If you’ve been wondering how FedEx complies to various external factors under which the company has to operate, including various political, economic, social, technological, legal and environmental factors- PESTLE, it would be better to clear your doubts now and enlighten yourself with this comprehensive analysis.
| Political Factors | Working under politically stable premisesSeeking government stability and avoiding countries with risk of military invasionKeeping away from corruption at various levels in supply chainStrength of U.S dollar determining profits madeOperating in Air Delivery and Freight Services |
| Economic Factors | Handling global downturn of economy and looking at stability of state’s currency Interest rate affecting inflation and Labor laws affecting employment to take in notice beforehandConsidering state capitalism and its stabilityEnsuring quality of infrastructure for efficiency in running the business |
| Social Factors | Conforming to society’s norms and values and its cultureMolding their strategies according to beliefs and attitudes of population which affects the type of services/products they’ll buyNot leaving unnoticed the social hierarchy system and leisure interestsConsidering education and skills level of population to help design strategies and market message |
| Technological Factors | Use of blockchain technology Enlightenment about technology’s impact on cost structureAwareness of the fact that fast growing technology will bring less profits but slow speed technology advancement will give better chance to cope with changes hence bringing more profitLooking upon technological advances of competitors |
| Environmental Factors | Recycling materialsUsage of renewable energy Consideration beforehand of the country’s weather and climate changes and the consequences that might come with it |
| Legal factors | Laws protecting privacy of customersHealth and safety law Environmental lawsCopyright lawEmployment lawsAntitrust law in Air Delivery and Freight Services industry (Conforming to these laws is a primary step in governing how the company runs) |
Going further, we will explain the importance of each factor one by one and also their examples and relations with each other which will develop our deeper understanding of the FedEx PESTLE analysis
Political stability as a critical value to the company that is operating in about 220 countries
FedEx that has a reach stretched around the globe must consider political stability as its utmost value. Only when the foundation is strong can we think of any further strength that the company can carry with it. Since instability is a poison to a company, leading to its slow, inevitable death, instability can be a source of great distress. Under instability, business supply chains are shaped into a disarray.
Corruption at so many stages can be a rising factor to cause economic chaos. Under the Global Anti-Corruption policy of FedEx, FedEx prohibits corruption and improper payments in all their business dealings throughout the world. An important part of their devotion lies in devotion to uprightness and honesty which strongly forbids corruption and bribery.
It has been agreed upon that even a well-established and highly profitable business can bring no good to the company if it is situated within politically unstable premises. Another concern of instability is seen in government instability that is depicted using the example that USA might diminish its trade via FedEx owing to trade war with China since FedEx lays its roots strong even in China. Government instability in many other forms may lead to military invasion and enforcements of new laws that might or might not favor the company.
The face of economy when global recession kicks in as well as when the laws enforce
When the economy declines and shrinks down all industrial activity, principally identified by a fall in GDP (such as seen in the recent events impacted by COVID-19), it gives companies a tough time and so it did to FedEx, disrupting its supply chains and impacting all businesses it facilitates. But simultaneously, putting safety on first priority, FedEx navigated bursting e-commerce volumes in the U.S.
Adding on, there is a general tendency for interest rates and rate of inflation to have an inverse relationship. When interest rates are low, the economy grows and inflation increases. So here we can add that country’s policies about the interest rates count for a lot. Moreover, FedEx has to consider state capitalism and its stability along with the stability of the state’s currency. A rise in the strength of the U.S dollar acts as plus, which predicts increased profit.
Labor laws increase job stability and allocates labor share of national income. This leads to improved productivity through joint effort and settlement of employer and worker, making the most out of the firms and helping all those employed and the employers. Therefore, seeing labor laws and unemployment rates can sometimes be a sign to reconsider your take on the stock market. Under Health and Safety law comes the safety of consumers using their product as well as safety of all forms for the employers, especially related to the working conditions they are exposed to. Data-protection law helps to keep consumer’s information private and confidential and copyright laws protect original work of authorship, creating a safe and secure space.
Social and environmental factors and their take on the company’s macroenvironment
One of the company’s many goals is to gain recognition around the world by its quality of being environmentally friendly, to form a good self-image for customers to see and build their trust in. In order to comply with that, all their actions should be sustainable like the use of solar power as a source of energy. Although flights carrying goods need to use diesel as a fuel, transportation vehicles on land can be switched to electric mode. Recycling materials is also a great approach to prevent pollution.
Additionally, getting a positive response from the society is the sole purpose upon which businesses wish to settle. This is greatly influenced by society’s norms, values, attitudes and belief systems as well as its culture. Also using population’s education level and mental maturity, FedEx has succeeded in making its way in the list of Top-10 World’s Most Admired Companies.
Role of technology and the right way to use it
Many people might think that use of fast-growing technology is the right way to work, however, the truth is, attaining slow speed in technological advances and allowing the employers to cope with it is most likely to prove more profitable. Regarding the aforementioned law concerning privacy of customer’s personal information and the products they buy, this can be achieved using Blockchain technology, which is a system of recording information in a way that makes it protected from being hacked or cheated. Furthermore, FedEx PESTLE analysis has to look at technological advances of its competitors. Also, they have to make sure whether use of technology is cost friendly to the service they are offering or just too high that might make people reconsider their decision of using services by FedEx.
FedEx is constantly working to improve their rules and regulations in such a way that favors its macroenvironment, bringing in more and more opportunities for its growth. With the rising business approaches comes rising risks and challenges that are faced by the company to which the company has been working in dealing with, accordingly. Through this article, you would have learnt about FedEx PESTLE analysis.
Frequently Asked Questions
Q- What services other than delivery, courier and shipping does FedEx have to offer?
Other services comprise copying and digital printing, professional finishing, signs, computer rental, and corporate print solutions.
Q- What quality of services does FedEx provide?
FedEx is a devoted 3PL (Third Party logistic) which promises to deliver excellent services. Their approach is conceptualized in Quality driven management (QDM) that includes Lean Management, Six Sigma, and Total Quality Management. It has a systemic, well-organized and research-based approach towards ensuring the quality of its services.
Q- Give highlights on FedEx supply chain statistics
The company’s supply chain contains 11,000-plus team members, about 358 million returns are processed every year, 508,000 Direct-to-consumer shipments occur everyday and 130 warehouses and distribution centers function in North America on a space of 35 million square feet.
