FedEx and Environmental Defense: Building a Hybrid Delivery Fleet SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of FedEx and Environmental Defense: Building a Hybrid Delivery Fleet
In 2000, FedEx Express and Environmental Defense began a collaboration to develop a source of new-generation delivery trucks with dramatically improved fuel efficiency and environmental impact. By 2005, prototypes had been developed by Eaton Corp., which supplied hybrid diesel-electric transmissions, and Freightliner, which integrated the transmissions into the delivery truck chassis. FedEx tested the prototypes and announced that it intended to buy 75 of the new hybrid trucks. Describes the process by which the new trucks were specified and developed and the roles of each of the organizations involved.
Authors :: Erica Plambeck, David W. Hoyt
Topics :: Technology & Operations
Tags :: Government, International business, Product development, Social responsibility, Supply chain, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "FedEx and Environmental Defense: Building a Hybrid Delivery Fleet" written by Erica Plambeck, David W. Hoyt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fedex Trucks facing as an external strategic factors. Some of the topics covered in FedEx and Environmental Defense: Building a Hybrid Delivery Fleet case study are - Strategic Management Strategies, Government, International business, Product development, Social responsibility, Supply chain, Sustainability and Technology & Operations.
Some of the macro environment factors that can be used to understand the FedEx and Environmental Defense: Building a Hybrid Delivery Fleet casestudy better are - – technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of FedEx and Environmental Defense: Building a Hybrid Delivery Fleet
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FedEx and Environmental Defense: Building a Hybrid Delivery Fleet case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fedex Trucks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fedex Trucks 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 and Environmental Defense: Building a Hybrid Delivery Fleet can be done for the following purposes –
1. Strategic planning using facts provided in FedEx and Environmental Defense: Building a Hybrid Delivery Fleet case study
2. Improving business portfolio management of Fedex Trucks
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 Fedex Trucks
Strengths FedEx and Environmental Defense: Building a Hybrid Delivery Fleet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fedex Trucks in FedEx and Environmental Defense: Building a Hybrid Delivery Fleet Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Fedex Trucks in the sector have low bargaining power. FedEx and Environmental Defense: Building a Hybrid Delivery Fleet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fedex Trucks to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the FedEx and Environmental Defense: Building a Hybrid Delivery Fleet 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.
Ability to lead change in Technology & Operations field
– Fedex Trucks 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 Fedex Trucks in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Fedex Trucks
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fedex Trucks does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Fedex Trucks has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in FedEx and Environmental Defense: Building a Hybrid Delivery Fleet 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.
Diverse revenue streams
– Fedex Trucks is present in almost all the verticals within the industry. This has provided firm in FedEx and Environmental Defense: Building a Hybrid Delivery Fleet case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Fedex Trucks 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 and Environmental Defense: Building a Hybrid Delivery Fleet - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Fedex Trucks has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fedex Trucks 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
– Fedex Trucks 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 Erica Plambeck, David W. Hoyt 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Fedex Trucks digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fedex Trucks 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.
High brand equity
– Fedex Trucks has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fedex Trucks to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Fedex Trucks is one of the leading recruiters in the industry. Managers in the FedEx and Environmental Defense: Building a Hybrid Delivery Fleet are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses FedEx and Environmental Defense: Building a Hybrid Delivery Fleet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FedEx and Environmental Defense: Building a Hybrid Delivery Fleet are -
Lack of clear differentiation of Fedex Trucks products
– To increase the profitability and margins on the products, Fedex Trucks needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Fedex Trucks 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the FedEx and Environmental Defense: Building a Hybrid Delivery Fleet HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Fedex Trucks has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Fedex Trucks is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Fedex Trucks needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fedex Trucks to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Erica Plambeck, David W. Hoyt suggests that, Fedex Trucks 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.
High cash cycle compare to competitors
Fedex Trucks 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study FedEx and Environmental Defense: Building a Hybrid Delivery Fleet, it seems that the employees of Fedex Trucks don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study FedEx and Environmental Defense: Building a Hybrid Delivery Fleet, is just above the industry average. Fedex Trucks 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.
Slow decision making process
– As mentioned earlier in the report, Fedex Trucks 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. Fedex Trucks 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.
Skills based hiring
– The stress on hiring functional specialists at Fedex Trucks 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.
Capital Spending Reduction
– Even during the low interest decade, Fedex Trucks has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities FedEx and Environmental Defense: Building a Hybrid Delivery Fleet | 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 and Environmental Defense: Building a Hybrid Delivery Fleet are -
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. Fedex Trucks can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fedex Trucks in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Manufacturing automation
– Fedex Trucks can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– Fedex Trucks 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.
Buying journey improvements
– Fedex Trucks can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. FedEx and Environmental Defense: Building a Hybrid Delivery Fleet 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.
Loyalty marketing
– Fedex Trucks 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fedex Trucks 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.
Better consumer reach
– The expansion of the 5G network will help Fedex Trucks to increase its market reach. Fedex Trucks 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.
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. Fedex Trucks can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fedex Trucks 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 and Environmental Defense: Building a Hybrid Delivery Fleet, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Fedex Trucks has opened avenues for new revenue streams for the organization in the industry. This can help Fedex Trucks to build a more holistic ecosystem as suggested in the FedEx and Environmental Defense: Building a Hybrid Delivery Fleet case study. Fedex Trucks can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Fedex Trucks 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 and Environmental Defense: Building a Hybrid Delivery Fleet - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fedex Trucks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fedex Trucks can use these opportunities to build new business models that can help the communities that Fedex Trucks operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats FedEx and Environmental Defense: Building a Hybrid Delivery Fleet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FedEx and Environmental Defense: Building a Hybrid Delivery Fleet are -
Consumer confidence and its impact on Fedex Trucks 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.
Technology acceleration in Forth Industrial Revolution
– Fedex Trucks has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Fedex Trucks 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fedex Trucks will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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. Fedex Trucks 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 Fedex Trucks business can come under increasing regulations regarding data privacy, data security, etc.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fedex Trucks.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fedex Trucks with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Fedex Trucks
– 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 Fedex Trucks.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fedex Trucks 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 FedEx and Environmental Defense: Building a Hybrid Delivery Fleet .
Environmental challenges
– Fedex Trucks 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. Fedex Trucks can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Shortening product life cycle
– it is one of the major threat that Fedex Trucks is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of FedEx and Environmental Defense: Building a Hybrid Delivery Fleet 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 and Environmental Defense: Building a Hybrid Delivery Fleet 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 and Environmental Defense: Building a Hybrid Delivery Fleet 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 and Environmental Defense: Building a Hybrid Delivery Fleet 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 and Environmental Defense: Building a Hybrid Delivery Fleet 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 Fedex Trucks needs to make to build a sustainable competitive advantage.