THE SUCCESS STORYDEBOPAM DAS (37162)DIPTENDU DAS (37167)

SAPTARSHI SARKAR (37262)

1973

• Founded by Frederick W. Smith; Headquartered at Memphis, USA

• On the first day of operation, 14 cargo aircrafts delivered 186 packages in 25 U.S cities

1978

• Listed in New York Stock Exchange, ticker symbol FDX

1974 • Within a year, delivery increased to 10,000 packages/day 1977• Congress passes Public Law 95-163 (Deregulation of Air Cargo transport)

1981

• Overnight letter service

• International service in Canada

• First hub at Memphis Int’l Airport

FedEx – Success Story

1983• First U.S. company to reach revenues of $1 billion

1994

• IT integration - www.fedex.com

• Delivery time substantially shortened

• Cargo handling reached 2 million packages/day1998

• Acquires Caliber System Inc. and creates FDX Corporation

• Launches ground and home delivery services

2000

• FDX corporation renamed FedEx Corporation

2014

• Cargo handling reached 10 million packages/day

FedEx – Success Story Contd…

FedEx Service Operation – Service Basket

Risk of new entry by potential competitors High fixed cost associated Economies of scale for existing companies

Extent of rivalry between established firms Continuous improvement in quality, price, and innovation Very low switching cost for consumers High exit barrier due to high fixed costs

Bargaining power of buyers Switching cost is very low Faster service, lower price, or service innovation important Quantity discounts bargaining by large corporations

Bargaining power of suppliers Regulatory power- prices of supplies e.g.. packaging materials Purchase in large quantities and supplier switching

Threat of substitute products There are not many substitutes to shipping Difficult to find a substitute in right price and right time

FedEx Service Analysis – Porter’s Five Forces

Segmentation and Targeting: FedEx Service Analysis – Segmentation & Targeting

Points of Parity (Service Qualifiers)• Shipment of Packages• Tracking Packages, Ordering

supplies• Payment of Bills

FedEx Service Analysis – Service Qualifiers & Service Winners

Points of Differences (Service Winners)• Larger Fleet catering to a Larger

number of Customers• Print & Ship from anywhere Service• Updating of Technology• Better Transportation Management• Better Logistics through Centre of

gravity Method

Overnight Package Delivery

Computerized Package Tracking System

Fusion of Technology: Use of Handheld Devices

Integrated Information Technology

Benefits for premium customers Digital Signatures: Better Service Reliability

FedEx Service Analysis – Competitive Service Strategy

• Finds location of Distribution Center that minimizes distribution costs

• Considers Location of Markets Volume of Goods Shipped to

those markets Shipping Cost

• Place existing Locations on a coordinate grid

• Calculate X and Y coordinates for ‘Center of Gravity’

• Assumes cost is directly proportional to distance and volume shipped

Centre of Gravity Method – Hub and Spoke Model

• Advantages of using FedEx Transportation Management

• Visibility

• Speed

• Flexibility

• For less than truckload (LTL) freight additional services are:

• Call before delivery

• Hazardous material

• Inside pickup/delivery

• Perishable

• Residential pickup/delivery

• Freezable protection

• Oversize length

FedEx Service Analysis – Transportation Management

7 P’ S OF FED EX

1. PRODUCT and ELEMENTS 2. PLACE & TIME 3.PROMOTION &

EDUCATION4.PHYSICAL

ENVIRONMENT 5.PRICE 6.PROCESS 7.PEOPLE

Product: FDE, FDEG, FDCC, FEXF, FFDIN, FDSCS, FDCS, FCIS, FEDEX OFFICE

Place: Asia, Europe, Middle East/Africa, Latin America, North America, AustraliaServices provided : 24*7

Promotion: FedEx uses sports as a medium for promoting its services, e.g.- Motorsports(F1),Golf(PGA Tour), Tennis (Roger Federer).FedEx promoted its brand through Cast Away, one of the Oscar nominated movieIn Nov.03 FedEx along with University of Memphis, started FedEx Institute of Technology.Since 2003 FedEx has contributed $5 million in R&D.FedEx Centre for SCM is helping organizations to meet key supply chain management challenges globally.

FedEx Service Analysis – Marketing Mix

Physical Environment: The staff members & vehicles as well as aircrafts plays an major role for providing services.Buildings, landscape, interiors etc. are least important for FedEx.For direct customer interaction they recruit front desk executives & provides coded information for their parcels

Price: Charges premium prices for quality services.The rate of FedEx Freight & FedEx LTL segments has shown an increase of 5.7% but there is no change in its rates.In China FedEx is slashing its prices for market penetration.It provides booking facility through internet.

Process:

Procuring products from the clients

Manufacturing, procurement and

Order Management Functions

Delivering products and

services to customers

For complexities EDI, EFT

Bandwidth and DSS for planning

and execution

• FedEx employees provide both pre service as well as post service.• FedEx seeks to employ staff from its surrounding communities.• FedEx hires people who have enough experience in transportation and SCM.

People:

FedEx Service Analysis – Marketing Mix Contd...

• To streamline automation solutions and make tracking even easier for customer, FedEx Freight will be retiring the Extensible Markup Language (XML) tracking application on December 31, 2014. They recommend integrating FedEx Web Services into your systems moving forward.

• FedEx Priority OvernightTM intra-country domestic for Austria, Czech Republic, Finland, Hungary, Norway, Poland, Russia, Spain and Sweden.

• FedEx Economy intra-country domestic for France, Germany, Italy, Russia and Spain.

• • Domestic and international shipping is easier with FedEx Web Services version 2013. The integration of domestic shipping capabilities into FedEx customer automation allows for one platform to be used for all domestic and international shipments originating . This feature also introduces Freight To Collect and Same Day Services (contracted services) for domestic shippers.

FedEx Service Analysis – Service Innovations

• FedEx Ground shipping label will enable to implement new services and include more detail about each shipment right on the label. A better label layout and improved barcode legibility — which means increased read rates and service reliability.

• Integrate common FedEx shipping functionality into your website or application, including the ability to locate the best rates, estimate transit times, and track the status of shipments.

• You can optimize your shipping processes by integrating FedEx Ship Manager Server into your system and controlling it through your database.

• If you are integrating FedEx functionality into an application intended for resale, the integration process differs from applications not being resold. Be sure to follow the process for applications intended for resale by using FedEx Compatible®.

• The customized asset returns solution designed by FedEx Transportation Management enables high-value containers to be more closely tracked and managed.

FedEx Service Analysis – More Service Innovations