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STRATEGIC MANAGEMENT FOR

COMPANY OVERVIEW

The FedEx Corporation founded in 1971 in Memphis is a logistic company which provides transportation, e-commerce, and business services. The company is globally presence in 220 countries and has more than 260,000 employees. In 1973 FedEx introduced the nextday delivery revolutionizing the distribution industry. Since the foundation FedEx made large investments in research and development as well as in its logistic infrastructure. As of January 2000, FedEx created a worldwide network consisting of 34,000 drop-off locations, 10 million square feet of warehouse space, 648 aircrafts, and 60,000 vehicles. In addition FedEx introduced several technological innovations which in turn have given the company an enormous competitive advantage. FedEx is made up of six

independent business units: FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, and FedEx Services, each compete in different sectors of the transportation industry in order to tailor the entire FedEx service to best fit each customers needs. Its parent company is the FedEx Corporation, which offers all of the strategic leadership, as well as the financial accountability for all of the business units. The business model that is followed at FedEx Corporation is Operate independently, compete collectively. The Chart below Corporation. lays out the decision making tree at FedEx

STRATEGIC MANAGEMENT FOR

ORGANIZATIONAL CHART
Executive Committee

Fred Smith, CEO, Chairman

T. Michael Glenn, VP Corporate Communications

Alan B. Graf, Chief Financial Officer

Robert Carter, Chief Information Officer

Christine P. Richards General Counsel Secretary

The board of Directors sits in conjunction with the vice presidents and is responsible for an array of activities such as auditing, executive compensation, information technology oversight, and governance. Although FedEx Corporation is a parent company of the six independent business units, FedEx Corporation offers strategic leadership at a corporate level and the operate on their own and are therefore solely responsible for their decisions and ultimate success. The top two performing companies, as well as the most widely known FedEx companies are FedEx Express and FedEx Ground.

STRATEGIC MANAGEMENT FOR

FEDEXS SIX CORE BUSINESSES

FedEx Custom Critical is North America's largest time specific critical shipment carrier providing the fastest, door-to-door same-day and next-day delivery of urgent freight, valuable items and hazardous goods.

FedEx Express is the world's largest express transportation company, providing fast and reliable delivery to every U.S. address and to more than 220 countries and territories. FedEx Express uses a global air-and-ground network to speed delivery of time-sensitive shipments, usually in one to two business days with the delivery time guaranteed.

FedEx Ground specializes in cost-effective, small-package shipping, offering dependable business-to-business delivery or convenient residential service through FedEx Home Delivery and FedEx SmartPost.

FedEx Freight is doing distribution and consolidation or an exact release-to-market date for customers latest product, or for a total-solutions approach to supply chain management, FedEx Freight is a Customized Solutions.
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STRATEGIC MANAGEMENT FOR

FedEx Services coordinates sales, marketing, information technology, customer service, and worldwide supply chain services support for the global FedEx brand. This includes the data management and networking expertise behind the package tracking capabilities for FedEx Express, FedEx Ground and FedEx Freight, along with e-commerce services, customer contact services, and other functions of the corporations professional services company.

FedEx Trade Networks helps simplify international shipping for customers of all sizes by providing flexible end-to-end services that include customs brokerage, global cargo distribution and trade facilitation solutions. Customers can utilize FedEx Trade Networks services as an entire package, or take advantage of individual services as needed.

STRATEGIC MANAGEMENT FOR

HISTORY
1971 Federal Express Corporation is founded in Little Rock, Arkansas. Frederick Smith realized the tremendous need for one to two day package and air-freight delivery that was better than the current distribution system. 1973 - Federal Express relocates operations to Memphis, Tenn. On the first night of continuous operation, 389 Federal Express employees and 14 aircrafts deliver 186 packages overnight to 25 U.S. cities and the modern air/ground express industry is born. 1975 - Federal Express installs the first Federal Express Drop Box. 1977 - After two years of lobbying led by Federal Express, Congress passes Public Law 95-163 enabling FedEx and other cargo airlines to use larger aircraft with no geographic restrictions on routes. 1978 - Federal Express Corporation is listed on the New York Stock Exchange; ticker symbol is FDX. 1981 - Federal Express introduces the Overnight Letter. Federal Express begins international delivery with service to Canada. Federal Express opens its Super Hub adjacent to Memphis International Airport. 1983 - Federal Express becomes the first U.S. company to reach revenues of $1 billion without merger or acquisition. 1984 - Federal Express acquires Gelco Express International and launches operations in Asia Pacific. The first PC-based automated shipping system, later named FedEx PowerShip, is introduced. 1985 - RPS Inc. (now FedEx Ground) is founded in Pittsburgh, Pa., and introduces bar code labeling to the ground transportation industry. 1986 - Federal Express introduces the SuperTracker, a hand-held bar code scanner system that captures detailed package information. 1989 - Federal Express purchases Flying Tigers to expand its international presence.

STRATEGIC MANAGEMENT FOR 1990 -Federal Express becomes the first company to win the Malcolm Baldrige National Quality Award in the service category. 1993 - RPS (now FedEx Ground) exceeds $1 billion in annual revenue in its ninth year of existence, recording the fastest growth of any ground transportation company. 1994 - Federal Express officially adopts "FedEx" as its brand for recognition as the worldwide standard for fast, reliable service. - FedEx launches fedex.com as the first transportation Web site to offer online package status tracking, enabling customers to conduct business via the Internet. - FedEx Ship software (now FedEx Ship Manager QuickShip) allows customers to process and manage shipping from their desktop. 1995 - FedEx acquires air routes from Evergreen International with authority to serve China.FedEx opens the Asia Pacific Hub in Subic Bay, Philippines, launching the FedEx AsiaOne Network. 1996 - RPS (now FedEx Ground) achieves 100 percent coverage of North America. 1998 - FedEx acquires Caliber System Inc. and creates FDX Corporation. 1999 - FedEx Marketplace launches on fedex.com, providing easy access to online merchants that offer fast, reliable FedEx express shipping. - FedEx Corp. acquires Caribbean Transportation Services. 2000 - Parent company FDX is renamed "FedEx Corporation." Services are divided into companies that operate independently yet compete collectively: FedEx Express, FedEx Ground, FedEx Global Logistics, FedEx Custom Critical and FedEx Services. - FedEx Ground launches FedEx Home Delivery, an innovative business-toresidential service, in major U.S. markets. - FedEx Trade Networks is created with the acquisitions of Tower Group International and World Tariff. - FedEx Custom Critical acquires Passport Transport. - FedEx teams with Amazon.com on a major e-commerce event, delivering the book "Harry Potter and the Goblet of Fire" to 250,000 eager customers on the Saturday of its release. - FedEx introduces customer technology solutions including a redesigned fedex.com, FedEx e-Commerce Builder, FedEx Global Trade Manager and FedEx Ship Manager.

STRATEGIC MANAGEMENT FOR 2001 - FedEx Express and the U.S. Postal Service forge a public-private alliance. FedEx Express provides air transportation of some U.S. mail and places FedEx Drop Boxes at post offices nationwide. - FedEx Corp. acquires American Freightways, a less-than-truckload carrier serving the 40 eastern states in the U.S. 2002 - FedEx Corp. brands two of its LTL companies, American Freightways and Viking Freight, together as FedEx Freight. - FedEx Trade Networks reorganizes; Tower Group International becomes FedEx Trade Networks Transport & Brokerage Inc., and a new subsidiary is created, incorporating the services of WorldTariff, called FedEx Trade Networks Trade Services. - FedEx Home Delivery completes its expansion to serve virtually 100 percent of the U.S. population. 2003 - FedEx marks a 30-year milestone; Federal Express (now FedEx Express) began its first night of continuous operations in 1973. - FedEx teams again with Amazon.com - FedEx Express and FedEx Home Delivery delivered over 400,000 copies of "Harry Potter and the Order of the Phoenix" (up from the previous release of 250,000) in a single day. (

STRATEGIC MANAGEMENT FOR

MISSION
FedEx will produce superior financial returns for shareowners by providing high valueadded supply chain, transportation, business and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.

STRATEGY
The unique FedEx operating strategy works seamlessly - and simultaneously - on three levels.

Compete collectively by standing as one brand worldwide and speaking with one voice.

Operate independently by focusing on our independent networks to meet distinct customer needs.

Manage collaboratively by working together to sustain loyal relationships with our workforce, customers and investors.

VALUES
PEOPLE: We value our people and promote diversity in our workplace and in our thinking. SERVICE: Our absolutely, positively spirit puts our customers at the heart of everything we do. INNOVATION: We invent and inspire the services and technologies that improve the way we work and live.
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STRATEGIC MANAGEMENT FOR INTEGRITY: We manage our operations, finances and services with honesty, efficiency and reliability. RESPONSIBILITY: We champion safe and healthy environments for the communities in which we live and work. LOYALTY: We earn the respect and confidence of our FedEx people, customers and investors every day, in everything we do.

FEDEXS BUSINESS OVERVIEW


FedEx is the clear market leader in express shipping, with nearly 50% market share by volume in the U.S. In ground shipping, it is only starting to establish itself in a market dominated by competitor UPS. In its freight businesses too, FedEx is gaining market share but its long-term success is uncertain. FedEx is placing big bets on the expanded international network it is now developing. Building out an international shipping network creates high upfront costs. FedEx's success will depend on how quickly it can attract customers to this expanded network.

STRATEGIC MANAGEMENT FOR

CONSOLIDATED INFORMATION FOR ALL FEDEX COMPANIES


WORKFORCE More than 290,000 team members worldwide AVERAGE DAILY VOLUME More than 8.5 million shipments for express, ground, freight and expedited delivery services SERVICE AREA More than 220 countries and territories, including every address in the United States FEDEX.COM( INTERNET) Over 32 million unique visitors monthly; more than 6.5 million package tracking requests daily and 20 million packages shipped via FedEx Ship Manager monthly OPERATING FACILITIES

Express: 1,057 stations; 10 air express hubs Ground: 32 ground hubs; over 500 pickup/delivery terminals Freight: Approximately 355 service centers Office: Nearly 2,000 locations

AIR OPERATIONS 688 aircraft; more than 375 airports served worldwide GROUND FLEET More than 90,000 motorized vehicles for express, ground, freight and expedited delivery service DROPOFF LOCATIONS

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STRATEGIC MANAGEMENT FOR


698 FedEx World Service Centers 1,804 FedEx Office locations 6,671 FedEx Authorized ShipCenters and Alliance Partners 43,106 FedEx Drop Boxes (including 4,988 U.S. Postal Service locations)

RECENT AWARDS

FORTUNE magazine: No. 8 among "World's Most Admired Companies" (2011) Wal-Mart: "Small Parcel Carrier of the Year" (2011) FORTUNE magazine: 100 Best Places to Work For (2010) Dow Jones Sustainability Index North America (2010)

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STRATEGIC MANAGEMENT FOR

MARKET SHARES

Overnight Letters U.S.A. Market Share

Parcels U.S.A. Market Share

Global Market Shares

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STRATEGIC MANAGEMENT FOR

COMPETITOR
United States Postal Service: USPS is also not traded publicly. It is an independent government agency that relies on postage and fees to fund operations. USPS handles all kinds of mail and ships domestically and internationally. They also offer prices subsidized by the U.S government. The USPS delivers more than 200 billion pieces of mail a year (at an average of more than 650 million per day) to some 150 million addresses in the US and its territories. Though it has a monopoly on delivering the mail, the USPS faces competition for services such as package or freight delivery. United Parcel Service (UPS) : FedEx and UPS are close competitors in almost every way. FedEx offers every service offered by UPS, including freight services. UPS is the worlds largest small-package carrier, by revenue and by volume. UPS offers ground, air, and ocean freight shipping and shipping-related services. Every day, UPS ships approximately 15 million packages for businesses and individuals around the world.

COMMENTS ON COMPANIES VISION AND MISSION STATEMENT


MISSION:FedEx will produce superior financial returns for shareowners by providing
high value-added supply chain, transportation, business and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.

VALUES: People , Service, Innovation, Integrity, Responsibility & Loyalty

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STRATEGIC MANAGEMENT FOR

SELECTED KEY WORDS IN FEDEX MISSION AND VALUES


I. SUPERIOR FINANCIAL RETURNS The fist key words are explaining about Survival, Growth and Profit. This is an important criterion for a company to stand strongly among the competitors. Investors main aim is to gain better profit. II. VALUE-ADDED The key word is showing about Product and Service. Its refers to an item of interest (product, service, person etc.) that go beyond the standard expectations and provide something "more" while adding little or nothing to its cost. Valueadded features give competitive edges to companies with otherwise more expensive products.

III.

CUSTOMER REQUIREMENTS This Key words are mainly focusing on customer as a priority. Customers are the most important people for any organization. They are the resource upon which the success of the business depends.

IV.

MUTUALLY REWARDING This statement shows how FedEx are sharing their fruit equally to the Customer and Employees. Its a concept to show the belongings among the employees towards the organization growth and they are play an important role for the growth.

V.

SAFETY These key words are emphasizing on Public Image, Employees and also customer. FedEx Business which mainly involving with transportation is highly exposed to accidents to its Employees. So Road safety, Occupational and health are given to top priority to take care of its employees welfare. This will create a
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STRATEGIC MANAGEMENT FOR good rapport among the customer where FedEx public Image are in good Conditions.

VI.

HIGHEST ETHICAL AND PROFESSIONAL STANDARDS. This statement shows FedEx Philosophy. FedEx has set their Philosophy or standards which their employee always takes as a guideline. We can see more details on FedEx Values which are People, Service, Responsibility & Loyalty Innovation, Integrity, and

VII.

PEOPLE FedEx is emphasizing where the people under one roof must always grow together. FedEx education its employees to have similar interest in improve their social and economic status.

VIII.

SERVICE FedEx wants their customer feel warm with the quality service provided. Every customer can create another customer because of the satisfaction the gain from previous services.

IX.

INNOVATION As Technology become and competitive advantages, FedEx is always focusing to have state of art facilities in improving the quality of services.

X.

INTEGRITY
Integrity is regarded as the honesty and truthfulness or accuracy of the FedEx among the people Involve with the business. No matter Shareholders or Stakeholders, both must have similar interest to create a strong successful organization

XI.

RESPONSIBILITY FedEx highest social responsibility interest is towards the community. FedEx always educate its people to give priority to the health and environment.

XII.

LOYALTY
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STRATEGIC MANAGEMENT FOR FedEx emphasize its team to be Loyal to the customer as well towards organization.

Over all FedEx Mission statement is complete and it is leading towards the positive growth of the organization. Even though FedEx does not have Vision Statement but FedEx has Created Values to be set at the top priority. We can see that their mission statement has broad scope and never narrow down to any monetary amounts, numbers, percentages or objectives. Its mission statements are sum up by 75 words only and with 6 important values. More over its mission statement is very inspiring. However we found the lacking of Vision statement can divert the FEDEX to infinity future which makes the organization hard to measure the fulfillment the goal.

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STRATEGIC MANAGEMENT FOR

SUGGESTIONS FOR FEDEX VISION STATEMENT


Since FedEx has no Vision Statement, we had form a new vision which FedEx should apply to have clear direction for the long term benefits. The Vision is as below:

We strive to be the Best Company to work for with the Best Service and the Best Brand in our industry. By using 3 main strategy to achieve this vision : Compete collectively by standing as one brand worldwide and speaking with one voice. Operate independently by focusing on our independent networks to meet distinct customer needs. Manage collaboratively by working together to sustain loyal relationships with our workforce, customers and investors.

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STRATEGIC MANAGEMENT FOR

ISSUES IN FEDEX
FedEx Initially concentrated on the US market. When FedEx decided to enter the international market, in which DHL had the largest Share, FedExs Strategy was not initially very successful. FedEx also tried to implement Its US strategy abroad. It purchased its own air routes and acquired other companies like Flying Tiger. FedEx expanded its network largely to main cities in most of the countries, especially China. However FedEx reposted a large financial loss of its international Division. This was due unexpected high costs of the its expanding network. Other factors are the unpredicted high repair costs of the flying tiger aircrafts and the costs of adapting organizational structure, the operational policies and human resource policies of the acquired companies in certain countries to comply with those of FedEx. FedEx was not very successful in adapting to the regional Cultures. Its US headquarters continued to make the major decisions to be followed by the regional offices around the world without much consideration to the diversified environments.

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STRATEGIC MANAGEMENT FOR

FEDEX EXTERNAL ANALYSIS


OPPORTUNITIES 1 2 Expansion of E-Commerce Required less Service centre Best web-based postal and courier services in the industry Asias population increase 6.7 % also Increases in the number of manufactured goods seek more transportation services Asias Population in 2010 3,879,000,000 and population in 1999 was 3,634,000,000 Entrant of new Competitor is low due to High Capital requirement. Especially to the Fix assets Globalization offer opportunity for expansionAFTA & NAFTA Will encourage more international Trade due to tax exception Increases of supplier Bargaining power is favorable to be Market Leader E.g: Wal-Mart & Apple (Biggest company in the world), IBM, Automobile Industry Seasonal Demand Increase E.g: Christmas & Chinese New Year, Thanks giving, Valentine ( Culture of exchanging Gifts) THREATS WEIGHT 1 2 Economic condition in Foreign countriesSingapore & Japan expected to have bad economy Condition due to Americas economy. 3 4 5 Political instability in foreign countries - West Asia New tax system impose by government Which never constant and create Pricing issues Competitors joint-ventured with foreign countries local transportation company. Cathay Pacific & DHL Joint Ventures for Express Cargo in Hong Kong. Substitution of New Services by using Internet- Emailing. Has reduced letter sending Tradition through mail box. TOTAL 0.08 0.07 0.09 0.1 2 2 3 1 0.16 0.14 0.27 0.1 Rules and restriction in Foreign countries 0.07 0.12 4 0.48
WEIGHT RATING WEIGHTE D SCORE

0.12

0.36

0.03

0.12

0.07

0.21

0.11

0.11

0.04

3 RATIN G 4

0.12 WEIGHT ED SCORE 0.28

0.1 1

0.4

2.75

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STRATEGIC MANAGEMENT FOR

OPPORTUNITIES
1) Expansion of E-Commerce Required less Service centre. Industry: As the trend is changing many companies are changing their service more to technology oriented. Technology making the giving courier service company competitive advantages so every company within the industry are try to have state of art facility with the latest technology

Company: It is no exception for FEDEX as well. It is one of the Best Web-based postal and courier services in the Industry. FedEx has reduced its operation cost and size and it is replaced by web portal customer services. This creates new opportunities to FedEx to have highest competitive advantages. 2) Asias population increase Industry The population increase which is 6.7 % also Increases in the number of manufactured goods. Directly it will seek more transportation services to transport those items for needs of the consumer. For instance Asias Population in 2010 3,879,000,000 and population in 1999 was 3,634,000,000.

Company: For FedEx its also right time for it to expand its network to new region. As FedEx was more keen into American market due to its strong Economy background. However Asian Countries like China and India is really coming up economically and its the right time to open new hubs in this countries.

3) Entrant of new Competitor is low due to High Capital requirement. Industry: Postal service is one of the expensive industry if we want to be global player. So

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STRATEGIC MANAGEMENT FOR there very little chances for new comer into the industry. This Is because, to start Courier or postal services, the capital required is very high.

Company: As we can see for FedEx, FedEx is has very strong financial background. Its capital and income is always above the Industrial average .

4) Globalization offer opportunity for expansion Industry: Since there is technology is everywhere, new era has come with the support of the technology which is Globalization. Globalization has make easier for trade from any part of the world to another part with less barrier. For example AFTA & NAFTA Will encourage more international Trade due to tax exception.

Company: Globalization is good for business, especially when you are FedEx Express, or FedEx, one of the world's largest express-transportation companies.

Unsurprisingly, Michael Ducker, FedEx's executive vice president, international, has been an active advocate of globalization, which is a catchword for the free flow of capital, trade and information

5) Increases of supplier Bargaining power is favorable to be Market Leader Industry: Many huge companies like IBM, Wall Mart and HP Computers is becoming market leader in their own market. We also understand this companies operation and customer is expanding. Due to this logistic industries will face more demand for transporting goods from other industries.

Company: FedEx has high opportunity to become a service provider for many expanding companies in other industries. Based on this, Fedex who has good reputation and

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STRATEGIC MANAGEMENT FOR branding in the market can tab all these companies for long term partnership for the purpose of logistic.

6) Seasonal Demand Increase Industry: Every part of the world has own culture and festivals but however during festival season the increase in demand for logistic services will incre ase too. Its very favorable condition because many American and European like to exchange gifts during Christmas. Company: FedEx has never had issues for seasonal demand increase because FedEx has well prepared with state of art facilities and equipment. More over its current main hub which is in American would be supporting to face the seasonal demand.

THREAT
1) Rules and restriction in foreign countries Industry: All courier company are affected by the rules and restriction due to different law practice such as need to paying tax higher than usual to the certain delivery product.

Company: To protect local courier, FEDEX must follow all the rules and restriction in every different countries.

2) Economic condition in Foreign countriesSingapore & Japan expected to have bad economy Condition due to Americas economy

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STRATEGIC MANAGEMENT FOR Industry: Americas economy gives impact to all industry because it involves exchange currency rate. Exchange currency rate can make the profit of the business fluctuate.

Company: FEDEX has not much affected of the economic condition because FEDEX already have a centre at the foreign countries. The business will not narrow down much because of the economy movement because they are using that particular countrys labor and raw material. 3) Political instability in foreign countries - West Asia Industry: Instability of political movement can be a threat to the industry such as changes in leadership that can give impact on rules and regulation, interest rates, taxation and more restraint.

Company: Company may need to restructure all the business flow to fit with the changes that resulted from the political instability.

4) New tax system impose by government Which never constant and create Pricing issues Industry: All the industry always need to pay fluctuate tax price every year due to changing in percent of taxation. The customer also bearing the cost of tax that makes the price of courier services is fluctuate.

Company: The tax eliminates the pricing advantages of the foreign courier such as FedEx, ensuring that the local courier cheaper than or at least competitive with foreign couriers. For example in Malaysia, the Pos Laju services are much more cheaper
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STRATEGIC MANAGEMENT FOR than FEDEX because they are protected by the government in terms of the taxation.

5) Competitors joint-ventured with foreign countries local transportation company. Cathay Pacific & DHL Joint Ventures for Express Cargo in Hong Kong.

Industry: Competitor joint-ventured give much more advantage to the customer but not to the other competitor as they much more stronger in handling the courier industry such as the brand itself can attract the customer using them and the offering place much more wider.

Company: FedEx have their own brand identity, even though other competitor thinking of joint-venture to survive in the industry, FedEx still can maintain their business from their loyalty customer.

6) Substitution of New Services by using Internet- Emailing has reduced letter sending Tradition through mail box. Industry: Courier industry in whole world were affected by the changing of the technology such as substitution of new services by using internet- emailing because the service offering much more cheaper and faster.

Company: FedEx was strongly affected on this substitution especially in sending letter. No doubt sending information via email is much faster and cheaper. Nowadays, the courier business is depending on the delivery other than letter such as goods for business purpose or personal.
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STRATEGIC MANAGEMENT FOR

PORTERS FIVE FORCES

Potential Competitors LOW to MODERATE

Suppliers Power LOW

Existing Rivals HIGH - FedEx, UPS, DHL

Buyers Power HIGH -large buyers - low switching cost

Substitute Products LOW - Shipping - commodity

Porters five forces model FedEx Corporation

Applying Porters five forces model to the industry is not an easy task provided that FedEx Corporation provides various shipping services. For simplicity, we examined and applied the Porters five forces model to the ground and air-shipping sector. In FedEx, these two sectors are represented by FedEx Express and FedEx Ground. FedEx Express is the world's largest express transportation company. FedEx Ground, on the other hand, is North America's second largest provider of small-package ground delivery service, following the lead of UPS. Other segments of shipping service industry are for example e-commerce and supply chain management services, which are not included in the Porters five forces analysis.

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STRATEGIC MANAGEMENT FOR RISK OF NEW ENTRY BY POTENTIAL COMPETITORS The barriers to entry are very high. One of the reasons that there is a high entry barrier is the high fixed cost associated with establishing the international transportation network. This includes hubs, ground transportation vehicles, air fleet, etc. Additionally, existing companies can take advantage of the absolute cost advantage achieved by large volume of shipments and economies of scale.

EXTENT OF RIVALRY BETWEEN ESTABLISHED FIRMS Established players in shipping service industry complete rigorously for a market share, as demonstrated by the constant battle between FedEx and UPS, the company who responses first to the constantly changing environment wins. Established companies have to strive for continuous improvement in quality, lowering price, and innovation. There is very low switching cost for consumers in this industry making rivalry even more intense. In addition, intense rivalry is also due to the fact that maintaining the infrastructure of an express delivery company presents an exit barrier due to high fixed costs. BARGAINING POWER OF BUYERS The bargaining power of large buyers in shipping service industry is high. Cost associated with switching from one shipping service to another is very low. Therefore, buyers can turn to a shipping provider that offer faster service, lower price, or service innovation with ease. This is especially true for large corporations, like IBM, which ships in large volumes and can bargain quantity discounts.

BARGAINING POWER OF SUPPLIERS The supplier power within this industry is fairly low. Large shipping service provider can affect prices of supplies, like packaging materials. This is because they buy in large quantities and can turn to different suppliers easily.

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STRATEGIC MANAGEMENT FOR

THREAT OF SUBSTITUTE PRODUCTS There are not many substitutes to shipping. In this day and age where many businesses have strong online presence and a small physical presence, it would be difficult to find a substitute in delivering their product. Shipping services are very much similar to a commodity, in that it is not easily replaced with another service or even a similar service.

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STRATEGIC MANAGEMENT FOR

FEDEX INTERNAL ANALYSIS


STRENGTHS 1 E-Commerce - Best web-based postal and courier services in the industry
-Has huge Capital to Invest More in R&D
WEIGHT RATING
WEIGHTED

SCORE

0.13

0.52

Well Known, Goodwill They had Positioned their brand


-Best Overnight Parcel Services -History to Minimal Services Complain

0.12 0.03 0.09 0.08 0.06

4 3 4 4 3

0.48 0.09 0.36 0.32 0.18


WEIGHTED

3 4

The Chairman and Vice President have significant experience


-High Influential in the Industry

Employees Loyalty
-Has numerous awards as best employer -290,000 team members worldwide

5 6

Key Partnership with Big Corporations


E.g.: LEUCO Tool Corp, Tractors and Ford

Own a large fleet Networks & Extensive Hub


-1,057 stations; 10 air express hubs, 688 aircraft, 90,000 motorized vehicles

WEAKNESS 1 FedEx does not have a competitive advantage


-In the shipping services industry because their return on investment is below the industry average

WEIGHT

RATING

SCORE

0.1

0.10

Unable to Tab Global Market and Operation Issues


-Using American management style in ASIA -Unable to Adapt to Foreign Cultures

0.13

0.13

FedExs high cost


-Because of their constant expenditures in their infrastructure, they are unable to lower their prices and thus take away market share from UPS.

0.05 0.07 0.06

1 2 2

0.05 0.14 0.12

4 5

Bad Forecasting
-No Preparation for seasonal Sales create Limitation in services

Low flexibility in services


-Always being too strict with policy made customer divert to competitor -Little Diversification

FedEx Too Focused with American Government and Market Support


-Nowadays American economy is not stable

0.08

0.16

TOTAL

2.65

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STRATEGIC MANAGEMENT FOR

STRENGTH
1. E-commerce FedEx competency is its dedication to innovation and embracing new technologies. This commitment to better serving their customers is what makes FedEx Express the number one express delivery company in the world with over a fifty percent market share in the express package delivery segment of the shipping industry. An example of how FedEx stays on top of new technologies was the fact that FedEx was the first company to embrace the world wide web and this attitude has made the FedEx website the number one website in the shipping industry with over one million hits a day and a network of over two million people connected through its website. Another example of FedExs commitment to innovation and technology are its wireless solutions, the first in the industry, which enables its couriers to send customer package information via a magic wand over a network for faster shipping times; its website allows customers to track their packages from the moment it was sent to the moment it is delivered, another area in which FedEx was the first in; and finally, FedEx has partnered with the university of Memphis to open the FedEx technology institute which will give FedEx first crack at the newest technologies that will be developed in the future 2. Well known Goodwill The FedEx brand name is synonymous with express package delivery. When a company or individual is needs to send a package in a quick and timely manner, they say FedEx it. They dont say UPS it. FedEx has positioned itself in the minds of its customers that they (FedEx) are the company you turn too when you need it there fast. A quote from allaboutbranding.com says it all, FedEx is a great brand. Great brands provide a source of identification. These brands differentiate great brands and cement their leadership credentialsi assurance of quality. This is a hard thing to imitate because you can say that youll get it there, but can you really? FedEx owns a large fleet of aircraft and has an enormous infrastructure to
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STRATEGIC MANAGEMENT FOR back it up, for anyone to viably compete with them would take lots of capital and a whole lot of advertising. 3. The Chairman and Vice President have a good experienced

During one of his two combat tours in Vietnam, Federal Express CEO Frederick Smith got a quick lesson in survival from a crusty Marine sergeant. Lieutenant, the sergeant told Smith, theres only three things you gotta remember: shoot, move, and communicate.(Fortune, Nov. 1997) Some thirty plus years later, and at the helm of one the shipping industrys largest competitors, Smith has utilized that same tactical advice in the business world. His maneuvering of FedEx has incorporated an aggressive shooting strategy as the company has emerged into numerous shipping regions around the world such as Asia, and furthermore, FedEx continuously has been pursuing and developing a solid foundation and infrastructure for the company and its future.

Frederick Smith is the founder of the Toddle House restaurant chain and the Smith Motor Coach Company, in which in 1931 The Greyhound Corporation bought a controlling interest, and which Greyhound renamed as the Dixie Greyhound Lines. This situation shows he had very great experienced in doing business after more than 80 years of experienced involving in the business activity. 4. Employee loyalty Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 290,000 employees and contractors to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities. Almost 50% of all FedEx spending goes to employee pay and benefits. Employee compensation is structured to acknowledge individual effort, stimulate new ideas, encourage

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STRATEGIC MANAGEMENT FOR outstanding performance and promote teamwork. All of these factors are reflected in the employees' Compensation and Rewards.

5. Key Partnership with big corporations Due to the enormous amount of infrastructure FedEx has, like cargo planes, delivery trucks, and holding hubs, they have a strong competitive position in the shipping services industry. FedEx seems to have tapered integration because although they control most of the distribution channels for their services, they still buy from independent suppliers in addition to company owned suppliers. Most of the independent suppliers provide maintenance services to FedEx, like aircraft maintenance and repair, facilities maintenance, and ground vehicle support equipment; however, some independent suppliers also provide some packaging supplies as well. 6. Own large fleet networks and extensive hub FedExs next existing competency is its infrastructure. FedEx has spent billions, over $1.5 billion in 2003 alone in capital expenditures, to create a worldwide network of hubs, airplanes and trucks. This is something that would be hard to imitate because, again, of the huge amount of capital needed to compete directly with FedEx and the fact that FedEx could cut prices to harm new entrants into the market.

The extensive infrastructure and resources FedEx has compiled are quite impressive. The company has added several optimum hubs, the Euro One Hub in Paris, the Asia One Hub at Subic Bay, and the new Iraq hub to increase the reach and accessibility in blossoming new economies and manufacturing locations. This infrastructure, coupled with FedExs continuous innovations and fulfillment of customers needs, is what will create continued success, and eventual sector competitive advantage in the years to come.

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STRATEGIC MANAGEMENT FOR

WEAKNESSES
1. FedEx does not have a competitive advantage

FedEx does not have a competitive advantage in the shipping services industry because their return on investment is below the industry average. When the FedEx return on equity percentages are compared to the returns of their leading competitor, the United Parcel Service (UPS), the FedEx returns are half that of the shipping giant. With such a low return on investments, FedEx does not appear to have a competitive advantage in the shipping services industry.

2. Unable to Tab Global Market and Operation Issues

FedEx unable to tab Global Market and Operation Issue because others country likes Asian make regulatory and governmental differentiation with others. In managing our services, FedEx more comfortable with American management style to operation their services. Despite its efforts, this industry does encounter many regulatory and governmental restrictions in areas of taxation, limitations and legalities. To help customers of various nations sort through the complications of these regulations, FedEx has recently introduced an online sight to aid for international shippers. FedEx has unveiled the first carrier-provided, online duty and tax estimator on its Internet-based FedEx Global Trade Manager application. 3. FedExs high cost

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STRATEGIC MANAGEMENT FOR FedExs weaknesses derive from their inability to differentiate themselves on a wide scale basis from UPS; this is hindering their ability to achieve an industry wide competitive advantage, although they do dominate the express delivery segment of the market. Another weakness is Fed Exs high cost, because of their constant expenditures in their infrastructure, they are unable to lower their prices and thus take away market share from UPS. 4. Bad Forecasting Due to lack of expertise internally FedEx has failed to understand the current trend of market and people interest. This is also mainly because FedEx was always too focused with American Market. As fedex want to enter globally, it still failed to captured seasonal demand for at every region. If we look globally there lot of religions, customs and norms are practices by the world population. For example we can look at China where they have tradition of sending gifts like fruits and hamper to their close ones to share the celebration JOY. FedEx is always not prepared to give them the best services at reduced cost.

5. Other weaknesses There are several weaknesses of the FedEx that are not captured in the four generic building blocks of efficiency, quality, innovation and customer

responsiveness. There are other elements of the company that are not as easily measured such as the company image and customers perception of the product and FedEx. However, the disadvantage to their strategy is in the challenge of being differentiated. Customers have very low switching costs, enabling them to easily turn to alternatives other than FedEx. While FedEx does offer a superior service, it is very difficult to convince the general masses of this, and whether the price is worth it. It has been very costly to differentiate itself, and will continue to be costly if FedEx intends to remain so. FedEx designed the business-planning tool to help customers obtain information before they ship about charges and fees they can expect in the overseas shipping

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STRATEGIC MANAGEMENT FOR process. This includes duty, excise, value-added tax (VAT), Most Favored Nation (MFN) rates and other governmental fees that are levied on international shipments to and from 42 countries.

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STRATEGIC MANAGEMENT FOR

FEDEX STRATEGIES INTENSIVE STRATEGIES

MARKET DEVELOPMENT FedEx Express and FedEx Ground provide the bulk of the company's business, offering valuable services to anyone who needs to deliver letters, documents, and packages. Whether dropped off at one of 43,000 drop boxes or more than 1,000 world service centers, or picked up by FedEx courier, each package is taken to a local FedEx office, where it is trucked to the nearest airport. The package is flown to one of the company's distribution "hubs" for sorting and then flown to the airport nearest its destination. The package is then trucked to another FedEx office, where a courier picks it up and handdelivers it to the correct recipient. All of this takes place overnight, with many packages delivered before 8:00 A.M. the next day. FedEx confirms that roughly 99 percent of its delivery.

PRODUCT AND SERVICES DEVELOPMENT To achieve this successful delivery rate, FedEx maintains an impressive infrastructure of equipment and processes. The company owns more than 70,000 vehicles, and its 643 aircraft fly more than 500,000 miles every day. FedEx operates its own weather forecasting service, ensuring that most of its flights arrive within 15 minutes of schedule. Most packages shipped within the United States are sorted at the company's Memphis super hub, where FedEx takes over control of Memphis International Airport at roughly 11 P.M. each night. After the packages are sorted, all FedEx planes take off in time to reach their destinations. Not all packages are shipped via air: whenever possible, FedEx uses ground transportation to save on expenses. For international deliveries, FedEx uses a combination of direct services and independent contractors.

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STRATEGIC MANAGEMENT FOR

DIVERSIFICATION STRATEGY

UNRELATED DIVERSIFICATION FedEx offers a wealth of electronic tools, applications, and online interfaces for customers to integrate into their processes to shorten response time, reduce inventory costs, and generate better returns, and to simplify their shipping. FedEx InSight is the first web-based application to offer proactive, real-time status information on inbound, outbound, and third-party shipments. It enables customers to identify issues instantly and address them before they become problems. In addition, FedEx InSight allows customers to see the progress of their shipments without requiring a tracking number, giving them convenient and unprecedented data visibility critical to effective management of their supply chain systems. FedEx technology enables customers, couriers, and contract delivery personnel to wirelessly access the company's information systems networks anytime, anywhere. In fact, FedEx was the first transportation company to embrace wireless technology-more than two decades ago, and continues to be a leader in the use of innovative wireless solutions. Features

InSight will display current status on all shipments matched to your account number and/or address.

Monitor all your shipments through reliable status updates for all incoming, outgoing, and third party shipments.

Receive immediate notifications about clearance delays, attempted deliveries, proofs of delivery, and more- via email, Internet, or wireless.

Benefits

Save time by eliminating the need to track each package separately Provide current status information if a shipment is delayed to avoid customer complaints

More efficiently plan manufacturing or distribution resources with proactive delay notifications, thereby decreasing costs

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VERTICAL INTEGRATION STRATEGY


HORZONTAL INTEGRATION

FedEx take a proactive step into their business strategy by pushing to horizontal integration of the company by purchasing Kinkos. Kinkos is a store for people to make photocopies, develop business reports (e.g. binding, portfolios, etc.), create business cards, signs, banners, pretty much anything dealing with any type of document. FedEx saw an opportunity to integrate because all these people were going to Kinkos making these documents and reports and then going to UPS or FedEx to have them delivered. Instead of going to another place to ship the documents, FedEx cut that out by turning Kinkos into FedEx Kinkos or what is now known as FedEx Office. When a customer printed their business reports he could send them out right away at one of the locations. There are a lot of things that can go wrong when a firm decides to take on another aspect of the supply chain. FedEx had just acquired Kinkos with the stated purpose of fueling its retail outlet expansion and driving growth of its transportation services. Kinkos would give FedEx access to those individuals and businesses lacking a regular pickup from a FedEx driver. FedEx would gain access to the copy chains mainstay the highmargin, small and medium-sized businesses that FedEx had long coveted but could not reach.

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FEDEX SWOT MATRIX


Strengths (S)
1. E-Commerce 2. Well known, Godwill 3. Significant experience 4. Employees loyalty 5. Key partnership with big corporations 6. Own a large fleet networks & extensive hub

Weakness (W)
1. Did not have competitive advantage 2. Unable to tab global market and operation issues 3. High cost 4. Bad forecasting 5. Low flexibility in services 6. Too focused with American government and market support

Opportunities (O)
1. Expansion of E-Commerce 2. Increase in number of manufactured goods 3. Entrant of new competitor is low due to high capital required 4. Globalization offer opportunity for expansion 5. Increases of supplier bargaining power is favorable to be market leader 6. Increases overall demand

SO Strategies
1. High invesment in e-Commerce (S1,O1) 2. Be favourable and give priority to the big corporation.(S5,O5) 3. Extending service network to asian (S6,O2) 4.Prepare all facilities to support seasonal demand (S6,O6)

WO Strategies
Change management culture to regional setting. (W2,O4) Create more variaties in provided service (W5,O5,O6) Not too focus to single market penetration (W6,O4) Create unique service - overnight parcel delivery (W1,O3)

Threat (T)
1. Rules and restriction in foreign countries 2. Economic conditions in foreign countries 3. Political instability in foreign countries 4. New tax system impose by government 5. Competitors joint-ventured with foreign countries local transportation company 6. Substitution of new services by using internet - emailing

ST Strategies
Joint venture with major airline companies in handling cargo (S2,T1,T5) Launch new emailing server with high capacity (S1,T6) Employee exchanging program regional (S4,T2, T3)

WT Strategies
Outsource to a local company at foreign countries. (W2,T1) Move operational hub to China, Indoneia or India - warehousing, parcel disegrigation (W3,T4) Hire expert/economist to forecast global economy (W4,T2)

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SO STRATEGIES
HIGH INVESMENT IN E-COMMERCE (S1,O1) As a company offered a good service via e-commerce with best in web-based postal and courier services in the industry, FedEx can expand their business around the world and required less service centre to operate. This situation not only can simplify their shipping but more convenience to customer to use their service in term of time and location.

BE FAVOURABLE AND GIVE PRIORITY TO THE BIG CORPORATION.(S5,O5) Key Partnership between FedEx and big corporations like LEUCO Tool Corp, Tractors and Ford leads FedEx become more favorable in the market and can increase supplier bargaining power. Hence, FedEx will become market leader in the world as biggest international company like Wall-Mart & Apple, IBM, and Automobile industry.

EXTENDING SERVICE NETWORK TO ASIAN (S6, O2) With their advantage by own a large fleet networks and extensive hub (1,057 stations; 10 air express hubs, 688 aircraft, 90,000 motorized vehicles), FedEx capable to expand their service by focusing at Asian region. By looking at increasing number of Asias population which is 6.7% (population in 2010, was 3,879,000,000 and population in 1999 was 3,634,000,000), it also expected to increase the number of manufactured goods. This situation make the manufacture company seek more transportation services to delivery their product and goods. This opportunity opens up to FedEx to increase their business by extending their service to Asian.

PREPARE ALL FACILITIES TO SUPPORT SEASONAL DEMAND (S6,O6) On the other hand, by own a large fleet networks and extensive hub also leads increase overall demand around the world to use FedEx service especially during peak period like on the day before Christmas and Chinese New Year (culture of exchanging gifts).
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STRATEGIC MANAGEMENT FOR Customer become more attracts to choose FedEx as a courier service by looking at all facilities own by FedEx to support seasonal demand.

WO STRATEGIES
CHANGE MANAGEMENT CULTURE TO REGIONAL SETTING. (W2,O4) FedEx unable to tab Global Market and Operation Issues. By applying American management style in ASIA and sometimes FedEXs top management are hardly to adapt their american culture with Asian cultures, indirectly can offer opportunity to expand their business in Asia. For example, AFTA & NAFTA will encourage more international trade due to tax exception. CREATE MORE VARIATIES IN PROVIDED SERVICE (W5,O5,O6) By offered low flexibility and little diversification in services, FedEX may encourage some customer divert to other competitor. But this weakness can increases supplier bargaining power and increase overall request from around the world to support seasonal demand. NOT TOO FOCUS TO SINGLE MARKET PENETRATION (W6,O4) In addition, FedEx still too focused with American Government and market support. But nowadays, American economy is not stable impact from 11 September crises. So, FedEx can take chance to globalize their services by focusing on stable market or niche market to maintain their market share and goodwill. CREATE UNIQUE SERVICE - OVERNIGHT PARCEL DELIVERY (W1,O3) FedEx does not have a competitive advantage in the shipping services industry. This proves by looking at return on investment that is below the industry average. To become more competitive in the market, FedEx create a unique service that is overnight parcel delivery. This service discourage entrant of new competitor due to high capital requirement especially to the fix assets.

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STRATEGIC MANAGEMENT FOR

ST STRATEGIES
JOINT VENTURE WITH MAJOR AIRLINE COMPANIES IN HANDLING CARGO (S2,T1,T5)

By offering best overnight parcel services with minimal services complain by customer, FedEx become a well-known shipping company and their brand name famous around the world. This is shows that FedEx is one of the companies follow strictly rules and restriction in foreign countries even though they applying American style to manage the company. Hence, this situation can promote a good opportunity to increase company market share by engage in competitor joint-ventured with foreign countries transportation company like Cathay Pacific & DHL joint-ventures for express cargo in Hong Kong.

LAUNCH NEW EMAILING SERVER WITH HIGH CAPACITY (S1,T6) FedEx applies a good e-commerce in their business by promote a good web-based postal and courier services. But they indirectly promote substitution of new services by using Internet (emailing). So this situation urge FedEx to launch a new emailing server with high capacity with involve a big cost to build it. EMPLOYEE EXCHANGING PROGRAM - REGIONAL (S4,T2, T3) At FedEx, they have numerous awards for best employer and they have 290,000 team members worldwide. But, by looking at bad America's economy condition, FedEx has threat in foreign countries like Singapore and Japan who expected to have bad influence from that. Besides, political instability in foreign countries like West Asia also becomes a threat to FedEX to manage their courier service properly and smoothly.

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STRATEGIC MANAGEMENT FOR

WT STRATEGIES
OUTSOURCE TO A LOCAL COMPANY AT FOREIGN COUNTRIES. (W2, T1) FedEx is front with difficulty to outsource their shipping services to foreign country because they are strictly applying American management style and unable to adapt foreign cultures. So, top management of company (head of branch) feels hardly to follow rules and restriction in foreign countries. This situation can cause lacking of new strategic management idea to compete with local shipping company.

MOVE OPERATIONAL HUB TO CHINA, INDONESIA OR INDIA - WAREHOUSING, PARCEL DISAGGREGATION (W3,T4) Move operational hub to China, Indonesia or India - warehousing, parcel disaggregation urge to high invest and involve high cost. It is because of FedEx constantly expended in their infrastructure, so they are unable to get lower prices. New tax system impose by government at China, Indonesia or India which never constant and create pricing issues also become a threat to FedEx. HIRE EXPERT/ECONOMIST TO FORECAST GLOBAL ECONOMY (W4,T2) By using professional service (expert/economist) to forecast global economy can be a weakness when they come out with bad forecasting cause from no preparation for seasonal sales create limitation in services. But, until today more investor are still using this forecast to make decision. This situation become threat to FedEx because, nowadays more hire expert/economist said that economy condition in American is not instable situation. Customer and also investor are from foreign company feel afraid to use America brand.

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SWOT SPACE MATRIX


Financial Position (FP) : Y-Axis 1 FedEx does not have a competitive advantage-return on investment below than industry average in shipping industry 2 FedEx's high cost 3 Bad Forecasting 4. High capital Holder Ratings 1.00 3.00 3.00 6.00 Average

13.00
1 2 3 4

3.25
Average

Industry Position (IP) : X-Axis Entrant of new Competitor is low due to High Capital requirement Globalization offer opportunity for expansion Rules and restriction in Foreign countries New tax system impose by government

Ratings 6.00 5.00 2.00 4.00

17.00
Stability Position (SP) : Y-Axis Asias population increase 6.7 % also Increases in the number of manufactured goods seek more transportation services Increases of supplier Bargaining power is favorable to be Market Leader Seasonal Demand Increase Economic condition in Foreign countries Political instability in foreign countries Competitors joint-ventured with foreign countries local transportation company Substitution of New Services by using Internet- Emailing Unable to Tab Global Market and Operation Issues FedEx too Focused with American Government and Market Support Ratings -1.00 -2.00 -3.00 -4.00 -6.00 -7.00 -6.00 -7.00 -6.00

4.25
Average

1 2 3 4 5 6 7 8 9

-42.00
1 2 3 4 5 6 7

-4.67
Average

Competitive Position (CP) : X-Axis Expansion of E-Commerce Required less Service centre Well Known, Goodwill - They had positioned their brand The Chairman and Vice President have significant experience Employees Loyalty Key Partnership with Big Corporations Own a large fleet Networks & Extensive Hub Low Flexibility in services

Ratings -2.00 -1.00 -4.00 -2.00 -2.00 -2.00 -6.00

-19
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-2.71429

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CP
Directional Vector Coordinates : x-axis: Directional Vector Coordinates : y-axis: -2.71 3.25

IP
4.25 -4.67

1.54 -1.42

FP

SP

STRATEGY TO APPLY AFTER SPACE


In average rating of 4.25 shows that FedEx is a good condition company in the industry. Difficulty of new competitor to enter this particular industries due to high capital is one of the reason that minimized the number of company in the industries. This will minimize the number of competitor. International and globalization business will also offer a great opportunity for FedEx to expand their business but the rules and restriction in foreign countries will affect the process of FedEx services.
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STRATEGIC MANAGEMENT FOR In terms of stability, we found that FedEx was affected by economic condition and political instability in the foreign countries. The merging of competitors with the foreign transportation company also affect the stability of FedEx business. Another important issue is substitution of new services by using email which is more economic, fast and efficient. As we all know, FedEx have a big name and goodwill. This are one of the FedEx competitive advantage. This are some of the idea how FedEx can strengthen their strategy : MARKET PENETRATION Market penetration occurs when a company enters or penetrates a market with current products & the best way to achieve this FedEx has to gain competitors' customers by lowering the price (part of their market share). For example, FedEx can attract DHL customers by lowering the price or give any special promotion for those who are using FedEx services for the very first time.

Other ways include attracting non-users of the product or convincing current clients to use more of product and service especially new potential market like East Asia. For example FedEx perhaps can take the current customers personal info such as email and phone number and they can texts or email any promotion to the customer such as Christmas or any celebration special rate. On top of that, FedEx can give the membership card to the current customer and give a special rate or special promotional to the membership card holder. VERTICAL INTERGARTION FedEx must control most of the distribution channels for their services by integrate with Small companies to wide the market share. To control the distribution channel, FedEx must play a biggest role in strategies the marketing pattern to suit with the market segmentation and geographical environment.

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To have Global Mindset instead of sitting at America, FedEx can go further by penetrating Asian country where they are dealing with America business. For example, FedEx can be a transporter to the company who sending in large amount of goods to be sale by assign as a panel for that particular company or, giving special rate to the loyal company who using FedEx services. PRODUCT DEVELOPMENT Product Mix has to be Increase as its create choices for Customer, like creating new packages or lowering cost for the bulk delivery. Product mix also consist of variety of choices to the customer to meet with customer need, for example, FedEx can create a product by package for the customer to value their money . For instance, FedEx can give a discount rate for those who send more than 50 letter or goods. FedEx also can make a promotion every season like Christmas to increase the sales for FedEx. HORIZONTAL INTERGRATION FedEx need to merge with Local Airlines Industry of Each country to expand the Market. This is a good opportunity for FedEx to making their brand identity more strong in each country. For example, FedEx can joint venture with local courier such as Pos Laju in Malaysia to expend their market. As we know, Pos Laju have barrier in overseas courier because of limitation geographical market. This opportunity can be subset to the each other expend their business. Countries like China, India and Vietnam becoming busiest Industrial Nation so there is demand for international trade where FedEx Can tab the opportunity in here. Besides that, FedEx have a huge opportunity in Asia because of their goodwill and the brand name itself. Chine is the best target for a FedEx to expend their business because most of the huge company already switches their business operation in here because of lower labor cost. Indirectly, all the product need to be distribute from chine to all over the world as FedEx itself have their own journey in delivery business trip in all over the world.
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STRATEGIC ACTION PLAN


Strategic Decision Strategies Objective Functional Action Tactical Action Plan Resources Required Timeline Personal Responsible Personal Accounta ble

Horizontal Integration FedEx acquiring local company at foreign country (rapid developing countries)

Increase market share and reduce rivalry in international market by.

Top management - Planning unit - Regional head

Acquire local companies share - Airliner - Current delivery company

Money Location geographical

Start 2012 End 2013

Local Government / Authority Liaisons Officer - to get help in legal issues of each country Strategic Management Officer - planning strategies Regional Manager - set up and modification of local hub - to monitor progress Economic Advisor - forecast market Operation Manager implementing FedEx operation strategy HR Manager understanding local HR policy -shape up employees mind set into FedExs culture.

Regional Director - to monitor the effectiven ess of the strategy and action plan

Operation function - Resources - Processin g

Opening and monitoring distribution hub.

Fleet Technology

Start 2013 by 2015 Able to capitalize local market share.

HR Administrator - Head hunter

Importing American or European expertise to and local manpower management.

Manpower

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STRATEGIC DECISION
Horizontal Integration: FedEx mission which is FedEx will produce superior financial returns for shareowners by providing high value-added supply chain, transportation, business and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards. Parallel to its mission and to increase and to maintain competitive advantage in the world FedEx can use Horizontal Integration as their strategic decision. Horizontal integration is a type of ownership and control. It is a strategy commonly used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal integration occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, e.g. a electronic manufacturer merging with another electronic manufacturer. In this case both the companies are in the same stage of production and also in the same industry. This process is also known as a "buy out" or "take-over". The goal of horizontal integration is to consolidate like companies and monopolize an industry. In this case, FedEx acquiring local company in the same industry and in the same stage of production like Kangaroo Worldwide Express (M) Sdn Bhd and Skynet Worldwide (M) Sdn Bhd.

STRATEGIC OBJECTIVE
There are several objectives why big company like FedEx should use horizontal integration as their strategic decision. Firstly, to increase market shares and to maintain customer trust. Market share often is associated with profitability and thus many firms

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STRATEGIC MANAGEMENT FOR seek to increase their sales relative to competitors. Here are some specific reasons that FedEx may seek to increase its market share:

Economies of scale - higher volume can be instrumental in developing a cost advantage.

Increased bargaining power - a larger player has an advantage in negotiations with suppliers and channel members.

Sales growth in a stagnant industry - when the industry is not growing, the firm still can grow its sales by increasing its market share.

Reputation - market leaders have clout that they can use to their advantage.

Besides, this strategic decision can lead to reduce rivalry in international market because FedEx monopolize an industry of courier service in the world. When FedEx monopoly an industry of courier services around the world, it can maximize profit. In addition, FedEx also can act as price maker which it can decides the price of the service to be charged. Then FedEx can change the price and quality of the product. So, FedEx have opportunity sells more quantities charging less price for the product in a very elastic market and sells less quantities charging high price in a less elastic market.

FUNCTIONAL ACTION
We categorized into three divisions who can make sure that this Strategic Decision is well manner and run smoothly. (1) Top management (2) Operation function and (3) HR Administrator 1. Top management consists of: i) Planning unit

Planning is very important part in the company in order to achieve c ompanys goal and mission. That strategy is made will determine the company's profits and losses in the future. FedExs top management planned to open new hub at new locations around the world. Besides, they are also plan strategies and ideas that will to be carried out by the lower level employees.

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STRATEGIC MANAGEMENT FOR

ii)

Regional head

Top management also acts as regional head. A regional heads primary task is to take responsibility, administration and watch over a number of recruitment teams within the region to ensure that Regional manager and every employer under his or her wing will get the right staff. The regional head is also responsible for the overall supervision of the regional managers as well as the improvement of the company profile by attending to the needs of the customers and make sure that they are satisfied. Besides, FedEx Regional head also play an important role in marketing to bring in more clients for further improvement of sales and production and handle public relations and client relationships. iii) Operation function Although at the new local company which already has their operation manager but FedEx still need to bringing its own experience manager to give solution and make the operation more cost effective. Current operation Management is still need to maintain as it suits to the local environment but new operation tactics can be add on by stages. a. Resources

To ensure that adequate material resources and transportation and be prepared in carrying out courier service delivery. So that there are no complications occurred during running of business operations, such as out of stock packaging and transportation technical damage.

b.

Processing

To ensure smooth work flow as required. So that lead time between customer order and shipping can be reduce. As a result, customer satisfaction can be increase and customer complaint can be reducing to zero defects. This situation can attract more new customer and maintain loyalty of existing customer.

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STRATEGIC MANAGEMENT FOR

iv) HR Administrator As Operation department, there will be not many changes in Human resources department this is because it is very crucial for a foreign company like FedEx to change the Human resources practices at this local company. What FedEx can do is, by adapting the current culture and slowly change to FedEx cultures by stages. The employee can be reacting opposite if we try to change them as they are in comfort Zone at the time being.

i) Head hunter Take responsibility in ensuring that only the best people are being selected to work for the employers the company serves and that all recruiting standards and methods are perfectly met. FedEx reserves the right to remove any employee who is not had great benefits to the company. Moreover, head hunter can take necessary actions for violations and inconsistencies done by the team members under supervision.

TACTICAL ACTION PLAN


As for the top management they are most responsible for the whole plan so they have to: i) Acquire local companies share (Airliner) Buy local airline companys shares in order to expand their power in that country / area and to speed up delivery worldwide. Rather buying FeDex should try to take some of the Airline Company Share to ensure Fedex has certain control over the Logistic Company at Local Country. This control helps FedEx to make most of the situation at foreign Country favorable to FedEx

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STRATEGIC MANAGEMENT FOR ii) Purchase current delivery company: Buying small companies to expand the delivery area such as rural areas where FedEx itself does not deliver there. Rather than starting a new Hub, FedEx strategies of Buying over new local company help FedEx to have little risk on the money they invested. This is because the local companies know better about the market environment and FedEx able to adapt by stages to it rather than learning from scratch. Tactical Action Plan by Operation function i) Opening and monitoring distribution hub: In order to open and monitor distribution hub, operation function need to furnish warehouse first. Warehouse distribution centers need complete resources to run the business/service properly and smoothly like computers, telephone and broadband services, fax machines, printers and other equipment, including forklifts to move goods. Consider order flow throughout the warehouse, as these will affect the efficiency of FedEx business. The operation function can monitor business by invest in accounting and management software suitable with worker level of education and technology grow in that local country. It is because FedEx need them to run distribution hub effectively. Tactical Action Plan by HR Administrator Importing American or European expertise to and local manpower management: Invite expert and specialist person to join the company and to further strengthen the company's position, especially to the newly opened branch either in or outside the country. Based on their working experiences, it certainly can increase FedEx productivity in service and as motivation to new employees. Also, enhance the potential of existing employees as well as sending a motivating course. Thus help strengthen the economic position of the company.

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STRATEGIC MANAGEMENT FOR

RESOURCES REQUIRED
Entering new market is not easy as we think, there are so many inputs are needed to start business at peoples places. The main inputs are :i) Money

All business need of capital money. When FedEx start a new business at new region, its need money to get it off the ground. FedEx need the money to rent or purchase space for the business, furniture and equipment, supplies, professional fees such as legal and accounting, as well as continuing the research and development of service. FedEx may also need money to pay employees. Natural, without the money the company could not further develop his business. ii) Location geographical

FedEx need to select the best location to start the new hub. The location need to be has low density to natural disaster are easy acces to all major cities surrounded. We think Southern Penisular Malaysia will be the best location to start a new hub. Its also near to world busiest port at Singapore and the place is connected with good railroads, Airports and also highways.

Resources required by operation function i) Fleet For rural residential areas and to deliver small parcel or letter, motorcycles were used to transport the goods and for large parcel, van and truck were used to send a parcel whether to individuals or business. In addition, cars or cargo shipment to other countries were used sea vessels service. This service was offered at low prices and affordable but its time-consuming. The perfect choice for customer to deliver parcel quickly, FedEx suggested to use airplanes service but its costly. ii) Technology:

To buy companys internal tracking and delivery software to minimize time and error such as bar code scan mobile.
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STRATEGIC MANAGEMENT FOR Resources Required by HR Administrator i) Manpower: Adequate skilled and semi-skilled people are required to run the company's operations in order to accomplish FedExs mission.

TIME LINE
YEARS 2011 ACTIONS Analyzing external factors of local market (Asian) DESCRIPTION Economic, legal, and politic stability within the country. Social, lifestyle, and trends of the people in the country. Geographic and environment of the local country. Search for the potential company which have a good rapport and strong financial position (e.g. Citylink in Malaysia) Man power selection and recruitment can be done by involving the local people Hire expertise in the country to forecast and analyze the industry. Analyze their price per share. Reviewing the channel distributions. Analyze company capital and capacity of production. Analyzing the company financial position within the industry. Company can implement the strategic management within the company by understanding the local market and company position within the industry.

2012

Screen the local company which is existed in the same industry.

2013

Make decision to choose the best company in the country and buy the company shares.

2104

Implementation of company strategy

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PERSONAL RESPONSIBLE
i) Local Government / Authority Liaisons Officer Ensure that all business matters are follow laws and regulations at local country. For example, to avoid FedEx breach the rules of shipping business, FedEx must have good relation with local government to know better about tax systems, ESOP ( Employee Stock Ownership Plan), and many more. ii) Strategic Management Officer Responsible for planning to smooth operation of the internal strategy of the company and developing and cascading the organizations strategy/mission statement to the lower ranking staff, and implementing appropriate rewards/recognition and coaching/corrective practices to align personnel with company goals. Strategic Management Officer also planning by prioritizing customer, employee and organizational requirements and maintaining and monitoring staffing, levels, Knowledge-Skills-Attributes (KSA),

expectations and motivation to fulfill organizational requirements. In addition, he/she accountable to drive performance measures for the operation (including a consideration of efficiency versus effectiveness), often in the form of dashboards convenient for review of high level key indicators iii) Regional Manager Task Regional Manager includes set up and modifications of local hub with supervise personnel assigned to the region and manage organizational issues within the company operations, work with managers, business experts and management analysts in dealing with technical aspects of the region, handle the team in various planning and execution of the operations of operational hub and analyze problems and methodical approaches to maximize the efficiency of the hubs operations. In addition he/she responsible to monitor progress of hub for example set up targets and make sure that deadlines are always met by the branch managers, take responsible steps to ensure that officers working in the region have access to business information as to what their powers and

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STRATEGIC MANAGEMENT FOR obligations are and constantly build and improve company image and look for more ways to improve further its promotion. iv) Economic Advisor Economic Advisor is important for to management in order to continue compete in the market. He/she will help to forecast market and anticipate what will happen to this industry in the future with their professional judgments. They also come out with professional solution for the company to ensure that FedEx continue to be the world's No. 1 in courier service.

Personal Responsible to Operation function i) Operation Manager An operations manager typically ensures smooth operation of various processes that contribute to the production flow of services of a FedEx. He/she also accountable for implement FedExs operation strategy. Obviously, the role of an operations manager is very wide and encompasses many operational areas. For example, the operations manager could determine the types of equipment needed to fulfill the organizational quality policy. Moreover, the operational manager could also formulate suggestions on how to make an optimum use of the resources of the organization. Personal Responsible to HR Administrator

i) HR Manager The Human Resources Director originates and leads Human Resources practices and objectives that will provide an employee-oriented, high performance culture that emphasizes empowerment, quality, productivity and standards, goal attainment, and the recruitment and ongoing development of a superior workforce. So that, he/she must be familiarized and understand local HR policy for example

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STRATEGIC MANAGEMENT FOR about ESOP or KWSP fund, working hours, overtime and other matter as stated by employee law and other relevant law. Other than that, the Human Resources manager responsible to coordinates implementation of services, policies, and programs through Human Resources staff; reports to the CEO and serves on the executive management team; and assists and advises company managers about Human Resources issues. In addition, HR Manager also have to educate, motivate and deliver courses to improve the quality of the work as required by FedEx once able to absorb as FedEx culture.

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PERSONAL ACCOUNTABLE
As FedEx main focus is going to be acquiring local companies at new region, regional Director is highly important and play a lead role to ensure ever process is doing fine. He also responsible for overall performance of assigned group companies FedEx has planned to start all over the region. He is also responsible to answer operational questions and issues from new hub.FedEx is already had 5 Regional Managers who is charges by main five continents in the world. They are: Michael L. Ducker FedEx Express Chief Operating Officer, Executive Vice President and President, International David L. Cunningham FedEx Express President, Asia Pacific Region (APAC) Lisa Lisson FedEx Express President, FedEx Express Canada Juan N. Cento FedEx Express President, Latin America and Caribbean Region (LAC) Gerald P. Leary FedEx Express President, Europe, Middle East, Indian Subcontinent and Africa Besides that the regional directors has to ensure do satisfaction by monitoring overall customer

Maintain communication with all local companies main owners on a

regular basis. Analyze local companies performance and provide feedback, guidance, training and encouragement in order to impact results. He also needs to assist in the developing of new operations procedures and policies like assist training department with new procedures and ongoing training. Finally he has to conduct and attend regional meetings for assigned regions.

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LEARNING OUTCOME
We would like use this opportunity to thank our lecturer to give us the knowledge and exposure the most important criteria should every manager has is Strategic Management. Strategic management is and art and science of determine what we should and the right time at right place by right people for the optimum result We undergo many stages and the initial stages were identifying an organization and what is latest crisis or issues undergoing by the organization. We identify FedEx as our case study and we found FedEx struggling to sustain in International Market.We also set goal and objective by determining FedEx Vision and mission. By doing this we learned where is FedEx focused and is their focused is accurate for the current trend. And the second stage we did external analysis for FedEx. At this stage we identify how far external environment can be favorable for FedEx. Our study of FedEx external environment was based on social, economy, politic/legal and also the environment After that we had also studied FedEx internal atmosphere of FedEx where we identify their strengths and weaknesses. Although FedEx has good financial background it doesnt mean FedEx has no minus point. It is very important to overcome the weaknesses by our strength. Later than we also list down potential strategies to be carried out FedEx but its not finalized yet as we wanted to have certain module to make final decision. As a decision making tool we had used Space strategy and Swot Matrix. Both our Module is determine that FedEx should focus more on maintaining competitive advantages. Competitive advantages make FedEx to be unique compare to other rivalry in the market. Moreover it also make FedEx to push is organization to have the best system in every field. At the final stage FedEx strategic action plan should be venturing in foreign local company to increase their market share globally. We also would like to say it was a great and challenging journey for past 14 week to identify the best strategies for FedEx. We are so proud that we learned very wide knowledge which is going to be very helpful for our future undertakings.
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REFERALS WEBSITES:
www.fedex.com

PRINTED MATERIALS:
Strategic Management, Concept and Cases, 13th Edition, Fred R.David Chapter 2: Business Vision and Mission Chapter 3: External assessment Chapter 4: Internal assessment Chapter 5: Types of strategies Chapter 6: Modules: SWOT and SPACE Chapter: Implementing

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