FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City
This case is appropriate for strategy courses and courses that focus on competitive dynamics. It follows FedEx from when it was the only international express-freight-delivery company with direct flights into such key Chinese cities as Shanghai, Beijing, and Shenzhen and a virtual monopoly over South China's international express delivery market up to the competitive events that had taken some of the shine off FedEx operations in China. Leadership in the fast-growing, highly competitive Chinese express delivery market was key to FedEx's international strategy. Some of the issues students must decide are what these agreements and joint ventures could mean to FedEx's business in China and how it should respond to the increasingly crowded market.
Swot Analysis of "FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City" written by Ming-Jer Chen, Jin Leong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Express Fedex facing as an external strategic factors. Some of the topics covered in FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City case study are - Strategic Management Strategies, International business and Strategy & Execution.
Some of the macro environment factors that can be used to understand the FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City casestudy better are - – there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China,
increasing energy prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Express Fedex, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Express Fedex operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City can be done for the following purposes –
1. Strategic planning using facts provided in FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City case study
2. Improving business portfolio management of Express Fedex
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Express Fedex
Strengths FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Express Fedex in FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Express Fedex is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Express Fedex in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Express Fedex in the sector have low bargaining power. FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Express Fedex to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Express Fedex is one of the leading recruiters in the industry. Managers in the FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Express Fedex has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Express Fedex has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Express Fedex is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ming-Jer Chen, Jin Leong can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Express Fedex has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Express Fedex has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Express Fedex has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Express Fedex is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Express Fedex is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Express Fedex are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Express Fedex has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Express Fedex to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City are -
High cash cycle compare to competitors
Express Fedex has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Ming-Jer Chen, Jin Leong suggests that, Express Fedex is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Express Fedex products
– To increase the profitability and margins on the products, Express Fedex needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City HBR case study mentions - Express Fedex takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Express Fedex has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Express Fedex supply chain. Even after few cautionary changes mentioned in the HBR case study - FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Express Fedex vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City, in the dynamic environment Express Fedex has struggled to respond to the nimble upstart competition. Express Fedex has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City can leverage the sales team experience to cultivate customer relationships as Express Fedex is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Express Fedex, firm in the HBR case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Express Fedex needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Express Fedex to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Express Fedex is facing challenges because of the dominance of functional experts in the organization. FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Express Fedex can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Learning at scale
– Online learning technologies has now opened space for Express Fedex to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Express Fedex can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Express Fedex to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Express Fedex to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Express Fedex can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Express Fedex in the consumer business. Now Express Fedex can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Express Fedex can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Express Fedex has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Express Fedex to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Express Fedex to increase its market reach. Express Fedex will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Express Fedex can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Express Fedex can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City are -
Consumer confidence and its impact on Express Fedex demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Express Fedex in the Strategy & Execution sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Express Fedex in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Express Fedex has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Express Fedex needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Express Fedex with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Express Fedex is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Express Fedex can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Express Fedex needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Express Fedex business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City, Express Fedex may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High dependence on third party suppliers
– Express Fedex high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Express Fedex needs to make to build a sustainable competitive advantage.