SIVA SIVANI INSTITUTE OF MANAGEMENT

COMPANY REVIEW SESSION

SYNOPSIS OF

“FedEx Corporations”

SUBMITTED TO: Lt. Col. NAIDU

P. SAI SIREESHA

SUBMITTED BY: BASUMITRA CHAKRABORTY H4-06

K. HIMABINDU H4-11

V. RASHMI D RAO H4-26

J. KOMALI H4-44
CONTENTS
1.Introduction
2.History
3.Mission, Strategy, Values
4.Financial Analysis
5.Market Analysis
6.4 P’s of FedEx
7.Advertising of FedEx
8.HR Practices
9.FedEx Facts
FedEx Introduction

FedEx Corporation (NYSE: FDX), originally known as FDX Corporation, is

a logistics services company, based in the United States with headquarters in Memphis,
Tennessee. The name "FedEx" is a syllabic abbreviation of the name of the company's original
air division, Federal Express, which was used from 1973 until 2000.

History

FedEx Corporation is a Delaware corporation; incorporated October 2, 1997 FDX

Corporation was founded in January 1998 with the acquisition, by Federal Express. With the
purchase of Caliber, FedEx started offering other services besides express shipping. Caliber
subsidiaries included RPS, a small-package ground service; Roberts Express, an expedited
shipping provider; Viking Freight, a regional, less than truckload freight carrier serving the
Western United States; Caribbean Transportation Services, a provider of airfreight forwarding
between the United States and the Caribbean; and Caliber Logistics and Caliber Technology,
providers of logistics and technology solutions.

In January 2000, FDX Corporation changed its name to FedEx Corporation and re-branded all of
its subsidiaries. Federal Express became FedEx Express, RPS became FedEx Ground, Roberts
Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were
combined to make up FedEx Global Logistics. A new subsidiary called FedEx Corporate
Services was formed to centralize the sales, marketing, customer service for all of the
subsidiaries. In February 2000, FedEx acquired Tower Group International, an international
logistics company. FedEx also acquired World Tariff, a customs duty and tax information
company, Tower Group and World Tariff were re-branded to form FedEx Trade Networks.

FedEx Corp. acquired privately held Kinko's Inc. in February 2004 and rebranded it FedEx
Kinko's. After the acquisition, all FedEx Kinko's locations exclusively offered only FedEx
shipping. 

. In September 2004, FedEx acquired Parcel Direct, a parcel consolidator, and re-branded

it FedEx Smart Post. In December 2007, the Internal Revenue Service of the United States
'tentatively decided' that FedEx Ground Division might be facing a tax liability of $319 million
for 2002, due to misclassification of its operatives as independent contractor.
Mission: FedEx Corporation will produce superior financial returns for its sharowners by
providing high value-added logistics, transportation and related business services through
focused operating companies. Customer requirements will be met in the highest quality manner
appropriate to each market segment served. FedEx will strive to develop mutually rewarding
relationships with its employees, partners and suppliers. Safety will be the first consideration in
all operations. Corporate activities will be conducted to the highest ethical and professional
standards
Strategy: The unique FedEx operating strategy works seamlessly - and simultaneously - on three
levels.
 Compete collectively by standing as one brand worldwide and speaking with one voice.
 Operate independently by focusing on our independent networks to meet distinct
customer needs.
 Manage collaboratively by working together to sustain loyal relationships with our
workforce, customers and investors.
Values:
 People: We value our people and promote diversity in our workplace and in our thinking.
 Service: Our absolutely, positively spirit puts our customers at the heart of everything we
do.
 Innovation: We invent and inspire the services and technologies that improve the way
we work and live.
 Integrity: We manage our operations, finances and services with honesty, efficiency and
reliability.
 Responsibility: We champion safe and healthy environments for the communities in
which we live and work.
 Loyalty: We earn the respect and confidence of our FedEx people, customers and
investors every day, in everything we do.
FINANCIAL ANALYSIS

The financial statement of any company is decided primarily by two major factors. They are as
follows:

 Financial performance.
 Financial position
Financial performance is calculated over a period of time and financial position is calculated as
on a fixed date. Analysis of revenues, expenses, and net income gives us financial performance
of the company and the analysis of balance sheet says about the financial position. We have
analyzed the financial statement of FedEx Inc. and some vital indicators have been discussed
below:
Financial performance:
Revenues: The revenues of Fed Ex show a consistent and healthy growth over last five
years. It grew from $32.3 billion in 2006 to $34.7 billion in 2010 with highest in 2008 touching
at $38.0 billion. It shows that the company has been fairly consistent over the years. Even the
devastating economic slowdown in 2009 did not have much effect on the revenues.
Operating income: Operating income is the difference between operating revenues and
operating expenses. It is the amount of profit that is realized from business operations after
taking out operating expenses. So it is expected to be higher for a healthy company. For FedEx it
is exactly that. It has grown significantly from $747 million in 2009 to $1998 million in 2010.
Thus it shows the robust economic status of FedEx.
Operating margin: It is the ratio of operating income by net sales. It is better to have
higher operating margins. It had a highly consistent rate over the years 2006 and 2007 at 9.3%.
At 2008 it was 5.5% . Though in 2009 owing to recession it dipped to 2.1%. However it
recovered to 5.8% in 2010. It is certainly a good sign for investors.
Stock price: The stock price had been very consistent over the years 2006 and ’07 at
$109 and $111 respectively. It was $91 in 2008. But it plummeted to $55.43 in 2009 because of
recession. At 2010 FedEx has regained its strength and its stock price is at $83.49 showing
perfect signs of recovery from economic doom.
Besides these positive signals the capital expenditure has been revved up by FedEx. It stands at
$2816 million in 2010 against $2459 million in 2009. It shows FedEx is investing in itself in
these troubled times to reap benefits when market shoots up.

Financial position:
It is determined by the assets and liabilities position of the company at a given date. It is
desirable that assets should be more than the liabilities.
Assets: The current assets in Nov 31,2010 is valued at $7398 million. The fixed assets
stand at $15266 million. Other long term assets(goodwill, pensions etc) are valued at $3249
million. The total assets being at $26093 million, FedEx is at a strong position for its future
operations.
 Liabilities: The total current liabilities are at $4863 million as on Nov 31, 2010. Long
term debt is at $1667 million. Other long term liabilities are valued at $5002 million. Thus we
can see that the assets and liabilities situation is very healthy in FedEx.

MARKETING ANALYSIS

FedEx Freight: Marketing Strategy: FedEx is organized into operating units, each of which
has its own version of the word mark. The Standard Carrier Alpha Code (SCAC) is a unique
code used to identify transportation companies.

FedEx Background: FedEx was found by Frederick Smith in 1973 using an eight million dollar
inheritance.

FedEx product lines: FedEx has seven product lines (FedEx Express, FedEx Ground, FedEx
Freight, FedEx Custom Critical, FedEx Trade Networks, FedEx Services, Kinko’s) and operates
under a single management umbrella.
FedEx Express: This division is the world's largest transportation company, operating in 214
countries. Federal Express Corporation owns its own fleet of 661 aircraft.
FedEx Ground: This division is second to the United States Postal Service (USPS) in overnight
small package shipment. This division is the largest US regional less-than-truck load (LTL)
freightliners.
FedEx Services: This division is a supply chain management and technology company.
Kinko's:
This subsidiary is a business service center with more than 1200 retail stores that provides copy,
fax, publishing, and back-office support.

4 P’s of FEDEX:
Place: FedEx serves 214 countries and every major city in the United States, Canada, and the
European Union.

Promotion: Federal Express has a clear promotional vision: increase shipping. Federal Express
Corporation has set a number of partnerships in place with distribution centers, supply chain
management firms, government agencies, and other parcel delivery companies.

Price: Pricing structure is complicated because it is affected by number of factors: (1) cost of
fuel and energy; (2) tariffs, duties, and taxes; (3) rentals, leases, and utilities; (4) fluctuating labor
costs; (5) foreign subsidies; and (6) competition pricing.

Product: FedEx products are cross branded and interconnected for delivering single-point easy
access shipping for customers.

Advertisement:

 “When it Absolutely, Positively has to be there overnight” – 1978–1983

 “It’s not Just a Package, It’s Your Business” – 1987–1988

 “Our Most Important Package is Yours” – 1991–1994

 "We Understand," 2009–present

 "We Live To Deliver" 2009–present

 "Brown Bailout" 2009–present.

 Motor sports: From 1997 to 2002, FedEx was the title sponsor of Champ Car World
Series when it was known as CART.

 Foot Ball: From 1989 to 2010, FedEx was the title sponsor of the Orange Bowl.

 Other sports.
FedEx’s HR Practices

Since its inception, FedEx's management focused on providing a suitable work environment that
encouraged employees to come up with innovative solutions. Employees responded positively to
the faith reposed in them and displayed exemplary commitment towards their work. The extent
of the commitment of the employees could be gauged from the fact that during the first couple of
years, when the company was going through severe financial difficulties, the employees were
prepared to sell their personal belongings and use their own credit cards to purchase fuel to
deliver the packages to the customers. Even when the employees didn't receive their salary on
time, they continued working with FedEx.

Smith believed that since FedEx was a service organization, its success depended heavily on its
employees. Hence, in 1973, he developed and implemented FedEx's 'People-Service-Profit'
(PSP) philosophy. According to this philosophy, if FedEx took proper care of its employees, they
would provide efficient service to the customers, which would in turn benefit the company by
generating more profits. This philosophy formed the basis of all management decisions taken at
FedEx...

Employee Communication and Performance Appraisal

At FedEx, two-way communication between the management and the employees was
encouraged. The employees were allowed to freely express their opinions about management's
policies. 

The company also devised mechanism to address and resolve employee grievances, apart from
employing a formal communication system to inform employees about the major events taking
place in the company. The employee communication programs implemented by FedEx included,
Guaranteed Fair Treatment Procedure (GFTP) and Open Door Policy (ODP).

The Benefits Reaped

Over the years, FedEx developed several innovative HR programs that served as a benchmark
for many organizations, particularly in the service industry. These programs not only yielded
financial benefits for FedEx (through improved employee productivity levels), they also
enhanced the reputation of the company as an employee-friendly, service-oriented organization.

Job Change Applicant Tracking System (JCATS)

JCATS is an on-line computer job posting system that allows hourly employees to post for any
available job.
Recognition and Reward Program
FedEx rewards employees for their work with awards such as the ‘Bravo Zulu’ and the ‘Golden
Falcon Award’.

FedEx Facts

At FedEx, we recognize that our impact is greater than the services we provide. We are
committed to being a great place to work, a thoughtful steward of the environment and a caring
citizen in the communities where we live and work. We are passionate about sustainably
connecting people and places and improving the quality of life around the world.
The Environment
FedEx is committed to providing global connections while minimizing our environmental
impact. We have integrated responsible environmental practices into our daily operations, and
we continuously set goals that challenge us to increase efficiencies and reduce waste.
Our People
Our people are the foundation of our success and the key to our future. FedEx provides a safe,
diverse and rewarding environment where our people have opportunities to grow and succeed.
Diversity
At FedEx, we believe in the power of people. We are as diverse as the world we serve, united by
a culture that believes our diversity makes us stronger. 
Local Community
FedEx cares about the communities where we live and work. Our team members give their time
and talents to organizations dedicated to improving communities around the globe.
Global Citizenship Report
Message from the Chairman at FedEx, we’re very proud of our ability to move goods and
information around the world quickly and reliably.