Research Essay FedEx Corporation Success Story

Introduction

This Research Essay FedEx Corporation Success Story report talks about FedEx Corporation as a company, FedEx Corporation is the result of the great hard work of Mr. Fred smith who initially had the vision of company that would do overnight goods delivery; this was a new concept in the field of transportation and freight companies, initially FedEx had to face many problems and it had almost failed in its starting period but Mr. Smith did not lose hope and started working with even more sincerity, and FedEx became one of the leading company. We will discuss the corporation journey from start to its present position.

Section-1

COMPANY HISTORY:-

FedEx Corporation is an export and import company integrated in Delaware. (Trimble, 1993)FDX Corporation was founded in January 1998 with the acquirement of “Caliber System Inc” by Federal Express.FDX Corporation was founded to look over all the subsidiaries of Caliber Systems. In January 2000, FDX Corporation changed its name to FedEx Corporation and Federal Express became FedEx express. (rajamani, 2007) FedEx Corporation is divided into four sub-divisions, they are as following:-

  • FedEx Express-This provides shipping services for the delivery of parcels and freight.
  • FedEx Ground-This chiefly serves the small package market of North America, it mainly provides residential and business ground package services.
  • FedEx Freight- This provides freight services which are less than truckload and it also provides freight shipping services too. This segment has a network of 370 service centres.
  • FedEx Services- This segment provides a plethora of services including but not limited to marketing, packing services, communications, information technology, sales, customer service, packing and supplies, back office support, digital printing platforms, professional finishing, ground shipping, digital retail, time specific delivery services  and retail and web based platforms printing. (walter, 2013)

Success Story Of How This Company became the No-1 company-

Mr. Smith was a trained pilot and his flying sessions gave him the revolutionised idea of delivery business. His idea earned him a mere c grade in college but that did not deter him from pursuing his dream which started in the late 1960s.He started His company Federal Express in 1971with $4 million which he inherited from his father and $80 million which was invested by venture capitalists. Federal Express guaranteed overnight delivery of crucial goods between any two destinations in the eleven city network. (Human, 2012). (brumley, 2011)

Finally success came to smith and by the end of 1970s, USA came to depend on FedEx’ ability to deliver freight, goods overnight like business documents, spare parts and last moment birthday gifts. At present FedEx is the number one in just in time delivery revolution world over, its trucks and planes are serving as mobile warehouses that are helping companies’ globally in cutting costs and in boosting their product.

Research Essay FedEx Corporation Success Story

SECTION-2

REASONS FOR FedEx CORPORATION SUCCESS:-How FedEx became one of the most successful freight companies? Is a complex question and there are many factors which have contributed to its success, they are the following:-

  1. Product offered-This is an important aspect which makes it unique from its rivals. FedEx provides a large number of options to its customers which ranges from individuals, groups, small and large business or companies in sending their goods. Product offering depends on a lot of factors like how the customers are classified in different categories and this categorisation decides how the goods are dealt with and how they are delivered always on time. FedEx caters to all categories of customers as all of them have unique requirements.(Fulton, april, 2000)
  2. Customer experience– A company can only succeed if its customers are happy with the company and FedEx has understood this very well. Customers experience start from the way the goods have been collected to how it was handled and how it was delivered and how the employee of the company interacted with the customer. FedEx has achieved a positive reputation in the customer experience field.
  3. Cost effective– FedEx provides a very competitive price  regulation and structure and it also provides compensation if the goods are not delivered on time.(Fulton, april, 2000)
  4. Service level-In this competitive era having an excellent service level is very crucial for the success of a company. In this field service level would include fulfilment of timely delivery of goods which is FedEx’s first priority also having competitive pricing, movement tracking, ability to limit damages to the minimum and providing best user experience, FedEx has come a long way in providing best in class service level. The parcels start coming by 10 p.m. and by 6 a.m. they all have gone for their destinations.(Fulton, april, 2000)
  5. Be authentic and real-FedEx gives the freedom to its employees to engage in the most genuine way and by always using their first names. They always get appreciated for their warm customer support.
  6. Be innovative-FedEx is a company that believes in innovation and is never lagging behind in trying novel things like video chat, online customer support, online product tracking etc. The company has been cutting down its air-craft division to reduce unnecessary staffing as such.
  7. Have a good reputation-Companies that have good reputation are always the first ones to get success and FedEx has always maintained a good reputation in the industry, it has always strive to provide the best service to its customers and have a good reputation since all these years.

SECTION-3

COMPANY’S VALUES AND STRATEGY –

Value Chain-The value chain is the most core reason for FedEx’s success. This supply chain starts from the picking-up of the goods which are gathered from different locations like residential areas, offices, and drop boxes. The value is created for the customers by giving goods pick-up services from any place and at any time. FedEx also has a money back guarantee if the goods do not arrive on time; this creates trust in the minds of customers. (group, december,2003)

The goods then reach the hub from where the goods are sorted according to their types and locations. The goods delivery is the most important value creation activity for FedEx Express and the delivery of goods has to be on or before time, for this all the employee work in a most efficient way.

After delivery, the customer service is the final step which provides after sales service and support to the customers in the most efficient and timely manner.

VRIN

  1. VALUABLE: Resources should hold a value for the company that is they should be an important asset for the company that could be a basis for competitive advantage.
  2. RARE: The resource should be unique in itself and they should not be easily available, that would give the company an exclusive advantage over its rival.
  3. INIMITABLE: Resource should be such that it cannot be imitated by any other similar resource with similar qualities only than the resource would give an edge to the company over its rivals.
  4. NON-SUBSTITUTABLE: The resource should be so unique in itself that it does not have a substitute; this will give a company a sense of monopoly because of the unique quality of the resource. (guide)

The information technology has widely helped FedEx in achieving competitive advantage. The FedEx institute of technology with the help of more than 150 researchers helps in the development of technology based innovation that is unique, inimitable and valuable like “3D Wizardry”, “3D Globe”. (Shurrab) Branding-In the field of branding also FedEx is way ahead of its rivals like UPS and DHL. FedEx promotes its brand with slogans which have been very successful like “Relax, Its FedEx”. FedEx also believes in making connections with its customers which DHL has failed to do.

SECTION-4

INTERNATIONAL STRATEGY-

Globalisation– Has helped FedEx in expanding its business from United States of America to world over. As now the world has become less isolated and all the countries are now interdependent. The boost in global sourcing and selling of products has led companies to expand their supply chain and explore new markets. FedEx has customers in more than 220 countries and it supports this supply chain through global contact, delivery services and information technology advancement. (smith, the corporate strategy of FedEx corporation , 2006)

SUPPLY CHAIN ACCELERATION-With globalisation the economy has become very fast paced and it has become a necessity to get finished goods and spare components delivered on time and as soon as possible. FedEx helps companies in providing the fastest delivery world over of all types of goods.

BOOST IN HIGH-TECH AND HIGH-VALUE ADDED BUSINESS-FedEx is one of the leaders in technology advanced services and with the increase in demand for high-tech goods, FedEx has come up with IT based shipping solutions to cater to all types of high-tech needs.

Growth of the E-commerce and internet-Today E-commerce is the most economical source which makes any kind of information available with ease. FedEx has a full-fledged e-commerce system which helps in the global business of most of the companies and consumers. FedEx helps in global growth of worldwide business by expanding its network in important markets like china, India, Asia etc. FedEx has also grown the capacity of FedEx ground and FedEx freight services to cater to the needs of global markets. (smith f. ) FedEx has modernised its air fleet and is replacing the old aircrafts with the new advanced ones that would help in faster delivery globally (uclick, 2013). FedEx is expanding its global services by venturing into new countries and new divisions. At present the company employs more than 315,000 people who are handling about nine million shipments every single day and are helping to generate annual returns of about US$43 billion. (young, 2013)

The corporation also owns around 80,000 vehicles and 658 aircrafts which help in the delivery in more than 220 countries. (ferrell, 2010)

SECTION-5

EXTERNAL AND INTERNAL CHALLENGES WHICH FedEx IS FACING- (chrisxxpl, March,2011)

EXTERNAL CHALLENGES-It includes weather, economy, and government

Government-It provides security and protection to the goods but this over protectiveness also causes delays in processing and then delivery time is extended.

Weather-It also plays a crucial role in FedEx operations and can be a big hurdle as well. Different countries have different weather and bad weather causes a lot of problems in delivery of goods. (Gutierrez, 2008) Rain, cyclone, snow causes delay in delivery of goods and it also causes heavy loss to company. (senko, 2011)

Economy-As the area of services of FedEx is expanding so is the need for more investments is increasing which is a huge challenge For FedEx, as it becomes difficult to get huge amount of investments which involves a lot of risk. (philstar, march,2013)

INTERNAL CHALLEGES-FedEx also has to deal with internal challenges like managing a large number of employees, labour issues, coordination issues etc.

Large number of employees-It becomes difficult to manage a large number of employees and FedEx has a strength of more than 3, 15,000 employees and catering to every employee needs is a tedious task to do. (Fernandes, march,2012)

Labour issues-A huge demand for labour has resulted in shortage of quality and cheap labour, and these days labour costs are very high which causes a lot of financial burden on the company. (robinson, october,2009)

Coordination issues-As now FedEx is not limited to just America only, and has networks in more than 220 countries, it is a very tuff task to coordinate between all these networks efficiently and without hurdles. (Russell, march,2002)

Solutions– At present FedEx is facing many issues like labour, government, economy, weather, there can be some solutions for these problems like for,:

Labour issues– FedEx can hire labours from developing countries where it can get cheap labour in large amount; also FedEx should do work for the welfare of workers and take care of their needs. (press, 2005)

Government issues– FedEx could hire professionals that are good in negotiating with Government and can come with a solution that would be beneficial for both the Government and FedEx.

Weather issues– Weather issues can’t be solved as such because weather is very unpredictable in nature but yes FedEx should always keep second option ready if weather causes some delay, and for example if a parcel can’t be delivered through airways than deliver it through roadways or through shipping.

Conclusion

In conclusion we can say that FedEx as a company has come a long from way, from where it had started its journey from a failure to being the most successful company. The company is one of the top most company in its field and it aims to reach the mark of 1 trillion by 2016 which doesn’t seems like an impossible dream, looking at the way it has surpassed everyone’s expectation. The company always strive to do more innovative work and be at the top position, but to remain at the top FedEx still have to look after many issues surrounding it which should be solved soon otherwise its rivals may just have an advantage over it, to be successful is easy but to maintain that success is a very hard work to do, one can’t take rest after becoming successful and one has to work even more harder to maintain that success. At present FedEx has a very vast network which makes it difficult to be managed by a handful of top leaders, FedEx needs to strengthen its top leadership so that it can expand its business even more further and also take on new ventures also it needs to implement more welfare schemes for its vast number of employees because in the end they are the backbone of this corporation and they have always put in their best of efforts to provide the best of services to the customers, only than it can remain at the top position.

 

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