2012

STARTEGIC MANAGMENT
Module: Strategic Management Coursework Submitted By: Fariha Farid BITE ID: 45790 Date: 12th Dec 2012

Table of Contents
S.No Contents EXECUTIVE SUMMARY HISTORY EXTERNAL ANALYSIS Industry Life Cycle Industry Dynamics Porters Five Forces Global Competition National Context Opportunities and Threats INTERNAL ANALYSIS Competitive Advantage Distinctive Competencies Strategies Four Building Blocks Strengths Weaknesses Image BUSINESS-LEVEL Business Level Strategy Issues in Differentiation Targeting Customer Needs Market Segmentation Differentiation of Quality Differentiation in World Advantages of Differentiation Impact of Strategy VALUE CHAIN Value Chain Product Technology Impact of National Context of Industry Response to Differences Among Nations Global Dimensions of Strategy CORPORATE-LEVEL STRATEGY FedEx Corporation Horizontal Integration Vertical Integration Fill in the Blanks, Conclusion Recommendation References Page No

A. B. C. D. E. F. A. B. C. D. E. F. G. A. B. C. D. E. F. G. H. A. B. C. D. E. A B. C. D.

Acknowledgement
This material was produced in the context of a project as part of our college assessment for Executive MBA Planned, conceptualised and written under the abled guidance and teaching of our lecturer Dr.Abhijit Ganguly and Dr Hector. My thanks are also extended to my friends, team mates and my sister who have inspired and encouraged me to put pen to paper through close collaboration and support without which this work and project would not have been possible.

Executive summary
Strategic management can be defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a companys objective (Pearce, J.A and Robinson, R.B., Strategic management: formulation, implementation and control, McGraw-Hill) In Vietnam during his combat tours, Frederick Smith CEO of Federal Express got a swift message in survival from a crusty Marine sergeant. Lieutenant, the sergeant told Smith, theres only three things you gotta remember: shoot, move, and communicate.(Fortune, Nov. 1997)

Nearly 30 years on Smith used the same tactics advice in the world of business. An aggressive shooting strategy adopted by his manoeuvring of FedEx has helped the company to emerge in many coastal areas around the world, such as Asia, and in addition, a solid foundation and infrastructure has been developed for the future of the business by constant monitoring and development. His movement led the company to innovate and develop products with customer needs.

Corporate culture is based on the highest customer service and shows the attitude of "do whatever it takes to serve customers" from top to bottom. The use of communication has developed as one of the extreme strengths for the company, not only for customers, but also inside. "FedEx has always been a pioneer in the field of technology and success fedex.com proves it." FedEx was one of the first to connect to the power of the Internet, by launching its website in 1994 with introduction of a new package tracking system one of the first true corporate Web services. Shortly after, FedEx became the first company that allow users to create their own unique barcode labels supply and demand for courier pickup. FedEx Ground uses wireless LAN technology to accelerate the movement of information from ship terminal to a central database. Although for e-commerce there was no planned strategy solution, decision of the company to adapt the organizational structure with systems and processes has carved a model for building a successful business in the 21st century, which supports the efficiency of transport logistics, as well as of sales and distribution. FedEx offers many advantages to its customers. Not only customers are faced with the choice of the carrier but are also given the choice of means of delivery. To support the interests of customers on the expertise of their products differentiate its from its competitors, FedEx created the state of the art technology to monitor and validate customer shipments. Deliveries are traceable almost from its origin to its destination with the convenience of your personal computer. In addition, FedEx
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provides important strategic development of the world shipping market. FedEx strives to develop innovations and listen to the needs of customers.

The company invested significantly in global infrastructure to meet the needs of their customers worldwide. FedEx connects some important centers in the world, accounting for 90% of the gross domestic product in the world. It placed particular emphasis on achieving a strong presence in the Asian market. Some countries, such as China, which has been mainly engaged in exporting, are now the largest importer of goods from around the world. Since 1984, the service expanded more than 300 cities in China. (Business Source Premier)

A cycle of continued success was created by FedEx endless innovation; desire to fulfill customers needs coupled with strong infrastructure which gives FedEx competitive advantages in the years to come.

Time Line
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The FedEx Corporation is a logistic company involved in transportation, E-commerce and business services worldwide. Frederick W. Smith a Yale University undergraduate in 1965 wrote a paper about airfreight shippers using the passenger route system, which he regarded as economically insufficient. Smith wrote the need for a specific system aimed to accommodate time-sensitive airfreight such as electronics, computer parts and medicine. Smith bought a major stake in the sale of aviation Arkansas, Little Rock, Ark in August 1971, after a period in the Army. Smith faced tremendous difficulty in delivering packages and other airfreight within a day or two during the operation of his new firm. This dilemma encouraged him to do the necessary exploration to solve the inefficient distribution system; therefore, the idea of Federal Express was created: a company that reformed business practices globally and now expresses speed and reliability. Federal Express was so-named due to the patriotic meaning associated with the word "Federal," which suggested an interest in nationwide economic activity. (about.van.fedex.com/fedex-opco-history) 1973 - Operations are relocated to Memphis, Tenn. 1978 - Inventory on the New York Stock Exchange with the ticker symbol of FDX of Federal Express Corporation. 1981 - Introduction of Overnight Letter, beginning of international delivery with service to Canada and opening of Super Hub adjacent to Memphis International Airport. 1983 Without merger or acquisition Federal Express becomes the first U.S. company to reach revenues of $1 billion. 1984 FedEx Power Ship was launched in Asia Pacific and acquires Gelco Express International. 1985 Introduction of bar code labeling to the ground transportation industry and RPS Inc. (now FedEx Ground) is founded in Pittsburgh, Pa. 1986 - A hand-held bar code scanner system the SuperTracker was introduced. 1989 To expand its international venture Flying Tigers was purchased. Robert Express (now FedEx Custom Critical) began service in Europe.

1990 -Federal Express becomes the first company to win the Malcolm Baldrige National Quality Award in the service category. 1993 Making the record of any ground company fastest growth in its ninth year RPS (now FedEx Ground) surpasses $ 1billion in annual revenue. 1994 FedEx officially becomes the brand name for Federal Express. 1995 - FedEx Asia One network is launched in Subic Bay, Philippines. 1999 Launch of FedEx Marketplace on fedex.com, opening of a hub at RoissyCharles de Gaulle airport as Euro One Network, and Caribbean Transportation Services are purchased 2000 FDX the Parent company is renamed FedEx Corporation FedEx Trade Networks is introduced 2003 - FedEx marks a 30-year milestone. 2004 -For US$2.4 billion FedEx Corporation acquires Kinko's, with a new identity FedEx Kinkos Office and Print Centers 2005 - Around the world flights are launched - A new Asia Pacific hub in Guangzhou, China is established. 2007 - FedEx Express constructs its service abilities in Europe, Eastern Europes, India, and China - FedEx became a wholly foreign-owned enterprise by gaining 50 percent share of FedEx-DTW International Priority. - FedEx Kinkos introduces Print Online 2011 AFL Pvt. Ltd. and its partner, Unifreight India Pvt. Ltd logistics, distribution and express businesses are acquired by FedEx Express. -The operations of Multi Pack in Mexico are purchased by FedEx Express. 2012 FedEx acquires French leading company TATEX. - A Polish courier company Opek Sp.z.o.o is brought for $ 54 million. - FedEx acquires, one of the largest transportation and logistics companies in Brazil Rapido Cometa, for $398 million brand

FedEx service life cycle.

http://www.palgrave-journals.com Assessed on 1st Dec 2012

The FedEx Mission Platform Mission

Superior financial returns, Meet customer requirements, Integration and Safety Vision To become world leader in express delivery and supply chain industry before year 2020 Strategy Operate Independently, Compete Collectively, Manage Collaboratively Values People, Service, Innovation, Integrity, Responsibility, Loyalty The Purple Promise I will make every FedEx experience outstanding.

Corporate Mission embodies the philosophy

External Analysis
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A. Industry Life Cycle

Wide ranges of transport and shipment services are offered by FedEx. FedEx is an oligopolistic shipping service industry with only few reputable and wellknown competitors. FedEx along with its competitors like UPS, DHL and USPS have their own low cost operations and brand loyal customers which create significant obstacles for a new entrant in this industry. FedEx can be categorized as being in the mature stage of the industry life cycle. In mature industries to intensify the competition "companies tend to recognize their interdependence and try to avoid price wars." (Hill Jones, p.57). In case of the mature industries the intimidation for strong rivalry between the recognized companies is reduced with a stable demand. A trickle down influence is created with the unpredictable economic condition, causing a decrease industry demand throughout, therefore a price war breaks among the companies in an effort to make money, and so, unpredictable future events can lead to break down on price leadership.

B. Industry Dynamics
Being a dynamic and energetic industry the shipping service industry meets a variety of needs of its customers. Business like Global Corporations, Industries, ECommerce organizations, individuals as well as small businesses needs a transportation industry to deliver their packages or documents around the world; these services however can vary in their nature. Being a large company IBM Corporation for example needs a shipping company Like FedEx to transfer their products, and there shipping demands needs specific circumstances which are provided by their service provider, FedEx Corporation. Discounts are given to IBM on shipment of large quantity and also FedEx helps in transfer of customs documents internationally. Internet a major revolution in the past era has changed the world and reshaped many businesses has also influenced the shipping industry. With the use of information technology and internet the customers no longer need to queue but can simply order a pick up on internet, and also can check the shipment status at any time. This appears to be the most reputable way of doing business in the present era by a shipping industry. However, many of us are not familiar with the fact that FedEx was the first shipping industry that introduced the tracking application by providing customer specific bar code for each shipment in 1994,which enables customer to stay in touch with their shipment throughout its journey. Todays technology gives us the wireless option to do the same job. However FedEx offers its customers the
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wireless technology for gaining access to their package tracking data through its web enable devices. These devices or personal data assistance (PDAs) enables customers to access tracking information from virtually anywhere and anytime. (About FedEx, Wireless Solution) To meet the customers refined needs the shipping industry like any other business needs to constantly endeavor latest technological revolutions. In the transportation industry FedEx is not the only company that implements the latest technology in their business but one of their major rivals UPS, is also trying to accomplish the higher standards by using this new technology. UPS delivers more customized and reliable services solutions to its customers by using the latest technological system. These developments include the facility to handle unique delivery orders to offer more customized time commitments and to allow customers to make in-transit changes on package deliveries. Innovation is apparent not only in FedEx but also in its competitors like UPS business strategy. As UPSs specified in its press release: These flexibilities correspond to todays complex global supply chains that demand speed and frequent changes.

http://faculty.poly.edu/~brao/fedex_case.htm : Accessed on 5th Dec2012

C. Porters Five Forces

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As various shipping services are provided by FedEx Corporation applying Porters Five Forces model to such an industry is not an easy task. I applied and surveyed Porters five forces to only two FedEx divisions FedEx Express the worlds largest express transportation company and FedEx Ground second largest in delivery of small-package ground delivery to UPS in North Americas.

Porters Five Forces

Graph 1: Porters five forces model FedEx Corporation
New Entrants: LOW Economies of Scale (truck, airplane, global network) High capital requirement

Power of Suppliers: Depend on type of purchases HIGH : Aircraft LOW : IT products Truck Maintenances and repairs

Industry Rivals: HIGH Global competitors UPS, TNT, DHL (with equally strong resources) High fixed cost and high exit barrier lead to aggressive competition

Power of Buyers: HIGH -Intense competition in express delivery industry -Low switching cost -More bargaining power for corporate customers (e.g. Dell Computers, Cisco Systems)

Threat of Substitutes: LOW Minimal substitute products available for physical goods. Only some documents can be sent by Internet, Email and Fax

D. Global Competition

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Package delivery service faces competition worldwide. FedEx Corporation faces competition not only with major international companies like UPS, DHL, and USPS but also with many small and regional companies. Due to financial crises many of the small companies are either merging into big companies or making alliances with them. So the competition is not becoming global because of this shakeout and consolidation.

E. National Context
FedEx functions as a complementary industry for a large number of other industries. FedEx Ground operations are greatly influenced by the local circumstances while changing global environment affects the FedEx Express.

Factor Endowments: A wide range of innovative factors are used by FedEx

Corporation in United States. To manage its complex hubs the organization uses the Logistics as one of the main advanced factor while physical infrastructure includes airports, roads and ports.

Local Demand Conditions: As the customer demand increase so the

companies thrive to upgrade their services to meet the needs of the customers. These demands need new innovative methodologies and broad range of technologies.

http://www.theferrarigroup.com/supply-chain-matters/2009/09/18/air-freight-as-a-leading-indicator-ofeconomic-recovery/

Assessed on 4th Dec 2012

F. SWOT Analysis
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G: PEST Analysis
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Political
Government rules and regulations are the primary political factors affecting an organization. FedEx being an international company needs to interact with different nations that dont implement tough trading rules and regulations, allowing them to make use of better international services. Business standards, political stability and industrial limitations are few other political factors that can affect the business. FedEx is successful in the international market because it firmly and strictly adheres to all relevant laws.

Economical
The economic factors which can distress the customers and can have effect on the business are interest rates, rise in fuel prices, inflation and exchange rates. The financial assets of the company are affected by recession in the market. FedEx is affected by the economic situation around the world; as a result it has to respond to the varying economic factors. FedEx need to be flexible with its charges depending on the economic condition of that country. Saturation of the US market has also affected FedEx negatively. Also the instability in the US dollar and EURO has affected the business which in turn has negative effect on the organizations like FedEx.

Social
Population and the education status of the country are the social factors that can affect an organization. These two affect the decisions that an organization makes in order to meet the demands of the customers. Increased urbanization goes in the favour of FedEx as there are more educated people to use their services. Also customers expectations are increasing with time, so FedEx has to provide fast and reliable services which are world class quality but modified to suit the local culture and custom.

Technological Factors
FedEx is successful like many other companies due to advancement in technology. The company used the Internet to its full benefit by providing anywhere in the world the electronic services. Consumers can check the status of their package from the comfort of their house. E-Commerce another great innovation which allows FedEx to connect with the world for the business transactions.

INTERNAL ANALYSIS
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Internal Service Quality

5C Frame work

A. Competitive Advantage

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The competitive advantage of FedEx as compared to its competitor, the UPS is low in the shipping industry as their return on investment is below the industry average.

A Model of Competitive advantage

Resources

Cost Advantage Distinctive Or Competencies Differentiation Advantage Value Creation

Capabilities

Source: http://www.quickmba.com/strategy/competitive-advantage Assessed on 2nd Dec 2012

B. Distinctive Competencies

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FedEx mainly possess existing rather than distinctive competencies. The proficiencies which facilitated FedEx to become the leading express organization globally are its ferocious assurance to innovation, technology, brand equity and strong infrastructure.

With the express package delivery FedEx is the name that comes first to the customers mind. A quote from allaboutbranding.com says it all, FedEx is a great brand. Great brands provide a source of identification. These brands differentiate great brands and cement their leadership credentials assurance of quality. FedEx infrastructure is its next prevailing competency. FedEx has spent a hugh capital to build globally network of hubs, trucks and airplanes. So FedEx is in a position to harm any new entrant by just cutting down its prices. The third competency for FedEx is its devotion to innovation and implementation of latest technologies. This obligation of better serving the customers keeps FedEx Express as the leading giant worldwide. This dedication is not a new thing as Frederick Smith of FedEx said in 1979 The information about a package is just as important as the package itself. FedExs vision guides its strategies. The motivation to be the world leaders has leaded them to their core existing competencies. UPS were world leaders in the shipping industry before 1980s but changes in the Motor carrier Act and Staggers Rail Act in early 1980s paved the way for FedEx to compete with UPS in many fields.

C. Strategies
FedEx current strategies are the fruit of its distinctive competencies which were built over a period of three decades. During this period FedEx has expanded its global network by offering fastest delivery time, like by starting the next day delivery to and from Taiwan on 2nd September 2003.Similar FedEx entered the Iraq market by offering door-to-door pick-up and delivery service. This characteristic aptitude of offering services where no one else has gone makes it difficult for its competitors to move into this shipping market Other strategy aspect of FedEx is its involvement in the latest technology which they achieved by establishing the FedEx Technology Institute at the University of Memphis in 2003. FedEx is the only firm that offers its customers automated and package tracking option.

D. Four Building Blocks

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The evaluation of FedEx against the four building blocks i.e. quality, efficiency, innovation and customer satisfaction does not give it a competitive gain against its competitors like UPS. The reason being that FedEx has invested such a hugh capital that their ROIC is not as decent as UPS.

E. Image
To big organizations like FedEx and UPS the element of image is very essential for their survival. In well-developed industries image becomes the key differentiator for the purchase decision. According to Forbes magazine (Jan 02), Being most admired is all about delivering what you promise to multiple audience, and thats something FedEx has down pat...FedEx has successfully transcended its image as simply an air express carrier for business to become a one-stop shop for any shipping need. Positive market campaign through advertisements reinforces the image of FedEx Corporation in the competitive industry. While image is further build by extending hands into the community projects. FedEx further improved their image by introducing steps to reduce their carbon emission and energy consumption.

http://www.admadness.co/2011/06/fedex-advertising-hits-the-nail-on-the-head-again Assessed on 4th Dec 2012

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BUSINESS-LEVEL
A. FedExs Business Level Strategy
A distinctive business strategy is setup by FedEx on the basis of its strength in logistics and technological innovation. FedEx sets a standard which is difficult to be followed by its competitors. Being labelled as Innovators FedEx has to convey this message to its customers that they provide only high quality of services. FedEx like its rivals is capable of fast delivery but they are more customers friendly. FedEx home delivery (new e-commerce residential service) is one of the other business strategies which separate it from its rivals.

B. Issues in Differentiation
To differentiate from rivals in shipping industry is very difficult as customers are very price conscious. They usually are not brand loyal as they might like to use the services of cheaper courier. Their aim is just to deliver their parcels on low cost, fast and efficiently on time. They are not bother about how advance the company is in technology and innovation. Affordability is the main concern of these customers. So to be the leader FedEx needs to differentiate itself from their rivals in every aspect of the business so that the customers recognize them as reliable industry.

C. Targeting Customer Needs

To meet the need of the customers FedEx have six different divisions in its corporation. As different customers have specific need each amenity covers a particular sector of the market. By targeting different market sections FedEx tries to satisfy the psychological needs of the customers who need guaranteed delivery within time specified period. Different services may be required by the customers at different times so FedEx will always be there to serve them.

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Case Profile - FedEx

http://image.slidesharecdn.com/fedex

Assessed on 3rd Dec 2012

D. Market Segmentation
FedEx is formed of different business units which work collectively as a whole unit under the banner of FedEx Corporation. These units concentrate on single market and operate independently rather than focusing on the whole market. This gives FedEx a competitive edge over its competitors. FedEx Express is the industrys global leader which provides rapid, steadfast and time-definite delivery. FedEx Ground supplies small package, less time-sensitive service to business. FedEx Home Delivery is dedicated to residential services and operates from FedEx Ground. The third unit FedEx Freight is responsible for delivery of heavy packages across whole length of haul. Under it also works the FedEx Custom Critical unit which specializes in time-specific customer critical shipment. To meet the demand of the international customers FedEx Trade Networks works to provide support to the international market and hence international trading. Lastly FedEx Supply Chain Services operates to provide customer satisfaction by coordinating the movement of good. FedEx Express and Ground are the profitable segments of the company and responsible for the major part of the FedEx business. FedEx conceits itself mainly on FedEx Express which gives a good successful picture of the company. It becomes clear that FedEx markets itself according to the demands of the customers and not by demographic areas.

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E. Differentiation of Quality
To meet the demands of its customers FedEx invested hugh capital in building its infrastructure. The transportation system and logistics play an important role in running the business and are the main functional units. There is good coordination among different functional units of the company which results in smooth running of the business and hence this forms the basis of good quality service to the customers.

F. Differentiation in the World

In US FedEx is often compared with UPS, while FedEx has made every effort to differentiate itself from its competitors. The market value of the UPS in US is more because of its pricing while FedEx is recognised globally for its services. FedEx resources allow them to run their business on much higher grounds than its rival, but with future globalization of the big businesses its competitors will try to overcome this differentiation. FedEx has 600 aircrafts in its fleet and has hubs all over the world, the quality which will be very difficult to overcome. FedEx strategies keep them apart and different from their competitors. This helped them to make large customer base. Being labelled as innovators it is easy for FedEx to set up new hubs and package tracking systems.

G. The Impact of their Strategy

The same strategic dimensions are used by most of the businesses and the one common strategy is the investment of hugh capitol in research and development to develop better technologies. The firms using the latest and better technology tend to have better market share nationally and internationally and this gives a competitive advantage to the company. The major competitor of FedEx, UPS took some years to build an infrastructure to take control of the domestic ground market in US of which now it holds major share. While at the same time FedEx started looking for ways to expand themselves internationally and build an infrastructure for competency in that market. The installation of the international hubs puts FedEx one step ahead of their competitors and thus gives them a competitive advantage. For any company the prominent growth opportunity is the international market place. FedEx entered the global market with the introduction of FedEx Express which is known for its fast and reliable transportation service. FedEx is a recognised leader in the global economy and offers its customers more options and limitless places. The
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second thing which goes in the favour of FedEx is the E-commerce. Customers can purchase any product from the internet and it can be shipped anywhere in the world.

Fig: Acer and FedEx: Stream lines returns [2] (Source: http://www.fedex.com/us/solutions/downloads/acer.pdf) Assessed on 4th Dec 2012

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VALUE CHAIN, TECHNOLOGIES, GLOBAL STRATEGY

A. Value Chain
Value Chain has primary and support activities. Primary Activities: Inbound Logistics: the products that need to be shipped are handling and stored. Operations: Value chain analysis, financial analysis, logistics, shipping of products, handling and checking orders. Outbound Logistics: receiving payments and transporting products. Marketing and Sales: Making people feel satisfied and comfortable with the product by developing a positive image of the product. Services: Customer satisfaction the main objective. Support Activities: Procurement: Purchasing assets, trucks, aeroplanes. Technology development: Financing in innovation, research and development, IT and e-commerce. HR Management: Hiring, training and development of employees Firm Infrastructure: Management, planning, legal support, law and government regulations which are necessary for the support of value chain.

http://www.google.co.uk Assessed on 3rd Dec 2012

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http://mediebevaegelsen.dk/ugens-top-fem-medier Assessed 3rd Dec2012

Overnight transportation and delivery of packages

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B. Product Technology
Product technology dominant all businesses in transportation in which FedEx operates. Internet is the prominent technology that is used by FedEx in handling its operations. FedEx has always been a technology trailblazer, and the success of fedex.com is testament to that. FedEx was the first to develop its Web site in 1994. Daily around 2.3 million customers connect to its web site which is known for its speed and customer focused features. The Web Marketing Association praised fedex.com as the "Best Transportation Web Site" and e-Week saluted it as a top e-business innovator. FedEx Solution is an example of another latest technology used by FedEx which is a selection of various electronic tools.

C. Impact of national context on the industry

Shipping industry and in particular FedEx depends to a greater extent on the national context. The market value of FedEx is improving as it is expanding its horizon without any limitations. The economic downturn in America has led it; to bring changes in its foreign policies. These changes will help FedEx and the other shipping industries to turn to the foreign markets.

D. Response to Differences among Nations

The opportunity of growth with globalization will help FedEx to reach its goal of brand building and standardizing its products in the new and diverse market. To overcome the barriers of governmental rules and regulations in different countries FedEx designed an online business planning tool FedEx Global Trade Manager to help the international customers to obtain the necessary information about the fees and charges for overseas shipping.

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E. Global Dimensions of Strategy

Global strategy shadows every dimension of FedEx. Therefore FedEx is divided into: FedEx 5 Geographical Zones: United States Asia-Pacific Canada Europe, Middle East and Africa Latin America-Caribbean Global Factors: Globalization leading to more integrated markets Borderless business transaction The basic concern of any customer in any part of the world is timely delivery of their product whether individual or business. This consistency does need FedEx to tailor their services. This helps FedEx to establish there successful pricing strategy instead of raising the cost of their services. In this way they can use their resources to upgrade their technology and to focus on time-sensitive ability to deliver. Another part of global strategy is having only few locations as the main centre for managing the operations, like Hong Kong for Asia-Pacific Network and Miami and two cities in Mexico for Latin America-Caribbean Network In short, low cost, standardized service and few key locations internationally to serve 210 countries show the FedEx global strategy is on the right track.

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CORPORATE-LEVEL STRATEGY
A. FedEx Corporation
FedEx Corporation offers the main strategic leadership as well as the main financial liability for all the company. FedEx is currently divided into different units which run independently but mould the entire services to meet the customers need. The main motto of the company is Operate independently, compete collectively. The decision making ranking at FedEx Corporation is as follows:

FedEx Express EMEA abridged organization chart.

http://www.palgrave-journals.com Assessed on 2nd Dec 2012

FedEx reorganized world-wide on 19th January 2000 with 5 geographical zones and with 6 subdivisions. For customers to have a single access point a single brand system was created. Standardized names of subsidiaries -leverage the FedEx brand name. Establishment of FedEx Services-hub for the growing portfolio of independent FedEx services.

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FedEx Services Further support for the FedEx family was provided by combining marketing, sales and technology. An extensive range of services and pricing schemes was set up by single sale force. Customers were provided with single point of access to all range of FedEx services Helps customers in invoicing, tracing of packages and also claims. Website www.fedex.com and common toll free number for all the services.

B. Horizontal Integration
Horizontal integration is merger of similar companies and procurement sought out by the industry leaders. It is a way of trying to increase the industry value of the company by lowering the price, increasing the product value and bargaining power of the company and managing industry rivalrys. FedEx from as early as 1980s has been involved in this. The purchase of Flying Tiger air fleet and American Freight are the example of this.

C. Vertical Integration
The strategy of vertical integration of FedEx is very aggressive. Having a very strong infrastructure gives FedEx a competitive edge in the shipping market. As they control most of the distribution channels they still purchase from independent suppliers. Most of these suppliers give maintenance services and some provide them with packaging services.

D. Fill in the Blanks

FedEx need to consider some fill in the blanks strategies which depend on existing competences like: Increasing their ground service abilities. Paying attention to recyclable material for packaging which will reduce their material cost and will show the public that they are concerned about the environment.

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Conclusion
Over the past 30 years FedEx has been a company which has changed the way we view express transportation and delivery services. FedEx a leader in the shipping industry has a basic purpose is to bind the world together through business. FedEx is known for its innovation, keeping its cost down, using latest technology to speed up the transactions of goods. To beat its rival FedEx has to understand that meeting the demands of the market place is essential. This can be achieved by setting tough targets for the future and then trying to achieve them. FedEx have shown how strategy helps in decision making and brings better results for the company. FedExs mission is to produce outstanding financial returns through its operational companies by providing shareholders with, high value-added supply chain, transportation, and business and related information services. FedEx strives to provide reliable, competitive, global, air and ground transportation of priority goods at a remarkable speed. FedEx will continue working to develop outstanding relationships among its employees, partners, and suppliers, while maintaining ethical and professional principles within its corporate staff, keeping safety the first consideration in all operations FedEx has based its strategic mission on three distinct levels. First, by focusing on its independent networks, FedEx will operate independently to meet its customers every need. Secondly, offering its services worldwide with the same mission, FedEx competes collectively to achieve the same goal. Lastly, FedEx management strives to develop mutually rewarding relationships with its employees, partners and suppliers. FedEx has a number of core competencies that continue to put it above its competitors. The company has built a corporate culture around these major strengths It strives to maintain loyalty to its customers while working to go above and beyond what the customers needs are. Another core competency is FedExs expectations of its members to display honesty, integrity, ethical behaviours, personal accountability and freedom to perform FedEx has continued achievement of its goals by setting high expectations for performance.

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Strategy Recommendation
Business Level
Integrated Cost Leadership and Differentiation Strategy Global key account management Key partnerships with major customers Advance IT devices providing real-time information Continuous innovations and first mover advantages Continuous improvement of organizational operation and cost reduction program o Purchasing policy of 2-3 suppliers or use fuel saving vehicles Market Penetration Strategy Increase market share by aggressively targeting at fast developing countries. Reduce its dependence on US market sales (more than 60%) Reduce the risk of fierce competition with UPS in US market

Corporate Level
Restructuring Strategy Optimize FedEx Express and FedEx Grounds operation o Consist more than 80% of total sales for FedEx o E.g. same pick-up team for customers Improve synergy among subsidiaries o Leverage the existing resources among subsidiaries o Shared activities, exchange of competencies (knowledge, staffs, success stories) o Regularly assess the current and new locations for office and warehouse and take advantage of different time zone in different countries to shorten the lead time for deliveries Financial Strategy Sell and lease back of aircrafts: 648 aircrafts with value of US$5.8 billion Huge fund for business expansion, tip-top condition of aircrafts, tax advantages, no problem with old aircrafts Concentric Diversification Outsourcing trend of supply chain by customers is on the rise Demand Responsive Model Innovative technology and information system Part of re-engineering strategy to turn around the FedEx Services into profitability

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References
Anonymous. About FedEx. FedEx Historical Timeline. Retrieved December 6, 2012. http://fedex.com/us/about/today/history/timeline.html?link=4 Anonymous. About FedEx. Wireless Solutions. Retrieved 2012.http://www.fedex.com/us/about/technology/wireless.html December 6,

Anonymous. About UPS. Company History. Retrieved December 1st, 2012. http://www.ups.com/content/us/en/about/index.html .@About FedEx: Technology@ copyright <http://www.fedex.com/us/about/technology/> 2003. December 1st, 2012.

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channels and logistics November 22nd, 2012

Benson, Joe and Kinsella, Bret. What your HR department can learn from FedEx: The power of a strong brand@. August 2001. November 20th 2012. http://www.allaboutbranding.com/index.lasso?article=297 Barrett Dona, UPS Suite of New Technologies Promises Better Customer Service, Operating Charles W. L. Hill and Gareth R. Jones, Strategic Management Theory, Sixth Edition, Houghton Mifflin Company, Boston, 2004. Efficiency, Latest Network Software Unveiled at UPS Technology Summit. September 23, 2003. Retrieved December 3, 2012 .http://biz.yahoo.com/bw/030923/235052_1.html Staff. Form 10-K for FedEx Corp. @. July 17, 2003. http://biz.yahoo.com/e/030717/fdx10 k.html November 20th 2012.

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