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The Corporate Strategy Assignment on FedEx Corporation

Executive Summary
The company Federal Express Corporation was started in 1973 as a transportation company exploded their growth through acquiring their own infrastructures such as plane, truc s, warehouses etc! They expanded their mar et share and operations through acquisitions and apposite strategic "isions! They are operating all range of transportations o"er air, sea, ground and rails! The FedEx corporation use #T for organisational and ser"ice excellences, and also used for information transfer, sharing and management! This helped the organisation to integrate their supply chain as well as "alue chain operations! The a$o"e said strategies and practices are emerged from the "ision of %r! Fred &mith, the Founder, 'resident and CE( of FedEx corporation and came into reality through his commitment! Currently, the FedEx Corporation $ecame one of the world)s largest transportation and *ogistics Company that pro"ide time ensured deli"ery of goods and pac ets worldwide! This report analysed the in"ention and growth of the company and its transformation from the transportation company to #T and internet ena$led transportation and *ogistics Company! This report explained the "ision and "isionary $ehind the success of the organisation, the transportation and logistics infrastructures, integrated "alue+chain and supply chains, "irtual information infrastructures! This further explained the mergers and acquisitions in the FedEx and its ad"antages, and the report ends with the analysis of "arious e"ents leading up to the ,anuary -... reorganisation! This report met all the requirements!

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Table of Contents

Executive Summary.......................................................................................1
1 Introduction.....................................................................................................3 2 The Express Transportation and Logistic Industry....................................3 2.1 The Strategic Vision and Visionary Leadership behind FedEx.............................4 2.2 Transportation and Logistic Infrastructure.............................................................6 2. Virtua! Infor"ation Infrastructure in FedEx.........................................................# 3 Branding and Business Structure..............................................................10 .1 $ergers and %c&uisitions.....................................................................................1' .2 (enefits and Li"itations of $ergers and %c&uisitions .......................................1' . %c&uisition of )a!iber Syste"s by FedEx )orporation.......................................12 4 Events Leading up to the January 2000 eorgani!ation..........................13 " #onc$usion....................................................................................................14 %. e&erence....................................................................................................14

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Introduction

FedEx *Federa! Express )orporation+ is a ,ery successfu! supp!y chain "anage"ent *S)$+ and g!oba! !ogistic co"pany operate o,er 22' countries and territories *-eb.'1+. The co"pany initiated in 1#. / and today/ it had transfor"ed itse!f as the 0or!d1s !argest express transportation co"pany through its g!oba! air and ground net0or2 operations. The co"pany is dedicated to pro,ide fast and re!iab!e operations to its custo"ers *-eb.'1+. The co"pany had spent profound!y on IT *Infor"ation Techno!ogy+ infrastructures to pro,ide accurate/ speedy/ re!iab!e and rea!3ti"e ser,ices to its custo"ers. The initiation of internet in 1##4/ opened "ore options to the co"pany for the integration of its ,arious !egacy syste"s to pro,ide enor"ous and efficient ser,ices a!! o,er its custo"er supp!y chain operations. %!ong 0ith a!! the "oney spent o,er the years on syste"s infrastructure/ the co"pany "ade 4S566 "i!!ion ac&uisition of )a!iber Syste"s/ Inc in 1##6/ to enhance the technica! capabi!ity and to "a2e the co"pany pioneer in e3 co""erce *Farhoo"and and 7g/ 2'''+. supp!y3chain operations. The co"petition in the industry 0as increased enor"ous!y/ and the co"pany fai!ed to "a2e co"petiti,e ad,antages fro" its 0e!! estab!ished technica! architectures and infrastructures. %s a resu!t/ the co"pany reorganised the operations of the group on 1# th 9anuary/ 2''' *Farhoo"and and 7g/ 2'''+. They integrated a!! the group operations and opened a sing!e access point for custo"ers to access the 0ho!e group. )urrent!y/ FedEx offers ti"e3definite/ door3to3door internationa! de!i,ery ser,ices 0ith "oney3bac2 guarantee and free proof of de!i,ery *-eb.'1+. 8o0e,er/ in spite of ha,ing a!! syste"s infrastructure capabi!ities/ the co"pany 0as strugg!ing to pro,ide efficient !ogistic and

The Express Transportation and Logistic Industry

FedEx estab!ished in 1#. as an air3ground express de!i,ery industry. They beco"e unbeatab!e in the o,ernight de!i,ery industry unti! 1#62. %s the co"petition in the industry increased/ the co"panies began to strea"!ine their strategies to cut do0n their operationa! cost. %s a resu!t/ they ha,e strengthened their !ogistic operations to reduce the !ength of the order cyc!e *Farhoo"and and 7g/ 2'''+.

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The expansion of the express transportation and the !ogistic industry 0as dri,en by three aspects/ such as the de,e!op"ents in IT and its app!ications to produce process effecti,eness/ business g!oba!isation and ,arying de"ands in the "ar2et for ser,ices 0ith "ore added ,a!ues *(uc2ho!d/ 2'''+ )urrent!y/ FedEx is the 0or!d1s !argest transportation co"pany pro,ides ti"e3definite/ door3to3door internationa! de!i,ery across 22' countries and territories. %s the co"petition in the sector increased/ the co"panies are started to concentrate on pricing/ custo"er seg"entation and &ua!ity of ser,ices. %s the pressure increased/ the co"pany had de,e!oped a strategy to get the cost !eadership in the "ar2et by reducing the costs *)rane/ et al!, 2'' +. )onse&uent!y/ they had focused on to ha,e 0e!!3"anaged !ogistic operations to cut do0n the cost through reducing the !ength of the order cyc!e *Farhoo"and and 7g/ 2'''+. The ad,ances in IT redefined the business processes/ and that increased the operationa! efficiency of the co"pany by increasing the capabi!ity to integrate and share the infor"ation in bet0een different depart"ents:operations 0ith in the organisationa! boundary *;ho/ et al!, 2''<+. This initiated the "o,e of !ogistic co"panies fro" "ere "anage"ent of transportation of goods to "ateria! "anage"ents. This inc!udes the inbound and outbound "ateria! f!o0s as 0e!! as the "o,e"ent of finished goods fro" production centre to retai!ers and custo"ers. %s a resu!t/ the !ogistic operations forced to inc!ude "ore ,a!ue added functions to contro! in,entory/ order processing/ purchasing/ production/ sa!es/ distribution and custo"ers *(orgen/ et al!, 2''.+. 8ence/ the initiation of IT integrates the physica! transportation of goods and the transfer and use of re!ated infor"ation 0ithin the organisation *Farhoo"and and 7g/ 2'''+. 2.1 The Strategic ision and isionary !eadership behind FedEx

The FedEx )orporation 0as estab!ished in 1#. as the express distribution co"pany by $r. Fred S"ith/ )hair"an/ =resident and )E> of the corporation. Fro" the initiation on0ards/ FedEx concentrated on the fast and re!iab!e next3day de!i,ery of ti"e3sensiti,e docu"ents and goods *)rane/ et al!, 2'' +. In ear!y days the success of the transportation and distribution business of FedEx 0as co"p!ete!y depended on the dedication of $r. S"ith/ and he be!ie,ed that assured fast next3day de!i,ery of ti"e3sensiti,e goods "ay bring "ore opportunities to the co"pany. The co"pany began to gro0 fro" 1#.6/ and ha,e beco"e pioneers in the transportation and !ogistics area. They 0on about 1#4

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a0ards for operationa! exce!!ence ti!! date. The basis of this success is the !ong3,ision/ strategy and !eadership of $r. S"ith/ the founder and )E> of the co"pany *Farhoo"and and 7g/ 2'''+. )urrent!y FedEx corporation consists of se,en independent units as sho0n in the be!o0 figure 1. Each unit represents ,arious areas of transportation industry and run autono"ous!y in order to pro,ide each and e,ery custo"ers 0ith best ser,ices co"p!ete!y fit into their needs *(uc2ho!d/ 2'''+. The corporate strategy pursued by the FedEx )orporation is /(perate independently, Compete collecti"ely0/ and the FedEx )orporation is pro,iding a!! financia! supports and strategic !eaderships *)rane/ et al!, 2'' +.

Figure 1" The Structure of FedEx )orporation Source" ?eference *(uc2ho!d/ 2'''+

The corporate strategy of the FedEx )orporation is to be !eader in the "ar2et and "a2e co"petiti,e ad,antages through cost !eaderships. For achie,ing this FedEx )orporation strengthen their supp!y chain and !ogistic operations by integrating and sharing ,a!uab!e infor"ation a"ong ,arious depart"ents:operations 0ith the use of IT. This reduced the order3to3pay"ent cyc!e ti"e and reduced the operationa! cost. The organisation insta!!ed 1''/''' co"puters in 1#6' and !aunched their -eb site in 1##4 for the increased custo"er interaction and support *Farhoo"and and 7g/ 2'''+.

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Figure 2" The )o"ponents of )orporate Strategy Source" ?eference *)hopra and $eind!/ 2''#+

The initiation of IT and internet to the co"pany has increased its responsi,e actions/ such as re!iabi!ity/ &uic2ness and re!iabi!ity as sho0n in the figure 2. This a!so brought differentiation of products in to custo"ers in ter"s of &ua!ity and uni&ueness *)hopra and $eind!/ 2''#+. The ,isionary behind the i"p!e"entation of IT and internet to the organisation 0as $r. S"ith/ and that brought increased co"petiti,e ad,antages to the organisation through cost3!eaderships/ fast responsi,eness and increased product differentiations. 8ence/ the core business:corporate strategy of FedEx )orporation is /to use #T to help customers and ta e ad"antage of international mar et0 *Farhoo"and and 7g/ 2'''+. This pro,ide 4S51' bi!!ion turno,er by 1##6 and spending 4S51 bi!!ion for IT infrastructure annua!!y and ho!ding around <''' IT professiona!s. 2.2 Transportation and !ogistic #nfrastructure

%t the ear!y days the ,ision of $r. Fred S"ith insisted that the co"pany shou!d obtain their o0n transportation f!eet/ instead of sub3contracting the transfer of goods to third parties and retai!ing space in other co""ercia! air!ines. -ith this ,ision co"pany started to obtain "ore f!ights and truc2s as an expansion strategy. They ai"ed to pro,ide a!! sort of transportation and !ogistic ser,ices through sea/ air/ rai! and roads/ as part of their supp!y chain "anage"ent a!ong 0ith ste,edoring/ 0arehousing and hand!ing. The co"pany a!so offered ,arious ,a!ue added ser,ices a!ong 0ith this such as !abe!!ing/ pac2ing/ asse"b!ing/ co!!ection and distribution etc. *-eb.'2+ as part of their ,a!ue chain processes. The success of this operations are 0e!! depended on appropriate strategic p!anning/ "anage"ent and organisationa! ser,ices *;uo/ et al!, 2''<+.
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4nder this strategy the gro0th of the co"pany 0as tre"endous and they achie,ed 4S51 bi!!ion re,enue first in 4S 0ith in ten years 0ithout any business "ergers and ac&uisitions. This success has been acco"p!ished through the effecti,e "anage"ent of their ,a!ue chains and supp!y chains and proper synchronisation in bet0een these as sho0n in the figure and 4 *Fe!!er/ et al!, 2''6+.

Figure $" )o"parison of Va!ue chain 0ith Supp!y )hain Source" ?eference *Fe!!er/ et al!, 2''6+

The ,a!ue chain p!aces the orders or re&uest fro" the custo"ers and the responsi,e action is ta2en p!ace through the supp!y chain as distribution. In the case of FedEx/ the ,a!ue chain starts fro" the pic23up of pac2ets fro" any !ocations at any ti"e 0ith a "oney bac2 guarantee of ti"e!y de!i,ery. These create "ore ,a!ue to the custo"ers. The pac2et co!!ected is transported to a centra! !ocation and stored their on destination 0ise unti! they are co!!ected and dispatched by p!anes or truc2s *)rane/ et al!, 2'' +. The ti"e!y de!i,ery of these pac2ets is considered to be the ut"ost ,a!ue for"ation acti,ity of FedEx. The pi!ots of the p!ane/ dri,ers of the truc2 and a!! e"p!oyees of FedEx are in,o!,ed in these ,a!ue creation acti,ities by de!i,ering the right pac2et at the right ti"e at the right !ocations. The satisfaction of each custo"er 0i!! add "ore ,a!ue to the organisation *)han/ 2''.+. The "ar2eting/ sa!es and custo"er ser,ices are "anaged 0ith the use of IT. The custo"ers are pro,ided 0ith interacti,e faci!ity 0ith the use of IT to trac2 and trace their orders and ship"ent increased the ,a!ue of the ser,ice pro,ided by the co"pany *Farhoo"and and 7g/ 2'''+. %!! pri"ary acti,ities are running 0ith the support of support acti,ities as sho0n in the figure 4. The support acti,ities are@ fir" infrastructure/ 8u"an ?esources *8?+ The "anage"ent/ Techno!ogy and de,e!op"ent and procure"ents *=orter/ 1#6<+.

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infrastructure of the fir" refers to the truc2s/ p!anes/ bui!dings etc. Techno!ogy refers to the IT acti,ities that uses for infor"ation sharing and "anage"ent/ such as order trac2ing/ tracing etc. 8? "anage"ent in,o!,es the "anage"ent of e"p!oyees in,o!,ed in transportation and !ogistics operations/ and fina!!y procure"ents in,o!,e a!! acti,ities that re!ated to the !ogistics and "o,e"ent of goods and ser,ices fro" production to distribution *;uo/ et al!, 2''<+ *Tay!or/ 2''4+. 2'''+. In FedEx/ a!! these acti,ities are synchronised together to produce "axi"u" "argina! benefits *Farhoo"and and 7g/

Figure %" %!ign"ent of Va!ue )hain 0ith Supp!y )hain Source" Ae,e!oped fro" ?eference *(orgen/ et al!, 2''.+ and *=orter/ 1#6<+

The FedEx enhanced their !ogistics operations 0ith !ogistics "anage"ent and "u!tip!e3 c!ient 0arehousing/ is considered as the first ,a!ue added ser,ice of FedEx outside the sheer "ateria! transportation. This fastened the despatch of goods and parts as per orders to ensure the sa"e day de!i,ery *?ec2!ies/ 2''1+ *Farhoo"and and 7g/ 2'''+. The gro0th of FedEx )orporation 0as i""ense during !ast fe0 years due to the deregu!ations of air!ine industry by go,ern"ent/ truc2ing industry and trade !ibera!isations in %sia =acific/ techno!ogica! ad,ance"ents and app!ications inno,ations/ and fina!!y due to the reduction in operationa! cost due to the rising inf!ation and 0or!d co"petencies *Farhoo"and and 7g/ 2'''+. )urrent!y/ the co"pany is operating in 21' countries/ 0ith 4/''' drop3off !ocations. The business is 0e!! "anaged and beco"e first in the 0or!d 0ith the infrastructures of 646

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aircrafts/ around 6'/''' ,ehic!es/ 1' "i!!ion s&. feet of 0arehouse around the g!ob and "anaging 2''/''' e"p!oyees 0ith a "ar2et share of 'B *Farhoo"and and 7g/ 2'''+. 2.$ irtual #nformation #nfrastructure in FedEx

The "ain ai" of the corporate strategy of FedEx )orporation 0as to uti!ise the i""ense faci!ities and functions of IT to pro,ide the ad,antages of g!oba! "ar2et to the custo"ers. -ith the out!oo2 of beco"ing a techno!ogy co"pany/ the FedEx insta!!ed a centra!ised co"puter syste" 2no0n as )>S$>S *)usto"er/ >perations/ Ser,ice/ $aster >n3!ine Syste"+ in 1#.#/ at their $e"phis head&uarters/ to trac2 a!! pac2ages that ha,e hand!ed by the co"pany. This syste" introduced and p!aced bar3codes to each and e,ery pac2age at the ti"e of their pic23ups and it 0as scanned these bar3codes at e,ery steps of the de!i,ery. This faci!itated the easy trac2ing of the pac2ages *Farhoo"and and 7g/ 2'''+. In 1#64/ the corporation introduced a ne0 syste" ca!!ed =o0erShip progra""e ai"ed to pro,ide "ore interacti,e custo"er ser,ices. This pro,ided the faci!ity to store fre&uent!y used addresses/ "a2e on!ine re&uests fro pac2age pic23ups/ !abe! printing/ pac2age trac2ing and etc. The introduction of internet and EAI *E!ectronic Aata Interchange+ redefined the )>S$>S syste"/ 0hich pro,ided "ore persona!ised interaction 0ith the custo"ers on a one3to3one basis. This he!ped FedEx to trac2 bac2 on their supp!y chain acti,ities to identify the points at 0hich the can pro,ide 0ith ,arious re!ated "anage"ent ser,ices *Farhoo"and and 7g/ 2'''+. In 1##6/ FedEx rep!aced their des2top co"puters 0ith net0or2ed co"puters under the proCect D?IA *D!oba! ?esources for Infor"ation Aistribution+ for i"pro,ing the infor"ation efficiency. %s the infor"ation beco"e crucia! to the business/ FedEx setup 0or!d1s !argest on!ine c!ient ser,er net0or2 on a rea!3ti"e basis and ha,e insta!!ed ,arious syste"s such as )>S$>S S&uared/ FedEx %pp!ication =rogra""ing Interface *%=I+ etc./ to trac2 and "anage the infor"ation f!o0 effecti,e!y. The rea!3ti"e and accurate infor"ation 0i!! he!p the organisation to reduce fai!ures in the business *)rane/ et al!, 2'' +. The co"pany used these ne0 techno!ogica! faci!ities for the effecti,e integration/ distribution and "anage"ent of infor"ation 0ith in the organisation for the efficient "anage"ent of their !ogistics operations and custo"er ser,ices/ 0hich are seen as their core acti,ities. The co"pany a!so used these techno!ogica! re,o!utions to connect 0ith

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their supp!iers/ corporate partners and custo"ers. The IT infrastructure in the co"pany he!ped to i"pro,e/ tighten and synchronise their supp!y3chain acti,ities and that brought cost3!eaderships and co"petiti,e ad,antages to the co"pany *)rane/ et al!, 2'' +.

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Branding and Business Structure


&ergers and Ac'uisitions

The ter"s E"erger1 and Eac&uisition1 are s!ight!y different in their business processes/ though it is co""on!y used. In the case of Eac&uisition1/ a co"pany buys another co"pany and estab!ishes their o0nerships. In this case the buyer ta2es o,er a!! businesses of the target co"pany by ceasing its existence and the stoc2 of the buyers continue to be traded *Ae=a"phi!is/ 2''#+. )onse&uent!y/ in the case of E"erger1/ t0o co"panies co"e into contract to go ahead as a ne0 sing!e co"pany/ instead of o0ned and function separate!y. In this case the stoc2s of both co"panies 0ere gi,en up and the stoc2s of ne0 co"panies are issues in p!ace *-eb.' +. $.2 (enefits and !imitations of &ergers and Ac'uisitions

The mergers and ac'uisitions can bring various benefits to the organisations) such as cost effectiveness and leaderships) increase revenue through mar*et gain and also can generate tax gain) are as follo+s" ,-eb..%/ *Ae=a"phi!is/ 2''#+. 1reater 2alue 1eneration3 The co"panies undergo $erges and %c&uisitions for generating "ore ,a!ue than the separate co"panies. The resu!tant Coint co"pany of the "ergers or ac&uisitions expect "ore share ,a!ues than the su" of the ,a!ues of the shares of t0o co"panies that ta2e part in "ergers or ac&uisitions *-eb.' +. #f a company is in a declined state due to various issues can undergo ac'uisition) if there is no other options to overcome the issues. Apparently) a company +ith strong mar*et shares can undergo merger deals +ith a +ea* company to get increased competitiveness and cost effectiveness in longer run. As a result of mergers or ac'uisitions) the target company overcome their difficulties and also +ill build up more mar*et share ,-eb..%/. 1aining Cost Efficiency: The "erges and ac&uisitions can produce cost effecti,eness/ as they can i"pro,e the econo"ic gro0th of the Coint co"pany. The resu!tant Coint co"pany can increase the production into a !arger sca!e 0i!! reduce the operationa! cost and in3turn "a2e cost effecti,eness *-eb.'4+
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The $ergers and %c&uisitions a!!o0 the co"panies to enter into ne0 "ar2ets/ and a!so to introduce ne0 products and ser,ices. This a!so "ay bring other ad"inistrati,e benefits to the organisation. The other benefits that identified are@ *-eb.'<+ )an obtain i"pro,ed "ar2et share )an generate Tax gain/ can increase re,enue and 0i!! !o0er operationa! cost -i!! increase co"petiti,eness Industry 2no0 ho0 and positioning Financia! !e,erage I"pro,ed profitabi!ity

!imitations" There are ,arious !i"itations for "ergers and ac&uisitions that "ay !ead to the fai!ure of the "ission are as fo!!o0s@ *-eb.'<+ Inappropriate Leadership@ This "ay affect the decision "a2ing processes of the resu!tant co"pany. Effecti,e co""unication is re&uired in bet0een the "anagers and e"p!oyees of both co"panies to boost the !ogistics and transportation operations. The functions of the ne0 co"pany shou!d be identified and incorporated proper!y for ensuring the ti"e!y de!i,ery of the ti"e3sensiti,e pac2ages. Fai!ure to this "ay !ead to the fai!ure of the "ission (ad $anage"ent@ The success of any co"pany is their efficient "anage"ent. %ppropriate !ogistic strategy and po!icies are re&uired to de,e!op for the effecti,e "anage"ent of the !ogistics and transportation operations. The i"proper o,eresti"ation about the "ar2et/ financia! and operationa! ,a!ues of the ac&uired co"pany "ay !ead to the fai!ure of the "ission as 0e!! as the operation of the co"pany. For getting the co"p!ete benefits of $F%/ the organiGations shou!d de,e!op appropriate strategies and po!icies to o,erco"e the !i"itations exp!ained abo,e. This "ay !ead to the successfu! transportation and !ogistics operations.

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$.$

Ac'uisition of Caliber Systems by FedEx Corporation

The FedEx )orporation 0as 0e!! running for the first 21 years fro" its initiation 0it the na"e Federa! Express )orporation. In 1#66/ the =arts (an2 Coined 0it FedEx as a subsidiary co"pany 0ith the ne0 na"e (usiness Logistics Ser,ices *(LS+. They got s2i!!s in the high3tech high3,a!ues industries transportation. The !ogistics business 0as not generating profitab!e inco"e at the beginning/ and as a resu!t/ the co"pany changed their na"e to FedEx !ogistics. Later again they "odified the na"e as FedEx Logistics and E!ectronic )o""erce *FLE)+ to attract "ore custo"ers and businesses *Farhoo"and and 7g/ 2'''+. %s the business gro0n/ the co"pany 0as !oo2ing ,arious 0ays to increase their resources and infrastructure. In 1##6/ they undergone ac&uisition 0ith )a!iber Syste"s/ and that created fi,e subsidiary co"panies/ such as Federa! Express/ ?=S/ ?oberts Express/ Vi2ing Freight and FAH Logistics. %"ong these subsidiaries/ !ast four co"panies are fro" )a!iber Syste"s. %!! these subsidiaries are "anaged indi,idua!!y 0ith their o0n responsibi!ities on accounts and co"peted co!!ecti,e!y. The ac&uisition of )a!iber syste" brought success to FedEx )orporation due to the fo!!o0ing reasons/ such as@ *Farhoo"and and 7g/ 2'''+ The ac&uisition brought ne0 techno!ogica! 2no03ho0/ expertise/ and "ore custo"ers and "ar2et share to FedEx. The )a!iber brought high s2i!! in the "o,e"ent of ra03"ateria!s/ p!ates and bars of stee!s and "anaging 0or2 in progress/ rather than the "o,e"ent of ti"e sensiti,e s"a!! pac2ets. The ac&uisition brought co"posite and 0ide ranged !ogistics operation channe!s focused on high3priced goods businesses. This ga,e added ad,antages to FedEx *FLE)+ by pro,iding a fu!! rage of supp!y chain so!utions. %c&uisition brought ne0 !ogistics syste"s/ app!ications and infrastructures as part of the !ogistics "anage"ent. The ac&uisition brought fi,e separate co"panies that 0or2 independent!y and a!so to co"pete together against their co"petitors/ 0ith a sing!e point of contacts. These co"panies are de,ised 0ith separate accountabi!ity and "ar2eting and sa!es tea"s to expand the business.

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The ac&uisition reinforced the dedication of FedEx )orporation to beco"e a successfu! fu!!3ranged transportation and !ogistics So!ution )o"pany/ 0ho is capab!e of de!i,er ti"e3sensiti,e "ateria!s o,ernight.

Fina!!y/ the ac&uisition a!so he!ped to de,e!op a FedEx (rand in the "ar2et and that increased their "ar2et share dra"atica!!y.

The ac&uisition brought a fu!!3f!edged supp!y chain/ of 0hich the front3end 0as "anaged by the one co"pany FedEx and the bac23end 0as "anaged by )a!iber syste"s. (y considering a!! these factors/ it is c!ear that the ac&uisition of )a!iber Syste"s by the FedEx )orporation *FLE) at that ti"e+ 0as a great success.

Events Leading up to the January 2000

eorgani!ation

The co"pany 0as perfor"ed ,ery 0e!! in the financia! year ending on 1 st "ay 1###/ and sho0n an increase of 26 percent fro" the pre,ious year and produced and earning of . percent. This raised the net inco"e to 4S5221"i!!ion sho0s ' percent increase. 8o0e,er/ in the next &uarter of the financia! year ending on 1 st %ugust/ 1### sho0s a dec!ine in the gro0th of the co"pany and its net inco"e due to the increased fue! prices. This a!so 0e!! ref!ected in the earnings of transportation business/ sho0ed negati,e i"pacts. In the next &uarter year ending on 'th 7o,e"ber/ 1###/ the co"pany reported that the operating inco"e 0as put do0n by 1' percent and conse&uent!y the net inco"e a!so 0as reduced by 6 percent. The continued rises in the fue! prises restricted the co"pany fro" achie,ing the !e,e! e&ua! to that of 4S do"estic gro0th. 8o0e,er/ the ?oberts Express/ Vi2ing Freight/ FAH Logistics and the )aribbean Transportation ser,ices produced an increase of 2. percent in re,enue and 12 percent in operating inco"e in the second &uarter. %s due to the continued sustained increase of the fue! price/ the co"pany has foreseen a do0n in the operating inco"e by near!y 4S51<' "i!!ion at the end of the year 1st "ay/ 2'''. These prope!!ed the organisation to re3design their corporate strategies to cope 0ith the current trends in the !ogistics and express transportation "ar2ets. %s a resu!t/ FedEx 0as decided to grab the enor"ous opportunities and faci!ities that pro,ided by the !o03cost internet techno!ogy. The i"p!e"entation of internet faci!ities cut do0n the geographica! barriers and a!so reduced the i"portance of the physica! existence of the co"pany. This doub!ed the opportunities of the FedEx and they ha,e

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used the internet faci!ities for the radica! re3design of their supp!y chain acti,ities. The pri"e concept of the ne0 strategy 0as to use internet and IT faci!ities for pro,iding "axi"u" satisfaction to the custo"ers and a!!o0 the" to connect g!oba!!y. This reduced the i"portance of 0arehousing a product/ as the custo"ers are !east bothered 0hen they satisfied 0ith the ser,ice. %s a resu!t the supp!y3chain acti,ities 0ere got 0e!! integrated 0ith the use of internet. The internet brought i""ense opportunities of e3tai!ing and e3co""erce/ and the co"pany expected to reach 4S5. bi!!ion in 2''' 0as predicted to reach 4S5 2. bi!!ion by 2''2 through business3to3business *(2(+/ e3co""erce and e3tai!ing. This brought a tre"endous exp!osion of opportunities to the co"pany !i2e FedEx and that ref!ected in their future gro0th.

"

#onc$usion

The FedEx )orporation 0as initiated by $r. Fred S"ith/ the =resident and )E> of the organisation in 1#. . The initia! gro0th 0as s!o0/ ho0e,er/ it gain its "o"entu" in 1#.6. The co"pany 0as ai"ed to ensure de!i,ery of ti"e3sensiti,e goods and pac2ages around the g!ob. The gro0th of the co"pany 0as tre"endous under the ,ision and !eadership of $r. S"ith. They integrated a!! their operations and infor"ation sharing 0ith the use of IT/ and a!so used IT for operationa! and ser,ice exce!!ence. )urrent!y/ the co"pany beco"e the !argest transportation and !ogistics $anage"ent )o"pany in the 0or!d. This report ana!ysed ,arious issues re!ated to the strategic ,ision/ transportation and !ogistics infrastructure/ techno!ogy infrastructure/ ,a!ue3chain and supp!y chain/ $F% of FedEx and ,arious e,ents !eading up to the 9anuary 2''' reorganisation/ as per the specification of the assign"ent &uestions.

%.

e&erence

(orgen/ E./ Areyer/ 8 *Ar+./ 8ynne/ 8./ Schea/ ;.>./ *2''.+@ IIntegrated Logistics and Va!ue )hain $anage"ent *% ne0 "ode! approach to ,a!ue chains+J/ The #nstitute for #ndustrial %anagement, the department for Economics and *ogistics, Trondheim, 4orway (uc2ho!d/ (./ *2'''+@ I$erging e3)o""erce and the Supp!y )hainJ/ FedEx Corporation + 5riefing at 6nnual 47#6 Conference )han/ 9.>./ *2''.+@ I?ea!3Ti"e Va!ue )hain $anage"entJ/ Communications of the ##%6, 2olume 7 #ssue 3 )hopra/ S./ and $eind!/ =./ *2''#+@ /&upply Chain %anagement3 &trategy, 'lanning, and (peration0, 4th Edition/ =rentice 8a!!/ IS(7@ '1 1. '426
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)rane/ (./ Landthron/ (./ $iri/ (./ ?e!ph/ 9./ SancheG/ )./ and Vernero,a. %./ *2'' +@ IFedEx )orporation@ Strategic $anage"ent =roCectJ/ &an ,ose Consulting 1roup Ae=a"phi!is/ A./ *2''#+@ I4nderstanding $ergers/ %c&uisitions/ and >ther )orporate ?estructuring Ter"ino!ogyJ/ 8nol 5ET6+a unit of nowledge! Farhoo"and/ %.F./ and 7g/ =./ *2'''+@ IFedEx )orporation@ Structura! Transfor"ation through e3businessJ/ 9ni"ersity of :ong 8ong Fe!!er/ %./ Shun2/ A*Ar+./ and )a!!ar"an/ T*Ar+./ *2''6+@ IVa!ue )hains Versus Supp!y )hainsJ/ 5'Trends ;ho/ )./ %ruan/ S.8./ TCitrahardCa/ )./ and 7arayanas0a"y/ ?./ *2''<+@ I%ir %sia K Strategic IT Initiati,eJ/ Faculty of Economics and Commerce, 9ni"ersity of %el$ourne ;uo/ S./ Lu/ S./ and Aic2erson/ 9./ *2''<+@ IThe case study of =L@ FedEx Supp!y )hain So!utionJ/ FedEx Corporation =orter/ $.E. *1#6<+. /Competiti"e &trategy3 Creating and &ustaining &uperior 'erformance0, 7e0 Lor2@ The Free =ress. ?ec2!ies/ A./ *2''1+@ IThe Va!ue )hainJ/ ;ec lies %anagement 'ro<ect 1m$:, www!themanager!org Tay!or/ L./ *2''4+@ I$anufacturer1s 7e0est )ha!!enge@ Ae,e!oping a Ayna"ic D!oba! Supp!y )hainJ/ 7epartment of %anufacturing #ndustry, FedEx

-ebpage Accessed -eb..1@ IFedEx Express K SuperbrandsJ/ pub!ished by FedEx M%ccessed on 2131232''# at 11.1< a"N and is a,ai!ab!e on O4?LP http@::000.superbrands.u2.co":bsb:)aseQStudies:(S('.QFedEx.pdf -eb..2@ ITransportation and Logistics IndustryJ M%ccessed on '13'132'1' at 11a"N a,ai!ab!e on http@::000.p0c.co":gx:en:transportation3!ogistics:index.Cht"! -eb..$" I$ergers and %c&uisitions *-i2ipedia/ the free encyc!opedia+J M%ccessed on '<3 '132'1' at '6.'' a"N and is a,ai!ab!e on http@::en.0i2ipedia.org:0i2i:$ergersQandQac&uisitions -eb..%" I(enefits of $ergers and %c&uisitionsJ M%ccessed on '63'132'1' at '#.4< a"N and a,ai!ab!e on http@::finance."apsof0or!d.co":"erger3ac&uisition:benefits.ht"! -eb..0" (erry/ %.-./ I%d,antages and disad,antages of ac&uisitions and "ergersJ M%ccessed on '63'132'1' at 1'. ' p"N and a,ai!ab!e on http@::000.he!iu".co":ite"s:1<6146#3"ergers3and3ac&uisitions

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