06 Nov In this module, you will start the creation of a SWOT analysis which is the identification of your strategic audit company’s Strengths, Weaknesses, Opportunities, and Threats. For this modul

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Strategic Posture and Corporate Governance – FedEx Corporation

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Strategic Posture and Corporate Governance – FedEx Corporation

FedEx Corporation was founded in the United States and now has operations all over the world. This corporation connects global economies by engaging in international trade and is responsible for more than 90 percent of the total gross domestic product of the world (Oster et al., 2017). The organization maintains the belief that through facilitating connections between individuals and the various commodities and services available, one's quality of life can be enhanced. FedEx was founded in 1973 under the name Federal Express Company by a naval pilot who recognized the difficulty in getting packages to several locations within one or two days. The expansion of the company's operations to more than 200 nations throughout the world has resulted in a year-over-year rise in the income of the enterprise. The corporation offers a wide variety of services, including as distribution and storage, packing, and shipping to over 220 countries worldwide via its subsidiary branches, FedEx Express. This company has grown and become competitive with industry giants like UPS and DHL because to a focus on innovation.

Company Performance

Investment

Based on the most recent financial reports, it appears that FedEx Company has performed quite well over the past year in terms of investment. The company's net income for the fiscal year ending in May 2020 was $4.57 billion, up from $4.37 billion the previous year. This represents an increase of approximately 5%. FedEx's total assets also grew during this period, reaching $62.78 billion by the end of the fiscal year (Earl, 2020). This represents an increase of nearly 9% from the previous year. Thus, it appears that FedEx has been able to grow its business and increase its profitability over the past year, making it a good investment choice for long-term growth.

Market Share

In terms of market share, FedEx has performed relatively well over the past year. The company held a 14.4 percent share of the global package delivery market in 2019, which was a slight increase from its 2017 market share of 14.2 percent (“FedEx Corporation,” 2019). FedEx's main competitors include UPS and DHL. However, FedEx has been able to maintain a strong position in the market, thanks in part to its focus on providing excellent customer service and its efficient delivery operations.

Profitability

The profitability of FedEx Corporation throughout the course of the past 4 years has been rather consistent. In terms of the interplay of FedEx's sales, the firm's revenue has consistently climbed from 2018-2021. This trend is expected to continue. Nonetheless, between the years 2018 and 2020, their stream of revenue did neither experience a significant fall nor did it experience a significant increase (“FedEx Corporation,” 2019). That is, till 2021, when it will increase to $83,959 from its previous level of $69,217. It is possible that the implementation of lockdowns as a response to the COVID-19 outbreak was a more significant contributor to this increase in revenue. It's possible that the lockdowns were beneficial to FedEx Corporation by inducing a shift in demand, increasing consumers' propensity to shop online, thus, as a result, raising income for the corporation during this period of time.

Company mission and vision statements

Mission

FedEx’s mission statement is “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” (COMPARABLY, n.d) FedEx emphasizes on its website how its services aim to improve people's quality of life by reducing their workload. The organization achieves this by serving as a trusted intermediary between its clients and the supply chain. And that's not all. Through its CSR initiatives, FedEx shows that it is committed to more than just shipping packages; it is actively working to improve people's lives in the communities in which it operates.

Vision Statement

FedEx’s vision statement is “being a dynamic and progressive courier services firm that leverages of technology and impact the lives of all people.” FedEx's actions show that the company's main goal is to have a worldwide influence, which it achieves by reaching all corners of the globe and connecting people through a complex network of logistics.

A good mission and vision statements should reflect the company's genuine goals and the solutions it envisions for the future. Companies need clear mission and vision statements to communicate their objectives to the public, its customers, and potential investors. The following are qualities that distinguish effective mission and vision statements from those that are less effective: (Putter, 2018).

Good Vision and Mission Statements

i. The message is clear, easy to understand, and makes use of language that is accommodating

ii. The statement outlines some very lofty objectives.

iii. The vision statement articulates positive aspirations for the future, whereas the mission articulates steady advancement toward the provision of improved services.

Bad Vision and Mission Statements

i. The message is difficult to understand because it lacks specificity, is very general, and contains simple grammatical structures.

ii. The message is lengthy and coated with wordiness, which makes it ambiguous not just to outsiders but also, at times, to insiders.

iii. The message is overused and gives off a negative impression because it portrays the company as the lone leading provider that excels over other businesses that offer comparable services.

FedEx Board of Directors

1. Marvin R. Ellison – He was appointed to the board in 2019. He is a member of the Audit and Finance Committee. He is an external member (FedEx, n.d)

2. Stephen E. Gorman – He was appointed to the board in 2020. His role is to provide oversight and guidance to the company. He serves on the Governance and Nominating Committee and the Audit Committee.

3. Susan Patricia Griffith – She was appointed to the board in 2018. Her role is to provide oversight and guidance to the company. She serves as a member of Information Technology Oversight and Nominating & Governance Committees. She’s an external member.

4. Kimberly A. Jabal – She was appointed to the board in 2013. She brings a wealth of experience in the areas of finance, accounting, and auditing to the board, and her appointment strengthens the board's ability to provide oversight of the company's financial affairs. She is an external member.

5. Nancy A. Norton – She was appointed to the board in 2004. She is responsible for the audit committee and the nominating and governance committee. She is an external member of the board.

6. Fred Perpall – He was appointed in May 2020. His role is to provide advice and oversight to the company on strategic matters. He is an external member of the board.

7. Joshua Cooper Ramo – He was appointed in 2020. His role is to provide strategic advice and counsel to the company on a range of issues, including technology, global expansion, and sustainability. He is an external member of the board.

8. Susan C. Schwab – She was appointed in 2018. Her role is to provide oversight and guidance to the company. She is an external member of the board.

9. Frederick W. Smith – He is the Executive Chairman and Chief Executive Officer of FedEx Corporation. He was appointed to the board in May 1998. His role is to oversee the company's operations and strategic direction. He is an internal member of the board.

10. David P. Steiner – He was appointed to the position in May 2018. He is responsible for providing oversight and guidance to the company on matters related to its business operations, strategy, and financial performance. He is an external member of the board.

11. Rajesh Subramaniam – He was appointed to the position in 2020. He is the president and CEO of FedEx Express, the largest unit of FedEx Corporation. He is responsible for the company's global air express transportation, e-commerce and shipping services. He is an internal member of the board.

12. Jim Vena – He was appointed to the board in May of 2020. His role is to provide advice and guidance on matters relating to the company's operations and strategy. He is an external member of the board.

13. Paul S. Walsh – He was appointed to this position in 2018. He is responsible for overseeing the company's operations and strategic direction. He is an external member of the board.

References

COMPARABLY. (n.d.). Fedex Mission, Vision & Values | comparably. Retrieved October 28, 2022, from https://www.comparably.com/companies/fedex/mission

Earl, A. (2020, February 1). Fedex hopes its 3 Big Investments will pay off. The Motley Fool. Retrieved October 28, 2022, from https://www.fool.com/investing/2020/02/01/fedex-hopes-its-3-big-investments-will-pay-off.aspx

FedEx Corporation. (2019). 2019 Annual Report. Washington, D.C.: United States Securities and Exchange Commission.

FedEx. (n.d.). Home > ESG > board of directors. Retrieved October 28, 2022, from https://investors.fedex.com/esg/board-of-directors/default.aspx

Placek, M. (2022, September 23). Topic: Fedex corporation. Statista. Retrieved October 28, 2022, from https://www.statista.com/topics/4064/fedex-corporation/#topicHeader__wrapper

Oster, C. V., Rubin, B. M., & Strong, J. S. (2017). Economic impacts of transportation investments: the case of Federal Express.  Transportation Journal,  37(2), 34-44.

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Strategic Audit Report

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Strategic Audit Report

History and Background of the company

The selected organization for this discussion is FedEx Corporation. Federal Express Corporation, now known as FedEx, was founded in 1971 by Frederick W. Smith. The company began operations in 1973 with 14 small aircraft and a team of just 500 people. FedEx was created to take advantage of the deregulation of the airline industry (Roadshow, 2019). Prior to this, all airlines were required to use the same rates and routes, which made it difficult for new companies to compete. But with deregulation, FedEx was able to create a more efficient shipping network that quickly gained popularity. Today, FedEx is a global company with over 390,000 employees and a fleet of over 650 aircraft.

The company offers a variety of services, including express shipping, ground shipping, freight, and even printing and copy services. FedEx has been widely successful, due in part to its innovative use of technology. For example, the company was one of the first to use barcodes to track packages. It also developed the first real-time package tracking system, which allowed customers to see exactly where their packages were at all times. In recent years, FedEx has faced some challenges, such as the increasing popularity of e-commerce and the rise of competitor UPS. However, the company has continued to adapt and innovate, making it one of the most successful shipping companies in the world.

What FedEx organization does and who its target audience is

FedEx is a global company that provides transportation, e-commerce, and business services. Its target audience is businesses and individuals who need to ship items domestically and internationally (Dhir, 2019). FedEx Corporation offers a range of services, including transportation, e-commerce, and business services. Its transportation services include air and ground shipping, freight forwarding, and third-party logistics. Its e-commerce offerings include online retail, business-to-business, and business-to-consumer sales. Its business services include printing, copying, and marketing. The company has a wide range of customers, including businesses, government agencies, and individuals. Businesses use FedEx to ship products domestically and internationally. Government agencies use the company's services to send items to military personnel and to ship humanitarian aid. Individuals use FedEx to send items to family and friends.

References

Dhir, S. (2019). Federal Express. In  Cases in Strategic Management (pp. 91-105). Springer, Singapore.

Roadshow, N. D. (2019). FedEx Corp.(FDX).  Transportation Research,  501, 377-2298.

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EXTERNAL FACTOR ANALYSIS SUMMARY (EFAS) – Microsoft Corporation

	FACTORS	WEIGHT	RATING	WGTD SCORE	COMMENTS
	OPPORTUNITIES
O1	Tablets and Smartphones	.15	3	.45	Tablets and Smartphones have provided a brand new market avenue for Microsoft. Microsoft is competing in this new sector via their Surface and Windows 8 phone, but they have not quite met market expectation with this (Jones, 2018).
O2	Gaming – Xbox and Kinect	.15	5	.75	Until 2010 Microsoft has been struggling in the gaming sector behind Sony (PlayStation) and Nintendo (Wii). But the launch of Kinect in late 2010 turned the corner in Microsoft’s favor and Microsoft has excelled in Gaming sector ever since launch of Kinect (Bloom, 2018).
O3	Online Service offerings via cloud	.10	4	.40	The cloud computing has brought a new era of service offering across the software industry that enable small and medium companies to make use of advance software technologies without large investment. Microsoft has a dedicated online services division to compete in this sector and has been performing relatively well (Microsoft, 2018)
O4	Emerging Markets	.05	4	.20	The technology sector in north America and Europe has matured, but there is enormous business to be tapped in emerging economies such as India and China as well as South America. Microsoft has done relatively well in getting their foothold in those markets (Smith and Simpson, 2018)
O5	Global Talent pool	.05	4	.20	Attracting and retaining a very advance technical workforce is the key for success for any technology company. Microsoft has done relatively well to attract technical workforce from across the globe and created an environment to nurture and foster that talent to new heights (jones, 2018).
	THREATS
T1	Competition	.15	3	.45	Competition is the biggest threat for a technology company. In 80s and 90s Microsoft had performed very well compared to its competitors, but in the new millennium Microsoft had to face fierce competition in every sector from companies such as Apple, Google and so on (Microsoft, 2018).
T2	Piracy	.05	3	.15	Piracy has been a threat to Microsoft and other software companies ever since beginning of the software industry. Piracy does make significant dent in Microsoft revenue. Companies like Microsoft have to keep developing new safeguard to prevent piracy as best as they can (Nelson, 2018).
T3	Legal challenges	.10	3	.30	Government regulation and legal challenges cause significant loss of revenue for Microsoft. Most recently Microsoft was fined €561 million ($732 million) buy European Union for failing to respect an antitrust settlement with regulators (Graham, 2018)
T4	Cyber security	.10	4	.40	Over last decade cyber security has become one of the key challenges for any large corporation and more so for technology companies like Microsoft. Microsoft has done relatively well not only to protect itself from cyber threats but has partnered with its customers including government organization to fight against cyber threats (Jones, 2018).
T5	Dynamic and volatile nature of the information and technology sector	.10	3	.30	The biggest challenge for a technology company is the ever changing nature of the business. Microsoft was originally focused on Windows operating system and Microsoft office software but over last few years has to change its business model to compete in services (cloud computing) and devices (Tablets, Smartphones). Microsoft has done well to adapt to new business model but often seem to lag behind its competitors such as Apple (Smith and Simpson).
	TOTAL SCORES	1.00		3.60

References

Bloom, J.C. (2018). Microsoft struggles in the gamming sector. Bloomberg Homepage. Retrieved from www.bloomberg.com

Graham, B. W. (2018). Microsoft fined by the government. Technology News Source. Retrieved from www.technologynewssource.com

Jones, C. L. (2018). New technology in the workforce and how it changes business today. Reuters. www.reuters.com

Microsoft. (2018). Official Homepage. Retrieved from https://www.microsoft.com/en-us/

Nelson, D. P. (2018). Piracy threat to Microsoft and other software companies since the beginning of time. US News & World Reports. Retrieved from https://www.usnews.com/

Smith, G, A., & Simpson, H. J. (2018). Microsoft and the changing dynamics in today’s tech industry. Official News Report. Retrieved from www.officalnewsreport.com

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College of Business | worldwide.erau.edu

All rights are reserved. The material contained herein is the copyright property of Embry-Riddle Aeronautical University, Daytona Beach, Florida, 32114. No part of this material may be reproduced, stored in a retrieval system or transmitted in any form, electronic, mechanical, photocopying, recording or otherwise without the prior written consent of the University .

External Factor Analysis Summary Worksheet

	FACTORS	WEIGHT	RATING	WGTD SCORE	COMMENTS
	OPPORTUNITIES
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