Fedex - Structural Transformation Through E-Business

Topics: FedEx, United Parcel Service, FedEx Express Pages: 8 (2384 words) Published: August 17, 2008
"Don't panic"
"whatever it takes"
"When it absolutely, positively has to get there overnight." "Relax, it's FedEx"
"FedEx, a growing 21 billion dollar enterprise in the 21st century, remain the world largest cargo airline, connecting 90% of the world Gross Domestic Product." (David Bronczek, President and CEO of FedEx Express, 2007)

FedEx - a company with its people that promised to pick up shipments when called, deliver new packaging materials when needed, get any goods to their destinations by a guaranteed time or even at a guaranteed range of temperature, and charge us a reasonable price to do so.

FedEx is a new-economy company, or we can say that FedEx is a service sector asset based economy company. The re-organisation taken place in FedEx has totally redesigned its business processes around the Web. Most of its shipments are ordered, tracked, and managed via the Internet.

In the new economy, FedEx need to consider its growth potential with respect to any investment opportunity, yet assessing that potential has never been more difficult. The post-dotcom era foresee that only those who focus on the customer and on creating new customer value proposition can succeed. In this new world, e-business is a must to be incorporated in the organization in order to create value previously unimaginable by the old corporation. The challenge is now on the phrase e-business. How is FedEx going to incorporate the e-business solution in the whole organisation, but remain focus in resolving its fundamental customer value proposition, thus outbeat its competitors namely UPS, DHL, and TNT, in addition to post office organizations around the globe.

FedEx need to choose the economy it wishes to be part of whether or not it is the conventional economy, era, or new economy, depending on the business model it embraces to create customer value and shareholder wealth.

Apparently, FedEx is one of the new economy company, with the Internet at its heart. In order to survive in the post-dotcom era, whereby the Net is totally transforming the business environment, a huge challenges is awaiting it externally and also internally.

One continuing obstacle was UPS, the so-called "Brown Giant", which remained the nation's largest overall package handler by far with some 1.8 billion delivered daily.

Internally, FedEx need to reevaluate its vertical integration and managing it with an extended scope, which involves: Achieving scale efficiency and effectiveness
Flexibility - which means the need for flexibility in adjusting both to a cyclical pattern of demand and to the different requirements of the customer. Compounding risk
"At FedEx, leading the way comes naturally. We originated the modern air/ground express industry. We invented the concept of time-critical expedited delivery. We were the first to use bar code labeling in the ground transportation industry and the first express company to offer time-definite freight service. And yet, today, FedEx is so much more. More services. More technology. All backed by more than 214,000 employees and contractors who are more focused than ever on meeting customer needs --- about five million times a day. As today's FedEx, we're proud to be one of the world's most admired companies. We're proud to be recognized as a great place to work. Most of all, we're proud to continue leading the way for our customers, our investors, our employees and our communities." FedEx 2002 Annual Report (Madan Birla 2005, 193)

Constantly striving toward new horizons is the term best describe FedEx.

In order to sustain its competitiveness, Fred Smith, the founder of FedEx instantly change the delivery deadline from noon to 10:30 am following the announcement of UPS saying that it was entering the next-day arena with deliveries guaranteed by 3 p.m. When others offer lower prices to entice...
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