Write a 2 page essay on 3: Fedex in the Chinese Express Delevery Market: Face-Off in the Forbidden City.had resulted in steep currency devaluation which had also negatively impacted on the operating p

Write a 2 page essay on 3: Fedex in the Chinese Express Delevery Market: Face-Off in the Forbidden City.

had resulted in steep currency devaluation which had also negatively impacted on the operating profit of FedEx (Darden Business Publishing, “FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City”).

The other significant problem recognized in the case for FedEx is high level of competition in the Chinese market. There are several competitors of FedEx in the market of China such as DHL, United Parcel Service and China Post EMS. Besides, the recent business expansions of competitors through mergers and acquisitions have made the business environment of FedEx more competitive to survive (Darden Business Publishing, “FedEx in the Chinese Express Delivery Market: Face-Off in the Forbidden City).

The way to respond to the first problem i.e. high operational expenses in the foreign market is to transform the fixed expenses to variable expenses. It not only helps to reduce the operational cost but also facilitates to increase the capability of the organization to react to the changing business environment. There are certain recommendations that can be helpful for dealing with the problem of fixed expenses such as reducing the amount of budget, closing the unnecessary services which bear extra expenses and optimizing the number of personnel through lowering the hierarchy level.

The justification for converting the fixed expenses to variable expenses is that organizations cannot reduce the amount of fixed cost according to the sales, while the variable cost can be adjusted in accordance with the changes in sales. The high fixed cost can hamper the business in difficult economic conditions such as currency crisis. Moreover, persistent high fixed expenses can render an organization to be out of business. Therefore, taking up cost reduction measures is a necessary solution for solving the problem of FedEx in the Chinese competitive market.

In order to implement the above recommendations, FedEx needs to employ part-time employees when needed,