- August 17, 2012
- Posted by: essay
- Category: Free essays
Logistics plays an extremely important role in the contemporary world. The development of international cooperation stimulates the growing interaction between companies and citizens located in different parts of the world, while logistics within countries should be developed even more because the speed of the delivery of products, mail, parcels, etc. is crucial for the normal functioning of the modern society. In such a situation, the role of such companies as FedEx, DHL, or Australia Post can hardly be underestimated. In this respect, it should be said that FedEx is traditionally oriented on the American market, but, similarly to its major competitors, such as DHL and Australian Post, it has started to develop international services worldwide. This is why today FedEx, DHL and Australian Post are major companies operating in the logistics and mail industry. At the same time, the competition between these companies raises new challenges, which FedEx, for instance, could hardly face in the American market, where its position is consistently stronger compared to international markets. Therefore, it is necessary to analyze the competitive position of FedEx and compare it to the position of DHL and Australian Post, in order to assess adequately the market prospects of the company.
First of all, it should be said that FedEx is the leader of the logistics industry in the USA. The leadership of the company is, to a significant extent, determined by its extensive experience of operations in the field of logistics since the company has a long history that makes American customers convinced in the reliability of the company. The latter contributes to the formation of the customers’ loyalty to the brand of the company and allows the company to maintain a positive marketing performance. The company’s revenue exceeded USD 35 billion in 2007, while the number of employees was about 275,000 (Company Profile for FedEx Corporation (FDX), 2008).
At the same time, it is important to underline the fact that a remarkable feature of FedEx, which distinguishes the company from its major competitors is the organization of the company in operating units, which are focused on their own specific operations they perform under the brand of FedEx. In such a way, the company attempts to achieve a higher level of mobility and flexibility through the creation of its operation units. In this respect, it should be said that one of the major operations units of FedEx is FedEx Express, which is the original overnight courier services, providing next day air service within the US and time-definite international air service. FedEx has the largest civil aircraft fleet in the world with the help of which the company provides its logistic services in the USA and worldwide. Another operation unit of FedEx is FedEx Ground, which has a large fleet of trucks and which provides day-definite delivery within the USA and Canada and, compared to FedEx Express this unit is cost saving.
The company has a number of other units such as FedEx Home Delivery, FedEx Smart Post, FedEx Freight, etc. The key point of its commercial success is operation units which give the company a competitive advantage of its major rivals due to the variety of services provided for customers in limited period of time.
As for major competitors of FedEx in international market, it should be said that DHL is one of the largest companies operating worldwide and providing services in international shipping of documents and freight as well as contract logistics. The company is based in Germany and it is owned by Deutche Post World Net. At the present moment, the company is one of the largest players in the logistics market in the world. The company is actively competing with such giants operating in the logistics market as Australian Post, FedEx, and others. DHL is represented in different countries of the world and it employs 150,000 people worldwide (DHL, 2008). The company has a well-developed network which provides the company with an opportunity to cover practically the entire world and deliver goods and documents in a possibly shorter time in any part of the world. In this respect, it should be said that the speed and quality of delivery services of DHL is one of the strategic elements that provides the company with an opportunity to gain an advantageous position in the global market. At the same time, the company actively introduces innovations to increase the speed of the delivery and the quality of its services. In such a way, innovations and speed of the delivery becomes crucial factors which DHL perceives as strategically important to its competitive struggle with FedEx and other rivals.
Another competitor of FedEx, Australian Post, is based in Australia and has a very strong position in Asia-Pacific region. On analyzing its competitive potential and power, it should be said that, in recent years, the company has focused on the broadening of the range of products and services offered to customers. In this regard, Australian Post has probably adapted the strategy of operations management implemented by FedEx. In addition, similarly to DHL, Australian Post widely implements technological innovations. In this respect, it is worth mentioning the investments of the company in major technology-based infrastructure programs. Due to the introduction of innovations, the company has managed to gain a leading position in Asia-Pacific region (Australia Post Annual Report 2005/06., 2006). Today, the company operates in three core areas: letters, retail and agency services, and parcels and logistics.
Thus, it is obvious that the competition between FedEx, DHL and Australian Post grows stronger. The current position of FedEx is stable since the company maintains the leading position in American markets and attempts to expand its presence on other international markets. Nevertheless, it is obvious that it will face serious barriers on the way to European market and, especially to Asian market, where the position of Australian Post is particularly strong and, what is more, Asian market is also attracting to DHL as well as FedEx. Consequently, FedEx will need to overcome the resistance of DHL and Australian Post to increase its share of international markets and, what is more important, FedEx cannot ignore strengthening of its major rivals. Otherwise, the company will lose its leading positions.
In such a context, it is possible to recommend continue its successful strategies and effective management approaches, such as operations management. At the same time, it is necessary to introduce technological innovations and offer new services and products in order to attract customers and improve its competitive position. Obviously, the company cannot ignore the fact that new technologies become the major factor that defines the competitive position of the company in the national as well as international market.