Federal Express
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FedEx is a global delivery services company founded in 1971 by Frederick W. Smith. It operates independently through subsidiaries like FedEx Express for express delivery, FedEx Ground for ground delivery, and FedEx Freight for less-than-truckload freight. FedEx uses a hub-and-spoke model and offers integrated applications through operating companies that compete collectively and are managed collaboratively. The company pursues a differentiation strategy through superior operations and technology to provide reliable, time-definite delivery to over 220 countries.
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Federal Express
- 1. Presented By: Savi Arora PGDM 2013-2015
- 2. FedEx • FedEx Corporation is an American global courier delivery services company headquartered in Memphis, Tennessee. • Founded by Frederick W. Smith in 1971. • The name "FedEx" is a syllabic abbreviation of the name of the company's original air division, Federal Express, which was used from 1973 until 2000.
- 3. FedEx Corporation Broad portfolio of • transportation, • e-commerce and • business services Annual revenue of $45 billion Offers integrated applications through operating companies competing collectively and managed collaboratively
- 4. Mission & Goals • FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business 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.
- 5. FedEx Express FedEx Express • express distribution • rapid, reliable, time-definite delivery • to more than 220 countries and territories • comprise more than 90 percent of the world’s gross domestic product • within one to three business days • serving 3.9 million shipments each business day
- 6. FedEx Ground FedEx Ground • ground small-package delivery services • to the U.S. and Canada • FedEx Home Delivery • FedEx SmartPost
- 7. FedEx Freight FedEx Freight • less-than-truckload (LTL) freight • FedEx Custom Critical
- 8. FedEx Services FedEx Services • sales, marketing, administrative and information technology • that support our transportation businesses. FedEx TechConnect • customer service, technical support, billings FedEx Office • array of document and business services
- 9. Origin of Idea • Frederick W. Smith viewed most airfreight shippers as economically inadequate. • Acquired controlling interest in Arkansas Aviation Sales, located in Little Rock. • Identified difficulty in delivering packages within one or two days. • Motivated to undertook research to resolve the inefficient distribution system.
- 10. Business Model • Delivery System operates like a bank clearing system. • All points connected through a central hub. • Hub-and-spoke system. • Also combine Airplane and Truck into one delivery system. HUB D1 D2 D3D4 D5 D1 D3 D5 D4 D2 * FREDERICK SMITH IN AN INTERVIEW WITH FORTUNE SMALL BUSINESS IN 2002
- 11. FedEx – Timeline • 1971 – Federal Express Corporation is founded in Little Rock, Arkansas. • 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.
- 12. FedEx – Timeline • 1977 - 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. • 1979 - Federal Express launches COSMOS (Customers, Operations and Services Master Online System), a centralized computer system to manage people, packages, vehicles and weather scenarios in real time. • 1981 - begins international delivery with service to Canada
- 13. FedEx – Timeline • 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. • 1986 - Federal Express introduces the SuperTracker®, a hand-held bar code scanner system that captures detailed package information.
- 14. FedEx – Timeline • 1989 - Federal Express purchases Flying Tigers to expand its international presence. • 1990 - Federal Express becomes the first company to win the Malcolm Baldrige National Quality Award in the service category.
- 15. FedEx – Timeline • 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. • 1995 - FedEx acquires air routes from Evergreen International with authority to serve China.
- 16. FedEx – Timeline • 1996 - RPS (now FedEx Ground) achieves 100 percent coverage of North America. • 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.
- 17. FedEx – Timeline • 2000 - Parent company FDX is renamed "FedEx Corporation." • Services are divided into companies. • 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.
- 18. FedEx – Timeline • 2001 - FedEx Express and the U.S. Postal Service forge a public-private alliance. • 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.
- 19. FedEx – Timeline • 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" in a single day.
- 20. FedEx – Timeline • 2004 - FedEx Corporation acquires Kinko's for US$2.4 billion, which expands the company's retail access to all of the 1,200-plus Kinko's stores for greater customer convenience (including more than 400 stores that operate 24 hours a day, seven days a week) • 2005 - FedEx launches around the world flights – Eastbound and Westbound – to provide faster, better connectivity to the major markets around the world.
- 21. FedEx – Timeline • 2006 - FedEx Corp. acquires Watkins Motor Lines, to serve customers in less-than-truckload freight market. • 2007 -FedEx Express builds its service capabilities in Europe by acquiring UK domestic express company ANC • FedEx Express expands its presence in India with the acquisition of Prakash Air Freight Pvt. Ltd. (PAFEX)
- 22. FedEx – Timeline • 2011 - FedEx Express acquires the logistics, distribution and express businesses of AFL Pvt. Ltd. and its affiliate, Unifreight India Pvt. Ltd. • 2012 - FedEx Corp. acquires the Polish courier company Opek Sp.z o.o. (Opek) for $54 million. • FedEx Corp. acquires TATEX, a leading French business-to-business express transportation company, for $55 million.
- 23. FedEx – Business Level Strategies The unique FedEx operating strategy works seamlessly — and simultaneously — on three levels: Operate independently by focusing on our independent networks to meet distinct customer needs. Compete collectively by standing as one brand worldwide and speaking with one voice. Manage collaboratively by working together to sustain loyal relationships with our workforce, customers and investors.
- 24. FedEx – Issues in Differentiation Due to the nature of the industry and the awareness level of the customer, difficult to differentiate. When it comes to shipping, customers are very price sensitive. Therefore, FedEx needs to differentiate itself in as many ways as possible from its competitors.
- 25. FedEx – Business Level Strategies FedEx’s strengths in logistics, operations, and technological innovation allow them to pursue a differentiation business level strategy. FedEx charges higher prices for its services than many of its competitors in the industry. FedEx lets their customers know that if they are willing to pay more, it will be worth it.
- 26. FedEx – Targeting customer needs Different customers have different needs. There FedEx divided itself into 6 different segments: FedEx Express, FedEx Freight, FedEx Ground, FedEx Trade Networks, FedEx Custom Critical, and FedEx Supply Chain Services.
- 27. FedEx – Market Segmentation Divided itself into different business units to better serve customer needs. Operate independently. Each segment can better concentrate on its own market rather than concern itself with the whole market.
- 28. FedEx – Market Segmentation • FedEx Express, is geared to satisfy time and day definite service for anyone needing speedy delivery of small packages (documents, legal papers, etc.), with a money back guarantee to ensure an on time delivery. • FedEx Ground service caters more to a business-to-business small and medium package delivery with less time and destination restraints. • FedEx Freight is the heavy package segment, allows customers to send packages of over 150 pounds, regional and interregional, within the continental US with flexible time restraints.
- 29. FedEx – Market Segmentation • FedEx Custom Critical, which provide shipping of products requiring special care in handling or specially equipped vehicles. • FedEx Trade Networks, which provide end-to-end support for international trade. • FedEx Supply Chain Services which synchronize the movement of goods for enhanced customer satisfaction FedEx segments its markets according to the needs of the customers and not by demographic regions.
- 30. FedEx – Value Chain Value chain for FedEx Express can be seen as starting with the pick-up of the packages Value is created for the customers by making package pick-ups possible just about anywhere or anytime. FedEx has a money back guarantee for those people whose packages do not arrive on time, therefore creating value by assuring timely delivery of the packages
- 31. FedEx – Value Chain The package delivery is one of the greatest value creation activity for FedEx Express. Provides customer service during the use of the service by letting customers track their package while it’s in route.
- 32. FedEx – Product Technology “FedEx has always been a technology trailblazer, and the success of fedex.com is testament to that.” FedEx became the first transportation company with Web site features that allowed customers to generate their own unique bar-coded shipping labels and request couriers to pick up shipments.
- 33. The Purple Promise We are united behind a simple promise: “I will make every FedEx experience outstanding.” To keep The Purple Promise, we must: Do whatever it takes to satisfy our customers. Always treat customers in a professional, competent, polite and caring manner. Handle every customer transaction with the precision required to achieve the highest quality service. Process all customer information with 100 percent accuracy.
- 34. The Purple Promise is more than what we say — it’s what we do. It unites us. Every one of us at FedEx is committed to making every experience outstanding.
- 36. Thank You
Editor's Notes
- FedEx Corporation provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $45 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 300,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities
- FedEx Express invented express distribution and remains the industry’s global leader, providing rapid, reliable, time-definite delivery to more than 220 countries and territories, connecting markets that comprise more than 90 percent of the world’s gross domestic product within one to three business days. Unmatched air route authorities and transportation infrastructure, combined with leading-edge information technologies, make FedEx Express the world’s largest express transportation company, providing fast and reliable services for more than 3.9 million shipments each business day.
- FedEx Ground is a leading North American provider of ground small-package delivery services, providing service to the U.S. and Canada. FedEx Home Delivery, the industry’s first ground service dedicated to residential delivery, is available from FedEx Ground and is backed by a money-back guarantee. FedEx Ground segment financial results include FedEx SmartPost, which specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-consumer packages using the U.S. Postal Service for final delivery to any residential address or P.O. Box in the United States.
- FedEx Freight is the market leader in providing less-than-truckload (LTL) freight services across all lengths of haul. FedEx Freight segment financial results also include FedEx Custom Critical, North America’s largest time-specific, critical shipment carrier.
- FedEx Services operates combined sales, marketing, administrative and information technology functions in shared services operations that support our transportation businesses and allow us to obtain synergies from the combination of these functions. T he FedEx Services segment includes: FedEx Services, which provides sales, marketing, information technology, communications and back-office support to our other companies; FedEx TechConnect, which is responsible for customer service, technical support, billings and collections for U.S. customers of our major business units; and FedEx Office, which provides an array of document and business services and retail access to our customers for our package transportation businesses.
- 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 - 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. 1979 - Federal Express launches COSMOS (Customers, Operations and Services Master Online System), a centralized computer system to manage people, packages, vehicles and weather scenarios in real time. 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. 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-to-residential service, in major U.S. markets. - FedEx Trade Networks is created with the acquisitions of Tower Group International and WorldTariff. - 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.
- 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.
- 2004 - FedEx Corporation acquires Kinko's for US$2.4 billion, which expands the company's retail access to all of the 1,200-plus Kinko's stores for greater customer convenience (including more than 400 stores that operate 24 hours a day, seven days a week) and increases its portfolio of services. The retail store locations get a new brand identity – FedEx Kinko’s Office and Print Centers FedEx expands services for customers in the e-tail and catalog segments by acquiring Parcel Direct, a leading parcel consolidator. FedEx later re-brands the FedEx Ground subsidiary as FedEx SmartPost. 2005 - FedEx launches around the world flights – Eastbound and Westbound – to provide faster, better connectivity to the major markets around the world. FedEx announces the development of a new Asia Pacific hub in Guangzhou,China. FedEx unveils California's largest corporate solar-power installation at its Oakland Hub. The solar-power array provides approximately 80 percent of the peak load demand for this f acility, and adds nearly one megawatt of zero-pollution electric generating capacity to the city of Oakland, Calif.
- 2006 - FedEx Corp. acquires Watkins Motor Lines, enhancing FedEx Freight’s ability to serve customers in the long haul less-than-truckload freight market. FedEx Express helps make precious deliveries around the United States, returning hurricane-displaced penguins to their new home at New Orleans’ Audubon Aquarium of the Americas, and delivering fragile remnants from the Titanic disaster to an exhibit in Atlanta. 2007 -FedEx Express builds its service capabilities in Europe by acquiring UK domestic express company ANC (later re-branded FedExUK) and Flying-Cargo Hungary Kft, now a wholly-owned operation in one of Eastern Europe’s most dynamic markets. FedEx Express expands its presence in India with the acquisition of Prakash Air Freight Pvt. Ltd. (PAFEX). FedEx expands its presence in China by acquiring DTW Group's 50 percent share of the FedEx-DTW International Priority express joint venture and became a wholly foreign-owned enterprise. FedEx Kinko’s introduces Print Online, an innovative Web-based printing tool allowing customers to access the chain’s professional printing services from anywhere in the United States. FedEx launches the FedExCup in partnership with the PGA TOUR, introducing a season-ending competitive element to the schedule.
- 2011 - FedEx Express acquires the logistics, distribution and express businesses of AFL Pvt. Ltd. and its affiliate, Unifreight India Pvt. Ltd. This acquisition provides FedEx more robust domestic transportation and added capabilities in India. 2012 - FedEx Corp. acquires the Polish courier company Opek Sp.z o.o. (Opek) for $54 million. This acquisition gives its FedEx Express business unit access to a nationwide domestic ground network with an estimated $70 million in annual revenue and 12.5 million shipments annually. FedEx Corp. acquires TATEX, a leading French business-to-business express transportation company, for $55 million.