FedEx’s external environment both positively and negatively affects the organizations operations. Their external environment consists of government, weather, and the economy. FedEx does not have a very large external environment because their operations are not affect by many outside sources. The government affects FedEx’s operations by providing security regulations. A regulation that affects them is increased security regulations that were just recently enforced by the federal government.
These regulations protect FedEx from any external threats that can be within the goods they deliver. This protection can also negatively affect FedEx’s operation by adding additional time to the delivery and processing operations of FedEx. The weather can also affect positively and negatively effect the operations of FedEx. Bad weather, which consists of excessive rain and snow, can negatively affect FedEx. These forms of weather can cause road closures due to flooding or snow and flight delays due to these same conditions.
With these delays and closures excepted shipping dates can be delayed causing problems with their customers. Weather can also positively affect operations because it can make deliveries arrive earlier than expected which results in satisfied customers. It can also positively affect them by delaying their competition that cannot have their hubs in ideal locations. The economy can both positively and negatively affect the operations of FedEx. With the economy in a recession FedEx’s operation and sales could have been decreased due to the amount of customers that FedEx had.
While in the recession FedEx had to rely on their business clientele to provide a large quantity of orders. If this clientele did not provide the appropriate amount of business FedEx would have to cut most of its employees and close down some of their hubs. Since the economy has turned around FedEx is able to acquire its regular clientele again. FedEx’s internal environment is the reason that FedEx makes the decisions it makes when dealing with operations. The internal environment of FedEx consists of customers, distribution and competitors.
This environment determines what FedEx does to succeed in their market. FedEx has two major customers who consist of businesses and individual customers. These business customers have accounts with FedEx to arrive at their location to pick up packages daily or weekly. Two-thirds of FedEx’s business comes from these customers so FedEx curves their operations to satisfy this clientele. Since FedEx’s competition is trying to acquire some of this clientele they have begun to operate and market to this clientele more effectively.
Individual customers are also in FedEx’s internal environment. These customers represent one-third of their business. With increased competition from competitors FedEx has marketed to this market substantially. They have created boxes that are prepaid for shipment as long as the contents fit into the box. This has effectively increased business amongst individual customers for FedEx. FedEx’s internal environment also consists of their distribution and delivery of packages.
This environment contains FedEx’s trucks and planes that it uses to transport their packages for their customers. If their trucks or planes break down FedEx needs to find an alternative or get these vehicle’s fixed immediately. Appropriate maintenance and regulatory inspections are done to these vehicle to keep them up and running for FedEx. FedEx’s internal environment also contains its direct competitors that make up the market. These competitors are U. S. P. S. (United States Postal Service), D. H. L. , and U. P. S.
The United States Postal Service has a slight advantage over FedEx towards individual customer due to their low pricing, offering of stamps and focus towards individual customers. D. H. L. is also one of FedEx’s direct competitors they offer almost all of their service for businesses but lack providing competition to FedEx for individual customers. U. P. S. is FedEx’s biggest competitor because they offer almost exactly the same service that FedEx does with the same target market. FedEx continuously tries to compete with U. P. S. and go back and forth with them on their service offerings.
