zed in Exhibit 1, which may be found on the following page. As the data presented in Exhibit 1 indicate, the package express business remains the 800 pound gorilla at FedEx Corporation.
The company's profitability in 2003 and 2003 is summarized in Exhibit 2, which may be found on the following page. As the data presented in Exhibit 2 indicate, FedEx Corporation is a highly profitable company. While the gross profit margin remained relatively unchanged from 2002 to 2003, all other profit measures, especially the net profit margin and the return on equity percentage recorded year-to-year improvements.
Exhibit 1 ù FedEx Corporation 2003 Revenues: Distribution by Service
Source: FedEx Corporation Operations, 2004
Exhibit 2 ù FedEx Corporation 2003 Profitability 2003 & 2002
Source: FedEx Corporation Annual Financials, 2004
The external analysis is concerned primarily with the social, political, economic, and technological factors that confront the FedEx Corporation. The external analysis also deals with the competitive situation in the industry.
Prices for express transportation are determined largely in response to economic factors. Demand, in economic theory, is defined as the quantity of some product ù either a good or a service ù that is either needed or desired by one or more consumers ù an individual person, a single firm, or a group of individuals or firms (Mastrianna & Hailstones, 1995). Individual demand is the quantity of a product required by a single entity, while market demand is the sum total of the requirements of all consumers for a product. Overall, demand is defined as a schedule of the total quantities of a good or service that purchasers will buy at different prices at a given time. Air express transportation is a product that is subject to demand by consumers.
A high price elasticity of demand means that the proportionate change in demand is greater than the proportionate change in pr...