Global Corporate Strategy of Fedex Essay

Excerpt from Essay :

The company offers training sessions for their staff members and presents them with several incentives, such as discounts on the organization's services or employee empowerment. This virtually means that the individual staff members are valued as vital organizational assets, and their input is considered throughout the decision making process.

The second component of the transportation and logistics infrastructure is given by the fleet. This is composed from the following:

654 aircraft fleet, out of which 71 are Airbus A300; 56 are Airbus A310; 13 are ATR 72s; 26 are ATTR 42s; 79 are Boeing 727; 1 is Boeing DC10 (10s); 6 are Boeing DC10 (30s); 57 are Boeing MD 10 (10s); 12 are Boeing MD 10 (30s); 57 are Boeing MD (11s); 10 are Cessna 208As; 242 are Cessna 208Bs and finally, 24 are Boeing 757-200s

43,000 vehicle fleet over 100,000 power ships over 2 million ships and ship managers for the online FedEx operations an estimated 1,100 world service centers over 2,000 authorized FedEx centers (Official Website of the FedEx Corporation, 2010)

All these numbers virtually point out to the fact that FedEx possesses a vast, diverse and complex aircraft fleet that is able to serve the needs of the customers. Extrapolating, it can be concluded that these functional and material features are now included in a wider and more comprehensive supply chain, used to better serve customer needs and generate more profits for the organization.

Virtual information infrastructure

As the express transportation and logistics industry evolved, it was only natural for the value chains of the players in the industry to evolve along. A relevant example in this sense was the inclusion of the informational infrastructure into the value chain of the entity. In other words, the use of information (and the infrastructure utilized in capitalizing on information) is now perceived as a new means in which the company can enhance its value. In other words, FedEx uses its information infrastructure to better communicate with customers mainly, but also with other categories of stakeholders. The company uses its website to register customer orders from around the globe, and as such centralize information. Aside this however, the website is also useful in attracting new and capable candidates which will then add more value to the company by allowing it to perform at higher quality levels.

Aside the actual websites, the company has used information technology to improve the very quality of the services and to further enhance customer loyalty. A relevant example in this sense has been the development of a small software application (which can be downloaded from the company's website) that allows customers to track their package since they sent it to the company throughout its final destination (Business Wire, 1995).

3. Branding and business structure up until 19 January 2000

The Federal Express Company was first opened in 1973, and laid as such the basis for the modern day courier industry. Few years into operations, the FedEx executives recognized the necessity for operational efficiency and innovation. They as such introduced COSMOS, an electronic computerized system which centralized information and allowed higher quality management of the fleet, the employees, the packages collected and delivered, as well as prospective weather scenarios. Throughout the forthcoming years, the company gradually introduced more and more technological applications (such as the computer based automated shipping system or the Super Tracker), most of which were not purchased off the store shelf, but customized to best meet the internal needs of FedEx.

With its course set for innovation and operational efficiency, Federal Express became ready to launch its activities at a global scale. They began by expanding into the Canadian market in 1981, where they operated as such. The penetration of other regions was however more challenging than initially believed. It as such became necessary to overcome the barriers with the aid of an internal transportation and logistics company.

The mergers and acquisitions of domestic courier companies were relatively common practices throughout the 1980s. As the forces of globalization were just beginning to emerge, organizations in the United States identified international growth opportunities. Yet, in those days, most markets were not liberalized, meaning that American corporations were met with tremendous barriers upon their attempts to penetrate the national industry. This then gave way to a new penetration opportunity -- through the merger with or the acquisition of domestic companies. Smaller size entities which possessed limited financial resources would generally merge with the domestic players, whilst larger size companies, with a wider access to financial resources would acquire the domestic players. Federal Express was one of the larger companies, which possesses sufficient financial resources and as such purchased the national courier organizations. The company used the M&A strategies (mergers and acquisitions) first in 1984, when it purchased Gelco Express International in order to ensure its fruitful penetration of the European and Asian / Pacific markets.

M&A strategies were also implemented by the courier organizations in order to increase their capabilities. In this order of ideas, companies would unite forces with other players in the transportation and logistics industry in order to either increase their fleet and reduce competition, or to expand their service palette. A relevant example of how Federal Express capitalized on this possibility was their purchase of Flying Tigers in 1989. The company was a United States-based courier, with vast expertise in airline freight transportation. With the purchase of this player, the Federal Express significantly increased its global presence, and diversified its service offering.

In the following years, the entity continued to expand globally and to innovate. It became the recipient of several quality awards, and the FedEx brand was born as the representative of "fast and reliable service" (FedEx Corporation SEC Filling). In 1998, the company would make the historic acquisition of Caliber System Inc., the end result being a new organization, called the FedEx Corporation. This acquisition was the one that offered FedEx the much desired diversified service offering, and its much longed for international presence.

4. Events leading up to the January 2000 reorganization

As it has been mentioned throughout the previous section, the FedEx Corporation has implemented and followed a strategy focused on international expansion through mergers and acquisitions, based on which they would diversify their service offering, as well as increase the numbers of customers. In achieving this desiderate, the company has undergone a series of processes, all which led up to the acquisition of Caliber Systems Inc. In 1998. The respective decade (the 1990s) commenced with FedEx being awarded the Malcolm Baldrige National Quality Award for the outstanding quality of the services they delivered. Three years later, the company developed yet another customized application, called the Express Clear SM Electronic Customs Clearance System, which would "expedite regulatory clearance while cargo is en route" (FedEx Corporation SEC Filling).

1994 was an important year for FedEx, as they launched their official website. The page was useful from at least three standpoints: it would first introduce the user of the internet to the company in the meaning that the website would offer extensive information on the company; additionally, the corporation also gained from the fact that the website was advertised on other pages. The second use was that of allowing customers to go online and commence ordering services; later that same year, the courier company would introduce several software applications which allowed customers to log in and manage their courier services as based on their necessities, and from the comfort of their own home or office. Finally, the third advantage was that the company enhanced its reputation as an international innovator.

Other software and internet applications were introduced to enhance the quality of the FedEx services. One example is constituted by the FedEx interNetShip, an internal application used to manage customer orders and track packages. With its aid, the FedEx employees became the first staff members to be allowed to manage shipments via the internet. Then, in 1997, the company introduced e-Business Tools, which allowed it to more easily and efficiently communicate with the software applications used for shipping and tracking. The following year, FedEx purchased Caliber Systems Inc. And the company changed for good. In 1999, they developed and integrated the FedEx Power Ship (R)mc, an electronic shipping system, which could be used to manage the shipments on various carriers (FedEx Corporation SEC Filling). With each year and each new software and internet application introduced, the positive results became measurable in terms of financial outcomes. In 1998 for instance, the company's revenues increased by 11 per cent compared to the revenues of 1997. In 1999, comparative to 1998, and despite the financial burdens of the acquisition of Caliber, the revenues increased by 6 per cent, and the net income increased by 26 per cent (Official Website of FedEx).

5. Recommendations

FedEx is probably in little need for recommendations, and, as history has shown, they have repeatedly revealed their ability to manage financial successful operations. Yet, a suggestion could be made in that of…

Sources Used in Document:


Marc h 16, 1995, FedEx Extends Tracking and Information Capabilities to America Online Users; Federal Express Customers already Using Services on FedEx Internet Worldwide Web Home Page, Business Wire

2000, FedEx Corporation SEC Filling, last accessed on January 18, 2010

2010, FedEx Corporation, Hoovers, last accessed on January 18, 2010

2010, The 9 Faces of Leadership, Fast Company, last accessed on January 18, 2010

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