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…show more content… 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
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.
Target market – Enter the European market, for door to door services. But for introducing a