CASE STUDY ON PROPOSED PRICING STRATEGY

Name :Rohan Singh

Institute : Sharda University of Business Studies
Track : Business Analyst
FEDEX: A CONCEPT THAT BLOSSOMED INTO AN INDUSTRY

▪ FedEx was the brainchild( invention) of Frederick W.Smith in 1965. An economics student at Yale
University, Smith wrote a term paper in which he came up with the idea for an overnight delivery service.

1973: Federal Express establishes 1989: Federal express purchases Flying Tigers
operation. 1997: FedEx launches an around the world flight which
reduces transit time from europe to middle-east and Asia.
1978: Federal Express was listed on
NYSE.
2006: FedEx Corp acquires UK-based ANC
1983: Federal express reaches $1.00 billion in
revenues without any takeover or acquisitions
LOGISTICS ASSOCIATION OF FEDEX & ABC COMPANY

Q: Provide best pricing option to meet next year’s fiscal expansion:

▪ The company could follow competitive oriented pricing strategy plus it can go for activity based costing
system to enter in the new international market and help the company to gain a large amount of market
share.
(A). Competition oriented pricing:-
▪ Charge according to competitors price( by determining the existing competitors price)
▪ Set price( lower/equal/higher). ———> W.r.t
U.S.P of product
Strength of competitor
Weakness of competitor
▪ Backward approach of pricing strategy as it is the manager’s task to see that the set price covers the cost
and desired profitability.
▪ Helps the company to easily determine the price
NEED FOR ACTIVITY BASED COSTING STRATEGY:

•
Focuses on identifying all activities associated with making a
product or doing a process.
•
It is based on activities, linking spending on resources to the
products/services produces or delivered to customers. Competitors
Govt. laws

ABC could be successfully implemented in this situation as:-

1. Product line differ in volume and manufacturing complexity Customers
Cost of
2. As product lines are numerous & diverse it requires different Price product
degrees of support and services.
3. It will provide ways of assigning the costs of indirect support
Current stage
resources to activities , business processes and of product life Marketing
customers. methods used
Q: HOW TO STAND OUT AGAINST COMPETITION :-

▪ Tailored needs according to consumer

▪ In middle eastern and EU parts the product needs to standardised as the each area has specific pricing strategy
▪ Focus on collaborative innovation so to develop new ideal solutions for customers
▪ By following a unique way of branding and prioritising the needs of the consumer
▪ One stop shop solutions to customers
▪ Providing hassle free processes to consumers to ensure loyalty
▪ Modernisation of resources will ultimately give a edge over competitors
▪ Studying the geographical and competitors strategy before operating on new grounds
Q: DIFFERENT WAYS BY WHICH COMPANY HAVE HIGH IMPACT
WITH CUSTOMERS:-

ABC COMPANY——> Fedex————🡪 supplies to consumers

(Source) (Service provider) (End users)
For a longer period of operating in international markets it is essential for a company to refine its processes
and cater accordingly by building a trust with their end users.
Following outcomes would help in building a long term relationship with the end users:
▪ When the source and the service provider come together to share all the financial risks and raw materials
▪ Flexible relationship between supplier and source in international market
▪ Provide consumer feedbacks via service provider to the parent company
▪ Timely association by the service provider (Ex: Advanced scheduling of the operational activities)
▪ Following Just in time approach (JIT) to utilise regular flow of cash
Q: HOW TO HANDLE EXCEPTIONS TO MY STRATEGY:-

•
Finding root •
Enforcing
cause of the advance
problem scheduling
•
Gathering data tactics so
consistently to avoid
•
Establishing and any kind of •
Enhance the
enforcing delay in vehicle
rules to operations. transportati
improve on network
efficiency
•
Timely
to improve
association
efficiency
with the
consumer
•
Timely and
regular
feedback
from
operating
grounds
Q: MODERN TECHNIQUES FOR IMPROVING THE PROCESS:-

•
Helps in
saving time
•
Electronic
proof of
Live support :
through
Tracking shipment
tools : status for
establishing
enables the consumers
customer service
centres or hubs customer to
which can provide find out the
simultaneous status of Example:
service along with shipment 24 •
E-mail tracking
the ongoing hours a day. •
Web services
operations.
•
Dedicated
application
for tracking
and other
solutions
 Q: HOW CAN WE SELL PREMIUM SERVICES TO GAIN ADDITIONAL

BUSINESS?

Most feasible solution in this case is to practise premium pricing so the

company can achieve its additional benefits provided to the consumers.
Improving the efficiency of B2C model and aiming towards greater
convenience for consumers.

The concept of Next-day or two-delivery a.k.a express delivery will be an

evolutionary step to sell premium services and gaining additional benefits.

Deferred Delivery Next/Same day

delivery
●
Delivery •
3-5 days
Time •
1-12 hours
•
Mail order
deliveries
•
Urgent deliveries
Typical Use Case
•
Premium pricing
•
Pricing
•
Normal
pricing
Q: OPPORTUNITIES TO REDUCE COST :-
Drop off area 1

Drop off area 2

Vehicle
•
Effective vehicle transportation system
•
Effective delivery through subsidiaries
•
Collects the cargo in the drop-off area so to
maximise the transport of good in minimal
amount of time
•
Focusing on maximum coverage at minimum cost
THANKYOU