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Federal Express case study.

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Introduction

Anastasia Nasyrova Facts about Federal Express FedEx Corporation ("FedEx") is the world's largest provider of transportation, e-commerce and supply chain management services. Operations began April 1973. Headquarters in Memphis, Hong Kong, Toronto, Ontario, Brussels, Miami, more than 150 000 employees worldwide. The company revenue in 2002 was $15 billion U.S. dollars. FedEx serves 366 airports in 214 countries with a total fleet of 648 aircrafts. The average package volume per day is more than 3.2 million. Value chain of freight and cargo transportation industry The value chain model highlights specific activities in the business where competitive strategies can be best applied. The model views the firm as a series or "chain" of basic activities that add a margin of value to a firms products or services. FedEx is in the Air Freight or Air Cargo Transportation Industry. This industry is in the early maturity life cycle because entry is difficult, yet current competitors are still growing. Companies can realize economies of scale in this industry in marketing and purchasing. Services in this industry are essentially identical, with the exception being the value-added services. Inbound logistics: Research the cost of transportation (including duties and tariffs) involved in establishing new distribution centers. ...read more.

Middle

It is very unlikely that FedEx operation would not suffer if there were strikes or dispute with outsourcing companies. But if FedEx employees went on strike, their competitors could gain an advantage. Through FedEx's expansions globally, they are subject to laws and regulations of all foreign countries. There are subject to the entire world's economic and political condition in the areas of fuel prices and supply, customer purchase of their services, and relations with foreign countries. 3. Rivalry Among Existing Firms This is a strong force in this industry because the competitors use price cuts to compete, there is a low cost and ease to switching brands, and the companies in this industry diversify and acquire other companies for strategic growth and synergy. FedEx competitors include United Parcel Service, Airborne Express, Emery Worldwide, DHL Worldwide, BAX Global, and United States Postal Service. FedEx holds 46.5 percent, the largest portion, with UPS and Airborne Express as the largest competitors. FedEx is clearly a large, strong, and growing express transportation company. 4. Threat of New Entrants Entry barriers in the express delivery and freight transportation industry are high. ...read more.

Conclusion

These efforts, combined with an improving economy, should position them to increase revenue, profitability and return on invested capital and to generate positive free cash flow. FedEx Ground have huge increase in the volume of daily processing shipments, due mainly to an expanded network, improved service levels, improved sales capabilities, especially for small- and medium-sized customers, and the power of the FedEx brand. The new FedEx Home Delivery expanded to serve 90% of the U.S. residential market. FedEx expending customer choices by offering home delivery with unmatched premium options like day-specific delivery and delivery by appointment FedEx Freight continued to make competitive gains despite a slow economy, and now offers the best service in the regional less-than truckload transportation sector. FedEx truly diversify and global company. FedEx currently serves more than 187 countries and territories with more 7,000 employees. The company provides the most extensive trans-Pacific airlift of any major competitor. FedEx engages in the promotion the cutting edge technologies in order to boost pickup and delivery efficiency and to give customers another convenient way to access FedEx information. They are leading in the e-business innovations as electronic commerce and supply chain management. FedEx recently launched the numerous programs that utilize wireless technology in order to give the customers unparalleled information about their FedEx shipments, whether inbound or outbound. 1 ...read more.

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