Introduction: Logistics is the management of the resources and their distribution right from the manufacturing point to the

destination of the product. Logistics was started early in the ancient times Roman and Greek empire; at that time the military officers were titled as Logistikas who were assigned to provide services related to supply and distribution of resources (http://www.bestlogisticsguide.com/logistics-history.html ) Since from the beginning in 1973, Federal Express Corporation had transformed itself from express delivery company to a Global Logistics and Supply Chain Management Company (Adamson, 2000). FedEx has a rich history in innovation. It is a pioneer for so many things. It has done a lot of improvement for the satisfaction of the customers (http://about.fedex.designcdt.com/our_company/fedex_innovation) Task One: 1.1 Porter five forces in FedEx Corporation: Porter 5 forces are used to analyse the competitive forces in the environment of the industry. It is used to identify the opportunities and threats of the business. The five forces are as follows: 1.1.1 Rivalry. 1.1.2 Threats of substitutes. 1.1.3 Bargaining power of buyers. 1.1.4 Bargaining power of suppliers. 1.1.5 Threats of new entrants. 1.1.1 Rivalry: The competition was very high in the logistic industry; there have been a lot of companies operating locally as well as globally in the industry. At this time in January 2000 FedEx was on its maturity stage and was not growing in its normal rate (Adamson, 2000). The main rivals of FedEx in the industry are DHL, UPS and TNT. UPS: UPS is one of the leading companies in logistic industry. Same as FedEx, UPS has also invested a lot in IT. Since 1986, it had spent $9 billion on IT and formed five groups to distribute its logistics software to electronic commerce users. FedEx developed all its internet software in house; in this the UPS commented as it is not a software developer and the companies which are taking this step is trying to go too far of the bridge (Blackmon, 1999). DHL: It is also one of the rivals of FedEx. Due to a large no of innovation in IT sector in logistic sector; In 1993 DHL had decided to invest US$ 1.25 billion of its worldwide capital in handling systems, automation facilities and computer technology and in 1995 DHL launched its website. 25 % of its shares were owned by Lufthansa Airlines and 25% owned by Deutsche Post (Exelby, 2000)

TNT: It is another major rival of FedEx. In 1998 TNT launched a web collection facility in the internet and in the same year it was the first company to launch global price service checker on its website which helps the customer to calculate the price of the consignment anywhere in the world (http://www.tnt.com/express/en_gb/site/home/about_us.html). 1.1.2 Threats of substitutes: Here, FedEx had a major threat from the UPS and TNT. These are the two big names in courier business and the major competitors of the FedEx as discussed above. In the early 1998, UPS formed the strategic alliance with open market, Inc., US based provider of internet software. It has been formed to develop the complete internet commerce solutions. They were also working with IBM and Lotus to standardise the format of their website. On the other hand TNT launched QuickShipper, it is the one stop online access to TNTs entire range of distribution services, from pricing to delivery. This new services were to be integrated with the existing online tools such price checker and web collection. It is the one to launch the worlds first global price checker. 1.1.3 Bargaining power of buyers: Buyers are having the ability to force down the prices, they can even bargain for more services or for high quality of services. The power of the buyer will increase if the volume of the buyer is high, switching cost is low etc (Henry, 2008). Here, the bargaining power of the buyers are average because FedEx had done a lot of innovation in the industry. It is also because FedEx is using the latest technologies in it and it does the good customer services. 1.1.4 Bargaining power of supplier: If the supplier product is very important for the industry then the bargaining power will be high. Also in some other cases like when the industry is not important for supplier etc (Henry, 2008). Here, the bargaining power of the supplier is high because here the suppliers are the fuel industry and the automobile industry, shipping industry. These are the materials which are very important for FedEx to run the business. So the supplier power is high. 1.1.5 Threats of new entrants: Always there is a threat for the new entrants in the market. If any new company will launch in the market, the customers will be diverted towards it (Henry, 2008). Here in FedEx case the entry of the new company will not affect FedEx much. This is because it is one of the most successful companies in logistics industry. 1.2 Porters value chain in FedEx Corporation: Value chain categorises the generic value adding activities of the organisation. It consists of the primary activities and the support activities. Both primary and secondary activities interdependent with each other(Porter, 1998).

Fig1. Porter value chain. The primary activities consist of: y Inbound logistics: It is the activities related to receive, store and disseminate inputs. It is the first step of the value chain. In this the organisation feeds the inputs. In FedEx corporation this stage starts with picking up the packages. It also takes the order in this stage. Customers should be given the possibility that they can deliver the packages in hand in several post offices. Operations: This activity is required to transform inputs into outputs. After the packages have been picked, FedEx will sort them according to their final distribution in one of the FedExs distribution centre. Outbound logistics: In this stage the parcels will be delivered by train, ships and aircrafts to the receiver of the parcels. It is very important that the packages should be delivered on time because it will increase the loyalty of the customer. Marketing and sales: It has done a lot of innovation in the industry, through which the sales increases. This kind of innovation is quite similar to marketing. It also does marketing by putting the FedEx banners on the vehicle. Services: It provides the services in such a way that the employees are satisfied. It launches the IT for the customers and it also launched its website for the services of the customers. This websites gives full information about FedEx. It also gives the distribution and supply information of FedEx. (Berger, 2011)

The support activities consist of: y Procurement: Here the subsidiary companies with the acquisition of calibre system are as follows: federal express, RPS, Viking freight, Roberts express, Caliber Logistics.

Human resource management: It consists of all activities which are which are needed for the recruiting, training, hiring and compensation for the best quality employee. Technological development: FedEx has done a lot of development in the technology. It has done a lot for the satisfaction of the customers. This activities are for the support of the primary activities. Infrastructure: This activity serves the company needs and tied its various parts together. (Berger, 2011)

1.3 Core competencies and capabilities: FedEx had three main core competencies such as: y The FedEx core strategy was to use IT to help customers to take advantage of the international markets. Over the years it had invested a lot on IT. By the time of 1998, FedEx became the US$ 10 billion company, which is spending US$ 1 billion annually in the development of IT. At a time when the competitors were busy in booking the space in the airlines etc, at that time FedEx had decided to acquire its own transportation fleet. It decided to expand through buying more trucks and planes. This expansion continues and on the tenth year FedEx became the first US Company to achieve US$ 1 billion without any mergers and acquisitions. FedEx launched its website in 1994, it was the first to offer online packages status tracking so that the customers can do the business through internet.

The dynamic capabilities of FedEx are as follows: y FedEx was the first to introduce internet into the business. FedEx had launched IT in 1994 that makes the life of the customer easy. This allows FedEx to run the business effectively. FedEx was the first to introduce bar code labelling for the ground transportation. When the competitors were busy in booking the seats for transportations, FedEx decided to start its own transportation for the business and this decision gave a success to FedEx. FedEx launched COSMOS (customer oriented services and management operating system), used to integrate the information about the goods being shipped and information about the transportation. It launched the transportation routing system named as AsiaOne network. FedEx launched its website (www.fedex.com), through which the customers can do the business through internet. It developed software named FedEx virtual order through which the customers can link the internet ordering with FedEx delivery and online tracking. It launched the onboard communication system.

y y

y y y y

Task 2: 2.1 Performance of FedEx: In the end of the 31 may 1999, the companys performance was outstanding. It goes beyond the expectations of the analysts. It made a record of earning of 73 percent which was 28 percent more than the previous year (Gelsi, 1999). At that time net income was US$ 221 million. But situation was totally different in the next financial year. For the 1st quarter ended 31 august. The company announced that the rise in fuel prices had effected the companys net income and the companies will not be able to cover the first quarter target. There was no improvement in the fuel prices and company says that the company will not be able to cover the second quarter target and it may go beyond the expectations of the analysts. At the end of 30th November 1999, net income was down by 6 percent and the operating income was down by 10 percent. It doesnt achieve the level of US domestic growth. rising in fuel prices continues to destroy the operating income. However, Operations other than the transportations such as Viking Freight, Roberts Express, FDX Logistics and Caribbean transportation services generate revenue and the operating income was increased by 27 percent and in the second quarter 12 percent respectively. 2.2 Internet market: There was a great impact of internet in the industry. It changes the meaning of competition in the market. There was a two- fold impact on FedEx. It opens the opportunities in logistics management. Because internet was used in the business for the re-engineering of the supply chains. Express transportation needs to be associated in the growth of e-tailing which expected to give the result of US$ 7 in 2000 and business to business EC expected to reach US $327 billion in 2002 (Lapping, 1996) 2.3 Subsidiary Companies of FedEx: y y y y y FedEx Express (formerly known as Federal Express) FedEx Ground (formerly known as RPS) FedEx Custom Critical (formerly known as Roberts Express) FedEx logistics (formerly known as Caliber logistics) Viking freight

FedEx Express (formerly known as Federal Express): It is the leader in the express distribution market. It offers 24-48 hours delivery service which operates in 211 countries. It comprises of 90 percent of the world GDP. FedEx was the undisputed leader of overnight delivery business during the period of 1998. It had 44500 ground vehicles and 648 planes that gives the support to the business (De Wit & Meyer, 2004)

FedEx Ground (formerly known as RPS): It is the second largest provider of business to business small package delivery. It was a company with low cost, non- union and a technological company. It is specialised in business to business shipments in one to three days of delivery. It was a service in which the FedEx cannot attract the people because FedEx cannot give in such a low price. RPS can give the services in such a lower price because it is the 15 year old company and prized itself on having one of the lowest cost models in the transportation industry. It only employ owner operator to deliver its services. The future plans of the RPS is to grow the business to consumer delivery services. This will give RPS to take advantage of the growth of the electronic commerce. RPS delivers 1.5 million packages per day (De Wit & Meyer, 2004). Viking freight: It was less-than-truck-load freight carrier in the western United States. The company managed about 7660 vehicles and 64 service centres. It shipped about 13000 packages per day (De Wit & Meyer, 2004). FedEx Custom Critical (formerly known as Roberts Express): It is also the leader in the industry. The service provided by Roberts Express is more like a limousine service i.e. it does the large amount of services at a time. In 1999, Roberts Express handled over 1000 shipments per day. In this the urgent shipments have to be loaded in 90 min of a call and the shipments would be arrived within 15 min of the promise time. It is the smallest company under the FedEx group. In this the loaded shipments can be track through satellite (De Wit & Meyer, 2004). FedEx Logistics (former known as Caliber logistics): It introduced the customised, integrated logistics and warehousing solutions worldwide. It was later renamed as FedEx logistics, that means FedEx can provide warehousing facilities only if its a bigger deal. In 1999 FedEx bought its first freight forwarder Carribean Transport services (De Wit & Meyer, 2004). 2.4 January 2000, reorganisation: Here the important change was the merging of two logistic operations i.e. Caliber Logistics and FLEC. The two companies were merge to form one single giant company, FedEx Logistics. These companies always seemed to complement each other in terms of their customer base and the services offered. Caliber was only in North America and Europe while FLEC operates in other different continents. There was a major change in the operations due to the reorganisation. It was no longer mandatory for FedEx to use the FedEx transportation for the solution of the customers. It would be use where it fitted. According to the cost and the geographic coverage. The decision will also set by customer choice and the requirements i.e. the kind of goods (De Wit & Meyer, 2004). In a result to combine the two operations the IT expertise came together and know how the logistics business works. The internet force the company to consolidate its systems and solutions. There is a heavy demand for the customers for the global solutions. The company was resolved to develop global systems for the implementation world wide. The world wide

implementation can be done through multiple currencies and multiple languages. The target was to generate 70 percent growth rate but unfortunately company didnt generate any profit. The company wants to be expert in five major segments such as health care, industrial, high-tech, automotive and consumer. The company decided to spend US $ 100 million in the next 3 years to become expertise in the above mention segments. The main intention for the reorganisation was to take the benefit of FedExs name which very much trusted by the customers for the reliable services and the innovations. The value of the brand name was once ignored in 1998 by changing the company name to FDX but then the mistake was realised and the name was again change to FedEx Corporations. Customer wants to deal with one company which can solve their requirements of logistics and transportations needs, FedEx came up with the company to solve all their needs and services of logistics and transportations. Collectively the FedEx Corporations will provide much affects in the market. For customers it is a easy way to do the business with FedEx because there was every thing under one roof that means one website, one invoice, one toll free number, one account number, one sales team, customer service team etc. On the other hand we can say that FedEx Corporation had occupied the whole market with the Reorganisation (De Wit & Meyer, 2004). The new company was organised but still there was some questions rise such as whether the new group will work or not. There are still the different teams of pickup and delivery staffs for different operations. in this one person could pick up the package sent by ground and another can pick up the package sent by express from the same company. But in UPS single person takes the two packages. To do the changes in the above factor company starts a new service known as FedEx Home Delivery. It was started to meet the needs of the customers i.e. to be specialised in business to customer De Wit & Meyer, 2004). Task 3: 3.1 Corporate Social Responsibility in FedEx Corporation: 3.1.1 Philanthropy: FedEx is doing a lot for the society. FedEx support the community We Serve, through the strategic investment by the people joined with FedEx. It also provides the resources which helps the children to have a better life. FedEx help the community through financial contributions, in-kind charitable shipping services and also by the volunteer services by the team members of the FedEx. The three core areas for investments can be Emergency and Disaster Relief, Child Pedestrian Safety and Environmental Safety. 3.1.2 Environment: It works for the environment such as conservation of fuels, conservation of material resources. It works for the community which concerns about the airport noise. It support the growth of sustainable energy. It works for the conservation of solar power to generate energy. It is associated with the green power. FedEx developed a machine which reduces the consumption of energy upto 93 percent.

.3.1.3 Industry leadership: FedEx is the environmental leader in the transportation industry. It is working for the development of environmental policy and the promotion of effective environmental management. The above factors are possible by the suppliers and contractors of FedEx. It is the first company to invest in large scale social power, renewable energy purchases, hybrid electric delivery trucks and the other environmental efforts. FedEx believes that environment is our home we should every possible steps to save the environment. We should not pollute it. It should be kept clean and tidy. It is the only transportation company to call publicly for fuel efficiency standards. 3.1.4 People: Peoples are the main assets for any business organisation. In the same way here people makes the FedEx what it is. Here the men and the women had the positive effort. The culture of the service is very well in FedEx. 290,000 team members of FedEx all over the globe works for the humanity. These are the real heroes of the world. Everyday these people risk their life to save others. 3.1.5 Diversity: FedEx believes that the people are the powers of the organisation. The diversity of FedEx makes it stronger, different views of different peoples across the world makes the FedEx stronger. (http://about.van.fedex.com/corporate_responsibility) FedEx is doing the very best possible way for the growth of cultural social responsibility. It helps the needy children, it cares about saving the environment and saving the nature. It does the charity for the needy. It helps the people across the globe from the natural calamities and a lot more. The main reasons of all these activities are the people which are related to the organisation. In the next five years there will no children crying for food. There will be no cutting of trees, makes the environment more beautiful. If ever there will be a natural calamities in the world FedEx will be there to help the peoples. FedEx will make the environment look more beautiful in next five years. (http://about.van.fedex.com/corporate_responsibility)

References: 1. Henry, A, (2008), Understanding Strategic Management, Oxford University Press 2. Porter, M, (1998), Competitive advantage: creating and sustaining superior performance : with a new introduction, Simon and Schuster 3. Adamson, D FDX Corp. Cganges name to FedEx, CBS Market Watch, 19 January, 2000. 4. Blackmon, D.A., Ante up! Big gambles in the new economy: Overnight everything changed for FedEx, The wall street journal interactive edition 5. Bruner, R. F and Bulkley, D. The battle for value Federal Express corporation versus United parcel service, of America, University of Virginia 6. Erwin, B Modahl, M.A and Johnson J ,sizing intercompany commerce, business trade and technology strategies, forester research, Cambridge, 1997 7. Gelsi, S FDX posts stronger than expected profit, CBS market watch, 30th june, 1999 8. http://about.van.fedex.com/corporate_responsibility 9. http://about.van.fedex.com/corporate_responsibility 10. http://www.tnt.com/express/en_gb/site/home/about_us.htm