FedEx, Federal Express Corporation (FDX) has been in business for over three decades, and is famous for overnight deliveries and still dominates the market as compare to other freight service providers. In 1971, Frederick W. Smith expressed his idea of overnight delivery service in an Economics academic paper for Yale University. He originated the concept of, the importance of speed and time instead of the cost. Smith’s concept was to access small cities and built a single hub that permits the packages to reach their destinations overnight. According to Smith’s professor his idea of single hub and overnight delivery was not productive and he received a grade of ‘C’ in his paper. Today that term paper idea is one of the largest freight services in the United States. The idea was very costly, and so before starting the business it was important to build a structure and a process; that was to be used in order for FedEx to function properly and efficiently. In the beginning company started off with an expensive advertising campaign and direct-mailing to make public aware of the FedEx ideology. According to the Company history index, “The company lost $29 million in its first 26 months of operation: in 1975 alone it gained $43.5 million in sales against an $11.5 million loss” ("FedEx corporation," 2012) Now that we have a brief background history on FedEx, we can continue with the further studies on FedEx. There are two questions that can answer the prediction of energy shift by Fredrick W. Smith, FedEx CEO.
What is the leadership challenges facing the CEO of FedEx?
According to the Wall Street Journal article by Bob Sechler, Fredrick Smith states that door-to-door and movement of good via sea is flexible and growing nowadays. Whereas, FedEx does arranges third-party shipments for its customers, but still the main business and structure of FedEx is moving goods through airfreight. The biggest challenge that I believe Smith is facing at the moment...
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