FedEx PESTLE Analysis

Published by MBA Skool Team, Last Updated: October 12, 2019

PESTLE Analysis of FedEx analyses the brand on its business tactics. FedEx PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.

PESTLE analysis is a framework which is imperative for companies such as FedEx, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.

Let us start the FedEx PESTLE Analysis:

Political Factors:

The political factors in the FedEx PESTLE Analysis can be explained as follows:

FedEx operates in 220 countries. The political stability in each of these countries is important for their business to grow prosperously. Instability has its own bane. Instability leads to economic chaos. The whole supply chain of the business gets hampered. The level of corruption at each supply chain stage is important factor too. US being the parent and major market, the dollar strength effects business. Political situations like Trade war with China hampers business since FedEx has its operations spread even in China. Government stability is relevant too. Stable government leads to smoother operations in business.


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Economic Factors:

Below are the economic factors in the PESTLE Analysis of FedEx:

FedEx is a company which carries out business in multiple countries. Global recession which struck the global economy like fierce thunderstorm effected business badly. Major base is in US and thus the country policies, inflation rates, interest rates matter a lot. Business has a very careful watch over the exchange rates since it operates in multiple locations across the world. Unemployment rate and the labor laws govern the tactical decisions in the business.


Social Factors:

Following are the social factors impacting FedEx PESTLE Analysis:

Social image and social media are extremely important parameters in today’s 21st century. Every firm wants to have a socially responsible image in the society. Every action they take has to be predicted with prior response from the society. Society is in the center stage of it all. The attitude of people forming this society, their education level, the philosophical maturity, various biases are some critical social factors. FedEx has gained a good social image in the society because of the social causes it has worked up for. It was in the world’s top 10 most admired companies list as rolled out by FORTUNE.


Technological Factors:

The technological factors in the PESTLE Analysis of FedEx are mentioned below:

Technology is driving force for advancement in every field of business in today’s disruptively competitive world. Adapting to new technology is necessity to have extra edge over the competitors. FedEx has invested handsomely in its related technology. Blockchain is a still developing technology. It has great application in various business fields but one of its major application is in supply chain and FedEx has capitalized on the same. FedEx has joined ‘the Blockchain in Transportation Alliance (BiTA)’ to understand more efficient use of blockchain in supply chain. The past investment in technology has given FedEx a strong financial output and thus they believe in investing it.


Legal Factors:

Following are the legal factors in the FedEx PESTLE Analysis:

With improved technology, substantial profits that the firms are making, laws have also become stricter. Governing these businesses is equally important. Environment laws protect the environment. Different countries have their own set of laws and FedEx has to comply with respective laws. Health and safety laws, Consumer protection and e-commerce are a few of them. The privacy laws are strict in this industry. Data breach is not completely avoided until blockchain completely takes over but business is responsible for security and privacy of the customer and the items they transport.


Environmental Factors:

In the FedEx PESTLE Analysis, the environmental elements affecting its business are as below:

Monetary profits is not the only long-term goal of the businesses. They want to be recognized as environment responsible business. They want to build a good image in front of its customers. Flights carrying goods need to use the conventional fuel. But the on-road vehicles used can be switched to electric mode. FedEx has adopted to solar energy where ever possible. This helps gain public support. But more importantly it reduces the operational cost. More trees can be planted. The operations which can be paperless can be adopted. Efforts are put to reduce its carbon footprints in coming years.

To conclude, the above FedEx PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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