Federal ExpressFederal Express

Amanjit KaurMelanie KwanLalaine Lagsob

Phoebe LeeJennifer Low

BackgroundBackground

Founded by Frederick W. Smith

Original concept at Yale

Early beginnings

1971 first incorporation

Yesterday and TodayYesterday and TodayApril 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 CorporationFedEx Corporation

Subsidiaries– FedEx Express– FedEx Ground– FedEx Freight– FedEx Custom Critical– FedEx Trade Networks– FedEx Services

FedEx CorporationFedEx Corporation

1998 – Original name of FDX corporation

January 2000 – Change name to FedEx Corporation

MilestonesMilestones

1975 – First showed profits1977 –Deregulation for air cargo allowed

use of larger aircraft1984 – Services to Europe and Asia began

GoalGoal

Operate independently and compete collectively

Current StatisticsCurrent Statistics

2003 Revenue of $22.5 billion

44,000+ Location

185,000+ Employees

SuppliersSuppliers

Supply chain management

CompetitionCompetition

United Parcel Service: Net Income

DHL

United States Postal Service

CustomersCustomers

Small businesses

Shoppers

Meeting customers’ expectations through IT

Use of IT/ISUse of IT/IS

FedEx Insight

FedEx Wireless Solutions

FedEx Global Solutions

Smart Tags from FedEx

Bargaining Power of SuppliersBargaining Power of SuppliersFairly 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 EntrantsThreat of New EntrantsLarge 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 BuyersBargaining Power of BuyersCan 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 SubstitutesThreat 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 Competition Between FedEx and its Rivalsand 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

OpportunitiesOpportunities

Top Employer

Strong Commitment

IT as culture

Key StrategiesKey Strategies

People-Service-Profit

COSMOS

IT/IS

Company StrengthsCompany StrengthsTransportation & Logistics

World-class logistic services

Business Logistics Services Division

Company WeaknessesCompany Weaknesses

Web-based interface

-Design/layout of software

-Lack of a single systems/data transfer standard

-Difficulties filling out online air bills

Company StrengthsCompany Strengths

Virtual MerchandisingGives business opportunity to outsource a lot more of its logistics

operations irrespective of size or nature of its business.

Electronic CommerceElectronic order taking and customer interaction drove costs down.

Integrated Supply Chain SolutionAllowed firms to concentrate on their core business, be it in

manufacturing or service excellence