Federal Express: The Money Back Guarantee (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Federal Express: The Money Back Guarantee (A)
Discusses a large overnight express company, which guarantees its service, and which has created a major headache for one of its customers. The problem exposes deficiencies in its service and in the guarantee it has advertised heavily. A formal complaint is made to the CEO. From the CEO's perspective, students must confront a variety of issues related to the problem.
Swot Analysis of "Federal Express: The Money Back Guarantee (A)" written by Christopher W.L. Hart includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Guarantee Express facing as an external strategic factors. Some of the topics covered in Federal Express: The Money Back Guarantee (A) case study are - Strategic Management Strategies, Customer service, Customers, Diversity, Organizational structure, Product development and Technology & Operations.
Some of the macro environment factors that can be used to understand the Federal Express: The Money Back Guarantee (A) casestudy better are - – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing household debt because of falling income levels, increasing energy prices,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
Introduction to SWOT Analysis of Federal Express: The Money Back Guarantee (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Federal Express: The Money Back Guarantee (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guarantee Express, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guarantee Express 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 Federal Express: The Money Back Guarantee (A) can be done for the following purposes –
1. Strategic planning using facts provided in Federal Express: The Money Back Guarantee (A) case study
2. Improving business portfolio management of Guarantee Express
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guarantee Express
Strengths Federal Express: The Money Back Guarantee (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guarantee Express in Federal Express: The Money Back Guarantee (A) Harvard Business Review case study are -
High brand equity
– Guarantee Express has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guarantee Express to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Technology & Operations field
– Guarantee Express 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 Guarantee Express in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Guarantee Express digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guarantee Express has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Effective Research and Development (R&D)
– Guarantee Express 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 Federal Express: The Money Back Guarantee (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Guarantee Express is one of the leading recruiters in the industry. Managers in the Federal Express: The Money Back Guarantee (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Guarantee Express has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Federal Express: The Money Back Guarantee (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Guarantee Express 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.
Sustainable margins compare to other players in Technology & Operations industry
– Federal Express: The Money Back Guarantee (A) firm has clearly differentiated products in the market place. This has enabled Guarantee Express to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Guarantee Express to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Guarantee Express 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.
Organizational Resilience of Guarantee Express
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Guarantee Express does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Guarantee Express in the sector have low bargaining power. Federal Express: The Money Back Guarantee (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guarantee Express to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Guarantee Express has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Guarantee Express 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.
Weaknesses Federal Express: The Money Back Guarantee (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Federal Express: The Money Back Guarantee (A) are -
Skills based hiring
– The stress on hiring functional specialists at Guarantee Express has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Federal Express: The Money Back Guarantee (A), is just above the industry average. Guarantee Express needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Guarantee Express 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.
Low market penetration in new markets
– Outside its home market of Guarantee Express, firm in the HBR case study Federal Express: The Money Back Guarantee (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Federal Express: The Money Back Guarantee (A), it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Lack of clear differentiation of Guarantee Express products
– To increase the profitability and margins on the products, Guarantee Express needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher W.L. Hart suggests that, Guarantee Express 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.
Interest costs
– Compare to the competition, Guarantee Express has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Guarantee Express has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Guarantee Express even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Guarantee Express 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.
Slow to strategic competitive environment developments
– As Federal Express: The Money Back Guarantee (A) HBR case study mentions - Guarantee Express 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.
Opportunities Federal Express: The Money Back Guarantee (A) | 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 Federal Express: The Money Back Guarantee (A) are -
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. Guarantee Express can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Guarantee Express has opened avenues for new revenue streams for the organization in the industry. This can help Guarantee Express to build a more holistic ecosystem as suggested in the Federal Express: The Money Back Guarantee (A) case study. Guarantee Express can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Guarantee Express can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Guarantee Express can use these opportunities to build new business models that can help the communities that Guarantee Express operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guarantee Express is facing challenges because of the dominance of functional experts in the organization. Federal Express: The Money Back Guarantee (A) 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 Guarantee Express 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 Technology & Operations segment.
Using analytics as competitive advantage
– Guarantee Express 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 Federal Express: The Money Back Guarantee (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guarantee Express to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Guarantee Express 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.
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 Guarantee Express 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Guarantee Express can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guarantee Express can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Guarantee Express can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– Guarantee Express has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 Guarantee Express in the consumer business. Now Guarantee Express can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Federal Express: The Money Back Guarantee (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Federal Express: The Money Back Guarantee (A) are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guarantee Express can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Federal Express: The Money Back Guarantee (A) .
Technology acceleration in Forth Industrial Revolution
– Guarantee Express has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Guarantee Express needs to keep up with the evolution of technology in the Technology & Operations 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.
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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guarantee Express can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Guarantee Express business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Guarantee Express can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Guarantee Express is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Federal Express: The Money Back Guarantee (A), Guarantee Express may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Guarantee Express in the Technology & Operations sector and impact the bottomline of the organization.
Environmental challenges
– Guarantee Express needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Guarantee Express can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Guarantee Express
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Guarantee Express.
High dependence on third party suppliers
– Guarantee Express 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 Federal Express: The Money Back Guarantee (A) 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 Federal Express: The Money Back Guarantee (A) 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 Federal Express: The Money Back Guarantee (A) 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 Federal Express: The Money Back Guarantee (A) 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 Federal Express: The Money Back Guarantee (A) 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 Guarantee Express needs to make to build a sustainable competitive advantage.