Marketing Strategy Falls School of Business – MBA program Dr. Michael D. Wiese – Fishers Campus Proposal to Management of Market Audit – SWOT / Environmental Analysis By: Jeffrey K. Lockhart October 02, 2012 To: Another open letter to the management of Federal Express Corporation (FedEx Corp): Ladies and Gentlemen, I am currently involved in an MBA marketing class at the Falls School of Business – Anderson University.
I have been asked, as part of a marketing audit, to assist in building a marketing plan that analyzes a portion of the “Situation Analysis” of such plan, for a particular Strategic Business Unit (SBU), or actual work unit, at my place of employment. The process for building a marketing plan starts with a detailed situation analysis of the market and business. The primary purpose of a situation analysis is to uncover key performance issues that usually go unnoticed in day-to-day business operations. The output of the situation analysis is used to build the marketing strategy.
To accomplish this I will discuss the Strengths, Weaknesses, Opportunities and Threats (SWOT) / Environmental Analysis, with respect to current market forces, the business’s competitive position, and its current performance for the identified SBU described below. I will do this by listing the internal strengths and weaknesses that impact the SBU’s ability to serve FedEx customers, constituency; as well, as directly meet the FedEx mission. Also, I will list some of the external/environmental factors that are impacting/shaping the ability of the unit to serve its customers, constituency; as well, as meet the FedEx mission.
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Finally, as part of the SWOT I will discuss the opportunities and threats that as managers you should be aware of; and for which you will want to manage. Identification of the Specific Business Unit (SBU): FedEx Express – Indianapolis Hub – Sec. 9 – Dallas / Ft. Worth ramp (DFW) SWOT Analysis: FedEx Express – Indianapolis Hub – Sec. 9 – Dallas / Ft. Worth ramp (DFW) Internal Strengths:| Internal Weaknesses:| Recognized as Industry Global Market Leader/ largest transportation company; providing fast reliable service for more than 3. million package shipments each business day; 10m + each day from the DFW ramp alone. (I)| Limited freight volume handling ability; with the DFW SBU only having 35 employees; and 16 slides, and four hours in which to perform each night’s sort. (I)| Leading-edge information and engineering technology (the Matrix). Current package tracking system is state of the art. This provides tremendous advantage for the various ramps in the Indy hub. (I)| Reliability on other areas of the hub to perform their job in a satisfactory manner.
Non-con drivers making timely deliveries of freight to the sort process. (I)| Worlds largest privately owned Fleet of cargo airplanes (660 jets). There are currently 90 gates for planes coming in and out of the Indy hub; DFW manages 2 of them each sort. (I)| Late in-bound planes can cause the entire sort to be delayed; resulting in late out-bound flights to the freights final destination. (I)| Boeing 777’s now fly into the Indy hub; lowering emissions, with less fuel consumption, this aircraft reduces the environmental and also noise impact of entire operations. I)| Costs and frequency of asset replacement / investment is very expensive. Keeping a fleet of 660 aircraft maintained; as well, the constant new purchase of aircraft is a drain on company capital. (I)| Indianapolis is the second largest distribution hub in the company; only behind home-base Memphis, TN. (I)| Plane “strikes” by tug drivers can be very costly incidences for the company. The DFW ramp had no aircraft strikes by its drivers during 2011; and none year to date 2012. (I)| FedEx Invented Express distribution. The Indy hub continues to grow due to this attribute of FedEx. I)| The cost in penalties for not meeting required express shipping deadlines for each package can add up to a significant total annual dollar cost. (I)| Providing rapid, reliable, time-definite delivery to more than 220 countries and territories; the DFW ramp participates in this. (I)| | Customer Service is provided by significant training of each DFW ramp worker in the correct processing/application of their job. (I)| | Below is a list of “External Environmental Factors” affecting the FedEx marketing strategy include both those that would be considered strengths; as well as those considered to affect the company in a negative manner.
External Environmental Factors - Strengths:| External Environmental Factors - Weaknesses:| FedEx has contracted long-term with the US Postal Service to deliver all of its Global Express Guaranteed international shipping freight. It features 1-3 business days to more than 190 countries (Money-back guarantee). (E)| Business is subject to major economic downturns. In the 2000 downturn many companies looking for a way to save money stopped shipping, or moved to cheaper methods such as surface shipping. This resulted in reduced routes and limited lay-offs. E)| FedEx now connects markets that comprise more than 90% of the world’s gross domestic product within one to three business days. (E)| A recent survey found that 84% of “satisfied” customers will “jump ship” for a better deal if the opportunity arises. With the marketplace becoming increasingly commoditized, customer retention has become a critical part of business strategy. (E)| FedEx measures customer service and loyalty via two separate indexes; a 1% increase in the Loyalty Index has been found to be worth approximately $100mm of additional annual business. E)| Inclement weather is definitely a negative environmental factor that can affect timely delivery of FedEx express delivery. Winter snows and summer thunder storms definitely present challenges to the various FedEx markets. | FedEx Express is named among the top five of the “World’s Best Multinational Workplaces” by Great Places to Work Institute. (E)| The TSA adopted new rules enhancing many of the security requirements for air cargo on both passenger and all-cargo aircraft. It is reasonably possible that these new rules, or other future security requirements for air cargo carriers, could impose material costs on FedEx. FedEx Express is named Super Eco-Airline of the Year 2012 by Air Transport World. (E)| The FAA’s regulatory authority relates primarily to operational aspects of air transportation, including aircraft standards; as well, personnel and ground facilities, which may from time to time affect the ability of FedEx to operate its aircraft in the most efficient manner. | FedEx Corp ranks ninth in the business Super-brands list and is the only company representing the transportation industry in the top 20, making it a leader in its field. E)| FedEx Express participates in the Civil Reserve Air Fleet (“CRAF”) program. Under this program, the U. S. Department of Defense may requisition for military use certain of FedEx Express’s wide-bodied aircraft in the event of a declared need, including a national emergency. | Opportunities and Threats are part of the SWOT analysis that must be examined by managers involved in the development of a marketing plan/strategy include the following.. Opportunities| Threats| The DFW ramp has the opportunity to grow its portion of the Indy hub market share if its manpower is increased.
It is only limited by itself. If the volume will support more staff it will be allowed. | Personal injuries in the workplace can affect the DFW ramp’s overall performance ratings. Thus, limiting the advancement of its managers. | The DFW ramp can control its freight misflows by continuing the training of its personnel. This will result in improved performance ratings for the ramp and additional opportunities for its managers. | Conflicts between personnel can negatively affect, and ultimately change the “mojo” of the ramp’s team performance.
Teamwork is a very important attribute, necessary for the ramp to meet its volumes and timelines. | The DFW ramp has the opportunity every night to help solidify the loyalty of 10m customers to FedEx. | If it does not do its job correctly the DFW ramp has the opportunity to give 10m customers a reason to use UPS for their next shipment of freight. | Each DFW ramp staff has the opportunity to quash the various FedEx competitors by performing their job with excellence. | Unionization is always a potential threat to the current positive work environment.
This would not be a good thing for the company. | By doing their job correctly, identifying suspicious packages each of the DFW ramp staff has the opportunity to act in place of a DEA or BATF agent. | Drugs trafficking and potential terrorism are definite threats to FedEx with each sort that takes place. | Theft prevention can enhance FedEx’s reputation in the market place. Each DFW ramp staff has the opportunity to act as eyes and ears against theft of freight being shipped through their area. | Individual theft of various pieces of freight can hurt FedEx’s reputation in the market place. |
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