Research and analysis of business problems Paper

And analysis of business problems - Research Paper Example This industry is mainly driven by technology, globalization and Integration. The logistic Industry trends show that in the coming years this sector is going to strengthen further. The expansion of the geographical boundaries and tapping more customers is the main motive of the logistics companies nowadays. The study is on one of the major companies in the Logistics Industry, known as FedEx. The company Fed Express Corporation, popularly known as FedEx, is an American company which was established in the year 1971 by Frederick W. Smith. FedEx offers several services to its customers which includes overnight couriers, freight services and other business support and logistics solutions. It is one of the biggest transportation companies providing logistics services and delivering consignments all over US and in more than 220 countries. The revenue of FedEx is about $ 34,734 million in the year 2010. There was a decrease in the revenue of 2.1 percent due to the impact of global recession. But surprisingly there was an increase in the profit percentage of the company compared to its last year’s profit (â€Å"Company Overview†). Business Problems of FedEx The major business of FedEx is overnight delivery of consignments. Though FedEx is one of the major players in the logistics sector, yet it is facing tough fight from the other logistics companies. The major issues that FedEx is facing are: The global environmental problems In the environmental issues, the first problem is with the airlines facilities. The absence of proper landing spaces, back-up plans and the airport facilities hampers the guarantee of delivering consignment on the right time. Cut Throat Competition The major issue in competition is to face the price wars of the competitors. UPS is a close competitor of FedEx and after its entry into the logistics market, the revenue of FedEx declined by 30.3 percent. Technological problems The technological factor is very important because it keeps c hanging within a short span of time. Zapmail became obsolete due to the introduction of Fax machines. FedEx lost about $ 350 million and it had to withdraw itself from such business. So it is very important to develop the technologies within the company so as to compete with the advance technology (â€Å"Introduction†). Human Resource problems The FedEx ground services faced new challenges from its contractors delivering parcels at FedEx ground. These contract drivers own the trucks which they drive for FedEx to deliver the consignments to different places. Now, these contract drivers are not the direct employees of FedEx. So these drivers are demanding direct employment of FedEx. This would entitle them with the pension schemes, medical facilities and other facilities that FedEx employees get. But FedEx is not accepting such demands of its contractual drivers. This is a major issue which has created a huge problem in the FedEx ground department (Johansson 7-10) The logistics market is highly competitive and it gets affected very easily by price and service changes. So the