Business_Analysis_Part_I

Business Analysis: Part I Introduction My responsibility as a mutual fund manager is to advise my clients on how and where to invest their money. I have considered making an investment in FedEx Corporation, using my skills as a mutual fund manager will determine whether I should or should not invest in this company. To get my research started, I will conduct a SWOT analysis, identify the internal and external stakeholders, describe their wants and needs, explain how their wants and needs are being fulfilled, if not, how will the company fix the problem. Finally, I will chose the most relevant factors of the SWOT analysis and make my decision on whether or not I should invest. Company Overview Fredrick W. Smith founded FedEx and began operations on April 17, 1973, in Memphis, Tennessee. FedEx is the world’s leading express transportation company, providing fast and reliable delivery around the world. FedEx provides access to a growing global marketplace through a network of supply chain, transportation, business and related information services. FedEx employs over 280,000 employees worldwide serve more than 220 countries and territories across the globe with a fleet of 669 aircraft, more than 75,000 vehicles to deliver more than 6.5 million packages per day (FedEx, 2012). SWOT Analysis The purpose of a SWOT analysis is to create an overview of a company’s strategic situation. The analysis identifies the company’s internal strengths and weaknesses and the environmental opportunities and threats a company face. Listed below is an overview of FedEx’s strengths, weaknesses, opportunities, and threats. Strengths: • Customer Service • Brand Name • People First • First company in overnight delivery • Guaranteed delivery • Centralized hubs (locally and globally) According to Quality Assurance Solutions, FedEx’s major strength is their slogan and the message that it conveys to the consumer (People-Service-Profit). Weaknesses: • Expensive services compared to competitors • Declining operating efficiency • Weak returns FedEx could lose revenues and annual sales if prices keep climbing and customers start seeing other brands that have more potential. Opportunities: • International expansion • Increase number of worldwide hubs • Expand online services • Offer larger variety of shipping services • Increase technical services for hardware and software installations • Market with other online companies Taking advantage of an opportunity when it presents itself would definitely increase sales and clientele. FedEx should offer more options to consumers who want to conduct all their shipping needs online and they should consider contracting with other online companies that use shipping services to gain brand recognition and trust (Quality Assurance Solutions, 2012). Threats: • Competitors • Rising fuel prices • Government politics • Natural resource costs • Economic downfall The biggest threat to FedEx would be their competitors. Competitors could use a competitive advantage such as a proprietary product or service that has more potential than FedEx’s products services. Stakeholders: Stakeholders are individuals, groups, and other organizations that are affected by and have an effect on the business decisions and actions. FedEx’s key stakeholders include board of directors, management, investors, the federal government, employees, creditors, suppliers and customers that share interest in the success of the company. The board of directors holds the power as well as has a higher interest in the operations of the company. They want and need to know every aspect of the business, internally and externally so that they are able to make changes, improve, or fix any problems that may arise to ensure investors and stockholders that their investments are solid and profitable. Management meet the needs of the stakeholders by acting as an agent of the business and taking into consideration what is best for the stakeholders. However, management can only proceed with what the owners or major stakeholders instruct them to do in terms of the needs and wants of other stakeholders. This is the stage where morals, values, and integrity are tested. It is not an easy job when it comes to satisfaction, what is satisfactory to some stakeholders may not be satisfactory to others. Investors are the stakeholders that have a financial interest in the company. Investors want to know if the company is making money. They want to see financial reports and statements that detail the company’s assets and liabilities. Their needs are fulfilled, as long as they get a return on their investment. Federal and government agencies are the stakeholders that have jurisdiction over the company. By law, it is the obligation of the business to declare its revenues, expenses and profits. To calculate the income tax collected by the state figures from those reports may be considered. Another set of information given to this category of stakeholders refers to the firm's employees- number, their wages. This way, the government agencies can establish pay payroll taxes. Since FedEx operate aircrafts, there are certain rules and guidelines put into place that government agencies monitor and FedEx must adhere to or face penalties. Employees as stakeholders make customers happy by their productivity, qualitative merchandise, and good customer service skills, this in turn make the customer and other stake- holders happy. Happy customers spend money as long as they are getting what they want. FedEx fulfills their employee’s needs and wants because with them people come first. Creditors and suppliers expect payment for all merchandise and services provided by them, on or by the due date. On time, payments take care of their needs and wants. Fulfilling needs: FedEx fulfills the needs of their stakeholders by adhering to their philosophy (PSP) People-Service-Profits. People refers to the employees, they do come first. The success of FedEx depends on employee performance, and diligence. Employees are required to perform in a timely manner as a team to ensure the customers guaranteed time. Team members earn rewards when the customers are happy, when the customers are happy, the company is happy, and when the company is happy, investors are happy. With needs and wants fulfilled, everyone is happy. My decision: After thoroughly analyzing FedEx’s SWOT analysis, I have decided to invest. I based my decision on the strengths and opportunities of the analysis. The strengths were impressive, brand name is well established, first company to have overnight delivery, guaranteed delivery, and excellent customer service are necessary for a company to grow and profit. The opportunities are achievable; in fact taking advantage of the opportunities alone with the current strengths will ensure further growth and success. Conclusion: In conclusion, before making any investment it is wise to research the company that you are considering. Conducting a SWOT analysis will help you identify the company’s strengths, weaknesses, opportunities, and threats. Digging deeper into the company’s profile identify the stakeholders, their needs and wants, and if the company is fulfilling their needs and wants. When making my decision to invest in FedEx, I used those same factors. References FedEx, (2012). FedEx history.Retrieved from: http://about.van.fedex.com/history Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2010). Understanding business (9th ed.). New York, NY: McGraw-Hill/Irwin.