Company Background
FedEx was founded in August, 1971 and started its operations on April, 1973 with the launch of 14 small aircrafts connecting 25 US cities. It went on to develop a hub and spoke distribution pattern, previously used by UPS in ground transportation. This later became the standard for air parcel distribution and enabled FedEx to become the leader in its industry
FedEx Corporation has transformed from an express delivery company into a global logistics and supply chain management company through e-business. It provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services.
For instance, FedEx supply chain services provides a full range of services, including freight management, transportation management and order fulfilment, supplemented by additional specialized and customized services, such as integrated fulfilment of inbound and outbound logistics, returns management and reverse logistics, and synchronized just-in-time (JIT) delivery management to customers’ requirements. .
Business models
B2B (Business to Business): To cooperate with other logistics firms such as DHL and UPS in some areas they have better infrastructure and logistic support services.
B2C (Business to Consumer): To provide delivery services to consumers such as business companies and estate residents.
C2C (Consumer to Consumer): To provide tracking services to customers
Globally Competitors
UPS
It is founded in 1907 and has a larger market share in Europe.The primary business of UPS is the time-definite delivery of packages. It extends service portfolio to include less than truckload transportation (primarily in the U.S.) and supply chain services-operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations.
DHL
It aims at investing in handling systems, automation, facilities and computer technology. It dominates the UK market and it is a main competitor of FedEx in the airfreight market which competing overnight delivery service.
TNT
The headquarters of TNT is in Netherlands and it launches a Web Collection facility on the Internet. It is the world’s first global Price Checker service on its Website that allowed customers to calculate the price of spending a consignment from one place to another anywhere in the world.
Asia Pacific Competitor
SF Express
Ever since its establishment in Shunde Port in 1993, S.F. Express has been committed to improving service quality and satisfying market demands. It has set up powerful business services including information collection, market development, logistics distribution and express delivery services.
Services and products offering
- Provide guaranteed domestic and international air express
- Residential and business ground package delivery
- Heavy freight and logistic service
What is Virtual Supply Chain?
Definition of virtual supply chain: Any chain (or network) connected through electronic links represents an organizational structure that facilitates efficient and effective flows of both physical goods and information in a seamless fashion.
1. Provide one-stop solution for customers and buyers and suppliers
- EDI (Electronic Data Interchange), enable manufacturer to improve inventory level and intensify the processing time by reallocating sources and procurement strategies
- For customers: Improve efficiency
3. Great transparency
4. Convenience in information sharing
- Provide communication along the logistic value chain
- Just-right inventory management (reduce cost and high flexibility)
7. Reduce transit time
8. Opportunities
- Creating more transaction
- Expanding logistic capacity
Internal
1.IT creates more business opportunities in Logistic Management
- Re-engineering the supply chain
- E-tailing
- B2B e-commerce
- Higher efficiency & reduce costs
- Information being shared between departments in a company is much faster
2. Provide
real-time information
- Global Operations Command Centre
- Worldwide central nervous system
- More efficient information gathering
- Dissemination of real-time data
- Non-stop updating without any delay
1. Enhance
relationships with cusomters
- Higher customers’ loyalty
- PowerShip System
- Value-added service
- Higher efficiency and control for on-line services
- EDI
- 1-1relationships relationships with customers
1. Provide
new service
- Track and trace system with higher accuracy
- Electronicalize more services to boost up the convenience
2.Enlarging
the market
- Calibers system
- broader portfolio of services unmatched by any competitor
3. World-wide
sourcing
- Lower cost
- Get the best deal by comparing alternatives from all over the world
What are the factors that put pressure on FedEx to consolidate its operations, while remaining customer-focused?
Factors:
1. Rising fuel prices
- Costs affect net income directly, the higher the costs, the lower the profit would be
- According to annual report of FedEx, the average fuel cost per gallon kept rising from 2010 to 2012
- Internet changed the basis for competition for most businesses
- Low cost and high variation
- Opened up opportunities in logistics management
- Customers are confused due to the repeating information
- Too many information on the internet
- Services are easily to be imitated
- Information of alternatives are easily to be gathered by customers
- Too many rivalries and hard to remain competitive advantage
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