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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