Fedex Case Stud
y FedEx in the Global Market
A case study by Mostafa El-Khamy and Yelena Golubov
BEM 106 Spring 2005 Caltech
FedEx in the Global Market
Every generation expects easier access to more of what the world has to offer; more products and services, more information and ideas, more people and places. Today a number of companies, FedEx Express, FedEx Ground, FedEx Freight, FedEx Kinko's Office and Print Services, FedEx Custom Critical, FedEx Trade Networks and FedEx Services, compete collectively under the FedEx umbrella. FedEx offers a vast array of transportation, e-commerce, business and related information services. For FedEx to stay up to date, it is important to feed the demands of the new generation. One main demand is the quality of service, including timely delivery, least amount of misplaced packages, quick customs services, immediate change of delivery address, sophisticated tracking system. Using its great reputation that was built from the foundation, FedEx grew into a $29-billion company with services in 220 countries and territories, operating 671 aircrafts and 71,000 vehicles, with 250,000 employees and of course it is significantly influencing the global economy. ( http://www.fedex.com )
H H
To formulate the strategy that FedEx should undertake with respect to the international market, one has to carefully analyze this industry.
The Six Force Industry Analysis:
We study how effective are Porter’s five forces and McAfee’s sixth force in shaping this industry (Porter, McAfee).
Exhibit 1: A comparison of FDX stock price with the S&P 500 in the stock market.
Rivalry:
There is a fierce competition between the transportation firms on price. The firms are constantly cutting prices, often with the goal of securing their market share. The major players in the international transportation industry are: •
FedEx ( www.fedex.com )
H H
FedEx successfully establishes itself as a leader in the US domestic parcel delivery. Building on
A case study by Mostafa El-Khamy and Yelena Golubov
BEM 106 Spring 2005 Caltech
FedEx in the Global Market
Every generation expects easier access to more of what the world has to offer; more products and services, more information and ideas, more people and places. Today a number of companies, FedEx Express, FedEx Ground, FedEx Freight, FedEx Kinko's Office and Print Services, FedEx Custom Critical, FedEx Trade Networks and FedEx Services, compete collectively under the FedEx umbrella. FedEx offers a vast array of transportation, e-commerce, business and related information services. For FedEx to stay up to date, it is important to feed the demands of the new generation. One main demand is the quality of service, including timely delivery, least amount of misplaced packages, quick customs services, immediate change of delivery address, sophisticated tracking system. Using its great reputation that was built from the foundation, FedEx grew into a $29-billion company with services in 220 countries and territories, operating 671 aircrafts and 71,000 vehicles, with 250,000 employees and of course it is significantly influencing the global economy. ( http://www.fedex.com )
H H
To formulate the strategy that FedEx should undertake with respect to the international market, one has to carefully analyze this industry.
The Six Force Industry Analysis:
We study how effective are Porter’s five forces and McAfee’s sixth force in shaping this industry (Porter, McAfee).
Exhibit 1: A comparison of FDX stock price with the S&P 500 in the stock market.
Rivalry:
There is a fierce competition between the transportation firms on price. The firms are constantly cutting prices, often with the goal of securing their market share. The major players in the international transportation industry are: •
FedEx ( www.fedex.com )
H H
FedEx successfully establishes itself as a leader in the US domestic parcel delivery. Building on