Fedex Porter's 5 Forces

FedEx is one of the largest global shipping and solutions corporations in the World. FedEx has more than 300,000 employees providing services to consumers along with businesses globally. FedEx has different operating systems, which include FedEx Freight, FedEx Express and FedEx Ground. All serve purposes on how they are able to deliver products to its consumers. The headquarters of FedEx is located in Memphis, Tennessee. They are only a couple of miles away from the Memphis International Airport. The location of FedEx headquarters is quite strategic because the airport almost never closes due to bad weather. The company began in 1973 and only had 389 employees at the time. Although UPS had already been established decades before FedEx, the express shipping competition soon took off. FedEx lobbied to remove restrictions on only being able to using small aircrafts. After the law passed in 1977 they were able to use bigger aircrafts allowing them to do more business. Wayne Risher a writer for The Commercial Appeal in Memphis said, “FedEx went from $109 million in airfreight revenues in 1977 to $35 billion companywide in 2007” (Risher, 1). Profits came soaring in and the spread of shipping locations quickly rose. Risher also said, “A single 727 could replace three, even four Falcons flying into popular destinations” (Risher, 2). FedEx was …show more content…
By finding ways to increase their cash flow, margins and returns has helped the company grow. FedEx 's has a solid balance sheet that enables them to keep going in a positive direction. According to MarketWatch, which is a financial website owned and operated by the Dow Jones, “FedEx stock price is currently at $161.28. Their price to earnings ratio is quite modest at 39.86” (MarketWatch). This means that investors are willing to pay $39.86 for every one dollar of earnings that FedEx generates. It is ideal to keep a company’s price to earnings ratio relatively low