MG1203: Marketing Management: Case Analysis'

FEDERAL EXPRESS : EXPANSION
STRATEGIES FOR CHINA MARKET

MG1203: Marketing Management: Case Analysis
GROUP : 9
2013-IPG-047 GAURAV SINGH
2016-MBA-017 NIVEDITA BHADAURIA
2016-MBA-018 PALASH LALIT MALVI
2016-MBA-020 POOJA KARMAKAR
2016-MBA-027 SHAILENDRA ARYA
2016-MBA-028 SHRAHI SINGH KARANWAL
ABOUT FedEx :
AMERICAN MULTINATIONAL COURIER DELIVERY SERVICES
COMPANY
PROVIDES TRANSPORTATION, E-COMMERCE AND

BUSINESS SERVICES
HEADQUARTERS: MEMPHIS, TENNESSEE, U.S.

THE FEDEX STORY
KEY PROBLEMS :
Geographic fragmentation of transport networks in china
Inadequate transport infrastructure in china
Excessive customs clearance times / bureaucracy
Lack of shipment-tracing services
PRC governments conservative policies
Internal Factors Strength Weaknesses
Aggressive advertising campaign Lack of personal relationship
Highly controlled distribution systems building within China.
SITUATIONAL with constant information about status of In order to fill their aircraft,
shipments FedEx is forced to take on Way
ANALYSIS:
FedEx has its own air service in and out of cheaper packages with very low
SWOT China. profile margin.
External Factors Opportunities Threats
Multinational corporations with Chinese Shipping companies already well

operations that already use FedEx elsewhere. established in china.
Customers who particularly value or require Very large investment in China

constant information regarding shipment based infrastructure including
status. acquisition of Flying Tiger Line
Inc. to establish its own air routes
in Asia.
Political Economic
FedEx interacts with various nations around the Inflation, exchange rates and interest rates are
world that dont enforce tough trade regulations, economic factors taken into consideration, for they
granting them the privilege of getting better have the potential to distress consumers.
international services. Depression in the market affects the financial asset
PEST Analysis Political stability, industrial limitations and of company
business standards. FedEx must be flexible with its charges, basing them
FedEx is successful in serving the world because on the economic status of each country it services.
it strictly abides by all relevant laws
Social Technological
Adapting to Chinese culture. FedEx like other organizations is successful primarily

due to the advancement in technology.
Populated countries are favourable to FedEx
because they have more consumers who require The company took the expansion of the internet to its
advantage by providing electronic services to customers
their services. anywhere in the world.
Global organization expansion is influenced by
With this technology consumers can check the status of
countries with literacy rates, something that their transactions with just a few mouse clicks.
certainly a driver for FedEx.
Consumer Analysis
HOUSEHOLD CUSTOMERS BUSINESS CUSTOMERS
Demand from the household sector is small and Document: Users are mainly from the banking, financial,
customers are price sensitive and less knowledgeable professional and healthcare services, trading and light
about service quality. industries.
Parcel: Users are mainly from the high technology industries,

Decisions will be made based on advertising, word-of- light industries and heavy industries. e.g. tools, apparel and toys
mouth and company reputation.
Air cargo: Users are mainly from the manufacturing sector
e.g., apparel, footwear and optical products.
ALTERNATIVES
Using multiple agents
Flexibility to utilize alternative companies in their core markets or regions
Required resources and support might not be available
Forming JVs with Sino-trans

Largest transport agency in China
controls about half of Chinas international express delivery business
Forming JVs with smaller local companies

Significant investment required to build distribution centers at strategic locations
Considerable investment in training needed to support future growth
Alternative 1: Fails to satisfy companies objectives
Alternative 2: FedEx looses its competitive edge i.e. Technology and lack of control
Most Suitable: A Joint Venture with small and local companies
current partner Datian W Air Service uncertain about future plans

primary objective of company is satisfied i.e. reliable an time definite service
After WTO accession, China is expected to ease FDI norms

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FEDERAL EXPRESS : EXPANSION

STRATEGIES FOR CHINA MARKET

PROVIDES TRANSPORTATION, E-COMMERCE AND

HEADQUARTERS: MEMPHIS, TENNESSEE, U.S.

External Factors Opportunities Threats

Multinational corporations with Chinese Shipping companies already well

Customers who particularly value or require Very large investment in China

Adapting to Chinese culture. FedEx like other organizations is successful primarily

Parcel: Users are mainly from the high technology industries,

Forming JVs with Sino-trans

Forming JVs with smaller local companies

Most Suitable: A Joint Venture with small and local companies

current partner Datian W Air Service uncertain about future plans

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