are financed more by debt.

For every dollar owned by the shareholders, Fedex owes 6,79 $ to creditors, which is relatively high. Fedex has been aggressive in financing its growth with debt.

Leverage ratios
Long term debt to equity ratio Time interest earned

Comment

Comment

This means that a company has $1,1 in long term debt for every dollar of asset

Fedex income before interest and taxes is 4,76x the amount of the total interest charges.

Activity ratios
Inventory-turnover ratio Total-assets turnover

Comment:

Fedex is able to sell out its inventory 10 times during the reporting period.

Comment:

The managers use rationally the funds that are confided to them..

Activity ratios
Fixed-assets turnover Average collection period

Comment

Comment

The productivity of the use of the fixed assets by the company is low. Total sales covered 1,19 times the fixed assets.

It takes Fedex 76 days on average to collect its receivables. This means that it does take a very long to turn its receivables into cash.

Activity ratios
Accounts receivable turnover

Comment

An Accounts Receivable Turnover Ratio of 5,7 means that the average dollar volume of Accounts Receivable are collected 6 times during the year.

Profitability ratios
Gross profit margin

Comment

It means that for every Dollar generated in sales, the company has 0,33 $ left over to cover basic operating costs and profit.

Profitability ratios
Return on total assets (ROA)

Comment

It means that for every dollar invested in Assets, the company is generating 0,11 $ in Net Income. High ROA number is better because it indicates that the company is earning more money on less investment.

Profitability ratios
Return on Stockholders equity (ROE)

Comment:

Return on equitymeasures a corporation's profitabilityby revealing how muchprofit a company generateswith the money shareholders have invested.