Rodrigo Loya Maria A. Silva

Colin GreenSandra Vargas Melanie RiveraJhael De Alba

Welcome to

History

Founded in 1971 by Frederick W. Smith. First Investment 1980’s:

– FedEx reached its maturing stage.– First US company to reach $1 billion in

revenues.

FedEx handles 3.3 million packages

General Environment

Global Provider of: - Transportation - e-commerce - supply chain management FedEx an Innovator company: - Overnight package and letter delivery - 10:30 am next day delivery

- Saturday delivery service

• Cost effective.• Alternative for small packages.• Distance and time are wider.

• When customers need it now.• 24hrs. 7 days a week, including nights,

weekends and holidays.

• Most familiar service.• Handles millions of shipments.• Delivers in 1 to 2 business days.

• Heavy weight shipments.• Less than truck load (LTL) freight.• 600 miles next day delivery.• 1,600+ miles second day delivery.

• Custom brokerage.• Electronic custom clearance.• Speed shipments across the border.

External Environment

Household name Competitive environment Global Presence IT advances Strong market position in air

freight

Competitive Environment

World wide presence Dominates ground services domestically High market share in the US Acquired full ownership of Mail Boxes, etc. Intense competition with FedEx

Competitive Environment

Recent acquire of ground services Specialize in air freight deliveries Global presence Other mergers, the effects.

Competitive Environment

Largest customer, but strong competitor

Attempt injunction against the alliance

Internal Evaluation

Management Uses strategic management in

planning and meeting goals

Strong in its corporate structure with low absenteeism and low turn over rates at the corporate level, by paying well and showing respect

2002 hours were reduced, with wages and benefits increasing but with profit and incentive sharing plans reduced

Marketing Major advantage by being a

household name

Able to respond to a changing consumer environment by operating independently completely and collectively

Internal Evaluation

Finance/Accounting

Fairly strong financial position

Year 2002 Highlights include large free positive cash flows, 22% increased net income and a $.05 dividend declared on common stock.

Fairly weak in leveraging; incurred large amounts of debt for an expansion project.

Production/Operations

Industry leaders in Air Express

Handles well over 3 million packages daily.

Excellent ground crew & pilots

24 hour customer service

Internal Evaluation

Research & Development Very innovative R&D team. Six year expansion plan

– Estimated cost of over 1.8 Billion– Doubling package volume

capacity– 10 new distribution hubs & 23

expanded hubs– Relocation or expansion of up to

300 existing facilities– Expected completion in 2009

CIS Highly innovative software

user and designer. Very aware of competitors

programs and systems. Constant and up to date

system employee training.

SWOT Analysis

Strengths

– Household name– Product quality– Global expansion– Abreast in technology– Air fleet

Weaknesses

– Employee racial discrimination– Lack of ground transportation

force– Costly technology innovations– Judgment for late deliveries– Increased debt

SWOT Analysis

Opportunities

– Global business growth– Online consumer

services– Increase demand in

logistics– Alliance with USPS

Threats

– Foreign competition entry into home

– Economic standing – Online competitive

advantages of rivals– Gain in competition service

costs

Strategy Formulation

Strategy 1– Online subsidiary with a consumer retailer

Creating a collaborative union utilizing technological strengths and online consumer industry growth to provide full consumer opportunities through the convenience of e-commerce

Multiple strengths, opportunities and positive industry strength

(SWOT Analysis, Space Matrix)

Strategy Formulation

Strategy 2

Last minute discount air travel tickets available to the public in order to gain additional profits from the already existing and operating transportation system in use

Major positive strength and opportunity

(SWOT Analysis, Space Matrix)

Travel

Strategy Formulation

Strategy 3

Enhancing and providing existing postal services formally provided by USPS

Strong opportunity and high competitive advantage

(SWOT Analysis, Space Matrix)

Mail

Evaluation of Alternatives

Forward Integration– Online Subsidiary With Consumer Retailer

Larger companies become more profitable– Ex: Wal-Mart, Target

Company is equipped and able to expand in this area– Leadership, technology, and equipment

Use strengths and opportunities as mentioned in analysis– Online consumer growth is expanding– Company is abreast in technology

Evaluation of Alternatives

Horizontal Diversification

Currently operates one of the largest airlines in the world– Has fleet of over 380 jets– Jets have state of the art instrumentation

Already employs more than 4200 skilled pilots Has some of the best air travel technology and equipment Highly capable to execute

Travel

Evaluation of Alternatives

Concentric Diversification/Horizontal Integration

– Opportunity from SWOT analysis– Existing contract with USPS– Future services to be rendered to private outside provider – Capable of providing additional USPS services

Mail

Evaluation of Alternatives

Counteracting competitive strategic moves

USPS recognition of lack of resources

Mail

Strategy Implementation

Strategy 3:– Concentric Diversification/Horizontal Integration

– Additional personnel– Insurance– Training

employee evaluations

Mail

Strategy Implementation

Service sites by way of franchise – UPS and Mail Boxes, etc.

Ample resources to accommodate USPS needs Expansion project can handle additional/new inflows

– Extra packages and mail

Mail

Strategy Implementation

Advertising TV Internet Sporting events/arenas New labeling on boxes

Mail

Pop Quiz

a. c.

b. d.

…and remember to mail by Mail