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Federal Express

Federal Express. Amanjit Kaur Melanie Kwan Lalaine Lagsob Phoebe Lee Jennifer Low. Background. Founded by Frederick W. Smith Original concept at Yale Early beginnings 1971 first incorporation. Yesterday and Today. April 17, 1973 – First day of Operations 186 packages 25 cities

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Federal Express

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

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

  3. Yesterday 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 Corporation • Subsidiaries • FedEx Express • FedEx Ground • FedEx Freight • FedEx Custom Critical • FedEx Trade Networks • FedEx Services

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

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

  7. Goal • Operate independently and compete collectively

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

  9. Suppliers • Supply chain management

  10. Competition • United Parcel Service: Net Income • DHL • United States Postal Service

  11. Customers • Small businesses • Shoppers • Meeting customers’ expectations through IT

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

  13. Bargaining 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 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 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 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 FedEx and 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. Opportunities • Top Employer • Strong Commitment • IT as culture

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

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

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

  22. Company 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

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