FedEx: Building a Global Distribution Powerhouse- Kamran Chaudhry Nov 23, 2010 76-505
Problem: Given that FedEx is doing remarkable in delivering certainty by connecting the global economy .The question is: is it the most cost effective, and where does it lead them with the recession and FedEx being in a kind of Maturation stage. Can they sustain the growth?
Facts and Analysis: FedEx formed in 1971, came into being from an idea Smith had when he bought interests in Arkansas Aviation sales. The company has had remarkable success. From growth to diversification, local to international. Freight to Customs, the company does exceptionally well. There are few areas where the company is not ranking number one. FedEx has made some
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Alternatives
Market opportunities – huge market growth in Europe. Also Buy Fuel Forwards (financial contracts) to hedge the costs. Advantage: save in costs and decrease volatile price situations. Disadvantage: it will require huge amounts of cash to purchase the forwards. Outsource jobs /tasks to cut costs and minimize the number of employees.
Market penetration – Get into the European market of door to door service. And capture the Manufacturing supply chain for smaller manufacturing companies. ( transport business)
Get into the inventory/ Raw material delivery of smaller productions firms under there FedEx freight services. ADV increase market share and revenue. Disadvantage: It will require a huge infrastructure of fleet of trucks and loader for loading and unloading.
Market Development –. Approach the smaller companies to set up accounts with Just in time inventory option
Product Development-
Develop – Automated sorting systems at the hubs. This will decrease the number of employees.
Decision – Cost efficiency is the initial target. I suggest that the company should cut down on operational costs as there Profit margin has gone down considerably. Concentrate on lower operational costs. Also look into entering the European market for Ground/Door to Door Service.
Implementation
Target market – Enter the European market, for door to door services. But for introducing a
My recommendation is for the company to stay focused on its main competitive advantage of supplying a
Recently the major project and problem is that Mark Cammar, President of CAH, determine what marketing strategies should be implemented for this move to the European market in 2001 from these
Creating various communication channels, that will enable multiple products to ship at once thereby decreasing costs.
The following 3 business opportunities each address one of Nairn “three horizon” business strategy, market penetration, product development and market development.
Federal Express officially began operations on April 17, 1973, with 389 team members. That night, 14 small aircraft took off from Memphis and delivered 186 packages to 25 U.S. cities from Rochester, New York, to Miami, Florida. Though the company did not show a profit until July 1975, it soon became the premier carrier of high-priority goods in the marketplace and set the standard for the express shipping industry it established FedEx has grown tremendously since its first night of operations in 1973. Now FedEx serves more than 220 countries and territories and continues to offer new products and services around the globe.
FedEx Corp., founded by Frederick W. Smith, began operations in April 1973 and was incorporated on October 2, 1997. FedEx Corp. is a publicly traded company on the New York Stock Exchange and headquartered in Memphis, TN. Fedex Corporation was formed in January 1998 with the acquisition of Caliber System Inc. The company reports in four major business segments. FedEx Express provides time-certain delivery within one to three business days serving markets that comprise more than 90 percent of the world 's gross domestic product. FedEx Ground provides low-cost, day-certain service to every business address in the United States, Canada and Puerto Rico
FedEx has produced superior financial returns to its shareholder in last couple of year. It has a worldwide business with a broad portfolio of transportation, e-commerce and business services. It consistently ranked among world’s most trusted and admired employers. The revenue has been consistently increasing and expected to reach at 45 billion in next year. EPS is also about 5.5 and the expected P/E ratio is 14.3 which show its growth potential. With the stock’s beta of 1.27 and latest dividend payout ratio of 9%, it can be expected that it will give a superior result in near future and thus it is one of the best alternatives for investment.
If my distributors will discard this JITD approach, I will have to recruit support from my internal organizations like the Sales & Marketing, Finance, Production, Logistics, Purchasing, Quality
From the beginning Smith had proposed to offer quick delivery, however as the business grew by leaps and bounds, it services reached way beyond just timeliness. By 2000, FedEx offered Express Shipping, Ground Delivery, Global Logistics, and FedEx Custom Critical. In that same year, FedEx Ground
FedEx Corporation provides customers and businesses worldwide with a broad portfolio of transportation, business services and e-commerce. FedEx was founded in August, 1971. It started to operate on 17 April, 1973 with the launch of 14 small aircrafts from Memphis International Airport. Federal Express officially adopted "FedEx" as its primary brand in 1994.
FedEx Corporation (FedEx) is a transportation service that offers overnight mailing services, freight services, logistics solutions, and business services. The company is one of the largest express transportation companies, delivering small packages nationwide and worldwide. It mostly operates in the US. FedEx has its main headquarters in Memphis, Tennessee and has currently employed approximately 300,000 employees in FY2014. The company-recorded revenues of $45,567 million during the financial year ended May 2014 (FY2014), an increase of 2.9% over FY2013.The operating profit the company made was $3,446 million in FY2014, an increase of 35.1% over FY2013. The net profit the company made was $2,097 million in FY2014, an increase of 34.3% over FY2013.
Expand market share at horizontal which is area level of market expanding which is limiting thinking about new business market. Never thinking about vertical expanding which means expand the customer in the same location.
Companies need to have the right product, distribution, CRM and after sales service network to grow.
(2010) mentions that the FedEx Corporation which leads Fedex “provides strategic direction and consolidated financial reporting for the operating companies that compete collectively under the FedEx name worldwide: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services.” These companies function under the motto of "operate independently, compete collectively and manage collaboratively." By upholding this functional strategy, it enables each FedEx company to focus exclusively on delivering the best service for its specific market and avoid wasting time and resources on problems unaffiliated with its core
FedEx Corporation (FedEx) is a transportation service that offer overnight courier services, freight services, logistics solutions, and business support services. The company is one of the largest express transportation companies, delivering small packages nationwide and worldwide. It mostly operates in the US. FedEx has its main headquarters in Memphis, Tennessee and has currently employed approximately 300,000 employees in FY2014. The company-recorded revenues of $45,567 million during the financial year ended May 2014 (FY2014), an increase of 2.9% over FY2013.The operating profit the company made was $3,446 million in FY2014, an increase of 35.1% over FY2013. The net profit the company made was $2,097 million in