Fedex: A Term Paper Turned into a $27 Billion Business

18th Aug 2012
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From the legendary college term paper in which Frederick W. Smith first advanced his idea of an overnight-delivery service to the infamous trip to the Las Vegas casinos -- where he won enough hands of blackjack to help him meet a payroll -- the story of how Smith built FedEx (FDX) into a $27 billion delivery juggernaut has become a part of Corporate Americana. Without a question, FedEx Corp. has been one of the great entrepreneurial success stories of the past quarter-century.A Yale graduate, Smith identified the tremendous difficulty in getting packages and other airfreight delivered within one to two days. This dilemma motivated him to do the necessary research for resolving the inefficient distribution system. Thus, the idea for Federal Express was born: a company that revolutionized global business practices and now defines speed and reliability.


FedEx Corporation is a logistics services company, based in the United States which provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $40 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 290,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities.Beyond figures, FedEx has done much more than capturing a sizable portion of the market from its rivals – it has captured a significant portion of ‘mind share’. FedEx has become the symbol for ‘anything that you can’t deliver in person’. FedEx is recognized (or very close to being so) for what it has sought to identify itself as – in its own words – “absolutely, positively” dedication to providing specialized solutions for every shipping, information and global trade. Clearly, this is not any different from what any other logistics company would try to do and in most cases, already do so to a fair extent. Why then has FedEx enjoyed such an unprecedented level of success?

Well, deciding the answer to this is not easy. There are a plethora of reasons where FedEx capitalized on their strengths. Companies like FedEx seem to cater to the existence of sub-classes of customers within each of these groups.FedEx allows the customer to decide how he needs his consignment to be sent depending upon his need for expediency and how much he is willing to pay. For example, all consignment to Canada from the US need not be sent over ground, a customer can air freight it if he wants it so. Ultimately, the customer pays for having the package delivered the way he wants it to be.

FedEx was built upon innovation, and it continues to be an integral part of the FedEx culture and business strategy. Their commitment to a creative, open culture propels the development of ideas, products and services that empower their customers to grow their businesses around the world

 Author credit: Madalsa

 

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