FedEx

I. BCG Matrix

The company, with its strategy of constantly acquiring firms, has grown
into a monstrous entity. But the company can be subdivided into
segments based on the services they offer. They can be divided into
FedEx Express, FedEx Ground, FedEx Freight and Other Services. FedEx
Express generates most of the revenue of the company which reaches up
to sixty percent of the total sales. FedEx Ground and FedEx Freight
contribute twenty-five percent and thirteen percent respectively of the
total sales of the company. The remaining percentage points can be
attributable to other services.
Each segments growth can be calculated by comparing their revenue
contribution of the fiscal year 2014 from the fiscal year 2013. Although
FedEx Express' revenue has not risen, we can still conclude that the
segment has a lot of potential to conquer the industry over UPS, its rival in
the industry. While the rest of the segments, FedEx Ground and FedEx
Freight have risen by 8% and 10% respectively. Lastly other services offered
by the company have plummeted by 6.25% from the previous year.
The segment which has the most potential is none other than FedEx
Express. It can be depicted as the star in the BCG Matrix as this segment
can compete toe-to-toe with its competitors and thus having a lot of
potential for growth in the acquiring market share in the industry.
FedEx Ground portrays an 8% market growth from the preceding year but
its market share is still nominal compared to FedEx Express. Clearly FedEx
Ground should be marked at the Questionmark area.
FedEx Freight shows the highest market growth at 10% but its market share
is the most insignificant compared to the three named segments. Same as
FedEx Ground, FedEx Freight can be located at the Questionmark area.
Other Services has the least market share at 2% among the four and
moreover its revenue shows an upsetting decrease of 6.25% from the
previous year. FedEx should try to improve this segment to remove it from
the dog area.
Market Market Revenue Revenue
Product
Share Growth (2014) (2013)
FedEx Express 60% -0.3% 27.1 27.2
FedEx Ground 25% 8% 11.6 10.6
FedEx Freight 13% 10% 6.0 5.4
Other Services 02% -6.25% 1.5 1.6
FedEx BCG Matrix

II. Organizational Structure

FedEx currently adheres to a divisional organizational structure. This type of

structure organizes the activities of a business around geographical,
market, or product and service groups. The company is organized on
divisional lines having operating groups for the United States, Europe, Asia
Pacific, Latin America, Canada, Middle East, Africa and many more.
Furthermore the company allocates a division for their FedEx Ground and
FedEx Freight services which is only offered in the United States of
America. Each division contains a complete set of functions.
This approach is useful when decision-making should be clustered at the
division level to react more quickly to local conditions. The divisional
structure is especially useful when a company has many regions, markets,
and/or products. However, it can cause higher total costs, and can result
in a number of small, quarreling fiefdoms within a company that do not
necessarily work together for the good of the entire entity. But since FedEx
is in the industry of transporting globally the problem of quarreling fiefdom
has already been duly recognized and addressed to by the company.

To improve the company's organizational structure having the four basic

departments of a company should be kept in mind. The basic
departments namely, operations, human resource, finance, and
marketing should then be classified as country specific or global oriented.
Operations, human resource, marketing are clearly country specific. While
finance can be both be a global-oriented and country specific
department.

In the proposed organizational structure we allocated each geographical

segment with all the country specific departments. Although each
geographical segment has a finance department we still retained the
financial officer to take charge of the finance globally.

Furthermore, FedEx does not allocate a portion of their organizational

structure for human resource, and research and development. Given the
volume of seasonal workers FedEx employs every year approaching
Christmas, FedEx should give importance to a Human Resource
Department to gain better information and control over this aspect. Also
research and development should not be overlooked as FedEx is
associated to machineries and equipment in their daily operations.