Contents Introduction ............................................................................................................................... 12 1.

1 Explain strategic contexts and terminology missions, visions, objectives, goals and core competencies ............................................................................................................................. 13 1.2 Review the issues involved in strategic planning................................................................ 16 1.3 Explain different planning techniques................................................................................. 18 2.1 Produce an organization audit for FedEx ............................................................................ 21 2.2 Carry out an environmental audit for FedEx ....................................................................... 24 2.3 Explain the significance of stakeholder analysis. ............................................................... 28 Conclusion................................................................................................................................. 32 References ................................................................................................................................. 33

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Introduction FedEx is one the largest logistic companies in the world plenty of departments in the world. This report shows the importance of vision, mission, objective and goals of FedEx. Furthermore, this report also shows the suitable strategy for FedEx by identify the environment audit, organization audit of FedEx.

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1.1 Explain strategic contexts and terminology missions, visions, objectives, goals and core competencies

Objectives

Goals

Mission statement

Vision statement

Vision: Vision statement is seen as a picture of organization in a future that set out the strategic intentions. It is also called the dream of organization. In general, we often confuse vision and mission statement but they have some differences. For example: the mission of organization is about behavior and actions for present and immediate future, while a vision is a sort of super-objectives in that, it may never be attained. In addition, vision may change overtime because at different time company may want to become different image. However, the missions of company tend to remain constant. According to Scenario, the corporate vision of satisfying worldwide demand for fast, time-definite, reliable distribution required a customer-focused approach. It means FedEx wants to provide the best service for customers, at that goods and information move quickly and exactly, global information and transportation can shrink time and distance to create advantage for customers. Mission: Mission statement is the specific role that the organization plans to fulfill within society. A clear mission statement that can: Provide a ready reference point Show purpose of company Present a clear organizations image

Mission statement of FedEx: FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business services through focused operating companies. Customer

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requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.(http://about.van.fedex.com/mission-strategy-values) The mission of FedEx is quite clear so it avoid the conflict in planning strategy. With an unclear mission may create conflicting tactics and confuse customers, suppliers, employees. A clear mission is good motivation for employees to work. Goals and Objectives: According to Mintzberg (1999) defines goals as the intentions behind decisions or actions, the states of mind that drive individuals or organizations to do what they do. In generally, goals apply to shorter time frames than the more general mission statement. However, goals are still non-specific. According to the letter of FedExs Chairman, President and CEO, FrederickW.Smith (2012): Global uncertainty, a slowdown of Asia exports and weakness in thetechnology sector challenged FedEx Express in FY12. Although U.S. domesticand international priority package volumes were down, yield improvementshelped FedEx Express maintain profitability. Were taking advantage of theflexibility weve built into our system to match our capacity to the demand;weve accelerated the retirement of older, less efficient aircraft andare replacing them with more fuel-efficient planes; and we are takingother actions to increase FedEx Express margins in the future, despite thelow-growth environment. Core competencies: Technology: It is very important with the success of FedEx. With the goal of organization, faster and more accurate, creating more advantages for customers, FedEx was among the first express transportation companies to realize the benefits of applying information technology in the business at early as 1978. Besides that, with the strong development of FedEx, the market of FedEx expanded into 5 continents so the benefit of IT is more important. According to the Scenario, In the mid-2000s FedEx had an estimated annual information technology budget of $1.4b and more than 2,000 technology professionals around the globe dedicated to improving speed

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and convenience while reducing costs. Also, FedEx had a wide array of partnerships in technology such as Orbit Commerce, Cisco, AT&T. Furthermore, to research and develop the technology to support the business, FedEx opened FedEx Institute of Technology. Trade Network: the main business of FedEx is freight so the trade networks are one of the core competencies. In 1971, the chairman of FedEx found that the tremendous difficulty in getting packages and other airfreight delivered within one to two days (Scenario). Therefore, he began to build a solution that can decrease the length of time. In an interview of with Fortune Small Business in 2012 he said My solution was to create a delivery system that operates essentially like a bank-clearing system does. Put all points on a network and connect them through a central hub If, for instance, you want to connect 100 markets with direct point-to-point deliveries it will take 9,900 direct deliveries. But if you go through a single clearing system it will take at most 100 deliveries . . . So youre looking at a system that is about 100 times as efficient. Up to present, FedEx have built huge trade network transportation over around the world to help simplify international shipping for customers of all sizes by providing flexible end-to-end services. Besides that, with plenty of aircraft to transport cargo about 660 aircraft (May 31 2012), trade network is the most significant core competency of FedEx.

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1.2 Review the issues involved in strategic planning Unclear about planning need: before planning a strategy, the organization must identify the missions, vision, goals and objectives of company. A lot of company cannot identify the clear mission statement so it is difficult to set a strategy. A strategy without clear mission statement will have plenty of conflicts and it often changes in a short period of time. Ignore financial focus: a strategy is a tool of FedEx that support FedEx to achieve the goals. The strategy must be real, achieved but some companies provide a perfect strategy that the organization cannot achieve because of lacking of attention on the financial sources of company. When the director make the strategy, he must care about the performance of company such as debt, profit, revenue, cash inflow and outflow, the ability to borrow money from bank. Therefore, FedEx must care about these factors to make a realistic strategy. Insufficient external factors focus: If FedEx just only care about financial sources, internal factor, they will lose their competitors. Not only internal factors are important, but also external factors are not less important. The external factors are competitors, economic crisis, and government. If FedEx do not care about the competitors, they will lack of information about the competitors strategy. In fact, a company cannot success if they do not understand their competitors. Furthermore, FedEx must focus on the economic crisis to predict what issues company will meet in the future. Lack of focus on opportunities for growth: tomorrow is completely different today and today is completely different yesterday. However, a lot of company make a strategy which lack of focus on the opportunities for growth. A person makes the strategy must have widely view to predict what will happen in the future to take every opportunity for growth of company. For example: the CEO of FedEx has to predict the trend of oils price to make the strategy. Poor expertise at local level: FedEx is the one of largest logistic companies in the world and they have a lot of good managers. However, that is not enough for a good strategy. FedEx has plenty of departments at each country so the strategy of FedEx must meet the law, policy of each country. When the managers make the strategy, they should focus on the culture, policy and law of this country because they will compete not only with UPS, DHL, and TNT but also compete with local company.

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More tactical than strategy focus: if the strategy of FedEx is that increase the market share, reducing fee of services is the tactic. When making the strategy, if the managers focus on tactics too much, that will be difficult for applying the strategy. For example: to increase the market share, we have some ways to do that but which way is suitable with the country or the situation of company? The managers should not decide the way to do because they do not know clearly the policy, law and culture of local.

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1.3 Explain different planning techniques BCG matrix classifies a companys products or services in terms of potential cash generation and cash expenditure requirements. There are 4 kinds of classification of BCG matrix Market share High Market growth High Low Stars Cash Cows Low Question marks Dogs

Stars (high market shares high market growth): in the short term, if the services of FedEx is in Stars, FedEx have to invest a huge capital to develop quality service such as purchasing new aircrafts, vehicles, marketing, researching and applying new technologies into the business. FedEx have to invest huge capital to maintain market position but promise high returns in the future. However, the logistic industry is not fast growing industry, so FedEx should not use this.

Cash Cows (high market share low market growth): Logistic industry is a mature, slowing-growing in industry and FedEx have high market share in industry. Therefore, FedEx should invest little capital expenditure but it will be generate high levels of profit.

Dogs (low market share low market growth): a business organization used to have the success but now this organization is in hard times. Dogs should be allowed to die or should be killed off. Dogs does not require investing too much. Also. It provides a poor return on investment. In fact, the business of FedEx is good now so they should apply Dogs

Question marks (low market share, high market growth): a business organization that has low market share in high market growth. These organizations need resources to grow market share, but whether they will succeed and become stars is unknown. In fact, FedEx is one of the largest companies in logistic industry so FedEx have high market share.

At the result, FedEx should choose cash cow or stars, but logistic industry is not the fast growing industry so cash cow is the best, especially we are in economic crisis.

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 SPACE: this analyses the position of a company and suggests a strategy on the basis of: Internal factors: Financial strength: Capital required vs. available: whole of the world is in economic crisis so the business performance of the most company is bad. In 2011, FedEx had profit from the business but the debt of FedEx also high. To develop more and more, FedEx need a lot of capital to purchasing more aircrafts, inventories, but the capital required is much more than the capital available. Ease of exit from market: the barriers of exit the logistic market is very high. Competitive advantage: Market share: FedEx has high market share in the logistic industry with DHL, UPS, TNT and Nippon Express. Service quality: FedEx provide the best services for customers which are evaluated are the best one with 99% on time service level. Besides that, FedEx always focus on improving the service quality. Environment stability: Technological changes: technology has an important role in the success of any company in logistic industry. Nowadays, with the investment to research technology, technology changes day by day. Rate of inflation: whole the world is in the economic crisis so the inflation is high at the most country in the world Industry strength: Ease of entry into market: the barriers of new entrant are so high because the capital required is so huge. Besides that, the competition between leading companies such as FedEx, DHL, TNT is so fiercest Growth potential is high.

There are 4 kinds of SPACE:

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In fact, FedEx has a good financial strength with high profit in many recent years. Also FedEx has strong competitive advantage with applying the modern technology in the business, the largest delivery network with the biggest air fleet. Besides that, the environment of logistics industry is really stable and the industry strength is high. Through that, the strategy of FedEx should be aggressive strategy.

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2.1 Produce an organization audit for FedEx

To produce an organization audit for FedEx, we can use SWOT method to analyze internal and external factors that impact on FedEx. Strengths: Strong brand name: FedEx is one of the biggest logistic service companies in the world. With a lot of experiences in logistic industry and a process developed over 40 years, FedEx had built a strong brand name and got loyalty of customers. When FedEx came to Vietnam, they did not need to take time to build the new brand name. Strong revenue growth: the total revenue of FedEx is increasing in every year in America, Europe and Vietnam also. It brings a good condition for FedEx to have capital to improve the service better in Vietnam. Especially, whole the world is in economic crisis, so with the good business performance, FedEx has more advantage to overcome foreign logistic competitors and local logistic competitors in Vietnam. FedEx is the first logistic service company apply www into tracking products in transit. It helped FedEx reduced the time to transit, more accurate and simplifies procedures. FedEx provide logistic services which are evaluated are the best one with 99% on time service level. Delivery network: with a huge transportation network connect plenty of nations in the world, FedEx had solved the issues how to transport good faster and reliability. Besides that, FedEx have the biggest air fleet to transport cargo, so FedEx have the largest market share in airborne service.

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 Weaknesses: The marketing strategy is very weak in Vietnam because the target customers of FedEx are firms, not individual customers in Vietnam. Therefore, the marketing strategy just focuses on firms by personal marketing. In fact, a lot of individual customers want to use local logistic companies to purchase goods in America and Europe. Because of the target customers are companies so the fee of services is very high for individual customers. The most of Vietnam people cannot use English but FedEx do not have Vietnamese website. Opportunities: Vietnam is a member of WTO so FedEx have equal opportunity to compete with local company and develop in Vietnam Since Vietnam was member of WTO, international trade is popular in Vietnam. The most of company have business relationship with foreign partner so logistic, express service is important. That is a huge opportunity for FedEx. GDP is increasing every in Vietnam so the demand of customer is also rising. Especially, the demand of young people about high-tech machine, new modern, fashion, so on, they often purchase goods from foreign country then shipping into Vietnam. FedEx is reputable company so FedEx is a good choice for Vietnam people. Fiscal policy and monetary policy of Vietnam government to encourage company produce goods in economic crisis. That brings plenty of opportunities for FedEx. Threats: Vietnam is in developing so logistic and express are very important. Therefore, a lot of foreign companies enter potential market in Vietnam such as UPS, TNT, so on. In addition, in many recent years, plenty of local logistic companies were established. FedEx has a lot of competitors in Vietnam Economic crisis and risk of war that impact on the price of petrol. It affects the fee of logistic service. FedEx also is affected by the price of petrol. The developing of Information Technology not only brings the opportunity for FedEx but also bring threat for FedEx because email and online security may lessen the need

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to delivery. For example: in the past, contract must be delivered to foreign country for partner but nowadays, electric signatory is very useful, we do not need to deliver the contract anymore.

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2.2 Carry out an environmental audit for FedEx PEST analysis:

POLITICAL

TECHNOLOGCAL

THE BUSINESS

ECONOMIC

SOCIAL

Political factor: the political of Vietnam is stable for a long time. In Southeast Asia, Vietnam is the country has stable policy. That is good news for any company want to invest into Vietnam, especially FedEx. With the stable policy, FedEx can secure to develop in long-term. Besides that, the government has a lot of policy to encourage foreign company invest into Vietnam because that is the good way to import the newest technology into Vietnam. There are some policies and laws that can affect the performance of FedEx at Vietnam such as labor law, tax policy, health and safety law, competition law, aviation law, so on. If FedEx want to develop in Vietnam, they need to follow these laws.

Economic factor: whole the world is in economic crisis, but Vietnam is still developing every year. Vietnam is one of the fastest economic growth countries in the world, especially in Southeast Asia. According to the latest data by the Minister of Industry and Trade Vu Huy Hoang published (December 2011), in 2011 export of Vietnam was reached 96 billion dollars, the total import and export turnover exceeded

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200 billion dollars. That is the good condition for FedEx to develop in Vietnam because international trade is significant for the developing of Vietnam. Social factor: Vietnam is a multi-nations country which has about 54 different nations. In fact, 70% population of Vietnam is living in big cities such as Ho Chi Minh City and Ha Noi capital. In fact, 68% population is in 15 64 year olds so the Vietnam is the young population country. Thus, all of those can be considered as advantages of FedEx when they invested in Vietnam because FedEx will have abundant customer sources. In addition, the young population often has high demand on the new things, communicate with foreign countries. Therefore, they are potential customers of FedEx. Technological factor: FedEx is strong foreign brand names in the world with the competitive advantages are delivery network and applying technology in running the business. Therefore, that is an advantage of FedEx because the technological level of Vietnam is lower than FedEx. Technology plays an important role in succeed of any business because it can reduce the operation cost, lead to innovation. Especially, FedEx is the logistic company with the slogan when it absolutely, positively has to be there overnight (1982), the influence of technology is very important. Faster and more accurate are always the missions of FedEx. To do that, applying the modern technology is the best way for FedEx. PORTERs five forces
Potential entrants

Suppliers

Rivalry among existing firms

Customers

Substitute

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Threat of new entrants: logistic and express industry is very attractive with new companies who want to enter the potential market so FedEx have to deal with the threat of new entrants. However, if the new companies want to enter, they have to overcome the barriers to entry. Capital requirements: the new entrants must have a lot of capital to invest to purchasing aircraft, car, and ship, so on to run the business. That is the huge capital for the new entrants with a lot of risks such as they will lost anything if bankruptcy. It means the high capital to entrant, the strong barriers for new companies. Switching costs: the main customers of logistic companies are business companies so they often choose the company which has strong brand name, reputation. Therefore, the switching cost is very high if they change other suppliers.

Threat from substitute products: a substitute product of FedEx is a service produced by another industry which satisfies the same customer needs. With the developing of information technology, nowadays the company can use electric signatory for signing contract. Therefore, they do no need to use the service of FedEx to transfer the contract for partner of company.

The bargaining power of customers: FedEx has plenty of competitors so the customers have a lot of choices to use logistic service. The more choice customers have the more bargaining power of customers. Customers are the god of company, so FedEx must consider the bargaining power of customers. However, the service quality is very important with logistic industry so the customers are less likely to be price-sensitive.

The bargaining power of suppliers: build a good relationship with suppliers is very important with FedEx to make sure they can keep transfer good on time. The most important supplier of FedEx is oil supplier. The price of oil has a strong impact on the performance of FedEx. If the price of oil increases, the fee of service immediately increases. Then, the customers of FedEx may change other company with the same

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quality but low price. Besides that, the suppliers of FedEx also have other customers outside the logistic industry. The rivalry among current competitors in the industry: the high barriers to exit and the cost of redundancy payments to employees create the fierce competition between FedEx, TNT, DHL and Nippon Express in Vietnam. To gain position in market, FedEx has own strategy such as reduce the operation cost to reduce the fee of service that may suit with Vietnam market. Furthermore, the price of oil is increasing so FedEx can provide some promotions to keep the loyalty of customers. The price can be considered at the key factor of the competition between current competitors in logistic industry. However, the service quality is also important so FedEx should focus on these factors to compete with competitors.

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2.3 Explain the significance of stakeholder analysis. One of the most important factors that affect the business of FedEx is stakeholders. The stakeholders have strong influence on the success of the business if FedEx meet the demand of them. In addition, stakeholders influence the strategic planning of FedEx. Therefore, FedEx must have stakeholders analysis that is important for the development of FedEx. Stakeholders Description Managers are people who control the company and employees to make sure the business running smoothly. In addition, managers have responsibilities to plan strategies for Managers Internal FedEx. Interest A job that has a good environment High wages Good promotion Benefits from the job such as knowledge, skills, training course. Satisfaction Influences FedEx is the huge organization with plenty of departments in many countries. Therefore, it is very difficult for FedEx if they do not have good managers. Economic crisis has a strong impact on FedEx. Therefore, the manager is very important because they are people who make decisions, strategies to avoid bad performance, bankruptcy. Employees are people who are hired by the Employees company to provide their skills, knowledge, good The most people of FedEx are employees so they have a major effect on the success of

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performance to achieve the goals of company

FedEx. A mistake of them may make the delivery late. In addition, the aptitude of employees is which affect the image of FedEx in customers. Tax Safety working environment Legal action The government has a strong power. The Vietnam economy is mixed economy but the power of the government is the strongest. If FedEx want to run the business at Vietnam, the first thing they have to do is that following the rule of the government. For example: pay tax on time, follow the employees law. Increasing market share Information, strategy of FedEx FedEx has plenty of competitors such as UPS, TNT, DHL and local logistic companies

Government is the organization that provides micro, macro-economic, policies and laws. FedEx have to follow these things to run the business at Vietnam Government External

Competitors are individuals or Competitors organizations that provide the same services with FedEx.

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at Vietnam. The performance of competitors impact on the business strategy of FedEx. If competitors reduce the fee of services to attract customers, FedEx must modify strategy such as reduce fee or give customers more promotion. The most important factor of stakeholders. The basic mission of FedEx is that meet the needs and wants of customers. Customers Connected High quality services. Future benefits Customer is the main reason why company survives. Purchasing behavior of customers is the factor that decides business strategy of FedEx. Besides that, the basic mission of FedEx is how to satisfy the demand of customers Suppliers are Suppliers organizations or individuals that Long term relationship with FedEx Suppliers play an important role in the success of

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support or provide resources such as envelop, stamp, oil for aircraft, so on.

Payment for goods or services Profitable sales

FedEx. FedEx must build a good relationship with all of their suppliers to make sure the business can run smoothly. For example: if FedEx pay money for oil company late, in the next time this supplier can suddenly increase the price of oil. That will affect the fee of FedExs service.

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Conclusion This report gives us the overview about missions, vision, objectives and goals of FedEx. In addition, we know the strength, weakness, opportunity, threat of FedEx. Furthermore, after analyzing the SWOT, BCG matrix and SAPCE and identify the environment and organization audit, we can make planning strategy for FedEx

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References Company information: Mission Strategy Values http://about.van.fedex.com/mission-strategy-values SUPPORTING HNC / HND AND FOUDATION DEGREES, 2010, Business Strategy, Chapter 1, p.6, Part A, London: BPP Learning Media Annual report 2012 FedEx Scenario

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