anjalicutek
Anjali Khurana
Marketing Strategy of FedEx Corporation : FedEx Corporation (NYSE: FDX), originally known as FDX Corporation, is a logistics services company, based in the United States with headquarters in Memphis, Tennessee.[1] 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.
FedEx Corporation is a Delaware corporation, incorporated October 2, 1997.[2] FDX Corporation was founded in January 1998 with the acquisition of Caliber System Inc. by Federal Express. With the purchase of Caliber, FedEx started offering other services besides express shipping. Caliber subsidiaries included RPS, a small-package ground service; Roberts Express, an expedited shipping provider; Viking Freight, a regional, less than truckload freight carrier serving the Western United States; Caribbean Transportation Services, a provider of airfreight forwarding between the United States and the Caribbean; and Caliber Logistics and Caliber Technology, providers of logistics and technology solutions. FDX Corporation was founded to oversee all of the operations of those companies and its original air division, Federal Express.[3]
In January 2000, FDX Corporation changed its name to FedEx Corporation and re-branded all of its subsidiaries. Federal Express became FedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to make up FedEx Global Logistics. A new subsidiary called FedEx Corporate Services was formed to centralize the sales, marketing, customer service for all of the subsidiaries. In February 2000, FedEx acquired Tower Group International, an international logistics company. FedEx also acquired WorldTariff, a customs duty and tax information company, TowerGroup and WorldTariff were re-branded to form FedEx Trade Networks.[3]
FedEx Corporation
in 1973, Frederick W. Smith founded Federal Express Corporation with
part of an $8 million inheritance. At the time, the u.s. Postal Service
and United Parcel Service (UPS) provided the only means of delivering
letters and packages, and they often took several days or more to get
packages to their destinations. While a student at Yale in 1965, Smith
wrote a paper proposing an independent, overnight delivery service.
Although he received a C on the paper, Smith never lost sight of his
vision. He believed many businesses would be willing to pay more to get
letters, documents, and packages delivered overnight. He was right.
Federal Express began shipping packages overnight from Memphis,
Tennessee, on April 17, 1973. On that first night of operations, the
company handled six packages, one of which was a birthday present sent
by Smith himself. Today FedEx Corporation handles more than 3 million
overnight packages and documents a day, and more than 5 million
shipments a day around the world. FedEx controls more than 50 percent of
the overnight delivery market, with total operating income of $1.47
billion on an astounding $22.4 billion in total revenue. FedEx does not
view itself as being in the package and document
transport business; rather, it describes· its business as delivering
"certainty" by connecting the global economy with a • wide. range of
transportation, information, and supply chain services.
Although most people are familiar with FedEx's overnight delivery
services, the company is actually divided into seven major divisions:
FedEx Express® The world's largest express transportation
corupany,serving214 countries, including every address in the United
States
FedEx Ground® North America's second largest ground carrier for small
package shipments
FedEx Freight® The largest U.S. regional less than-truckload freight
company, which provides next-day and second-day delivery of heavy
freight in both the United States and international markets
FedEx Custom Critical® Provides 24/7 nonstop, door-to-door delivery of
urgent shipments in the United States, Canada, and Europe
FedEx Trade Networks® Facilitates international trade, customs
brokerage, and freight forwarding
Chapter 7 Marketing Research and Information Systems
FedEx Services® Consolidated sales, marketing, information technology,
and supply chain services that support all FedEx global brands
Kinko's® A chain of more than 1,200 retail stores providing business
services such as copying, publishing, and shipping operations
FedEx purchased Kinko's in 2004 to provide new business services and to
expand FedEx shipping options at Kinko's 1,200 retail stores. The
purchase followed rival UPS's acquisition of 3,000 Mail Boxes Ete.
stores. Renamed the UPS Store, that acquisition put UPS closer to small
to medium-size customers and high-profit infrequent shippers. FedEx's
purchase of Kinko's, which operates 110 stores in 10 countries, is
expected to help the company reach new customers and expand in Asia and
Europe.
FedEx Express and FedEx Ground provide the bulk of the company's
business, offering valuable services to anyone who needs to deliver
letters, documents, and packages. Whether dropped off at one of 43,000
drop boxes or more than 1,000 world service centers, or picked up by
FedEx courier, each package is taken to a local FedEx office, where it
is trucked to the nearest airport. The package is flown to one of the
company's distribution "hubs" for sorting and then flown to the airport
nearest its destination. The package is then trucked to another FedEx
office, where a courier picks it up and hand-delivers it to the correct
recipient. All of this takes place overnight, with many packages
delivered before 8:00 A.M. the next day. FedEx confirms that roughly 99
percent of its deliveries are made on time.
To achieve this successful delivery rate, FedEx maintains an impressive
infrastructure of equipment and processes. The company owns more than
70,000 vehicles, and its 643 aircraft fly more than 500,000 miles every
day. FedEx operates its own weather forecasting service, ensuring that
most of its flights arrive within 15 minutes of schedule. Most packages
shipped within the United States are sorted at the company's Memphis
superhub, where FedEx takes over control of Memphis International
Airport at roughly 11 P.M. each night. FedEx planes land side by side on
parallel runways every minute or so for well over one hour each night.
After the packages are sorted, all FedEx planes take off in time to
reach their destinations. Not all packages are shipped via air: whenever
possible, FedEx uses ground transportation to save on expenses. For
international deliveries, FedEx uses a combination of direct services
and independent contractors.
FedEx services are priced using a zone system in which the distance a
package must travel to reach its
final destination determines the price. FedEx offers FedEx Same Day®
Delivery for $173 for packages up to 25 pounds. FedEx Ground rates vary
widely by package weight and shipping zone. For an extra $4, customers
can have a courier pick up their packages rather than dropping them off
at a drop box. Saturday pickup and delivery is also available for an
additional $12.50. Prices vary for larger packages and international
shipments.
In 2001, FedEx Express expanded its reach with the announcement of two
7-year service agreements with the U.S. Postal Service. In the first
agreement, FedEx Express provides air transportation for certain postal
services, including Priority Mail. The second agreement gives FedEx
Express the option to place a drop box in every U.S. post office. FedEx
did not get the exclusive rights to drop boxes, which left open the
potential for UPS to negotiate its own agreement with the postal
service. Both FedEx and the postal service operate competitively and
maintain separate services in all other categories.
FedEx Maintains Leadership Information Technology Despite its tremendous
successes, FedEx has faced some difficult times in its efforts to grow
and compete against strong rivals. The overnight delivery market matured
very rapidly as intense competition from the U.S. Postal Service, UPS,
Emery, DHL, RPS, and electronic document delivery (i.e., fax machines
and e-mail) forced FedEx to search for viable means of expansion. In
1984, facing a growing threat from ekctronic document delivery, FedEx
introduced its Zap Mail service for customers who could not afford
expensive fax machines. For $35, FedEx would fax up to 10 pages of text
to any FedEx site around the world. The document was then hand-delivered
to its recipient. Soon after the service was introduced, the price of
fax machines plummeted, ultimately forcing FedEx to drop ZapMail after
losing more than $190 million. Many analysts still argue that the
overnight delivery market could eventually lose as much as 30 percent of
its letter business to electronic document delivery, especially e-mail.
FedEx constantly strives to improve its services by enhancing its
distribution networks, transportation infrastructure, information
technology, and employee performance. FedEx also continues to invest
heavily in information technology by installing computer terminals at
customers' offices and giving away its
Part Three Using Technology and Information to Build Customer
Relationships
proprietary tracking software. Today the vast majority of FedEx
customers-more than 70 percent-electronically generate their own pickup
and delivery requests. FedEx has also moved more aggressively into
e-commerce with respect to order fulfillment for business-to-business
and business-to-consumer merchants. For example, FedEx's Home Delivery
network has grown rapidly and now reaches virtually every U.S.
residential address.
FedEx offers a wealth of electronic tools, applications, and online
interfaces for customers to integrate into their processes to shorten
response time, reduce inventory costs, and generate better returns, and
to simplify their shipping. FedEx InSight is the first webbased
application to offer proactive, real-time status information on inbound,
outbound, and third-party shipments. It enables customers to identify
issues instantly and address them before they become problems. In
addition, FedEx In Sight allows customers to see the progress of their
shipments without requiring a tracking number, giving them convenient
and unprecedented data visibility critical to effective management of
their supply chain systems. FedEx technology enables customers,
couriers, and contract delivery personnel to wirelessly access the
company's information systems networks anytime, anywhere. In fact, FedEx
was the first transportation company to embrace wireless technology-more
than two decades ago~and continues to be a leader in the use of
innovative wireless solutions.
The Future for FedEx Corporation As FedEx moves ahead, the company has a
lot going for it. No other carrier can match FedEx's global capabilities
or one stop shopping-at least not yet. To increase its competitiveness,
FedEx is focusing on increasing revenue and reducing costs through
tighter integration and consolidation, improved productivity, and
reduced capital expenditures. Five themes frame FedEx's efforts to fully
leverage the strong franchise of the FedEx brand:
Vision: It's the foundation of any successful business, and it starts
with the management team. Our core strategy is clear and reinforced
throughout the organization through effective communications.
Service: We must continue to streamline all our internal processes that
touch the customer to deliver a flawless experience every time. We are
delighted at being ranked highest in the J. D. Power and Associates 2002
Small Package Delivery Service Business Customer Satisfaction
Study SM for air, ground and international delivery services, and we
look forward to raising the service bar even higher.
People: . Our diverse and talented employees around the world are united
in their absolutely, positively, whatever-it-takes. spirit .•. No •
matter which operating company they work for, • their teamwork and
their commitment run purple.
Innovation: We will continue to invest in new technologies such as a
real-time wireless· pocket PC that gives our FedEx. Express couriers
fast wireless. access to the FedEx network.
Value: As we add more value to our customers' businesses, we believe we
can also create more value for our shareowners.
Why has FedEx been so successful? A major reason is the company's
enviable corporate culture and work force. Because employees are
critical to the company's success, FedEx strives to hire the best people
and offers them the best training and compensation in the industry.
FedEx employees are loyal, highly efficient, and extremely effective in
delivering good service. In fact, FedEx employees claim to have "purple
blood" to match the company's official color. It is not surprising that
FedEx has been named one of the "100 Best Companies to Work For" six
consecutive years.
Another reason for FedEx's success is its leadership in information
technology and customer relationship management. The company's focus on
"delivering certainty" has allowed it to hone in on opportunities that
give FedEx additional capabilities in innovative information technology
solutions.
A final reason for FedEx's success is outstanding marketing: FedEx is a
master at recognizing untapped customer needs and building
relationships. FedEx is also never content to sit on its laurels as it
constantly strives to improve service. and offer more options to its
customers. After 30 years of success, there is little doubt that Fred
Smith's C paper has become an indispensable part of the business world .
Evaluate the methods. used by FedEx to grow, both domestically and
internationally .
FedEx Corporation is a Delaware corporation, incorporated October 2, 1997.[2] FDX Corporation was founded in January 1998 with the acquisition of Caliber System Inc. by Federal Express. With the purchase of Caliber, FedEx started offering other services besides express shipping. Caliber subsidiaries included RPS, a small-package ground service; Roberts Express, an expedited shipping provider; Viking Freight, a regional, less than truckload freight carrier serving the Western United States; Caribbean Transportation Services, a provider of airfreight forwarding between the United States and the Caribbean; and Caliber Logistics and Caliber Technology, providers of logistics and technology solutions. FDX Corporation was founded to oversee all of the operations of those companies and its original air division, Federal Express.[3]
In January 2000, FDX Corporation changed its name to FedEx Corporation and re-branded all of its subsidiaries. Federal Express became FedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to make up FedEx Global Logistics. A new subsidiary called FedEx Corporate Services was formed to centralize the sales, marketing, customer service for all of the subsidiaries. In February 2000, FedEx acquired Tower Group International, an international logistics company. FedEx also acquired WorldTariff, a customs duty and tax information company, TowerGroup and WorldTariff were re-branded to form FedEx Trade Networks.[3]
FedEx Corporation
in 1973, Frederick W. Smith founded Federal Express Corporation with
part of an $8 million inheritance. At the time, the u.s. Postal Service
and United Parcel Service (UPS) provided the only means of delivering
letters and packages, and they often took several days or more to get
packages to their destinations. While a student at Yale in 1965, Smith
wrote a paper proposing an independent, overnight delivery service.
Although he received a C on the paper, Smith never lost sight of his
vision. He believed many businesses would be willing to pay more to get
letters, documents, and packages delivered overnight. He was right.
Federal Express began shipping packages overnight from Memphis,
Tennessee, on April 17, 1973. On that first night of operations, the
company handled six packages, one of which was a birthday present sent
by Smith himself. Today FedEx Corporation handles more than 3 million
overnight packages and documents a day, and more than 5 million
shipments a day around the world. FedEx controls more than 50 percent of
the overnight delivery market, with total operating income of $1.47
billion on an astounding $22.4 billion in total revenue. FedEx does not
view itself as being in the package and document
transport business; rather, it describes· its business as delivering
"certainty" by connecting the global economy with a • wide. range of
transportation, information, and supply chain services.
Although most people are familiar with FedEx's overnight delivery
services, the company is actually divided into seven major divisions:
FedEx Express® The world's largest express transportation
corupany,serving214 countries, including every address in the United
States
FedEx Ground® North America's second largest ground carrier for small
package shipments
FedEx Freight® The largest U.S. regional less than-truckload freight
company, which provides next-day and second-day delivery of heavy
freight in both the United States and international markets
FedEx Custom Critical® Provides 24/7 nonstop, door-to-door delivery of
urgent shipments in the United States, Canada, and Europe
FedEx Trade Networks® Facilitates international trade, customs
brokerage, and freight forwarding
Chapter 7 Marketing Research and Information Systems
FedEx Services® Consolidated sales, marketing, information technology,
and supply chain services that support all FedEx global brands
Kinko's® A chain of more than 1,200 retail stores providing business
services such as copying, publishing, and shipping operations
FedEx purchased Kinko's in 2004 to provide new business services and to
expand FedEx shipping options at Kinko's 1,200 retail stores. The
purchase followed rival UPS's acquisition of 3,000 Mail Boxes Ete.
stores. Renamed the UPS Store, that acquisition put UPS closer to small
to medium-size customers and high-profit infrequent shippers. FedEx's
purchase of Kinko's, which operates 110 stores in 10 countries, is
expected to help the company reach new customers and expand in Asia and
Europe.
FedEx Express and FedEx Ground provide the bulk of the company's
business, offering valuable services to anyone who needs to deliver
letters, documents, and packages. Whether dropped off at one of 43,000
drop boxes or more than 1,000 world service centers, or picked up by
FedEx courier, each package is taken to a local FedEx office, where it
is trucked to the nearest airport. The package is flown to one of the
company's distribution "hubs" for sorting and then flown to the airport
nearest its destination. The package is then trucked to another FedEx
office, where a courier picks it up and hand-delivers it to the correct
recipient. All of this takes place overnight, with many packages
delivered before 8:00 A.M. the next day. FedEx confirms that roughly 99
percent of its deliveries are made on time.
To achieve this successful delivery rate, FedEx maintains an impressive
infrastructure of equipment and processes. The company owns more than
70,000 vehicles, and its 643 aircraft fly more than 500,000 miles every
day. FedEx operates its own weather forecasting service, ensuring that
most of its flights arrive within 15 minutes of schedule. Most packages
shipped within the United States are sorted at the company's Memphis
superhub, where FedEx takes over control of Memphis International
Airport at roughly 11 P.M. each night. FedEx planes land side by side on
parallel runways every minute or so for well over one hour each night.
After the packages are sorted, all FedEx planes take off in time to
reach their destinations. Not all packages are shipped via air: whenever
possible, FedEx uses ground transportation to save on expenses. For
international deliveries, FedEx uses a combination of direct services
and independent contractors.
FedEx services are priced using a zone system in which the distance a
package must travel to reach its
final destination determines the price. FedEx offers FedEx Same Day®
Delivery for $173 for packages up to 25 pounds. FedEx Ground rates vary
widely by package weight and shipping zone. For an extra $4, customers
can have a courier pick up their packages rather than dropping them off
at a drop box. Saturday pickup and delivery is also available for an
additional $12.50. Prices vary for larger packages and international
shipments.
In 2001, FedEx Express expanded its reach with the announcement of two
7-year service agreements with the U.S. Postal Service. In the first
agreement, FedEx Express provides air transportation for certain postal
services, including Priority Mail. The second agreement gives FedEx
Express the option to place a drop box in every U.S. post office. FedEx
did not get the exclusive rights to drop boxes, which left open the
potential for UPS to negotiate its own agreement with the postal
service. Both FedEx and the postal service operate competitively and
maintain separate services in all other categories.
FedEx Maintains Leadership Information Technology Despite its tremendous
successes, FedEx has faced some difficult times in its efforts to grow
and compete against strong rivals. The overnight delivery market matured
very rapidly as intense competition from the U.S. Postal Service, UPS,
Emery, DHL, RPS, and electronic document delivery (i.e., fax machines
and e-mail) forced FedEx to search for viable means of expansion. In
1984, facing a growing threat from ekctronic document delivery, FedEx
introduced its Zap Mail service for customers who could not afford
expensive fax machines. For $35, FedEx would fax up to 10 pages of text
to any FedEx site around the world. The document was then hand-delivered
to its recipient. Soon after the service was introduced, the price of
fax machines plummeted, ultimately forcing FedEx to drop ZapMail after
losing more than $190 million. Many analysts still argue that the
overnight delivery market could eventually lose as much as 30 percent of
its letter business to electronic document delivery, especially e-mail.
FedEx constantly strives to improve its services by enhancing its
distribution networks, transportation infrastructure, information
technology, and employee performance. FedEx also continues to invest
heavily in information technology by installing computer terminals at
customers' offices and giving away its
Part Three Using Technology and Information to Build Customer
Relationships
proprietary tracking software. Today the vast majority of FedEx
customers-more than 70 percent-electronically generate their own pickup
and delivery requests. FedEx has also moved more aggressively into
e-commerce with respect to order fulfillment for business-to-business
and business-to-consumer merchants. For example, FedEx's Home Delivery
network has grown rapidly and now reaches virtually every U.S.
residential address.
FedEx offers a wealth of electronic tools, applications, and online
interfaces for customers to integrate into their processes to shorten
response time, reduce inventory costs, and generate better returns, and
to simplify their shipping. FedEx InSight is the first webbased
application to offer proactive, real-time status information on inbound,
outbound, and third-party shipments. It enables customers to identify
issues instantly and address them before they become problems. In
addition, FedEx In Sight allows customers to see the progress of their
shipments without requiring a tracking number, giving them convenient
and unprecedented data visibility critical to effective management of
their supply chain systems. FedEx technology enables customers,
couriers, and contract delivery personnel to wirelessly access the
company's information systems networks anytime, anywhere. In fact, FedEx
was the first transportation company to embrace wireless technology-more
than two decades ago~and continues to be a leader in the use of
innovative wireless solutions.
The Future for FedEx Corporation As FedEx moves ahead, the company has a
lot going for it. No other carrier can match FedEx's global capabilities
or one stop shopping-at least not yet. To increase its competitiveness,
FedEx is focusing on increasing revenue and reducing costs through
tighter integration and consolidation, improved productivity, and
reduced capital expenditures. Five themes frame FedEx's efforts to fully
leverage the strong franchise of the FedEx brand:
Vision: It's the foundation of any successful business, and it starts
with the management team. Our core strategy is clear and reinforced
throughout the organization through effective communications.
Service: We must continue to streamline all our internal processes that
touch the customer to deliver a flawless experience every time. We are
delighted at being ranked highest in the J. D. Power and Associates 2002
Small Package Delivery Service Business Customer Satisfaction
Study SM for air, ground and international delivery services, and we
look forward to raising the service bar even higher.
People: . Our diverse and talented employees around the world are united
in their absolutely, positively, whatever-it-takes. spirit .•. No •
matter which operating company they work for, • their teamwork and
their commitment run purple.
Innovation: We will continue to invest in new technologies such as a
real-time wireless· pocket PC that gives our FedEx. Express couriers
fast wireless. access to the FedEx network.
Value: As we add more value to our customers' businesses, we believe we
can also create more value for our shareowners.
Why has FedEx been so successful? A major reason is the company's
enviable corporate culture and work force. Because employees are
critical to the company's success, FedEx strives to hire the best people
and offers them the best training and compensation in the industry.
FedEx employees are loyal, highly efficient, and extremely effective in
delivering good service. In fact, FedEx employees claim to have "purple
blood" to match the company's official color. It is not surprising that
FedEx has been named one of the "100 Best Companies to Work For" six
consecutive years.
Another reason for FedEx's success is its leadership in information
technology and customer relationship management. The company's focus on
"delivering certainty" has allowed it to hone in on opportunities that
give FedEx additional capabilities in innovative information technology
solutions.
A final reason for FedEx's success is outstanding marketing: FedEx is a
master at recognizing untapped customer needs and building
relationships. FedEx is also never content to sit on its laurels as it
constantly strives to improve service. and offer more options to its
customers. After 30 years of success, there is little doubt that Fred
Smith's C paper has become an indispensable part of the business world .
Evaluate the methods. used by FedEx to grow, both domestically and
internationally .
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