Structural Transformation Through E-Business Essay example

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FedEx Corp.: Structural Transformation Through e-Business
Pauling Ng and Ali R Farhoomand
The University of Hong Kong
FedEx has built superior physical, virtual, and people networks not just to prepare for change, but to shape change on a global scale. to change the way we all connect with each other in the new Network Economy. FedEx is not only reorganizing its internal operations around a more flexible network computing architecture, but it's also pulling-in and in many cases locking-in customers with an unprecedented level of technological integration. Since its inception in 1973, Federal Express Corporation had transformed itself from an express delivery company to a global logistics and supply-chain management company. Over the
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The reorganization was expected to cost US$100 million over three years. Was this simply a new branding strategy or did FedEx have the right solution to leverage its cross-company synergies and its information and logistics infrastructure to create e-business solutions for its customers?

The Express Transportation and Logistics Industry
FedEx invented the air/ground express industry in 1973. Although UPS was founded in 1907 and became America's largest transportation company, it did not compete with FedEx directly in the overnight delivery market until 1982. Competition began with a focus on customer segmentation, pricing and quality of service. For most businesses, physical distribution costs often accounted for 10-30 percent of sales or more. As competition put pressure on pricing businesses began to look at ways to cut costs yet improve customer service. The solution was to have a well-managed logistics operation to reduce the length of the order cycle and thus generate a positive effect on cash flow. The growth of the express transportation and logistics industry was brought about by three main trends: the globalization of businesses, advances in information technology (IT) and the application of

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