Fedex Corp.: Structural Transformation Through E-Business
Executive Summary
FedEx pioneered the modern global transportation industry and integrated information system into its business to provide seamless e-business solutions. Despite maintaining its traditions of “firsts” and out performing analyst expectations year after year, FedEx’s earnings took a turn for the worst in 1999-2000.
Three core factors have been identified for the downturn; operational challenges and management issues, internet and e-business advancement, and competition. Issues such as fuel price increase, global recession, staff strikes, government policies, year 2000 (Y2K) compliances, failed FDX rebranding and poor systems integration are discussed in detail. The rapid growth of internet along with its availability to the masses and its effect on the advancement in e-business are also covered, and not left out is also the topic of intense competition from local and global industry players that affected FedEx’s market dominance.
Rebranding and reorganization strategy covering FedEx’s logistics and information systems infrastructure, fuel hike solutions and cost down activities are discussed as the top priorities of the company in order for it to recover. It is also suggested that FedEx continuously assess the desires for change and make use of performance indicators to gauge its renewed e-business strategy based on the balanced scorecard (BSC) approach.
Recommended solution, implementation and justification are made for FedEx based Porter’s Generic Strategies of cost, focus and differentiation for it to become the leader in the express delivery and logistics industry via e-business. In essence, cost and focus will facilitate in gaining a bigger market share, improve income growth and enhance fiscal revenues while differentiation will aid FedEx in having a competitive edge over its rivals.
Statement of the problem
FedEx invented the modern air/ground express industry and became the...
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