Case Analysis: Federal Express
Introduction
Federal Express is an express transportation company, founded in 1973 by Frederick W. Smith. During his college years, he recognized that the United States was becoming a service-oriented economy and needed a reliable, overnight delivery service company designed to solely transport packages and documents. He wrote a Yale term paper on this idea, and received a ‘C’. His professor thought it would never work. Fortunately for Frederick Smith, he didn’t take it to heart and ended up building that company he dreamed of.
He found investors willing to contribute $40 million, used $8 million in family money, and received bank financing. He started Federal Express with over $80 million, making it the largest company of its time ever funded by venture capital.
Background
Federal Express became successful so quickly because all their competition became weaker at the same time. They built a super-hub in Memphis, Tennessee, where all packages from the United States would be loaded on the correct transport and shipped out each night.
Today, Federal Express has over 143,000 workers worldwide, and delivers more than 3 million express packages to 200 countries daily. One major change has affected Federal Express. In January of 1998, Federal Express changed to FDX Corporation.
FDX Corporation now includes Federal Express, Roadway Packaging System (RPS), Viking Freight, Roberts Express, and Caliber Logistics. Even though FDX owns all these companies, Federal Express still remains independent. FDX’s strategy is to corroborate on selling and synergies for all FDX companies, but run operations separately and keep each company’s strengths and markets separate. Therefore, some information will be about FDX, but most wi ...