FedEx PESTLE Analysis 2022 (2023)

Imagine you’re James Bond, and your secret service has assigned you a task to deliver a package halfway across the globe in three days maximum, but guess what? You can’t leave the city. What would you do?

I am sure you’re thinking pretty hard, and you are still clueless, but trust me, it is actually possible. Okay, that jaw drop was expected, but don’t worry, I’ll tell you how.

Have you ever heard the name FedEx? I am sure you must have. You can simply Ship or Air Cargo your package through FedEx to any country you want; it’ll reach the desired destination in three days maximum.

FedEx is a multiIndustry company that participates in the transportation of packages and provides designing services. Recently, It has also become a part of the eCommerce industry.

Initially, like any startup, FedEx had a humble beginning. FedEx was a brainchild of an undergraduate student at Yale University. He worked hard on his idea of developing a transportation company that soon started its operations in 1973. From there onwards, it never looked back.

Currently, FedEx is considered among the largest courier companies in the world as per the market cap. A company that many people initially thought would fail managed to generate revenue of $83.95 billion in 2021.

No one had ever thought that FedEx would get so popular that Tom Hanks would play the role of a FedEx troubleshooter in the famous movie Cast Away. So after looking at this exciting journey of FedEx, we decided to conduct a FedEx PESTLE Analysis.

PEST analysis is a handy tool to identify how external factors such as the political, economic, social and technological impact a company’s growth. Add the legal, and environmental factors and you’ve got yourself a PESTLE analysis.

FedEx started its operations in Memphis initially. Now it has spread its operations across the globe. Currently, FedEx is operating in more than 220 countries, which makes it a household name.

It is a difficult job to make sure that the operations run smoothly despite operating on such a big scale. To ensure that, FedEx owns a large number of vehicles and aircraft. FedEx’s fleet consists of 684 aircraft, while it owns more than 87,300 vehicles so that no disruption is caused in its operations.

We will now conduct a PESTLE analysis of FedEx to see what external factors influence the performance of FedEx, but before we proceed further, I would recommend you guys look at some of the examples of PESTLE analysis to get a better understanding of this article.


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Political factors

Political factors are the very first element of the PESTLE analysis. Political factors strongly impact the business and play an essential role in determining its long-term sustainability.

Since FedEx operates in almost every country across the globe, global politics are a source of risk for FedEx.

To run a smooth business in a country, political stability is crucial. The political instability in some countries where FedEx is active has a significant impact on its operations and growth.

Currently, the political situation of countries like Russia and Afghanistan is unstable due to internal and external conflicts, which negatively affect business activity. A lack of focus on the current situation can adversely affect its revenues and profitability, leading to inadequate capital investments.

Moreover, styles of governments also influence the operations of a business. For example, FedEx primarily operates in countries with a democratic form of government.

One of FedEx’s perks is doing business in countries with a democratic form of government. Such governments provide companies with a friendly and supportive environment to carry out their operations.

Talking of supportive policies, governments with a relaxed taxation policy toward businesses are considered a haven for inventors. However, while considering the political factors that influence a company’s operations, we must not forget that tax policy broadly impacts businesses.

FedEx should invest in countries where governments facilitate investors and impose low taxes on investors.

Economic Factors

Another critical element of this PESTLE analysis framework is economic factors that affect the performance of a business.

Like any other business, economic factors such as inflation, interest rate, and recessions influence the operations of FedEx.

The economic growth of countries directly impacts the business residing within its geographical boundary. Therefore, if a country is observing economic growth, a good level of economic activity is taking place in that country which is beneficial for any business.

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The GDP growth can be an excellent indicator to guide FedEx while making expansion decisions. Therefore, to expand its operations, FedEx Corporation should choose countries with a high GDP growth rate for expansion.

A high economic growth rate provides opportunities for long-term growth objectives and can stimulate the demand for FedEx’s products. However, if a country’s economy grows slowly, consumers will be more conservative spenders, directly affecting FedEx’s revenue growth.

Another economic factor that is considered to be very important is inflation. Inflation is when the cost of living rises, and people spend more money than the number of goods they can purchase. Therefore, it affects companies negatively since it reduces consumer spending on goods and services.

Currently, we are observing high inflation worldwide as post-COVID-19 effects and now due to the Russia-Ukraine war.

Operating in such circumstances can be very damaging for FedEx since high inflation would cause a drop in the demand for FedEx services, and the company’s cost of operations would also increase. This would lead to a loss in revenue and market share.

Socio-cultural Factors

Social factors are the third essential component of the PESTLE analysis. Social factors represent the important demographic characteristics such as norms, social values, and customs of a society.

When a business carries out its operations in different countries, that business must understand the social factors of those countries. Therefore, the success of FedEx can be attributed to its ability to identify social factors and adapt its strategies accordingly.

One of the key social factors that impact the operations of businesses is consumer behavior. The amount of money you have available to spend on goods and services is your disposable income.

People who possess more disposable income and are willing to spend more on goods, products, and services to improve their lifestyle will provide exciting growth opportunities for FedEx Corporation.

FedEx should target markets like the USA to operate since it has the highest household consumption in the world. This means operating in such markets could help FedEx in generating high revenue.

Moreover, FedEx should keep a close eye on the demography of its operating countries. Today, in a world where marketing plays a crucial role in making a business successful, you need to know the demographics of the market for efficient marketing.

For instance, FedEx could use marketing strategies targeting immigrants with diverse backgrounds by showing its soft side towards immigrants in a country like the USA, where more than 51 million immigrants reside.

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Technological Factors

As the world is getting technologically advanced, FedEx needs to stay connected with modern technological developments to gain a competitive edge and stay relevant in the market.

This article section will discuss some technological factors that have important implications for FedEx Corporation.

Back in the days’ businesses only used to look at the infrastructure of a country before expanding their operations in a country, but now to perform well in a market, it is essential to look at the technological infrastructure of a nation.

Countries that have well-developed technological infrastructures are more likely to be able to provide the foundation for cost reductions and innovations in a company.

It is very beneficial for FedEx if they work in countries that have a well-developed technological infrastructure. This is because a country’s technological infrastructure supports cost reductions, innovation, and value creation. These factors will help FedEx generate more profits and eventually lead to market dominance.

Moreover, technological innovation is currently creating a significant impact on businesses in every industry. Therefore, the emergence of new technological innovation trends would greatly impact FedEx’s product development and marketing strategies.

Emerging technological innovations are the ones that are new in nature but hold the potential to make a significant impact on the company.

To maintain a competitive advantage with its customers, FedEx should adopt technological innovations such as E-commerce to streamline its operations and improve the user experience.

The organization can position itself as an innovative leader in the industry and achieve operational efficiencies that will make FedEx more efficient for its clients.

Legal factors

Legal factors represent all the laws that affect the operations of a business. Governments across the globe make laws to keep the business practices clean, which businesses have to abide by.

FedEx can be sued like any other country if it does not obey the host countries. To reduce these risks, it is necessary to evaluate legal factors. It is possible that up-to-date legislation could provide information on potential risks and how the company can deal with them.

Employment law is a combination of constitutional and statutory factors used to protect employees’ rights.

This includes the right to fair wages and working hours, equal treatment for all employees, privacy in the workplace, protection from discrimination, and much more.

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Recently, FedEx earned bad publicity when an employee of FedEx sued and won the lawsuit against the company over its controversial policy.

FedEx Corporation must comply with employment laws in countries with strict employment laws to prevent discrimination.

This will help FedEx strengthen its employer brand image, which is important for attracting and retaining the top talent from the market amid the ongoing war for talent.

Although strict business laws usually don’t make businesses happy, laws like Intellectual property law protect many companies from getting their patents stolen.

Strict implementation of this law provides a safe playing field for innovative companies like FedEx. It allows it to maximize its profits.

Environmental factors

Environmental factors, such as natural resources and waste disposal, have always been important for all businesses. However, environmental factors have gained higher importance in the business environment due to global warming and climate change.

Since many countries impose heavy fines and even bans on companies that harm the environment due to their practice, FedEx should gain an understanding of all environmental regulations to avoid lawsuits and reputation damage in the market.

Strict laws and regulations to protect the environment push businesses to take action towards reducing environmental harm. FedEx corporation should adopt responsible production and consumption practices, improve its marketing image, and ensure full compliance with environmental regulations.

The development of renewable energy sources emerged as a powerful trend in various sectors. In some world regions, governments even offer attractive subsidies for renewable energy sources.

By taking advantage of these benefits, FedEx Corporation can achieve sustainable business development objectives by investing in renewable energy sources.

This will not only improve the image of FedEx, but it will also cut down the operating costs of FedEx, which will generate high revenues for the company.

FedEx PESTLE Analysis: Final Thoughts

Before wrapping up, let’s just summarise what was learned through this article. Initially, we started off by sharing a bit of the background of FedEx and how it currently operates.

Then we proceeded to the PESTLE analysis of FedEx to see how the external factors influence the operations of FedEx. We discussed political, economic, social, technological, legal, and environmental factors affecting the operations of FedEx.

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PESTLE analysis is only used to investigate the impact of external factors on an organization. If you are curious to know the internal and external factors affecting FedEx, have a look at the FedEx SWOT Analysis.

In the end, we assume that besides gaining information about the external factors that impact FedEx, now you guys have an understanding of what PESTLE analysis is.


Is Pestel analysis still relevant? ›

PESTEL analysis is also a very popular tool among management consultants to help their clients develop innovative product and market initiatives, as well as within the financial analyst community, where factors may influence model assumptions and financing decisions.

Is PESTLE used for SWOT analysis? ›

Unlike SWOT, which is tied to analyzing a specific company's internal capabilities, PESTLE is designed examine a company's external environment. Sometimes referred to as “scanning the business environment,” a PESTLE is meant to be a macro or “big picture” look at the market in which your business operates.

Which is better PESTLE or SWOT? ›

What's the Difference Between a SWOT or PESTLE Analysis? The main differences between a SWOT or PESTLE analysis are that a SWOT analysis focuses on actions you can take INTERNAL to your business environment, a PESTLE analysis identifies EXTERNAL factors that are mainly outside of your control.

What is PESTLE analysis give examples? ›

PESTLE is an acronym that stands for six external factors affecting your business: political, economic, sociological, technological, legal and environmental. Each of these can have a profound effect on your business and varying implications, for example, in terms of: duration of impact - short term or long term.

Which companies use PESTLE analysis? ›

The PESTLE analysis of the companies has been done in this context for multinational companies such as Samsung, Starbucks, and Pfizer. Samsung operates its business in the field of electronic goods and it is one of the leading brands of the world.

Is PESTLE analysis reliable? ›

It helps companies understand and study how political, economical, social and technological factors affect them. PEST analysis is quite effective and accurate when used as a strategic planning tool but it also has some limitations that need to be dealt with.

How to do PESTLE analysis of a company? ›

How to do a PESTLE analysis
  1. Identify the scope of the research. ...
  2. Decide how the information will be collected and by whom. ...
  3. Identify appropriate sources of information. ...
  4. Gather the information – you can use the template below.
  5. Analyse the findings.
6 Dec 2021

What are the 6 PESTLE factors? ›

In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal.

How do I link my PESTLE to my SWOT? ›

PESTLE analysis considers the broad environmental context that affects the business and the changes that occur in this context. SWOT analysis then interprets these findings for the business to determine the strengths and weaknesses, and opportunities and threats.

What is the most important Pestel factor? ›

There is no single most important factor in the PESTEL framework. Depending on the subject to be analyzed, different factors may be supportive or detrimental. There is something that is most important in strategy formulation - knowing your company, knowing your competition, and knowing your customer.

When should you not use PESTLE? ›

These six factors include: Political.
Before diving into such a detailed study, it's best you understand the disadvantages of PESTLE analysis first.
  • It can't offer the full picture. ...
  • Factors change. ...
  • Simple isn't always better. ...
  • Most data isn't easily found. ...
  • It eats up all your time. ...
  • The risk of mishandling information.

Why SWOT analysis is obsolete? ›

The SWOT (strengths, weaknesses, opportunities and threats) analysis is outdated, an endangered species. Many organizations spend half their time looking internally, at strengths and weaknesses, creating blinders and stifling innovation, which is a killer in highly disruptive environments.

What is a good PESTLE? ›

Our Top Mortar and Pestle Picks:

Best Overall: Chef Sofi Granite Mortar & Pestle. Best Budget: Health Smart by Maxam Granite Mortar & Pestle. Best for Small Batches: Gorilla Grip Original Granite Mortar & Pestle. Best for Large Batches: Williams Sonoma Marble Mortar & Pestle.

What are examples of Environmental factors in a PESTLE? ›

Environmental factors include, for example, natural disasters and weather patterns. Legal factors include laws involving issues such as employment, health and safety, discrimination, and antitrust.

Where can I find info for PESTLE analysis? ›

Resources for a PESTEL Analysis
  • Business Source Complete (EBSCO) Country Reports, on the right side tool bar, links to extensive current reports providing information on the PESTEL factors in a country. ...
  • Nexis Uni. (Replaced Lexis Nexis Academic) PESTEL factor information is provided for countries.
3 Nov 2022

Who is the father of PESTLE analysis? ›

Who created a PESTLE analysis? The PESTLE analysis was invented over 50 years ago by Francis Aguilar, who was an American scholar whose expertise was in strategic planning. In the late 1960s, Aguilar published a book titled Scanning the Business Environment in which the now known PESTLE tool was first identified.

What are the four components of PESTLE analysis? ›

There are six elements to a PESTLE analysis: Political, Economic, Sociological, Technological, Legal, and Environmental.

What is legal in the PESTLE analysis? ›

Legal factors include: the laws and legal framework that affect the organization's environment – such as health & safety laws, employment law, consumer law, and antitrust law.

What questions should I ask in a PESTLE analysis? ›

Sections of a PESTEL analysis template
  • Who are our stakeholders?
  • When is our country's next local, state, or national election? How could this change government or regional policy?
  • Could any pending legislation or taxation changes affect our business, either positively or negatively?
15 Nov 2021

How do you do a market analysis of a company? ›

These are the seven steps of conducting a market analysis:
  1. Determine your purpose. ...
  2. Research the state of the industry. ...
  3. Identify your target customer. ...
  4. Understand your competition. ...
  5. Gather additional data. ...
  6. Analyze your data. ...
  7. Put your analysis to work.

What are trends in PESTLE? ›

PESTLE analysis is the analysis of trends and factors that can affect the context in which humanitarian action is carried out and/or your organisation as a whole. It requires the user to look at six different domains: political, economic, social, technological, legal and environmental.

What are the five 5 factors that give rise to market opportunities and threats? ›

Porter's 5 Forces outlines five key competitive forces that make up every industry including:
  • The potential for new entrants into the industry. ...
  • Existing competition in the industry. ...
  • The arrival of new goods or services on the market. ...
  • Supplier power. ...
  • Consumer power.

What are the 4 factors of SWOT analysis? ›

A SWOT (strengths, weaknesses, opportunities and threats) analysis looks at internal and external factors that can affect your business. Internal factors are your strengths and weaknesses. External factors are the threats and opportunities.

What is the difference between SWOT analysis and Pestel analysis? ›

To compare, PEST analysis will only examine external factors that could affect your business (although it will help you think specifically about different areas of interest), while SWOT analysis considers both internal and external factors. To conduct a PEST analysis, follow our directions and get a free template.

What are the 4 reasons why PEST analysis is useful? ›

PEST Analysis is useful for four main reasons:
  • It enables you to spot business or personal opportunities, and gives you advanced warning of any significant threats.
  • It reveals the direction of change within your business environment, so you can adapt what you're doing to work with the change, rather than against it.

What are economic factors in pestle? ›

Economic factors include inflation rate, interest rates, foreign exchange rates, economic growth patterns etc. It also accounts for the FDI (foreign direct investment) depending on certain specific industries who're undergoing this analysis.

Why is PESTEL and SWOT analysis important? ›

SWOT and PESTLE analysis together allow companies to get a combined view of the internal and external resources, threats, and opportunities. Since both frameworks analyze the environment based on different factors, companies can get a holistic view of the possibilities and threats that exist for them.

Does PESTLE analysis work best for large Organisations? ›

Key Takeaways. PEST analysis stands for political, economic, social, and technological. This type of analysis is used to gauge external factors that could impact the profitability of a company. Generally, it is more effective with larger organizations that are more likely to experience the effects of macro events.

Which of the following factors should not be included in PESTLE analysis? ›

The factor competitor analysis should not be included in Pestle analysis. A PESTLE analysis is a context to analyze the key factors (Political, Financial, Sociological, Technical, Legal, and Environmental) manipulating an organization from the outside.

When would a business use PESTLE? ›

Uses of PESTLE Analysis

Broadly speaking, though, there are two main applications for PESTLE analysis which we want to discuss: Assessing the viability of a new venture. Analyzing the macro environment.

What has replaced the SWOT analysis? ›

A SOAR analysis maintains the Strengths and Opportunities sections of a SWOT analysis but introduced Aspirations and Results in the place of Weaknesses and Threats. Aspirations focus on what the organization wants to do, who they want to serve, and where they wish to operate.

Which company is best for SWOT analysis? ›

The following are some top companies' SWOT analyses: Amazon SWOT Analysis and Company Analysis. Apple SWOT Analysis and Company Analysis. Dell SWOT Analysis and Company Analysis.

What are the 7 environmental factors? ›

Environmental factors include temperature, food, pollutants, population density, sound, light, and parasites.

What are three 3 Examples of environmental conditions that affect employees? ›

Common types of environmental issues in the workplace
  • Poor air quality and ventilation. Poor air quality is most common in manufacturing or work sites that release pollutants but can also be found in standard office buildings. ...
  • Asbestos. ...
  • Mold. ...
  • Noise. ...
  • Ergonomics.

What are the 9 environmental factors that affect business? ›

Here are the nine types of external environment factors that affect businesses:
  • Technological factors. ...
  • Economic factors. ...
  • Political and legal factors. ...
  • Demographic factors. ...
  • Social factors. ...
  • Competitive factors. ...
  • Global factors. ...
  • Ethical factors.
13 Jul 2021

When should you not use pestle? ›

These six factors include: Political.
Before diving into such a detailed study, it's best you understand the disadvantages of PESTLE analysis first.
  • It can't offer the full picture. ...
  • Factors change. ...
  • Simple isn't always better. ...
  • Most data isn't easily found. ...
  • It eats up all your time. ...
  • The risk of mishandling information.

Is SWOT analysis still relevant today? ›

SWOT analyses can be used at the top of the business to identify major trends or in specific aspects of your business such as your positioning, pricing, distribution – anything where you need to fully understand your current situation in relation to the wider market and opportunity.

When should PESTEL analysis be used? ›

A PESTEL analysis is used to identify threats and weaknesses which are used in a SWOT analysis. Political factors include government policies, leadership, and change; foreign trade policies; internal political issues and trends; tax policy; regulation and de-regulation trends.

Are SWOT analysis still used? ›

The SWOT (strengths, weaknesses, opportunities and threats) analysis is outdated, an endangered species. Many organizations spend half their time looking internally, at strengths and weaknesses, creating blinders and stifling innovation, which is a killer in highly disruptive environments.

What is a disadvantage of pestle? ›

Disadvantages: Some PESTLE analysis users oversimplify the amount of data used for decisions – it's easy to use insufficient data. The risk of capturing too much data may lead to 'paralysis by analysis'. The data used may be based on assumptions that later prove to be unfounded.

What 4 factors would be included in a PEST analysis? ›

A PEST analysis covers four elements: political, economic, social and technological factors.

What is legal in PESTLE analysis? ›

5. Legal factors in PESTLE Analysis. Legal factors include changes to legislation impacting employment, access to materials, quotas, resources, imports/exports, and taxation. These factors have both external and internal sides.

Which company has the best SWOT analysis? ›

Businesses perform a SWOT during strategic planning.
The following are some top companies' SWOT analyses:
  • Amazon SWOT Analysis and Company Analysis.
  • Apple SWOT Analysis and Company Analysis.
  • Dell SWOT Analysis and Company Analysis.
  • Google SWOT Analysis and Company Analysis.
  • Microsoft SWOT Analysis and Company Analysis.

What can I use instead of SWOT analysis? ›

A NOISE analysis is a strategic planning tool that is a useful alternative to the SWOT analysis. Conversely, the NOISE analysis allows decision-makers to analyze the current state of the business and create a strategic improvement plan.

What are the 6 PESTEL factors? ›

PESTEL is an anagram, meaning it is a word that created by using parts of other words. In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal.

What comes first PESTEL or SWOT? ›

If combined, PESTLE analysis is usually completed first to provide a context for the SWOT analysis.

Which PESTLE factor is most important? ›

There is no single most important factor in the PESTEL framework. Depending on the subject to be analyzed, different factors may be supportive or detrimental. There is something that is most important in strategy formulation - knowing your company, knowing your competition, and knowing your customer.

Why is SWOT better than soar? ›

While SWOT analysis takes a look at where a company is, SOAR strives to be forward-thinking to address the potential of the business. By eliminating weaknesses and threats, SOAR focuses on positive elements more likely to be influenced by the company.

What is the most overlooked SWOT analysis? ›

Opportunities is the SWOT analysis category that marketers overlook. It is probably the most difficult section to fill out – it is not surprising that not giving it enough focus is among the biggest SWOT analysis mistakes that companies make.


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