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
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
The following 3 business opportunities each address one of Nairn “three horizon” business strategy, market penetration, product development and market development.
My recommendation is for the company to stay focused on its main competitive advantage of supplying a
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.
Creating various communication channels, that will enable multiple products to ship at once thereby decreasing costs.
The management wants to have a Just-in-Time Distribution. For me, this is a good plan since they will be able to get a better forecast demand coming from the distributors. The goal is to let the supply chain players participate in this new approach in supplying products to the customers.
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
1. Give examples of needs, wants, and demands that FedEx customers demonstrate, differentiating these three concepts.
FedEx Corporation, situated in US, is one of the leading supply chain management solution providers in the world. With annual revenues as high as USD33 billion, the company offers incorporated business
In assessing its growth, their lower revenue/package yield services including international domestic (via acquisitions) and FedEx SmartPost are leading this trend. FedEx is also taking alternative strategies to grow its package and parcel volumes. Its freight services for express-related packages and LTL freight shipments also enables Fedex to be placed in a better competitive position. Thus this initiative of taking volume market share from UPS may end up paying off in the long-term, but remains to be seen. Lastly, FedEx's supply chain services are the fastest growing segment within the company, while UPS is losing market share, and DHL's dominant presence is only getting
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.
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
FedEx is one of the leading logistics companies in the United States, with a particular specialty in Home Delivery. From a grassroots background to the thriving company you see today, FedEx has navigated many twists and turns to stay competitive. FedEx Home Delivery has blossomed since its inception, by offering value added services to its customers such as Delivery Manager and the Package Returns Program. However, they have also struggled to keep up with the exploding growth of e-commerce. In an effort to outpace in competitors by investing heavily in infrastructure, FedEx Home Delivery is at a precipice in which there is no turning back.
Studying FedEx, UPS and their competitive relationship in the decade from mid - 80's to mid - 90's gives a good insight for the companies' and industry's future. The two companies have different strategic goals and are operating in the same industry but in different main markets: FedEx is working on "producing outstanding financial returns" and focuses on the overnight air market while UPS is looking for "earning reasonable profit" and its core business is the two-day ground delivery. However, by 1981, the two companies started to have a strong sense
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.