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FedEx Corporation’s External Factors Research Paper

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Updated: Jun 15th, 2020


As Basch (2001) explains, FedEx Corporation is a package delivery and solutions company whose services are consumed by both individuals and businesses globally. Headquartered at Memphis, Tennessee, FedEx Corporation is the current giant in express package delivery services. The firm has a well-established customer base due to the excellence of its services and superior innovative package tracking procedures. It has fully endorsed the culture of “time is money” and has a dedicated team of employees who, despite making just a minimum wage, do all that is possible to ensure that operations at the firm run smoothly and produce the expected results.

Macro Environmental Factors Affecting FedEx Corporation

The macro environment of an organization is the global business players and it mainly implies the external surroundings. The following are some of the macro environmental factors that affect the delivery operations of the organization and how the factors influence its operations

Social factors

These are factors that specifically focus on the needs and wants of FedEx customers and the size of the market that FedEx serves. The enterprise stands to benefit in a case whereby the target market is of a high population. Literary levels adversely affect global organizations’ growth in a particular country. The business growth in many countries worldwide is essential to the growth of the firm as more need for courier services arises (Basch, 2001).

Economic factors

These factors touch on the purchasing and the spending powers of FedEx customers as well as the cost incurred by the company in delivering packages to its customers. World economies fluctuate. Hence, the company needs to be flexible in its service charges to maintain its customers. Denrick (2009) asserts that the FedEx management believes that there exists a huge potential for growth overseas as compared to the market in the US. Trade barriers used to be a challenge for the company, but it is steadily expanding into the European and Asian markets after the fall of these barriers (Denrick, 2009). Additionally, the firm has partnered with the Alliance for Environmental Innovation to develop hybrid diesel-electric delivery vehicles, a move that is expected to save it about fifty percent of total fuel consumption yearly.

Political/legal factors

Since FedEx is an international company, the delivery of its services to its customers is faced with a number of legal challenges. Countries with no trade regulations grant the company a privilege for excellent delivery services (Norris, 2007). However, FedEx is occasionally faced with the legal problem of accessing some international markets and airports. For instance, China’s statement that China Post had monopoly control over all international domestic shipment of documents made FedEx to partner with DHL, Worldwide and TNT on a legal war of ensuring that China does not “monopolize intra-country jurisdiction over the international express market” (Song, 2003, p. 45).

Such cases require a huge input of capital to win. Additionally, the organization has had to deal with legal complaints from its pilots regarding tax liability inquiries from the IRS. However, the company has been able to solve these issues aptly.

Technological factors

FedEx has been successful due to appropriate technological advancements in its package delivery procedures. The firm utilizes the internet to process the delivery details of its customers who are at different geographical locations worldwide. It uses optical scanners and barcode readers to track packages on transit and has currently partnered with AT&T Wireless with the aim of advancing its shipment tracking procedure. In line with the necessary technological advancements, the business establishment has signed a deal to purchase around thirty-eight Boeing 777 freighters (Norris, 2007). These are a high capacity and long-range crafts that will handle the delivery of packages.

Physical factors

There are a number of physical factors that influence package delivery processes of the organization. The distance to be covered forms a typical factor to be considered when doing an overnight service delivery. The speed of the package delivery jets is fast, enabling each to make at least a delivery in one night (Song, 2003). However, noise pollution has been identified as a major problem in the hubs of delivery.


The package delivery pattern of FedEx is affected by the demographic information gathered from its various markets. Demographic information reveals important information such as the location of customers, their purchasing power, and urgency of the services offered by the firm. Such information is essential to FedEx because it ensures no huge investment is made in an unpromising market. Norris (2007) gives an example of demographic information of a growing small business market that is not being fully satisfied by UPS. Hence, FedEx would work on strategies of capturing such a market niche.

According to Denrick (2009), Publix is an international company that serves a number of customers of different cultures, organizations, and subcultures. A number of customers today consider the quality of the goods that they purchase. Thus, their choices play a big role in the decision-making process of Publix.

Impacts of the factors on the focal organization of the firm

The macro environmental factors have impacts on the Publix focal organization in the following ways:


Age distribution and household patterns determine the innovative ideas of Publix. A population consisting mainly of the elderly members of society and schoolchildren would go for already prepared meals or pre-cut food. In a financially overfished population, the choice of the meal would be one that is affordable regardless of the quality of the food (Denrick, 2009).

Social factors

Publix puts the needs of its customers first before everything. Whether Publix employees are dealing with a minor or an adult, employees show a high level of respect and demonstrate to the customers all the items that are available for buying and those that would fulfill their needs.

Political factors

The business establishment is a multi-store business located in various regions in the US. The business pays taxes and other operational fees, but its operations are not as restricted as those of FedEx that has to deal with international trade barriers and, at times, monopolized markets.

Market Factors


Collaborative relationships among organizations lead to general trends of growth of firms. They mutually benefit from one another and are exposed to a variety of resources. Collaboration has been a key to the success of FedEx and as Song (2003) explains, the firm made collaboration with the US. Postal Service, a move that saw it handle all the Express Mail for the Postal Service. FedEx would then appropriately utilize its air fleet at daytime instead of relying only on the night delivery service.


FedEx experiences competition from other package delivery firms such as the UPS, Deutsche Post World Net, and DHL (Denrick, 2009). Most of these firms have rapidly and aggressively developed into a third-party logistics business, presenting a significant competition to FedEx. As a result of this fierce competition, the organization has also been forced to dabble into logistics besides diversifying from its long-term and core US Express.


There is a minimal bargaining power of the FedEx suppliers owing to the fact that there are only few different types of suppliers to the firm (Norris, 2007). The performance of the enterprise is less affected by supplier factors because the few who are available have low power to influence its operations. This is due to the competition at their respective organizations and due to the fact that FedEx does not give one supplier a priority over others (Norris, 2007).


Regulation has a significant influence on the operations and performance of FedEx Corporation. Issues resulting from the delivery of packages from the company that adversely affect the surrounding environments, such as noise near hubs, are subject to control. A directive may be given by a particular government to reduce such noise and this would affect the operations of the firm as it struggles to acquire aircrafts with little noise production (Basch, 2001). Trade barriers are also as a result of regulation of trade by various governments and it might lock a potentially viable target market for the firm.


FedEx Corporation is a multinational firm that is exemplified by excellent performance outcomes. However, it is affected by a number of macro environmental and micro environmental factors. The FedEx customers are a loyal group and believe in the ability of the company to deliver their package inquiries in time. Although it encounters a number of challenges, including competition, the company uses a strategy of low pricing to maintain its customers. In addition, the company is keen on diversifying its functions and expanding into the ever-growing global markets outside the US.


Basch, M.D. (2001). Customer culture: how FedEx and other great companies put the customer first every day. Upper Saddle River, NJ: Prentice-Hall. Web.

Denrick, H. (2009). FedEx Refreshes Web Tracking Tools. Journal of Transportation, 12(3), 23-67. Web.

Norris, C. (2007). Empowering Employees to Delight Customers at FedEx. Management Development Review, 16(7), 118-133. Web.

Song, H. (2003). E-services At FedEx. Communications of the ACM, 46(6), 45. Web.

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