Question

Cases: Case 5-1 FedEx Corporation

Federal Express Corporation, now known as FedEx, was started in 1971 by Frederick W. Smith, an entrepreneur who recognized the need for a company that could deliver documents overnight. The company is headquartered in Memphis, Tennessee, and it maintains a workforce of more than 290,000. The company provides transportation, e-commerce, and business services in more than 220 countries through a portfolio of businesses including FedEx Express, TNT Express, FedEx Ground, FedEx Freight, and FedEx Services. FedEx’s main competitors include UPS and DHL along with various smaller, local delivery providers. The company is known for being a great place to work at, as it has frequently made Fortune magazine’s list of the Best Companies to Work For. It accomplishes this through the use of annual employee surveys (The Survey Feedback Action Program), evaluations of leadership potential (The Leadership Evaluation and Awareness Program), and a Reward and Recognition Program (e.g., Golden Falcon and Bravo Zulu! Awards).

The mission of the company is as follows:

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 team members, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.

The company’s strategic objectives are to:

• Achieve 10%-plus operating margin
• Increase EPS 10% to 15% per year
• Grow profitable revenue
• Improve cash flows
• Increase ROIC
• Increase returns to shareowners

In terms of corporate strategies, FedEx focuses on growth in the following areas:

• Grow internationally
• Grow our supply chain capabilities
• Grow through e-commerce and technology
• Grow through new services and alliances

One core competency for the company is its ability to use the planning process to support continuous improvement and innovation in all aspects of its operations. Technology has been a major focus of the company’s planning efforts. This has resulted in a variety of industry-leading innovations, including the first automated customer service center that includes the COSMOS (Customer Operations Service Master Online System), real-time package tracking, and the Command and Control satellite-to-ground-level operations system that enables the company to deliver packages based on the fastest and safest routes possible. It manages the interface between more than 750 customer service stations and 500 air traffic and traffic hubs around the world. This enables the company to coordinate inbound and outbound aircraft and thousands of delivery vehicles to ensure the smooth and efficient delivery of packages to their destinations. Other examples of how FedEx’s superior operational planning process has led to the creation of innovative technological solutions include the SuperTracker devices that are used by drivers to track and retain detailed information about all packages and the APEC Tariff Database that is used to expedite global delivery of packages through the creation of an integrated information source for the specific tariff and customs requirements of most countries.

Discussion Questions

1. How does FedEx engage in both strategic and operational planning?

2. Conduct a SWOT analysis of FedEx. Based on this analysis, what can you conclude about the company?

3. What is FedEx’s competitive advantage?
4. What are the human resources functional strategies used at FedEx?
5. Do you think it is beneficial for organizations to engage in a strategic planning process? Why or why not?
6. Think about a student organization you have been involved with or a part-time job or internship you have held. Did this organization have a competitive advantage? If so, what was it?

Answer 1

Answer-1) Fed Ex engage in both strategic and operational planning by ethics and innovation. Fed ex believes in top class customer service and value added logistics by corporating highest ethical standards and professionalism. Fedex plans a strategy for each and every market segment and has a blueprint of how to provide Greater returns to shareholders. Fedex plans operations through innovation and development. Technology is key and making some technological advancements like real life tracking, satellite mapping etc, fed ex has perfected operations and minimised the risk of any item lost or failure .

Answer-2) SWOT ANALYSIS OF FED EX

STRENGTH

1) Global reach

2-) Sustainable business model.

3-) Technology enabled operations.

4-) Efficient logistics services.

5-) Diverse business portfolio including many other business other than logistics.

Weaknesses

1-) Different tax rates around the world which deprives them to do a business in a country with higher tax rates.

2-) Difficulty in maintaining such a huge global infrastructure with thousands of delivery every day.

3-) pollution problem - As delivery are done by people driving cars, the pollution increases a lot.

Opportunities

1-) To make Technology more advanced for smooth operations.

2-) Adopting electric vehicles for delivery.

3-) New delivery methods such as drone delivery.

Threats

1-) Local competetors .

2-) Government tax regulations.

3-) Pollution norms.

Based on the swot analysis , I can say that STRENGTHS of the company outweigh the weakness but their is a still lot to improve and the innovation should be such which can be sustained.

Answer-3) Fed Ex's comepetetive advantage is that it has better Technology and people are more committed to the job. As we know, fed ex invests a lot in new adaptable Technology and the whole process ,when the person orders and till the person gets his/her is delivery is automaed.

Answer-4) The Employees in Fed ex are treated very nicely where their are many award program, feedback from Employees are heared , rewards are given to the good Employees. So these all are strategies of fed ex to make the Employees more committed towards their jon