FedEx was founded in 1971 by Frederick W. Smith with its first day of operations on April 17, 1973 delivering 186 packages to 25 cities. It has since expanded globally to over 210 countries with 185,000+ employees and annual revenue of $22.5 billion in 2003. FedEx operates several subsidiaries including FedEx Express, FedEx Ground, FedEx Freight, and FedEx Custom Critical. It has achieved many milestones in its growth and now aims to operate independently while competing collectively.

1. Federal ExpressFederal Express
Amanjit Kaur
Melanie Kwan
Lalaine Lagsob
Phoebe Lee
Jennifer Low

2. BackgroundBackground
Founded by Frederick W. Smith
Original concept at Yale
Early beginnings
1971 first incorporation

3. Yesterday and TodayYesterday and Today
April 17, 1973 – First day of Operations
– 186 packages
– 25 cities
Today
– 210 countries
 Global network
– Asia-Pacific
– Canada
– Europe, Middle East, Africa
– Latin America-Caribbean

4. FedEx CorporationFedEx Corporation
Subsidiaries
– FedEx Express
– FedEx Ground
– FedEx Freight
– FedEx Custom Critical
– FedEx Trade Networks
– FedEx Services

5. FedEx CorporationFedEx Corporation
1998 – Original name of FDX corporation
January 2000 – Change name to FedEx
Corporation

6. MilestonesMilestones
1975 – First showed profits
1977 –Deregulation for air cargo allowed
use of larger aircraft
1984 – Services to Europe and Asia began

7. GoalGoal
Operate independently and compete
collectively

8. Current StatisticsCurrent Statistics
2003 Revenue of $22.5 billion
44,000+ Location
185,000+ Employees

9. SuppliersSuppliers
Supply chain management

10. CompetitionCompetition
United Parcel Service: Net Income
DHL
United States Postal Service

11. CustomersCustomers
Small businesses
Shoppers
Meeting customers’ expectations through IT

12. Use of IT/ISUse of IT/IS
FedEx Insight
FedEx Wireless Solutions
FedEx Global Solutions
Smart Tags from FedEx

13. Bargaining Power of SuppliersBargaining Power of Suppliers
Fairly low for FedEx
– Suppliers have to face their own competitions
 e.g. Suppliers of delivery vehicles have to compete
in order to gain FedEx’s business
Exceptions:
– Highly unionized workforce can have more
power if protected by their unions and labor
contracts

14. Threat of New EntrantsThreat of New Entrants
Large capital investments are required for
entering this industry
– Air fleets, warehouses, distribution centers,
labor force
Customers are difficult to attract because of
switching costs
– Online tracking, online sales, and shipping
system

15. Bargaining Power of BuyersBargaining Power of Buyers
Can vary greatly between new and existing
customers
– New customers initially have power
 Shop around for low prices; demand a certain level
of service
Existing customers have decreased power
– High switching costs made them unwilling to
change

16. Threat of SubstitutesThreat of Substitutes
Currently low, but subject to change
E-mail
– Less likely to be used to transmit sensetive info
Regular mail (e.g. US Postal Service)
– Still have issues with security, speed, and
reliability

17. Competition Between FedExCompetition Between FedEx
and its Rivalsand its Rivals
Is extremely intense
• New business strategy
 e.g.) UPS who is specialized in ground shipping has
came up with UPS Overnight
 e.g.) FedEx who’s main focus is in the business
segment is planning to enter the residential market
None of the companies have a clear
domination over one another

18. OpportunitiesOpportunities
Top Employer
Strong Commitment
IT as culture

19. Key StrategiesKey Strategies
People-Service-Profit
COSMOS
IT/IS

20. Company StrengthsCompany Strengths
Transportation & Logistics
 World-class logistic services
 Business Logistics Services Division

21. Company WeaknessesCompany Weaknesses
Web-based interface
 -Design/layout of software
 -Lack of a single systems/data transfer standard
 -Difficulties filling out online air bills

22. Company StrengthsCompany Strengths
Virtual Merchandising
Gives business opportunity to outsource a lot more of its logistics
operations irrespective of size or nature of its business.
Electronic Commerce
Electronic order taking and customer interaction drove costs down.
Integrated Supply Chain Solution
Allowed firms to concentrate on their core business, be it in
manufacturing or service excellence