Founded by Frederick W. Smith, FedEx Express was established in 1973 and it has grown rapidly. Smith had the idea of creating a company that would deliver mail all over the United States over night. His idea was to fly mail from one location to another at night because the traffic is better and packages could be sorted, distributed and out of its original location faster.
Delivering to over 220 countries and territories, FedEx today is a big global industry with a vast network worldwide.
The company that started as a laid out in an economics class today is one of the biggest mail distribution corporations known by all customers as the company that “send shipment overnight” (FedEx,2013).
Employing more than 245,000 workers, contractors, pilots and operational personnel, FedEx is a corporation proud of its employees. FedEx creates opportunities not only for their full time employees but the company also hires college students as part time employees. It not only provides the college students a flexible job but it also helps FedEx cut costs, especially because the corporation is not unionized except for their pilots that are associated with the ALPA.
FedEx not only employees in the United States, but it also employees overseas and 13 percent of its current employees are international.
* Organizational Structure
The FedEx Corporation like many others is structure with a CEO, CFO, Market Development and Corporate Communications VP, Chief Information Officer, General Counsel and Secretary. Each subdivision of FedEx has a CEO, current David J. Bronczek is the CEO for the FedEx Express subdivision. Frederick W. Smith remains in the main position of President and CEO of the company as a whole (FexEx, 2013).
FedEx main headquarters is in Memphis, Tennessee and the company has also another four headquarters which are located in Ontario, Canada; Guangzhou, China; Miami, Florida; Brussels, Belgium. FedEx also has more than 46,000 drop-off locations all over the country and many other regional hubs to help short and deliver packages.
Utilizing a hub-and-spoke sorting and distribution system FedEx Express and FedEx ground have the capacity to process 15,000 to 20,000 packages daily. The technology utilized in its 29 hubs helps to speed the process and make it more effective. Operating 675 aircrafts and 75,000 motorized vehicles worldwide, FedEx has the capacity to utilize its transportations and guarantee delivery within 24 to 48 hours.
* Internal Policies and Internal Culture
FedEx has been known for its outstanding Human Resources programs. The company implemented a no-lay-off policy, minority recruitment efforts, and guaranteed fair treatment practice within the organization. The company’s dedication to its employees and the technology acquired to make employees job more efficient helps empower workers. FedEx has a traditional culture where the company is centralized and very well structured. The most important component of the company is the people and that’s why their philosophy is “People-Service-Profit”. Market
* Market segmentation
FedEx target all ages in the market, the service is offered to everyone that needs packages delivered in a short amount of time. Service is offered to all the population in the United States and other countries. Home delivery is a great option for those who are unable to go to a FedEx store. Businesses that are in need of faster document deliveries is also benefited by FedEx because the lines in the stores are normally shorter that the regular UPS stores.
Value chain analysis
By offering so many options and convenience to customers FedEx has been creating value to the firm’s process. The three overnight options is an example of this value being built to the organization. Customers can choose a First Overnight, Priority Overnight, and Standard Overnight, depending on their necessity. SameDay service is offered as well if packages are up to 70 pounds. FedEx has become the second-largest ground small-package carrier in North America because of its service and its quality.
Company current strategy
* Generic Strategy
One of the things FedEx does to cut cost is hire college students as part time employees and because of the high turnover they don’t need to unionize. FedEx also differentiate from offering home service to customers. For a small fee they can come to your house to pick up the package for you. All the work customers have to do is to get the package ready. This creates convince for customers without leaving their homes.
* Corporate Strategy
FedEx implemented a customer service-driven strategy to ensure and outstanding customer experience. The implementation of this strategy complements the core value of the organization which is to create a positive customer experience. The strategy has three main components to it. First is putting the customer at the heart of everything they do, second is having outside organizations measure consumer, peer, and industry satisfaction and third is to deliver a positive experience to customers, employees, and communities. Company’s current financial performance
* Ratio Analysis
In 2012 FedEx had a total current asset of $9,056,000 and a total current liability of 5,347,000. Those numbers led FedEx to a 1.7:1 liquidity ratio (Yahoo Finance). Since 2010 according to yahoo finance we can see that FedEx has more current assets that current liabilities. Currently FedEx holds a profit margin of 4.53 percent turning it into net income and operating margin of 7.35 percent (Yahoo Finance)
* Trend Analyses
On the last three years according to financial statements, balance sheets and cash flow FedEx profits have been increasing. The company have been making more investments and increasing its assets as well.
When comparing FedEx with UPS we can see that the market capital of FedEx of $31.39 billion is smaller than USP of $76.56 billion, however it is higher when compared to the industry which is 923.76 million. FedEx also has a higher number of employees compared to UPS. When comparing revenue and net income, FedEx is still behind UPD by a significant amount of money. As we can see FedEx has been growing and expanding in the market however UPS is still leading the market of group postal service (Yahoo Finance).
Core competencies based on key resources and capabilities
Based on the financial statements revised about and the history of the company FedEx does have sustainable competencies and have sustainable competitive advantage in the industry. As mentioned before FedEx core values are focused on the customers and the corporation is trying to deliver a positive experience to customers. Being the second largest ground shipment corporation in the US is alone a sustainable advantage for FedEx. Assessment of Internal Environment
FedEx is a valuable corporation that has been in the market for many years. It’s loyalty to employees creates a better work environment and helps the organization to be recognized for its values and culture. The service FedEx provides to customers is also essential to everyday life. The commodity it offers and the speediness is convenient not only for individuals but also for many businesses.
The company has some rare aspects to it. The idea of having so many hubs and aircrafts makes the company unique and efficient. Offering SameDay service is a rare option that guarantees service done on time for customers. Also the different options of night shipment and guaranteed money back if package is not delivered on time are a great options and security for customers.
* Difficult to imitate
The business is not difficult to imitate, the difficulty is the competition and the ability to do make the business successful. It takes time to build relationship and trust with customers and in the economy we live in today it becomes very difficult for businesses to expand as fast as FedEx did. FedEx is substitutable due to the fact that there are other options in the market for customers. However the convenience and practically of its service can possibly be non-substitutable.
FedEx Corporation, 2013. FedEx history. Retrieved from
FedEx Corporation, 2013. Executive biographies. Retrieved from http://investors.fedex.com/phoenix.zhtml?c=73289&p=irol-govmanage Yahoo, 2013. Key statistics. Retrieved from http://finance.yahoo.com/q/ks?s=FDX+Key+Statistics Yahoo, 2013. Competitors. Retrieved from http://finance.yahoo.com/q/co?s=FDX+Competitors Yahoo, 2013. Balance Sheet. Retrieved from
http://finance.yahoo.com/q/bs?s=FDX+Balance+Sheet&annual Yahoo, 2013. Income Statement. Retrieved from http://finance.yahoo.com/q/is?s=FDX+Income+Statement&annual