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FedEx Corporation is an American worldwide courier delivery company, it is also known as FDX Corporation, and its head office is in Memphis, Tennessee.
In today's Economic Networks, this company is uniquely positioned to leverage the networks power to help our customers to connect to the high-tech, and high-speed worldwide marketplace.
FedEx Corporation is also synonymous to the overnight delivery; the company was developed during the 1970s.This company continues to dominate the market nearly three decades later. In the 21st century this company was restructured by the market leader and now it is composed of five broad operating companies:
FedEx Express: This is the real overnight courier services, in United States it provides next day air service and provides international service in definite time.
FedEx Ground: It guaranteed to delivery in definite day within United States and Canada. It is less costly as compared to FedEx Express; it uses a large fleet of trucks to ships small packages by ground.
FedEx Freight: In United States it is the second largest LTL (Less Than Truckload) carrier.
FedEx Custom Critical: It is responsible for delivering urgent, valuable, or hazardous items by using trucks or chartered aircrafts.
FedEx Trade Networks: It provides the services related to the customs, insurance, information technology services and transportation advice.
FedEx Corporation is operating in 211 countries; among the above five major company, FedEx Express is the world's biggest express shipping company. FedEx makes nearly five million physical shipments in every business day and also processes more than 100 million electronic transactions. For speed up the transportation FedEx uses its planes, electronic technologies, and ground vehicles so that companies and individuals can deliver the time-sensitive material across large distances without any delay and difficulty.
Environment of the Company:
FedEx is rooted on people- first philosophy; in this respect for the every people is an elemental value and everyday trading practice. The FedEx Corporation has more than 290,000 team workers from various walks of life, reflecting the diversity in the company. The environment of the company is very good where people can contribute and grow. The work place in the FedEx is very safe and company is dedicating to improve it. Company promotes and support to a culture of health and safety to the benefit of employees.
Technology and Process:
FedEx was the first express transportation company who realize the importance of technology. FedEx pioneered first automated customer service center just after five years it begin operation. FedEx provides real-time packages tracking for every shipment by using world's biggest telecommunication networks and computers.
The company's couriers operate Super Tracker; it is a hand-held computer, which is used to record the transit of the shipments through the FedEx integrated networks.
With FedEx, customers can obtain their packages status at any possible locations along with the path of delivery in real time. Customers can track their packages in three ways: by using FedEx Ship Manager on fedex.com, via the use of FedEx Corporation Web site on the Internet, or FedEx World Shipping Software. .
The current revenue of the FedEx Corporation is more than 9.6 billion; it delivers more than 3.5 million packages daily. It has more than 30,000 motorized vehicles. In the FedEx Corporation more than 290,000 team members working.
2). The six nations (Kuwait, Bahrain, Qatar, Oman, United Arab Emirates and Saudi Arabia) creates The Gulf Cooperation Council (GCC), it is an economic political policy-coordination forum. Each member nations are free to pass and enforce its own law because GCC cannot impose trade policies on member nations. A custom Union is implemented by GCC in January 2003. This means, the member nations have adopted a customs policy and procedures. These policies and procedures are given below.
In the United Arab Emirates (UAE) FedEx is the Gateway Hub with a facility of pre-clearance in Dubai. FedEx obtain prior approval regarding tax and duty charges by contacting the consignee, for shipments with a value more than 1400 (DHS). FedEx-UAE has an agreement with Dubai Customs for the dutiable shipments at 270 USD and more.
Air Waybill: For every shipment to the UAE an international air waybill is required.
Commercial Invoice: It is required for each shipment except documents. It includes complete consignee and shipper's information including fax number, telephone number, number of goods, and description of goods.
Import Licenses: Health certificate is required from the country of origin of the products. This certificate is for proving that the country of origin of the items is free from any transmissible or infectious diseases.
Commercial Shipments: The exporter/importer should have a license which is given by their local municipality and hold a trade license from local chamber of commerce.
Personal Shipments: UAE government requires the personal identification number of recipient's in order to shipment into the UAE.
CIF values are used for customs valuation. This means that the transportation cost plus cost of item plus the paid amount for insurance is taken as total and then the assessed duty rate which is applicable for the commodity classification. In UAE only 5% duty rate are taken for most goods.
The UAE is a member of GCC (Gulf Cooperation Council). The GCC members sign an agreement; under this agreement some eligible products will be liberate from duties and other charges. In order to qualify in benefit status, the price of products cannot be less than 40% of the final value and it must be made in a factory which is at least 53% owned by local which is licensed by the members of respective Ministry of Industry and Finance. According to the GCC Customs Union Agreements, the GCC nation's members have adopted a common external tariff rate for almost every product of five percent. A list is developed by the GCC on which higher tariff rate is applied.
The Customs duty for almost every item is calculated by using the CIF value at the rate of 5%. A 50% customs duty for importing of liquor/alcohol and 100% customs duty for the import of tobacco products are applied on the CIF values.
Technical Barriers to Trade (TBT's):
A relatively liberal business policy is maintained by UAE. There are some non-tariff barriers to business and investments in the form of agency sponsorship requirements and for the food items shelf-life requirements.
A UAE national sponsor, distributor or agent are required if any Foreign Company wanting to do business in UAE. According to the UAE's Commercial Agencies Law, foreign company can distribute their items in the UAE only through the exclusive commercial agents which are either UAE nationals or companies which are totally owned by UAE nationals.
The foreign company can recruit one agent for the whole UAE or for a particular area or group of areas. All the UAE commercial agents should be registered from the Ministry of Economy and Commerce. Once selected, distributors/agents have exclusive rights and have legal protection against the termination of agency agreements only by mutual agreement of the foreign principal and the local agent, notwithstanding the expiration of the term of the contract. Except for those companies which are located in the Free Zones, at least 51% of a business must be owned by a UAE national. A company which is active in importing and distributing a item must either be a 100% UAE owned distributorship/agency or a 51% UAE / 49% foreign limited liability company.
For receiving a government tender contract in UAE, requires that the company must be registered. An organization must enjoy at least 51% ownership in order to be registered. The UAE does not require that any part of any government tender be sub-contracted to local company but it does grant a 10% price preference for the local company. WTO Agreement is signed by UAE on Government Procurement.
Food product is also faces some rules and regulations which are considered as a minor business barriers. According to GCC mandated shelf life requirements each products stating both the production dates and the expiration dates must be written on the applied label. At the time of import the product must have at least one-half or more than their shelf life remaining or clearance will be denied.
3). FedEx Corporation also called FDX Corporation, is a worldwide management services company, it provides clients and business with the shipping, trade and marketing services. It is also much focused to leave a good impression with the people and location it serves, so FedEx uses PEST (Political, Economical, Social and Technological Factors ) to determine where it stand in the market and what improvements are required in service.
i) Political Factors:
An organization is very much affected by primary political factors like government rules and regulations. Since FedEx is an international organization, so FedEx communicate with the various country around the world that don't enforce tough business regulations, and granting them the privilege of getting much better international services. Political stability, business standards and industrial limitations are other political factors which affects an organization. FedEx is very successful in serving the world; this is because it firmly abides by all relevant government laws.
ii) Economic Factors:
The analysis of Economic indicates many variables such as: availability of credits, level of disposable income, interest rates, shifts in nature of economy, government deficits, GDP trends, monetary policies, price indexes etc.
The economic factors which are taken into the consideration are exchange rates, inflation and interest rates; they have the power to distress the costumers. The financial assets of an organization are affected by the depression in the markets. The depression in market have both positive and negative for FedEx that it gives services around the world, since it have to respond to the varying economic factors as a result. Based on the economic status of every country it serves, the charges and basing of the FedEx must be flexible.
iii) Social Factors:
The strategic analysis of the social component relates to assessing the demographic, cultural, and social and environment profiles of a addressable markets. In the United States, demographic, cultural, and environment trends are shaping the ways Americans work, produce, consume and live.
An organization which is affected by social factors is educational perspective and population of the international and macro-economical society. These factors belong to decisions which are making by the organizations to meet the needs and demands of a particular number of customers in certain countries. If a country is very populated then it is favorable to FedEx, this is because they have more customers who require their services. Worldwide expansion of organization is influenced by the countries with high literacy rates; certainly it is a driver for FedEx.
iv) Technological Factors:
Technology has much revolutionary impact on the businesses; it provides a way to gain the desired business efficiency and productivity. For example Internet is used for the instantaneous global interaction which is very important in order to success in business.
Due to the advancement in the technology, primarily FedEx is very successful like other organizations. The FedEx is taking the full advantage of the expansion of the Internet for providing electronic services to their consumers anywhere in the world. With the present technology, with just a few mouse clicks a customer can know the status of their transactions. FedEx is able to interact with the world by using e-commerce, and other innovation for business to business transactions.
v) Competitive Factors:
It is very important part of external assessment to identify the opponent organization and their capabilities, objectives, strengths, strategies, threats, and weaknesses. Good knowledge about their competitive in business, like in FedEx is a main factor for success. The external opportunities can be signified by the weakness of the competitors, while the key external threats are the strengths of the competitors. It is more advantages to accompany for making good strategies, if they have more information about their competitors. This information can be collected from the internet.
The main competitors of the FedEx corporations are- DHL Worldwide Express, Warren Transport Inc. and Tiger Inter Modal Inc. etc.
4). The opportunities and the challenges faced by FedEx corporations in the UAE is given below.
Since Dubai is very rich emirate so there is very high opportunity for the growth and development of the FedEx Corporation.
Technological Opportunities: The improvement in information technology enables the FedEx to integrate business and subsidiaries functions altogether. For reducing the costs and improving the customer services FedEx is looking towards wireless technology.
Since in the Dubai there is large number of internet and e-commerce users, so it is a major catalyst for the growth of FedEx corporations.
Change in Customer Behavior: Since the purchasing of products by the consumer over the internet continuously increasing. A survey is made by a company; it involves interviews with more than 42,000 people from 37 different countries worldwide. The result shows that a quarter of internet users have shopped online and other 15% plan to do shopping during the next 6 months. This survey presents an opportunity for the FedEx.
Challenges faced by FedEx:
FedEx take care of more than 3,000 transactions, and 1,000 enquiries for the status of the packages. FedEx maintain more than 6 million shipments each day, around the world.
In this business, speed is highly matter. To find out the information of the shipment at any time and the reliable transportation is major challenges faced by the company. To overcome these challenges FedEx constantly exploring different ways and technology.
Another challenges faced by the FedEx is how to integrate the minor, smaller localities into the FedEx network of freight, ground and Information technology.
In Dubai FedEx faces many challenges these are:
The policy of UAE is very strict; it restricts to ship some items from the other country. For shipping any item in the UAE various regulatory clearances are required in addition to the customs clearance will be required for certain commodities.
Before the shipping an item the shipments being processed under:
Advance arrangements should be made otherwise duty drawbacks may be claims.
Under the FedEx International Broker Select option, Temporary Import Bonds are acceptable for initial import only.
Licenses are required from the U.S. State Department.
Export permission is required from U.S. Drug Enforcement Administration.
Registration shipments Certificate.
Fastest growing On-line Shopping Trend: In the present days on-line shopping trend is getting more popular, the most interesting and favorable feature of this trend to our business is that in on-line shopping the home delivery is the facility almost all the customer shopping on-line requires. So together with the serving the individual people as customer, FDX must focus on developing relation with this on-line shops, so that all the products that these shops has to deliver go through the FDX channels. FDX already has well established delivery channel all across the world, in this way for the bulk order the FDX will provide these firms with reduction in the delivery prices and these firms will enhance the business and market of the FDX.
In present scenario these on-line shopping organization randomly gives the delivery order to any courier service, but if FDX will give these companies the proposal by mentioning that now their product will be delivered by the world's best courier service provider, which will ensure quality together with the motive of healthy customer relation. It will definitely favor the business of the FDX.
Reduced margin but try to practice monopoly, give local service producers chance: As stated the company has an effective information system, the company can take its advantage to figure out the regions in which the company is earning less profit, the company can pick the local service providers in those regions to fulfill their deliery orders with the term of working that those providers will work as subsidiary of FDX, they can function as normal but they will deliver the orders of FDX in the way of FDX. In this way FDX can reduce operational cost in those regions and develop the market and business with that capital in the region of major interest.
Build healthy customer relationships: Just like the other businesses this business is also customer dependent and customers play an important role in growth of the business, so it becomes the responsibility of the company to keep the customer relationship strong and healthy, time to time make customers realize that company cares them and how importat they are for the company. It can be done by gifting the major customer (who are responsible for major turnovers and uses services in bulk frequently), give small customers with the discount so that they use same service next time.
Some part of the world is still out of reach: The firm operating in more than 200 countries must have aim to bring rest of the work under its functioning. There are a few more countries left in the world the company must target those countries if the market will grow in those countries also the functioning of the company will also enhance result in more and more employees which will cause the increase in size of company, it will indirectly create the monopoly of the FDX all over the world, due to this the profit will also shoot up and in the mean time the brand value of the FDX will grow strong and reputed.
Employee training and skill development: The profit and development of the business of the firm basically depends upon its employees, so the development and the training of the employees becomes the major responsibility and priority of the company. The company must run training and development program for its employees time to time, in which they should be trained and the company should focus on the development of skills required to perform their jobs effectively. Actually the employees are the living interfaces of any firm, investment on them can also be accounted as the investment in the branding. In this way the production will be improved and each employee can add his effort in more effective way than previous way.