Federal Express

1
Federal Express

• Amanjit Kaur
• Melanie Kwan
• Lalaine Lagsob
• Phoebe Lee
• Jennifer Low

2
Background

• Founded by Frederick W. Smith
• Original concept at Yale
• Early beginnings
• 1971 first incorporation

3
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

4
FedEx Corporation

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

5
FedEx Corporation

• 1998 Original name of FDX corporation
• January 2000 Change name to FedEx Corporation

6
Milestones

• 1975 First showed profits
• 1977 Deregulation for air cargo allowed use of
  larger aircraft
• 1984 Services to Europe and Asia began

7
Goal

• Operate independently and compete collectively

8
Current Statistics

• 2003 Revenue of 22.5 billion
• 44,000 Location
• 185,000 Employees

9
Suppliers

• Supply chain management

10
Competition

• United Parcel Service Net Income
• DHL
• United States Postal Service

11
Customers

• Small businesses
• Shoppers
• Meeting customers expectations through IT

12
Use of IT/IS

• FedEx Insight
• FedEx Wireless Solutions
• FedEx Global Solutions
• Smart Tags from FedEx

13
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 FedExs business
• Exceptions
• Highly unionized workforce can have more power if
  protected by their unions and labor contracts

14
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

15
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

16
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

17
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 whos 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

18
Opportunities

• Top Employer
• Strong Commitment
• IT as culture

19
Key Strategies

• People-Service-Profit
• COSMOS
• IT/IS

20
Company Strengths

• Transportation Logistics
• World-class logistic services
• Business Logistics Services Division

21
Company Weaknesses

• Web-based interface
• -Design/layout of software
• -Lack of a single systems/data transfer standard
• -Difficulties filling out online air bills

22
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