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TOWS Matrix: Strengths, Opportunities And Threats

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THREATS 1. Intense Competition • The current freight market is highly competitive. Companies within the same industry compete on reliability, geographical factors, price etc. As mentioned, key competitors of Fedex include UPS and DHL, which have greater resources and sometimes more favorable conditions. Thus Fedex always needs to come up with innovative ideas to efficiently serve his customers to gain maximum profitability. 2. Seasonality of the Business • Businesses can also be affected by seasons. Typically Fedex will have an increase of volume in business around the November or December periods. Thus if they experienced severe weather conditions, which was like the winter of 2014, volumes declined which affected the earning for that quarter for the company. 3. Rising Fuel Prices • Fedex will have to increase its prices to its customers with the rising fuel prices. This is because it would start to include a fuel surcharge on all its invoices. Thus consumerism would depend on which parcel carrier hikes its fuel surcharge more. TOWS Analysis The TOWS Matrix (Exhibit 2) is a useful tool for in identifying strategic alternatives based on the Strengths, Weaknesses, Opportunities and Threats. The TOWS matrix identifies many strategic options for FedEx to consider. The first alternative for FedEx to consider is to keep doing what they are doing and spent efforts on fine tuning the current processes. FedEx would continue to push a high-performance culture focused on

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