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Fedex Case Analysis
Federal Express is the world’s largest package delivery company today. They have been successful mainly because of their technological advancements. Technology has allowed them to have superior customer service and quality that was unparalleled by any company. No company was able to offer overnight delivery of packages with the speed and precision that Federal Express did. Although Federal Express remains ahead of its competition today, their advantages over other firms in the industry are slowly diminishing.
FedEx’s modeling capability gave them a competitive advantage as they implemented new methods and technology. They currently have a SuperHub with several regional hubs and packages are managed and tracked by a system called COSMOS. This system allowed customers to know where their packages were at all times and was later integrated for web use, allowing customers to track packages over the Internet. Today, UPS also allows customers to track packages over the Internet and has improved customer service. I would assume that they have developed a mainframe similar to that of FedEx to decrease FedEx’s competitive advantage. The United States Postal Service, which has lower rates, has also increased their customer service and quality. FedEx must find new technological advancements to stay ahead of the competition in the package delivery industry.
However, expanding into different businesses seems to be one of the strategic directions of the company. This direction is driven by increased competition in their current industry. New businesses, such as logistics, will have wider margins for FedEx and help them to increase revenues and profits. Also, FedEx should continue to expand and invest in the international market because it is growing at a rate faster than that of the domestic market. FedEx spends a lot of money on improving their technology, which has proven to be successful in the past, but their key to success today is expanding into new businesses and the international market.
FedEx’s financial statements shows that its assets have not been utilized as well as other firms in their industry, but their profitability is better than other industry firms. Still they must decrease selling and administrative expenses while increasing sales.
As mentioned in the case, there is a significant market potential (almost 870000 pieces per day) for documents and small package mailing. An analysis shows that in FEC stations, the volume for Courier Pak is 30% more than Priority One. That means Courier Pak market has a growing potential. In addition, it is found that the variable cost of it is the lowest among all other overnight delivery services provided by Federal Express (Table. 2). That means Courier Pak may be a more profitable product.
Business depends very critically upon Fed Ex. If Fed Ex had a major disruption to their delivery system, flowers would not be delivered on time, resulting in dissatisfied customers. For example, if Fed Ex employees went on strike, there would be no alternative equivalent to Fed Ex to deliver flowers to customers. UPS, although an alternative, did not deliver perishable products in the same timely fashion as Fed Ex.
John Deere & Company manufactures and distributes agriculture equipment as well as a broad range of construction and forestry equipment. The company is partnered with FedEx in order to maintain the logistics flow involved with the company’s transactions. FedEx is responsible for providing outsourced transportation services to 11 Deere facilities across the US and Canada. The 11 Deere facilities have different service agreements with FedEx in terms of cost and service depending on the type of business unit.
The United States Postal Service is a reliable, excellent, and efficient delivery service. Overall customer rating of any business makes it a profitable and reliable industry. The post office has met these expectations and has gone above and beyond to serve their customers. This delivery service and its employees contribute in many ways to citizens across the nation. They are the best shipping industry in the United States.
The old pony express should consider getting into e-business as suggested in a national news magazine, “Give every American an email address when they're born” (Source A). Using paper mail has proved inefficient and troublesome for some, but by switching over to electronic mail people will have all their mail sorted in one place. People in society should care because technological integration is necessary for the near future and without it, society risks losing valuable time. Furthermore, a graph forms the 2009 annual report of the USPS shows that although mail volume has decreased, delivery points have increased (Source B).
The USPS needs to be restructured to better suit the changing world. The United States Postal Service, or USPS, is the most commonly used mail service in the United States but, it is slowly being replaced by e-mail and private contractors who are easier, faster, and more convenient. The USPS will have to adapt to a world that is filled with people searching for services that are more internet based, faster, and convenient.
There are few things that are impressive about Southwest Airlines first one is how they treat the employees. For Southwest Airlines employees are first and customers are second. If the employees are treated well that will bring in happy customers. Next is that Southwest is not only with their low prices but is able to create a competitive advantage by offering a fun and humorous experience when flying. Finally another impressive fact is when Herb Kelleher’s retire from CEO position yet remained a Southwest employee till July 2014. Even after the retirement he was still active with the Southwest Airlines that reflected his enthusiasm and dedication for the
The United States Postal Service provides an efficient and reliable means of written communication across the United States for a low price. Recently; however, the USPS continues to lose both business and revenue as more competition enters the mail service market. Therefore, the USPS should be restructured to meet the needs of a changing world.
Finally in 2000, FedEx completed the transformation of it’s global brand by integrating the companies portfolio of services under one name: FedEx Corporation.
The united states postal service has helped the universe communicate from sending a “get well” card to paying bills. However, as great as this system has been to society times have changed, card that take two days now have transformed to a new way of technology that takes up to minutes even seconds to send. It is crucial for the USPS to accommodate it’s system to modern technology.
In June of 1995, Amazon.com was officially launched on the World Wide Web. The company was one of initial noteworthy companies to process transactions for products over the internet. It was launched at just an online bookstore originally but has since re-engineered its product lines to incorporate CDs, DVDs, electronics, computer software, video games and toys, and a lot of other products as well. It began in Seattle, Washington, and now is an established competitor globally.
Technological factors. This is very important factor for Amazon therefore the success of the business depends on that. Amazon has to face a lot of technological challenges and to find a way to be ahead of the competitors.
Diversification or further investing in the current portfolio would not have been the solution. Understanding the market needs is more than understanding technological advancement because innovation should be market driven. In this case, both strategies could still have been practical but with the customers’ needs in mind. Additionally, increasing production efficiency in retention of current business strategy could also have boosted its revenues by reducing wastage or idle time. Considering not all countries move at the same technological level, the company could still have invested in supplying the outdated products to places such as India or Africa. However, as the CEO there is a need to pursue the best strategy by focusing on what works our best but still have the customers ' mind at heart (Xerox Maps Business Service Strategy,
Cost cutting; Technology plays a significant part in package delivery companies capability to assist customers in cutting their inventories which UPS owns. The UPS system processes packages using advanced information technology and are transported by the companies’ own aircraft, fleet or delivery vehicle so UPS does not rely on other companies.
According to CIO Robert Carter, FedEx has always been a technology driven organization. To begin with most of the technological innovations in FedEx were driven by business need. FedEx was the first delivery company which provided real-time shipping information to the customer by introducing the COSMOS (Customers, Operations, and Services Master Online System) in 1979. COSMOS is a centrally operated computer system which FedEx uses to date to manage people, delivery packages, delivery vehicles (planes and vans), weather related changes etc. FedEx founder Fred Smith is famous for saying, “The information about the package is as important as the package itself.” (Baldwin, 2013). Pre-COSMOS most of the field operations for FedEx were decentralized,