Fedex Competitors Analysis and Customer Retention Strategies

Fedex Competitors Analysis and Customer Retention StrategiesIntroductionIt is apparent from FedEx Corporations (FedEx) track record of command it is clearly a leader in the constancy. be the worlds 1 stockpile dose confederacy with 3 million packages delivered daily, FedEx surely knows what it is doing to write the business gro advanceg and light (Williams 2005). However, like most businesses these days, there are ever trials and tribulations. Important decisions essential be made bothday, it is critical that quick thinking and a clearly defined method of operations management must be followed to keep things running smoothly. Of course, the straightforward test to whether or non a truehearted operations management flow is in place is how the attach to is fited to deal with the unexpected.This brief exit examine who impinge ons up FedExs transact guest base and how the company attempts to satisfy and retain its nodes. As well, the risks interpreted in day to da y business entrust be evaluated conjugate with the manner FedEx is able to manage the chances it must often take. An opposite per centumage point for discussion is the impact of sudden penury for the industry and specifically for FedEx. Finally, FedExs top competitors will be studied, weighing strengths and weaknesses of each company. An evaluation will be presented as to how FedEx would just if one of its main competitors would try to win a valued client based on the strength and weaknesses outlined.The CustomersAs with most successful businesses, FedEx is aware that it has a variety of different customers, including inside and external. some(prenominal) external and essential customers need to be satisfied with the military operation of the company to keep things on track. Reviewing the importance of both external and internal customers is critical.The internal customer for FedEx is obviously its own employees. 250,000 strong in 2005 with a 27 percentage step-up rate from 2004 shows that FedEx is growing quickly (Williams, 2005) and that flake of proceeds call for to be managed appropriately. To maintain employee satisfaction, FedEx take outers a emulous salary, fair working conditions, and the ability to climb the corporate ladder if desired. Employees boast of their success at FedEx and their true delight at working for this company byout the company website (Fed Ex confederacy Website 2005).Externally, there a few to a greater extent customers to consider including corporate, consumer, shareholders and stakeholders. Corporate clients, including Dell and Hewlett Packard, expect their products to be delivered on quantify and in good condition. As well, consumer clients expect to receive their products on succession and in good condition. Shareholders, since FedEx is a public company, expect pro summates to be up and costs to be down. Finally, stakeholders are those people affected by the corporate actions of FedEx. atomic number 18 it s operations interfering with almostthing in the community? Are its airplanes breaking noise ordinances?The bottom line is that the customers for FedEx are many and their needs are different so FedEx must consider the management of its operations from many angles.The risksThere are many risks that one of FedExs packages not to arrive at its intended destination on time including unexpected volumes, weather, misrouting, and bottlenecks at customs. Luckily, FedEx has regulate into place the appropriate controls to prevent a ride out of any package.As mentioned earlier, in efforts to prevent the loss of clients, FedEx has adopted policies and practices that take in proven successful. To address the place of unexpected volumes and weather problems, FedEx has built in quite a bit of redundancy into its systems. Its misfortune planning is prime(prenominal) with proactive monitoring of weather and air traffic. As well, managers stay in close communication each day to plan, constant ly staying one clapperclaw ahead of the game. Additionally, FedEx actually has multiple hubs across the world in the grapheme that packages need to be re chaired.The automation of the sorting process keeps packages that are misrouted to a bare minimum. Packages that need special customs attention are as well as proactively reported to local authorities so there is minimal prospect for those packages to slow the process. Even with these modern forms of automation in place, FedEx still prides itself on providing a human touch and discreetnessing each package as a golden package(FedEx political party Website 2005).Of course, if packages are delayed or do not ship to the accurate address, the company runs the risk of losing clients. Corporate clients batch decide to take their contracts elsewhere and consumers will lose their feelings of loyalty if FedEx does not deliver the divine service it promised. FedExs philosophy of Absolutely, Positively, Whatever it takes (FedEx keep com pany Website 2005) as discussed on its website is a direct reflection of what FedEx is willing to do to express the job done. In the unfortunate case where something goes awry with a package, FedEx e very(prenominal)placely wants it customers to know there is a place to go for help and psyche available at the end of the line to help work through terminations. Indeed, FedEx straitss many online tools to track packages as well as a call number with live contain staff 24 hours a day, 7 days a week, 365 days a year (FedEx Company Website 2005).The do of sudden demandThe effects of an unexpected and sudden demand development can be challenging for any company. In not managed correctly, a myriad of problems can result in the express service industry. This is a direct result of the company not being able to breed products when the demand arises (Melnyk Denzler 1996 p.447).Specific issues that can arise when sudden demand occurs accommodate late shipments, incorrect shipments, bottlenecks, scheduling difficulties, cost increases, and capacity issues. Externally, late or incorrect shipments affect the customer relationship and have a shun impact on in store(predicate)(a) business. Internally, bottlenecks can cause major issues in do shipment deadlines. In addition, without appropriate notice, staffing can be off and there can be inadequate human resources available to carry through the unexpected demand. Directly, if staff needs to be scheduled at the finishing minute, there is a good chance that overtime wages will be required and costs can skyrocket. Finally, capacity issues are created by the unexpected demand and lack of equipment to actually transport the additional packages.Overall, to square up unexpected demand, the operations manager needs to focus on mastery of forecasting coupled with having a flexible base of resources (Melnyk Denzler 1996 p.448). Luckily, FedEx is well positioned with its contingency plans. Like David Rebholz, executi ve vice-president of FedExs US operations and systems states Ninety percent of the package flow is predictable but that different 10 percent can really throw you. All FedEx, like any other company, can do is have the procedures in place to manage that 90 percent perfectly and have the contingency plans to deal with the other 10 percent when it come ons.The competitionAccording to a recent article in the World Trade publication (The Big Three UPS, FEDEX and DHL 2005 p.20), FedEx, UPS, and DHL are referred to as the big three in the express service industry. Another redoubted competitor in this grocery space is trinitrotoluene Logistics. To consider what quality of threat each one of these competitors may pose to FedEx, it is important to look into each of its competitors strengths and weaknesses as well as their mart positions. Specifically, it is important to analyze each companys history, leadership, market presence, and say-so for future branch.UPSHistoryThe United Parce l Service (UPS) began in 1907 as the American Messenger Company and has continued to grow and flourish every since (UPS Company Website 2005). The companys ability to continually reinvent themselves to fit the markets needs has kept them at the top of its game.leadersMichael Eskew, the authorized lead and CEO for UPS, has been at the helm in his current post since 2003. Although relatively new-sprung(prenominal) in this leadership role, he has served with the company since 1972 as a faithful and forward thinking employee. Ninety percent of the company is owned by managers, employees, founders, and families. This ensures that those with a vested interested in the company are stand for from the front lines to upper management (UPS Company Website 2005).Market PresenceUPS has complete itself as the largest package delivery company in the world. To grow its express delivery serve, it of late purchased Overnight and is also committed to provide its customers a full line of egr ess chain management work.Potential for future growthAs mentioned, UPS has a strong history of positioning itself for growth during times of change and shifts in the marketplace. Last year, employee growth was 8.2% and Net gross revenue Growth was 9.2% (Williams, 2005).DHLHistoryThirty Five years ago in 1969, DHL Worldwide Network took shape as the low cost delivery service as it entered the marketplace and attempted to carve a time out for itself as the low cost provider. Since then, the company has been working hard to straighten out new customers and convince them that with lower costs, quality need not be sacrificed (Hannon 2005). From the dough, DHL has committed itself to providing what it customers need. As early as the 1970s, the company realized that the globalization of trade was playing a key factor in the current business climate and adapted itself to be able to provide the services required for success in the international arena.LeadershipDr. Klaus Zumwinkel, curren t head of the Board, is leading the way to stool DHL as a premier service with the highest quality at competitive prices (DHL Company Website 2005).Market PresenceRanked as the world leader in cross border express deliveries, DHL is spreading its wings to capture even more of the delivery services market. Setting its sights on winning more of the ground delivery business, it recently acquired Airborne. In addition, DHL seems to be stepping it up a notch in cerebrate on its human touch for customers as Karen Johns reports, customers say we are oftentimes more responsive, flexible and human to deal with (Hein 2005).Potential for future growthAnother company that seems positioned as ready for growth, DHLs net sales grew by 21.6 percent last year while the employee count grew by 7% (Williams 2005).trinitrotolueneHistoryThomas Nationwide Transport (TNT) began back in 1946 as the first express delivery service. In the 80s, the company began to offer more logistical services as they u nderstood the market demand for it. In the 90s, the company also began to offer supply chain solutions and looked to establish themselves as innovators in the total supply chain arena (TNT Company Website 2005).LeadershipDave Kulik, Group Managing Director, is at the forefront of leading the company with new ideas in the supply chain and express delivery services industry. Leadership in the company seems to embrace advancement from within and reflects a true commitment to employee growth through many initiatives, including Investors in People ( TNT Company Website 2005).Market PresenceAlthough TNT offers only about 1/6 the sales numbers of its major competitors like DHL, UPS, and Fed Ex, their customer list is impressive. A key to TNTs focused success is the targeting of specific industries. Their client list includes big users such as BMW, GM, and Proctor and Gamble (TNT Company Website 2005).Potential for future growthAlthough TNT appears to be flexible in adding new products and services to offer its client base, it does not seem to be as aggressive in earning additional market segments as some of its competitors. However, for the last six years, the company has recorded 22% revenue growth each year (TNT Company Website 2005). In addition, back in 2004, TNT launched a $115 billion, six-year improvement program to keep its business up to speed (Keane 2004).FedExHistoryFrederick W Smith had the vision for FedEx while attention Yale back in 1965. His dream became a reality in 1973 when the company first became incorporated (Journal of blood Strategy 1988, pp.15-21).LeadershipFedExs professional founder is still the CEO, Chairman, and President of the company. Since the beginning, Smith has positioned FedEx as the industry warning setter and has given all others a bar to reach for in terms of overall performance.Market PresenceFedEx is the 1 express transportation company in the world and continues to grow and diversify. Its recent purchase of Kinkos has hel ped to expand its retail presence as well as the supply chain management services it can provide to its customers.Potential for future growthFedEx has enjoyed exponential growth each year since the beginning and has forever been able to manage the growth with ease. Last year alone, FedEx supported an 18.8% progress in sales and a jump in employees of 27.7% (Williams 2005).How does FedEx measure against the Competition?After review of FedEx and its main competitors, it is interesting to consider what may happen if one of its competitors would try to win clients from its customer base. Cleary, FedEx is a strong fraud in its field but the competition is fierce.In a competitive bid against its foes, FedEx would need to go on the offense, foregrounding all of its attributes that make it stand out above and beyond. The best sales pitch is always a positive one, focusing on your companys strengths quite than bad mouthing the competition. In an effort to keep important client relations hips, FedEx could highlight the followingIts original visionary and founder is still at the helm and directing the company that is still considered the industry standard setter.FedEx is the 1 express transportation company with sales revenue growth of 18.8% over last year, and net income growth 72.9% over last year (Williams 2005).FedExs commitment to do Absolutely, Positively Whatever it takes to keep the customer satisfied.Its positive track record in the industry and ability to adapt to meet the growing needs of its client base (i.e. the purchase of Kinkos).The commitment FedEx has to not only deliver on time but to treat each package like a golden package.In the case that questions arise regarding a delivery, there is always live support staff ready and available to field phone calls from consumers. Of course, packages can always be tracked on line.A competitive price offered for a competitive service with high quality standards.It appears that FedEx and UPS are both making play s to meet the end customers needs from both ends of the spectrum. FedEx got its start with the idea to guarantee delivery of overnight packages anywhere in the US. UPS, however, ramped up as a company focusing on ground deliveries. Both now are trying to get a piece of the others pie, and both are attempting to do it through acquisitions (DNS Retailing directly 2005, pp35-37).Many analysts and recent articles have placed FedEx and UPS in a direct competition for each others market space. In the article Can FedEx put on More Than UPS?, it is reported that both companies are projected to do very well but there is a belief that FedEx will do better (Tsao 2005). Specifically, the more positive outlook for FedEx has much to do with their involution into ground deliveries where margins are higher. Conversely for UPS, it is looking to expand into a market with lower margins.ConclusionAfter review of FedExs specific customer base, the risks that it takes, the problems of sudden demand, i ts rivals, and a possible scenario of stolen customers, it is evident that FedEx is well positioned for success in the future. Existing competition in the marketplace will continue to put pressure on FedEx to provide high levels of service at a competitive rate. Overall, Fed Ex is well positioned to serve as an industry leader.ReferencesDHL Company Website 2005, http//www.dhl.com.Federal Express Spreads its Wings 1988, Journal of business enterprise Strategy, vol.9, issue 4,pp.15-21. Retrieved on October 28, 2005 from Business antecedent post-mortem Database.FedEx and UPS deliver much more than mail 2005, DSN Retailing Today, vol.44, issue10, pp.35-37. 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