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Assignment 2 Executing Strategies in a Global Environment Examining the Case of Federal Express




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BUS 599 Assignment 2 Executing Strategies in a
Global Environment Examining the Case of Federal
Federal Express
Federal Express is seeking the way to increase the volume of Courier Pack
which has tremendous growth kpotential for the company. Their goal is to
increase the Courier Pack volume from 1300 to 6000 per day. However,
shipping managers are avoiding a risk of choosing unapproved carriers and
Federal Express lacked marketing efforts.
Therefore, to achieve the goal, I recommend (1) Federal Express to use various
advertising methods such as TV, magazines, newspapers, and radio (2) to focus
on benefits of using Courier Pak and (2) to give enough education about the
feature of Courier Pak to executives who make decisions.
Value Proposition of Courier Pak
Courier Pak is a viable product and has huge opportunity because first of all,
considering the delivery of documents or other small items are 870,000 pieces
per day, the potential market for Courier Pack is huge if the item is weighted

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less than 2lb. Second, the variable cost of Courier Pak is $4.25 which is less
than the cost of Priority One Package, $10.60 and Standard Air Service
Package, $9.21. It implies that Courier Pak is more profitable. Third, Exhibit 4
shows that Courier Pak has unfilled potential because the sales had doubled in
the past year even though Courier Pak prices had been increased three times.
Fourth, the average weight of Courier Pak is one pound while the average
weight of Priority One and Standard Service package is about 14pounds. Taking
a cargo-carrying capacity of 6200 pounds into account, Courier Pak could
maximize the revenue per one aircraft.
FedEx successful story lied under the leadership of Frederick Smith (the
founder and the CEO). Frederick Smith is always committed to his believe, and
this attitude help the company to go through the difficult period and overcome
any obstacles, especially with the tight competition in the industry. His believe
also determined the strategy process and strategy content that the company took.
In 1973, FedEx invented Express Distribution Industry based on Smith’s believe
that the opportunity will open to a company that could provide reliable
overnight delivery of time-sensitive documents and packages. William Conley,
the VP FedEx Logistics, said “If we’re all operating in a day –to-day
environment, we’re thinking one to two years out. Fred thinking five, ten,
fifteen years out” (De Witt & Meyer 2004). Frederick Smith is a visionary.
Usually, visionary type strategic planning is done at the CEO level. Frederick
Smith leadership skills did not appear coincidently. When he was teenager he
said “I didn't know I wanted to go into business, but I knew I wanted a
leadership position” (
Furthermore, Smith was visionary who forced his company and other
companies to think outside of the proverbial one (De Witt & Meyer 2004). He
was a generative thinking person, and he had legitimate power to determine the

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organizational behavior of his company, because he was a CEO at that time. In
other words, he acts like hub of the wheel for his company. Smith says success
in business boils down to three things. "You have got to have a viable product or
service and a compelling strategy. Then you need an efficient management
system. Assuming you have those things, leading a team is the single most
important issue in running an organization today." (
“Advantage is better soldier than rashness” (William Shakespeare). Strategic
management is concerned with relating a company to its environment in order
to successfully meet long-term objectives. Whether a company has a
competitive advantage depends on the business system that is has developed to
relate itself to its business environment (De Witt & Meyer 2004).
The type of competitive advantage that a firm chose will be influenced by what
the targeted group of buyers find important (value driver). According to Porter
(1980), there are two form of competitive advantage: lower cost and product
differentiation. However, they are impossible to combine. FedEx more focus on
offering product difference by adding more value services for the customers by
providing tracking number, barcode label, and Netscape based website for easy
access. In 1973, FedEx invented express distribution that revolutionized the
industry. By capitalizing on the needs of businesses for speed and reliability of
deliveries, FedEx shortened lead-times for company. In other words, FedEx
taking the route of product leadership to meet buyers’ need for special features
and advanced product performance (De Witt & Meyer 2004).

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Just what I was looking for! Super helpful.