Federal Express
Amanjit Kaur
Melanie Kwan
Lalaine Lagsob
Phoebe Lee
Jennifer Low
Background
Founded by Frederick W. Smith
Original concept at Yale
Early beginnings
1971 first incorporation
Yesterday and Today
April 17, 1973 – First day of Operations
– 186 packages
– 25 cities
Today
– 210 countries
Global network
– Asia-Pacific
– Canada
– Europe, Middle East, Africa
– Latin America-Caribbean
FedEx Corporation
Subsidiaries
– FedEx Express
– FedEx Ground
– FedEx Freight
– FedEx Custom Critical
– FedEx Trade Networks
– FedEx Services
FedEx Corporation
1998 – Original name of FDX corporation
January 2000 – Change name to FedEx
Corporation
Milestones
1975 – First showed profits
1977 –Deregulation for air cargo allowed
use of larger aircraft
1984 – Services to Europe and Asia began
Goal
Operate independently and compete
collectively
Current Statistics
2003 Revenue of $22.5 billion
44,000+ Location
185,000+ Employees
Suppliers
Supply chain management
Competition
United Parcel Service: Net Income
DHL
United States Postal Service
Customers
Small businesses
Shoppers
Meeting customers’ expectations through IT
Use of IT/IS
FedEx Insight
FedEx Wireless Solutions
FedEx Global Solutions
Smart Tags from FedEx
Bargaining Power of Suppliers
Fairly low for FedEx
– Suppliers have to face their own competitions
e.g. Suppliers of delivery vehicles have to compete
in order to gain FedEx’s business
Exceptions:
– Highly unionized workforce can have more
power if protected by their unions and labor
contracts
Threat of New Entrants
Large capital investments are required for
entering this industry
– Air fleets, warehouses, distribution centers,
labor force
Customers are difficult to attract because of
switching costs
– Online tracking, online sales, and shipping
system
Bargaining Power of Buyers
Can vary greatly between new and existing
customers
– New customers initially have power
Shop around for low prices; demand a certain level
of service
Existing customers have decreased power
– High switching costs made them unwilling to
change
Threat of Substitutes
Currently low, but subject to change
E-mail
– Less likely to be used to transmit sensetive info
Regular mail (e.g. US Postal Service)
– Still have issues with security, speed, and
reliability
Competition Between FedEx
and its Rivals
Is extremely intense
• New business strategy
e.g.) UPS who is specialized in ground shipping has
came up with UPS Overnight
e.g.) FedEx who’s main focus is in the business
segment is planning to enter the residential market
None of the companies have a clear
domination over one another
Opportunities
Top Employer
Strong Commitment
IT as culture
Key Strategies
People-Service-Profit
COSMOS
IT/IS
Company Strengths
Transportation & Logistics
World-class logistic services
Business Logistics Services Division
Company Weaknesses
Web-based interface
-Design/layout of software
-Lack of a single systems/data transfer standard
-Difficulties filling out online air bills
Company Strengths
Virtual Merchandising
Gives business opportunity to outsource a lot more of its logistics
operations irrespective of size or nature of its business.
Electronic Commerce
Electronic order taking and customer interaction drove costs down.
Integrated Supply Chain Solution
Allowed firms to concentrate on their core business, be it in
manufacturing or service excellence