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 FEDEXMISSION 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 FEDEXOBJECTIFS OF FEDEX1- 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.LAnalysis P.E.S.T.E.LPolitical environmentPolitical 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.LAnalysis P.E.S.T.E.LEconomical environmentEconomical 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.LAnalysis P.E.S.T.E.LSocial 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.LAnalysis P.E.S.T.E.LTechnological environmentTechnological 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.LAnalysis P.E.S.T.E.LLegal environmentLegal environment

Legal processes in negociating land rights

Government regulations affecting mergers in the late 80’s

Demand and Offer by D.A.S

First SBU : Express service

Opportunities Threats

Demand High competition between delivery services and traditional air freight carriersSome companies are giving extra services such as consulting, custom assistance, and trafficking.Selection of the level of desired services

Big companies are buying small ones

Opportunities Threats

Offer Sending documents is a necessary convenienceGood services at lower costsFast growth in Asia and EuropeRemove of European custom barriers

On-time delivery

Overnight letter business has a slow growth in the USPrice warEntry of Airlines in the market providing regional servicesLegal processes in negotiating for landing rights that are restricted by bilateral aviation treaties

Second SBU : Heavy freightOpportunities Threats

Demand High competition Big companies are buying small ones

Offer Fast growth in Asia and EuropeRemove of European custom barriers

Price warEntry of Airlines in the market providing regional services

Porter’s five competitive forcesPorter’s 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 factorsCritical 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 imitate2-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.

STRENGTHSExtensive 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)

WEAKNESSESSubsidiaries 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

OPPORTUNITIESGlobalization 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)

THREATSFierce competition (T1)Innovation is easily imitated by competitors

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

FedEx Freight12.44%

FedEx Ground19.85%

FedEx Express63%

FedEx Service5.57%

Liquidity ratios:• Current ratio • Quick ratio

Leverage ratios :• Debt to asset ratio• Debt to equity ratio• Long term debt to equity ratio• Time interest earned

Activity ratios:• Inventory-turnover ratio• Total-assets turnover• Fixed assets turnover • Average collection period • Accounts receivable turnover

Profitability ratios:• Gross profit margin• ROE • Return on total assets (ROA)

Financial ratios:

Current ratio: Current ratio:

Liquidity ratios:

CommentFor 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.

Quick ratio:Quick ratio:

CommentFor 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 ratioDebt to asset ratio Debt to equity ratioDebt to equity ratio

Comment

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

Comment

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 Long term debt to equity

ratioratio Time interest earnedTime interest earned

Comment

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

Comment

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

Activity ratios

Inventory-turnover ratioInventory-turnover ratio

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

Total-assets turnoverTotal-assets turnover

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

Fixed-assets turnoverFixed-assets turnover Average collection period Average collection period

Comment

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

Comment

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 Accounts receivable turnover turnover

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

Activity ratios

Gross profit marginGross profit margin

CommentIt 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) Return on total assets (ROA)

CommentIt 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

Profitability ratios

Return on Stockholders’ equity (ROE) Return on Stockholders’ equity (ROE)

Comment:

Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.