PEST analysis for FedEx
PEST analysis, which stands for Political, Economical, Social and Technological factors, is used in the process of environmental scanning of an organization. This analysis is a part of the market research and helps in giving a general perspective towards the macro environmental factors. It can be used to be aware of the market conditions and the improvements that are required.
Political factors that affect an organization are the laws and regulations set forward by the government of the place the firm is operating in. FedEx being a global company interacts with many countries worldwide, making it easy for them to provide better international services like custom clearance, freight forwarding, etc. The various countries and political systems FedEx works with do not impose tough trade regulations. A possible reason could be the acceptance and growth in globalization. Some other political factors that can be taken into consideration are the political stability, trade restrictions and employment laws. To be able to serve the entire world, FedEx needs to abide by the rules set. Its success is showing that it has been following these international rules and regulations.
Economic factors like interest rates, exchange rates and inflation, disturb the purchasing power of consumers. The firm’s capital is at stake when there are dips in the market. FedEx faces problems when there are severe inflations or hike in exchange rates. Since FedEx trades with countries worldwide, interest rates and exchange rates vary in every country. When the purchasing power of its potential consumers is lowered, it affects the organization negatively and vice versa. An incline in a country’s economy results in an increase in the use of services of an organization. With a worldwide network in many countries, FedEx needs to adapt itself and adjust with the fluctuations. Their costs need to be predetermined according to the economic conditions of the respective countries.
Demographic and cultural aspects of the global and macro-economical society are some factors that that affect an organization socially. These mainly focus on the consumer wants and needs and the size of the target audience the organization is dealing with. A high population might prove as an opportunity for FedEx as there are more consumers to deliver to in terms of their services in all sectors. A literacy level of countries affects the growth of global organizations. The growth in the business environment in many countries is the main reason for the growth of FedEx. As more businesses need courier services, which are safe for transporting important official documents, FedEx needs to exploit them and make optimum use of it.
Advancement in technology and means of communication helps organizations like FedEx to keep track of its parcels and couriers. For the consumers, checking status of their couriers is made easier. ( include this if u want: technology can help reduce the time taken for a parcel to reach from one country to another).
Source: ChinaStones - http://china-stones.info/free-essays/business/fedex-economic-social.php